#755: The Bottom Is In with James Check

[music playing] You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe heathen. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. And the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. [music playing] James check, they've got our boy in the street and they're murdering him in the street. Bitcoin is at $66,500 right now. $66,250 based on my block clock, madly. $250. It'll be 2k by the end of this thing. You know, it's been a fun ride. It was cool. We learned a lot. We made some friends. And that's the thing. The yield is the friends you made along the way. Yeah. Well, the yield could also be the cat she get from Bitcoin sold from Micro Shredge's balance sheet to cover the yields that's been promised to you. Be a stretch. You see it? Yeah, yeah. With 32 Bitcoin. I mean, the sell side, you just can't handle it. Who's buying this 32 Bitcoin? Right. It's-- we were discussing it right before we ever recorded, but it's funny. I got three are you OK techs today? It's like, yes, I'm fine. And so this before. It is weird. I know you've-- you did some content with Michael Sullivan about sentiment analysis, sentiment. And Matt O'Dell and I were discussing this last Thursday on rabbit hole recap. For me personally, it hasn't been this bad since the summer of 2015 when people legitimately thought Bitcoin was going to die. And I mean, I wasn't around 2015, but just based on my studies, that is the bear. That's like the most horrendous of all the bears. Anybody who thinks you've been through hard time, you haven't been through a hard time, that-- the length of it. Like, it was a year of down and then a year of nothing. And Bitcoin was dead. Your biggest exchange is-- Oh, like just a whole different animal. Every bear market gets progressively less brutal. There's also a side to it. We were saying before he recorded it, like you developed some-- you develop a thicker skin, right? You and I, we've been through a couple of these drawdowns before. So I forget where I heard this, but just the idea of resilience, right? Mental resilience in anything really, but as an investor, mental resilience is how quickly you can bounce back, like you get the initial shock wave and go, oh, man, what's this red candle? But then you just go, OK, back to clear thinking, what does this actually mean? Does it change my thesis? Does it-- has anything actually materially changed? And the answer is, no. Nothing has materially changed at all. Bitcoin's the same. So I've been talking about having to sell some portion of their Bitcoin. I wrote a piece on this yesterday just sharing my thoughts. At the end of the day, what I think is, like, the sale of 32 Bitcoin, let's face it, they don't need the 2 1/2 million bucks. Maybe he needs more AI tokens for his slop image generation. But my general view is that they don't need the money. They're selling it to slay the sacred cow, right? They've been saying, don't sell your Bitcoin for years and years and years. And that just is not for the business model they have built. They can't do that. They have to sell the Bitcoin at some point in time. And more importantly, what they're really doing is saying to their creditors, whether prefs or debt holders, don't worry. There's six months of cash in the bank. But also we've got 34 years worth of Bitcoin. They're making that like, no, no, guys, we're serious. 34 years. And in my piece, I was saying, like, these guys, you got to remember with strategy, they have a fiduciary duty to their stakeholders. Bond's first, press second, equity third. You know who's not on that cap table? Bitcoin and Bitcoin is. Like, I'm sorry, guys, like Bitcoin is not on the strategy cap table. They have no fiduciary duty to look after us. Now, of course, there's like a secondary effect where they don't want to nuke the market to zero. So my view is what they're doing is they're slaying the sacred cow because there is going to be very serious money out there. And it's perfectly, perfectly fair. Rightfully so, who's been concerned saying, hey, there's this 840,000 Bitcoin Horde that this dude might have to liquidate in a distressed manner. And the sale of 32 Bitcoin, I don't know what the 32 numbers, I'm sure there's some symbolism behind it. But the sale of a very small trivial token amount is just the firm bases into their creditors. Don't worry, your dividends are here. We're going to pay for them. And the other one is it's kind of way laying a lot of the fears that he's going to get himself into hot water. They may have to sell Bitcoin before they get to hot water, but they're not going to get to a point where they're just distressed. And it's like, now we're in liquidation. They'll be peeling stuff off like in theory. They could sell one point, whatever, 1.7 billion worth of Bitcoin, which is one week of ETF outflows. And most of that is basis trade anyway. All these angles we can go down. Can the Bitcoin hand or two billion dollar sale? Yes, it's like been doing that religiously for last, however many months. So can you take it to a billion off? Yes, your price takes a hit. But then it's got a year runway. So that's my big picture of you. First and foremost, strategy does not have Bitcoin and Bitcoin is on the cap table. That's just reality. And the other one is it at the end of the day, if they buy themselves a year runway, from soft. So that's my view. It's a signalling mechanism to say, yes, the dividends are going to get paid. Yes, we're going to liquidate long before you, Mr. Market, take us out to the woodshed. And in my view, it's actually a de-risking event. You get the short term stuff or algorithms just pick up the headlines. I say, oh, strategy sells. Therefore, run sell algorithm 101. But at the end of the day, when all the dust settles, I do actually think there's a bit of a de-risking event, because now we have clarity. Market's absolutely hate uncertainty. And that's been like, is uncertain overhang. It's still going to have a degree of an overhang. But certainly, once you rationally think about the problem, a decent chunk of that overhang has actually been taken away in terms of the uncertainty component, which I think is overall look back and say, has a good thing. Yeah. And so the people saying that this is causing the current stress on the price. I find it hard to believe again, 32 Bitcoin. Not enough to move the market into your point, I think just slaying in the sacred cow doesn't mean they're going to drop all 840,000 whatever Bitcoin they have now tomorrow. And by the way, if they are going to drop 840,000 Bitcoin, do it at a lower price for me. If you would mind, that'll be wonderful, please. And honestly, like, I'm in this world, I have mixed feelings about the whole strategy/digital credit thing. I'm going to hate the term digital credit. I just think it's nonsense, but it doesn't make any sense. No, I'm really not a fan of it. So I would rather, honestly, if I could like construct the world that I would love, that I can't, because you have to just live in the world in front of you. I'd rather this stuff wasn't there. But at the same time, I also understand that you can't change how the market operates. Straylor just happened to do what he did. This is where we are. This is how the market played out. Is he going to kill Bitcoin? No. Is he going to be part of the story moving forward, of course? Absolutely. So it's one of those interesting dynamics where you just kind of have to accept the world that it is. You can't shape the world that you want. But I also don't think that anything they're going to get themselves in a hot water because they're really sending a signal, say, don't worry, guys, we'll be paying down stuff and clearing any, you know, any thorns long before we hit them. Yeah. And it's funny because I'm looking at the show notes. We recorded last, in the beginning of February, right after the capit- I think it was Doring. I think the night that we recorded. It was early in, yeah. That was the price-pain capitulation. Make the distinction because I suspect that this is the time-pain one. And all the people who have just been like, oh my god, I can't do this anymore. I can't- it's that end of 2015 type thing. It's like, I've been down here for six months. It's over. It's done. Yeah. So we, I think literally while we're recording, I think we went down to like 58K and then went back up, published it, had 63K. Here we are. 66 headed towards 65, right now, 66, 393 pumping a little bit during this recording. We've been up towards 80 since that. Just looking at year to date, we got up to 82 now back down to the level as we were when we recorded in early February. Time-pain, is that what you think? I have a word for this, chop solidation. And that was my call back when we had that time-pain capitulation. My view was, and still is, the downside momentum has crescendoed, I think, in February, right now. That, you know, right now we're having a waterfall sell off the climb, right? By the way, taking out the low is actually because you generate just maximum beer, right? And it's funny actually because like for me as an analyst, no matter what happens, there's going to be people throwing tomatoes at me because like, I've been saying, and I stay and buy it, for a probability standpoint, 60K is like really low type stuff. 