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Preston Pysh and Andy Edstrom: Swan Signal Live E29

Posted 9/21/20 by Brady Swenson

Founder of The Investors Podcast Network, Preston Pysh, and author of Why Buy Bitcoin, Andy Edstrom, reunite their incred­ible camaraderie to discuss Micros­trategy adding even more Bitcoin to their balance sheet. We discuss how Michael Saylor’s made these purchases, why he made the purchases, and why this was such an impor­tant devel­op­ment for Bitcoin. As always Brady Swenson, Swan Bitcoin’s Head of Educa­tion, hosts the lively discus­sion.

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Summary

0:00 Intro­duc­tion

1:02 How Micros­trategy completed their Bitcoin purchase

9:52 Micros­trat­e­gy’s corpo­rate struc­ture allowed this purchase

17:50 Micros­trategy could take on debt to buy Bitcoin?

20:19 Bitcoin’s proof of work and network size as a moat

28:14 Will there be another market crash?

32:07 How did their purchase not move the Bitcoin price?

39:47 Why owning cash is risky

43:46 Bitcoin’s upside poten­tial

48:27 Bitcoin’s toxicity as a benefit

51:53 Kraken got a Wyoming bank license

55:00 The end of fractional reserve banking

1:01:14 Preston Pysh’s dreams for plane

1:05:07 Wrap up

Transcript

Brady Swenson:

All right guys, welcome back to Swan Signal live. Two of them this week. You’re getting a double dose. We’ve got a lot of big news to talk about, and we’ve got the guys that we want to talk about it with here, Preston Pysh and Andy Edstrom.

Before we dive into the episode, quick note about Swan. Daily buys are coming, guys. We’re launching by the end of the month. The pressure’s on Yan and team to get that launched by the end of the month. So go to swanbitcoin.com/dailybuys, and you’ll be able to sign up for that beta group. That’ll be a lot of fun. Catch those dips even better than the weekly buys. Super excited about that. We have almost 1,500 people on that beta list, and we’re going to get it out to every­body’s hands that wants to get in. So check that out.

We are here with Preston Pysh of the Investors Podcast Network. What’s up Preston? Welcome back to the show.

Preston Pysh:

Hey. Great to be back.

Brady Swenson:

And Andy Edstrom, author of “Why Buy Bitcoin?” What’s up Andy? Welcome back, man.

Andy Edstrom:

Great to be back with you both.

Brady Swenson:

This is the third time for both of these guys. Setting a record. They’re become regulars on the show, and there’s good reason for that.

Today, we’re going to dive in to this MicroS­trategy news, guys. They just doubled down hardcore. Doubled down on bitcoin as their reserve asset. We’ve got a lot of new infor­ma­tion, I should say, from the time that it was released in August. Middle of August, I think it was. Got a lot more detail now from the Pomp Podcast from yesterday and some tweets that came out from Michael Saylor, the CEO, just today, as well. And we’re going to get into all that detail and talk about how this thing all went down.

Brady Swenson:

Andy, why don’t you start off. Give us the blow by blow. The logis­tics of this move here.

Andy Edstrom:

Okay, sounds great. Happy to do it. Can you hear me clearly?

Preston Pysh:

You sound great.

Andy Edstrom:

Excel­lent. Okay. So, yeah, we have learned quite a bit. And I think that I want to zoom out a little bit and talk in general terms a little bit about corpo­rate finance.

So gener­ally speaking, you learn, as an investor and in corpo­rate finance, there’s two sort of levels of capital alloca­tion. You’ve got, within the company, capital alloca­tion. And then you’ve got between compa­nies. So any business that has assets and cash flow, hopefully has positive cash flow, it takes those cash flows, and it can decide what to do with them. It has the ability and the respon­si­bility to, if it can, reinvest in the business profitably. And that’s a decision between options. It’s do we focus on market one or market two? Do we build out a product A or product B? And hopefully, ideally, a good manager and a good board can allocate capital within the company.

Now, if they can’t effec­tively allocate capital into the business, then they have to look at other options. There’s a second level of capital alloca­tion. Preston has probably educated his audience about this already. Which is between businesses. If I’m a hedge fund manager, I’m a mutual fund manager, I’m just a regular individual investor, I decide I want to put my money in this stock or that stock based on the capital alloca­tion decisions and the business prospects of each individual company.

So there’s two levels of capital alloca­tion. And the CEO and the board sort of sit in between the two. They have a respon­si­bility to allocate cash flows and capital within the company. And they, of course, are respon­sible to, and report to the share­holders.

Now, in the case of MicroS­trategy, these two levels came into play in an inter­esting way. So August 11th, MicroS­trategy made two announce­ments. One was about internal capital alloca­tion. That was, “Hey, we have a new idea and policy with respect to what we do with our treasury. And also, we just put 250 million into bitcoin. 250 million of that treasury.”

And then also they made a second decision, which sort of bridged the internal and the external. They said, “Look, we’re also going to do a tender offer. So we’re going to offer to take company cash and buy shares in the open market. Basically bridge the internal to the external capital alloca­tion decision.”

And I won’t get too much into the details, but it may be inter­esting to some listeners. They did a modified Dutch auction. Basically the way it works is they said, “Hey, we’re willing to buy up to 250 million of company stock, and anybody who wants to tender between 122 bucks and 140 bucks,” by the way, which was basically the current stock price to about a 15% premium, “Anybody who wants to see us their shares will buy them.”

And the way it works is if I’m willing to sell at 125 and Preston’s willing to sell at 130, and Brady’s willing to sell at 140, well then, my order gets filled first, then the next, then the next. But they fill the order book, and once they reach the limit of what they’re willing to buy, every­body gets taken out at the top price that basically fills the whole order.

So what happened was they offered to buy 250 million, but they only got 60 million tendered at that premium. And so what happened was a month went by, and Michael Saylor and the board figured out who was on the bus with respect to their internal treasury decision. They basically said, “Hey, we’re going to make a bitcoin bet. Anybody’s who not inter­ested in this, in terms of the share­holders, we’ll take you out. We’ll take you out at a premium.” And then once he gathered the ordered and realized there was only 60 million of demand, basically, to buy the shares back, then he came out three days later with the double down announce­ment, “Hey, we’re going to buy another 175 million.”

And so, when the Harvard Business School case study was written on this, in terms of the corpo­rate finance and managing the market, I think it was actually kind of a brilliant maneuver, because at the same time, they managed to make the bitcoin bet, then take out the share­holders who weren’t on the bus with respect to, “Hey, we’re going in the direc­tion of bitcoin,” and then close out the tender offer, and then double down and do the second buy. So I think it was brilliant. I think the timing and the accessing, both the capital alloca­tion decision of buying the bitcoin and taking out share­holders who weren’t inter­ested in the strategy was really smart.

