Andy Edstrom - Is the World Truly Ready for $1 MILLION Bitcoin?
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Hey, hey, welcome to the Bitcoin Matrix podcast. I'm your host, Cedric Youngleman. Today, I'm thrilled to be joined by Andy Edstrom, a wealth management expert and one of Bitcoin's most insightful advocates.

In this second appearance on the Bitcoin Matrix, we dive deep into Bitcoin's market cycles, explore the emotional and strategic challenges of holding during bull runs, and discuss the evolving dynamics of property rights in a decentralized world. Andy also shares his thoughts on real estate institutional adoption and why he remains so bullish on Bitcoin's future. So I hope you enjoy this conversation.

The only thing I'm going to ask of you is if you can please go and subscribe to the RSS feed and or our YouTube channel. And if you do want to get in touch with me, it's Cedric at the Bitcoin Matrix dot com. We could also sign up for our newsletter. Now let's enter the Bitcoin Matrix with Andy Edstrom. What is real? How do you define real? You can't jump into cash. Cash is trash. What do you do? You get out.

Andy Edstrom is the author of the book, Why Buy Bitcoin? Investing Today in the Money of Tomorrow. Additionally, his opinions on Bitcoin have been published in the Wall Street Journal and his opinions on regulation of the internet monopolies have been published in The Economist. Andy has spent his entire career in wealth management, private equity, and public markets investing. Prior to the global financial crisis of 2008-2009, he caught a glimpse into the making of financial sausage while working at Goldman Sachs.

Andy holds the Chartered Financial Analyst and Certified Financial Planner credentials, as well as a Bachelor of Arts in Economics, Magna Cum Laude, and Phi Beta Kappa from Williams College. Andy lives in Los Angeles with his wife and children. He serves on the board of directors of the Robert M. Adams Foundation, a charitable foundation supporting education, healthcare research, and other philanthropic projects.

Andy Edgstrom is one of our earliest guests and a longtime friend of the show. Welcome back to the Bitcoin Matrix podcast, sir. How are you? Cedric, I am well. It's great to see you, my friend. It was a joy doing that early episode with you. I feel like it was four years ago or longer. And I just want to tell you that your pod, Bitcoin Matrix, is one of the very few that I still listen to regularly. So it's great to be on with you. Wow. Wow. I really appreciate that.

Flattered. You know, I was excited to run into you at Michael Saylor's 100K party. Unfortunately, fortunately, I guess it was in the porta potty. So maybe not the best environment. We got to chit chat outside. Yeah, you were on episode 14. And I think that came out on November 6th, 2020.

And the blurb on is a kind man with too many credits to list. Andy Edstrom is perhaps the greatest asset in the argument for Bitcoin's dependability down the line. We touched on economic tradeoffs, 9-11, the Patriot Act, and the deceit of government-backed fiat.

You know, this episode gave the definitive answer to the age old no coin question. Why buy Bitcoin based on your book? I definitely recommend people go back to that. It was actually interesting before the show came out. I reached out to you, I think, before maybe right when I started putting material out and you were like, how do I find your show? I got to listen to it. I make sure I'm not going on like a.

You know, crypto podcast here or something. And I kind of appreciated the don't trust verify. You know, so many Bitcoin is as generous as you and everyone else are like, like, yeah, come on. It's kind of courageous, but like you don't know what you're getting into. So, you know, we go way back there.

But you're in LA these days. Yeah.

And then regarding your comment about running into each other at the bathrooms at the 100K party, some of the best conversations come out of running into people at the bathroom. I met Matt Pines in the very, very, very long line for the restroom at the –

that party that i think it was mccormick and gemini put on together this was a few conferences ago and uh so yeah you know run into great people at uh bitcoin party uh bathroom stops that's uh that's just the way it goes but uh you're right i am in west la it's a gorgeous clear day here uh it was not a gorgeous clear day most days last week uh i'm a few miles from the palisades fire

So it was a pretty long and sobering week, and very grateful that we didn't suffer any personal damage. I do have clients who got evacuated. I have friends who got evacuated. I have a couple clients. Sorry, I have one client who I believe lost his house. I haven't been able to contact him. I have a couple friends who

you know, who lost their houses. One who, by his own description, he said, by some miracle, my house survived. And I was thinking soon after the fact that,

Is that a miracle? I think it's a miracle if you have a lot of personal affects and you really feel strongly personally about your home. But on the other hand, the rest of the neighborhood is gone. And so it's hard for me to imagine moving right back into one's house in the current state. That said, I'm pretty optimistic for...

the rebuild. I have a contractor in the neighborhood. He's working on the house next to mine. That's a whole other story. He grew up in the Palisades. So, you know, he has very personal ties to the place. And he tells me that he's already getting dozens of inbound calls, people saying, hey, come rebuild my house, you know, put me at the top of the queue, bring me to the front of the line. Let's get this done quickly. And

So I don't have much doubt at all that it gets rebuilt very quickly. Having said that,

You know, I'm hopeful that this event makes a mark on the politics of California because we had swung pretty far in the wrong direction over a period of years and years. And yeah, so I'm sort of cautiously optimistic that this could result in positive developments overall. But in the near term, it's a tragedy overall.

I guess it was nine days ago, Tuesday night, I was staring out my office, my home office window, and I could see the orange billowing flames off in the distance. It was probably two and a half, three miles away, but there's definitely a part of the brain, you know, my amygdala was stimulated, let's just say. You know, I felt the fear response. My wife

was packing go bags. You know, I told her, I don't think we're at risk because if my place burns, you know, it's a couple, it's more than two miles of, of urban sprawl, you know, between the fires and us. I mean, we've lost the whole city probably if we, if we lose our house, but nevertheless, it was a, it was a little stressful and,

It'll be a permanent imprint on everyone who lived through it, not just the direct victims, but also those around them. And I guess all I can do is think positive thoughts and have positive hopes for the future. I still love L.A. You know, this doesn't make me want to leave, but it does make me want to see a change in government policy. Wow.

So, I mean, this won't come out for nine or 10 days, but I mean, it seems like you're safe now. And fortunately, I mean, I don't know how you got, I mean, two miles away, even with urban sprawl. I mean, just what the news was happening. I mean, I was in New York City on 9-11 and in the suburbs in the following days. And you could see the smoke and the plume for 20, 30 miles. But, you know, wasn't so worried about embers and things like that and wind changing and

Yeah, I mean, I can't imagine like sort of the calculations you were having to make. And have you gone over to the Palisades or how close have you? I mean, what kind of what have you seen or witnessed? Yeah, yeah. So I was exercising in Santa Monica, California.

pretty not far from the border of the palisades i don't know a couple days ago they've still got streets blocked off you know the fire department has trucks uh the california incline as of that moment was closed in the direction toward the palisades and the california incline in case people don't know is this

big, it's this road on this big hill from Santa Monica down to the Pacific Coast Highway, the PCH. And it's basically this artery from Santa Monica down to the PCH, which then connects up toward Palisades and Malibu. And so, yeah, so you can't go in that way. I'm sure if I went on foot, I could find a way to get in. And I know people, including one or two Bitcoiners who have made their way, you know, made their way back in.

