4:15 Max’s Take on Bitcoin’s “End of an Era”
6:50 TINA’s Expectations for the Market
12:58 “The Big Long”
20:30 A Fiat Collapse & Entering a New Monetary System
35:05 What Could Slow Bitcoin Down?
40:00 World Game Theory for Bitcoin
45:15 Consequences of Phenomenal Returns
57:10 Bitcoin Narratives and Use Case Maturity
1:11:50 How Bitcoin Changes the World Economy
1:47:44 On-Ramping No-Coiners to Hyper Bicoinization
1:50:40 Closing Thoughts
20:00:07 SSL Sign-Off
Hello, welcome back to Swan Signal live everyone. Really glad that you came back to join us today. Swan Signal Live is a production of Swan Bitcoin, the best place to accumulate Bitcoin, the greatest money that the history has ever known … History of this amenity has ever known. I am Brady Swenson, head of education at Swan.
This will be our closing show for the year. It’s been an awesome year for Swan Signal Live. We started this thing on March 13th, the day after the big crash on March 12th, all the way down to 30, a hundred or whatever it was. Got inspired like, “Hey, we got to get on Twitter and talk Bitcoin with some of our friends.” And 43 shows later, we have Bitcoin Tina and Max are here to close out the show … Close out the year with us.
It’s been a lot of fun. Thanks to Brekkie for your help behind the scenes and getting things organized. Thanks to Cory for your support as well and Jorn for making the show look great. So gents, welcome to the show. I’m really excited to get into this one. We got to talk about one thing, Max, you’ve been a smash and buy, the last couple of hours on Swan. We’ve got smash buys live and ready to go. How are you feeling it, man?
Yeah, the smash buys on Swan bitcoin are awesome. And I buy Bitcoin all the time from different services and exchanges and stuff, and I think this is just becoming the best one. It’s easy and it’s a lot of fun, the layout is great, it tells you how many stats you got and it’s just easy to do. I cannot endorse them enough.
Awesome. Yeah. Well, it’s been asked for for a long time. Glad that we are finally able to be ruling it out. We’ve got about a few hundred people who are enabled at this point. Hopefully tomorrow we’ll have everybody enabled and it’ll be a lot of fun. Bitcoin Tina, thank you for joining the show, man. Appreciate you having you here.
Tina is a former trader. He’s a finance guy, knows he knows this stuff on that front and has been in Bitcoin for quite a while. Well known as being a preamble on Bitcoin Twitter, and really carrying the banner. Welcome to show, man.
Thank you very much, Brady. Hi Max, nice seeing you.
Yeah. Bitcoin Tina. It’s great. I follow you on Twitter. I’m always there and getting the pump me up, man. The pump me up with Bitcoin Tina, I’m pumped up. You got me pumped up. When I read your stuff, I go buy more. Yeah. What can I say?
I love you Max. You pump everybody else up yourself. You’re great.
Pump it up, Pump it up.
You’ve been in a lot longer than me.
Well, it’s a movement. It’s a lifestyle, it’s a beyond the Red Pill is the Orange Pill. It’s beyond the red pill. And it’s changing everyone’s frame of mind, frame of reference the way they think, they’re having a global raise of consciousness. We’re seeing people that were doubters come on board. We’re seeing people that were on board get more emphatic about it. We’re seeing … The whole thing is just utterly becoming climactic right here and heading into 2021, 21 million coins. 2021, we’re going to see some fireworks I think.
I agree. I very much agree.
Raoul Pal is in the chat Tina. And he says that he’s heard about your reputation. Your reputation precedes you on Twitter, and then he can melt some faces. So we’ve got to get Raoul fired up today, so you can smash by.
Max, you’ve been in this for a long time. Since Bitcoin was a buck, you’ve been talking about a publicly for a very long time. Put this year in perspective of your longer than most history of Bitcoin.
Right. Well, we had three major crashes, right? The one we just had was what? 70% or more. We had one in 20′, back in the 2012 area or so. That was a 90% one. It was a 30 drop back to a buck. Then we hit like a thousand drop back to 250. Then we had 20,000 drop back to what it was at? 4,000. So we’ve had three of these major contractions, if you will. I don’t think we’re going to have something like that going forward because there’s just too much big money, really moving into the space.
I think as the price goes higher, volatility is going to get less. And actually Bitcoin is less volatile this year than a lot of other currencies out there. There’s probably half a dozen other currencies that were much more volatile than Bitcoin. I think the volatility decreases. I think this is really two things are going on.
One thing is, I think we’re at the end of an era. The era from 2009 to 2017 was really the era of the swashbuckling . And we have legends in the industry. People that found it and we know who they are and they’re bigger than life. But starting in 2018, 2019 and now 2020, now the industry has changed. Now, Tina has been on Wall Street as I’ve been on Wall Street. And I would say it’s kind of similar.
I’m curious what he thinks about this. Back in the eighties, when I was on Wall Street from ’82 to ’87, we were all in our twenties and we were all doing the Wall Street thing hard. Then the ’87 crash hit. And what came out of that was a lot more corporatization of the merger and acquisition game, the Carl Icahn’s and the Ivan Boesky and those guys as the huge personalities.
Ron Perlman, they became the less of a factor and became more of huge banks, more consolidation. And so it was kind of an end of an era and a lot of ways. That the eighties era had ended. It seems to me that similarly with Bitcoin, where we’ve ended that period of a wild West days, and now we’re entering more of an institutional led global market. Which is going to be great for the price, but it’s not going to be as fun if I may say that.
It was the sixties of bitcoin.
It’s insane how much I agree with you on everything you just said. So I keep telling people that I expect there to be no more than 30% to 40% bear markets. The reason being primarily is not only are people coming in with bigger money, but the whole perception of Bitcoin as an asset is undergoing a radical shift on the part of those people with big money and institutions. Where it’s going from an asset, which is thought very poorly of and thought as weird and quirky and not understood at all, to an asset that ultimately is a must own asset and becomes a core with the portfolio ultimately as well.
And so that major shift. So when you have people who start to perceive it differently, you’re going to bring in money. I think you’ll have bigger money guys. They might sell a little bit at whatever they think the peak is, but it goes down 30% or 40%. And they start to say, “Oh my God, I should’ve bought more of this.” They add to their position and that keeps the market from collapsing 80% to 90%.
On top of that, there’ll be other players. So the guys who will have bought one to 5%, will be strutting around having made 10, 20 X their money. And they’ll have friends, they’ll be like, “Damn, I didn’t put anything into that.” That’s your drop 30% or 40% and say, “I got to get me some of that.” And so I agree. I think it’s going to change the trading of it entirely.
And I think you’re not going to see … I do think you’ll see pretty substantial pumps because it’s only so much of it out there. But I don’t think you’ll see these more than a 30% to 40% bear market, not going to be 80% to 90%. And I agree with them, Max said about Wall Street. I think that’s really exactly right. People forget that in 1995 and 1996, the S&P was up 70%, which was an enormous amount.
The bull market that started in November ’94 with the election of the Republicans and the Newt Gingrich house of representatives was the start of a bull market. And that market pretty much went nonstop into 2000 with a brief interruption with the Thai Baht and long-term capital management in ’97 and ’98. So you had a pretty long bull market. I think this will be much bigger bull market because of the scarcity of Bitcoin.
I think the more and more people begin to understand the nature of this technology. It’s not just a reserve asset. I think it’s being very much undersold by people calling a trusted reserve asset. The technology being developed in Bitcoin is really substantial and I think that it needs more coverage from people. There’s all sorts of really neat things. I think perception is a little mistaken.
I think people want to create a legacy overlay on what Bitcoin is, which is a huge mistake. So we have things like a lightening pool, which is really significant out there. People barely know anything about it, and it’s just a minimized form of lending. There’s no lending that exists like this, and you’re actually lending your Bitcoin so other people can use it, locked in some kind of a multisig I think.
I don’t know the details of lightning pool, but this is a very different kind of a product. And this is nothing … The Defi space right now looks like some kind of a gambling version of a tinker toy set that supposed to be like the legacy system, which is just sort of ridiculous, it’s sort of like some kind of a weird amusement park that people go to, to go play carnival games and win dumb prizes.
Whereas in Bitcoin, the real defy that’s going to happen is in things like lightning pool, which is amazingly cool. And I think you’ll have more people who are smart, who figure out trust minimized ways of lending and that’s where the real excitement is. And so Bitcoin is so undersold and as the world begins to understand what this thing really is, and what’s being developed, they’ll be completely blown away by it. Their description of it is completely inadequate.
Yeah, no. That sounds good. I mean, you’re describing the nineties there, which was also similar to the eighties. You had that big move up until the dot-com crash. And similarly, the dot-com up until the crash of 2001 was filled with a lot of people who were in it for a certain ideology. You had John Perry Barlow who wrote the declaration of independence for the internet.
And I was involved in something in Los Angeles and everyone was talking about how liberating this all was, and we could all create our own content and this was a whole revelation. Then after the crash of 2001, it became totally consolidated and the effort to turn the internet into HBO, which effectively it has become, everything is streaming, everything is paid to play. And that era, that age of innocence, it was done.
So with Bitcoin, I think also we had an age of innocence and personalities, and I think it’s finished. I think now we’re going to have this huge run-up, it’s going to be more institutional. I was looking at something of course on Twitter, where I see most of my perception of reality and there’s this something going around, which I think is very smart and people are comparing the big short, which was that huge bet in 2008 against the subprime market and they made a movie about it, to Michael Saylor, buying a borrowing money at three quarters of a percent and going along Bitcoin and calling this the big long.
I mean, there is some symmetry there. It’s another old kind of a Wall Street reference. Tina, your thoughts.
I spent a lot of time short selling and I used to go to things like grants conferences, and I was very much of a grants follower. I knew a lot of these guys, I follow all of them guys like Bill Fleckenstein and Fred Hickey and others. And I did short a lot of stocks. I think what these guys don’t understand is that Bitcoin is exactly …It’s a short on the entire legacy system.
And it’s a brand new technology that’s going to completely remake economic paradigm and I think people are missing this. I think they miss how big this is. It’s a much better paradigm than the existing economic paradigm, which is very unfair in many ways. And I think that this is huge. I think that it is beyond huge. It’s not just about making money.
And I think people have the wrong take on lot of this. They want to overlay the way they see the world with the way Bitcoin has to be. And I think that’s completely wrong. Technology changes the way the world works. People have a hard time imagining the world that’s different from the world that they know, and technology is constantly changing how things work and you wind up with new institutions and new ways of doing things which completely replace and displace things.
Henry Ford said, if the people had asked me, they would have asked for faster horses and I think that this is constantly a human foible to assume that you’re going to take new technologies and new ways of doing things. I argue that banking was a technological solution. We’re still working with a technological solution, which was invented in like the thirteenth or the fourteenth hundreds.
Banking’s going to completely be revamped and completely changed and maybe completely eliminated. People think fractional reserve banking has to exist and I disagree with that entirely. Fractional reserve banking existed for a particular reason, because the money was such that you had to have fractional reserve banking. With money which is divisible the way Bitcoin is, which is essentially infinitely divisible, where payments can be made virtually instantly.