And by the way, the stock’s now at 165 or something. It had been in the low 120’s. So anyone who sold into the tender offer now looks like an idiot. And now, Michael Saylor gets to run a company where the remaining share­holders are more likely fully aligned with his vision of bitcoin’s the way to go in terms of where we want to invest our balance sheet.

So that’s my take on the blow by blow. I think it was brilliant. I’d be hard pressed to come up with a better tactic if I was the CEO or the board of this company.

Brady Swenson:

Heck yes, man. That was well done, sir. This is why we have you on the show. Preston, any color you want to add to that?

Preston Pysh:

There’s nothing to add to that.

Andy Edstrom:

I hope I didn’t steal Preston’s thunder.

Preston Pysh:

Not at all. I loved it.

Andy Edstrom:

I hope I didn’t take away from your plan to commen­tary there.

Preston Pysh:

No, it was much better than my commen­tary.

Andy Edstrom:

Look, I could go on. I think they can actually do more. I think the balance sheet could support more bitcoin, and that’s a topic I’m happy to talk about. But I’ll hand it back to you, Brady, for now.

Brady Swenson:

Well, I was just going to say that Michael Saylor was on the Pomp Podcast yesterday. And if you haven’t watched or listened to it yet, you should do that. The last 20 minutes, especially, are just absolute fire. This guy is all in on bitcoin. Liter­ally.

So he says in there that they have 95% of their reserves are invested in bitcoin. Or they’re on stock. That makes up their corpo­rate treasury now. He said that this is a delib­erate corpo­rate decision to move the company to a bitcoin standard. Preston, man, that’s exciting language to me. I love hearing the CEO of a big public corpo­ra­tion in the United States talking like this. Did you think something like this might happen this year?

Preston Pysh:

I didn’t think anything like this was going to happen, to be quite honest with you. I kind of expected there to be a much more conser­v­a­tive approach, at least for compa­nies of this size. I think your smaller businesses, especially on the private side, I think that this is expected. But I think in the public market, for a billion dollar company to be doing these kind of moves, I was not expecting that. I was expecting 10% of the whatever marketable securi­ties they had. Maybe they shifted that in at 10% tops for a billion dollar type company.

But I think, and Andy, maybe you know this better than I do, but the way that the voting rights that were stripped out of the company, as far as the earning rights versus the voting rights, Michael has a control­ling voting portion of this, right?

Andy Edstrom:

Yeah, so I am delin­quent. I’m leaning on you, Preston. I’m assuming that you’ve analyzed the proxy state­ment. That’s the part that I didn’t do my homework on yet. I was sort of thinking in terms of the corpo­rate finance piece. So I’m going to lean on you on that one.

Preston Pysh:

Yeah. I’m pretty sure. I don’t know the percent, but I’m pretty sure he has a control­ling voting right piece in this.

Andy Edstrom:

Yeah.

Preston Pysh:

And I think that’s the part that… It’s really funny on Twitter. You see people saying he’s not managing his risk, he’s not doing his fiduciary duty, and all this kind of stuff, and I’m just smirking, like what the hell are you all talking about? If you control the voting rights of the company, you can do whatever you want. And if share­holders don’t like it, well then sell your shares and go somewhere else, because there’s nothing you can do about it.

Andy Edstrom:

Preston just artic­u­lated perfectly. And this is why the sort of order of opera­tions was so brilliant. He basically said, “Look, we’re going to do this. And we bought some bitcoin. And if you don’t like it, we’ll buy you out of premium.” The stock was at 122 or something. And he offered premium. And anybody who wanted to tender, anybody who didn’t want to be on the Michael Saylor bitcoin bus could get out at a premium.

And so, he took those guys out. There weren’t that many of them. And then he just came back over the top and bought another 175 million, and the stock continued to climb. So two things. One, the stock is up materi­ally 35% now. It was down a little today, but I think it’s still up a lot, number one. Number two, anybody who didn’t get on the Michael Saylor bitcoin bus, at the moment, looks like an idiot. If you sold your shares at the tender price, you left money on the table.

Andy Edstrom:

It’s a master stroke. And getting to what Preston said about fiduciary duty, anybody who wanted to sell in at a premium.

Preston Pysh:

What duty?

Andy Edstrom:

Well yeah. It’s like he gave the option to the share­holders, right? And he gave them the rope to hang themselves.

Preston Pysh:

He’s not managing other people’s money. He has the voting right. So when you start a company, like Amateur Hour, and if you don’t have money, well then, you have to go out and start doing funding rounds. But if you’ve done this before, and you’re sitting on enough cash to start your own second business, the whole thing comes down to keeping your voting rights.

If you do need money for whatever reason, because you’re not cash flow positive, you’ll watch people that have done it before. The first thing they do is all right, well, let’s break out the earnings rights and the voting rights from the common stock that we’re about to sell you. That way I never have to listen to a thing you say, and I can tell you to get lost if you ever come in here with a point of view or a strategic vision that’s different than my own. That’s where he’s at.

And that’s why he can do this. And that’s why I don’t think you’re neces­sarily going to see this from other billion dollar compa­nies, because usually, when you get that big… I mean, look at Jack Dorsey. It was kind of surprising to me, Michael’s question at the end of the podcast with Pomp, because if anybody under­stands why Jack Dorsey’s not doing this, it’s Michael Saylor. Because of the voting rights.

Brady Swenson:

Yeah, absolutely. Yeah. Somebody posted in chat, I think it was Nate Sharp. Shout out, Nate. 70.8% control of the voting shares, I think he’s got about 30% of the outstanding or total shares, but 70% of the control, in control­ling voting shares.

So yeah, this is very uncommon for a big public company, right?

Preston Pysh:

Yeah.

Andy Edstrom:

Well, okay. It is, and it isn’t. Some of the internet giants have exactly this struc­ture. Mark Zucker­berg.

Preston Pysh:

Yeah, Mark does, yeah.

Andy Edstrom:

He controls Facebook. I’ll never forget the movie The Social Network where the Sean Parker character has the business cards printed, “I’m the CEO, bitch.” Which is a message to the board, “You can’t fire me, I’m in charge.”

Brady Swenson:

Yep.

Andy Edstrom:

That’s a pretty big company. Likewise, Google has two share classes. Now, Serge and Larry, I don’t think they have technical control, but they have such a large percentage of the voting bids that it’s practi­cally very hard to unseat them.

Andy Edstrom:

Ditto, I think…

Preston Pysh:

Warren Buffet. Warren Buffet, he’s in the 40% range as far as his voting rights. And then when he did his B’s, the B’s have 1/100th of the voting rights of an A share. So I think Andy has a good point that you can find these examples. Now, whether you’re going to see somebody else go as bold as Michael Chad Saylor did, I don’t know that you’re going to see that.

Brady Swenson:

GigaChad.