And so I think it's doable. I haven't done it. You know, my wife is concerned about chemicals exposure, chemical in the air, chemicals in the air. I think that's probably legit. I mean, I sort of doubt that going up there for an hour or something would really result in any measurable health effect. But I'm not in any hurry to get back up there. I was actually supposed to meet with my client who lives in the Palisades area.

I believe his house made it. Last I had heard, he was sort of on the outskirts, more down in the valley, sort of below. There's an area called, I guess it's Rustic Canyon.

that's right there, which is where he is. But his house was fine, but his daughter's house was not fine. Anyway, I was supposed to meet with him for lunch yesterday. Needless to say, he canceled, rescheduled on me. But yeah, there's definitely been some fallout in terms of personal relationships and professional activities going on. But

yeah, we're fine. I'm hopeful that they rebuild it soon. There were structures that survived. The developer, Rick Caruso, who, by the way, ran for mayor. I wish he had won that election recently. He didn't. But he developed this shopping center in the Palisades. He has a mansion in the Palisades.

He contracted private fire suppression services. They worked. So that shopping center, as I understand it, is still standing. I believe his mansion is still standing. And, you know, it's just an interesting case study of

Well, it's a case study in the fact that measures can be taken. Preparatory measures could have been taken that weren't taken. I don't know if it's a case study in sort of private market solutions versus public market solutions. It sounds like it is, right? Sounds like the government didn't deliver...

But private markets did deliver, although I suppose he could pay up and pay any price considering he's a multibillionaire. But yeah, it's a sad and fascinating case study in a lot of ways, and it's going to be studied for years to come. I mean, this is a major tragedy, and I'm sure even just running errands or

kind of getting through your day in LA, I'm sure this would all... I'm asking, but I mean, I remember after 9-11, I don't know if this is comparable or not. It seems like it probably is in so many ways. That's an interesting... Yeah, I hadn't thought about the comparison to 9-11. I mean, look, there's not a lot of... Maybe not in terms of casualties. Yeah. But in terms of, I mean, just broad devastation and the ability to sort of return to, you know, normalcy. You know, neighborhoods...

A big neighborhood. I don't know how big you can describe Palisades. But it's devastated. Even if your home survived, it's not like your kids are going to go to school on Monday. Even if your home survived, I don't know if you have running water, electricity. I mean, what survived? You talk about Rick Caruso, the economic calculation of hiring...

I guess the private firefighters to save his mall. Maybe that was a bad decision. Maybe he would have, because like how valuable is the ball now that, and I'm not trying to joke or kid about this, but I do wonder what it's going to be like for you the next, for a period of time, just kind of everyone trying to rebuild, get on with their day, talk about other things. I mean, is this all anyone's talking about? That's what I would imagine. Yeah.

Yeah, look, so I grew up in L.A. I've lived here my entire life except for eight years when I was at school and then I was living in New York. I lived in New York just after 9-11. So I moved to New York in that recessionary aftermath period, which took years to rebuild and recover. And I actually lived next to the World Trade Center site

in 2006, 2005, 2006. And that was a time when, let's face it, you could get great deals on rent because the neighborhood itself was still a wasteland. I mean, they were still pulling bodies out of the Deutsche Bank building, which was, I can't remember if it was next to my building or two buildings away. So that was truly devastating. I think

Look, there's not a lot of smiles on faces around L.A. right now. That's for sure. Certainly, if you lost your home in the Palisades, and I know people who have, it's hard for me to imagine. I mean, I haven't had to survive that kind of an event. I think that analytically, it's not as bad. I suspect it's not as bad as 9-11 events.

That's my suspicion. We'll have to see. We'll have to live through it. I think people still are going to want to live in the Palisades. Those who have lived there a long time, who built their lives there, if they can afford it, right, if they either can fund it out of pocket or if they have enough insurance to rebuild, I think they will rebuild. There certainly will be some who cannot afford it, either because they were

completely because they hadn't renewed policies or because they were underinsured or because they're at a point in life when they're older and it's just kind of not worth it to them to rebuild. Maybe it's an opportunity for them to move somewhere and, who knows, move toward where their grandkids are. I don't know. But yeah, look, it's going to be... I'm still cautiously optimistic that the rebuild...

will happen quickly. I think it probably happens a lot more quickly than what you saw in lower Manhattan after the 9-11 attacks. And yeah, that's my assessment, but I guess we'll just have to wait and find out. Yeah, I guess my pessimistic view is it's more in line with what happened in Lahaina, and maybe it's really hard to rebuild. And for several, whether people are uninsured or not insured enough, and then all that maybe, these were historic homes, right? Yeah.

Many of them. So they were probably built on a very different code with much more, you know, less easements from the road and from the sidewalk and from, but yeah, maybe some, yeah, it'd be very interesting. I wish you guys the best. Thank you for that. And yeah, look, maybe, maybe I'm naive and just, just optimistic. I think the,

I think the scale of it allows for a rebuild. I think the other thing, too, is that, I mean, it is a global market, although you could have said the same, obviously, for Manhattan. Like, is there demand for real estate overlooking the ocean, you know, in West LA? Like, obviously, yes, and I think there...

I'm not going to say always will be, you know, who knows what the far future holds, but I got to believe there's a lot of people who either were residents or are aspirational, hopeful residents, you know, that would love to move in. So we'll see how it goes. I mean, after 9-11, I as well moved into lower Brooklyn, into Cobble Hill. And then after a few years, I moved to San Francisco and did my West Coast stint.

And did quite a bit of consulting down in LA. Had you been in Manhattan before Brooklyn? No, I didn't live in Manhattan before Brooklyn. But I worked on the 90th floor of the Towers, Tower 2. I was not there that day. I was in Manhattan that day, midtown. My God. I didn't know you were one of the sort of lucky few. I've heard...

people talk about, I don't know, what's the term? Not imposter syndrome, but feel like they got extremely lucky and then some felt that they didn't deserve it or had guilt over it. I kind of threaded the needle. I rolled off my client about nine months before 9-11, so I wasn't supposed to be there for months. I wasn't going to be there, but I had connections. I knew people in the building and I knew people in the buildings nearby and I was in Manhattan that day and

You know, I had this buddy was mine. I was like on 26th floor of my building and buddy was like, Hey, I'm going up to the 52nd floor to watch tower to fall. And I was like, I don't need to see that live. Like I, my God, you know, I don't need to spectate that. And there's other things going on here. I need to talk to people and regroup, but,

Yeah, it was a crazy day. And then I moved to California. I spent a couple of years there. And I definitely know the beauty of the West Coast and the allure. I found that, you know, maybe without the mountains, I've found everything I want in Florida now. You know, but I was just back in Brooklyn and I miss New York a little bit. I do want to talk about property rights because you mentioned sort of like Rick Caruso and

you know, like this notion of like hiring private firefighters. Like maybe you can sort of expand a bit about property rights and how they're derived and, you know, how people kind of can think through those situations. Yeah. So Bitcoiners love to talk about or think about property rights. I think that one thing that maybe some Bitcoiners get wrong is from a practical perspective, they think of property rights as inherent human rights. And I think I believe that and many believe that

And that may be sort of ethically true. Then there's the practicality, which is in practice, your property rights have nothing to do with you. They are either recognized or not by those that surround you, right? Property rights exist around here because of the law, and the law springs out of government in practice. I mean, we can talk about the founders and

how they felt about natural rights and how that informed the construction of the government. But as a practical matter, government imbues the law with power, and it's the law that protects property rights. But that all has to do with whether those around us are at any moment in time respecting those property rights. And so Bitcoin, of course, mostly fixes this. It doesn't completely fix it. I mean, obviously, the ability to custody your own keys is,

is a de facto property right. That doesn't mean that those can't be extracted under duress, whether $5 wrench attack or other means, other threats. But it definitely tilts the balance of power in favor of the individual property holder. But I've been thinking more about this concept of

an investment where the value of the investment is your expectation of its value in the future. Maybe I should say the rate of return on an investment is your expectation of its value sometime in the future, plus any cash flows that have accrued in the meantime.

