Fort Knox Is Empty, Bitcoin Is the Reserve

Michael Tanguma (00:01.124) I think we gotta just go, I think the best way to start is like whatever's funny or we're enjoying because once you like bring that energy and then the rest, it just transpires throughout the rest of the pod. Jackson Mikalic (00:09.964) Well, we are recording and what if I'm not enjoying anything that's happening in this market right now? Because if you look at the price chart, we're in a big time bear market. I have the one month price chart up here. Look at this thing. Yeah, it's ugly. I know it's ugly. Yeah. and yeah, so we are recording the last trade. We got my co-hosts Tim Cotsman, Michael Tanguma and Brian Cabellus. Gentlemen. Tim Kotzman (00:22.594) That's red. That's really red. Brian Cubellis (00:23.144) gosh. Jackson Mikalic (00:37.494) How are we doing? know Michael's under the weather, but other than that, how's everyone doing? Brian Cubellis (00:43.075) Doing well. Tim Kotzman (00:43.236) I'm ready for 100,000 again. Brian Cubellis (00:46.402) Yeah, it's been a little too long in this range. I think Checkmate on Twitter posted some metric that he tracks, which is basically like the choppiness factor, which means Bitcoin is oscillating in a range. And that spiked to an all-time high over the past couple of weeks. So this prolonged range that we're in is actually pretty unique in terms of Bitcoin's price history. Michael Tanguma (00:46.414) We persist. Jackson Mikalic (01:27.35) Wait, hang on. Is it just me or is Michael like half cyborg right now with his audio? Brian Cubellis (01:32.752) little cyborg-y, but we can at least hear you. Jackson Mikalic (01:35.978) All right, cyborg mic. Not a good kind. Yeah. Jackson Mikalic (01:48.45) man. Brian Cubellis (01:50.889) And he's gone. Jackson Mikalic (01:51.01) All right. Yeah, I guess we'll just let it keep rolling. Brian Cubellis (01:56.11) Yeah, it's fine. Tim Kotzman (01:57.156) Yeah, it's like the gold in Fort Knox, and it's gone. And... Brian Cubellis (01:59.975) And it's gone. You think they're actually gonna do that? Are they gonna audit Fort Knox? Tim Kotzman (02:04.856) they live stream it. Brian Cubellis (02:06.402) I mean, that would be absolutely must watch television. Tim Kotzman (02:10.008) I mean, the most hilarious outcome is the most likely. So my prediction is within the next four weeks, you'll have a live stream of Fort Knox. That would be awesome. Brian Cubellis (02:18.444) I mean, both Trump and Elon have mentioned it pretty much every day this week, I'm pretty sure, of like, yeah, we just want to see if it's in there. Michael Tanguma (02:28.089) I like the Will Smith or the Fresh Prince of L.A. when he goes into the living room and he looks around and it's empty. they're just like, where's it all at? Jackson says we're looking at charts. This is the one that has me excited. I don't know if it's easy to pull up, but basically, yeah, the year to date on gold up 12 % with Bitcoin only up 4%. And we kind of know what the leading indicator is there. So just a matter of time. Brian Cubellis (02:32.078) Yup. Jackson Mikalic (02:44.736) Yeah, we got it. That looks good. Jackson Mikalic (02:58.848) Yeah, we had a conversation this week with Peter Groskopf of Argo, chairman of Argo, former CEO of Esprit, and thought it was a good conversation overall, but he was sharing a little bit of the short-term sentiment around the gold market and seemed to think that it is a bit overstretched or overheated at the moment, but went through all the structural reasons why he sees $4,000 per ounce of gold in the not too distant future. But I think what you're getting at Michael is that gold tends to be the canary in the coal mine for global liquidity. And I think that's kind of what we're seeing now is we're in a period of consolidation for Bitcoin. But what we're watching in the gold price, I think is an indication of what is to come. I mean, do you guys have any thoughts about that? Have you been paying attention, Brian or Tim, to liquidity? Brian Cubellis (03:49.838) Not so much on the liquidity front, but obviously you've been tracking gold and all the of intricacies of the market structure there that are causing some of the chaos in terms of the increased demand for physical delivery of gold, I think is at the crux of what's happening here. That's interesting that Peter was calling for $4,000. Did he put a time frame on that? Because I think we referenced this a week or two ago, but like, what was it Michael? Like every $30 move in gold is like, or was it $300 move in gold is like one market cap of Bitcoin? Yeah, that makes sense. So he's calling for a three Bitcoin move over what kind of time frame? Michael Tanguma (04:31.897) I think it was $300, yeah. The $300 move was a $200. Jackson Mikalic (04:40.834) And I want to say it was a medium timeframe. Call it like two years or so. I would have to go back and listen to the episode. It wasn't this year, but it was not too far in the future, he thought. Michael Tanguma (04:52.345) I haven't, I gotta send them to you in our Slack, but there's a lot of deep rabbit hole threads going on Twitter where commercial airlines bringing back gold from London for the past three months and they're sitting in these airplanes. I don't know exactly, haven't had the time to go down this rabbit hole, but yeah, there's definitely something with the physical delivery and ultimately something's happening. Brian Cubellis (05:15.97) Well, yeah, I mean the real tin foil conspiracy if we want to go there is like they're flying the gold back to the US to refill Fort Knox because Fort Knox is currently empty. Jackson Mikalic (05:27.97) Well, we'll see it on the live stream soon enough. But yeah, think there's this, we're in this interesting period now where the turmoil in the gold market, I think, is not necessarily isolated there. There's just a lot of geopolitical tensions. There's just a ton of overhaul that's happening within the US government. And then you also, all the way over in Asia and China, there's gold trading that's exploding as well. So I just think that there's this overarching theme of moving away from US treasuries. It ties into obviously just what will happen with stable coins and US treasury demand there. I think that's ultimately the long game or it is already kind of playing out, but that's the strategy for the US treasury. But then we're seeing all these other nations, you know, call the bluff where it's like, all right, I'm getting debased year after year. It's getting worse and worse. I need to have something that's harder. And so that's where the gold delivery is coming into play because ultimately those paper contracts don't actually protect you from anything. It's like, Peter said in that podcast, why would you want to own something that's a hedge against the system within the system, right? It just doesn't make any sense. So it's the same thing with Bitcoin too, where the smart investors are reducing counterparty exposure. They're actually owning the physical, know, quote unquote physical Bitcoin, whether it's, you know, on a sovereign custody platform or it's in their own custody. But those ETFs, think, why they're great for exposure, they're just similar to paper gold, right? It's not really a way, if you're gonna own an asset outside of the system, you don't wanna own paper claims of it. Michael Tanguma (06:57.527) Yeah, that reminds me