Andy Edstrom:

GigaChad is right. He is… I mean, this is truly an epic play. I mean, we’re right to be bullish about okay, this knocks one barrier out of the way. For sure, this is a conver­sa­tion in board rooms. Should we expect a massive flood of bitcoin buying by every public company out there? No. It’ll be some sub-segment of the market that acts second, so to speak, is the fast follower.

Andy Edstrom:

But it still set the clock, right? Saylor, himself, on the Pomp Podcast said he figures nine months for a decent sized company to sort of run the traps to get where he already is in terms of allocating capital bitcoin. Yeah, we’ll see. Somebody’s going to do it.

Brady Swenson:

Yep. Yep. The other thing that really caught my atten­tion on the Pomp Podcast was he really credited, first of all, the lockdown. Because he was at home and had this time, and kind of tipped over the edge of the rabbit hole at that point, and had a bunch of time to just devour bitcoin content. And he really credited the exten­sive library of bitcoin educa­tion that’s out there. Both of you guys included, with The Investors Podcast, and your book, Andy, “Why Buy Bitcoin?”

There is so much that’s been built out over the last couple of years. I think this is super bullish to see a corpo­rate CEO who you know has spent a lot of time running compa­nies for 20, 30 years. He’s doing his due diligence running the company himself. And he talked about how he sensed the bullish case for bitcoin, the bitcoin standard, and essays by Parker Lewis, and podcast episodes outside his C‑suite to study and then they’d come back and they’d talk about it.

They’re liter­ally having bitcoin jam sessions, falling down the rabbit hole together. And he gets every­body on board. They’re all bitcoiners now there. This just kind of array… All different kinds of content. There’s something for every­body there. And we can bring a corpo­rate CEO up to speed in a couple of months to the point where he’s ready to spend 500 million dollars in bitcoin is just absolutely bullish to me.

Preston Pysh:

You see a lot of this on Twitter, where people were saying, “Oh my god, he’s not managing his risk,” and other stuff. So the company makes 30 million dollars, approx­i­mately. 30 million dollars a year. Based on the assets that sit on their balance sheet for the products and services that his company creates. So let’s say bitcoin goes to 5,000 dollars and never goes higher than that for the next two years. How does that impair anything that he owns? It doesn’t. Guess what? He’s still making 30 million dollars a year.

So the argument that this is posing risk to his company, I would maybe even go as far to argue that… Let’s say bitcoin went to 5,000 dollars tomorrow and stayed there for another two years. I think in a year from now, or two years from now, his stock is still going to trade as a multiple off of the 30 million dollars that they make every year. It’s not going to impact his market cap at all.

Andy Edstrom:

Yep.

Preston Pysh:

Every­thing on Wall Street works off of the income state­ment as far as the projec­tion for future earnings. So people that say things like that, and the fiduciary, they don’t own a business, and they definitely don’t do accounting, and they definitely don’t do valua­tions on businesses.

Andy Edstrom:

So I’m going to press the bet here. Okay? What Preston says is 100% right, and I’m going to go further. There are plenty of activist share­holders who rattle the cages of CEO’s, because they have too much cash or they have too many uninvested assets on the balance sheet.

He knows, and he’s made the state­ment that adding more capital expen­di­ture to his existing business is not going to grow the business. His situa­tion actually reminds me quite a bit of a bond deal that I did in a former life, basically back in my days at Goldman, for a company called FTI Consulting. Which, like MicroS­trategy, is like a body shop. Yes, they have a tech element. Yes, they’re Goldman software. But they’ve got like 2,500 employees, and basically they’re a consulting business. They have smart people that provide data and analytic solutions to clients.

The company has basically no debt. The balance sheet is pristine on the liability side. Preston mentioned they’re doing 30 million-ish in cash flow. And that’s true. Inter­est­ingly, I think it was in the Q2, the second quarter results, there’s presen­ta­tion, and Saylor talked about roughly 50 million of operating cash flow.

So I think he’s actually guided upwards on the earnings powered business. When I look at the business and say… Okay, let’s call it 30 – 50 million of cash flow, this business could easily support some debt. I don’t see any reason why he couldn’t go into the high yield bond market, raise a couple hundred million in bonds, do 8 – 10 year maturity so you’re not facing a repay­ment risk in the next few years, push it out a number of years. I’d be shocked if he can’t raise money. That would be a four times leverage, roughly, if you’re saying cash flow is EBITDA. That’s an approx­i­ma­tion.

But a four times levered company could easily service 5% coupon debt. That would be 10 million… 200 million at 5%. That’d be 10 million bucks on interest expense. He’s got 50 million, or 30 – 50 million to play around with. He could come over the top, do a 200 million dollar bond deal poten­tially and buy another 200 million of bitcoin.

This is not impos­sible. I’m not saying he will do it. What I’m saying is the business could support more debt if it wanted to.

Preston Pysh:

Yeah. Big time.

Andy Edstrom:

Yeah.

Brady Swenson:

Yeah. All right. So another thing that he brought up that I thought we could jam on for a little bit. He talked about proof of work for a minute on the Pomp Podcast, which I thought was really inter­esting. And made perfect sense once he dropped it. So he was talking about how do you get over the anxiety of putting so much money into an 11 year old, what some might still consider, an exper­i­ment?

So he pointed to proof of work. He said… Here’s a rough quote. He said, “This is a proof of work crypto-network, designed to be a store value. And we’re going to expend huge amounts of energy to protect that network.” So he under­stands that there’s a need, there’s a connec­tion, a connec­tion between the real world and the digital world, and that’s through the expen­di­ture of energy. And he under­stands that that is neces­sary for the protec­tion of the network, because in turn, you’d have to expend enormous amounts of energy to attack it.

So I’ve heard the analogy before, I think it may have been Dan Held, that it’s like a giant wall. You can think about that wall in Game of Thrones. That ice wall that just keeps going higher and higher. Just hashes on top of hashes on top of hashes. We’re doing X hashes now, 150. It’s 150 quintil­lion hashes per second. Just building that wall of energy to protect the network. And he gets that. That’s why he’s not anxious about putting 500 million bucks into bitcoin. Love that.

Preston Pysh:

I mean, he buys into PlanB’s stock to flow model. He buys into the idea that the price is being driven by produc­tion costs, just like Satoshi said it would back in 2010.

Brady Swenson:

Yep. Yeah. And it’s a thing that I think most people don’t get. And I want to keep talking about this on these shows. The proof of work model is not wasteful.

Preston Pysh:

It’s part of the incen­tive struc­ture.

Brady Swenson:

Exactly. It’s also that.

Preston Pysh:

So when you say you’re going to do a proof of stake, I think that it’s … For me, it demon­strates, if you’re trying to produce some type of crypto-coin that is money, and you’re trying to drive an adoption curve, and if you don’t think proof of work is part of that incen­tive struc­ture, I think you totally miss the whole game theory on this, big time.

Brady Swenson:

Yeah. Yeah. So yeah… Go ahead.