The entire way that the legacy system evolves is going to become an entirely different system. It’s not going to be an overlay. And there’s this very strong risk. And I think a risk that a lot of people who are coming to the crypto space, who don’t really get this, is that Bitcoin is going to displace all of those things that exist in the system that we have today. It’s going to completely remake it.
And if you try to build a model of a business based on legacy, guess what? You’re going to be blown out of the water in the next decade and your business won’t exist. If you’re building for yesteryear, you’re not going to exist in that business by the end of the decade. You will have to skate to where the park is going, not to where the park is. And certainly not to the way that where the park was.
And so I think you have a lot of people who think they’re smart, who think they understand things and they’re getting it all wrong.
Yeah. But the question – .
There’s so much there. I got it. I’ve taking notes. I’m going to bring us back and forth but Max, please take it.
Yeah. Is there, like there was with the big short? Which was the taking down of the subprime market by some Wall Street sharpies who made billions doing so. Michael Saylor is engaging in the big long, he’s engaging in a speculative attack where he can borrow it three quarters of 1%, which is extraordinarily cheap historically. And he’s buying Bitcoin effectively to attack the Fed and attack the US dollar in the same way that George Soros did in 1992.
They attack the British pound and they broke the bank of England, they forced Britain out of the exchange rate mechanism and Soros made a billion dollars in a week. It seems to me that Michael Saylor is launching this speculative attack against the US dollar by borrowing at these artificially low rates and loading up on Bitcoin and that’s going … And the dollar is getting weak. And so its weak again today.
It’s looking terrible. If the dollar keeps getting weaker, that means we got a real poll problem on our hands in America, because inflation is going to start really printing at numbers that nobody’s seen in 20, 30 years. And the people making money on Bitcoin as it gallops through a hundred thousand and beyond are going to be like, “Well, we told you so, but guess what the keys are unconfiscatable will so go fuck yourself.” Right?
Is that what we’re … We’re Wall Street veterans. I mean when Paul Tudor Jones said, it’s the fastest horse in the race and it’s good for humanity. That’s like throwing red meat to a cage full of lions.
I have to say I see it differently, Max. And number one, I think that people conflate a weaker dollar in currency terms as opposed to a weaker dollar in buying power terms. And I think this happens all the time and I think a lot of people do it and I think it’s a mistake to do that. The weakness in the dollar is reflected in both inflation, as well as in currency terms. And it’s not only the currency terms that matter.
In fact, I would argue that the weakness in the dollar is more in inflation terms. And what we’ve seen in the last 40 years has been asset inflation. So what happens is, the dollar weakness is reflected in an S&P that goes up compounded annually at some very high rate and NASDAQ, which does similarly, that’s the real weakness in the dollar.
That’s the big, broader weakness in the dollar and fiat currencies generally. So I don’t quite agree with the speculative attack argument.
Right. No, I get it. We got asset inflation and the feds claiming they’re fighting deflation, even though if you included to something that Michael Saylor points out. He said that 20 years ago, you could buy a million dollars in bonds and get a 5% coupon and a 50,000 a year in income. And now you need a 10 to 20 times that purchase in bonds and that’s genuine inflation in his terms, right?
But we have asset price inflation for sure, but the average person in America, because everything’s been outsourced to China. And because our energy is basically coming in from countries that we have colonized in the middle East. The average American doesn’t really have a price to sticker shock when they go shop for food or they buy their gasoline.
So now with the weakness in the dollar that we’re seeing and the inability to control that weakness on the dollar, because the fed has completely tapped out and Michael Taylor has provided a vector out of this mess. Unlike gold, gold is not the vector out because it was totally controlled and people start saying it, “Wait a minute, my CPI just doubled in the last month and my dollar can’t buy 25 cents worth of groceries that I got in 2018.” Right.
I mean, that’s real CPI inflation. Can’t be it’s the genie’s out of the bottle. And there’s no way to bring it back in. I mean, that’s what I think is going to catch people’s attention. And that’s also going to start some panic buying into Bitcoin as the fastest horse in the race. You know, gold we’ll get some of the ancillary benefit of that, but it won’t be like Bitcoin, which is sent to print many multiples of the current price.
When it comes to currency collapses from what I know of it and I’m no expert in it although I do remember. I forget where I was, I was traveling somewhere when that happened. I can’t remember what it was, I think in 1992, usually it’s because locals are fleeing their currency, but I don’t think this is just about a currency collapse. I think that’s really wrong. I think that you’re actually going to watch Bitcoin go up a lot in value and people will simply adopt the new system.
I think that people have buying urgency because the price goes up and I don’t think…
Goes up against what?
It goes up against the dollar.
In a hyper inflationary collapse against Bitcoin right now, it’s just not hit the mainstream media yet. Once you’ve got a hundred thousand dollars Bitcoin and people also are losing, they can’t afford food anymore. That’s going to be highly problematic as the politics of that in America in 2021.
And I don’t think you’re going to have a situation where people can’t afford food. I think what you’re going to see is I think you’re going to see Bitcoin going up in value. I like to ask this question cause see, I actually don’t like this take. I don’t like this framing cause I don’t really agree with it. And I think it brings about more fear than it brings about a positive nature and discussion of Bitcoin. So I’m not a fan of this. I’m not a fan of the spec of attack arguments.
A quick side note, people already can’t afford food. You got 150 million Americans below the poverty line and the food stamp programs and the other programs. If you pull the plug on those, you you’d have that homeless crisis go up by dramatically anyway as it is. People living in their cars to work at Walmart for the wages that don’t support a lifestyle.
So the poverty is an incredible problem in America.
Right now and any kind of dynamic change to the purchasing power of the dollar will exacerbate that to extraordinary levels.
Yep. I don’t think that-
Am seeing it that way too.
I don’t think that that’s what we’re going to see though. I don’t think it plays out quite like that.
Well, the only way to not play it out like that is to print more money, right? We know that 30% of all the money ever been printed in America has been done so in the last two years or three years. Don’t call me on the exact numbers there, but there it’s an extraordinary up ramp. You see the M1 money supply in the last six months like that hockey stick just skyrocketing to the moon of who’s the biggest buyer of all this debt. It’s America itself. It’s the federal reserve bank.
So you’ve got this fia currency crisis heading all over the world. The dollar is back the Corrington Paul Krugman at the New York times by men and guns, men with guns, right? So, and of course, if that’s backing the dollar, the military industrial complex, which spends $250 million a day on gas alone, just to keep the tanks filled up. That’s what America pays on their daily gas bill, right?
So now gas just goes up three or four X, right? And now the military, like every empire they’re like, “We can’t afford the freaking gas man.” The military is toast. You know, in America can’t support the dollar anymore. China, Russia, Iran, all these countries are already doing side deals and bilateral deals and getting out of the dollar as fast as they can and buying Bitcoin before dollar collapses.
There’s no way you can sugarcoat a dollar collapse. There’s no Rosie ending to that story. Its loss of purchasing power is profound and the poverty that’s already extremely pervasive in America, it goes through the roof and you already have social unrest. So want of course, some gasoline on all those street protests. Why don’t we get a million people on the street torching cars. Like this is 2021 coming soon not to a theater near you.
I think you’re right ultimately. I’m not sure if it’s a 2021 event. I do think that they probably continue to play the same games with spending and controlling the yield curve, which is effectively money printing. So I do agree with that. I don’t like the framing of it. And I don’t know exactly … I think you watch a Bitcoin system grow dramatically and it becomes like a giant craft, which enables people to enter a new system. It doesn’t have to be a meltdown quite described like that. If people-
I’m presenting a Van Gogh, I don’t … You can put at any frame you want. It doesn’t change the quality of the painting, right? All the essences, all the colors, all the composition, all the brush strokes I’ve been building now since Clinton, since Reagan and then Clinton who got rid of Glass-Steagall, who they brought in the commodity of futures modernization act, which was totally undermined the U S economy and gave Wall Street, the keys to the castle.
They printed trillions of dollars, they bailed out all the banks, they bailed out long-term capital management. They engaged in moral hazard to the point where moral hazard became the de facto business model of America. And Jamie Diamond keeps 90 cents of every dollar he steals. And that’s the business model, fraud. Now that’s unsustainable. And the only way we’ve got a good scenario on the other end of this is you gotta let the system collapse.
That’s unfortunately what’s got to happen sometimes. You got to let the system collapse. The sooner America, utterly collapses and GDP collapses by 80%, the sooner we can rebuild this shit and have a country worth living in. Right now it’s not worth living in this country. It’s complete disaster area. We need the whole thing to completely collapse and then the constitution as an idea, the bill of rights, as an idea that will survive because they can’t kill an idea.
We build from scratch and Bitcoin becomes the reserve currency. That’s definitely going to happen, but it’s going to be a hell of a lot higher than it is here. If you want to be one of the architects of new America, buy Bitcoin now become individually sovereign and be the Ben Franklin of the 21st century. Or you can sit around what their Dick in your hands and be fucking poor and eating dirt. Those are the two alternatives in 2021.
Hold on one second, Tina. So I’m leaning toward the Max side of the equation on this one. Now I don’t know, about the rights and the streets and the politics of fear, but we also have to be real at the same time. Because I don’t think that we can necessarily put this thing back in the bottle at this pointY right? So like Max was saying on the Swan land that you guys were at, like a couple of weeks ago, Michael Saylor’s pulled the pin out at this point and just like thrown the grenade into the boardroom of the federal reserve bank, right?
So how do you stop it at this point? Once the play shows that it’s going well. I mean, we had a PTJ was on May. It was in May of this year. Micro-strategy first announced this thing in August of this year. Since then, we’re just seeing cascade and all of this stuff happening behind the scenes, we’re just going to see over the weeks and months of the coming year.
And then it’s not just equity and cash that they’re putting into Bitcoin. It’s now low-interest debt that the other side apparently just doesn’t get yet. So everyone who understands what’s happening gets the leverage up on everyone who doesn’t understand what’s happening. That’s just like this massive cascade and that’s why we call it hyperBitcoinization . It’s like those gradually then absolutely suddenly happen.
You gotta have a pro-Bitcoin bet using interest rates that are artificially low, because they’ve been bailing out the banks for 20 years and destroying the economy as a result. Michael Saylor stood up and said, “I couldn’t have bought my back my own stock with these cheap rates and I could have had stock options and I could have made billions of dollars that way. But I think actually inflation’s a real problem. So instead, I’m going to attack the fed by doing a speculative attack by borrowing at these incredibly cheap rates and going along Bitcoin.”
And I think that is the pin being pulled on the grenade. And I think a lot of very wealthy people are going to do the exact same thing and following Michael Saylor’s footsteps. And that means there’s a hundred trillion dollars sitting in investible accounts around the world.
Bitcoin market cap is under 300 billion. If only 5% of that money goes into Bitcoin, do the math, it’s goes a lot higher from here. And it takes a whole new generation with it because the millennials and the gen Z are in the Bitcoin. The baby boomers, they’re going to get completely rolled over and they should rightfully get rolled over because they are the ones who gave the baby, the millennials, all the student debt, they made housing unaffordable, and they totally stole everything from the economy. And now they’re going to get their commuppance and they deserve it.