55 is, I'll talk about it in terms of queues, quantiles, like percent of all days, 55K is Q5, meaning 5% of all days have been further below that. I use a whole mean reversion index. I'm going to hold a bunch of different tools in there. If you go back and look at all the previous beers, they've all like the bottom wick was a Q5, Q4 or Q5, Q6, something like that. The ones that are deeper is 2011 when Bitcoin is $2, right? Which, that's the face of that. It's not really a comparative market cap. I'm that 32 Bitcoin and Valley would have bought the whole there market cap back then. So like in terms of the price paying capitulation, I think that the downside momentum crescendo. That doesn't mean you have more downside. It just means that the downside, like if you think about 2022 as an example, that was the only bear market where the time paying capitulation which came with FTX actually undercut and went lower than the original low. But from a technical standpoint, you get a nice, weekly bullish divergence on like RSI and things like that. There's a bunch of, you've just lost that downside. momentum. And that remains my base case. I still believe that bottoming between the true market man at 78k and the realized price of 55, that's the zone of interest. The lower down you go, the deeper into deep value you are. I just keep it really simple. Deep value is anything below Q 20, right below the bottom fifth of the market cycle. If you look at any statistics and say, how you got 80% win rate, you roll that game all day, right? You don't even ask any questions. You say, yes, I'm going to dollar cost average the whole bottom below 70k is Q 20. So welcome back to deep value. And I'm not even going to dig it up. I do find it interesting. All the folks who quote tweet themselves and be like, look how smart I am and look at how right I was at this point in time. I'm going to tweet somewhere. Someone else can go on finance. I'm not going to do it. There's a tweet where I was saying, like, you know, if we pull back down to that level, if maybe when. Think about what you're going to do. And that's that's all that people should be doing. Don't worry about what some dudes predicting the price are going to do because none of us know. But the right thing to do is to just find high value, right? Look for the probabilities. Put them in your favor. Make the decision for what you're going to do ahead of time and just stay humble and stacks out when the time comes to many people are going to get too cute with it. And I'm actually running a study right now, which will probably publish later in the week where I try to model out, like what is the perfect DCA verse lump sum strategy in a current bear market setup? If you do a lump sum and you're waiting for that Q5 event, you might get plus or minus like 5 or 10 percent of a better entry with all the stress it takes to like try and buy the bottom week. But if you just start DCAing and the bottom bit, you get like plus or minus 5% the exact same cost basis. It just doesn't matter. So so many people are going to fantasize we're buying the bottom week. Just look for high probability deep value. Anything below 70k is just happy days. But I was told it's over. It's not happy. It's over. AI is taking all the money. Quantum is going to kill us again. That'll show up again too. We'll have quantum things showing up in the next couple of weeks. Yeah. It's funny how this all rhymes. What is the on-chain data saying? I mean, you mentioned the realized price or the short term realized price 55k. 55k. How 54 for the realized price yet? Yeah. How's that how's that evolved since we last we last. It's basically flat. Yeah. So when I'm looking at those mean reversion models, there's some models that I call fast and some are slow. The realized price is like the 200 week moving average like an aircraft carrier. These things take a lot to move them, right? They're just very, very stable, which means they're good anchors because they don't move over long periods of time over the course of several months. Yes. But the realized price has more or less been 54k for a long time. Certainly since February, it's basically on nowhere since then. What I was looking at this morning, what I like to look at during these types of events is what are people doing? So there's two buckets of metrics that we look at in the on-chain world. There's what I call unrealized metrics. Things like MVRV, show me how in-profit people are. Unrealized profit or loss. That's incentives. How are people feeling? Right. Right now, similar to Michael Sullivan's work, people feel terrible. Their cost basis is down. They're underwater, supply, coins in loss. People feel terrible because they're portfolio is red. The other side of the coin is what are they doing with that information? And they're signal there, particularly when you break it into cohorts. So what are the people who have coins under 60k? Were they bought under 60k? What are they doing right now? Absolutely nothing. The amount of realized profit being locked in, I looked at before 138, 2 million a day, which sounds like a big number. That is as low as it was during the period after FTX. Like after FTX had happened, in dollar terms, mind you, the price is whatever it is, 15 up to 60k. So with four times higher, more than, and the amount of dollar profit being locked in by people who are in the money is as low as it was in the weeks after FTX. So that's how much, but that's what the old money is doing. The old money is doing absolutely nothing. So take that as one packet of information. And then the other packet of information, what are the people who aren't so young, who bought much higher? Well, they're currently locking in the second largest loss spike that we've seen of the cycle. 750 million. So approaching a billion, three quarters of a billion, it'll be a billion by the time I run the data this afternoon. So we're now getting to half the amount of loss that getting locked in is what we saw in February, which is about two billion, same in November. So the folks who bought recently and are terrified are capitulating massive losses. The people who've been in this market for a long time and are really in the money, are doing absolutely nothing. That's what they're spending behaviors doing. So I kind of flip that around and say, well, for me personally, where am I? I'm the, the, the guy with the coins that are in the money for the most part. What am I doing? I've been buying like a madman in the last 24 hours, right? My DCA has been humming since November. Just chugging away daily DCA once we broke down below the true market mean in February, switch it on to double and just let the thing hum. So yeah, I think it's really interesting. It's watching these kind of disparities. Every man these dogs got a chart. I've got a ton of charts. No one knows what the future holds, but like the sentiment picture and Sullivan's done work on this too. The OGs are far more optimistic and their moods are far less volatile than what he calls like the plebs of the retail. The new folks who've come in and just here for like number go up. So there's a divergence there between people who are a bit more seasoned and have taken a punch a few times. And folks who this may be their first rodeo. When you compare those two, you get to just these interesting divergences are just everywhere. And I love when you see it across Michael's work, across what's going on in the on chain world, you start to see all these like packets of, ah, this is a consistent, this is now a very consistent story across the whole market. And it's funny too, comparing where we are today and where we were falling through this level in February when we last met. And for some reason, I don't feel like I don't nearly have that like hit my stomach. I'm like, oh man, this one hurts. This one's like, I went back to where we were. Yep, three months ago. Yeah, and that's that's part of that Brazilian thing, right? You've seen this movie before. In my view, like I can feel it, that February one felt like the shock wave. There's also part of it where like you can only use the fact that we've been shopping around the 60k range, 6070, whatever. Now if we go down to, I don't know, 50, let's go down to 55, which is the bottom of where my like range of probabilities is. I got to know 55 54. You are going to have so much fear that that is like, if you are not looking at this as like, okay, it's, I think the downside is over, bull begin at that point in time, you kidding yourself, because it just generates so much fear. Every remaining tentative white knuckling bull just goes, no, it's over. I have to get out of this thing. They capitulate and what there's a pain. Everyone's been there. When you've sold the bottom, a bottom could be local, could be global, doesn't matter. You sold an asset and then like you did it not forced selling. Sometimes it's forced selling, but like you did it because you were scared. The next three months you can't buy. You just like, there's something in you that's like, no, it can't, I know it's high, but like it has to come lower. And you just, everyone's been there. You've felt it and it, there's this denial phase. And what happens is the bear beats people into submission, every rally fails. And the deeper it gets into the bear, the more confident the bears get. Michael's also done work on this, where he shows how confident people are. And I like the, I loved his confidence metric because confidence is a non directional tool. I got a bunch of non directional tools as well. And I like shit. My personal favorite metrics are non directional tools because I then have to go, okay, so people are feeling really confident right now. Let me go and find other stuff to contextualize what they're confident about. So it's like the opening question, and then it gives me a whole bunch of other things to then I've got to then answer the question of what are they confident about? They were confident at the bull market peak. And they're confident, like they were really tentative through November, February, but