of, it came out this week, Paul Tudor Jones had like a $600 billion, or $600 million position, like close to a little over half a billion from his fund. And it's like, these guys are super smart. They've been involved in the asset for a while. At what point do they wake up and realize that if they're going to have that size of a position, counterparty risk in an ETF is also something else. Like we're probably a ways off, but you can imagine once you establish that size, like imagine that doubles. to 1.2 billion. And you're looking around and you realize Coinbase sits on all of that. It's a similar dynamic with Bitcoin. Jackson Mikalic (07:35.266) It's kind of a weird thing where, Brian, I don't know if this is your experience as well, but I didn't even hear the term counterparty risk in TradFi. Like I had to go into Bitcoin to start learning about it. So Michael, yeah, Michael, to your point, it's like, I don't think anybody, I won't say anybody, but most people don't actually even like think about this. They only think about it when it's too late, right? In the GFC, then people think about counterparty risk and they're like, well, shit, I have my assets tied up and then solve an entity. Brian Cubellis (07:45.014) Yeah, it's an afterthought. It's an afterthought. Jackson Mikalic (08:04.086) but it doesn't really come up in conversations for day-to-day allocation of capital. Michael Tanguma (08:09.623) And I love that because when you think about it, like the Bitcoin ecosystem is just a microcosm of the financial ecosystem and it's smaller and more accelerated. So you can have a bank run. Like counterparty risk has always been understood or known. For 15 years, the way majority of people hold it is offline because they had to learn these things the hard way. And you find out really quickly when you take delivery if too many people come for it that, we saw this with FTX and everyone that blew up in 2022. So... This has just been papered over in the financial markets traditionally. You just extend the volatility and, you know, oh wait, was the last time I guess like a little bit in 2020. yeah, Bitcoin's just an accelerated market structure. And so you get to find out really quickly if somebody's naked. Jackson Mikalic (08:58.656) Yeah. also counterparty risk doesn't actually matter in the traditional system to the extent that you just get made whole by, you know, new currency units being entered into that system. Whereas that's where I think it's just so early for Bitcoin, right? Like people don't even appreciate 21 million. I think we had a call this week with someone from the traditional finance space. Objectively, a smart person has run a really successful business, but he's like, yeah, there's like something with Bitcoin, right? There's like a certain amount of them. He didn't know the number. Brian Cubellis (08:59.022) Right. Jackson Mikalic (09:28.224) And it's not a knock on him, but it's just like these things that we just think are like the ABCs, you know, we know them. These are actually still not widely understood things like 21 million, the halving and increasing scarcity. These things are not widely understood. And then if you're, if you can't even understand that, then you're certainly not going to understand the significance of counterparty risk of a digital bear instrument. Brian Cubellis (09:50.85) Yeah. And to Michael's point around Bitcoin being somewhat of a microcosm or an accelerated version of the traditional financial system, the core or one of the critical differences is that you have the optionality. Even if you're using a counterparty for your Bitcoin, you always have the optionality to self-custodian it. Whereas that is just not the case if you have a billion dollars of gold. You can't just click a few buttons and attempt to take possession of that. Right? So it's, it's an accelerated sort of market structure, but also it just has these different dynamics to it where there's more natural sort of inherent checks and balances on the custodial system in that someone can just take delivery of the asset in a few minutes and for a pretty minimal cost. Jackson Mikalic (10:45.932) You can just deliver things, right Tim? Brian Cubellis (10:47.63) You Jackson Mikalic (10:50.558) One thing we're, go ahead Michael. Tim Kotzman (10:50.648) Yeah, just deliver it. just... Michael Tanguma (10:50.841) Actually, Tim, I'd be curious not to... We'll devolve too much, but you mentioned you were having a conversation a few weeks ago and you realized how early we were to Bitcoin and multi-institution custody because there was this referencing proof of reserves and all of these things that were like these thoughts of how the market structure will develop when inherent to multi-institution custody is this notion of proof of reserves on chain. Just curious how you think about that because on the treasury side, that's the one that makes the most sense in my mind, simply because in traditional you have controls on a financial perspective or from accounting and how you move funds and right now anybody holding Bitcoin on their treasury literally has to leave it on Coinbase or they're gonna hold it offline on hardware devices which also brings up a whole slew of other issues. Tim Kotzman (11:44.246) Yeah, I won't say anything specific about certain geographies and certain companies that may be public companies, but I mean, we're so early that some companies somewhere in some country, like they might be a Bitcoin treasury company and they might still be like just holding Bitcoin on like a hardware device. Like, like that would be shocking to me. But I think it's it's like not heard of. And then it's like this new thing. And then it's suddenly like everything in life. But like even right. You only have what one ETF that actually tell like has the online address, but it's a commingled address or a general address, however you want to phrase it. I think. Yeah, like once the ball gets rolling. and it becomes commonplace and everyone's like, yeah, like it's just right messaging and messaging and messaging. then it would be like, oh yeah, like this is just like the best way to do it. Everybody knows that, but we're like a few months or a year away from that, I think. That's my, from my seat with, right? Like I think I told Jackson a couple of days ago, like, I don't know. It was not too long ago. It was kind of embarrassing. Like I couldn't have told you the difference between like collaborative custody and multi-institution custody. So like, yeah, we're like, I'm an idiot, but also we're early. So I think that's just, yeah. Michael Tanguma (13:01.218) Yep. Tim Kotzman (13:20.804) It's a lot for anyone to wrap their mind around, but if they don't even know how many total Bitcoin, like what the hard cap is, yeah, the difficulty, like, like, just go ask somebody on the street, what's the Bitcoin difficulty adjustment? What does it mean? And how often does it happen? And they'll just like, look at you like you're insane. Michael Tanguma (13:30.713) Yeah, well. Michael Tanguma (13:40.985) think one of the most shocking things we all cumulatively found this past year spending time in the Middle East was, because I think this is a notion to what you're saying, is the majority of big holders hold their Bitcoin on ledgers and then they put them in like a central bank vault. Like that's the most sophisticated version of custody that exists in