And then I multiply that by some probability that my property right is actually maintained. And I feel like we need a term for this. And I haven't settled on one. Maybe you've got some ideas. I've been thinking of something like ownership durability or retention probability. You know, security of tenure. That's actually a legal term.

which I learned from my wife recently, who, by the way, recently finished law school. I'm happy to tell that story. But it just so happens that she, midlife, we had two kids. She decided that she wanted a career switch. She had been a teacher before. She stopped working to raise the kids.

And, by the way, we subsequently had a third kid. That's a story I won't tell. But the two kids at the time, she says, I want to go to law school. I said, great. Sounds wonderful. I'm sure you'll be great at it.

See if you can figure out a way I don't have to pay for it. And she did. She got a full merit scholarship to Pepperdine. And the reason she got that scholarship is not just her ability, but it was the fact that Rick Caruso was a Pepperdine grad. And he had recently given $50 million to the law school. They renamed it Caruso School of Law.

And so, you know, Rick Caruso basically paid for my wife's law degree. So thanks. Thanks, Rick. I did vote for him, by the way. Not shocking after the fact.

Anyway, back to the property rights question. I do think that the value of any asset that any of us possesses or owns is, yeah, its future value multiplied by some probability, which hopefully is close to 100%, but it's lower than 100%. And it all depends on the security of our property rights. And those property rights, I think many Bitcoiners would argue, are not

are sometimes called into question and called into question more and more these days hey bitcoiners invest in bitcoin with confidence why do i recommend river river is the best place to build your bitcoin wealth and they offer zero fee on recurring buys

proven full reserve custody. Earn 3.8% interest on cash paid in Bitcoin. Put your cash to work and earn Bitcoin. Cash is FDIC insured, no hidden fees or minimums and withdraw your cash at any time. River makes it simple and secure to save your wealth in Bitcoin. Get $100 when you sign up and buy Bitcoin on River at river.com forward slash matrix. Well, maybe on a scale or a spectrum,

How would we broadly rank asset classes via this sort of ownership durability model? Like, let's say that Bitcoin was the highest ownership durability. Let's put that at 100% or maybe put it at 99.5% because of sort of, you know, the human equation element in this and

you know, pressures, external pressures or whatever you want to call it, your own inabilities to secure your coin or, you know, maybe other external factors to, you know, exert force on you to get you to give up your coin or whatever you want to call it. But maybe if you looked at gold and probably not from a perspective of physical security, because we all know you can't just amount a lot of it and secure it and probably very low ownership durability, but stocks, bonds, real estate, how would you rank those?

yeah good question i like the question of real estate if it's your primary residence obviously you not only have the law on your side generally speaking but you also have the ability to defend it potentially if you choose to so that's so that's one um if it's real estate that's an investment property now you're on shakier ground figuratively speaking right i think because let's say in the state of california

you know your renters have significant rights it's not so easy to evict uh you know deadbeat renters um there are various laws that uh that that govern those properties held for investment and then moreover you've got the tax system uh the way it works here and i think in most jurisdictions is you got property tax

You know, how does that figure in? I think you have to factor in tax when you're talking about your ownership value of an asset because it impairs the value of the asset by the amount of the tax over time. So I guess that's some thoughts on real estate. With stocks and bonds and things, you know, it's all the law. It's all on paper. I think there's an interesting...

factor to think about, which is, you know, does ethics and honesty of management play a role here? You know, I imagine owning a public stock where the management team is scumbags and they basically loot the company, right? There's lots of examples of this through history. I think of Dennis Kozlowski and Tyco as a classic example.

The way that one worked, though, was the company was so large that even if you stole a lot, the equity value wasn't impaired by that much. But let me tell you, he did steal a lot. I think it's more a risk with private companies, smaller, earlier investments. Maybe they don't have the same public scrutiny. They're not subject to financial accounting advice.

reporting requirements. There's maybe less eyes on the management team. You know, you can imagine yourself getting into a position where management doesn't treat investors fairly. Investors have to decide whether it's worth suing to, you know, try to recover value. So I think there's probably a distinction there between public and private investments where, you know, hopefully the public investments are more profitable.

are more secure. And then I think jurisdiction matters too. I mean, you definitely, U.S. public company reporting and legal standards are still the gold standard globally. I mean, you've got, I don't know, 100 plus jurisdictions where there are stock markets, and you definitely don't have the same legal claim in the Nigerian stock market, I don't think, that you do in the American stock market. So those are a few factors that come to mind in terms of the

relative merits or relative strength of ownership durability in the asset class that you just mentioned. Yeah, very interesting way to look at it. I want to talk about a thread you recently put out about a week ago. It'll be about two weeks old by the time this show comes out. You said, Dear Bitcoin noobs, yes, you bought the top. You're worried about further losses. It's okay. Welcome to Bitcoin. A quick thread. Liquidity is drying up.

This may be right in the short term. Maybe Treasury is messing with the TGA or moving back toward long-dated issuance as a final parting shot to the new administration. But inauguration's now only four or five days away from when we're speaking now. Break that tweet down a little bit for me. And what message are we starting to get out here to noobs?

Yeah, the first message is Bitcoin always goes down, except for sometimes it goes up, right? As you know, most days of the year or days of the cycle, you're losing money compared to when you bought or you're losing dollar value. Okay, you're losing purchasing power. Like it or not, we're still in a world where the unit of account is the dollar or is fiat. Hopefully that won't last forever, but it could take a while.

So that's one factor. I think the second factor is, yeah, it is hard to get into Bitcoin and you buy and the price goes down and you're staring at losses and you're questioning your thesis. You're questioning your understanding of this asset. You're questioning whether you made the right decision. Are you too late? You know, was that the end of the bubble? All of these things.

All these things that go through your mind when you have fear, which is triggered by a markdown in the value of your asset. So, you know, we've all been through it, except for those of us who were on the cypherpunk mailing list, you know, who knew from the beginning that Bitcoin was a thing. The rest of us mere mortals have these feelings, and it's totally normal and natural.

And, you know, I like American Hodl's framing, which is you're really not a Bitcoiner until you've been through a full cycle, right? You've lived through a bear market. You've tested your conviction and you are, yeah, you are forged. You are forged in that bear and you emerge a bright orange Bitcoiner on the other side. So, you know, I know there are folks out there who are new to Bitcoin. They don't have the confidence level yet. Maybe they don't have the knowledge yet.