then March hits, run, war, oils are worlds falling apart. Bitcoin's got to go to zero at 65K. And suddenly, everyone's angry and confident. And the bearish sentiment starts coming out. Every man, these dogs got a bare flag pointing to 45K at the same chart. And you just get this like, ah, now they're really confident on the other side of the equation. And what happens is people, it's recently bias. The reason people lever up at a bull market top is because they've looked at the last two and a half years of green candles and gone, mate, this thing's never going to stop. And then journalists will only ever write a bearish headline when Bitcoin's down near the bottom because now it feels safe to jump at the pool. All right, it doesn't feel safe to be like out on an element 125 mil, I think Bitcoin's a Ponzi and it's going to zero. You just look like an idiot. But you don't look like as much of an idiot when like everybody else has jumped into the pool. And that's why the IMF bottom ticks because they only feel safe enough to put out a paper. They spend six years writing with all their PhDs. They only feel safe enough to publish it when Bitcoin's down at the bottom. And it feels like it's never going to come back. So that's all the same sentiment, confident at the exact wrong time. That's funny. I mentioned the text I got today. And these are from two of them or from people who should know better. They've been in it. They know one of them was like, Hey, you're not worried about this right? Like I'm pretty sure you're not. I was like, yeah, I'm fine. Stacking. Increasing the stack. But there is, I'm sure you've noticed it, but there was this narrative floating around that AI sucking out all the sales from the wins of Bitcoin sucking out the win from the sales of Bitcoin. And liquidity is just simply going towards that. It's going to be hard for Bitcoin to recover until that liquidity sort of finds a pressure release valve, the IPOs for SpaceX and Thropic OpenAI, whatever it may be, or Bitcoin finds a reason to be bullish for it. And I think it's important a lot of who I spent I've recorded with Chris Martinson today. I'm going to talk about it on on Arab and off-air who's asked me, is like, "Are you wearing an online account?" I'm just getting back to the basics of like, "All right, does this peer-to-peer-to-shered-to-cash system still enable peer-to-peer transactions that are censorship-resistant? Is it backed by proof-of-work? Is there 21 million?" Yes, yes, yes. Okay, we're good. Yeah. And are they going to base the currency when this is all said and done? Absolutely. So you just put all these things together. No, totally. You go back to fundamentals and the system keeps humming. There's no question that the AI trade is just like a big, you can feel it. It's like a vacuum that's just sucking up absolutely everything. Now, there's some parts of it that have a lot of merit. There's bottlenecks left, right, and center. You know, you can argue that there may not be certain bubbles. But then once you get these IPOs go live, I've read a bunch of pieces on the SpaceX IPO. And I mean, guys, the numbers are so far off making sense. Like, I know equity analysts, right? I'm not going to pretend to be an equity analyst. I couldn't tell you left from right. But I can smell testings and I've kind of seen this stuff enough. I'm like, the numbers are just out of control. It makes no sense. So Emily, you know, they're changing rules to the S and P to stuff this thing in because they're like, they don't have the buyers for it. So everything's going to get solved. But let's go back to the Bitcoin piece. Let's imagine, right, that we have this IPO moment, you know, go back through history, generally speaking, there's like a hero IPO. And that's like the genesis point of the beginning of the end of the bubble. Because like suddenly the euphoria just goes, and in this scenario, where is Bitcoin going to be? It's going to be the most under owned forgotten asset of all time. You know, like not people, people say, oh, but when the bubble finally cracks, Bitcoin's going to get taken down to zero. It's like, dude, no one's going to own it. He's going to sell it at that point in time. That's what the time pain process does. It removes anybody who's sitting there going like for me, I'm not rotating my Bitcoin profits into AI. Sure. Would it be a good decision? Yes. But there's also like I buy Bitcoin for the swing trades. You know, I buy it for whenever I do buy it, it's that long term investment, right? I buy it for the, it's my longest duration asset. I've got plenty of money that I stick in all sorts of stuff. But for my long term duration, I don't trade my gold. I don't trade my Bitcoin. Then my long term savings. So at some point in time, we've got a massive alligator jaws. They close. And everyone always assumes they're going to close by Bitcoin going down and stocks going down as well. It's like, no, they're going to close because Bitcoin's forgotten. And then suddenly it's going to be the only thing in the room that's moving. And what happens to all the fast money, you know, so like the market is cyclical. We're going through this rotation. And I would actually say something I've observed and I kind of had this idea as a theme. I do think this like idea of capital rotation. It feels like something that I know it's always been a factor. But even if you think about it from like the microcosm of the Bitcoin crypto world, it used to be like a rising tide lifts all boats. And that used to be the same for the stock market too. A rising tide would lift all boats. But now we've been in this like, oh, this sector is getting crushed, but these ones are doing well. A.I. is doing well, but this sector is getting crushed. It's a lot more of like a stock picker's market. And I do think that's more, more or less going to stay the same. But it kind of feels like how does how do I describe this in terms of like the energy of the market. It feels like the pons of occasion of everything like real late stage fiat stuff where everyone has become the fast money. Like everyone is the fast money. Now the system incentivizes people to chase the hottest thing all the time and forever. And that's why you're almost getting this like almost like a resonance rather than like being less like stable pool of capital. It's invested in everything that a ball of hot money. The ball is the majority. And then there's like less and less of that fundamental capital because there's career risk. Oh, why didn't you own all these A.I. names that everyone just piles in? So yeah, it's an interesting dynamic, but I can't imagine the Bitcoin is going to be a heavily owned, heavily forced sale asset when it's all said and done because we're in the process of flushing them out as we speak. That is what this process is. Time pain. It's going to be no one left to like everyone who's in the trench at the end of this process. It's going to be people like you and I. Who do I want to be in the trenches with the asset of a bear market? You know, good stuff. So for this work was brought to you by good friends at Bikki. Yes, things happen, things get lost. You need to replace your phone. Life happens and Bikki has been designed with this in mind. So if you're looking for the easiest way to secure your Bitcoin off the exchange, go get a Bikki. It doesn't come with any seed phrases. There's no single point of failure. It's a two to three multi-sig. You have your device. You have the mobile app and block stores. A key in the server. 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Or, out for the highest level private client service with Unchained signature and get a dedicated account manager, discounted trading fees, exclusive access to events and features, and much, much more. If you want a partner that helps you secure and grow your Bitcoin without giving up control, go to Unchained.com and use the code TFTC10 at checkout to get 10% off your new Bitcoin multi-sake vault. That's TFTC10 at Unchained.com. I love being in the trenches with you James. It's funny too, because this is the first time, again, 13 years where AI has obviously taken the wind out of sales from a liquidity perspective, but then from a mind share perspective, all the capital and then all the mind share. I mean, admittedly, I think we talked about it in February. It's certainly taken up a good chunk of our time here at TFTC over the last six months as it's been trying to implement it. We've had great success doing that. It's been a lot of fun, but I think it's the hot chick on the block right now. I think too many extents deserve it. I think that's going back to the sentiment analysis. If you haven't been in it for a while and you came in in like 20, 20, 2021, and it was like, oh, yeah, the debatement trades here. It's on Bitcoin's going up. People are looking at the attention getting sucked out of the room too and being like, oh, is this really dead? That's when you have to fall back on the fundamentals. Yeah. And like, you know, at a smaller microcosm, gold's pulling back. Gold's been down from its high. Is it over for gold too? Is it like precious metals out of favorites? Like, no, Marcus just go through the cycles Bitcoin hit a peak. It's got to work off the steam. Gold went through a peak. Eventually, all these things have to peak because nothing goes up in a straight line or a parabolic line in some cases. Nothing goes up in a parabolic line forever and everything comes to an end. And that's why at the end of the day, I think I mentioned this on your, I think it would have been last time I was on is really too well. Bitcoin is genuinely dead, which is its own conversation at a