So if you’re right and it plays out like that in 2021, as you say, your numbers are actually way off because the numbers for 2021 start to look like North of 500,000 to a million and the numbers for 2022, start to look like 10 million and the numbers for 2023, start to look like 20 to 50 million. You don’t have a hundred thousand dollar Bitcoin next year.
You have somewhere between a half a million and a million dollar Bitcoin next year and $10 million Bitcoin the year after and $20 to $50 million Bitcoin a year left.
Hold on I gotta smash buy, I’m totally pumped up. I’m pumped up. Here I am at my limit, raise my limit Cory. I hit my limit again. Raise my limit damn it! I feel the need for the corn!
Because the scenario of Michael Saylor types leveraging their balance sheet with debt to buy Bitcoin, you start to wildly reprice this thing in ways that is not accounted for in plan B’s sock flow, it’s wildly under accounted for. So if that starts to become something, just moving people’s assets as they are now, into Bitcoin gives you somewhere between few hundred thousand dollars in the next one to three years, I think two to $400,000.
But if you’re going to get people who start to engage in that type of activity, borrowing to buy Bitcoin on that kind of size, then the numbers shoot up exponentially. Those numbers are way too low because plan Bs numbers are based on comparisons of a world where that’s not taking place. You don’t have people borrowing to that extent to go buy assets, which are fixed and supply with a known supply. So it’s going to be like, I can’t … Bigger than an elephant stepping on a tube of toothpaste with a pinhole in it. It’s …going to be numbers that are much, much bigger than numbers that we expect if that kind of buying takes place. I don’t know that-
That’s what I’m saying, man.
Look, Tinder is dry.
I agree with you.
And Michael Saylor has started the fire and it’s a very dry fire because the world in America, for example, just look at the sole stock buyback farce, Apple computer’s earnings have been going down for 10 years. And yet the stock’s worth over as close to $2 trillion. Why is that? Because of fraud, accounting fraud. They buy back their own stock with this cheap money, and they report earnings that are not going down, but that supposedly are going up, which is a complete… It used to be illegal to buy back your own stock until Reagan changed the law. And for obvious reasons, it’s outright fraud. All these companies in the S&P 500 engage in this massive accounting fraud. When people realize the emperor has no clothes, there’s no earnings, Tesla had 1,000 times earnings. Give me a break there.
But if you adjusted for the buybacks, the S&P right now would be down 50% from where it is today, 50%. Imagine that. The S&P collapses by 50% in a week, like Enron disappeared in a day, because everyone realized it’s all accounting fraud. So now you’ve got the contraction of that multi-trillion dollar asset. Part of that money is going to jump into Bitcoin. And I agree with you, 100,000 is too low of a bar because when the cascade effect kicks in you’re going to see $100,000 snap like balsa wood, and just go from there. There’s no top, because with this fraudulent paper money system there is no bottom.
Well, I don’t disagree with anything you say. I don’t think things work that fast, but they could. They could absolutely work that fast, because I’ve been looking at this since the early ’90s. I think the fed has been fucking up since the early ’90s. I don’t think people realize how much the fed has been fucking up since the early ’90s. I don’t think people understand how bad policy is. And I do think that that money has been fleeing. Right now, we have had a wicked inflation for a few decades already. We don’t see it as that because it feels good, it’s a feel good inflation because it’s an asset inflation. But if things start to accelerate like that, then the price of Bitcoin will really start to grow beyond numbers that I’m previously talking about. And we’ll see a massive escalation. The whole thing will be completely different. It will-
Completely devastated. All the models will be completely destroyed, like Saylor said.
Models will be… Well, I’ve always said-
… break them to the upside, just breaking them all to the upside. But the thing is, I think that we’ve all been thinking that that was going to happen in six to eight years, but we’ve had a Black Swan this year and it’s pulling everything forward. And now Michael Saylor’s pulled the pin and speculative tack is on the table. All bets are off. 2021 could be the escape velocity year, the last cycle. It really could be that way just because of how everything’s played out.
What will slow it down? Let’s talk about that. What would slow it down from happening? People just being in utter disbelief that this could actually be happening, that would probably slow people down, but there’s going to be a lot of smart people who are starting to believe, right?
I think the common answer you hear from people in slowing it down is action by the government. I actually think that accelerates it to the upside because I think governmental action will cause people to realize, holy fucking shit, I have to own this goddamn thing. Because once they start to begin to understand it… Riots are people being insane, and we’re in a financial riot right now. And one at a time they come to Bitcoin. They gain their sanity and they come to Bitcoin, except the process can get rapidly accelerated.
I think you have a lot of people who are longer term holders of Bitcoin who hold a lot who do not understand these issues at play. They own a lot of it. They do stupid shit with their Bitcoin. They sell it, they short it, they trade it. And these people are going to wind up with none. And I really hope they wind up with none because I think they do a lot of damage to Bitcoin with some of the dumb stuff that they do, some of the shorting they do, some of the selling that they do.
I think that there is a possibility that Saylor has pulled a pin. I agree with what you saying, man. I don’t disagree with that. I hold those same views myself. I think the system is irreparably broken. I think it’s been broken for a very, very long time. And all of these things can come to a head. The whole notion of gradually then suddenly we could be close to entering that suddenly part. I think you will have urgent buying at some point north of 20K, it might be at 50K, it might be at 100K. People will wake up, they will start allocating funds to it. I think that there is definitely a possibility this accelerates at a much faster rate than I thought. And I said to plan B numerous times, “Your model breaks on the upside.” To which he told me his model numbers are pretty high. And I say, “Still, your model breaks to the upside and I maintain your model breaks…”
Yeah. I think that’s what the game theory says.
Well, there’s two things here. Number one is liquidity. We’re already seeing liquidity dry up on the major exchanges. So it’s going to get hard to source Bitcoin. The demand is going up exponentially and supply is drying up. So you could get those huge 150,000 point or a dollar prints. It goes 100,000 and the next print is 150,000 because there’s nothing for sale.
Absolutely. I’ve said this. I’ve said this. I expect there to be-
There’s no liquidity, right?
I expect in this decade, I don’t know when, but I do expect that there to be that exactly that issue. I’ve said this. I’ve been saying this for a long time, that I expect the CME to be blown up by Bitcoin. I expect all these Bitcoin lenders to get blown up. I think people who operate on a legacy model will get blown up. I expect there to be some point in the future timeframe, I don’t know exactly when and I’ll throw out, there could be over 24, 48, 72 hour period over a week where Bitcoin will lift from some number, $500,000 to a million and a half dollars, from a million dollars to $7 million where it will just lift. It will start to lift and there’ll be barely any prints because people won’t want to sell, because selling will be moronic.
There’s no liquidity.
And there’ll be no liquidity. And you will sit and watch a market lift and reprice. I think people don’t understand how that can happen. Bitcoin will crash to the upside. Bitcoin is not like any other market, and it will not come back in. People think, “Oh, well, it’ll sell back in.” Well, who will be the idiot that will sell it? Maybe you’ll buy something with it, but you’re not going to have to part with that much. If you…
Look, the US government could say to Bitcoiners, “Pay your taxes in Bitcoin, we’ll give you a 90% discount. And we’ll give you a free shopping mall somewhere in New York City.”
Only if you never have to pay taxes ever again.
Right. I mean, the government. They say, “What about governments? Governments, is this a worry?” My answer is, “What government? Which government are you talking about? Which one?”
This could all-
“What government? Tell me which government is going to do this, and I’ll tell you another government that’ll say, ‘Go ahead and kill yourself because we’re hoarding Bitcoin.’ ” Iran’s already got 4% of the hash rate. If nobody responds to Iran, Iran is going to be the richest country in the world in another five years. Either US gets into the hash race now, or they need to start learning Arabic.
Yeah. Take us through the game three, Max. Walk us through this.
Well, the game theory is quite-
Because, like I said, we’ve been living with this mental model… One second. We’ve been living through this mental model of 26, 28 years. Or I mean, sorry, 2026, 2028 is going to happen. People are having a hard time seeing this. Walk through how this could happen next year and hyperbitcoinization, which blows everybody away.
Great. Well, first of all, I think in Iran actually they speak Farsi, I believe. I got to be… Get the comments, clarify something. I get that clarified. But nevertheless, the game theory is baked into the Genesis block, right? All the incentives that what makes Bitcoin perfect are all the incentives of all the actors in the protocol are perfectly balanced in the state of perfection. The nodes, the miners, the buyers, and everyone is in perfectly game theory balanced protocol. And we saw it build over years. We saw all the miners’ concentration was in the Ukraine. Then it was in China. Now it’s in America. It’s moving to… It’s a global feast. And it’s all game theory driven and nobody monopolizes it. China doesn’t have most of the… Monopolizes anything, that’s false.
You see this mining is dispersed all over the world. It’s distributed. The need to distribute, it’s built into the Genesis block. It’s like a centrifugal force. It’s like when you go on the ride at the amusement park and you spin around and everything is forced out centrifugally, and then the bottom falls out and you’re just stuck to the end of the wall. I don’t know if people ever seen this ride at the amusement park, but it’s a centrifugal force ride. Bitcoin is like this, it generates centrifugal force where distribution is constantly pushing to the edge, constantly pushing to the periphery. And the center… It’s never about the center, it’s not centralized.
So then you have this game theory jumps up to corporations. So now Michael Saylor has laid down the law, laid down the glove, laid down the gauntlet to his corporate brethren and the boardrooms out there and said, “Ha ha, I’ve already doubled my money. My stock price is tripled or something like that. We’re going to head to the highest stock price ever. I’m going to be richer than Jeff Bezos. I’m going to be worth $250 billion. I’m the biggest weenie waiver of all the weenie waivers,” as Michael Saylor has got the biggest weenie. You’ve got Jeff Bezos, you’ve got Tesla, you’ve got all the billionaire is going to be like, “Wait a minute. I can’t let this guy have the biggest weenie. I’ve got to get my Bitcoin. I want to have the biggest weenie.”
So you got that going on. And then you apply that to countries, right? So countries are sitting there and you’ve got the US dollar world reserve currency. And you’ve got all the client states that have been abused and beaten up. But the US dollar with sanctions or censoring the Swift system, or a as New York Times said, “If you don’t take our US dollar we’re going to kill you.” Like they did in Libya, they did in Iran, they did in countries all over the world, isn’t it? That’s the America’s foreign policy, take the dollar or we kill you. So all these countries are saying, “Hey, guess what? We got to vector out of here. We’re going to start buying Bitcoin, hoarding Bitcoin, mining Bitcoin.” So the game theory plays out. Then the US, like a Sputnik moment. They’re like, “Oh my God, we can’t lose the hash race. We got to get into this. We’re going to start subsidizing Bitcoin mining.” Now the US is actively mining and buying and hoarding Bitcoin.