Andy Edstrom:

I think, to go right to the proof of work concept. And Saylor’s comments, which you, I think, artic­u­lated really well, both of you guys. Saylor’s a career tech guy. He started MicroS­trategy like… I think it was 1989 or something. Yeah, 31 years in the Founder/CEO seat, and he’s been public for 20 years or whatever.

So he under­stands networks, he under­stands tech. But, and this is the thing that all the proof of stakers forget. They forget that whether you’re tech CEO or just a non-tech, regular CEO, you’re going to trust the thing that’s the biggest and is the baddest, and has been around the longest time, and is the most lindy. And even if you don’t under­stand proof of work, you do under­stand that bitcoin is more than half the “crypto-market,” and has had this longevity, and it just keeps not dying and coming back. And the hash rate increases, and it just gets stronger and stronger and stronger.

Andy Edstrom:

It’s all the stuff that… Max Keiser actually had a good tirade on the last Swan Signal.

Brady Swenson:

Yeah.

Andy Edstrom:

A few days ago. It’s all this stuff that just feeds back. So yeah, the tech savvy guy under­stands that proof of work is the thing. But the non-tech savvy CEO’s are going to under­stand that the strongest, longest enduring network is the thing. And either way, bitcoin wins.

Brady Swenson:

Yep, yep. Yeah, he was talking about how he brought up the MySpace compar­ison that always gets thrown at bitcoin… That there’s going to be a new coin, and bitcoin will be the MySpace, and some new technology will come over and eat it up.

But he was saying look, once you get to a 100 billion dollar market cap business, you’ve got network effects that just run away. And destroy every­thing else. And we’ve seen that with all the networks, social networks, etc. build on top of the internet. And it’s basically, he’s saying it’s game over. Bitcoin has won at this point. And it’s clear that we’re all arriving at that same conclu­sion, for the most part.

Brady Swenson:

So the network effects upon network effects, it’s a runaway freight train at this point. Inevitable.

Andy Edstrom:

Can I go back to the comment, I think Preston, you said someone was claiming oh, this is reckless from a fiduciary stand­point, putting money in bitcoin. I just want to return to that.

So one of my jobs as a Wealth Manager is an asset allocator. And I give money to hedge funds and other active managers to go pick stocks to go manage. So my question… I have a new question for any existing managers and candi­date managers. And my question is tell me your best invest­ment ideas. And please bench­mark them against the follow. MicroS­trategy stock is up 35% in five weeks. And forget about just going along bitcoin. Let’s say you’re just a stock manager. Or let’s say you’re an activist fund manager. Or even you’re a crypto-fund manager. Hey crypto-fund manager, is your best idea altcoin, going up 35% in five weeks? I mean maybe one or two of them. But can you get the same kind of risk adjusted return in some non-equity, non-SCC or regula­tion protected “asset” as you can in a NASDAQ listed stock?

Show me a better idea. I’m waiting. I’m here all night.

Brady Swenson:

I mean, how much is the MicroS­trategy up now since the news in August? Did you say 35%? Is that what you said?

Andy Edstrom:

Yeah. I think it was at 121 or something.

Preston Pysh:

It’s up 100% since March.

Andy Edstrom:

Yeah.

Preston Pysh:

Approx­i­mately. He might be 80 or 90, but it’s up almost 100% since the bottom in March.

Brady Swenson:

It’s like a bitcoin ETF now.

Andy Edstrom:

It’s inter­esting. And by the way, that comment, I think, is one of the reasons that Saylor and the board took pains to issue a separate press release that says not just we bought bitcoin, but this is our holistic, new treasury strategy. And by the way, if you don’t like it, tender your shares. We’ll take you out.

So from a sort of an SCC perspec­tive, this is not the same dynamic as Long Island Block Chain. Or company that renames itself to take advan­tage of the buzz or the upward swing in bitcoin or crypto. No, this is a well-measured, well-artic­u­lated corpo­rate financed decision that gave an out for share­holders that didn’t want to partic­i­pate.

Brady Swenson:

We got a couple questions coming in from the chat and YouTube. Let’s roll with this one from Dennis. It’s for Preston. Preston said on other pods that he believes there will be another liquidity event similar to March at some point. Does he expect bitcoin to be effected in the same way? He’s trying to recon­cile with this?

Preston Pysh:

Yeah, I don’t know. It wouldn’t surprise me if it did. I don’t know that it’s going to be as pronounced as the event in March, just because of the lack of coins that you now have on the market to be purchased, based on the change in the reward. I’m a firm believer that the further away from the last halving event that you get, you’re sucking all that liquidity of the previous reward flow out of the market. You got Michael Saylor’s buy in just 38,250 bitcoin off the market. So those aren’t there to allow that drastic drop, kind of like what we saw in March.

So I think that the macro … I think the impair­ment that you see on the macro landscape is going to be extremely real in how many fiat units are removed from the system all at once and in a very cascading. Very quickly, two, three week period of time. It’s going to happen fast.

And most people do not have 100% of their savings in bitcoin, so they have other positions that have counter-party risk. Call it debt or some type of deriv­a­tive vehicle that isn’t 100% escrow in there. Those kind of things are what just remove the number of units from the system very quickly. And so I think if you see the entire global stock market going down, similar to what we saw in March, do not be surprised if you see bitcoin initially go with it. But the rebound is going to be much more dramatic than the rebound that we saw in March, because it’s going to be still trying to achieve that 100,000 stock to flow valua­tion mark.

And rest assured, the central banks are going to step in and print. They’re going to quadruple down. I don’t know if they’ll quadruple down, but they’re going to come with even more fire power than they came with in March if there’s this fiscal air that I kind of suspect will eventu­ally play out.

Brady Swenson:

Yep. Sounds good, man. We have one for Andy from the chat. I believe this one was from Max on YouTube. Rick, you want to throw that one up on the screen for us if you can still get to it? If not, just send me in chat what it is, and I’ll ask it out.

Preston Pysh:

And I see George’s comment. 288K, yeah. That could be the orbit, not 100K. I don’t know which one it is. I’m just using the more conser­v­a­tive number.

Brady Swenson:

Yep.

Andy Edstrom:

Yeah, six figures. Six figures feels right.

Preston Pysh:

Yeah.

Brady Swenson:

Yeah, and I feel once you get to six figures, because then you’re…

Preston Pysh:

Why stop there?

Brady Swenson:

It’s just that big, round number. There will definitely be some resis­tance there, but we’ll plow through it like 10K, I think. And plus, I think… You get to gold’s market… What is the number to get to gold’s market cap? Is it like 50-something?

Andy Edstrom:

Yeah, it’s 500K. It’s 20ish million times 500 grand is 10 trillion, right?

Brady Swenson:

Yeah. Yeah. There you go. Okay, here’s the question. And this is a good one. And he actually talked about this on Twitter today. And we all … I’ll just kind of read these tweets out, and then I can let Preston go from there.