fundamental level. If that, if you do not believe that is true, which I don't, then at some point, the bottom gets put in. And all you're trying to do is find the most opportune period of time. And I mean, most of investing is doing nothing. Most of succeeding in these markets is just doing absolutely nothing, being patient, waiting for the right opportunity, putting the odds in your favor and then doing absolutely nothing. And it's actually very hard to do, right? Because people want to go and chase the next thing and once they're invested somewhere else, they don't want to rotate their capital and like, it's a whole thing. And that's why I think like for most people, having a basket of like, these are assets that I just accumulate at this pattern. Here's my simple rules set. And this is my like capital that I rotate in and out of stuff and kind of play the, you know, play the hot money game. So just understanding your buckets is super helpful. Knowing what asset you own and why, like, what's the actual reason for it? My goal is a very specific purpose. It is different to the purpose of my Bitcoin, which is different to the purpose of my hot ball of money. So, you know, just having those different buckets, I think, I'm not all of people do it. They just think, Oh, I'm 100% invested in Bitcoin because I believe in it's like, yes. But now you're going to feel this like anxiety and pain because you have no other capital, just like play around with this stuff, you know what I mean? And don't get, if you're 100% geared to one asset, ideologically, I get it, but it's not probably the healthiest mindset because it's in many ways it clouds your judgment because you You only look at one thing. Right. You're so anchored to one thing, but having a bit more of a spread gives you a bit of a feel around what's going on. Yeah. And it's actually been refreshing, not like on the AI stock, something I've been covering or allocating to them. It has been refreshing, like picking up a new hobby, if you will, and like thinking about something different than Bitcoin 24/7 365. And that's not the same. Not still very focused on Bitcoin, but it's just like, yeah, you get to focus on other things. And I think the first six months of this year, too, it's been really interesting because it's using the AI tools to figure out how to increase cash flow at my business, which is like, okay, if you're going to be ideologically pure and allocate to one asset in particular, it's like, okay, how do you, how do you de-risk or how do you, you sort of de-leverage your emotions to the assets? Like, yeah, you increase cash flow where you're not really worried about your savings as much. Yep. Yeah, yeah. And I'm like, I want to go into the old details, but there's a tax change policy here in Australia, a new budget and all the rest of it. And it took me like 10 minutes, but to get the bones of the analysis, but the ability to just like punch in a problem and say, look, here's the setup. Here's, I'm going to find the old rules, going to find the new rules, build a program. I want to test the sensitivity of this scenario, this scenario, this scenario. And it's ability to just like build up the bones of the analysis. Like, it's amazing. And you can do that for anything, right? There's times when I got a reconcile to spreadsheets and my accounting, I'm like, hey, can you go and just reconcile these two workout wear the different, oh, here's the error. There's something over here that isn't being carried forward or whatever. All these things are fascinating. It's an amazing tool. But I've certainly noticed, I'm sure you've come across the same. I can totally understand the logic of if you're a skilled operator, whatever it is that you do, it's going to be massively advantageous for you. If you're just punching in slop queries, you're going to get slop out. You have to kind of know what you're doing. And the process of actually like putting the time into writing a brief, making sure that the whole system understands like what exactly is it that you want to do. Here's the area like you've got to be really explicit with, here's where I need you to help make a decision versus here's the decision that I want you to make. Because if you give it a suggestion, if your idea is wrong and you don't ask it to fact check it or find a better solution for you because it can find better solutions for you. But if you just say, hey, do this and this and like, you know, use this method and blah, blah, blah, if you use this method is incorrect, it's going to build you a model that has your slop in there. So just that whole process, I find fascinating. The more time you spend with it, if you're in like a single project you're working on, the first like 10 prompts, amazing stuff. Once you get to like the 20th prompt, errors start showing up, it starts like forgetting context and like things start to break down. But like, yeah, I find it fascinating. You can see where it's going, but you still have to babysit it and you still have to be a skilled operator. I do worry about graduates in all fields though. I think that's a real, like that's a scary prospect because it kind of makes sense to hire a not great hair, but near, near gray hair instead of skill hire a more senior person who can then handle, you know, these AI agents. But if you're coming on the tools and trying to learn the job, much, much harder because you don't have that skilled operator and there's also a thing I remember from my engineering days. This concept of what happens if we hire a bunch of people and we train them and then they leave the company. And the perfect, I was a beautiful counter answer is what happens if we hire them and we don't train them and they stay. But now you've got to flip that around because what's going to happen is there's a bunch of companies who cut costs and don't hire graduates. Someone else will go, well, no, we actually need to grow a workforce, but people aren't that loyal. So yes, they may give them a good start, but after five, six years, people get bored of any job and then they want to move. So what happens is you could actually not be the one training these people, saving and making a bunch more money because you're, you know, using a couple of gray hairs and some AI tools and then you can go and hire the new folks who've been trained elsewhere. Now they'll be scarce and they'll be expensive, just a simple supply and demand problem, but that whole concept of like, what if we don't train them and they stay at falls apart? Yeah. Well, that, I mean, that's why it's important to not only train people, but I'm not sure if you caught Jack Dorsey's conversation with the Sequoia partners, but I think I was happy to hear his perspective on that, which is like the whole concept of companies changing with AI where you have this and companies basically becoming an intelligence layer that has all the context of your business, your different product lines, your customers, your revenue, your cost, all that stuff. And it sits in the intelligence layer and then the job of an employee, just to work around the edges of ping that intelligence layer to basically do their job correctly and better than they would have been able to do before and when I've honed in on something I've been focusing on internally or at TFTC to your point about the 20th prompt being very, very shitty. It's like we've been building this memory system in the back end, this persistent memory system that has the full context of our business. So it has like every transcript, every newsletter, every ad deal, blah, blah, blah, like it just sits in this intelligence layer that we can ping and it has all the context of the business over time and it's building that context as we add more information to it. It's the idea of TFTC.skill, right? That's not the idea of basically building like your business bespoke skill. Yeah, but it comes down to like there's knowledge graphs that you can run. So like we use OpenClaw, we run a knowledge, a couple of knowledge graphs on the server and these basically just track everything. Like there's a James check page in our knowledge graph that has every transcript or every podcast you and I have ever recorded. I hope you don't mind, but every newsletter, what paid subscriber, I'll feed it to the LOM to help make sure that we're facilitated good conversation whenever you come on the show. It's got your newsletter throughout time and how your perspective hasn't changed and it doesn't have to go search that basically from zero anytime I prompt it. If it has it in the knowledge graph, it's amazing how you can build the, and having that context means you do have that back history and you can, it's almost like you're building your own brain more or less, your own AI brain that you can then ping and say, hey, find this invoice for me, right? How do we build this client? How do we do the contract language here? Nah, that's awesome. It makes a lot of sense. Yeah, but the point being is like if you know how to do it, it's going to be incredibly beneficial to your business. It has been for us and then bringing back to the broader point like it makes sense to me while why some of the attention has been focused towards AI and away from Bitcoin because the stuff is fascinating. But again, it goes back to, I mean, what you just mentioned, I think people would be remiss to overlook Bitcoin right now because if you look at the fundamental backdrops of the job disruption, that's on the way. Like what's that going to do for the fiscal side of the books with all these governments? You look at what's going on in the Middle East with the straighter hermirs like there are certainly going to be some price inflation pressures that emerge towards the back half of this year as a supply chain disruption really begins to hit the market. So that's going to be price inflationary and then you're going to have like the potential perfect storm of like prices rising while a lot of people are getting laid off and what is the Fed? What is the Treasury going to do? What are central banks and other governments around the world going to do? And I think the big print for lack of a better care. Bill comes due eventually. That's just the nature of the beast and all this stuff accelerates it. It accelerates the approach to it. And you know what is kind of interesting in the moment. I mean, you mentioned the debatement trade before. I found it kind of interesting that the, I think it was JP Morgan released like the debatement trade is like a thing. Now you and I and Goldbugs and everyone be talking about the debatement trade for years, right? 