Max Fear. Max Opportunity. The Bitcoin Bull Market Starts Now.

Michael Tanguma (00:01.671) And we are back to the last trade. We got to get the energy. There was too much somber nature. Jackson's sitting in grandma's basement, cabinet, whatever he's in. And there wasn't enough energy to start the episode. And we should all be very bullish. Jackson Mikalic (00:01.85) All right. All right. Nope. That's that is my line. That is my line. Jackson Mikalic (00:18.214) Let's, let's restart here. We're back. It's the last trade. That is my line. It's not Michael's line. And, you know, I actually did have this thought. It's funny that you mentioned that because ever since I got put in this new office, the price has just been tanking and, I don't know if there's anything to it, but there was actually a lot more bullishness at the time when I was recording from the cave. And now that I'm in this fancy office, it seems like the price is falling out from below. Brian Cubellis (00:42.606) Can we pull up the terminal for a second? We just haven't done it. We owe it to the people. Michael Tanguma (00:44.967) Well, I want to, before we pull up, before we pull up the terminal really quick. So we have all these analytics, how many people listen, how many people start, and generally the most right now at this exact moment. So let's maybe do like a, it's either good omen, sacrificial lamb, whatever we want to call it. But I brought a hat. We took some to some very prominent bankers in New York the other day. And I have an extra one. These were made special edition. Actually somebody close to the business sent them. Jackson Mikalic (00:49.094) Don't make me do that. Michael Tanguma (01:13.223) in their network the Imperial. It's a very nice hat and whoever leaves a comment that has the most likes by the end of next episode drops I'm gonna personally because it's with me because I wish I could send it to Jackson so that he would have to ship it but I'm gonna have to go or my wife to the post office and ship it to whoever has the most likes. So there's a nice honor and pat. I think like we just need to boost the sentiment, get some swag and maybe, just maybe it'll be the nice switching of the trend from where we sit today in Jackson's grandmother's cabinet to getting out of there and being able to get that nice land for his family and really flourish. Jackson Mikalic (01:56.028) Man, every time the office is shrinking. Started with an attic and now I'm in a cabinet, but I like that. Let's see who can get the most likes on the comment. We always appreciate the support on the show, so this is going to be a good rip. We're going to get the energy flowing. We got the price pulled up. Actually, you can see here, you can look at the one year price on the terminal. We're looking at an 87 handle on the Bitcoin price, $87,000. And Michael Tanguma (02:00.871) fine Jackson Mikalic (02:22.019) We actually stopped pulling this up every single week when you can see where we were earlier in the spring here back in the 80s. So we actually have taken a full trip back to the mid 80s and we are, but Brian, before we hit record here, Brian was actually pretty bold up and Brian, I don't want to steal your thunder, but essentially nothing has changed, right? mean, sentiment is in the gutter. It's actually, first of all, I don't really know how this index is tracked, but Brian Cubellis (02:30.424) We are back to the mid-80s. Jackson Mikalic (02:50.021) The sentiment is apparently as bad as it was when FTX collapsed in November of 2022, which is just wild to me. So why is this happening? Brian Cubellis (02:54.444) Yeah, I think it's there's a confluence of factors right now. I think the biggest one in my mind is that everything that's on the timeline, everything that people are talking about is very sentiment driven. And most of it is anchored to these historical four year Bitcoin cycles. And so, you know, if you're you're just looking at that and you're doing some form of technical analysis, you're scribbling lines on the chart, it looks like this would be a place that maybe we drop. you know, 50 to 70%. Just in terms of historical timing, what the chart looks like, that is what a lot of people are anchoring to. The other factor that you have is the government was just shut down for the longest period on record, know, month and a half, basically, which had this abnormal sort of interim effect of constricting liquidity. Right as, you know, Powell has said a few weeks ago that quantitative tightening ends on December 1st. And we're probably looking at more rate cuts going through the end of this year and into next. So on the sort of macro liquidity condition side, as we talked with Mel Madison last week, we're really in a totally different position than we were last Bitcoin cycle top in 2021 in terms of the macro environment, liquidity conditions, what the Federal Reserve is about to do. It's basically the exact opposite of those situations in 2021 leading into 2022. And so I think there's just a lot of sentiment driven anchoring going on that is not looking at the actual fundamentals of Bitcoin as a neutral reserve asset, which, you know, if you look at the course of 2025 and even the six months before that, call it the past 12 to 18 months, the fundamentals for Bitcoin as a neutral reserve asset have only strengthened and increased. You know, just this week we have Abu Dhabi, their investment vehicle increasing their exposure by I think like 3x to iBit Bitcoin ETF. You have Harvard a few months ago, you have Emory following Harvard's lead. So you have university endowments beginning to allocate to both Bitcoin and gold as sort of the sound money allocation. You have talks of debasement, generally speaking, you have talks of the unsustainable federal debt and deficit spending that is only going to lead to more currency debasement and only leads to people seeking out Brian Cubellis (05:18.956) neutral reserve assets, which are scarce or finite, namely gold and Bitcoin. I think Mel had a great point on last week's show as well around, the US government doesn't want inflation to show up in the real economy. So whether that's housing or just goods and services, they'd rather have it show up in purely monetary assets. And really, and Bitcoin are those two monetary sponges that can soak up a lot of the debasement that we're headed for. And so to me, Nothing has changed in terms of like the overall Bitcoin thesis. If anything, it's actually strengthened over the course of the year. And the price action, you know, it's it's feel like we, you know, we say this all the time, but like you just do have to zoom out and recognize that a lot of what's happening with the price in the short term is noise. You have to ignore it. You have to think about the actual fundamentals of the asset. And most people on Twitter aren't looking at fundamentals. Technical analysis, also known as astrology for men. is the exact opposite of fundamental analysis. It's technical analysis. You're just looking at a price chart and drawing lines on it and saying, it looks like it's going to go this way or that way. It's completely untethered to actual fundamentals of an asset. And so I just think that's where we're at is most people. Also, our friend Frank on Twitter had a great chart earlier this week that showed this most recent sort of drawdown is the largest short-term holder capitulation on record in Bitcoin's history. There's the narrative around the OG whales selling, and there has been some of that over the past 12 months, but this most recent drawdown is really a lot of short-term folks who probably bought over $100, they don't really know what they own, they're looking for a quick buck in a trade, and now they're scared and they're being shaken out of their position. And that's just what happens with Bitcoin. You get shaken out. That is what the price chart ends up doing to people, because most people are not thinking about the long-term fundamentals of the asset. They're thinking about the short-term price action and making it quick. So all that is to say, I am extremely bullish. Do I know what the price is going to do this week, next week, next month? No, not at all. But I'm pretty confident over the next five to 10 years that we're going much, much higher because of everything that I just referenced around the macro environment and the actual fundamentals of the asset. Michael Tanguma (07:37.457) Jackson, you pull up that one link? Cause I feel like it's a good piggyback off of that about the bullish, I forgot what the title was. Jackson Mikalic (07:48.923) Yeah, I mean, there's like lot of links here. Michael Tanguma (07:50.053) The prudence, prudence and patience are virtues of prosperity. think taking it a step further, I know this is going to sound like hyperbolic, but it's really not meant to be like, this is very bullish for most Bitcoin holders, Bitcoin investors in the sense of, Jackson Mikalic (07:53.817) I gotcha. Michael Tanguma (08:10.759) This was, guess he's like the chancellor, former chancellor of the UK. didn't even know this guy. was just the, was thinking about this the other night and then I saw Matt Pines tweet. says, why is everyone having to meltdown over the Bitcoin price? This is what they want, right? They can start, stack more Bitcoin for less, basic economics. 