the market. So yeah, we're very early. Jackson Mikalic (14:05.218) Yeah, one thing I wanted to go back to, Michael, I don't know if you mentioned though with Paul Tudor Jones that it was, and this is from the 13f filing. So that information was just, the filing date was the 15th of February for the fourth quarter of 2024. One thing that really irks me is that you have Bitcoin Twitter just saying, oh, this is their exposure for Q1 2025, which just indicates that a lot of people were commenting on this, don't even understand. the nature of 13F filings because everything that's public right now is from Q4 of 2024. So it means that they, you know, that position may not be there anymore. But one of the things that's important to call out is for Paul Tudor Jones, that iBIT exposure was like by far the largest position of the fund. I think the next largest position was an energy ETF, but it was like maybe $300 million smaller position. So pretty significant allocation there. know Paul Tudor Jones probably in 2020 was speaking about Bitcoin just being the fastest horse in the race. I nothing's changed there. And so it's always good to see, you know, putting money where your mouth is. He's also talking his book, of course, but there's a reason why some of the most successful fund managers are over allocated to Bitcoin. I think one other thing to call out too, we just recorded with Matt Colich drive, Tim and I did. And We were talking a bit about pension allocations. What we didn't get into though was any of the 13F stuff. And Wisconsin State Pension Fund boosted its IBIT position to over $300 million. So it's actually over 100 % increase from Q3 to Q4. So I think just between the Trump administration taking office or first winning the election and that indication of increased regulatory clarity, of support. And then now him taking office in January, a lot of these confirmations within his cabinet are going to be bullish for Bitcoin. And then ultimately ties into, think Trump this week was talking about, he was talking about the crypto and the Bitcoin price, right? Like he was like, it's going up because the market knows that I want to make Bitcoin, or sorry, America the crypto capital of the world. So I think, know, there's just like the money, the big pools of capital are positioned for what's to come this year. Brian Cubellis (16:27.598) Yeah, I he's obviously doing a little like probably a premature victory lap on, you know, saying Bitcoin's making all these all time highs. But I don't think he's necessarily wrong. Like, think if, you know, if we think about the parallel universe where he didn't win, like, I don't know, because I think, you you wouldn't have all of these cabinet confirmations that are very pro Bitcoin, pro crypto people. And you wouldn't have sort of the lifting of this you know, the choke point stuff, of this, you know, everything we've been dealing with for the past four years, like you wouldn't have that sort of reprieve from that status quo. So I don't think he's like entirely wrong, but it is always funny to just see him take credit for everything. Michael Tanguma (17:13.369) Who was the other big filing that came out about their micro strategy position? It was someone- Yeah. Yeah, exactly. Jackson Mikalic (17:13.687) Yeah. Jackson Mikalic (17:19.809) Wasn't. Brian Cubellis (17:19.918) think it was Canner, right? Canner Fitzgerald. Tim Kotzman (17:23.332) $1.03 billion in MSTR shares. Jackson Mikalic (17:29.058) Tim, what can you tell us about that? Tim Kotzman (17:31.704) That's a lot of freaking shares. I mean, what? I don't know. Sometimes I have to like calm myself down. When I was recording with Tad a few days ago, like text me words. He's like, Tim, that was great. You are memetic. And I'm like, I'm a meme. Maybe I need to calm down a little bit. It's like, yeah, the former chairman of Cantor Fitzgerald. Brian Cubellis (17:33.303) You Michael Tanguma (17:42.509) Ha Tim Kotzman (18:01.238) is now the Commerce Secretary jumping where I'm wrong, right, with all these word soup and titles. And his company that he was just the chairman of owns a billion dollars of MSTR and he's in charge of this like 37 quadrillion dollar sovereign wealth fund that might come to be. Like, like, like. Michael Tanguma (18:19.513) and owns 5 % of tether. Tim Kotzman (18:22.062) What, like, you have Adam Back this morning, like, saying, literally tweeting, you are not bullish enough? Like, it sounds like gladiator. Like, are we living in a simulation? Like, what the, what the F do you think's gonna happen in the next couple months? Like, it's like, I don't know what else to say. I'm like, posting Adam Back videos where he's saying the bull run is like, not even really begun yet. And like, I'm not the bullish guy here. Like, Adam Back's the bullish guy. Jackson Mikalic (18:38.464) Yeah, the best part about this Tim. Michael Tanguma (18:49.997) Tim, Tim I got him. Jackson Mikalic (18:50.86) Well, you literally wear an orange tie every day, Tim. You're obviously the most bullish one of the four of us. Brian Cubellis (18:54.67) You Michael Tanguma (18:55.417) Tim, I have very serious question ask you. Are you going to bring this energy? Are you coming to happy hour next Wednesday? Tim Kotzman (18:55.926) It's irresponsibly long. Tim Kotzman (19:07.126) invite to a happy hour. Michael Tanguma (19:09.091) We're hosting a happy hour and Tim keeps playing coy that he may or may not have been invited. Just want to make sure, you know, you're going to bring this energy because this is what we're going to need. Tim Kotzman (19:10.916) Yeah. Tim Kotzman (19:16.002) Yeah. Tim Kotzman (19:20.062) I, this is just me, so yeah. Come hang out. Michael Tanguma (19:24.633) It's gonna be a big week. It's gonna be a big Brian Cubellis (19:27.256) Big week for those who aren't aware, Bitcoin Investor Week in New York City next week. I think the actual conference days are like the Thursday, Friday, but there's a ton of events throughout the week. We will be co-hosting a private luncheon with Strive on Tuesday and then we're having a happy hour with Arch who we actually just announced. This will come out on Friday, but we just announced on Thursday that we partnered with Arch to provide Lending services to our clients and so super excited about that and so we'll be hosting a happy hour with them So if anybody's in in New York next week and wants to connect with us, please reach out Michael Tanguma (20:07.981) Yeah, not to dox Tim, but he took out a loan to buy more ties. He didn't have to sell them. I'm glad we can provide services for everyone. Brian Cubellis (20:11.531) You Tim Kotzman (20:15.012) I'm bullish on orange ties. mean, honestly, I need to set up a merch store to sell orange ties. I mean, that's probably how I need to monetize the podcast. It's like, like a, yeah, it's like, I don't know, even if I only make $1 per tie, we're going to sell like 8 billion ties. Brian Cubellis (20:23.192) Sounds lucrative. Jackson Mikalic (20:25.642) Yeah, that's, yeah, you could get a sponsorship. Brian Cubellis (20:34.092) You Jackson Mikalic (20:37.43) Yeah, I guess we could just end the episode there then. But seriously, yeah. I wanna go back to Howard Lutnick because one of the things he talked about in an interview this week, I guess after he was confirmed was that there's not going to be any slashing of entitlements. And so one thing to call out is