And I'm just trying to help them understand what might be going on. You know, I think we're still in a bull market. I also think substantial downward corrections are normal in bull markets. They certainly have been in prior bull markets. There's, you know, Bitcoin trades with technicals to some degree, although not perfectly. And it's faked people out plenty of times. I mean, I've been watching this thing's price for,

whatever, seven plus years. And occasionally it humiliates people, including and especially the best traders, which is why it's generally a bad idea to actively trade Bitcoin. And yeah, I was just trying to, you know, put a frame out there. You know, is there a bearish head and shoulders pattern forming perhaps?

As it turns out, by the way, the recent price action was in the opposite direction, suggested that that pattern didn't complete. Who knows? Maybe it will in the future. I'm not sure, but I think it's a good example of take the long-term view. Don't worry too much about the short-term. I think it invites a bigger discussion of price targets in general. And I have a range in my mind, but I think it's worth...

discussing the fact that, first of all, price targets in Bitcoin are impossible to begin with, right? The range of outcomes is huge. Secondly, if the pattern repeats this four-year cycle, then we're in the big up-move year, but the magnitude of that is unknowable. So it's like you already got a wide potential range. That window is probably even wider.

And then lastly, you know, it's going to depend on actual fundamentals and events. Like, will there be a strategic Bitcoin reserve? That's probably going to drive the price. You know, do we get a lot more liquidity, you know, big print? That's going to matter. Do we experience some market shaking event like we just had last year with the yen carry trade unwind?

Do you have some sort of black swan that occurs? Do you get the game theory playing out with governments competing with each other to buy more Bitcoin sooner and get on the train before the next passenger? Will all these happen? I have probabilities in my head assigned to each of them. I have no idea whether – who's right in terms of the probability assessment. And even those that have exactly the right rational probabilities assigned –

Still haven't rolled the dice to, or thrown the coin to see which side comes up. So basically we just don't know. And so the message is hodl, but also know what you own, know that big price moves are totally normal. And in the short term, it's impossible to project the price. And I'll maybe add one final thought on this topic for the moment, which is,

You know, when I published "Why Buy Bitcoin?" I committed the cardinal sin of every investment analyst, which is picking a dollar price target and a date, right? You're not supposed to do both because then you can wiggle out. But this was, what, five and a half years ago almost, and I had three scenarios in the book. And one scenario was the failure scenario, right? It goes to zero. There we go. Thank you for that.

he's cedric's holding up his copy of y by bitcoin the second scenario was oh it's already reached its potential you know like maybe it won't go up much or go down much and then the third scenario was the success scenario and in the success scenario i put a price target of about 400 k so price at the time of publication was eight or nine k and the target was 400k

And so you figure, you know, what's the multiple on that? Here we go, Cedric. We're going to test your math skills. 400 divided by 8. 400 divided by 8? Yeah. Are we really doing this to me? 50. 50, yeah. 50x, okay, on a 10-year timeline. Now, if 50x, you know, if it's exponential or geometric or, you know, something along that, then you figure –

square root of 50 is about the square root of 49, which is 7. So you might have thought, oh, you get 7x in the first five years and you get another 7x in the next five years. And maybe actually it's weighted to the front end because when it's smaller, you get a higher rate of return than when it's bigger.

But suffice to say, you know, these are kind of the rough numbers. So four and a half years from now, do I think still that we'll be roughly at 400K? Yeah, that seems pretty reasonable to me. That's still a cycle away. You know, we've already made from 8 to roughly 100 right now. You know, we've already made, we made more than the 7X. We made whatever that is, 12X. But order of magnitude, it's not too far off.

So in terms of how this thing has gone on a long time period, I think we're kind of in line. But it just goes to show, can one make long-term price predictions like a 10-year? Yeah, maybe. We'll see if it's right or not. But can you make short-term price predictions with any accuracy? Yeah, my answer is no.

All right. Well, there's lots to unpack here. And I'm going to throw a few things at you that we could kind of riff on. So one, though, just earlier you mentioned that you just kind of you might you have a third kid. Congratulations. I am a third. I bring it up because I'm a third. And my brothers are nine and 12 years older than me. So I appreciate both sides of that. And I have a warm spot in my heart for the threes of the world.

You know, the third ones. But also, I like, you know, I think you also talked about this on Stefan Levera's show, but, you know, like how really models are very flawed. You know, the sort of the historical data is how is it going to inform future price discovery and why would it be consistent or how does it evolve over time? What are the assumptions, the variables and then vetting these things out?

But if we do look to the past a little bit, in 2016 and 2017, Bitcoin, I think, did something like a 26x. I think it went into 2017 around 1,000. And then you sort of did about, at the end of the year, close to 18k or peaked. I should say not end of the year, but peaked around 18k. So you're looking at like an 18x. And you could kind of see something along similar lines of like where we are now going to something like,

I've seen, you know, models based on that activity of like 2.6 million this cycle. So I want to move to another thread you put up because people are looking at this as possibilities. You know, I'm not saying it's highly probable. Something I kind of think a lot about with Bitcoin, though, is where I do...

wonder because I think that you know not only do does the historical not necessarily inform the future but we have a very limited data set here like we have three cycles I mean we're not talking about a lot of data points you know we have 16 years in but I do think things will sort of repeat in Bitcoin it's sort of this mathematical fractal like thing and you know so I look at the fact that you know Bitcoin is already 10x eight times in 16 years

Makes me think maybe that will happen again in 16 years or less because things kind of could get faster. It's sort of peer-to-peer technology built already on top of the Internet. It's Internet of value on top of the Internet. Maybe things get faster. So I want to get to your thread on – no problem. By the way, I'll just start riffing on some of those price levels. $2.6 million, I think I heard you say, if you apply a prior –

a prior cycle or maybe it was the two cycles ago multiple what what probability do i assign to that outcome pretty low um also by the way i hope it doesn't happen

I'm curious your view on this. I do not think the world is ready for $2 million Bitcoin. I don't think the world is ready for $1 million Bitcoin. I think a move to seven figures within the next year or two could be pretty disruptive. So I'm really not hoping for that. I think seven figures a couple cycles from now, you know, let's say,

four or five years ago, excuse me, four or five years from now when a lot more infrastructure is built out, you know, when, uh, you know, governments have positioned themselves appropriately, you know, uh,

Hardcore Bitcoiners will say, keep the governments out of it. I'm not sure my view aligns with them. That's okay. Bitcoin accepts all kinds. And so, yeah, I don't think it's very likely at all that we get to seven figures a cycle. And also, I hope it doesn't happen. And by the way, that can be because of the numerator or the denominator, right? If it's because the dollar is cratering,

That's probably not a sustainable or safe situation for most Americans. Likewise, if the numerator just goes ballistic, I think that could cause some problems if it happens soon. So that's one. Two is, do I think there's a very good chance, though, that we get much deeper into the six figures? Yes.

That's entirely possible. By the way, I'm not going to say a million dollars is impossible in this cycle. Anything is possible with Bitcoin. And then equally, you could say, well, have we already peaked? And I think the answer is, yeah, we've peaked. We've already seen the top for this cycle if...

something significant significantly negative happens for bitcoin you know going forward like you know a deflationary recession you know like the fed really going nuts and jacking up interest rates a whole bunch more you know or some like major i don't know geopolitical event terrorist attack that you know it's proved that it was mostly funded with bitcoin you know then governments react somehow i mean these are the kinds of things that i think you'd

likely have to see for us to have peaked in price. So I do expect upside as my base case. But yeah, seven figures seems pretty unlikely to me. Yeah, I mean, I think, well, I'm not going to debate how likely or unlikely it is. But what I'm trying to get is a little bit of the bearish side here. But I like this thread you put out because I think it really, you know, we talked a little bit about noobs or people earlier to Bitcoin, right?