So the game theory plays out on the sovereign level. It plays out on the sovereign wealth fund level. It plays out on the central bank level. I’m sure in 2021 some G20 central bank is going to say, “We’re stocking Bitcoin as a strategic reserve.” So they put on notice to the central banks now, “Either you join us or you’re going to be obliterated out of existence.” The corporations, “Either you buy Bitcoin or you’re going to go to the way of the Dodo.” A high net worth individuals, “Either you buy Bitcoin or your Fiat money wealth is going to disintegrate to zero.” So the game theory kicks in on all these levels, all the way up to the highest level, to the sovereign level. And that’s how it kicks in. That’s how it works. That’s the vector that it’s on.
Bitcoin is a vector. That’s the best way to understand it. It’s not like anything… There’s no asset class in history has ever come close to being anything like Bitcoin. It’s on its own vector. And that vector is going to go continue on with us or without us. Even if we all killed each other by throwing atomic weapons at each other, and the human race became extinct in six months, Bitcoin would still be going. The vector is still in place. It doesn’t need us. It’s still going to be hashing every 10 minutes. It’s up to us. Do we want to live anymore or die? Right? Bitcoin is the destroyer. It is the killer of the central bank plague. And that’s how it all works out. That’s the game theory. It’s all playing out beautifully. It was all there on the Genesis block, it was all right there. It’s just all there. What can I say? We were touched in a divine way.
The creator and the destroyer. Tina, I’m sure you’ve got comments. Let it rip.
No, I’m just in awe of Max. Just seller’s personal holdings, what he’s talked about as having 17,000 Bitcoin. At $11.7 million Bitcoin he will have $200 billion, which is equivalent to Bezos. Of course, Bezos will probably be quite deflated at that point. I’m still going over in my head what Max is talking about. In my thinking, people have always thought I was crazy, but Max really takes it to another level.
Wait a minute.
And I love that.
You know the psychology of these narcissistic megalomaniacs.
No, you’re totally right. You’re right.
Michael Saylor is driven by this mentality. He’s been in the technology business for something like 25 years. Microstrategy has been a peanut in the world of technology giants, and he’s sick of it. He doesn’t want to be a peanut anymore. Bitcoin is his ticket to the big time.
And once that becomes obvious all these other guys are going to fall into place and start buying Bitcoin.
You’re totally right about that. That’s exactly right. Not to denigrate Michael at all.
This is what I’m saying.
I love Michael, and I think he’s brilliant, but you’re exactly right. Microstrategy was a high flyer, its stock was $3,000 in today’s dollars. It’s a $280 stock, $300 stock today. And Max is right, Michael had $7 billion and he was a big swinging dick in Washington back in 2000. And then the stock fell out and Bitcoin is his ride. And Michael is very, very, very, very smart. I mean, I think he’s got some phenomenal insights and I’m a huge fan. He figured out what Bitcoin is earlier than most people in his position, which I think is amazing and I give him tremendous credit. Certainly some people have owned a lot from early on, but Michael figured it out now and gets it, bought it personally, bought it for micro strategy, and then issued debt in order to get more.
And he totally gets it. He gets it in a deeper way than many, many, many, many Bitcoiners get it. He really gets it in an incredibly deep way. I’ve listened to, I think, every pod or YouTube that he’s done. His insights are phenomenal. He understands history of science because he majored in that at MIT. He understands the perspective on this, and I think he’s got this nailed in a way that almost no one else does. I think Max and I get it. I think we understand this. I think there are other people out there. I think many Bitcoin OGs don’t understand it. I don’t think they understand what they own. Some of these people who have 2,000, 5,000, 20,000 Bitcoin, wouldn’t do the stupid crap that they do if they understood what they owned. Why play, I lend your Bitcoin for 3% if your Bitcoin is going to go up 100X in a few years? You don’t do that. That’s just dumb. Why risk it for something that’s going to have these phenomenal returns? You don’t do that. I think he really does understand.
I think you’re right. It could be the spark because what you have is… I have said for a long time that the fed is like a person with a gas pump on full pouring it on the floor inside of a closed garage. And I’ve said that his policy like that, it’s in search of a spark and some oxygen. And all you have to do is that door opens, you get a spark and, voom, the whole place goes. And Michael Saylor might be the spark. What we have here is we have something starting, and the world is not paying attention to it. But the world is really a quick study and people will figure this out and figure it out fast. I think that this accelerates really quickly.
I think what people miss is… I think people think they have time, but they don’t actually have that much time. You have to start getting a position on, you have to own some, you have to buy it, you have to learn how to get it off an exchange, you have to custody it yourself. Because if somebody else holds your Bitcoin for you, that day might come when somebody says, “You’re not giving up…” So the US government says, “You’re not giving up Bitcoin out to anybody. We’re taking it.” And then you’re screwed. Well, that’s a problem for the people who have their Bitcoin on those exchanges, but it ain’t a problem for you if you control your own Bitcoin, because they can’t get that.
So here’s a question for you.
Here’s a question for you, your thought exercise. If this game theory plays out on the cyber level, will Grayscale Bitcoin Trust, the Gray Scale Corporation which now owns a huge position of Bitcoin, be nationalized?
Anything’s possible. Anything is possible. You can’t simply have a taking without fear value. So look, I own some so that I can spend for my expenses without selling the Bitcoin that I have. They can’t just take it. According to taking, you have to actually provide a fair price. It is what it is, and I would…
Yeah. But in the case of Grayscale, it’s all right there and it can be poached. The US government, they’re claiming eminent domain, or some other emergency measure, position of power. They walk into Barry Silbart’s office and they say, “Barry, thank you for your service. We now own Grayscale, because we need the Bitcoin to compete with Russia, China, and Iran. And as a good patriot, I know you’ll be on for the ride. Thank you, Barry. Have a nice day.”
Well, Bitco… I was listening to Mike Belshe talk about Bitco. And Bitco, from what I understand, actually has a very advanced form of multisig and they have it in multiple jurisdictions, so that can’t happen to Bitco. So Bitco Bitcoin can’t be confiscated like that because if you’re at Bitco… I don’t know if this is true, but this is what I heard in the podcast. Because I believe Grayscale was originally held at Xapo which was bought by Coinbase, if Coinbase is doing something of a similar structure where you have multi-jurisdictional keys held for a multisig, then they can’t simply acquire Grayscale’s Bitcoin because it’s multi-jurisdictional. If however.…
But they have the ability to coerce. There was just a case recently where somebody was moving some of the Silk Road Bitcoin, and they coerced that person to give up their private keys because once they had them in custody they basically tortured them or threatened to torture them. In other words, the government is not going to politely ask. Barry, or Armstrong, or these guys, if they’re not anonymous, like Satoshi is anonymous, they know where they live. They can walk in, take them down to CIA headquarters, throw them in a box and say, “Okay, let’s play.”
That may be, but if it’s multi-jurisdictional then other people who control the keys in other parts of the world and other jurisdictions that the US doesn’t have access to, they’ll say, “Well, fuck you. You’re not getting it.”
That’s a good point. I mean, that’s a good point. If it’s multisig and the SIGs are in Russia and Russia would not play along, right? All this Russia phobia we’ve seen in the last four years during the Trump administration, even though the genuine existential threat was coming from China and had nothing to do with the Russia, but maybe part of that Russia phobia was the recognition that a multisig wallet with signatures in Russia could be a problem in the future. Maybe that’s why the US government wastes so much time on that end of their waste of time businesses. But I agree with you, multisig and multi-jurisdictional is a good way to protect against a single country trying to nationalize a huge honeypot of Bitcoin at Coinbase or at Grayscale. I think that’s a good point.
I think so, too. I think this is a good place to bring in Corey. Corey wants to hop in on this discussion, help us wrap up the year as well here in 2020 going into 2021. Take a moment. If you’re watching now, we’ve got 650 people. Most of you watching on YouTube. Go ahead and like this video. It does help spread the video and this swan page out to more people on YouTube. Spread that good Bitcoin education. So smash that like button, subscribe, turn on notifications. We do this every Tuesday. This is the last of the year, but we’ll be back on January 5th with Robert Breedlove and Nick Bhatia to kick back off a whole other year. Every Tuesday, every Friday, we do Swan Lounge, also a very fun show. We bring in Bitcoiners, it’s more laid back. So definitely subscribe to the channel. Corey, welcome to the show, man. How’s it going?
It’s good to be here. This has been an incredible discussion so far. I’m absolutely loving the rotating images of Tina Louis Black there. That’s great. That was brilliant, Brekkie. What, you looking at me? Anyway, yeah, it’s just been an absolutely spectacular year. When I think back to the first week of January, I think we’re still calling this Swan product save Bitcoin at the time and renamed it Swan and built the whole thing in Q1 and got live March 30th. It feels like so long ago. We wanted to launch the thing at Bitcoin 2020 in San Francisco, and that got completely blitzed by pandemic. Now any of us have barely seen each other in person all year, which is crazy. I see Brekkie every once in a while in passing in LA, but that’s about it anyway. Anyway, so what’s left on the agenda for the chatting today?
Oh, well, we’ve been through a ton. There’s so much that has been left on the table to dive back into as well. We can dive back into the idea that Bitcoin is a lot bigger than what it’s being perceived as now. The idea of the narrative development. Digital gold’s been around for a long time. People are finally starting to see that the idea that Bitcoin is meant to be huddled. This is a scarce asset that we’re supposed to hold onto and store our wealth in, store value narrative is being established. But as Tina was saying earlier, there’s so much more to Bitcoin than just the adoption of it as a store value by big corporations this year. As a reserve asset, there’s been a ton that happened this year. Maybe we could just riff on that a little bit.
Tina was talking about lightning pool and lightning coming online. All of that’s very important. The idea that DeFi looks like a place for adults to go gambling online since you can’t fly to Vegas is actually moving over to Bitcoin. That’s possible on Bitcoin with lightning and RGB and all of that stuff. So there’s a lot more going on here than just the store value, although that’s obviously going to be the driving narrative and has been all year. So anybody want to talk about something interesting that… A use case that Bitcoin has improved on over the year? Or something that you think is important for us to keep in mind as we move forward and build?
Well, I guess just from a high level perspective, you’re just talking about money. So anything that you could do with money, and now you’ve imbued the money with better properties that make you be able to do things with money that lives on the internet, you’re only limited by your own creativity to some degree. You don’t have to build this stuff into the protocol, there just needs to be a unit that you can use for payment in your app or your system. And that thing could be decentralized or centralized, it doesn’t really matter. You can do discrete log contracts, which is clever. You can do things with lightning. All of these different things.
They could be called layers in as much as there’s a decentralization aspect that uses the native currency or whatever, but you can also just use the currency just like any other business or idea or service that you ever come up with that has ever used money, you can use Bitcoin instead and take advantage of some of the characteristics that are new to Bitcoin, like multisig and lightning and all these different things. I think it was really cool that, as an example, you’ve watched Augur in the Ethereum space spend six, seven years, whatever… They were one of the first ICOs trying to get live and have some volumes for betting and trying to figure out oracles and all these different things. They’ve taken in so much money, and so much money has been spent, and they just never have done anything. It’s just a coin that some people trade on a theme and a story, basically.