So Michael Saylor tweeted that we acquired 21 thousand… This is from the initial buy of 21 thousand in August… We acquired 21,454 BTC via 78,388 off chain trans­ac­tions. Then secured it in cold storage with 18 on chain trans­ac­tions. He says bitcoin scale is fine as a store of value. And then he followed up if bitcoin is treated as a treasury reserve asset based on our model, 99.98% of all trans­ac­tions will be off chain and assets at risk will be in cold storage 99.92% of the time.

Brady Swenson:

Sounds like a great model to me. Very efficient. So Preston, can you take those numbers and kind of explain how this much bitcoin was bought without moving price too much?

Preston Pysh:

So… I talked to Michael on the phone today. And we talked about this specific topic. And I just don’t know what discre­tion I have to really kind of answer it. So I’m going to kind of pass the buck. But I guess I’ll say this in a general way. If you were trying to put as much of a position on as he put within a quarter because of the quarterly reporting that they’ve got to do with their 10Q, he could have easily put that much of a position on throughout a quarter, easily over a three month period of time and not even … No one would have known at all. Very easily.

And his point to me was I just can’t imagine if you’re a Paul Tudor Jones and you’re coming at this thing with billions. You could do it very silently. Was his point to me. Yeah.

Brady Swenson:

I mean, it goes to … It speaks to bitcoins liquidity. Right?

Preston Pysh:

Yeah.

Brady Swenson:

You can acquire a bunch of bitcoin, like you said, off chain trans­ac­tions. 78,000 off chain trans­ac­tions.

Preston Pysh:

Yeah.

Brady Swenson:

And he talks about this, also, in terms of volatility. Because this really comes down to being a question of volatility. Why didn’t the price move so much? And he says that volatil­i­ty’s not a problem, especially long term. But even now, he says that one guy like him can damp the volatility to either side, because he’s buying off OTC and stuff, making private deals.

And insti­tu­tions will come in after this, and they’ll dampen both sides. In fact, he said that, and this was great… He said that insti­tu­tions have an incen­tive to dampen the downside, but not neces­sarily the upside. So he’s like if there’s going to be volatility in the future, it’s going to be to the upside, because that’s good for everyone.

Preston Pysh:

Yeah. And think about it. With a person like him taking that many bitcoin off the market that just aren’t going to be traded… You can’t produce more of these things, and so when they’re taken off the market and they’re stuffed into the hands of somebody who says they’re going to hold on to them for 100 years, I treat mine the exact same way. Dude, I’m not putting these things on the market and trading these dips. Give me a break. I don’t want to deal with the tax burden. Give me a break.

I think most people with signif­i­cant sums of money that are doing this are clawing them off the market, and they’re stacking them away and not even thinking about putting them back on the market any time soon. Regard­less of the volatility. Sorry Andy.

Andy Edstrom:

Yeah, no. I just want to augment the concept of sort of putting buy pressure on, or sort of putting the floor on price, right? Which is exactly what Preston was talking about.

So if you’re a fund manager… I go back to my days working at a hedge fund. I do all this due diligence work, I do my research, I go pitch the invest­ment committee. Okay, I finally get approval to buy a stock or a bond. Or in this cast bitcoin.

Andy Edstrom:

Okay, I’ve got an approval. And I’ve got a limit price. I’ll make up numbers right now. Okay, bitcoin’s… I haven’t looked lately, but it’s near 11K. So maybe I’m approved to buy at 12K or lower. To a certain amount. Now, I don’t want to go put in an order for however many 10’s of thousands of bitcoins at once, because that’ll spook the market. But as long as I’m buying sort of below my limit, then it’s sort of at my discre­tion.

So I don’t want to spook the market, but I also… Every time the market goes down, I’m going to be that steady bid. Because the worst thing that happens to me as an analyst or a junior portfolio manager at a fund is I got my approval to buy the thing, and then the price ran away from me. It got too high, it went over 12K, now I got to go back to my invest­ment committee.

You could have a similar dynamic with the corpo­rate balance sheet, where the CFO or the CEO says, “Okay, my board approved this to buy X, 10’s of millions of dollars of bitcoin, but it’s got to be at a certain price or better.” So don’t spook the market, but if you can move volume slowly through the system and accumu­late in the range that you are now or a little bit lower, you’re going to push the price up.

The second thing I’ll say, and this is not with the benefit of being an OTC trader or anyone active in the bitcoin market, because I’m certainly not that. When you look at accumu­lating stock as an investor, pretty safe to buy 10% of the volume in a day. In other words, if a stock trades… Let’s say 10,000 shares a day, you could probably buy 1,000 shares a day, roughly speaking, without sort of moving the price movement in the market.

So if bitcoin trains a billion plus a day, more than a billion in BTC to USD, then you can be buying 100 million a day by that logic with little diffi­cultly. So yeah, bitcoin is the only crypto-asset that one can buy in size, I think, without signif­i­cantly moving the market.

Preston Pysh:

Yeah, I think Michael would agree with you.

Brady Swenson:

Yeah, well, he does. And here’s the way he put it. I think this is great. He said, “Bitcoin is magical. It’s the hardest working asset in the history of the world. You can liqui­date enormous sums of this stuff on a Saturday night. What other asset can you do that with?”

Andy Edstrom:

Preston is protecting his source, because he said that he talked with him directly. So discre­tion here, I can see.

Preston Pysh:

I can tell you right now that that was one of the big things that he was disclosing to me, and that he was surprised. I think for him, he came at it with so much money. And I think he was just amazed that he wasn’t able to move it like you would in an equity or anything else. It’s a massive, massive global market that’s just chewing through fiat like nothing else. It’s amazing.

Brady Swenson:

It is amazing. Michael has a good comment here on YouTube. He says going back to fiduciary duty, I believe Saylor, in the inter­view with Pomp, briefly mentioned that CEO’s need to consider the negative effects of holding cash and need to protect their treasury.

Brady Swenson:

So talking about fiduciary duty. Saylor made the metaphor of holding cash in your treasury as an ice cube melting.

Preston Pysh:

I can’t stand that term, just because this is not a hedge fund that we’re talking about. This is not a money manager. This is not a finan­cial advisor. When I hear fiduciary duty, those are the things I think about.

Brady Swenson:

Right.

Preston Pysh:

This isn’t this. This guy owns this business. He has the voting rights of this business. And so, he can do anything he wants for the most part. I mean, he can do a whole lot more than somebody who’s managing 100 million dollars that was given to them from other people.

Brady Swenson:

Yeah.

Preston Pysh:

I push back on that termi­nology, but I think the comment that the person’s asking there about protecting that erosion of cash on their balance sheet, a lot of these compa­nies, they’re sitting on marketable securi­ties is what they’re doing. They’re buying equity. I think a lot of them have wised up to the fact that you don’t want to have something with counter-party risk on your balance sheet.