But I think maybe people who've been in Bitcoin longer, maybe four, one, two or three cycles already and are thinking a lot about, you know, them waiting for this year and trying to figure out. And everyone, none of this is financial advice and everyone's situation is very different. But things could play out to, you know, and I think what makes riding the bull interesting.

much more difficult than the bear is in the sense the bear is one that hibernates. It's calm. It's like static. You know what's happening. If anything, it's going sideways or down. And you can see as an opportunity. But in monetary terms, you can only lose what you put in.

So let's say you put in $100. You could only lose $100 if you ride this thing to zero. In bull market, you're $100 if you 10x, now you're at 1,000. If you think it's going to 1,000x from there and you sell, you're going to miss out on infinite gains, right? In a sense, right? You're the proverbial infinite gains. You don't know how much higher it's going to go than if you sell now what you're missing out on.

And that could be more than what you would lose if, you know, based on your principal value. So, you know, looking at this year ahead, because everyone or a lot of Bitcoiners in the Bitcoin bubble think that, you know, 2025 is going to play out as expected. And whether it's, you know, 100% as expected or 50% or 0% or 10%, like, it might be good to have a game plan and to think about emotionally, right?

how to configure that game plan. So maybe some reasons we don't get a very big bull market in 2025. Maybe the Fed policy stall. Maybe there's a policy reversal. Maybe just in the new year, we rotate out of certain asset classes into new asset classes at a macro level. Maybe policy comes into focus. And maybe there's not a Bitcoin reserve.

And or maybe there's a move to the gold standard or maybe, you know, this is sell the news with the inauguration or we just don't have momentum. Right. And you could see lots of reasons for all that. So, you know, what you went on to say, are you bearish? You said, no, you're definitely not. But do I expect on an ongoing bull market well into 2025? Yes, you do. But also thinking about when I start pulling a few lifestyle chips off the table.

Hopefully, I don't have to until well into the cycle. But that's an interesting way to put it because I think a lot of people think about it as I'll never sell Bitcoin. And maybe that's fiat in itself. It's money. It's a tool. You can use it now. You can use it later for things you've always wanted. I think there's also people say, I'm never going to sell. I'm going to trade. But when do you trade?

You know, and maybe when do you just maybe upgrade your lifestyle? You know, I think a lot of people have said sell your chairs. Maybe you've turned to your wife or your husband and said, honey, we're going to sell the chair. And one day, you know, we can buy 10 chairs. Well, do you ever get to the day where you can buy the one chair back or the two chairs? And, you know, are we going to go? Are you going to be saying like, yeah, we could buy 10 today, but we're going to buy 100 next cycle. You know, honey, like when does that, you know, so how do you think about this?

Yeah, every one of your listeners who's married is nodding their head right now. They've all had this conversation. I've had it. I'm sure you've had it. Yeah, look, I'll speak from my own perspective. So I had never sold taxable Bitcoin. Fact one. Fact two, or expectation. Do I expect to sell taxable Bitcoin this year for the first time? Yes, I do.

You know why? Well, I have my reasons. There are some lifestyle chips, as you said, that I would probably want to take off the table. You know, there's things that I've been hodling for a while. I've never had what I would consider an extravagant lifestyle. I mean, I've always been a saver. I think Bitcoin made me even tighter fisted than I already was.

you can interview my wife to find out if that's true or not. Sad to say, I think it probably is. So yeah, I mean, if you're a Bitcoiner and you've been in for a cycle or two, or even longer, you may be asking yourself, you know, I've been renting, do I want to own a home? Maybe you're fortunate enough to already own your home. You know, do you want to own a second home? Or do you want to buy that nice car that you've been

You know, you've been thinking about, do you want to take some nice trips? Another comment. Yeah, take care of your spouse. Take care of your significant other. Buy her something nice on occasion. Buy her a nice experience. You can be involved. You'll make a great memory. So I think a lot of Bitcoiners should be thinking in these terms. And then, of course, the alternative as well. How about just borrowing against the coins? The market is developing.

um it's still early days it's still pretty nascent my base case assumption is that as the current bull market plays out and when it reaches its end and i you know we won't know in advance we never know in advance when the end is but my my expectation is that plays out this year that's my most likely case and my expectation is also that

the borrowing market will not develop enough in that time period for me to look at that as a realistic alternative to selling some coins. And it pains me to say that because I'm a California taxpayer and we have the highest rates in the nation, even higher than New York, I think at max bracket. But, you know...

Anyway, it's painful to think about. But yeah, my base case assumption is selling some coins. And I think that everyone, every Bitcoiner or Bitcoin holder who hasn't yet parted with any coins needs to prepare themselves for the possibility that they'll miss the top. They'll miss the opportunity to sell at their target price, whatever that target price is.

and that they'll have to sit tight for another four-year cycle. Oh, footnote to that, we never know if the four-year cycles will maintain forever. You know, it could be that the price pattern in the future is just different. And so, as with anything, yeah, you've got to prepare yourself for the possibility that you get it wrong, and that your highly liquid, most liquid asset in the world, that's Bitcoin, proves to be

less liquid in practice because you have to wait a lot longer for your target price, you know, whether that's measured in dollars or in purchasing power terms. Well, kind of along that, those lines, one, do you think the Bitcoin market is sort of the price in dollar terms is manipulated at all or sort of, uh,

When I say manipulate, I don't mean this really nefarious Dr. Evil way, but I mean large pools of money trying to push it one way or the other, or maybe large pools of money trying to suppress it at times or not. I mean, any of that. Yeah. So 100%, I think that the smaller the asset, any asset, the more manipulated it is. I also think that all assets are manipulated to some degree. It's just kind of a matter of degree. Yeah.

I think it's harder to manipulate assets as they get bigger. I think it's easier to manipulate assets where the ownership concentration is high. So where is Bitcoin today? Well, you know, it's now a $2 trillion asset, roughly. That sounds pretty big. On the other hand, it's pretty closely held still, right? If you believe...

the chain analysis, and if you look at the UTXO set, and you look at how many coins have never moved, even if you assume that a lot of those coins are lost or gone forever, Satoshi's coins, you know, other people's, you know, the guy who is still trying to dig up that landfill in the UK, right?

I think he lost that case again. Somebody asked me recently, like, hey, is it over for this guy? I'm like, no, it's never over. Like, if the price keeps going up by orders of magnitude, like, they'll find a way. They'll find a way to dig up those coins. What if he's wrong? What if they're not there? I don't mean to be wrong. Well, they could be wrong. Of course they could be wrong. There might be too much decay. Bit rot is a thing, right? It's not in that landfill, maybe.