2019 I think things really started to accelerate in terms of that dynamic. I'm Lynn Alden's talked about this with the repo rate spike and all those things. That's where I started to become evident that there were cracks, right? COVID then came and dropped all that stimulus in the system kind of pushed things further ahead. But the cracks were well and truly in the process and continue to be in the process of widening with this AI CapEx boom. It has been a private market stimulus that's buying materials, it's building things, it's hiring labor, building data centers, buying copper like you know, buy and the whole lot of power generation, the grid, all of these services materials. It's a private sector, sector stimulus. In many ways, it kind of looks like growing our way out of the debt, but the problem is that like all of these things have a timeline. There's a timeline that this can go on for and just like the dot com bubble, they build a ton of fiber up the cable that is tremendously valuable, but it took years and years and years to break even on decades. So it's going to be something very similar, but there is no well, well, we don't have a bubble like that because it's how markets and people and capital operates. So there's going to be this point in time where like we get this concentrated burst of stimulus could go for many years, but it doesn't actually fix, it doesn't grow out of the debt because the debt is so unbelievably large and is growing because the government's involved in all of this as well. But I remain to spend and build stuff up. It's been funny again. I'll come back to the Australian. the Australian setup, they're putting through all these budget changes and there's this very sad state of affairs video of our finance minister. And the guy's grilling and saying, so you saved 150 billion. You said you saved 150 billion in the budget. Is that net or gross? I don't have that number. So I give it. If you saved, you saved the public, you saved 150 billion. Most people in the public would say, okay, you've got an extra 150 billion. But looks to me like you've spent it back into the budget, like there's been spent and more elsewhere. So do you have spare money at the end of this budget? Or do you have more? Oh, yeah, we saved 150 billion. No, you're not answering the damn question. And this is the thing. They've already gone and spent 250 billion. They saved 150, but they've gone and spent 250 billion somewhere else. So none of that is fixed by any of this. And there's another layer to this whole thing, which Nick Bader and I have been talking about. The impacts of both AI, the shortages you mentioned early from the straight, all of these things are not going to ripple through economies equally. If you're in a developed nation like the US, China, even I would argue Australia, probably going to be fine because we can just out bid other countries. A lot of this stuff is going to impact poorer countries, right? The global south is going to impact them considerably more. So a lot of the like the K shaped global economy is probably going to widen as well, which is a sad state of affairs. But that's it's very much in this regime of like global power competitions and man, I mean, we are living through genuine, genuine history and trying to handicap all this stuff and predict how it plays out is impossible. But you know that it's changing. And you know that within that change, the one thing that isn't changing is the government's a no, they're just, they're no more fiscally responsible than they've ever been. In many ways, they're worse because they're spending wartime budgets in a time when, I mean, sorry, you can argue it's kind of wartime. It's a cold war type thing. But you know, that that problem doesn't get fixed. So is it going to be more fair at the end of the day? Absolutely. So for weeks, this was brought to you by good friends at crowd health. I've been a happy crowd health member for almost five years now. My wife and I have had two children while we've been on crowd health. And I actually just got the last bill for a third child funded. It was $6,157. crowd health negotiated down to $2,309. And we only paid $500. Rest was crowd funded by the crowd health network. If you're sick of health insurance premiums and having to pay deductibles and getting ripped off at the hospital, join crowd health. It's an alternative way to pay for your healthcare. It's not health insurance is crowd funded. Healthcare as you can tell they negotiate prices for you. You pay in cash. It's much cheaper. Overall, we're much happier. They have incredible perks. Go to join crowd health.com/tftc to sign up five years on crowd health. Not looking back. Join crowd health.com/tftc used a promo code TFTC. Once you set up your account, you're going to get $99 a month for your subscription for the first three months. All right, freaks. 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Spend free out, keep your Bitcoin the whole game. If you've been stacking for years and you need liquidity without triggering the taxable event, this is worth a serious look. Go to even.com/biccoin. That's AVN.com/biccoin. Check it out. On top of that, you have. You see here in the states, you have this long end of the yield curve relatively elevated. You've got the interest expense on the debts about to surpass social security payments. You're going to have to roll over a ton of debt. You're going to go into more debt. It looks like 70s era echo inflation may be on the table. It's not looking great. To your point about the emerging economy is actually had a conversation with somebody last Friday off the record over a lunch. And he made a really astute observation with the AI specifically, like all the AI infrastructure is being built either in the states or to some extent in China. And obviously, US equities markets are way more open than China. So what you're seeing is like a capital flow from Europe, emerging economies into the US equities markets. So that's like we're sucking capital not only away from Bitcoin in other assets, but literally from other countries. And then to your point, they're opportunity cost of using that capital to invest in their local economies versus US equities markets is real and will manifest in potentially a negative way in disaster. Beat that global K shape. You just described. Yeah, it's very interesting because it would have been April last year, April 2025. I did a big report right around the tariff tantrum where I was trying to help my clients understand what my general view was in terms of how the rest of the world perceives the US actions with all the tariffs. And my read at the time, and I still think remains valid. My read at the time was we're probably actually going to see a net outflow from the US. And we did over the course of the 25, most other stock markets outperformed the US market. But then as we came into late 2025, yeah, I trade just suddenly because I mean, it was it was humming and starting to grow, but it just exploded. And then you started to see like South Korea, I mean, the Korean stock markets, going ballistic, Japanese, all these companies that are involved from a memory or whatever it is, all these bottlenecks that are occurring, they started to explode. You started to see copper prices, right? Miners start performing very well as well. So you start to see this dispersion as the trade really heats up in the back half of 2025. And now the US is sucking that money back in. So you kind of get to this interesting position where back in 2025, my view was you're probably going to see over the course of the next couple of decades, you're going to see like the Europeans and the Japanese say, actually you missed a Japanese pension fund or you missed a European pension fund. You've actually got to invest your money here. It's almost like soft capital controls where they increase the regulation on the amount of local government debt that certain entities have to hold. So that I think is likely to continue because it's trying to fight this free market force of the market putting money in the US, right? Which is very much in Brent Johnson's view, this dollar milkshake, the US is the market where these things happen and it just sucks all the juice out of other countries. And they've got to fight often via regulation to keep that capital. So yeah, fascinating stuff. And we're really watching. It is sovereign games of it's game of risk, right? Sovereign game of risk. Yeah. And then like if we do build all the data center infrastructure here, we're the dominant or a dominant percentage of the overwhelming or the overall data set infrastructure that exists globally, like then like we're selling that, we're exporting that compute to it's like a new commodity that you're