Just look at Berkshire Hathaway. It’s a perfect example. If you went back before the 2008 crisis, they had a ton of fixed income security sitting on their balance sheet. And the reason why is because they knew if we go into another reces­sion, the central banks are going to come in, they’re going to drop interest rates, and then those 10 year, 30 year bonds, or whatever they are, the longer duration the better, get bid like crazy, and they make tons of money. And what you haven’t seen since 2008 is Warren Buffet putting a bunch of long duration bonds back on their ballot sheet. They’ve kept it in short-term, very low duration, cash-like bonds. But they’re very short duration, so the interest rate risk, the infla­tion risk is not there on them. They spend just like cash.

But you look at how many marketable securi­ties are on a balance sheet like Berkshire Hathaway, they’re buying businesses. Now, are they buying the right ones? Well, their Apple Play was a sure a good one. I mean, look at how Apple’s performed this year. It’s just been … It’s going hyper­bolic. It’s crazy. Any type of business, any type of equity, which I don’t see that as counter-party risk for the most part. I mean, you could get into a nuanced defin­i­tion of it probably being that in some regard. But for the most part, you don’t have counter-party risk there. And what you want to own is something that has this impen­e­trable mote of enduring compet­i­tive advan­tage that doesn’t have a lot of tangible assets on the balance sheet, that can weather a depres­sion-like scenario.

If you’re owning that type of equity, it’s going to do fine. It’s going to protect your buying power, is probably the best way I can describe it. Is it going to outpace a currency that has been created for the very first time on a global scale that has a minus­cule, pathetic market cap in refer­ence to where it’s intending to go? Of course you’re not going to compete with that kind of buying power.

But if you’re conser­v­a­tive and you don’t under­stand this, and you don’t under­stand proof of work, and you don’t under­stand network effects, and you don’t under­stand all that stuff we talk about so commonly, and you’re an investor that just wants to stick to something you know, I would tell them that’s probably the place they need to go when they’re looking at equity, is things that fit that descrip­tion that I just provided.

Andy Edstrom:

Yeah. This feeds back into what came out of Michael Saylor’s mouth, again, too. Which was one of the things he said was 10 years ago, or eight years ago, buying network effect enabled business was a great idea. You could buy Apple at … I don’t know what the valua­tion was then. A few hundred billion dollars.

Well, at two trillion dollars… It wasn’t so long ago that Apple traded at eight times earnings. It traded like hardware company. Now it trades at 35 times earnings. So it trades like a pure software company. Which is right? Well, neither is quite right. The answer is somewhere in the middle. It is software and hardware. But when Saylor says oh, this is an already dominant network. It’s fairly clear that it is the dominant network in the space, in the arena in which it’s competing, and you can pick it up for a couple hundred billion bucks rather than a couple trillion bucks, yeah, that seems more compelling.

I’m not bearish on software compa­nies or giant compa­nies, but Saylor is right when he suggests that the upside embedded in a couple trillion dollar company like Apple is just much more limited than for an asset that is 1/10th the size but has 10 or 100 times the poten­tial market.

Brady Swenson:

I mean, what happens when you have compa­rably, compar­a­tively infinite free debt from central banks fighting against an immutable fixed supply? Saylor’s saying, like Preston was eluding to this… Saylor said he’s holding this stuff for 100 freaking years. He doesn’t care about the volatility. If there is any.

Preston Pysh:

He’s still making 30 million next year.

Brady Swenson:

Exactly. Exactly. And this is a perfect example. So if you have this infinite free debt, and you have this immutable fixed supply asset, you have people taking it. Like Saylor taking it off the market, he’s not trading. He’s holding that. That’s gone. Like you said, for a century. He maybe is being a little hyper­bolic there, but maybe not.

And then you just start squeezing every­body, because they’re just holding the bad money. This is how it works. The good money pushes out the bad, and this is how it starts. It starts with a CEO that has control­ling interest of his company and can make this happen with relatively little friction. But a year, two years, you’ll see more conser­v­a­tive boards and compa­nies starting to allocate.

Andy Edstrom:

Yeah, I love how it blows up in the idea of the risk free or low risk, just keep your purchasing power asset at the corpo­rate treasury level. Wind back the clock 10 years and the CFO … Well, the CEO says to the CFO, “Hey, CFO, the “cash,” don’t lose it. Don’t lose the money.” And then the CFO goes to the Treasurer and says, “Don’t lose the money, and earn me a positive rate of return.” And the Treasurer says, “Okay, I can do that, because I own a little bit of long term treasury debt. I own some medium to short term treasury debt, and then I have some short term and cash equiv­a­lence. And that’s yielding me a few percentage points, and infla­tion, “CPI infla­tion” is 2%, so I’m beating infla­tion.”

Now, fast forward to 2020. Present day. The 10 year treasury bond is below 1%, and basically the whole yield curve is near zero. So the CFO says to the Treasurer, “Just don’t lose the money.” And the Treasurer says, “Okay, if I buy safe securi­ties, I’m guaran­teed to lose you money. I’m guaran­teed to lose you purchasing power. So if you need me to not lose your purchasing power, then we need to think different,” as a former Apple Founder/CEO would say. We need to think different about how we allocate our treasury. And yeah, there’s going to be a lot of finance commit­tees and boards who are “thinking different” about what it means to not lose purchasing power with your corpo­rate treasury.

Brady Swenson:

Yeah. Okay, one other topic I wanted to bring up that Saylor mentioned on Pomp. And I think it’s a good one to talk about. He didn’t call it this, but it is the topic of toxicity in bitcoin. He said, “I want to hear…” He’s talking about if you’re going to put a bunch of money into bitcoin, he led into it by saying, “You can take 500 million dollars and put it on our network, and every­body in the commu­ni­ty’s going to spend ever iota of their energy to make sure no one F’s with the network.” He’s like, “When I’m looking at the bitcoin commu­nity, I don’t want to hear about any of the alter­na­tives.” He’s like, “I want to hear that you’re going to defend the network to the death against someone who would compro­mise it.”

And we have this conver­sa­tion, and it’s impor­tant to talk about on shows like this, because we do have people who are new to bitcoin watching, and you’ll see these very heated debates. Actually, they won’t even be debates, they’ll just get very heated, just shut down. Like we’re not going to talk to you about this altcoin or this other idea, and it may… It will sound, and it did to me at first, too… Off-putting. Why are they closed minded? Why are they not willing to have this conver­sa­tion?

Well, what I learned was is that conver­sa­tion’s been had 1,000 times. And we’ve realized how impor­tant this thing is. How much is at stake here. And how impor­tant it is to have bitcoin in the world, and have bitcoin be successful, because fiat is so damaging. And scams are damaging.

So he gets it. He gets it. He’s come along on all fronts. And he even gets this kind of aspect of bitcoin.