Could be wrong. Yeah, exactly. Could be barking up the wrong tree. Are the coins there? Is the gold in Fort Knox? These are important questions. So, yeah, I think that probably Bitcoin price is more manipulable than almost any other asset at its size. And there aren't that many assets that are, you know, $2 trillion. I mean, you're talking about a handful of stocks. You're talking about gold. You're talking about, you know, sovereign bond issuers.

handful of those also, but I would suspect that for you know for a multi-trillion dollar asset it's probably still the most manipulable just because of the concentration of the holder base and you know that's just kind of the normal course you know it used to be a micro cap stock equivalent we all know about pump and dump schemes and micro cap stock land and

it's graduated past that. And if it reaches its potential, it'll get bigger and bigger, which will make it less and less manipulable. All right. Yeah, I agree. And so let's say, you know, it's a market that could be bullied around a bit. And, you know, I want to compare it to micro strategy. And maybe where do you think there's better or greater or more transparent price discovery? And the reason I ask that is frame it up like this. So

We know how many coins exist. We could track them on a ledger, but we don't know how many coins are for sale. They could be on an exchange, and that doesn't mean they're actually for sale. There could be fake trades, spoof trades. There could be coins that are not on an exchange, but they will come on at a certain price. People's lives change. I'll never sell these coins. That person dies. Their heirs sell the coins, right? So we have very little transparency how many coins are lost, if they're not moving because they're lost or they're just being held. So little transparency.

Whereas with stocks, we have like in a weird way, a lot of transparency. We know exactly how many are issued. We know where they are. We know what was custody of them. We know the short positions very clearly, you know. And so where is true? Maybe which one's scarcer?

And I'm being a little tongue-in-cheek here. I'm not recommending anyone ever buy MicroStrategy to get the qualities of Bitcoin. And I'm not getting into sort of the trade here of it or trading. But just what do you think? Where do you think there's greater price discoveries? Considering that MicroStrategy is sort of developing this, what I think is the greatest security ever put on the markets, and it's a Bitcoin hovering machine. And I think it's going to do things on Bitcoin, like a Bitcoin bank or Bitcoin insurance, that they're not even doing now. So...

Did you say, by the way, did you say a hovering machine or a hoovering? Yeah, it's just like a vacuum. I was thinking a hoovering machine. Michael's sucking up all the coins. I got that one wrong. But this is not a grammar test or a vocab test, basically. But fair enough. It's hoovering up Bitcoin. I think he's doing it in a way that he's engineering the capital markets and securities in a brilliant way. He's going to eat up the bond market.

A lot of macro huge institutions cannot buy spot Bitcoin. He's offering that he's leveraging to buy Bitcoin. There's no it's lots of interesting things. But I'm really looking at maybe price discovery just in terms of liquidity and transparency into the assets held and who's holding them and who's long, who's short. So I like I think there's cross currents here. It's a really interesting question. I like this question.

As you pointed out, on the one hand, we don't know how many coins there are. At least we don't know how many coins are lost in the case of Bitcoin. We think we know how many coins MicroStrategy has. Of course, that's conditional on honest reporting and accounting, which I think is highly, highly likely, you know, whatever, 99% chance or something. Like, I think it's quite unlikely that there's fraud.

I suppose that there's more risk of fraud with respect to the custody of the coins. You know, this is the old, this is the Fort Knox question. Is the gold in Fort Knox? Are the coins in Coinbase, Coinbase custody? I think they probably are. Do I have 99% certainty of that? I'm going to say no. Do I have 90% certainty? Perhaps, you know, 80% probably, but,

So I think that's another risk with respect to, quote unquote, how many coins there are. I think that your point on transparency and holdings is a good one. I mean, I think, you know, the transparency... And shares. Shares outstanding. Yeah, yeah. Shares outstanding. I mean, that's like, you know, the number...

The number is the number. I'm not too worried about the share count in the case of MicroStrategy. And I'm also, yeah, I think the surveillance in terms of, like, is trading in a U.S. listed stock, NASDAQ listed stock now, better surveilled than the Bitcoin blockchain? Probably yes. So, yeah, I think you probably have more view into price manipulation now

on MicroStrategy. I wonder how many shares are actually trading on the exchange for MicroStrategy compared to how many coins are trading on exchanges or and over the counter. Oh, good question. And over the counter on both sides, right? So you have over the counter on both sides and you have exchanges on both sides. I wonder how many, like which one has a thinner marketplace? That's a good question. I don't know the answer to that. I'd love to see the data. It's going to be interesting, yeah. Someone listening now, enlighten us.

Yeah, which one's going to sort of, you know, which one's gonna be the heart, which one's gonna be the horse? I mean, obviously, I think Bitcoin price discovery is the horse. Or Bitcoin, the qualities and traits of Bitcoin is the value proposition is the horse. But like, where does price discovery actually occur will be interesting.

Here's another, you know, framing for that price discovery. Another way to think about that is...

Thea is working day in and day out to bring you the most intuitive Bitcoin self-custody solution, regardless of how much you own or what your storage goals are. And they support your favorite hardware. Download Thea now for hassle-free Bitcoin self-custody.

at thea.us/cedric. That's T-H-E-Y-A.us/C-E-D-R-I-C. Who's got the right analytical framework for what the asset is worth? I think that at minimum, you have to say that right or wrong, you know, I've got a valuation model or framework for Bitcoin.

You have to say that the value of MicroStrategy stock is derivative of that and is more complex than that because you have the added layer of one is a complex capital structure getting more complex by the day. And two is, yeah, what is the right valuation framework for that business model? So I think price discovery has got to be harder today.

potentially a lot harder for MicroStrategy stock because you have all the complexity of Bitcoin itself plus several other parameters. Yeah. And then kind of, I'm really curious. I mean, I think you went to like a CFA holiday party.

Yes, I did. And so I'm kind of curious what the temperature check or... Not recommended, by the way. Not recommended. I wonder how TradFi is sort of looking at Bitcoin right now. We kind of looked at what we were thinking going forward, but I wonder what they're thinking now at 100K or then maybe it was 95K or whatever it was. And I want to lace in there, how is maybe the changes in FASB going to maybe change things, period, and change their views? Yeah. Yeah.

So CFA Society, in case people don't know, it's a professional certification. And you've got to take a bunch of tests, and it's pretty hard. And it's just a professional certification for professional investors. That's what it's designed to be.

And so every city in the world, major city, has its own chapter. And there's an organization, basically. They do social events. Okay, so they have their annual Christmas party. And it was pretty well attended. Los Angeles is one of the bigger markets, obviously, because it's high population. And there were a couple hundred people at this event. And I went to this thing years back. I think it was right after I'd published the book.

And I was sort of laughed out of the room. I'm like testing the waters here. I got my copy of the book. I'm walking around. Oh, hey, just really having random conversations. Hey, where are you on Bitcoin? What do you think about it? And it was definitely early days and it was not taken seriously. So I figured, ah, I'll run this test again. It had been a number of years. So I went and I did it and I had about a dozen conversations. And

What was a little surprising to me was how early we still are so I would say you know obviously everyone had heard of Bitcoin But of those dozen or so conversations, I would say three-quarters. Let's say nine people had had no real understanding of it you know you ask a few basic questions and You know they really don't throw the ball back There's just you know there's not a lot going on intellectually or in terms of knowledge and

Three of the conversations, so let's say a quarter of them, were with people that actually had some demonstrable knowledge. But I would say even within those or within that subset, you know, there's one guy who knew a lot about the price action and the correlations to other assets. And he really knew it well as a trading sardine, as we like to say, right? And...

But he didn't have any sort of underlying understanding of the property rights and what it means to hold your own keys and self-custody and sovereignty and all that good stuff. There was another one who was a deep skeptic who actually had pretty decent knowledge. And he was long, quote unquote, I think he owned the ETF, right? He wasn't owning actual Bitcoin self-custodying.