When you have a tiny little startup with two or three people… I think we had the Atomic Loans guys come over and chat with us and they’ve taken a couple million bucks. And yeah, there’s this tiny little centralized company up in Toronto or whatever, but they’re using discrete log contracts and they figured out there’s good enough oracles to be able to take bets on most things. And it works. It’s decentralized settlement. It basically leverages DLCs. And that’s not even the tip of the iceberg, that’s the tip of the tip of the iceberg. I just think this next cycle is going to see such a massive explosion in companies that want to actually make money leveraging aspects of Bitcoin, leveraging things that Bitcoin allows you to do that weren’t possible before. I’m too dumb to think of them, but it seems really clear that there are going to be thousands of them in the next five, 10 years.
Max, how does this system meld with the legacy system? Do you think it’s a break? Like Tina’s saying, we build alongside and parallel with it, and then there’s a break. Or does it meld together as adoption happens and we bring over because there’s demand now to do deals in Bitcoin, there’s more development on lightning, et cetera? Do you see them melding or a clean break parallel, and then clean break?
Well, to pick up on what Corey was saying there, what I was thinking when he was talking. We’re going to see a lot more wealth distribution in a way, where from within there’s always a flowering, like a lotus flower it’s always generating from within more creativity so things become a lot more balanced. Nowhere in nature do you have the current capitalist system where it’s dominated by one central authority and that’d be the central bank. the only thing in nature that is similar to that would be cancer, right? Cancer is something that’s a predator that just eats things up. That’s what the central bank is doing, and it’s totally unsustainable. Where Bitcoin is totally organic and it just fits in with our natures and everything that we know in a spiritual sense. That equanimity that should be part of the economy will be realized, whether it’s these small companies that bloom and become bigger and sustaining and create wealth, but right behind them will be another huge wave.
One of the problems in the system now is you get a company like Microsoft that becomes a predator and they just eat up all the competition, they become huge and they stifle innovation. Monopolies and oligopolies are very stifling in the US right now. In the turn of the last century you had the trust busters, you had Teddy Roosevelt. They had to break up all these monopolies because they got stifling. There’s too much concentration and that’s not healthy, that’s not natural. This way it’s built into the system. It’s built in because the money is perfect, then the competition will be perfect, and the outcomes will be perfect.
You end up with the situation where I think that distribution concept, as it’s understood in economics where people are always talking about wealth or redistribution or distribution, it’s a very clumsy term, and it’s not very well articulated, or there’s no policies that address it. But Bitcoin reinvents it and says, wait a minute. What we’re going to do is we’re just going to create perfect money and people armed with perfect money, the outcomes are going to be getting closer and closer toward perfection. And it allows you toward perfection. That’s the vector that Bitcoin’s on. It’s always heading toward that.
People come in and you have an economy that’s sustainable, right? If you have an economy that’s sustainable, nobody’s really thinking about it. I mean, look all around us. Humans are the only animal on the planet that seems to have fucked it up, right? No other animal has these problems. It’s totally sustainable. They’re not taking tranquilizers all day and starving to death, right? How did humans fuck it up so badly? I think Bitcoin will rectify that wrong.
I tweeted earlier that Bitcoin is hubris resistant. It rights the wrong of the conceit that humans can manage money, the central part of an economy, extremely complex organic system, better than the way the naturally occurring form of itself. Tina, how do you see this playing out in terms of the melding of the systems together and you see this playing out in terms of the melding of the systems together and how do you see Bitcoin? Let’s move past debating how long this is going to take. What’s a Bitcoin future look like to you?
Future in what timeframe?
Just in a past Bitcoinization, a Bitcoin future, a Bitcoin based future.
Okay. Well, my guess is that you watch the system’s grow in peril. The governments will attempt to impose constraints and Bitcoin will grow to a size where it won’t be able to enforce those constraints. There’s some size at which market participants will pretty much do what they want and there’ll be so many participants. The desire for Bitcoin will be so high and the tools and techniques to work around those constraints will be such that people will simply do what they want to do. People already do what they want to do. You know anybody who takes drugs? They do what they want to do. There are lots of things that people do, and they do it anyway, regardless of what they’re permitted to do. They find ways to do these things. Bitcoin will grow large enough and it will just evolve naturally.
We’ll just step into the next system. People will start operating in the system at some point. Interesting thing about Bitcoin is, and I think what Max was driving at, but I’ll say it a little bit differently. We see this with mining. Mining is maybe the most perfect competition that humans have ever seen. In basic economics class, that first class I took, I think it was macro with one B and they teach you about perfect competition, monopolistic competition, oligopolistic competition, all the different types of competition that you can have. I don’t really remember, this is a long time ago that I took these classes.
We don’t see perfect competition existing anywhere. The nature of Bitcoin mining is pretty close to perfect competition even though you have some larger miners. Because there really isn’t a way to earn a return on your Bitcoin. I don’t believe we’re going to have a world that has credit or debt in a Bitcoin only world. I think that this will go away. I think debt or credit will be destroyed by Bitcoin. I think Bitcoin’s inherent nature is deflationary. I like to give the example that if I had a business, and I’m going to paint an extreme example just for the point of illustration. If had a business and I was doing a million dollars in sales in the first year, I borrow a million dollars and my margin is 10%. I make a hundred thousand dollars in year one. In your ten it grows to a $10 million a year revenue business, still have a 10% margin. My debt was a million dollars. I earned a million dollars in income. I can pay off that debt pretty easily.
In a deflationary world, in a Bitcoin world, in year one, I have a business, I borrow a hundred Bitcoin. I’m earning a hundred Bitcoin in value. I have a 10% margin. I’m earning 10 Bitcoin. In year 10, I’m earning 10 Bitcoin because it’s value has gone up tremendously in buying power. Not just against dollars, but in buying power. I can buy much, much more with my Bitcoin. I earn a 10% margin. That’s one Bitcoin. I can’t pay off that debt. It’s a hundred Bitcoin that I owe. I don’t have it. I’m only earning one Bitcoin a year. I think that it’s deflationary nature is highly destructive to debt and lending. I think debt and lending and credit exists in a world that we’re in because those were technological solutions that had to be met.
I think you’ll have a world which is only a world of equity and a world of money. I think the whole nature of a yield curve is a legacy view of the world. I don’t think it will exist. I think that you might find trust, minimize ways of lending. See, to my way of looking at things, flood is in some ways not really lending. You’re renting out your use of Bitcoin. You’re renting it to somebody for a fee. That kind of is what working capital ought to be. You’re kind of renting it, but it’s been done in a trust minimized way. The more ways we can figure out to lend in a trust minimized way, those will grow. And so it will be a very different kind of lending than currently exists. If I were to broadly define the legacy Fiat world against the Bitcoin world, I think their foundations are different.
To me, Fiat legacy is founded fundamentally on the concept of a promise. I promise to pay you. That is the entire nature of the foundation of legacy system. Bitcoin is founded on the idea of trust minimization. That’s a very, very different structure. I think they lead to very different types of consequences. I heard George Gammon comment, I’ve heard Raoul Palcomment, they think that you have to have things operating a certain way and you can start this way and it will inevitably lead to that. I think that there are examples they might like to use. I’ve heard George Gammon say this. He uses free banking. I think that we didn’t have technological solutions that were available in free banking with gold in the legacy system with currency, non-backed currency. We simply don’t have the technology to deal with certain things and I think that the constraints of Bitcoin, of trust minimized deflationary money will set up it’s own restrictions that will prevent things from happening in certain way.
George Gammon was commenting with Peter McCormick and saying that well, if you had some form of catastrophe or war, then you could force lending. I think that, that’s not actually going to happen. You could try, but I don’t think that people will accept that money. You won’t be able to have more Bitcoin. I think the answer will be a different answer. I think you will see evolve maybe insurance companies to deal with some of these issues where you’re prepaying for your risk. I think it’ll look like different structures. I think we’ll see different structures evolve. Very much a non-believer in the idea that the world has to continue to exist the way it has. I don’t notice a lot of horse and buggy carriage repair shops when I drive around. The world changed. I don’t need a watering station for my horse. I don’t need a place to go get some hay to refuel. The world’s changed. It’s a different world. Different technologies will bring about different things. I think that’s a silly kind of example, but if you think about it, you’ll figure out a lot of examples like that.
Yeah. I think that, that brings up a lot of great stuff to comment on. I definitely want to hear Max’s thoughts on all of this. Corey you want to chime in first and then I want to hear Max’s comments also on the idea of how Bitcoin will change the way our economy works, the way our society works and just the future in general. Take that as far as you want, focus it on just the economy, part of it, go to the social level wherever you want to go.
Sure. We’ve got a commenter in the YouTube chat today. So hi Addison, thanks for joining. A lot of questions about what happens in a Bitcoinized world and will it create some other problems. Which problems will it solve and which will it not solve? We can absolutely talk about the problems that Bitcoin is likely to solve. We can also play it out as best we can rationally and try to think about some of the other issues that it will create. One thing we cannot do is say that leaving a system that is significantly worse in all respects, the base money is just completely broken in a Fiat system. This experiment has failed. Leaving that alone, just because the much better money, money that’s 10 times better, a hundred times better, a thousand times better, a million times better and not doing that because you’re worried about some of the problems that, that better money might create or opportunities that it might create.
Because when you have a problem, you have an opportunity to go and create something and make that better. You don’t do that. That’s not how we advance as people. That’s not how businesses make decisions. It’s not how societies make decisions. It’s immoral to leave the crappy thing in place, just because you’re worried that the better thing might have a few negative side effects. From first principles, you replace the crappy thing with the much, much better thing no matter what. Then you think about, okay, what are some of the amazing benefits of Bitcoin? There’s been a lot of, a lot of back and forth and some people attempting to do some educating and pointing toward great resources in the chat like Stephan Livera’s podcast and Saifedean’s book et cetera.
I would say probably the most interesting thing and both of these guys have talked about it plenty is, when you remove friction by having everyone essentially using the base money and being able to in the not so distant future, exchange any good and service globally for Bitcoin. For slivers of a Bitcoin for Sats. And probably in the future of subsats or whatever they end up getting called. You remove all that friction, it basically increases the opportunity for people to work with each other, to cooperate, to pay for goods and services without that tax of switching back and forth between currencies, without the friction of having to wait for the legacy financial system to be sending that value around the world. We already do this. Some of us are kind of living in the future that everyone will live in, in the not too distant future, which is just being able to contract with anyone for any good or service anywhere in the world at any time.
The amount of economic activity that, that unleashes will lift all of us. And we will, in my view, if the steady state productivity growth under sound money was probably like 2% globally and then it stagnated a bit and let’s say it’s gone down to one and a half or something in the Fiat experiment. I think under money that’s much better than gold and has all of the properties and capabilities of Bitcoin is widely used by billions of people around the world as a store of value of medium of exchange, unit of account. You’re actually going to see global productivity at a steady state, like average global productivity could be 5%.