exporting. Absolutely. People don't own it in other countries. It's crazy. Again, too. And you can turn off the inverted commons intelligence of other people, which is why it's actually in this other thing. It's an existential, national security grade thing. And that's why it's going to suck in so much capital why it is because like there's no, this doesn't happen. It's going to happen. Right? Now it's going to get overbilt. There's no question about that is going to have a bubble. You know, these IPOs just history would say is probably the beginning of the end of that process can get pretty lunatic by the end of it. But it is most likely that the governments are going to back this. The Chinese can't not be competitive in this field. The Americans can't not be competitive. And then at a company level, Google has to invest because they have to be competitive with, you know, all the other businesses that are trying to build this stuff. So all the individual players also have to be dominant because once you lose your dominance, it's game over. So it's this game where they just, they must, to must type event rather than what? Yeah, who's Zuckerberg said it last last year. It's like, I don't care if we spend a trillion dollars like we can, we blow up like the opportunity cost of not trying is too high. Crazy, right? Yeah. It's, uh, acidating times, but switching gears back towards our little cottage industry here. The world of Bitcoin and broader crypto. There has been interesting the dislocation of broader crypto from not only Bitcoin, but I think you mentioned earlier, there's going to be pockets of things. E cash had like a little moment there with all the shills came out. It seems like hyper liquid is having a moment itself. It's where dislocated from Bitcoin and broader crypto. And then you have capitulation in the East world. It's like the bankless guys dumping other eaves and, uh, but like coming around to John Feff's view that he wrote in 2017. It's, it's, it's not very valuable. Yeah. Brutal, it is a brutal thing, but yeah, it was, I appreciated David's, he wrote that piece on Twitter. Um, it's, that's crazy. There's a bunch of big coins who are like, oh man, I can't, If you're an atheist, she also ain't no dude. I'm looking at a guy who had his whole, like if it turns out the Bitcoin thesis was wrong. It takes a lot of balls and a lot of compute power to come to the realization to say, "Oh, the ethos money thesis did play out." And it was really lackluster. It did a very self-reflective. I finally recognize the problem. That takes balls, man. You may not agree with everything he says. I don't agree with everything he says, but at the thrust of it, he has come around to the John Feffer view, which is a gas and gas is not very valuable. You had your time in the sun and you priced in all the future growth. When you price in all the future growth, there's no future growth. You run out of steam. You credit to him for writing that piece because it would have been hard. It's selling it all. Quite difficult. I agree. I agree. It's just, I think I engaged a little bit of Shadam for it and cheered on me for doing it. But it is funny. It's screaming for a decade. This is the ultimate outcome. It is a big, big boy thing to come out and say, "Hey, acknowledge I was wrong. I'm changing my mind and going to publicly do that." But I think it's to the point, brought that up because what do you think happens with broader crypto moving forward? Do you think this is going to become? I think it's in a world of trouble. I think it's in a real world of trouble. We were talking about stockpickers market. I think that is on steroids. I think we've finally got to the crypto extinction level event where the garbage just gets culled and eventually there's just no bias for any of it. Now I'm sure we can probably trace this thing back and if you go back to the 10th of October 25, there's the leveraging event which kind of kicked everything off. There's bodies there that we probably, I don't think we've really found out what happened properly in terms of who got wiped out but market makers and all rest of it. But some of these tokens quite literally went to zero on that day. The price went to zero and that's because there was no natural bitters and that's the thing. Bitcoin doesn't go to zero because it has natural bitters. We can see it all the time. We can see it in terms of the amount of sell side that gets absorbed, the amount of buy side that comes in. Bitcoin has a natural buyer of real people, real entities, real companies who actually want to own it. On the flip side, that is just not true for the crypto world by and large. So really, it's a painful recognition that the thing you built is perpetual swaps and stablecoins. That's the product market fit been developed. That is ultimately the product market fit. That's a very narrow band. It's really not like for the hundreds of billions of dollars of VC and all the speculation and everything else. You made dollars digital and you built a casino. It's just a really painful recognition and like there's a point where the market just goes, it's just not coming back. And I think I do think we've hit that extinction level event. So I think it'll be very interesting. I think there'll be a lot of people. I mean, at the end of the day, I would say that it's overall, it's a net negative in terms of it's like FTX. There are people who got burned by FTX who will simply never buy this asset class ever again. And I think people who've been in crypto for five, six, seven years and have gone through the process that you and I have gone through with Bitcoin like my conviction of Bitcoin doesn't change. It's, you know, I learn more and I understand it more and I analyze it more. But like my core view, the Bitcoin is going to be a very important part of the future of the monetary system is unchanged. And imagine if you lost that, imagine if like it was just really, really apparent, really clear as day that it was just never coming back. There's a lot of people who are going through that right now. And I just don't think they are ever going to own this stuff ever again. I think they just drop off the map. They might as David did buy some Bitcoin because like I get it, like I still get the premise. But so just like pull out of the entire other X million tokens, it'd be like, I just just over, I mean, that's just going to be a true extinction level event. Um, there's still folks who think there's going to be like revenue, but like I, I look at the whole DeFi world and like I can see a world where DeFi was a cool idea. I can construct a world where that would have been quite interesting. The problem is it relied on shit coins and speculation. So that's a part of it. But like you can imagine, let's just for example, just imagine the Bitcoin happened. There was some breakthrough we were able to do a lot of the stuff. Maybe Bitcoin is using it all the time. The problem is the attack surface. And if you think we were talking about AI before, if you think about how much attack surface there is as the AI models get better and spot loop holes that no human would have ever thought about, I just think the risk for the whole crypto world, any DeFi system has moved from return on capital to return of capital case in point, something called kelp down, but hacked by the North Koreans and it basically created so much bad debt in R.V., which is the biggest lending protocol, blue chip, but it's big. And suddenly every like that, they drained half the treasury of every founder and DeFi project at all. There was all very wholesome rainbows and unicorns come together. We're going to patch it over. Don't worry. You'll be made whole North Koreans are going to do it again. And they're going to have pack some e-holes called like bread down or something. And it's just going to be like, eventually you just can't have your money in it. And I think that any serious capital is looking at that. And I certainly told my clients to look, just be if you have DeFi positions, if people do, just go through the process of thinking about your exit. You know, like I'll leave it to you. What you want to do, but like understanding that the risk is now a zero, not a two, three, four percent yield. It's like you might get just a haircut straight off the bat. No, I just think the bear case or the whole ecosystem, it's always been there. But now it's like front and center really, really hard to argue in the affirmative. It's a really, really bad state of affairs. Yeah. Yeah, it's not looking great because the kelp dowel wasn't the only, they're like two or three that like uptrend. It was all you know, there's all over Arbor, or what happened to Arborum. There's no, there's all these weird whacking hands. There's all this stuff getting like I saw a chart based on saying that like we're currently at an all time high of like monthly hacks. And I do find it quite interesting because like, just to touch on the quantum thing, not to disparage the quantum thing. I still, I'm still, I've said my view. I still believe we should be developing the solution because the risk is existential, even if the probability and the fougaysian stuff is all I think still real. However, think about all the hundreds of billions of dollars that have gone into the whole crypto while this like a big treasure chest that could be nicked. And then like there's these, these folks building these weird and wacky quantum machines that may or may not work, spending tens of billions of dollars for an uncertain outcome. And like a lot of them pitching now that stealing Satoshi coins will be there like that's their revenue maximizer. And by the way, telling Bitcoiners