that with Doge, right, there's all this discussion and some action about what can... Tim Kotzman (20:40.58) That's our secret business plan. Jackson Mikalic (21:05.089) do to reduce the spending of the U.S. government. It actually doesn't even matter because while there's $37 trillion of debt at the federal level, there's like $200 trillion of entitlements. And so if those aren't going to be addressed in any way, that just means that there's literally the only way to pay those back is just to create more dollars. And so we're talking a bit about this, but it's ultimately, think, it's one of the more concerning things I think at the most macro level is that A lot of people who are relying on entitlement programs to eventually retire are either not ever going to be able to retire or they will retire but then outlive their retirement because what they were relying on is something that could be printed into oblivion. so that's ultimately why I think, someone actually commented, I'm gonna address the comment on the last trade a couple weeks ago. Someone was like, someone was like, why? Why are guys excited about states adopting Bitcoin or the government adopting Bitcoin? Like why don't we just let people buy it with their otherwise would be tax dollars? And the answer is because most people don't buy it, right? Like most people don't actually A, have the time or have the interest to figure out what's going on here. And most people admittedly don't have the time. Like you call it like the bottom like 25 % or 50 % of the US. Like they're struggling to get by. We're in a very privileged position to be just like chopping it up here. And so like those people have to like they're working multiple jobs in many cases. They don't have time to be listening to Bitcoin podcasts. They're not listening to the Bitcoin treasuries podcast, Tim. And so the thing why this is important is because ultimately institutions will have to adopt Bitcoin on behalf of their constituents because most people will actually not have the time or the ability or the money to figure this out. And so I actually think it's an incredibly good thing to see these institutions stepping in. A, it doesn't impact your ability to own Bitcoin however you want to own it, B, it's for the greater good if these institutions have Bitcoin as long as they're using that, right, for the benefit of their constituents. Michael Tanguma (23:11.363) That's very well put and that's something that I admittedly early on in getting into Bitcoin, I was naive in believing, we got to get the lower class into Bitcoin and don't care about getting others rich and really learned quickly. Like this notion of emerging markets and frontier markets is all a lark in the Bitcoin space because at the end of the day, one large sovereign fund, one large state. country getting involved makes all the, like, is 100 to 1000x more impactful than, you know, a million people in some random country adopting it to like stack some sats. Like, at the end of the day, you have to add to liquidity profile. The price appreciates, awareness gets there. We know that we only need X percentage of penetration for the rest of the market to like catch up and then just start to adopt it. So you need those flows to be very large and the beauty of this is a positive zone game. because there's no dumping on anyone. Like the asset appreciates, they can still buy, they benefit from a fixed supply, their purchasing power is secured, and nobody talks about this and nobody understands that. That's why we focus on what we focus on here is because you have to support large holders, whether it's state, sovereigns, countries, high net worth individuals, institutions, and then you can naturally build a business to go down market, but you can't start the other way. Brian Cubellis (24:29.388) I also think it it accelerates the education process to some extent, right? you know, prior to real material institutional involvement in Bitcoin, like, you know, it did it did take a curious individual, someone willing to look a little crazy and be very contrarian to deeply understand it and then store their own energy and value in it. And, you know, now that we're reaching the level of states, governments, larger institutions, corporates entering the space. That just accelerates the education across the board because it gives more air cover to the individual to say, I won't be that insane or I won't be looked at as insane if I learn about this thing and decide to use it as a savings technology. It just gives you more air cover and it actually gives you more of an incentive to learn about it too. It's like if my state government is buying Bitcoin for their treasury, maybe I should think about it. Tim Kotzman (25:29.028) Brian, are you talking about Bitcoin or meme coins? Brian Cubellis (25:32.322) Bitcoin, too. Bitcoin. Not Libra coin. Tim Kotzman (25:33.988) What happened in Argentina? Brian Cubellis (25:38.19) Yeah, a lot has happened, really just over the past six days. So this, the most recent shitcoin calamity, to put it lightly, dropped last Friday. So after, you know, after we recorded last week, it was on Valentine's Day, Eve, or that evening. And the president of Argentina, Javier Malé, who, you know, people were hyping this guy as a pro Bitcoin supporter. very excited that he had gotten elected. He tweets out a token address on Friday night. Libra coin, Argentina's meme coin, goes live. Over the course of probably 30 to 45 minutes, it pumps to like five billion market cap. It then, as one might expect, starts to dump, starts to rug, and... You know, no one really knows what's going on in the moment because, you know, the initial tweet came from Javier Malé's verified Twitter account. He also reposted it on his verified Instagram account. So I was like, okay, it doesn't seem like he was hacked because, you know, it'd be difficult for someone to simultaneously hack both his accounts. Not impossible. But the thinking was that, okay, this feels real. And it starts to dump, obviously. And then he then he comes back like hours later after it's already dropped, you know 90 plus percent Just distancing himself from it. Like, you know, I think he he later did an interview where he was like I didn't promote it I just shared it like that was a direct growth like that Kind of an insane way to phrase your involvement in this in this meme coin but the the larger takeaway to me from all of this is and it's something I mentioned a few weeks back when the Trump coin dropped. It's like we are seeing the shitcoin casino meme coin mania at the presidential level, like at the nation state level of countries dropping meme coins. And, you know, the architecture, the playbook for these things hasn't changed, right? Like it's still an insider game, a pump and dump. And if there's any silver lining to any of this, in my mind, it's that Brian Cubellis (28:00.428) these very high profile people, whether it's Trump, Melania, Malay, Dave Portnoy in the mix, these people have massive followings and they're basically exposing meme coins and crypto for what they are. These are just massive pump and dump schemes where insiders extract value from unsuspecting retail investors. And so my positive spin on all of this is like, I do think to some extent this is speed running the education process of like someone who's observing this from the sidelines, been thinking about investing in