10 years from now, it'll be such an insignificant pullback. And this is super important because yes, like while our pocketbooks, retirement, whatever it is that you're measuring in US dollars goes down in some level of time period from where we're at at all time highs. If somebody to Brian's point understands the fundamentals of the asset, they're just basically getting more Satoshis for the dollar that they're putting in. And so it goes all the way back. where it's super relevant on how insane and preposterous the digital asset treasury trade was, was because not only do they not deliver value, there were no fundamentals. So when the price retrace, everyone pukes it out because nobody has any understanding of like why or how they were gonna deliver value, where when this happens. The people that have no understanding of Bitcoin, to Brian's point, get shaken out. But the people that understand the fundamentals, independent of the monetary setup, but that there's only 21 million, the credible monetary policy, the need for censorship-resistant, permissionless money, or have only been strengthened, hasn't changed, and you get more sats for your dollar if you're out in the economy producing goods and services and value to the world. And so it's very positive in that sense. And that's where the vast majority of people should be. Now, obviously, if you're building in this space, it hurts because you see it, your clients, if there's leverage. I mean, there are things on the margins where, but from an overarching, like, person just looking to preserve their wealth, nothing's changed. And you're able to take dollars that they can continue to print, park them in this underlying asset. And then the last thing is this is where all the money's made. Michael Tanguma (10:04.807) because most people cannot withstand the volatility. They don't know how to custody it. And so anybody listening that has material amounts of Bitcoin, they've had to get to the point of the volatility and understanding it, and then the custody. When these things get figured out, when multi-institution is standardized and the market understands you can't lose the asset, and you also don't have to figure out how to convince your 85-year-old grandmother how to use a ledger. And then the other side of it is the market doesn't go and retrace 30 % on a win, but it's 3%. I think they just halted or in the past hour the S &P dipped 2.5%. It looks like a candle from hell. Point being is when it looks like that at 2.5 % in Bitcoin and the market freaks out, the price can be hundreds of thousands, if not millions of dollars. And so this area of volatility and uncertainty is the opportunity, but you have to pay for it with patience and understanding of the fundamentals. So I look at it as a positive for lot of individuals. Brian Cubellis (10:58.798) Yeah, other, I was gonna say one more thing just in terms of, and it may sound like cope, but like it is a silver lining in my mind that, you know, what we do know both anecdotally from running our business, but also just being in the market and talking to other folks, in terms of the institutional adoption of Bitcoin as a neutral reserve asset, like there are people who have been getting up to speed over the past 12 months and they've been thinking about making an allocation, but it didn't. Jackson Mikalic (11:01.605) Yeah. Brian Cubellis (11:28.078) it probably didn't sit right with them to top blast it at 125. And so this type of dip back under 100, you know, a 30 % plus correction is actually exactly what a lot of those people are waiting for. And so in order for a lot of these new cohorts of demand to come in, you kind of need this in some sense. And it's literally what we've seen for the past 12 months, right? Like this is a right where we're at today is a 31 % drawdown from the all time high. We had a very similar one in April and then another one before that. I forget the exact month timeframe, but this is the third one that looks very similar. And I think this is just kind of good for all of these new cohorts to come in because, you know, if it was just going up in a straight line, they would feel much less comfortable allocating. And so I think this sort of stair step up, this chop, salidation, whatever you want to call it, I think is actually kind of a positive. for a lot of these new pools of capital that want to get exposure, but they don't want to top blast it because that's just, you know, that's what they're trained not to do, right, like in all other asset classes as well. Jackson Mikalic (12:36.473) No top blasted, I like that. Chat, is Brian coping? Leave a comment if he's coping about the price action. One thing I wanted to call out too, Brian, I like some of the points you made there. One thing I've been thinking about is just the divergence between gold and Bitcoin, right? So we've been discussing gold more frequently on the show this year. Some people don't like that. They think we only are allowed to talk about Bitcoin, but we're gonna talk about other asset classes and you're gonna like it. Brian Cubellis (12:36.768) No one wants a top last. Jackson Mikalic (13:05.903) But you know, earlier this year, gold and Bitcoin were number one and number two in terms of year to date price performance. then Bitcoin, mean, certainly after the past week, is even further lagging as the worst asset class year to date. And gold remains very firmly in the first position around, I think, 50 % or so year to date. And I've just been trying to think about, you know, lot of these assets, these two assets, have a lot of similarities. And from an investor perspective, my perception is that people own them for similar reasons. The fiat system is unsustainable, neutral reserve asset, geopolitical tensions. But I started thinking more about this and, you know, 2022 is always the signpost a lot of people go back to in terms of the sanctions of Russia's reserves. And I've been thinking about this for a while. was like, well, that was back in 22. It's 2025 now. Why is gold still accelerating to the degree it is and why has this been just such a blockbuster year? Because we've had this information, we've had this data now for three years. We know that geopolitical tensions are increasing. And I was just thinking more about that in 22 and 23 where it was still a lot more tight from a liquidity perspective, rates were still higher and gold tends to have that inverse relationship between the real rate of return. you know, using CPI and using the Fed's benchmark and gold is a zero yielding asset, you know, tends to do worse in high real return interest rate environments. And so I think we're getting out of that and that, you know, the geopolitical sanction of Russia's reserve paired with the trickle down of interest rates coming over time, paired with the fact that this is truly becoming a global reserve asset to the extent it hasn't been over the past like 100 years, right? And through Bretton Woods, through 1971, it's just been less and less gold in the monetary system. And that shift is starting to happen in real time for wherever it was, like 10 to 20 % of global reserves today. It's only increasing over time. And so I've been thinking about like, all right, well, on the gold side, it makes sense. The gold sniffing out liquidity conditions easing quicker than Bitcoin is, ironically, because most people think Bitcoin sniffs it out before gold. Jackson Mikalic (15:20.025) You pair that with the fact that sovereigns are actually accumulating in scale, which we still have not seen with Bitcoin, right? That's been an obvious, I think, a mismatch between where expectations were at the start of the year and where they are today. Everyone was all bowled up on the SBR. People were bowled up on all the state news early in Q1, Q2 of this year. And all we've really seen is no audit on the US Strategic Bitcoin Reserve, budget neutral allocation strategies