that this is our revenue pool to which like just imagine a world while I don't support freezing coins, just imagine that tomorrow we all go, "Oh, yeah, well, freeze them." Why didn't they just do it with the North Koreans didn't use AI and just hack summer because like if the business case for a quantum is theft and crime, just do crime, just use AI and just steal shit from the defy ecosystem. What are you doing building these complex machines? I don't know. I find that like parallel humorous at a minimum, right? I've not a disparage. I think quantum we should still take seriously. But I do find it kind of funny that like, bro, just go and hack kelp down. You'll make a ton more money and it will cost you 50 bucks in tokens. What are you spending 10 billion dollars on a bridge and all these pipes and you know, weird quantum particles and shit like it doesn't make any sense? Yeah, it is, it is copical. And like again, it highlights the design principles of the Bitcoin project that's taken over the years. It was like, hey, let's keep the attacks with surface as small as possible. Make sure this is relatively simple dumb and straightforward of a protocol so that people understand how it works and if bugs arise, how to fix them pretty trivially. And I think it's your point being validated in real time that this design approach to distributed monetary network is very wise on Satoshi's behalf. Those have picked up the mantle of keeping the protocol going since he left. And it is, I do feel a bit for the crypto people. There's a lot of people, RAH put in more than a decade of work, prime years and I mean, a long arc of history will be recognized like even the bad ideas are necessary to try in a free market that's actually functional. And I mean, I don't want to come off like a prick here, but I think to your points becoming clear that these are not going to work out in a long term. And it will be interesting to see the sentiment backlash that Bitcoin gets in terms of like a squorned X-girl friend just saying, I can't, I can't. David obviously recognizes like, hey, there's something with Bitcoin here. I'm going to acknowledge that. But how many others are going to say no, it's all fake. If my thing was fake, but quite as to. Yeah. And, you know, it's, it's tricky because Ethereum's got this whole roadmap to quantum proof the protocol. But say, yeah, but ECDSA is just like hard coded throughout all of your smart contracts. Like the user. are experience of saying, Hey guys, how do you email them? Can't tell them like, Hey guys, can you move out of like the V5 protocol, move into the V6 and then liquidity pools. They've got a shift around and you just think about all the places that and then all you need is one of them. And let's face it, the whole, my, my core view for the quantum debate is this is going to be really hard and really risky, really, really risky stuff. New crypto cryptography is not, you don't take that lightly. That's, that's, there is a bigger risk in my opinion of us rushing it and putting the wrong system in place than a quantum computer showing up tomorrow, considerably more risk in that angle. It's hard. There's a small pool of people in the world who can do it, right? We're talking about, you know, very, very small collective of people who actually have the cryptography, the quantum skill, are able to sense check this stuff, understand the existing system, know how swapping this out like that's not small small potatoes. And you think about all these little protocols that have zero chance of finding one of those people. And then trying to fit in with every, it's just like the downstream effects. If quantum is real, it's just came over for that whole system. You may fix the protocol, but you're not going to fix all the smart contracts. The users are going to get wiped. Then you've got the North Koreans who are also stealing stuff. You got AI hackers, crime, crime, crime, crime, crime. Like it's just, it's, it's really big attack surface. And yeah, I mean, like, you know, Bitcoin's not strictly out of the woods. I still think it's going to be very, I mean, I do believe that it has been so heavily reviewed and scrutinized by some of the, I mean, literally every hacker on the planet has been looking at the Bitcoin code and saying, how do I get into this thing? Right? It's been happening forever. So it has to be the one of the most reviewed pieces of software in the world. So it'll be amazing if AI finds holes made slop and pretend it finds holes. We'll see, but I think that the attack service on Bitcoin is considerably smaller. And certainly, I mean, that's just the only place in this world. So any place I can fill safe with. So yeah, it's, however, one more thing I want to float. I had an idea the other day. Goldbugs love to point at quantum is like Bitcoin's existential zero zero day risk. If SpaceX is successful in any way, shape or form or any of these space companies successful or if UFOs are a real thing, grab a gun through this whole display. I have no edge in understanding the disclosed of aliens, but I just thought this was an interesting thought experiment. If it turns out that aliens are real, we start space fearing, golds are zero because there's a whole universe of gold out there that eventually comes, comes to worth. So it's kind of the same argument just looked around, but like in theory, we can actually solve the quantum thing. Once you're up in space, you can't solve the gold supply problem. That's an infinite problem. Yeah. And I think, I mean, we don't even need to go to space. I think Groobles was highlighting this like, I think in April this year, just a reminder that there's more progress creating gold out of thin air than there is for quantum computers factoring past the number 15, like they're literally solving some alchemy problems in China, I believe, where they can turn some some raw materials into gold using some sort of system. It sounds like the same. Remember that, there was like a super conductor at some point where they a room temperature, super conductor in the whole world was lit on fire and they're like, no, I told you I was bullshit. It's like one of those. Yeah, it is, it is fast. So you mentioned stable coins earlier. Maybe we're going to end on that. What is your thesis there? Are they susceptible to the potential security risks that exist on these competing protocols that a lot of the stable coin. That's interesting one. Well, they're, they're a target because they're money, right? There are money of forms and what's people use them. The issue with them is that they can be frozen. Now they can't necessarily be frozen straight away. And you know, if you've got a bunch of tevh, there's a possibility of and we saw this with a from memory. I'm fairly sure some of these kelp down hackers swapped it into eith, which to be very fair can't be stolen and frozen. So they kind of understood, but they also had a bunch of their tevh, stolen, they had a bunch of it on an L2, which got frozen. So like there's gates all over the place. You can't exactly deposit it to Binance and get away with it coin base. They're probably going to block you. So I think stable coins are, it's interesting because I wouldn't want to be, I mean, sorry, I shouldn't say that because being tether is a crazy, crazy lucrative business. But the amount of like having to surveil, that's just going to get out of control, right? The amount they're going to have to surveil stuff and freeze things and request from governments and all that kind of thing. That's going to be a whole, a whole headache. But I do think that the stable coin thesis. And that's why in my post, when I was replying with David from bankless, my post is based saying, Ethereum, the blockchain is very successful. And I actually just don't understand how anyone can argue otherwise. I could say the same for Tron. I could say the same for Solana. Why? Because they have literally dollarized parts of the world, Venezuela. You know, there's parts all over the world that predominantly use tether as their money, right? You go to Turkey, you can easily spend tether. So it's one of the things where it has dollarized parts of the world, which quite frankly has been like a desire for the Bitcoin idea for a long time to provide a money. They were coins have done that. So undeniably, those rails have been successful. There's no value capture potential for the underlying asset for the eth and the soul and the, you know, there's no value capture for the token. But the rails have quite literally dollarized. And that doesn't matter what rails it's on. So I also think that just genius clarity act. Both of those are a very clear signal that the US sees this is actually good for dollar Germany. So I'm going back to that national security idea of AI. I think that stable coins proliferating is hugely beneficial to the US. And they're going to push for it. I think it's they're going to support it as far as they can because it makes all the sense in the world. And what I think is so interesting about the stable coin story, it was chosen by the free market. People chose tether right in these countries. They didn't, well, in fact, their government would rather they didn't have it. They chose it because it was better than their local savings. And truly that's part of my thesis for Bitcoin as well. Because we're fortunate you and I had to live in, you know, Western nations, the US and Australia. Our currency isn't great, but it's also not terrible. Not the lira. It's not the Bolivar. So the quantum leap, the use upon the quantum leap from a from the lira to or the Bolivar to the dollar US dollar is about the same magnitude as us going from the Aussie