It could be 10%. We don’t know. It could be much, much, much bigger and better. It’s going to unleash a pure form of capitalism and cooperation, the likes of which we’ve never before seen on this planet. It’ll be like the Belle Époque times a thousand. That’s what I’m really interested in. Yes, sure, there will be some people left behind, but I think we’re going to have plenty of excess capacity, plenty of money, plenty of resources, plenty of new technologies to absolutely be able to take care of people in a charitable way.
Max, a bitcoin future. There’s a lot there you can play with man. There’s a lot there. You can go in whatever direction you want..
What stops people from doing what they want to do. It always comes down to fear. Most people are riddled with fear and Fiat money compounds the problem because it creates a situation where let’s say in this country, if suddenly you’re absent Fiat money, you can become homeless. If you have to go to the hospital and you need some medical attention, the way it’s set up now is you could become bankrupt and something like hundreds of thousands of Americans went medically bankrupt in the last couple of years and that’s fear. That tool of fear is used to subjugate. It’s used to propagandize, it’s controlled centrally by the worst amongst us who have Fiat based power. Now with Bitcoin in the mix, what happens when you take that fear away? When you take the fear away, that vacuum inside of you is replaced by love. It’s replaced by faith. You can take the average person and you take away all their fear and you replace it with love or replace it with faith.
That person is a different person. That person is doing something and they’re doing it fearlessly with compassion and that makes all the difference. That can happen pretty quickly. When enough people lose their fear in this country and the world around us, because the Fiat money, fear barons have been put out of business by Bitcoin, that’s it. We have a spiritual awakening where the fear has gone. Once fear is gone, you’re at peace. And with peace, you can do something or not do something. But it doesn’t matter if you do it or not do it. That’s something that I think we will experience in our immediate futures. That’s something that we see very rarely. It’s hinted at through certain religious tracks, religious concepts, the hints at this idea but doesn’t nail it. Doesn’t solve for it. We see it through artistic endeavors when we’re moved by a work of art, for example. That’s fear leaving our body when we see a work of art that’s fantastic and it moves us emotionally. That’s the fears leaving us and it’s replaced with this faith and we have a spiritual experience. We have an emotional experience.
We kind of know it’s there, but it’s like a ghost. The ghost of actualization, the ghost of ideation is here. But we can only glimpse it through a peripheral vision, through our that maybe our sixth sense. It’s hinted at to the artists and the poets. With Bitcoin, it becomes realized. It’s becomes who we are and our journey many, many, many long years, hundreds of thousands of year journey of fear and hate comes to an end. We may be the generation that experiences it. So on one hand, the Gen Z and the Millennials, they got the raw end of the stick because the boomers stole everything. But on the other hand, as the boomers die off, it could be the millennials and the Gen Z that experience this rapture. That could be interesting to see. I hope I’m around to see the full flowering of this. Hello?
Sorry, guys. People will think that you sound crazy who are new to Bitcoin talking like this Max. How is it exactly that a simple thing like money could have such a drastic change on individuals and then therefore society?
Right. Well, you have to go back to the history of money and that’s of course the part of the Bitcoin rabbit hole is people end up having that part of the experience. It’s Bitcoin is technology, it’s money and it’s sociology and it’s psychology and it’s game theory and all these different things. We have a lot of people in the space that speak on these things and more every day. Even a Michael Saylor is at heart an engineer. When he talks about Bitcoin, he’s talking about it as a world-class electrical engineer talks about it. He’s already at an incredibly high level and then you put Bitcoin into the mix and what comes out of his mouth is stunning. It’s Oh my God, it’s incredible.
Going back to the history of money, it’s the beginning of our experience here on this planet, has always been characterized by a need to assemble, to communicate, to use some kind of communication, and to travel and to move and to take in the world through our senses. We have these brilliant senses, the eyes and ears and tastes. Why do we have all these senses? To take in so much of the world. To take in so much sensory information in such a powerful way. The mind, that’s still unknown territory that it’s going at a hash rate of about a billion hashes per second, the human mind, and it’s just simulating all this. There’s trillions of synapses and it’s just this organism that’s taking in the minuscule and the cosmic all at the same time and making sense of it or not making sense of it.
But we have these communities and at the core of all of these communities is communication. And at the core of this communication also is this wanderlust of the world around us, which means we’re traveling, we’re moving. That always involves trade. That always involves trade. That always involves the ability to exchange something of value with somebody else. What happened over time is that what humans noticed is that if I can exchange for something for value that holds it’s value, then it helps me take in my senses. It helps me move around, helps me travel in the world. It helps my wanderlust. It helps my insatiable needs of my senses to take everything in. If I have something of value that keeps it’s value. So we had many experimentations. We had beads. We had shelves. We had gold of course played this role for thousands of years.
Gold takes value into the future. I can take my gold anywhere in the world. Somebody will accept it in exchange, even though it’s not recognized formally as a medium of exchange by any government, people will nevertheless take my gold. I can go anywhere in the world that has exchange value and that exchange value has been consistent for thousands of years. That brings us to Bitcoin and it takes everything up a level because now, instead of having relative scarcity, I’ve got absolute scarcity. It’s different than gold in this respect. Gold is relatively scarce, but it’s not absolutely scarce. Gold is relatively portable, but it’s not absolutely portable. Gold is relatively divisible, but it’s not divisible to a hundred million places.
A few other things that Bitcoin has, or that are superior to Gold. So then you take that human with that wanderlust and wants to through their senses take in all the cosmic reality, all the immediate reality, all the relationships, all the communication. We are a sponge for reality. We love reality, we want more of it. You put that into the mix where I can use this perfect form of absolutely scarce, medium of exchange language, money thing, Shakespeare wrote, “the world is your oyster.” You can go anywhere at any time and you’ve got your Bitcoin world is there at the same time. Wherever you are, you’re we are with Bitcoin and Bitcoin is always with you. You can always exchange. You’re always going to be welcome. It’s unconfiscatable, again, something that’s not true with Gold. Bitcoin is unconfiscatable.
I can go literally anywhere in the world, show up and I can walk into a room of Bitcoiners and say, “I need this. I need this. I need this.” They’re like great. It’s going to cost you X number of Bitcoin. Fine. Here I am and I’m in this new place and my senses are taking in new things. Our senses are insatiable. Our wanderlust is insatiable. Humans are, are always going to be pushing the envelope. We’re always going to be flying to the moon. We’re always going to be crossing the ocean. The early ocean crossings were done by folks who thought the earth was flat and they were going to sail right off the ocean. Did they stop? No. How many people signed up the fly to Mars? Plenty, even though it’s a suicide mission. Their heart has an insatiable quest for the new.
It’s both our greatest asset and our greatest weakness because the money sucks. The money unfortunately does not equal our ambitions as humans to know everything and to experience everything. With Bitcoin, these two things are finally merged. Perfect money with a human soul. You put those together and you have a new evolutionary step. It’s a quantum evolutionary step. We’re going to be a different species very soon because the legacy system and the inadequacies of this system that we’ve had now, 200,000 year experiment with, will change. It will be a quantum change. It’ll be a step change. And of course, change is something most people don’t want to experience. People are resistant to change even with that wanderlust.
If you look at the vast majority of people, they’re mired in fear, they’re mired in hatred because they are the victims of the Fiat money paper pushers, and the paper barons. They live in the hobbles. They live in a prison of paper money and they dream of escaping. Again I’ll say it, Bitcoin is a vector. It’s a vector out. Michael Saylor’s on that vector. He had the dream to be richer than Jeff Bezos. I believe he will be. That dream will be realized. You have lots of different people with lots of different dreams, like a Robert Breedlove. When I listen to him talk, he’s got a dream about, I think it’s very spiritual in nature what he talks about. I think he can do this fearlessly. There’s no reason why whatever his vision is can’t be realized. All dreams can be realized. Think about that. All dreams can be realized if the money, it doesn’t support the fear mongers.
If the fear goes out of business and love takes over, there’s nothing that can’t happen. Our natures are not horrid. We’re not the hard people that we pretend to be. We’re actually greater than that. The problem has been the money. And with the money going back 200,000 years as a form of monetizing our sensual wanderlust. That’s what money’s been and it hasn’t really been up to the task until now. Now this thing up here, there’s a path to be opened yet that is quite expensive. It’s like Carl Sagan. Remember that show Cosmos. You could feel that Carl Sagan, he had that wanderlust of the cosmic dimensions of things and he communicated that very well through television. He became very well known for this because he touched on something because people really do have a cosmic lust to take it in because their minds are extremely advanced. But nobody yet has used that organ to its fullest in a networked way. We’ve had the occasional super genius.
The Davinci’s, Einstein, and they’re like silos out there. Super accomplished in their spiritual accomplishment. But imagine applying that to the network, and you’ve got a billion or more people suddenly having that epiphany at the same time, which I think Bitcoin enables. And then you have a different reality and fear dies off. Fear is like your appendix. It’s an organ we don’t really need. We don’t need fear. It served a purpose a million years ago, but it doesn’t serve any meaningful purpose. The people who say it does are the paper money Fiat printers. That’s, that’s how they maintain their empire of fear. It’s through bullshit paper money. Now Bitcoin is here to eradicate that.
Who feels inspired to take the baton. Speak up.
Okay. I want to ask Tina a question. Well, Tina, actually go ahead and say what you’re going to say. Then I have a question for you.
A couple of things, I’ll go backwards. Comment on what Max was talking about fear. Somebody had commented that fear is stronger than love, to which I have one counter. If you’re a parent defending your children, you’ll give up your life. Not because of fear, but because of love. Love is much stronger than fear. Love is much more powerful than fear. People follow people much stronger because they love them and admire them. That’s the wrong face, come on. People follow others. I had a professor who said that Winston Churchill inspired a nation, moved a whole nation. People didn’t fear him. They adulated him. They believed in him.
They followed him. Dictators try to move you and inspire you with fear. But that doesn’t work. Even Adolf Hitler, he attempted to use love to follow him. Even though he also used fear as a tool. People are much more strongly moved by feelings of love and admiration than they are pushed by feelings of fear. We’re very much moved by those feelings so I agree with Max. Credit is not a good thing. Credit is incredibly predatory. Credit is predatory in it’s very nature. People become debt slaves. They can’t get off this horrible treadmill.
You have lenders who are predatory lenders because they lend you money that they know you can’t pay back. They lend in ways that they know you can’t pay back, which enables them to acquire your things. I think we will have some lending in a Bitcoin world for people who are predatory and people will eventually learn that they don’t want to borrow because borrowing in Bitcoin will cost them their Bitcoin and anything else that they have. I don’t think that will be the nature, but people talk reverently about credit. Credit is horrible. At it’s very core credit is fundamentally evil.
A mortgage is a death pledge. That’s what a mortgage is. Go look it up. Bitcoin works because Bitcoin is pure competition. Unlike the legacy system, if you’re very wealthy, you can run to your returns on things. You can have returns from interest payments, but Bitcoin demands that you either work or invest. You have to work for your Bitcoin. The legacy system, the credit system is fundamentally different in that regard. You can relatively easily live off of the credit. The only two ways that you’ll be able to earn Bitcoin in a Bitcoin only world is you will have to invest it, or you will have to work for it. There would many different means of investing it and you may hire someone to help you invest it, but it comes from work. There are no easy ways of gaining Bitcoin.