that we heard about six months ago. Nothing. No update there. And all we've seen in terms of a sovereign interest really is the Czech Republic National Bank allocating like kind of a million dollar or whatever their currency is, Krones, whatever it is, pilot to Bitcoin Strategic Reserve. So like, if I could summarize where my head is at currently is, well, the sovereign bid clearly exists for gold. Gold has a more sensitivity to real interest rates. Bitcoin, the expectations were so high and the reality was so much lower than that. Yet the the easing is actually about to ramp up substantially. And Brian, to your point, like tie in the last piece of the puzzle is Wall Street is really like on the sidelines still in many ways. Right. Like a lot of the firms don't have trading custody. A lot of firms are still opening up ETF access. And most of these players are still trying to figure out like what the hell is going on with Bitcoin versus the rest of the space. And so I think that's why Bitcoin has lagged so much this year and I ultimately expect that Bitcoin would outperform substantially compared to gold in 26. Michael Tanguma (16:52.859) Yeah, I mean, I think there's a couple things to unpack there that I don't necessarily know if gold is sniffing out the liquidity. think like Mel talked about it last week as far as we've never seen this level of liquidity tightening with interest rates, the level that they've been post 22 where they're at. I think there's more geopolitical. issues when it comes to China net settling in oil in different countries understanding that they cannot hold treasuries and effectively buy the goods and services they need on behalf of their individuals to maintain like the status quo around energy production and feeding their citizens so they have to hold a harder asset. And the price of that appreciation, it's kind of inverse. The price of the gold appreciation is the same idea how Bitcoin can easily move is it's such a small asset like there's so much debt not enough dollars and if people moving out of that debt into gold that would naturally cause especially like if the gold price has somewhat been suppressed and you're able to take physical delivery that's moved away from this like um kind of um like static or whatever the price has been you know the pascal at 20 years in the 800 to 1800 range and then on the bitcoin side it's still a small asset relative to everything we're talking about. So any kind of liquidity constraints or deleveraging, we saw there's multiple angles that this could happen. This was the October 10th crazy perp stuff that may be unwinding. There's other things that could be happening here. But I think the broader theme is that we've kind of been in a bear market this whole time, which is like not popular to say in the sense that because of interest rates, because we never hit gold all time high, and we've never really seen if anybody like looks around their phone and how many people that were their friends and family stepped into the Bitcoin market. The real bid was similar to the gold side, which was sovereign, some institutional, a little retail, in the same way that on the BTC side, we know Abu Dhabi, know UAE, we know other sovereigns are stacking that aren't telling us. Michael Tanguma (18:52.741) We also know that the ETFs had certain amount of inflows, but I would chalk that up to for 15 years, they haven't had an easy way to buy Bitcoin. So you turn that on in any liquidity market, there's all this money in those capital markets. So that turned on, but I don't think like we're actually even hit a bull market. And so that's where we've just sat in the past year. We saw the price run up, but we actually haven't seen any kind of retail interest, any kind of crazy volumes. And so I think it's just a product of that, but the liquidity stuff, don't necessarily think that's, I think that's a driving force to like, how much money exists in the system and how it has to go somewhere that we got to 125,000 with unfavorable liquidity cycle and we're gonna eventually have to turn that on because we just know it's easy math. There's too much debt, not enough dollars and unless you inject more dollars into the system, the market naturally delivers. Brian Cubellis (19:38.956) Yeah, I mean... Jackson Mikalic (19:41.327) Yeah, I would also add to that real quick. And Brian, maybe this will tie into what you were going to say. We have to get to a point where there's going to be an increase in liquidity for a number of reasons. And I think it ties into the fact that the jobs report just was vanished. It was just wiped off the face of the earth in October. And it was objectively the worst. worst round of layoffs on a monthly basis in over 20 years and just like, that's very convenient. We don't have the data anymore. And so I think there's just that also it's kind of like the market structure we've seen for the past decade or two where actually bad news is good news to the extent. Well, all right, people are losing their jobs. That's going to impact the economy because there's going to be less consumption theoretically if they can't get rehired somewhere immediately. Well, what are we going to do in terms of keeping the economy going? We're just going to start sending out the tariff stimulus checks. We have the midterms in 26. We need to get money to people. We want to stay in office. So I think actually all this bad news, it's really jolting the markets right now, but it's naturally going to have to fizzle out with more dollars entering the financial system and also the economy, in my opinion. Brian Cubellis (20:50.03) Yeah, the only other thing I was going to say is, and I wrote about it in today's newsletter, to Michael's point, like it sounds crazy to say, but like, you know, if you're measuring Bitcoin in gold terms, we haven't really broken out. We haven't seen true price discovery of Bitcoin in gold terms. We kind of tapped it earlier in the year. sort of an upper resistance and you know, we haven't gotten back up there and obviously gold is run. So that's a factor as well. But I think that that is that's kind of where we're at and part of me thinks too like, you know, if we're gonna if we're saying cycles are dead the four-year Bitcoin cycles are dead. It may actually be advantageous for the year for it to break proverbially to be this year when you know, it was supposed to be a green year if you're just looking at the pattern of green green green red green green green red. that we've seen, if it breaks this year and the red is like marginal, like minus 5%, and then the next two years are green, and then maybe the fourth year after that is like marginally red again, like that's actually probably preferable than, you know, if we were up 30 % this year and then down 60 % next year. So I think, you know, there's a lot of silver linings here. And again, like all of this, all of the sentiment. is not being driven by fundamentals. Like if you are focused on the fundamentals, if you're focused on the TradFi incumbents, all the fintechs that are still figuring out how to play this, there's been a ton of &A over the past couple months. Like this isn't going away just because someone drew a line on a chart. Like there's a real disconnect in terms of what people think online and what's actually happening behind the scenes globally, not just in the United States. So everything is in my mind, super constructive in terms of like Bitcoin fulfilling its destiny as a neutral reserve asset. All of those things have progressed this year. Michael Tanguma (22:44.507) Yeah, maybe the last thing to say on that is the cycle might have been tied more to liquidity than anything else. And it was probably a convergence of the halving of the supply coupled with liquidity. But if in this cycle, those are basically deconverging where the halving has a less of an impact and the liquidity hasn't been there, that's where you see an unorthodox or different cycle structure. But again, it just means that it's kind of like elongated. It doesn't really change the dynamic of Bitcoin supply demand constraints and quote unquote animal spirits were just a proxy for human behavior. When that changes, you end up with these crazy cycles, the blow off tops, because people go over their skis and leverage and all these things, and you're just getting accelerated business cycles in Bitcoin, because there's no circuit breakers and there's no bailouts, until eventually in a free market, that's what's supposed to happen, is businesses go up. out of business, others rebuild, they learn from it, they don't get malinvestment. And