dollar to Bitcoin or to gold, right? Going you're going up into a sound money, right? Sound soundness is a scale in many ways. Now there's obviously a large portion of fear currency that is unsound from a absolute value. But there are far more unsound money's. And this is what the Ethereum folks never understood with their ultrasound money theme. The rate of issuance isn't the problem. The number, the absolute value of the issuance is not the factor. It's the ability for some dude to turn up overnight and say, your dollars are worth half as much. They're worth twice as much. I want more, you get less. It's the change. It's the human governance layer that makes it unsound. And if you think about any of these currencies that get devalued overnight, in fact, I use this analogy. It's again, it's different, but it's it's it's close enough. The Australian government, I won't bore people with the details, but with their budget, they effectively change from a 50% capital gains discount after one year to being it's now indexed. So if you think about that, indexation of CPIs like 3%. So now your long term capital gains discount goes from 50% to 3%. Right? Per year. They've affected the devalued our savings. Right? They've made it. Just they came out with a budget that just kind of came out of nowhere. And suddenly, if you're an Australian, your savings after 2027 are going to be taxed at practically double the double the rate 50 value your savings. And that was a human governance decision. Same when they devalued the Egyptian pound that they devalued the Turkish lira. The human governance angle is the problem. And over time, the US dollar is just going to absorb and consume all of these smaller currencies. The US dollar is going to get this way. I'm very much on board with Brent Johnson's telemilkshake theory. I think the dollar just absorbs all these smaller currencies. The people of that nation choose it. Their government hates it. And that's why the weaker fear currencies will collapse into the dollar. The dollar dollar rises more and more places. But ultimately, does that change the soundness of the US dollar? No. So the more people to move on to the US dollar, the more people eventually realize, hey, you know what? Yes, it's stronger than what I had. But now this is my baseline. Hey, turns out this is also shit. What do I do now? I've got to keep going up and up the stack. So this is a patch of flow of people moving up towards. I actually need a sound to savings asset. So yeah, I mean, there's the kind of a long-term view that I see, but I don't think the dollar is going anyway. I think it's going to eat all the other fear currencies first. And do things, Debucoins, are a big part of that. Yeah. As Parkour Lewis said, and gradually, then suddenly it's the credibility of your monetary policy, which is that's it. We're here to get like, yes, you can have ultrasound money. But it's actually ultimately not ultrasound because you've changed it four or five times along the way and settled on this from a medic purposes. And that's that. That in speaker emoji. is going to change that. Yeah. It was a good college try though. It was good effort. And it's funny too. It's good. Yeah. I completely agree. I think everything's going to fail into the dollar and then ultimately, like, what is the credibility of the dollar's monetary policy? Not very good. For reasons discussed earlier. And many Bitcoiners will get frustrated and say, "No, we shouldn't be public stablecoins." And I think want to be clear. And I think you or I are saying, like, go use stablecoins tomorrow, particularly, I mean, we're fortunate and I think individuals in our shoes and our economies, we don't have to. And you would be just very stupid not to recognize that there is demand for these things. I mean, it's objective as you-- Undeniable. Yep. Already pointed out. And I think you should also be objective about the state of Bitcoin as a fully mature monetary system that covers savings and payments. And the payment side, while it's made massive strides in the last decade, it's still probably not where it needs to be for mass adoption. And that's one thing that's incredibly encouraging to me or has been at least for the last year, first six months of this year, particularly with the onset of these AI tools, while the attention has been drawn into other markets and other parts of the economy, the second layer is that are being built on Bitcoin or getting more mature at a faster pace and that infrastructure that will be necessary to enable that jump from stablecoins to Bitcoin is getting to a point where it can actually facilitate that not tomorrow, but it's working towards that ultimate state where it can do that. Yeah. And I think it's also important for people to recognize we've been in a bear market for six, seven months. Six, seven months. Even if you're a four-year cycle theory dude, or last, it's 12 months is the typical bear market duration. So guys were in the last chapter of it. So there's a lot of folks who are looking at this equation of being like, this bear market feels like it's never going to end. Bitcoin is just dead. It's over. It's been just like started. It's a there's quite literally no data point in Bitcoin history that suggests that this doesn't resolve value and lead to the upside. What's going to happen is a lot of people are going to miss it because they're going to get too cute. They're going to try and be too cute. Time the absolute bottom and like again, run the studies to my best estimate. Just dollar cost averaging through the bottom 20% of the cycle anything below 70k gives you a better entry price. You know, as good an entry price as trying to lump some the bottom tick. Stop like don't lose hair, grow, grow gray hair over it. And by the way, I said this before, the feeling that you have right now watching AI moon and the feeling you had back in January watching silver moon and choose whatever it is. That has been Peter Schiff's life for 17 years. It's why he is the way he is, right? It's six months, seven months. Can it be all right? Bitcoin's going to bottom. You just got to be there for it. Not a mean like to get too cute with it. Don't try and time the bottom. I spent going back to Michael Sullivan's work. I spent a bit of time a couple of weeks back where I liked a couple of bullish posts. And the algorithm on Twitter immediately showed me the most moon boy ridiculous nonsense. And the most doomerish and like some dudes predicting six K charts with like a legitimate arrow on their price chart being like this is like my TA. And I was like, oh, God. So then I did the other thing the next day. And the reason I caught and don't do this is I mentioned the Australian tax thing. I mentioned I put a bunch of posts out. My feed just immediately changed entirely. I stopped seeing anybody who wasn't Australian like it was so instantaneous. Like how sensitive are these algorithms? So then I started liking some bearish posts. And next thing, you know, I've got again, the most ridiculous moon math because they're the ones I'm going to engage with and like you're in India. You're so wrong. And then just like chart after chart after chart of the same bear flag with the same arrow all pointing to 45 K again, might happen, not my base case. In fact, very far from my base case. But like be very, very careful with how sensitive these algorithms are like on X particularly. And to be fair, that's the only social media platform I use. So from sub stack. It is so sensitive that the world you are seeing is absolutely crafted by your mood and your mood crafts that scene, which then crafts the scene for your mood. This is what Michael is doing. He's analyzing how people get pulled into these ditches, right? Of just utter doom. And people who've been around for a while, you develop that resilience, you be key. You know, a bit more optimistic because I know how this resolves. I've seen this movie so many times, it looks the same, the patterns are the same. Right. All these dynamics are very familiar. It doesn't feel like February, right? February felt like a true beer capitulation moment. This is apathy. This is apathetic. No one cares. So all these fears about all this stock market is going to blow up and then it's going to take Bitcoin down. So like, dude, there's going to be no one who owns it when there happens. There's no sellers, there's almost no sellers now. Like, once we get to that point in time, like, it's just, so yeah, I think folks don't get too cute. Just honestly, my advice for this cycle is just by the bottom fifth, the bottom fifth of the cycle, my button, like just round numbers, the bottom fifth is below 70 K below 60 K is the bottom 10th. So you're talking about a 90% chance of it being like in the money and down to 55, 54 K, that's the bottom fifth, five percent. The lower you go, the better it is. Don't have to think it. Just just stay humble stacks at get through the other side. It's going to be fine. I cut some of that message we did out earlier today. This is a summer stack. Two not the noise. Hone your craft and just say humble stacks. That's just remember how it felt today. He came and you like, damn, I wish I bought more in the 60s. 66, 6, 50 right now. What are you doing? Yeah. It may run away from you between now and when this is actually posted next Monday, but we shall see James. It's always a pleasure. Stick around, stick around after a record. I want to show you something because I think you'll get a kick out of this. Good on you. Thanks, mate. Good to be here. All right. Peace, love freaks. Thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. 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