Andy Edstrom:

Yeah, I think from the corpo­rate treasurer, I’m just spit balling here, and I’m thinking out loud. To the concept of the toxicity of bitcoin and the liquidity, and the market depth, and just the lindy. And I don’t mean to deflect the question, but I’m thinking about the next CEO or Treasurer who’s like, “Okay, I want to allocate something to crypto-assets.” Let’s say they want to go that wide.

It’s like the Treasurer saying, “Well, usually we buy treasuries, but how about we buy Nigerian govern­ment bonds?” Not to pick on Nigeria. But, “How about we buy some devel­oping market bonds, and that’s our treasury asset?” And it’s like, wait, what? No, you’re going to pick the biggest, baddest asset out there. And the toxicity of the commu­nity, for sure defends this thing. And I try to be as toxic as possible within reason. Although I’m still a legacy finance guy, so viewers can judge for themselves.

But it’s just… When people come into this thing, and they’re doing their learning, they’re going to see as the biggest, baddest, most defen­sible network out there. And Saylor is smarter than most. But it’s just hard to ignore the facts on the ground.

Brady Swenson:

Yep. Yep, yep.

Andy Edstrom:

I see a question on the feed, by the way, on the right, Brady.

Brady Swenson:

Yeah.

Andy Edstrom:

Okay, right on.

Brady Swenson:

You want to bring some more in? Call one out if you like it, Andy.

Andy Edstrom:

No, I don’t know. There’s so many.

Brady Swenson:

Let’s do this one. Let’s do the Kraken getting a bank license. You guys have any comments about Kraken being the first crypto-exchange company to get a bank license? Out of Wyoming, I think.

Preston Pysh:

I mean, I think this is just massive. All I’ve heard since I’ve own bitcoins for the last five years is how govern­ments are going to shut it down, and how as soon as it starts to take off, the govern­ment’s going to confis­cate it. And all these things. That’s all we’ve heard for five years.

Preston Pysh:

And now you’re seeing the exact opposite. So I mean, you just have taken a sledge­hammer to that argument. I guess that’s my only comment.

Brady Swenson:

Yeah, absolutely.

Andy Edstrom:

Preston, you’ve managed to condense it to the note, but it’s so incisive, it’s like, “Look, it’s happening.” Once you got licensed banks and you got corpo­rate treasuries or NASDAQ listed compa­nies buying things, how are you going to outlaw it?

Preston Pysh:

Yeah, the entrench­ment’s crazy.

Andy Edstrom:

Yeah. I guess my only thing that I would add is the setup… This, I think, brought to light or highlighted sort of the genius of the Wyoming, this SPDI setup, which is… The thing about banks is the main reason they’re so heavily regulated is because of leverage. Is because they do fractional reserve, and they can blow up, and that’s a problem. We’ve seen it happen before in this country, we’ve seen it happen in other countries, and it’s ugly.

Andy Edstrom:

So by the way, I happen to believe, as I’m sure do both you guys and most of our viewers, that fractional reserve banking, at least 10 to 1 leverage, 50 years from now will go down in the history books as one of those barbarous relics that we’ve gradu­ated past as a species. This was a bad idea.

Preston Pysh:

Totally agree. Totally agree, Andy.

Andy Edstrom:

So hopefully bitcoin brings us past this civiliza­tion­ally. But the brilliance of the SPDI license struc­ture is it’s 1‑to‑1. It’s got to be fully backed. So usually, I think the regulator or the Congress-person, or the govern­ment person’s poten­tial objec­tion to something new and exciting or poten­tially “dangerous” in finance in general is there’s embedded of leverage.

This just does away with that. This says don’t worry about the leverage. It’s 1 to 1 backed. It’s just not even a concern. So the way it was struc­tured is the smart step to remove that sort of headline risk from the whole concept. And that way you get… The licensed bitcoin or crypto-associ­ated insti­tu­tion gets the foot in the door and the beat goes on.

Preston Pysh:

And it’s not just fractional reserve banking. It’s an accel­er­a­tive fractional reserve ratio that we’ve seen for 80 years. And so, what does that create from an incen­tive struc­ture when that’s your policy for decades? What it does is it creates an incen­tive where as soon as you get anything in your pocket, your incen­tivized to go and spend it as soon as possible. And live outside of your means.

And to do all these things that we see in society, and we say, “Why does every­body do that? Clearly you’re living outside your means, and you’re just going in debt up to your eyeballs.” It’s an incen­tive struc­ture that has been created through fractional reserve banking that has aggres­sively expanded it’s ratio for an even larger fractional reserve. And you’re at the end game, and this is going to be the solution.

I saw on the announce­ment for the Kraken Bank, I saw somebody asked. In Jesse Powell’s announce­ment, I saw somebody had said something about fractional reserve banking, and Jesse Powell responded to the person and said, “Well, according to our license, we can’t do any fractional reserve banking,” and I was just like oh God, I love this. This is going to be amazing. And the transi­tion for society’s going to be extremely painful. But the end state of where this is going is it’s going to help a lot of people, and it’s going to provide a remedy to so many issues that we see in society right now. And it’s going to happen in a way that, I think for most actors that aren’t heavily into this kind of stuff as we are, I think it’s just going to be like, “Wow, just remember back in 2020 when it felt like the whole world was going to blow up.” And 20, 30 years from now, it’s going to feel like every­thing is trending in a way different direc­tion that’s benefi­cial for all parties involved. Across the entire globe.

Brady Swenson:

It’s the dawn of the bitcoin renais­sance, everyone.

Preston Pysh:

Yeah.

Brady Swenson:

And this is why we call it the rabbit hole, because it just keeps going. The effects, the follow on effects of a very simple change from a short time prefer­ence money to a long time prefer­ence money is massive. Down the stream. Then you make those individual changes, incen­tivizing, realigning those incen­tives with person better­ments for yourself or your family. Then that all just accumu­lates, snowballs into a society that does the same thing. And then you get… That’s why, I like to call it the renais­sance, because you get projects that are long term, just 50, 60 year projects of just grand ambition that you only really get when you have the solid founda­tion of a money like bitcoin. A fixed asset money. And you don’t have fiat that’s stealing from your time all the time.

So yeah, I think there’s… Like Jeff Booth likes to talk about. You combine this defla­tionary money with defla­tionary technology, and you satisfy the basic needs for most people. Everyone, eventu­ally, on the planet, for extremely low costs. Trending toward free. And once you have those basic needs taken care of, then of course, you’re able to pursue your dreams, your ideas, your hopes, passions, all that stuff.

Brady Swenson:

So that’s where this things leads. And that’s why Preston’s so excited about the end state. It’s amazing. So I think it’s inevitable and also a moral imper­a­tive.

Preston Pysh:

You’re definitely going to take a step back to take two forward, though.

Brady Swenson:

Yeah, no doubt.

Preston Pysh:

Here in the short term. It’s going to be pretty brutal for some folks, I think.