so I still think we end up in these like quote unquote cycles where there's blow off tops and we go into these mini bears. I just think that the construct of the first 15 years on a potential thousand year asset may not be the playbook forever. Brian Cubellis (23:56.58) Yeah, that's what said. Jackson Mikalic (24:03.162) I'm curious what you guys think about, Brian, maybe you've been closer to this. Why has the sentiment shifted so quickly in the broader markets around the artificial intelligence narrative? Like why all of a sudden is there all this concern about this being, I saw a survey of fund managers and 53 % of them responded with this AI bubble they're calling it being the number one tail risk that the fund managers were concerned about. And then I saw another stack. similarly that spoke to that same concern and I'm curious like if you've been paying attention at all to the earnings reports that have been coming out and just like general investor sentiment there why do you think all of a sudden there's this concern popping up? Brian Cubellis (24:44.515) You know, I think it's, there's a few things. I mean, you could look at the Michael Burys of the world just calling it, like calling it a bubble, like that impacts market sentiment around what has been happening. I think the, one of the more important sort of dynamics at play is that there's immense concentration in terms of the contribution of returns from a handful of companies that are related or adjacent to AI that are driving the S &P and the NASDAQ. So there's a greater recognition. of that as it accelerates, as it gets more more concentrated, it looks like it looks more precarious to the average investor. The other the other critical point of all of this is like the circular nature of a lot of the spend and funding. You know, I wrote about this a couple of weeks ago in the newsletter, but like that is also making investors feel, you know, a little cautious around this whole trade because there is a lot of circular logic in the spend. with no real concrete payback periods or return on investment capital. There's theorized return on investment capital. think A16Z had a report a few weeks ago, and then CO2 had another one where they tried to map out how they're foreseeing returns on all of this spend. And it's like they came out to like 20 % over the next five years, which doesn't feel like enough in my mind for the amount of spend that's happening. And so I think it's a complements of all those things. It's the Michael Burry's calling it out. And he may be right or wrong on his thesis. think his thesis or his theory is really around basically he thinks these companies are manipulating the depreciation of the assets. There may or may not be truth to that. I've heard the other side of it as well. But all of that is to say like it seems like a crowded trade one. And two, it's driving the broader equity markets, which is concerning. Like if you're being realistic about just equity markets broadly, if there's a ton of concentration in this industry or this space where there's no real visibility or line of sight to returns on all of this spend and investment that's happening, it's kind of just like, and we've talked about this, Michael, like the proverbial goal or the return is so great in their minds that the spend is actually irrelevant. Brian Cubellis (27:10.265) today and your forecasting of the returns is irrelevant because you can't even fathom or imagine the value to be created when someone achieves AGI, for example. And so I think it's all of those things that are just making people more cautious around it. I think as we talked about last week, it kind of doesn't matter to a certain extent. And I don't want to sound flippant, but like. We are in this melt up period where all of these things are going to continue to go up because, well, what else would you invest in? You don't want to go into negative yielding bonds, so you're probably just going to keep adding to your S &P and NASDAQ exposure and hope that this trade doesn't unwind before you're able to monetize some amount of Michael Tanguma (27:54.342) Yeah, I mean, it reminds me a lot the question of like the Fed and interest rates and where they're going. Like, it's hard for me to address it because it reminds me of Fed speak in the sense of nothing changed. Like nothing's changed with the liquidity crunch, liquidity that needs to be injected, what Bitcoin does in that market in the same way that the AI trade was always. a trade that was rooted in lack of fundamentals because embedded into what he referenced, Brian and Burry on the depreciation of the asset, the debt amount, initially it was supposed to be like revenue that was funding these projects, now they're taking out debt. when you look at, well, inherent to that trade is deflationary in the sense of people will lose jobs, people like you can't repay back the exact unit economics of what you're baking in to how you're gonna repay it because things would go lower. It's been a mimetic trade and it was like really post 21 when the market delevered and interest rates rose. You needed almost a narrative to park a bunch of capital and AI was that, and then you needed the markups to participate, whether your private equity venture, even public equities was the AI aspect. When it's come out publicly that most public traded companies don't even use AI, they don't even feel like when you take a poll that they're using it in a way that is adding to productivity. And so to the question of what you describe, Jackson, it's just narrative driven. It's the same thing with as much as we want to believe that the debasement trade is understood, it's not. That was like somebody the night before. Sunday saying, turn on the debasement trade and everyone starts talking about it. And you just hear it pick up. And right now, it's like the AI thing is overcrowded, deleveraging, fundamentally sound. Michael Tanguma (29:36.136) But again, it doesn't matter because once liquidity gets injected, everything goes back on because where else are you going to park your excess dollars? And you need places and they're narrative driven more than anything. That's why the mean coin thing is funny because it's very similar to just the regular market. It's just in a more acute version of the Ponzi, which is you're just like, this thing has vibes, so I go for it. Right now it was AI and right now there's a liquidity crunch. There's other things going on with the government shutdown that everyone's picking a thing to say this is the overcrowded trade. And the second that changes with liquidity, everyone's like, we're back on. It's like, why are we paying attention at the end of the day? Too much debt, not enough dollars, you want scarce assets and you just need to go back to producing value. Brian Cubellis (30:11.215) Yeah, the other thing I didn't mention, Jackson, to your original question of what's contributing to the sentiment, I think a few weeks ago there was the report that OpenAI was asking for a federal backstop. Now they walked that back, but that is a signal to people that maybe this is unsustainable if those companies would need a federal backstop. So think that scared people too. Jackson Mikalic (30:36.411) Please, please sir. Yeah, I mean, I think you guys made a lot of great points. I always anchor back to like, what do you do, right? mean, people have been talking about the concentration in the biggest companies in the United States for a while now. It's only getting worse. I think we're at 35 to 40 % of the S &P 500 is the MAG-7. A lot of the MAG-7 has invested very heavily into these technologies and they're driving a lot of the growth. So. Unless like you just are incredibly bearish on this technology and you'd rather hold bonds and have negative real returns. And I don't really know where else you go. Or if you're like trying to move out of your grandmother's attic and you want to buy a house and maybe you do take some off the table. But yeah, there's not many places to go. I generally agree with the thesis there. And then one other thing, Michael, that you flagged was the Block Investor Day. I was curious if you have any thoughts there because like amid all this amid all this crazy stuff going on in the markets in the Bitcoin space, had really strong investor sentiment, strong presentation yesterday at the investor day. The stock price is ripping. We've seen square merchant adoption. What are your thoughts there? Michael Tanguma (31:47.208) Yeah, maybe just right before that, one thing to call out is this is the exact reason why gold belongs in individuals' portfolios. Because