And he liked it as a trade, but he had all the usual concerns about, you know, is it really a supply cap, a hard supply cap? Like, you know, will we have to have tail missions in the future because transaction fees aren't high enough, you know, quantum computing, all that stuff.

So, you know, sort of, I guess, quote unquote, real FUD or real risks, I guess. But he was still viewing it as a trade, you know, and he didn't own actual coins. And then the last guy owns a Bitcoin, but also he had spent the last several years working at startups for real world asset tokenization companies, right? Putting stocks on the blockchain. You know, does he understand Bitcoin? No.

I don't know. He doesn't, I'm not sure he's, in my opinion, if you really understand and internalize Bitcoin, you either work in Bitcoin or you work not in blockchain, but you work in, you know, a fiat job while you stack Bitcoin. These are the optimal strategies. Anyway, so yeah, I think it's such early days. I mean, if the ETFs, let's say, opened up

the spigot for wealth management. And these people, you know, several of them are wealth managers. They're not all wealth managers. They're portfolio managers and analysts and back office people and accountants. Anyway, but they're all professionals in the finance space. And three quarters of them basically have no idea. And more than 90% of them have little idea or don't really understand it. Then, yeah, I think we're still early in the learning process.

This means there'll be lots more demand in future than there is today. Some of it will be via the ETFs. Some of it will be for actual coins. Some of it will first be for paper Bitcoin. And then as they learn, right, they'll learn what it means to really hold Bitcoin. And it makes me still very bullish for the future of Bitcoin price.

That's a different thing than network security or self-sovereignty or how many people actually hold their own keys. But in terms of price, it left me pretty darn bullish for the future of Bitcoin. They still ain't figured it out.

Yeah, even going back to what we were talking about earlier with sort of the 2016-2017 trajectory and why, you know, sometimes I get so bullish. I think, you know, the next phase of Bitcoin adoption from an economic, you know, purchasing price perspective, purchasing power perspective is going to be price agnostic. So I think a lot of no-coiners and pre-coiners now are

And I don't say this in a derogatory way, but retail, these are my friends, my family, myself, right? You know, I'm retail, and I wish, you know, retail was the whole movement, right? But I think when retail comes to Bitcoin, myself included, you think about it as what new money am I willing to put into this to speculate on this thing? You know, especially when you think of it before you start thinking about a savings, right?

And if you come to it from that perspective, you're like, oh, I'm going to speculate on this thing and I'm going to put some new money in it because I'm not going to – you probably like the things or are committed in some way to the things you already have, especially if you come from the – my guy told me to buy this stuff. I'm in the indexes. I'm not going to get rid of any of the safe stuff. My wife would kill me. My husband would kill me.

So you're very like, what new money do I have? Do I have any spare change lying around? Because most people, myself included, don't have a lot of money to throw into this new thing that they don't understand and go speculate on it. What are you going to put into that? $500, $1,000, $10,000, right? I mean, that's a lot of money to go speculate on something. But I think in this next phase, when high net worth individuals and corporations and nation states, like you look at the way MicroStrategy buys Bitcoin, it's price agnostic.

Because you move, and I think Bitcoiners go through this usually around maybe their second cycle. You move to like, what else can I sell or trade for this better thing? You move from speculating to like, these are my reserves. And I fathom that a lot of high net worth individuals or entities, when they think about this, it's kind of like we have 10% of our reserves in gold.

Let's call up our guy or girl at Morgan Stanley and put half of that in this other thing. I don't care what the price is. Is it $100K? Is it $150K? I don't care how many I'm getting. We're making the move. I don't want this other thing anymore. And that's why I think it can get very bullish. Because I think that's a stampede when that happens, too. It's a race. I used to think it was a race.

I think it definitely could be a race if very deep pockets start really reallocating quickly. I mean, you mentioned governments. For sure, that's true. Corporates, also true. And sometimes I check myself. I ask myself, like, why haven't we seen more corporates move in sooner? Obviously, Michael gave us the playbook, Michael Saylor playbook.

But of course, it's hard to implement because you've got to jump through all these hoops in terms of legal and accounting and informing your shareholders about what you're doing and potentially what he did. He did a tender offer. He offered to take his shareholders out at a premium so that those that didn't like the strategy wouldn't have to hang around.

um so and then you mentioned the accounting obviously and i'm no accounting expert but i will say that yes the the accounting rules were especially unfavorable and that's fixed now so uh so i've you know part of me is surprised that we haven't seen corporates move sooner um we definitely could see it unfold very quickly i think about certain asset classes like where what's the biggest asset class

that could get demonetized and where capital could flow from. And I think it's real estate. I mean, obviously the bond market is huge, but the real estate market globally is multiples of the bond market and multiples of the stock market. And so that's clearly the biggest pool of existing capital, but it's also arguably the least liquid pool of capital. And so, look, I definitely know people, I have friends who are

and clients as well who are big real estate investors and they're, you know, the smarter among them have already allocated a bunch toward Bitcoin and they want to allocate more toward Bitcoin and they're continuing to do so over time. You know, some are still nervous about the cycle and price. It's like, you know, let's say you're sitting on a giant real estate portfolio and a bond portfolio. Is now the time, you know, after a big move, a big bull move,

from a low of whatever, 16 to 100, you know, is that when you want to be allocating? Some people, yes, because they recognize that it's likely going a lot higher. But on the other hand, there are, you know, there's two voices in their head. Am I too late in this cycle? You know, is now the time? So, and then if it moves even faster, I have to think about scenario analysis and stability, like, you know,

Will governments, including the U.S. government, let it go parabolic to a million in short order? Maybe we'll be allowed to go to parabolic, you know, to two million before they start shutting off the on-ramps. And then you get into the question of, oh, okay, but, you know, if it goes that far, do the on-ramps matter? Because people will figure out, you know, that they got to hold the thing that's

that's being constricted, you know, not outright prohibited. But, you know, read the writing on the wall. You know, do as I say, not as I do in terms of the government signaling. So I don't know. I think there's a lot of factors at play. I'm very bullish. I think Bitcoin continues to demonetize some of these big asset classes. Could it happen very rapidly? Yes. But it's kind of not my...

base case in terms of these capital flows. I mean, I am sort of amazed. Let me put it this way. It was 2017 when I first bought Bitcoin and I thought it was happening. Like I thought hyper-Bitcoinization was happening now, right? Just like Pierre Rochard thought it was happening, I don't know, when the 2013 or whenever he got involved. So we always think that it's happening now. And so far it hasn't. And, you know, could this be the cycle? Yes, it's possible. But I'm assuming...

I'm not assuming that's going to play out that way. Well, that's why I appreciate speaking to you and people kind of maybe more like-minded with you because it's a little bit balanced. I can get very up or down about it. I really do think we're...

One I want to touch on, so bonds versus real estate in terms of where Bitcoin pulls from. And I think they're both incredibly flawed now on a fiat system. But maybe they don't get truly dematerialized or deflated. Maybe Bitcoin inflates both. Maybe Bitcoin backs bonds and Bitcoin backs real estate. And what I mean by that with real estate is real estate developers need to put Bitcoin in their maintenance reserves.