crypto or Bitcoin and they see people just get destroyed on these worthless meme coins. I think they get to the end result of thinking about Bitcoin in a different light much faster. I think it was interesting to see, I think it was head of The head of the central bank of the Czech Republic over the past week or so has been making some comments about Bitcoin. I think they announced that they were going to do some sort of strategic reserve. And he had some quotes that were pretty powerful in the sense of he understands Bitcoin is different from the rest of this. And so I think that's the education. That's what needs to permeate as a result of all this stuff. And it's unfortunate because people are obviously getting hurt in all of this financially. But I think what used to take several years for someone to learn, like they might be learning in a few weeks that all this other stuff is nonsense and I should focus on Bitcoin because you have heads of state reiterating that line of thinking and then you just see what happens when these things inevitably rug pull. Michael Tanguma (29:46.861) Well... I really want that to be true and I hope it is. I would take partially the other side just in the sense of people just see things collapse and they just conflate them for all the same, right? People know Bitcoin is volatile and so when they see another mean coin, they just assume it's all like speculative. So I don't know, like I think if somebody's educated or on the cursory, like looked at the asset class and wondered what's the difference, I think to your point, it's probably an easier path to saying, okay, this thing's real and the others. But if it's just like somebody on the outside perspective, looking at digital assets, they probably just think it's all like a big Ponzi because everything just crashes. Brian Cubellis (30:24.524) Yeah, but then you also have to consider like the 16 year track record of Bitcoin, right? Versus a few minutes to a day of a pump and dump. they're that starkly different. Michael Tanguma (30:30.04) Yeah, I'm just saying. Michael Tanguma (30:36.249) 100 % I think if you go into a room with the CIO and explain that they can see that but somebody that's just like busy during the week and looks on the news and sees the next cryptocurrency like they don't know the difference between Bitcoin and that and how long that was around they don't know that it was just 12 hours Brian Cubellis (30:48.662) Yeah, and to be fair, there's also a component of this of like financial nihilism where like there are people who even though they know it's a rigged game, it's a rigged casino, they're still gonna put their chips on the table because they think they can get the 100,000 X and they don't think that that's possible with Bitcoin because they have a shorter time preference effectively. Michael Tanguma (31:08.939) Exactly. Jackson Mikalic (31:09.11) Yeah, I mean, it's ultimately an action of despair, right? I think it ties into the idea that most people feel all the pressure of the inflation. A lot of people recognize that their retirement is continuing to become more and more longer dated from when they initially thought. And so, I mean, I've seen this too within my own family. have an uncle, for example, who's pretty working class. He's provided for my three cousins and done all right for himself, but he's not... he doesn't have a lot of money. And so he's asked me before, like, you know, Christmases or Thanksgiving's about other shit coins because he hears other people talking about it or he sees it on YouTube. And to him, it's like, it's all my analysis of it is like, it's a reaction to like the despair that most people face where it's like, maybe I will put a thousand dollars into this because maybe it'll be 10,000 or be a hundred thousand dollars. Right. And so that's, that I think is the big underlying issue here. And that's why I think it is so critical for leaders of states, of townships. If you go into the local level, I think that's why it's critical for there to be a push for adoption of Bitcoin, because ultimately this could help to reduce the pressures of inflation. It could ultimately reduce the tax burden on these individuals as well. And it leads to a more prosperous life for the country as a whole. So that's why I'm optimistic. Unfortunately, it just seems like these lessons are never fully learned, right? Like the Trump coin, and then I didn't even know about the Malay stuff until we just talked about it. And yeah, there's just so much going on every day, right? And then you have like a couple of weeks ago, people are conflating on CNBC, well, hock to a coin. What's the difference between that and Bitcoin? So it's like, we have a long road, but that's ultimately why people are elected into position of power, because the constituents that elect them want them to represent their best interests and they're in a position of having responsibility and looking after their people. And so like we've been having, we've had some conversations with folks at the state level and they want to do things the right way. I mean, there are people out there. The funny thing is right at Bitcoin's bottom up. So you have people who own Bitcoin who understand it deeply and then they, they've seen how it's benefited them as an individual. So naturally then they want to use that to further the mission. Jackson Mikalic (33:32.495) you know whether it's in just their local community or at the state level or at the federal level so that's what I'm optimistic about. Michael Tanguma (33:37.485) Yeah. I think it's really well put in the sense of like, What Brian basically referenced was these tokens are like lottery tickets on your iPhone, right? And we all know how lucrative the lottery system is. And what I think ultimately we have a big opportunity to do and others is like these banks coming in are gonna offer up lottery tickets next to their checking and cash balances. The ones that don't understand or not thinking long-term. But then to your point, Jackson, we're now actively talking with banks as well. And the thing I've really kind of coalesced around, I think we've coalesced around is This user experience where it's not a lottery ticket, it truly is just savings technology. And whether it's 100K or 150 or $350,000, you can just store a little bit and more more of your wealth in it, it increases in purchasing power and then you just have a better life. And so that experience between your checking and you used to have a savings where you put dollars and it generated a nominal yield. Now this is just a real yield in the real world, purchasing power. That experience is something that I think we want to get to, and I think we ultimately get to, and the banks that get there first are gonna be the long-term winners because it's just the right play. While everyone else is losing money, you're able to preserve your purchasing power, have a nice experience, and then just better your life is something that's gonna be exciting to see play out, because I don't see many other ways to make this happen. where historically it's been, I gotta go to a Coinbase or another third party firm, have to buy it, seems speculative, I gotta figure out how to custody it. Just imagine in your banking experience, you direct deposit, buy some Bitcoin, sits there. It's a very clean way to just manage your finances. Jackson Mikalic (35:17.046) Yeah, think, yeah, I