I think on time horizon, and specifically if you're an older individual, but then also conviction and confidence, imagine you're sitting on whatever your portfolio is. could be 10 million, 100 million, a billion dollars. You're coming up the curve and understanding Bitcoin and you feel a retrace like this. Like if you don't deeply understand Bitcoin, well, you probably weren't going to park a large percentage of your assets there. But if you did and didn't deeply understand it, now you're looking at the market with a 30 % drawdown. But that doesn't also preclude, I mean, you should just be in equities that are overpriced, like we just talked about and in bonds that are negative yielding. And that's where gold has a perfect position sizing to sit there, reduce the volatility while also still being long the same trade of debasement. And this is really the rationale that gets missed by most individuals from an early entrant coming in and saying, okay, I understand gold. I can look at the volatility profile. It's nowhere near what, you know, for thousands of years it's sat as a hedge against the basement of any currency. And I want to sprinkle on some Bitcoin as I get more and more convicted. It's a perfect asset for an individual all the way to a large institution or multi-billionaire that may wake up and understand this market is insolvent, but they also aren't ready to ape in. to BTC and so it's just a real interesting dynamic that people can understand that gold sits right next to Bitcoin and it's perfect. Jackson Mikalic (33:12.687) Yeah, that's a fair point. think the one challenge there is the obvious physical limitation, right? So if you don't want to have the counterparty risk, you want to have physical gold ownership, then well, you can do that. Certainly can people. Michael Tanguma (33:25.029) Yeah, but none of these billionaires are taking physical delivery of the BTC. So it's the same thing. And you can get better. Jackson Mikalic (33:29.667) Yeah, I'm not but I'm not talking about them just talking about like I would imagine you would rather own physical gold than you would rather own GLD or or Fizz right so. I get where you're coming from. think I would agree with that, but it's just a matter of like, well, okay, you could, if you do think markets are overheated, you want to sit in something that will still preserve purchasing power, but you want to do it the right way. There is some friction there because then you have to buy it physically and then you have to go to market to sell it. And then you have to get the dollars and buy something else with it. It's just like there are, there is friction there inherently with gold ownership. Michael Tanguma (34:01.991) There is, but that's a product of an overfinancialized world that has been long the 6040. so product services entrepreneurs haven't built. Bitcoin type products that we're familiar with today when it comes to separately managed accounts insured vaulted in areas that are regional like I expect all that to start to exist as more and more people wake up to understanding these both of these things so don't I think like that's a limitation today but it won't persist in the future to just like keep people to be like Bitcoin is the only thing. Jackson Mikalic (34:31.727) Yeah, no, I get that. You want to talk about block? Michael Tanguma (34:35.323) Yeah, the block thing, there's two aspects of it. Block yesterday and maybe Brian can dig deeper in because I just saw it from a cursory level, but I guess completely crushed their earnings. was interesting stat. They have like 14 to 24 business lines that are generating over 100 million in net profit across them. But what I thought was the most fascinating is maybe it's post, this is really where the administration and overhang come together of... like air cover in an organization because Miles Souter, who's been involved with them for a while in the Bitcoin space, he's been behind the scenes building cash app. And he was recently on Marty's Pod and did a real good recap for anybody interested in just understanding not only where they came from, but just like how hard the internal dynamics are to get a company of that size, even with a leader like Jack to fully embrace Bitcoin. And it sounds like the past 12 to 18 months, there was a really strong concerted effort to just drive that we need to be winners here and we need to effectively, from a cross-functional perspective, start to like integrate these services around Square, Cash App, because those are basically different businesses, or historically have have been and it sounds like post that and then a lot of the sentiment this year had them come out with like world-class tools to really further Bitcoin adoption. And this is some of the underlying fundamentals that have not changed. They've only increased. When you think about, I think there's 54 million merchants that they have. There's maps that they included to find merchants accepting it. I think one of the biggest ones most people are interested in is that now merchants can sweep any kind of amount of cashflow into BTC. And then also, merchants have better tooling to ultimately show their product in the terminal where I think there's still a little work that has to Michael Tanguma (36:21.989) done but the cash app user can use the cash app application to pay for the goods and services never touch bitcoin never have to deal with cap gains but they can bypass as a merchant the interchange fee and the interchange fee is people here two or three percent it's really much greater than that because it's 2 to 3 % on gross, but that eats into your bottom line net profit. So it's much greater. That 3 % on what your net profit is is still, you know, it's a larger number than just the gross revenue. If you're only making X, there's a larger percentage than what that's taking a chunk of. And so if there's economic incentives, which everyone's always understood, that if a merchant has the economic incentives to want to acquire or have their client change the user experience by just tapping or using a card, you can now start to get greater and greater adoption. And so I think it's super bullish on what they're doing. And again, it's just something that's happening under the radar while there's all this sentiment that exists currently in the market. Brian Cubellis (37:19.151) I think that's all very well said. I think my perception, I still, I need to listen to Miles on Marty's pod, but my perception of Block historically has been like, this has kind of always been the master plan. I think it just like took longer than most people expected it to because of Jack's leadership. think people expected a lot of these things to be turned on like a lot sooner than they were. But I think, obviously it's always more difficult than it appears on the surface to implement a lot of these things and execute properly. But the biggest, one of the biggest takeaways from all of their recent announcements to me was, and you sort of alluded to it Michael, was like the ability for someone to not know that they're using Bitcoin and know, pay in dollars, like maybe they don't have Bitcoin and they just want to pay in dollars, but the merchant on the other side of them happens to like Bitcoin and understand Bitcoin and want to receive that payment into Bitcoin and it can happen seamlessly. with no friction. That's the biggest thing to me because, and we've talked about this at length, the real sort of UX story for Bitcoin as a medium of exchange and also a store of value going forward is basically tightening the fidelity between dollars and Bitcoin and reducing the friction as much as possible to the point where people don't even need to know necessarily that they're using Bitcoin. But if someone at the other side of their trade does want to use Bitcoin, they can. and it's all interoperable and very seamless and not a lot of friction. we move, that gets us to a world where people understand I spend in dollars and I save in Bitcoin and they're right next to each other, interoperable, exchangeable, at very low cost, very quickly as well. So I think that was kind of the broader takeaway for me is like, this is a huge step just in terms of getting to that place where more people understand that dynamic. Michael Tanguma (39:12.421) Yeah, and maybe the last thing, it's too easy. It's not meant to dunk on it. It's just meant to explain. right now because when the price comes back we'll hear more more noise is this is the definition of proof of work and producing value and it preserving wealth and also furthering kind of like what is happening