I think in many ways it will be a much better system. It also drives competition. I was saying before about perfect competition. Perfect competition is actually not great for producers, but wonderful for consumers. Consumers very much benefit from more and more competition. It means that producers have to work harder. Companies don’t always want to work harder for you. They like to do as little as they can. Companies will regularly look for regulatory protection to protect you from their competitors because they don’t want to work quite that hard.
We’ve seen over and over again when there is more competition that comes into a space that you get more for less, or you get better service or better quality for the same amount because people have to deliver more than they would when they can get somebody to just beat you up with regulations. I don’t know if I’ll be around for a Bitcoin world. I’m not young. I hope I am. I hope it happens fast. I hope I’m around for a Bitcoin only world, but I think it will be better in many, many ways. I think people think the way they do about the legacy system, because they can’t imagine the world could be any different. Money is about pricing the things in the system that we have. It’s pricing resource, money prices everything, and prices are the most important thing in resource allocation. If you think of money as a yardstick but you’re constantly changing the length of that yardstick, how do you get accurate pricing? You can’t have accurate pricing. That’s the fundamental flaw with a flexible money. People think that you can work miracles with having more money. More money doesn’t bring about more resources. It doesn’t mean that there’s more wood to build buildings. It doesn’t mean that there’s more cement to pour. It doesn’t mean that you’ve produced more doctors or engineers.
Money doesn’t change the resources in your economy. If you make more of it, If you have X set of resources in your economy, changing the amount of money that you have, doesn’t make it 2X. This notion that we have about money is absurd. We think we create it and then there’s more stuff available to buy. That’s absurd all you’re doing is changing the price, which becomes a form of theft. So there’s numerous problems with the existing system. And I don’t know if Bitcoin will be perfect. There are a few things in the world are perfect and maybe nothing and Bitcoin will have its own set of problems, but it will be so much better than the existing system. What was that question, Cory?
Well, I wanted to ask you-
Money is so foundational to humanity.
Yeah. I wanted to ask both of you guys, we’re closing out 2020, we’re heading into what we think is going to be a really exciting year. It’s getting really chippy out there in public discourse and we’re seeing a lot of people essentially turned toward mercenary profiteering, and we’re seeing a lot of basically just big arguments. And I want to ask both of you guys with your life experience and neither of you have any trouble whatsoever taking somebody on and having an argument, but also, maintaining personal relationships with those people. How should Bitcoiners maintain their equanimity and their humility, in the face of being so damn right?
And knowing that all these other people that you’re arguing with and the people that are wrong are eventually going to be part of a Bitcoinized world because that’s reality and they’re still going to be around? So how do you think about… Let’s put Max on the spot here. So J.P.Morgan is putting out all kinds of bullish reports and eventually… He’s no dummy and if Jamie Diamond doesn’t die, he’s going to end up being a Bitcoiner. He’s probably going to have a bunch and they’re going to have a bunch of Bitcoin businesses and they’re going to do what they’re going to do or whatever. How would that feel if someone that’s been so diametrically opposed to what you’ve been working for and working on and been so disingenuous along the way, turns around and in the future is a Bitcoiner? How will you handle him begging to come on your show to explain he had it wrong and wants to kiss your giant Max ring. And are you going to let them on and have some Kumbaya in 2028?
Oh, my feeling towards Jamie diamond it’s always been a form of tough love. I’ve often been chiding him because I know at his core, he has enough sense to understand what I’m saying. And so it’s just a question of nudging him and we worked. So Jamie Diamond was teachable. He hit his fiat money bottom, and now he’s coming over to Bitcoin. Somebody like Peter Ship I think is… Will go to the grave as a bitter no coiner, same thing as Nouriel Roubini. They will never have hit their fiat money bottom. So until you hit your fiat money bottom, you’re not open to the message of Bitcoin. So you will go to the grave as a bitter no coiner. And so I put it out there. These are guys who I know are hurting inside from all the pain that they’ve caused over the years.
And the way to get themselves to a better place is to come over to Bitcoin and a lot of them now are. Ray Dalio was gone from a skeptic. Now he’s on the fence. He’ll be jumping into Bitcoin. Even Michael Saylor was a skeptic back in 2013. Now he’s on the side of Bitcoin. Saifedean Ammous when we first told him about Bitcoin in 2012, I think it was, he totally rejected. Said it was bullshit. But over time, a lot few interviews later, he came over to the side of Bitcoin. And when I was at Peter Schiff’s house in Connecticut a few years ago during Christmas, Spencer Schiff was there and it was the first time he had ever heard of Bitcoin. Now Spencer Schiff is on the side of Bitcoin. So I think it’s pay… One must exhibit a certain degree of mercy for the bitter no coiner and not to write them off entirely.
I think anybody has the ability to get it and to safely transition over to Bitcoin. So if it’s… I speak in the language that Jamie Diamond speaks in. I know the wall street language. I know that he wakes up every morning basically vomiting bile and hatred of himself because he knows the kind of pain and destruction he’s been responsible for. And, but we can’t simply… You don’t remember Jesus and the lepers, he didn’t throw the lepers away and Jamie Diamond is a leper in his own right. And I don’t feel right just throwing him into the garbage. He can be saved and he’s now getting it. J.P.Morgan is now embracing it. And so let’s not just leave these people to the gutter. Let’s try to reach out with some compassion and help them help themselves. I think that’s the Satoshi Way.
TINA, what kind of love can you conjure up for the people that you’ve battled and been frustrated by over the years in the future?
I’m not frustrated by them. I know that they will own Bitcoin. I tell them all, “You will buy it.” I give them a price they’ll buy it at. Here’s the thing that I understand, I’m not special. I came to an understanding and I know that other people will also come to that understanding. Everyone will understand Bitcoin and everyone will own it. It’s just that simple. They will also figure it out. I have no doubt they’ll figure it out. People figure it out whenever they figure it out and that’s fine. And there’s nothing wrong with that.
I didn’t buy Bitcoin till this cycle. Max bought Bitcoin very early on. I heard Trace Mayer talk in 2014 and foolishly didn’t start buying. I talked to him afterwards. I should have said, “How do you buy this stuff Trace?” But I stupidly didn’t. We talked about other things. But I could have had a lot more. People will come to understand. People are mostly pretty smart. People understand things. So we’ll keep talking and little by little, they will come on board. They will start to see it and understand it. I think that it’s reasonable to have a skepticism. We’ve seen lots of things. I’ve traded for many years and invested and we’ve seen many things that we’re skeptical about. It happens all the time in markets that people are skeptical. I was an early Amazon user. I started buying the books on Amazon I think in 1999. I never bought the stock.
I love using Amazon. I could have bought a lot of stock at 5 and $6 and I like 2002 or three. I could have owned a real crap ton of Amazon stock. I became a prime member not that many years later. One of the first prime members. Stock was like $40 at the time. I could have bought less, but I could have bought Amazon. I don’t know where to say $3,000. Happens all the time. People have views on things. They changed their mind. They see things differently. People see Amazon differently today than they saw it then. I don’t know why I didn’t buy it it was dumb. This is just how the world works and they’ll figure it out.
I think people are going to be figuring it out really fast just to bring it back to full circle. It’s where we started this conversation. I think we are going to see people having to figure it out very fast and that’s… The situation is going to be forced. The issue is going to be forced much more quickly than we thought it was going to be over the next couple of years. It should be a bonkers 2021. This 2020 year was incredible. PTJ, Stan Druckenmiller, Michael Saylor, Stone Ridge Asset Management, BlackRock’s talking about it, Grace Deal’s going crazy. PayPal’s in, Square bought 50 million. Ricardo Salinas says 10% of his liquid net worth in Bitcoin. The all time high was hit then called on the New York times on November 30th.
I know we’re all waiting to celebrate 20K precisely. Matched Mass Mutual, 169 year old insurance company, which is… Insurance companies are usually pretty conservative in these regards, bought a hundred million dollars of the Bitcoin via NYDIG. This is just trying to get in under the end of the year and I have a feeling we’re going to see so much more of this in Q1 Q2 Q3-
Got to throw in our homie’s in the UK, Ruffer Asset Management, which I’d never heard of, but evidently 27 billion under management. One of their funds as 625 mil. There’s a lot of illiquid strategies, which is funny because they just put 2.5% of it in the most liquid of all assets. But yeah, exciting. So little 15 million allocation for a UK institution, but I’m sure the first of many more.
Exactly, and all of these will add up and they’re just going to keep falling. So how does it play out? Like Max was talking about, the Game Theory says that, this is a reserve asset. People are buying it and holding it. They’re not just speculating on it to make it dollars. They’re using it as a way to prevent themselves from losing purchasing power in dollars. So they’re holding it for a long time. That narrative is sweeping the industry now. The entire economy at this point, and it’s just going to continue. So that means liquidity comes off exchanges, supply dries up, there’s supply shock. We’re going to see massive green candles. As TINA was saying earlier, as we reprice this asset to not… to moving as the narrative or the mindset about it has shifted from I’m going to make some fiat gains on this speculation, digital money, magic internet money to I’m holding this for the long-term.
And so now, that’s where the price is. It’s way up there now, because everyone’s changed their perception about what this thing actually is. And I think we are going to see an incredible 2021 and beyond that will blow people’s minds because we’ve been brought it forward several years. I have no doubt. So Max final words from you on what you expect to see in the next year or so? What nostalgia from this year or from just your Bitcoin past in general? Get us riled up man. Tell me what we’re going to see in 2021.
I think the big story in 2021 aside from Bitcoin is going to be dollar collapse. US dollar collapse, as I’ve said before. We talked about it, we had some different views on this. I’m kind of sticking with my view that dollar hits… It collapses, US dollar. And that’s the other side of the trade. That’s what Michael Saylor is saying. That’s what Paul Tudor Jones is saying. That’s what another people like Stan Druckenmiller has gone long gold. Anyone who buys gold is going short to dollar, and they’re also buying Bitcoin. But Bitcoin… One of the big shocks of this year was when BlackRock reported that they saw in their ETF business. And they’re the biggest ETF provider in the world. The biggest money manager in the world. They saw people dumping gold ETFs to buy Bitcoin. And that is remarkable to see that happen this year.
It’s just incredible. It makes that Barry Silbert ad for Grayscale Drop Gold that he did earlier in the year which people thought was outrageous. Nobody would dump their gold to buy Bitcoin. Who would… What idiot would do that? And then here we are at the end of the year and the numbers tell us that’s exactly what’s going on. That’s amazing. But I think 2021 that’s the US dollar it’s no longer going to be a world reserve currency. And I think we have to get ready for a massive economic collapse and just hope it doesn’t last too long. But so that’s what I see to in 2021.
Corey, you want to give us your 2021 prospects for Bitcoin? Just the economy in general? Bitcoin industry? Take your pick on exactly what you want to look at, but let’s hear some thoughts about 2021.