totally agree. It's clean. It's also essential too, because most of these people don't have brokerage accounts. They don't have, you know, retirement accounts. so Michael, to your point, they may only enter the extent they interact with financial institutions as they have maybe a community bank where they're getting some very small percent of interest on their checking account. And then their savings account is marginally higher. But we all know that we're in an environment now where that is ultimately still a negative real yield. That wasn't always the case. I mean, people could actually save in U.S. Treasuries at some point and not be totally debased out of their what little or maybe large amount of retirement money that they have. But now you just can't do that. mean, I have a Chase account that I keep barely any money in at all, but they pay 0 % on checking accounts. So that's what most people are up against, right? They have the bank account. That's where they have maybe some emergency funds. If they could access Bitcoin, whether it's just... 1 % or 5 % of their savings directly there, that's a huge improvement upon what they already have. Brian Cubellis (36:20.622) It's to your point, Michael, like the long term winners in the incumbent space are going to be the ones that go about this the right way and view Bitcoin as the new savings account effectively. But part of that is also avoiding putting the shiny gambling token right next to that. And so I think, you know, that's what's going to destroy your reputation over the long term is putting people in things that Michael Tanguma (36:20.697) Yeah. Brian Cubellis (36:49.998) You know are in the broader crypto space that are going to underperform Bitcoin meaningfully over time. And I think part of the problem right now is like these people still can't distinguish. You know you have people calling like blue chip cryptos and including like Ethereum and Solana in there. And it's like if we want to really strip this back to reality it's like those those other coins are no different than meme coins. Like in my mind like going back to you know speed running the education. part of the reason that education process has been longer historically is because these alternative blockchains, these other cryptocurrencies have done a pretty effective job in sort of masquerading as decentralized or promising all these different forms of utility to where they can sort of get away with the scam longer. Right. And so it takes it's it takes longer for someone to realize that it's bullshit. Whereas with these actual just worthless meme coins, it's a faster process to realize it's bullshit. But like all these alternative blockchains are no different in the sense of they have the same sort of insider dynamics, lack of sort of credible neutrality, people who are in control as opposed to being truly distributed and decentralized. I think that's where people are going to put their hand on the stove ultimately in the incumbent TradFi space is by not realizing that. These alternative blockchains are the same thing as Trump coin. They're the same thing as Libra coin Michael Tanguma (38:26.105) The funny part I was thinking about, I've never experienced, and I was wondering if we've ever seen a disparity in education or asymmetric information and realizing this. we haven't, and the reason why is because we've never here, or in the past 100, if not 1,000 years, have lived while money has been monetized or been created in real time. Right, because when it's technology, like, I can see Uber to like cabs and the difference and like the step function change. But you can start to like grasp that and there's always the laggards. But when you're like monetizing an asset in real time and you're creating like a new money is basically being poured in real time and everyone else is trying to create another one. It's just, and then especially because we never really educated on what money is, it ends up where you have this just disparity of information. It's going to persist for the next decade. It's sad. Talking to banks and other large multinationals and like their thing now, I guess, is like stables. Like they're just really excited about stable coins. Brian Cubellis (39:24.63) Yeah, there was a good tweet I saw today. I'm not sure who this person is. Juthika on Twitter tweeted, will never be another fair launch like Bitcoin because you can never recreate the environment where everyone had access to, but nobody cared about such a thing. And I thought that was a really articulate way of putting it because when we talk about Bitcoin's fair launch dynamics, its immaculate conception, it's sometimes hard for people to wrap their minds around why. that is the case and why it can't be recreated. that's the best way of putting it. It's like, you can't have that in today's world where everyone, at least on the periphery has heard about crypto or Bitcoin. You can't launch a new coin in a fair way where it could trade valueless for months. That just wouldn't happen if it had any long-term trajectory to it. just can't be done again. I thought that was a very nice way of putting it. You needed that environment where actually no one gave a shit about it. Jackson Mikalic (40:33.45) Yeah, I agree. One, to change topics a little bit or go back to something we talked about was the Fort Knox audit. Do you guys think that, I think it was the, what's his name? Walker from the Bitcoin podcast had an interesting tweet about just the idea that this could be almost staged to the sense that they, you know, people know that there's not actually the amount of gold that we say there is or claim there is in Fort Knox and by opening up that door or that Pandora's box, then we can use that as a way to accelerate the push for a national strategic Bitcoin reserve. Do you guys think that holds any credibility? I'll say I think it does to the extent, not maybe that it's like that theatrical, but I do think that those that are within the Trump cabinet and administration, think they recognize that Bitcoin is ultimately the way to leapfrog all these other countries that are moving toward gold. But do you guys have similar differing thoughts there? Brian Cubellis (41:40.334) I don't know the answer necessarily, but it was interesting. I guess in an interview this week, Scott Bissett basically said like something to the effect of like, we wouldn't be considering gold reserves for the strategic wealth fund. And I thought that was interesting for a few reasons, but mainly just like, is there an underlying sort of to what you're alluding to Jackson of like, are there people who recognize like, we need to leapfrog and sort of forget about the gold and move towards Bitcoin. That comment would lead me to believe maybe that is the case that, you know, because otherwise, like, why would he say that? Like, why would he say, no, we're not considering our gold reserves for the sovereign wealth fund? Jackson Mikalic (42:26.946) Yeah, because it's a rock. I don't know. Yeah, I agree though. I mean, I was talking about this over the summer. We had a spaces with a Peruvian bull and I've been thinking about this for a little bit now and I know a lot of people have, but I think that's ultimately the direction this goes, right? Because if you're the U.S. government and you issue U.S. treasuries and you recognize that demand is dwindling for all the reasons we