here is when a business delivers goods to the world and then is able to get educated and giving the tools to transfer that capital that's being debased into BTC that's the treasury company adoption that's the stuff that everyone that's along bitcoin should be advocating for and evangelizing and talk about because you're basically strengthening all of it around. Versus the opposite is when you're taking out debt and leverage that exists in the system to go buy more Bitcoin, which allows for all other individuals to hold less BTC in a trade that has no fundamentals. It's just completely counter to everything that is happening here and nobody fundamentally talks about it or gets it. And so it's just like a, will call it out till the very end because it's just a ridiculous thing. And I've, it sucks to talk to like clients and individuals that are so far underwater and they just assume everyone's underwater because everyone went long. And I think like 90 % of people holding Bitcoin have some form of digital asset treasury exposure. And it's just like, there was an altcoin account that had a great tweet yesterday. It was like, Hey, if this, any of these things, any like slightly retrace, make sure you go sell that. And then just don't do any of dumb shit. again. Jackson Mikalic (40:41.914) Hmph. Michael can't help himself. He's got a dunk on the treasury companies. You know, that's one thing too, though, is in terms of actual corporate adoption, there were so many narratives around that happening 12 months ago that we were going to see more corporate adoption, but we haven't seen virtually any of it. I mean, this outside of what we just discussed, which I think is really big news, it's incredibly important from like a merchant perspective and getting Bitcoin more integrated into businesses all around the world. But we actually haven't seen like public companies step out and add Bitcoin to the balance sheet. I'm sure private companies are doing it, but you know those are just not being disclosed as much Michael Tanguma (41:17.895) Just on that note, it makes complete sense. Imagine you went long Bitcoin by taking out a home equity line, a credit, or you maxed out all your wife's credit cards and then your friend sees you go up but your wife tells them this is what you did to do it. They're going to think you're insane. It's the same idea. If you have all these shell companies going and taking out debt, and then you have somebody that produces economic value and you go to your board or shareholders or CFO and you're like, this is how they're doing it. We don't have to do it exactly like, well, this looks like a crazy Ponzi. This doesn't look like fundamental accumulation. No, no, no, I'm just explaining. I'm explaining to why it hasn't happened is because like it looks like a bunch of crazy noise. doesn't look like somebody, if there was a thousand. Jackson Mikalic (41:47.321) I'm not, yeah, I'm not arguing with you. I'm just saying like there hasn't been... Jackson Mikalic (41:56.944) So you're thinking that is your case then that like people boardrooms, executives see the pure play treasury companies and think that that is what a corporate strategy looks like. Is that what you're saying or no? Michael Tanguma (42:10.469) No, I'm saying it's the opposite. I'm saying when you have a caricature of what a CEO is supposed to look like, like Michael Saylor out there basically telling you to like sell your kidneys for Bitcoin, it's the worst type of evangelism for that area of the market. That is like people that produce economic goods and value to the world that makes it impossible for them to rationalize how they can park a small percentage of the asset. Cause that's how you get real adoption, not by people taking on leverage, creating and spinning up shell companies. And the analogy I was explaining, maybe it wasn't clear, was if you're an individual that is preserved Brian Cubellis (42:25.559) Yeah. Jackson Mikalic (42:25.688) I understand. Michael Tanguma (42:40.393) their wealth and got ahead when your friends didn't, like it's a lot easier to evangelize that this is a better form of money versus if you went and took out like second mortgages or you were levered up versus all your credit cards and they're like this guy seems like a nut job like this doesn't make any sense. Jackson Mikalic (42:55.961) Yeah, I didn't. I see what you mean now. So tracking there. And then I didn't get to fully finish my thought. I think it's just like, what you what you said makes sense, Michael, in terms of like public perception of what a treasury strategy looks like. And, know, Michael Saylor saying to, you know, mortgage your home, take take loans out and buy Bitcoin at the top. Not a great look. But. Yeah, yeah, that's. Brian Cubellis (43:14.923) And sending out AI slot memes of himself. There was a reply to one of his slot memes yesterday from Clifford Astas, who's a TradFi guy who, he doesn't understand Bitcoin, but he understands how ridiculous that looks that the CEO chairman is just doing AI slot memes and not explaining why the stock is down. He's just saying, never back down with an AI slot meme. That is what Michael, I think you're referring to, is the perception of it is just insane to the average person. Jackson Mikalic (43:24.303) Ha ha. Jackson Mikalic (43:41.955) Yeah. All right, let me. Michael Tanguma (43:44.07) And it's a paradox because look at Figma, look at Square, look at Tesla, like these companies produce some, can theorize on how much value, but they actually produce goods and services that deliver some level of value to the world. And they have to shut up about the trade of Bitcoin because that is not their business. So they paradoxically can't be loud about how this is better because they're just too busy delivering value to the world. And then you have the opposite, which is just like, I think today these DATs and at least Ethereum, Ethereum, feel like I never had a list, but when you say Ethereum, there's like a convulsion that comes out. Is there like just puking out these assets because I think Sequance was another, it's not about even dunking on the trade. It's about trying to express to other people because this will come back, not to lose their ass. Jackson Mikalic (44:26.863) Alright, yeah, no, I get that. The thing, I did not get to fully express my opinion. But, no, I also think that there's an aspect to it as well where... Brian Cubellis (44:32.399) Wait, wait, wait, wait, wait. Michael Tanguma (44:35.836) Yeah. Jackson Mikalic (44:40.803) Everything is very short term ism, right? So I think there's just less pain that people are currently experiencing at the corporate level as it relates to inflation. It's obviously still there, but it's not as rampant as it was and in your face in 2020 and 2021 when all hell was breaking loose. And then the other thing as well that is a tailwind or should be a tailwind for Bitcoin adoption at the corporate level would be just like debanking as well. So I don't I think both of these things, the rampant inflation and censorship, financial censors, censorship that we saw in like three or four years ago is a little bit more muted today. But that's not to say that those are, of course, coming back, especially on the inflation side. And I'd certainly say with like where things are going on digital ID, central bank, digital currencies, we're to see certainly a lot more financial censor censorship. Man, I'm having trouble with that one today in the next decade. Michael Tanguma (45:32.86) The problem with all that is it really doesn't matter. It's only number go up that people buy into. Like that's the thing. It really is. Like that's why institutions come in. They're not like institutions at the end of the day will make number go up or number go down where we're heading from the size, right? Of where the asset sits. And they do not care about any of it except for is this a trade that can make them more money? That brings in more adoption. Price goes up, brings more awareness, more confidence, conviction. Like all the other stuff really ends up being That's why number go up to the best technology Jackson Mikalic (46:05.465) I kind of disagree with that, though. mean, not I don't disagree with the idea that that's the best, but I disagree with the idea that people don't care about the other things. if you ever I've spoken to Canadian investors, right, at corporates and individuals, and a lot of them will cite the stuff that happened back with the trucker protest is like financial financial censorship was like the reason why they first got interested in Bitcoin. Michael Tanguma (46:21.158) Thank you. Michael Tanguma (46:27.207) I agree. What I'm getting at is like, we're at a $2 trillion market cap. We have 10 to hundreds of trillions to go. Those individuals that move the needle and will increasingly like what you're describing as a sophisticated Bitcoin investor that's had to, it could have taken two, five, 10 years to get there. There's no institutional allocator that's sizing this based on any other fundamental outside of like its scarcity properties and like backtesting what it's done in a portfolio and they have nothing to do with any of what that guy said is the point. Jackson Mikalic (47:02.415) Well, I know, but I'm talking about corporates. But anyways, I was talking about like private companies and public companies, not institutional investors. Michael Tanguma (47:10.66) That's what saying, like anybody with any material amounts of wealth are not coming at it from a censorship perspective. Brian Cubellis (47:14.521) Well, I would kind of take Jackson's side. There is the continuity aspect from a business, know, the stuff we saw with SVB and the banking collapse. There is. Jackson Mikalic (47:14.711) Ha! Michael Tanguma (47:24.259) But it's a good story. I've said that since it happened in 21, but that people aren't doing it. Like nobody's parking Bitcoin for payroll because SBB is gonna happen. They assume SBB is not gonna happen. If it happens, they're gonna get bailed out. Brian Cubellis (47:36.365) Yeah, that's fair. Jackson Mikalic (47:42.65) All right, well, let's move on. None of them. Michael Tanguma (47:45.019) You gotta, if you disagree, I'd love to hear. Jackson Mikalic (47:48.198) Well, my thing was twofold. So maybe you disagree with the censorship piece, but the second piece was the inflation is like it's there, but it's not there to the degree it was five years ago. And so that's my, that was one of the main points I was making is Bitcoin maybe is less attractive from a corporate balance sheet perspective to the degree your dollars are not getting devalued at like a 15 or 20 % annualized clip. And if it's happening at like a three to five or 10 % clip, then maybe you stomach it and you can pass on price to consumers. Michael Tanguma (48:20.199) It's just not true though. that's again, fed speaking, gaslighting, inflation is 10 to 15 % to 20%. Go look at what a ribeye costs. We just had this discussion with a bunch of bankers and everyone like a ribeye is a perfect example because the amount of economic inputs that have to go in from the land to the feed, to the production, to getting it to the distribution. so inflation is anywhere between five to 15%. The reason where the market coalesced is you're conflating or it's like a fallacy in that sense that liquidity was running in 21. Inflation was the byproduct of that. There was a lot of dollars being able to move. So risk assets went on. So that's why the asset went on. It wasn't because inflation was ripping and then people are looking for a hedge against that because inflation is still ripping. And the point mainly was that number go up is the reason why people come in. It's not because they associate Bitcoin as this hedge against inflation. Jackson Mikalic (49:11.833) Yeah, I mean, I agree and disagree with like certain things of what you're saying, but I think we should move on either way. Brian, I saw a couple of things on your side that we didn't get to that were interesting. Curious if anything sticks out. And if not, the thing I was going to want to pull up was the municipal bonds, the BIP bonds of New Hampshire. Thought that was interesting, something new to discuss. Brian Cubellis (49:35.812) Yeah, I mean, we can talk about it. Like, I actually don't think it's that crazy. Like, I feel like we've seen little drips and drabs of examples of this, of like pilot programs. We're going to do XYZ. Like, you know, the New York mayor a year ago saying we're going to do bitpons. Nothing ever happened. Like, it's a cool pilot project. You know, I think the on the, if we want to take the custody angle on it, I think they're storing it with a single counterparty, which doesn't feel ideal for a long, you know, a long duration. sort of Bitcoin infused muni bond. But you know, it's good to see, I wanna see more of it. But I'm not like overly excited about it necessarily. Michael Tanguma (50:18.011) Yeah, this reminds me of the Czech Republic stuff. There's a lot of stuff we haven't covered, but there was a Czech Republic buying a million dollars, I guess from the bank, the central bank, to see how it works. Yeah. Brian Cubellis (50:26.467) The other side of it is though, it has to start like this to some extent. You're not going to see the actual thing immediately. You have to see these types of pilot or beta tests. So in that sense, it's certainly positive. The other one I brought, if you wanted to pull up, I thought there was a report from the IMF, funny enough, that did basically an analysis of currency devaluations since 1971. Michael Tanguma (50:42.151) Can we cover a couple of... Brian Cubellis (50:55.919) And it lays out pretty overtly just the peril of fiat currencies since 1971. And there's a few lines in there I think worth pulling out. But basically, the takeaway is like, there's a line in there that says, virtually no one is safe from a large currency depreciation. Meaning like, it could happen to the dollar too, and it will, and it kind of is already, was sort of the takeaway that I got from it. But there's a lot of good data and charts in there that just speak to. the level of debasement that's occurred since we left the gold standard in 71. And obviously it's not a US-centric report. It's looking at all instances of currency devaluation since that point. I forget the exact number, but it's in the hundreds of the amount of currencies that have really collapsed since that point. Jackson Mikalic (51:48.943) Yeah, I see that line there now. pulled up the report. Virtually no one is safe from large depreciation. Brian Cubellis (51:52.719) It's a fact. These are the facts. Go ahead. Michael Tanguma (51:57.552) I think... Jackson Mikalic (51:58.886) This one slipped through the cracks. Michael Tanguma (52:02.307) A couple of bullish things we glossed over. We can go deeper, but I didn't want to call out. There was a lot of the M &A investments into this asset class. There's just not that many assets. And when you're a TradFi firm or public markets, when you think about DCG going public, Kraken, I believe it was 200 million that Citadel invested and they raised like 800 million. And then we mentioned it, but Abu Dhabi tripling their position and then Harvard, think tripling are like very close to that in gold and Bitcoin. I do think these are important heuristics because while we're talking about the market and, you know, prognosticating or pontificating on what's happening, at the end of the day, people are moving real large sums of capital because the writing is on the wall that these things don't go back in the box. And those are more objective than the subjective takes. We're like kind of viewing on like what's currently happening. Jackson Mikalic (52:56.783) Yeah, we'll have to see after this quarter wraps up. It's gonna take a while, but we'll have to see what the 13F data comes through on the fourth quarter. I'd be curious to see if any of these institutional allocators have pared down a position. I would imagine not, just because they're not going to add to a position one quarter and then divest of it or... you'll materially reduce it the next quarter. That just doesn't make sense in terms of how these allocators tend to think. It's more so decade type of approach. But yeah, I mean, there's just a lot of selling pressure. And Brian, I'd be curious to hear your thoughts. Like, do you agree with me there? You think that it would be shocking to see that Harvard or Emory or large endowment foundation with Bitcoin exposure to reduce exposure quarter over quarter after just adding to it the previous quarter. Brian Cubellis (53:45.208) Yeah, it kind of goes back to what I was saying before around this market structure and price action we've seen for the past 12 months. What you'd actually expect them to do is be lagging into the trade. And so I think we've gotten a few data points of that being the case in terms of people increase or these institutions and entities, endowments, whatever it may be, increasing their position. I mean, it's not impossible, right? Like you could see them. trim or completely exit a position, but all that would tell you is that they never understood it to begin with and they didn't actually have