Andy Edstrom:

This is the hardest thing that I struggle with explaining to people. The ethics of bitcoin, basically. Which is when you go down the rabbit hole, as probably most people listening to this pod have. And obviously Preston and Brady, you guys both have. Is you come to the realiza­tion that the edifice is cracked and broken. And so we can do this the hard way or the really hard way. And the longer the charade and the lever­aging up goes, again, back to Jeff Booth’s thesis, the harder to unwind, and the more painful.

And so it’s really the decision of do we take less pain by getting over the hump sooner? Or do we just keep defer­ring, and building up, and accumu­lating more pain and damage? And one of the things I struggle to … I talk with my wife about this. And I’m like, “Look, this is… We’re talking war. We’re talking there could be many lives lost. Could be real strife and struggle.” And so if it’s allowed to continue, the damage won’t be counted in dollars, it will be counted in true human suffering.

So I believe that bringing forward the Day of Reckoning at a lower threshold of pain and damage is just about … It’s got to be one of the most ethical things that one can spend one’s time on.

Brady Swenson:

100% agree. That’s why we’re here, right? On a Thursday night at 10 o’clock Eastern.

Andy Edstrom:

Yeah, I mean, if we’re honest, NGU makes it a little less painful.

Brady Swenson:

Oh yeah, no doubt about that. I mean look, we can sit here and talk about how we are here for the moral imper­a­tive and the more ethical future, which we are. But I think most of us, if not all of us, got into this thing because of number go up, NGU technology. So that’s one of the beautiful things about bitcoin, right? It aligns those incen­tives and then gives you something even bigger and greater to go after.

Brady Swenson:

All right, well, let’s wrap this up. We do have a couple of fun questions for Preston.

Brady Swenson:

One of them was, I think it’s from someone from Bitcoin Mom in YouTube. This is from awhile back. So I don’t know if we can dig it up or not, but the question was, “Preston, what kind of plane are you going to buy when all of this grand vision comes to fruition?”

Preston Pysh:

Oh man. I don’t know.

Preston Pysh:

I mean, so here’s the thing with getting your own plane is like, do you get something that is for fun and for going out there and flying around and scaring yourself a little bit? Or do you get something that has utility for getting the family from place to place? That’ll be the challenge. What was the other one?

Brady Swenson:

Which is more exciting? Piloting or bitcoin? To you.

Preston Pysh:

Yeah. Piloting. The type of piloting that I had the experi­ence to do was … It’s pretty hard to match that experi­ence.

Brady Swenson:

Okay.

Preston Pysh:

But this is pretty exciting. This is very, for me this is a lot of hard work. And the critical thinking that’s required to make sure that you’re not doing anything stupid.

Brady Swenson:

Yep.

Preston Pysh:

There’s some paral­lels there to flying, at least a combat aircraft, there is. But yeah, I’ll take the Apache on that question.

Brady Swenson:

That was one of the guesses I saw in the chat. So there you go. I think that was a good guess.

Andy Edstrom:

That’ll cost you a few bitcoins. That’s got to be a few million bucks a unit cost for one of those, right?

Preston Pysh:

Yeah, if you can even get your hands on one. It’s military export. But yeah, 26 million I think is the going price for one of those.

Brady Swenson:

That’s a lot of bitcoin.

Andy Edstrom:

Pretty rich.

Brady Swenson:

It’s going to be a lot less in 10 years.

Preston Pysh:

Yeah.

Brady Swenson:

Cool.

Preston Pysh:

If I was going to buy a jet, probably something afford­able. Like a toy jet. Like an L39, something like that.

Brady Swenson:

Nice.

Andy Edstrom:

That’s good. My best friend is a pilot also, and while you’re going to fly your own aircraft, he’d be happy to fly it.

Preston Pysh:

I don’t know if I trust myself anymore.

Andy Edstrom:

That’s the question right? If there’s stakes. It’s one thing if it’s your own life and you’re flying solo. But if you got passen­gers, do you want to have the respon­si­bility?

Preston Pysh:

Yeah. Yeah, hopefully the AI is further along here in the future, and it doesn’t matter if you’re a pilot or not.

Brady Swenson:

That’s what I’m hoping for.

Preston Pysh:

I think that’s an easier software solution than on the ground, to be honest with you.

Brady Swenson:

I’m sure it is. There’s a lot less to take into account.

Preston Pysh:

You’re not trying to miss all the various obsta­cles and inter­pre­ta­tions and whatnot. I think that up in the air and just the traffic patterns and all that kind of stuff is highly regulated in the way that every­thing’s published and updated. So I would think that that would be a much easier solution to kind of come up with, is autonomous flying.

Andy Edstrom:

Which will be more dangerous in five years, piloting a jet or managing your private keys?

Preston Pysh:

The keys.

Andy Edstrom:

That’s what I was thinking.

Preston Pysh:

Yeah.

Andy Edstrom:

There’s more at stake.

Brady Swenson:

Yep. All right gentlemen. Gentlemen, this was fun, as always. We’ll do this again. We will … Well, we’ll have to do it again. Maybe we should just make this a regular deal. This is too much fun. You guys, a lot of fun hanging out with you.

Brady Swenson:

So don’t forget, swanbitcoin.com/dailybuys. All right, that’s coming soon. And I’m super excited about it. I know we’ve had massive demand about it. So that will be launching by the end of the month hopefully. You can go to swanbitcoin.com/dailybuys to get signed up for that. And both of these guys have Swan Force links, our referral program. So if you want to support Andy or Preston, you can go to swanbitcoin.com/Preston or /Andy. You’ll get 10 bucks of bitcoin. And you can support these guys hard work for bitcoin. It’s a lot of hard work, like Preston was saying. So all right gentlemen, take care.

Preston Pysh:

Thanks Brady, thanks Andy.

Andy Edstrom:

Thanks guys. Great time as always.

Preston Pysh:

See ya. Yeah.

Andy Edstrom:

Yeah.

Other Episodes

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

Links

Swan Bitcoin

Swan Bitcoin — the best place to buy and invest in Bitcoin

Swan Bitcoin on Twitter

Swan Signal on YouTube

Swan Signal on Facebook

Swan Signal on Twitch

Swan Signal Podcast

Swan Signal Telegram Chat Room

Preston Pysh

The Investor’s Podcast

Preston Pysh on Twitter

Preston Pysh on Linkedin

Andy Edstrom

Andy’s Personal Website

Andy’s Twitter

Andy’s Linkedin

Why Buy Bitcoin –Andy’s Book

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.

Brady Swenson

Brady is the Head of Education at Swan Bitcoin, the best place to buy Bitcoin with easy recurring purchases straight from your bank account. Brady also hosts Citizen Bitcoin, a podcast focused on documenting his journey learning Bitcoin, featuring some of the biggest names in the Bitcoin world.

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Swan Bitcoin does not provide any investment, financial, tax, legal or other professional advice. We recommend that you consult with financial and tax advisors to understand the risks and consequences of buying, selling and holding Bitcoin.