talk about weekly, You recognize that stable coins are a way to have demand, but you also are cognizant that these other countries have been accumulating gold, certainly at a bigger clip the past decade, but even more so in the past like two years. And so as far as we know, because they haven't been public about it yet, I mean, there is some information on national treasuries or other other nation states, the treasuries of Bitcoin, we have that stuff on the on-ramp terminal. So you can see like what's publicly disclosed, but there's still an opportunity here for the U.S. to lead. I think the U.S. does have with the confiscated Bitcoin or sees Bitcoin has the largest amount of Bitcoin already. And we obviously have the means to acquire more of it. So I think it is pretty obvious. And it just seems like by how people are positioning themselves, that that's really the direction this is going to ensure that the U.S. remains in a dominant position from a financial standpoint for the foreseeable future. Brian Cubellis (44:02.222) Do you guys think we get any sort of a doge dividend as they're calling it? There's been talk of like $5,000 for every person, which just makes me think of the stimmy checks that we got during COVID. And I'm gonna pull up. Jackson Mikalic (44:23.788) Jimmy, how many were sent out? Was it like two or three? Brian Cubellis (44:25.033) Stimmy check. Brian Cubellis (44:29.39) So $12,000 if you just poured that all into Bitcoin, you'd have that return, which is just wild to think about. $17,520, a 1,360 % return over about five years. So, you know, if we did get some sort of Doge dividend, Jackson Mikalic (44:37.196) Let's say that, yeah, say what it is. Brian Cubellis (44:57.422) I'm curious to see how many people would just do the same thing and import it all into Bitcoin. It could be a massive boon for sort of short-term near-term Bitcoin price if people are waking up to this in a more coordinated fashion. Like, yeah, if you're going to give me cash, I'm going to buy hard money with it. Jackson Mikalic (45:18.102) I was just looking at the number there, Brian. it's the plan would be $5,000 refund checks. so 79 million households for a total of $400 billion. And so that's 20 % of Doge's projected savings by 2026. I didn't go any further detail than that, but so we'd be looking at $400 billion being sent directly into American households. a CPI, you know, we're not going back to 2%. We already knew that, like, That's obviously inflationary. You inject about a half a trillion dollars into households. in many cases, will have to spend it and a lot of people will spend it. And yeah, I mean, I certainly, if I receive that, it's obviously going into Bitcoin. If I knew it was coming, already, I would figure out a way to get that $5,000 into Bitcoin preemptively if I don't have it available. But yeah, I think there's some merit there for sure. Brian Cubellis (46:05.934) you Brian Cubellis (46:13.688) Tim, would you port it into MicroStrategy? Tim Kotzman (46:18.04) Hmm. I would probably put it into Bitcoin in my on-ramp account and then take a loan against it and put that cash into MicroStrategy. Brian Cubellis (46:27.064) There you go. Jackson Mikalic (46:29.398) Lover to the gills. Brian Cubellis (46:29.646) Anything new? Any worthy updates on the strategy front, Tim? I know there was a new convert put out this morning. I think I haven't done any other follow ups around the STRK, like the strike instrument. Any updates from your end on just following strategy and everything they're doing? Michael Tanguma (46:31.552) One up. Tim Kotzman (46:51.684) Yeah, I don't know that there's any update on strike. think they need a few weeks to a few months to kind of get that market and certain thresholds. check in the box before they can get an ATM on that. But as you mentioned, they have somewhere between a two and $2.3 billion convert that is priced and out the door and should be closed by end of tomorrow based on all the filings. So probably some Bitcoin being bought if not today or tomorrow this weekend. Michael Tanguma (47:31.619) This just came out or it was tweeted about the, this is the positions. They increased from Cantor. So there's obviously the one we talked about with MicroStrategy. But look at, you could see Mara Coinbase increased the iShares, Grayscale and Fidelity and Bitwise positions. So they're basically all in on Bitcoin. Jackson Mikalic (47:55.658) and Ethereum, so I guess they're ready to ride down the Ethereum position to zero for the greater good. Michael Tanguma (48:00.089) They're trying to just throw a little smoke out there. It's a smoke screener. It'll be very interesting to see what the, I mean, we haven't talked about that, but the CFTC, SEC, and OCC all having heads now that were former, I believe all execs at digital asset firms. So this notion of like, where the market's heading and what Ludwig knows. This is an interesting dynamic, seeing these positions. Jackson Mikalic (48:32.512) Yeah, that chart you just pulled up too, I think it's interesting that Tim called the number out earlier, but it was $1.03 billion of exposure to MSTR and then only about $100 million exposure to iBit. So they have a 10x bigger position in micro strategy than they do in the Bitcoin ETF. So they're bullish, I would say, is what we can discern from that. Tim, I told you this was coming, so you better have something ready for us. But you're tweeting out earlier this week, and you have been, you think a million dollar Bitcoin by the end of 2025, and you were as bold to say two million by the end of 2026. So that would totally go against the historical cycles that we've seen. So I think you're implying that there's a super cycle upon us, but Tim Kotzman (49:06.971) Ha Jackson Mikalic (49:29.858) What would you say to kind of back the sentiment that you're sharing there? Tim Kotzman (49:35.414) just encourage everyone to go watch the Adam Back CNBC interview that I posted and said look for the 500 people that commented wanting to know my rationale I mean I'm not as smart as Adam Back and not as eloquent and he lays out right corporates institutional and if you get nation states in there I just the reality of printing endless fiat to buy bitcoin that is not endless. mean that's I don't necessarily think it's the end game meaning like a super cycle but I do think we're going to see an elongated cycle and so that's where the you know increased price next year comes from. Yeah, mean, everything that you guys were just talking about, like the sovereign wealth fund, I think it would be a little disappointing and people would just kind of move on. It would not be part of the conversation as much if they said, yeah, we're gonna put our gold reserves in this new sovereign wealth fund. It's like, all right, well, we don't need wrapped gold in a new fund. We already have the gold. So they're, know, Brian, to your point, best sense, probably like just. moving the conversation forward. Like, well, if we're going to have a sovereign wealth fund, we've never had one before, let's actually make it something that's going to make the golden age of America and all these things that all these guys keep saying. And then like, is there anyone more controversial in the entire, on the entire planet than Trump and Elon? So like every single day you get a headline and But again, the most hilarious outcomes, probably the most likely, right? Livestream