Well it’s going to be really exciting and I think the majority of people that are in Bitcoin and interested in Bitcoin, just because of the exponential nature of growth of the community, most people, this is their first bull market. Even I came in in spring of 17, so I caught sort of the tail end of the last one. So it’s been awesome to go through the entire cycle and do the whole try to listen to people and maintain your faith and stack through the dark winter and pick up some cheap sats in the threes and the fours and fives and sixes as much as you could. And then see sort of the fruits of your labor and the fruits of your education, the fruits of your commitments start to pay off basically as the market starts to run again.
And I don’t think that this asset is fairly priced. I think that we have tons of upside. I have absolutely no idea what happens in the future. I don’t think that four year cycles continue forever. I don’t know if it breaks down in this one or the next one or the one after that or whatever we will see. I see a lot of logic in… It’s interesting some of the big funds out in New York are starting to talk about essentially a supercycle or a shallower pullback, basically because TINA started talking about it and then Preston started talking about it on this show and I think they’re kind of like, It’s worked its way into people that are not anywhere close to Bitcoin Twitter or Bitcoin maximalist type podcasts. So pretty cool that that’s getting out there. I still am kind of the belief that there’ll probably be a huge blow off top at some point in this and so it’ll go up more than it probably should have.
And so while you may see a 30 or 40% pullback from a weekly higher or a monthly… I’m sorry, a weekly close or a monthly close, whatever the intraday high is. When it gets completely insane in the froth, you may still see a big pullback of 60, 70, 80% or something like that. But this is all just thumb in the air. Just thinking about things, I’m committed to holding my own stack for generations and teaching my kids about it. I gave some sats to my daughter for losing a tooth last week. So I’m converted. I actually have no idea what my fiat net worth is. I only care about my Bitcoin stack and so it’s kind of… It’s interesting and challenging and fun to be living in the future.
The future is all around us for those people that are talking to Bitcoiners and thinking about Bitcoin every day. But this is definitely not where mainstream society is and all chances are that we’re going to see a massive asset rally in 2021 as vaccines roll out and people start to really go back to work and go out have fun again. There’s a lot of pent up demand for traditional assets and that’s going to be probably good for Bitcoin price too, because people will have all this excess cash and will be investing a lot of it in Bitcoin and Bitcoin is probably going to be the fastest horse in a secular bull market as well. So that’s just kind of my view of what’s probably going to happen in 2021. We’re going to have a lot of friends that don’t pay attention to Bitcoin and are still doing just fine and buying bigger houses or whatever, but we know what we’re in this for and it ain’t just fiat gains that’s for sure.
So keep educating yourself, tell your friends. I still go back to the classic line, what you’re willing… The amount of money, the amount of wealth that you’re willing to store in the Bitcoin protocol is directly correlated to your level of understanding. So the best thing you can do for anyone in your life that you care about is just encourage them and help them get educated about Bitcoin and they’ll make their own decision. This shit really does sell itself, but it sells itself to two people that actually understand it. If you understand it you’ll be in a really good spot. So stay curious, stay bit curious, and you know what? You can use swanbitcoin.com too to buy Bitcoin. So, there, done chilled.
TINA let’s hear your words of wisdom wrap-up. Summarize some of your thoughts that you shared today and put a bow on it for the end of this amazing banner year for Bitcoin in 2020.
Absolutely. I actually… It’s interesting. I really wonder… What Corey just said was actually really interesting to me as to whether or not any of my ideas have managed to percolate into places like that. Like when people are talking of Bitcoin who worldly are not part of Bitcoin Twitter and all. That’s kind of interesting and if that’s really true, I find that exciting. There’s a guy who wants to know who I am, what I look like in the chat. But here’s, what’s important. It doesn’t matter who I am and it doesn’t matter what I look like because it’s not about me it’s about Bitcoin. If my ideas are good, then my ideas are good. If my ideas are crap, then my ideas are crap. You need to decide for yourself what you want to do. You need to learn as much as you can and try to figure out, do you want to own this? How much of it do you want to own? What do you understand about it? These are the things that actually really matter. It doesn’t matter what I think. It’s not relevant what I think about Bitcoin. These are my opinions.
And the question is, have I made arguments which make sense? Do they hold water? Are they cogent? Do you agree with them? Arguments need to stand on their own. And it doesn’t matter who says what. And just because somebody achieved some level of success or notoriety doesn’t, mean their ideas are better. Doesn’t mean their thinking is clearer. And I think we make a mistake when we assume that because some authority figure says something that it makes it smarter or better. We all fall for this. But nobody has the answers, but we try to learn from the things that they say and the things that they do. Aristotle was Aristotle because of the things he thought. So maybe it was a mistake to call myself Bitcoin TINA, and maybe someday in the future when I’m dead, people will talk about what Bitcoin TINA said about this or that. But it doesn’t matter who I am. What matters is Bitcoin. That’s, what’s really important. So I don’t know exactly what 2021 will bring. I think that we will all be surprised. I don’t actually expect the dollar meltdown.
Max could be right though. It’s really hard to know. The interesting thing… Everybody read his entire blog and I liked. It comes from, The Sun Also Rises written by Ernest Hemingway and the character was asked, “How did you go bankrupt ?” Slowly at first, then all at once. Markets actually work this way all the time. We see it happen in markets all the time. I’ve been trading and investing since the eighties. Max can confirm this from his own experience. Not that I’ve been training since the eighties. Markets tend to work on a gradually then suddenly basis. People do whatever they do when their trading and then all of a sudden something catches fire and markets move. Look at the way Tesla moved. It was in a large sideways range for some period of time, and then went up 10X in the last year. Gradually then suddenly. It did well then it went sideways. This happens in markets every freaking day. And it’s going to happen in Bitcoin too.
This is not a bizarre idea. This is how the world works. So I don’t know when that moment is, when that trigger event is. If I did, I’d lever up and get as much as I could.
And that’s what’s happening. That’s what’s happening right now.
I do think that things are happening very quickly and they’re going to accelerate.
And you can lever up on cheap fiat against it so it’s going to be absolutely fascinating. This is a fantastic discussion guys. Thank you so much. I really appreciate your time and wrapping things up. I just want to say thank you to everyone for listening and watching. This has been an amazing year for Bitcoin, but also for Swan. We have built something from the ground up in this past year. We launched in March and we have a product that people seem to like and we’re having a lot of fun building and sharing with everyone. We have shows like Swan Signal Live and Swan lounge, and we’re supporting and producing other great Bitcoin education content. It really is an incredible sort of just blessing. I think we all feel that way at Swan. To be able to do this work, get up and work for Bitcoin every day.
And you all who are watching right now are huge part of that. Thank you for being on the Swan squad, whether or not you’re actually stacking a swan or you’re just here in the chat, hanging out spreading Bitcoin knowledge in general. We have an incredible opportunity here, we’re at inflection point in human history. We have a technology that can really bring a beautiful future, a bright orange future for all of us. It’s not just about an investment. We believe it’s the greatest investments case to make and you should just buy some a little bit and stack set slowly and find your way in, but then continue to learn. Continue to pursue the question, what is money? And understand that this fiat sort of monsters, Frankenstein’s monster that we’ve been living with is really affecting our society at a fundamental level. And ourselves individuals at a fundamental level. As Max is getting to there.
It’s part of our soul even has… Is reflected through money. It’s the way we communicate to each other. Our desires, our needs, the solutions that we have for each other in society. And that’s what Max is talking about. We have something that kind of fits that language more like a glove. That language that of our souls of our desires, where wants and needs to each other much more precisely than Fiat money has ever because it’s manipulated or even gold. It’s anything that’s been centrally controlled. So this is a new thing in the world. It’s a new thing in human history. It is an inflection point. It’s a fascinating journey to be on and it’s blowing all of our minds collectively as we dive into Bitcoin. If you’re new here, if you just started stacking the Swan, you’re just learning about Bitcoin and you’re like, “Oh, this is just kind of crazy.”
It is kind of crazy. We feel you, and were there. It’s something that It feels like you have some knowledge that the rest of humanity doesn’t quite have yet and you’re sort of ahead of the curve and that’s true. It’s amazing opportunity to front run the billionaires and make some money and be a part of this new Bitcoin economy. But it’s also I think imperative on us and that’s why we’re doing shows like this to share the deeper message about what Bitcoin is and can mean for all of us. And I think that will help bring about that bright Bitcoin future in the best safest most peaceful way possible. Thank you again for joining us on this journey. Looking forward to an amazing 2021. Go to Swanbitcoin.com, become a member. Join the Swan squad. Let’s… we’d love to be your wing man on this Bitcoin journey that we’re all enjoying together. Again thank you so much. Hope everyone has a great year. Happy hodldays. Shout out to Camilla for that I saw it in the chat. I love it. Happy hodldays everyone. Take care. We’ll see you next year.
Episode 8 –Andy Edstrom and Ansel Linder
Episode 9 –Rockstar Developer and Jeremy Rubin
Episode 10 – Bitcoin TINA and CK Snarks
Episode 11– Gigi and Knut Svanholm
Episode 12 –Adam Back and Preston Pysh
Episode 13 –Alex Gladstein and Matt Odell
Episode 14 –Robert Breedlove and Tuur Demeester
Episode 15 –Isaiah Jackson and Max Keiser
Episode 16 –Gigi and Udi Wertheimer
Episode 17 –Aleks Svetski and Jimmy Song
Episode 18 –Stephan Livera and Marty Bent
Episode 19 –Mark Moss and Ben Prentice
Episode 20 –Samson Mow and Parker Lewis
Episode 21–Lyn Alden and Jeff Booth
Episode 22– Robert Breedlove and Cory Klippsten
Episode 23 — Saifedean Ammous and George Gammon
Episode 24 –Jameson Lopp and Eric Martindale
Episode 25 –Preston Pysh and Andy Edstrom
Episode 26 –Lyn Alden and Nic Carter
Episode 27 — Erik Townsend and Yan Pritzker
Episode 28 — Max Keiser and Tone Vays
Episode 29 –Preston Pysh and Andy Edstrom
Episode 30–Raoul Pal and Vijay Boyapati
Episode 31–Dan Tapiero and Dan Matuszewski
Episode 32–Robert Breedlove and Parker Lewis
Episode 33– Danielle DiMartino Booth and Michael Saylor
Episode 34– Jeff Deist and Stephan Livera
Episode 35–Will Reeves and Yan Pritzker
Episode 36–Alex Gladstein and Marty Bent
Episode 37–Brandon Quittem and Robert Breedlove
Episode 38–Jake Chervinsky and Rafael Yakobi
Episode 39–Alex Adelman and Desiree Dickerson
Episode 40–Andy Edstrom and Lyn Alden
Episode 41– Der Gigi and Hass McCook
Episode 42–Preston Pysh and Mark Moss
Bitcoin TINA on Twitter
Bitcoin TINA on Bitcoin Magazine Podcast (Parts 1 – 4)
This blog offers thoughts and opinions on Bitcoin from the Swan Bitcoin team and friends. Swan Bitcoin is the easiest way to buy Bitcoin using your bank account automatically every week or month, starting with as little as $10. Sign up or learn more here.