They need to have Bitcoin on their balance sheet. Maybe this way they'll be able to repair and maintain their buildings. Maybe they won't have to gouge their renters because of depreciation of Bitcoin. Maybe they could just perform those functions at a utility plus some sort of margin for their services. And I think that'd be great, maybe moving to...

Because I'm in that situation. I rent and then we are looking to buy. But becoming a homeowner, aside from the positives of homeownership, which is stability and security and you could augment your house any way you want and

uh you know different things like that uh you have to kind of like become an expert on a lot of different trades that i want no interest in uh plumbing electric you know being an electrician a carpenter or you have to hire someone for all this and become a project manager another thing i don't necessarily want to do with my time from that front so you know maybe there there's a lot of room for experts who can run housing uh

And, you know, Bitcoin can support that. And bonds, I think there's a lot of opportunity. I just did a show with CJ on bonds and Leon Wankum on real estate. But I think there's a lot of opportunities for maybe Bitcoin to inflate the bond market or support it or recapitalize it. Because I think one of the things that just structurally in terrible bonds is like you got these guaranteed fiat denominated payouts in this debasing currency. So it's just not inherently like it's flawed to me. And yeah.

But I don't think bonds and real estate and equities go away and credit goes away on a Bitcoin standard. But I do think all of this, when I get bullish on price, I think I get very bearish on freedom and sort of

freedom money and on governability. I think sort of what you were getting to there is maybe, you know, government lets it run up to 2 million. Everyone's so pro-state, pro-government, and the government rolls up the on-ramps and you can only have your Bitcoin and an ETF and you can't take it out and all these different things and it's neutered and they gave you your number go up and they took everything else away from it.

or as much as they could. So my final question to you, though, is, you know, why is it that you can get a non-secured loan at a pretty good rate in the single digits and, you know, you collateralize and over-collateralize your Bitcoin and you get a not-so-great-ish loan, you know, rate in the double digits? And, you know, when do you think that will change? I mean, you kind of talked about it a little bit before, but, like, why is that? That just doesn't make any sense to me. Yeah.

So just a quick anecdote. I was looking at buying a property literally a year ago, not even a year ago. I think it was 11 months ago. And, you know, I didn't want to sell Bitcoin. And so I was looking at borrowing against my Bitcoin. Now, at that point in the market, yes, the ETF, I guess, had just got approved. And so you'd had somewhat of a pump, but then you had the sell-off afterwards. So it was like, you know, yeah, price was higher than it had been recently, but it didn't feel like that big a bull market.

um and so this is before you know the massive inflows to the to the etfs really pumped it pump price up to into the 70s i think it was and so i went to the lender there were very few actual active lenders in the market at that time just not even a year ago i went to i think one of the better ones and i got i think according to them was their institutional you know grade deal offer

And it wasn't too exciting. It was like, it was, I think it was 10% interest rate, but the terms were, yeah, you got to post the coins, you know, they can rug you, they can liquidate you down. I can't remember down 50% or, or something. I can't remember the magnitude of the price move, but there was like two levels of liquidation, right? It was like, you got a short period where you can post collateral, you know, to cure the under collateralization and then beyond a certain point, then you're just toast. Oh, and by the way,

the, you know, they can basically cancel the loan for any reason. I can't remember if it was 24 hours notice or 48 hours. So, and then, oh, if you wanted to pay an extra percentage point, you know, you want to pay 11% instead of 10%, okay, now you get a one-year term, you know, you get a one-year guarantee on the rate. Okay, well, BFD, not too exciting.

Anyway, ultimately I did not get comfortable with the terms of that loan. Fast forward to today. Is there more happening? Yes. I know several other providers in the market.

I do think that number one, banks have been excluded from this market, right? This is the top 121 stuff. Well, that's a huge portion of the global balance sheet. Like most of the global balance sheet is banks and if banks effectively cannot touch the asset, you know, they have to hold a dollar collateral against the asset, you know, so it's functionally not even an asset from a balance sheet perspective. Like that whole pool of capital is unavailable.

And so then you reduce it to what's the pool of capital that understands the asset and do they want to underwrite loans where they're making –

you know, let's say a reasonable, I don't know, high single digit rate of return on collateralized loans when instead they could just allocate more capital Bitcoin. Like I asked myself the question, you know, I'm an investor, broadly speaking, would I like to be underwriting, you know, collateralized loans to Bitcoiners or would I rather just own Bitcoin? Probably rather just own Bitcoin. Um, so will this get fixed over time? Yes. Um,

Do I expect it to happen this cycle? No. I wish it would because I'd like to use the product myself. I'm definitely not holding my breath, but I think it does come down to it's still that small percentage of the global capital that is available. And then secondly, it's a much smaller circle of people that understand the investment opportunity and they just want to hold the actual asset itself rather than lend to Bitcoiners.

I appreciate you setting some light there. Hopefully things will come to fruition this year. I know CJ Constantinos is doing a soft launch on People's Reserve this spring, Q1, and hopefully a hard launch in Q2. I'm hopeful that they come out with some great products there for Bitcoiners. Dude, it's been four years since we did the show, and I'm looking at the book here, the picture on the book. You look the same, maybe better.

Very kind. Thank you. Very kind. What are you doing? You look better. You look, you look better too. I mean, I went, yeah, I don't know. I think when I took that photo, I was, when I took that photo, I guess it was, was it, I guess it was just pre COVID because the book would have been, the book came out literally months before COVID. Um,

Yeah, I don't know. I'm probably no different or not too different from where I was then. I'm probably eating more keto. I'm probably eating more meat. I'm definitely eating more beef. Who knows? Maybe that's working in my favor. Who could say? You look great too. You know, Bitcoiners sometimes take care of themselves. What can you say? It does change your time preference. I think it does help you take a long-term view.

Most of the Bitcoiners I know that have kids have lots of kids. They're thinking about the long term. They're excited for a bright orange future and they're optimistic and they're yeah, they're investing in themselves and their families and their communities and the network itself. So I think it's all positive. Well, good luck in L.A. out there to carry yourself.

Thanks, Cedric. And, you know, I hope to see you again soon. Hope to visit you in Florida sometime. That'd be cool. And yeah, you know, unfortunately, no place in the in the country is truly safe from all natural disasters. You know, we just had one. Someday we'll have a big earthquake. It's happened before. You know, hurricanes are a thing. But we you know, we plan for the future.

And and we do our best and we try to help out our communities when we can. And I guess life goes on. Clay Space, friend of the show, did a lot of research on this topic and he moved to Boise, Idaho to be in the safest place in America from a lot of different threat perspectives. The book is fantastic. I recommend people go out and get it. Why buy Bitcoin investing today in the money of tomorrow? This has been dope as always. Andy, I'll leave it to you for any final and parting words and let people know they can find you and your work.

Yeah, no, much love to you and your audience and all the Bitcoiners out there. And Edstrom Andrew on Twitter. That's the main place you can find me. And yeah, looking forward to seeing how the rest of this bull market plays out. And all the while learning with others and helping others learn about the long term view of

on Bitcoin and what it's really about with respect to self custody and sovereignty and everything that comes in addition to hopefully number go up. Thanks for tuning in to this episode of the Bitcoin Matrix. If you enjoyed the conversation, don't forget to like subscribe and drop a comment below with any questions or thoughts you may have.

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