of Fort Knox and abolishing the IRS because you don't need an IRS if you have an ERS, right? And the interesting thing is, you know... Tim Kotzman (51:42.018) Just speaking for myself, I I'm on a learning journey. And so as these different voices on social media, not so much mainstream media, talk through their hot takes on, you know, should there be a Doge dividend? Maybe not. Why not? Tim Kotzman (52:02.124) just see what's happening. mean it's like published information but when you put it all together And not to beat a dead horse, but like, honestly kind of can't believe that Adam back tweeted. You are not bullish enough today. Right. Everybody gives gladiator so much shit. And you have like the guy that invented hash cash saying you're not bullish enough. I mean, I don't know what more people would need. And again, like I don't, I'm not saying $10 million or a hundred or Brian Cubellis (52:25.902) You Tim Kotzman (52:42.158) billion dollar Bitcoin by next year. mean, historically, you want to talk about cycles. I mean, it's you only have to go back two cycles to see a 10 or 20 X and that's a 10 and 20 X. yeah, that's I think it's fun to be excited. I'm excited because I'm learning every single day and I'm encouraged by where we're going because I just I don't see any data points that would leave me not to be encouraged as to where we're going. Some people use the term bullish. And I just think even this range that we're in, when we pull up the on ramp terminal, it's like, that's what the guys that I talked to, they're like, you know, the, can just kind of not go parabolic that's actually really good for the cycle. I've been hearing that for the last two years and I think that in and of itself is really encouraging. Like, all right, we're between 90 and 110. you could easily go to 150, 200,000. within a few months, a quarter or two. And again, I think that's being conservative. So I think it's gonna be really interesting, not just this year, but next year and all of the learnings, right? The meme coin fiascos, the... Tim Kotzman (54:17.548) noise being kind of transparent, right? All these viral videos of, you're just upset because I dumped on you before you dumped on me. It's like, well, like he's being pretty transparent and educational about some of this stuff. If you think about it from that aspect and you have these like presidential international incidents with meme coins. I think that is educational. Michael Tanguma (54:36.002) Yeah. Tim Kotzman (54:45.666) So think it's all for the good of Bitcoin anyways. So yeah, lots to be excited about. Michael Tanguma (54:52.535) Yeah, I mean, think I'll take a more temperate approach than the million. I think we end up probably higher than we all think and, you know, anything's on the table. But the thing I'll say is... I think more people are starting to realize we've talked about this before and you hit on it, Tim, is that this most likely goes out into 2026. Like there will be it will overextend. There will be leverage built into the system. But, you know, I think it came out last week was it State Street and City don't their their custody services won't even launch until 2026. Like there's still so much plumbing, still education, onboarding from RAAs to their clients, to institutions, to sovereigns. So, yeah, I do definitely think that we're going to see like a longer cycle than just a general blow-off top in the next like two quarters. And the other note you mentioned about the most interesting path is generally the one we seem to be taking. just on that notion alone, you know, you can imagine that we get some crazy numbers just because everything else has seemed to be going crazy everywhere around us. Jackson Mikalic (55:57.58) Well, good timing to have a loan product live. I'm going to be using that. I'm going to take a little loan out now that I've had to talk to Tim about $1 million per Bitcoin 2025. Michael Tanguma (56:09.837) Yeah, mean, not to go too far in the weeds, we're going to talk with the Arch guys are fantastic. We're going to have a podcast with them in New York. The caveat to that is there's no such thing as a free lunch. like in same way we say people pay for custody and their peace of mind and like how they sleep at night. When you have leverage, ultimately going to experience volatile market and you're not going to sleep very good because you can potentially be marketed called multiple times. And then at the end of the day, the thing that sounds easy, and it's the hardest part, is when do you exit a position? Because if the price is $750,000, you think it's going go to $1.2, and it cuts in half. So that's just like, it's not like a free lunch. You're going to have to manage it. So this is speaking from somebody that's very much not had a free lunch. But the other thing that's more interesting about this product that I find fascinating and it's going to be exciting to figure out how we integrate into our overall platform is Arch has this line of credit aspect. Jackson Mikalic (01:00:16.534) Bye. Michael Tanguma (01:00:30.167) where, and this is something I previously had worked on with Visa, we never got to see the light of day because of FTX and what happened there. But you can imagine this notion of you have your Bitcoin store value, your savings account for your personal wealth, and then you wanna tap into liquidity because you would go on a vacation, you wanna buy, wanna fix your cabinets, whatever it is in your house, and you can tap into that line of credit. You can manage like, tapping the line of credit, paying in cash, or using your credit card to put things down, then get points, pay that line of credit off the credit card. There's different ways to manage that where opening up liquidity is gonna be something that's huge this cycle. And I think it's, in my opinion, more healthy way to use leverage than to just buy more Bitcoin. But again, everyone's gonna do what they wanna do. There's no such thing as a free line. Jackson Mikalic (01:01:23.522) Well, the biggest issue I have would be losing sleep because as you guys know, I like my sleep. I like to go to bed early. So if anything would have me reconsider, I'd be not sleeping as well. Yeah. Brian Cubellis (01:01:29.44) You We can't have that. We can't have a sleepy Jackson. Jackson Mikalic (01:01:37.814) Yeah. Michael Tanguma (01:01:38.605) Tim, how do you think about leverage? Tim Kotzman (01:01:43.396) don't think it's appropriate for this podcast. Yeah. Michael Tanguma (01:01:45.154) Ha! Michael Tanguma (01:01:48.729) Well, there you go. If you want to hear about Tim's leverage, you can come to the happy hour next Wednesday. We're hosting with Arch. We'll have that online and social if you want to try to join us. Jackson Mikalic (01:01:59.65) Yeah, yeah. And for anyone who's based in New York as well or will be in town for the Bitcoin Investor Week, just feel free to reach out to us at OnRamp or to Tim, Bitcoin Treasuries podcast. We'll have a lot of things going on there. It should be a great conference. We're looking forward to it. So please get in touch if you'll be around. If you've been listening to the show, would be a lot of fun to get to meet in person. Gentlemen, I think we'll wrap it there. Good week. Nice to see you all. Tim, like the orange tie. Keep it up. and we'll see you next week. Brian Cubellis (01:02:31.31) Thanks boys. Tim Kotzman (01:02:31.726) Awesome.