conviction and it was more of a trade as opposed to a long-term allocation. So I would err on the side of like, I would not expect to see that. I would expect them to be adding on weakness because that's generally how you set up a long-term trade is you buy an initial slug and then you leg into it. You use the volatility to your advantage. Michael Tanguma (54:41.927) Should we talk? Yeah, I that makes sense. There would be a lot of egg on their face if they accumulate a position and then puked it out the next quarter. Brian Cubellis (54:44.279) Right, from an optics perspective, that would also be the case, you're right. Yes, please. Michael Tanguma (54:52.167) Should we talk slop economy? think one one that was interesting maybe to set it up because they're kind of like the the big dogs in the fintech room is that new cash delivery. I thought that this is just really poetic and fun because they're kind of like it's one taking advantage of like the Jackson Mikalic (54:56.366) no. Michael Tanguma (55:13.509) the culture of like trading and what they're doing, but also it's kind of like describing Bitcoin because I guess this was like completely under the radar. I don't know if you guys saw it where Robinhood was like rolling out and I don't know if this is fully rolled out or just testing, whether it's like GoPuff or Grubhub, one of these technology apps that will deliver food, they'll deliver bags of cash so you can like, you know, get out of a position and get dollars if you need to spend. And it just reminded me of Bitcoin, like traders, and you can just take the Bitcoin, the stable coins, or go into your bank account, get your dollars. They're kind of describing this other form that's existed for a while, and gains. I don't know if you guys have thoughts there and I was just gonna go into all the prediction stuff because the polymarket guy calling out the gambling markets as like Ponzi's or whatever. It reminds me very much of like crypto of everyone's coins like a scam or a registered security except for your like gambling marketplace. Brian Cubellis (56:01.569) Right, except for yours, yeah. Brian Cubellis (56:06.925) Yeah, the prediction stuff is very, very funny. Like we've talked about this in past weeks, but like everything is becoming gamified and casino-ified. like there were a couple other headlines that I added that were, know, Cal-She is one of the major ones. Polymarket's the other one, but you know, there's all these different partnerships, right? So you're just seeing the blending and the merging and the convergence of all these different things that allow people to gamble on literally anything. And so... CalShe partnered with StockX, which they sell sneakers and other collectible type items. So now you can bet on the trajectory of a collectible, which is just insane to think about. then Coinbase also is going to launch their own prediction markets via CalShe. So another partnership for CalShe on that side, merging sort of crypto with prediction markets. So stocks, crypto, collectibles, gambling, sports, all of these things are converging to just move people out of the risk curve. make leverage bets, try to hit a home run because the nihilism is pervasive and people don't know where to turn. It's sad and it's nefarious that these companies are now basically taking advantage of that nihilism and just pushing anything and everything to people to speculate and gamble on when people should just be storing their value in a better form of money, but most people don't understand what's actually happening here. Michael Tanguma (57:33.35) And this penetrated all the way to, I'm sure you guys saw like the MSB deal, Mohammed bin Salman, when he, there was, maybe he didn't. He was, guess, whatever, it was with the Nvidia CEO, Trump and whatever, Musk. think it was some, I don't even know what to reference. I think it was an AI summit. But long story short is he referenced, you know, I heard you can make a bunch of money here in this country by like betting on what suit I wore. and I guess you got it wrong because I'm not wearing a suit or whatever. But yeah, it's just a, I think it was probably like a subtle dig too, it's just the American gambling markets. Jackson Mikalic (58:15.117) Yeah, it's definitely a slop economy, that's for sure. I mean, I don't really have too much to add there. Did you guys see my office cabinet has been exposed? Had some video issues here, but yeah, I don't know, sad state of the economy where just people are looking for a quick hit. You know, I actually saw something similar. forget which one of you guys just mentioned it, but I've seen more and more takes online about how... crypto is essentially throwing in the towel. Like more and more people in that ecosystem are saying, yeah, like 90, 95 % of this just go into zero, maybe like more of it's going to zero. And we just have to accept that like the super cycle is. more so in stable coins like there's actually a use case there like Bitcoin continues to have a use case for a number of reasons. But I think it's just interesting to see that I don't know if it was just people getting wrecked a month ago in October that just totally destroyed sentiment. But also the fact that if you look at and people always will point it out. But if you go back and look at price performance of some of like the top 20 top 20 top 10 top 20 50 tokens over the past like four years like pretty much none of them ever hit like all time high. So it's like constantly having to try to peddle something new out, have the narrative behind it, sell at the right time. And I think people are finally getting exhausted to the point where it's like, yeah, there's actually nothing going on here. We just have to maybe be truthful about that. Michael Tanguma (59:39.954) So I promise I'm not saying this to either A, B, contrary or B, disagree with you. But like if we have to be true, like we're called out the sentiment on like Bitcoin, Twitter and Bitcoin influencers, it's noise. It's the same side on the crypto side saying it's dead. Yes, it's always been dead. It's the same way like, well, is AI overcrowded? I was like, well, it was always a non-productive trade for the whoever's investing. Jackson Mikalic (59:43.52) Ha! Michael Tanguma (01:00:05.029) The reality though is that there is no shortage of capital that still believes in digital assets and these different primitives that they'll be able to create real world assets, perpetual futures, and just like all this tokenizing, just everything under the sun. And that's a little bit different. And specifically, if you take into the vantage point, if we have been in a bear market, well, there hasn't been these like use cases outside of like prediction markets and stable coins where People have galvanized around it but that happens with the bull market because as more dollars come into BTC it naturally gets cycled out people get further on the risk curve even if the Bitcoin doesn't get cycled out Institutional investors are looking for other things because again, they don't fundamentally understand Bitcoin And so they're thinking well, there's these other assets that I can make money from so I just caveat like yes on Twitter There's this like insular world that's becoming increasingly irrelevant on understanding that like well Maybe I was kind of dumb and long crypto this whole time, but I still think TradFi has a ways to go to like not do any of this and by index of Citadel investing 200 million in Kraken like that's not a Bitcoin company you know and so like that's just the canary of we're just very early to all this and even though the crypto people that have been here for 10 years recognize this is all noise there's no value problem like the rest of institutional investors are not there Brian Cubellis (01:01:19.727) Yeah, I would say it's just... Jackson Mikalic (01:01:22.274) Yeah, but maybe there's a little bit of a difference in terms of like investing in a private company than accessing public markets compared to like my perception of it is yes, I agree. There's always going to be like or not always who knows, but there is for a while going to be Wall Street interest in like some of the top other crypto assets. I mean, you see it with like the Solana and the Ethereum staking ETP products like this stuff is happening. But I do think that I don't know if it was October and the events there, but I think sentiment, you know, think sentiment's bad in our space. And again, it is a bubble. The sentiment's way worse in the crypto space. And I just fundamentally believe like, yeah, Wall Street's going to participate in this industry, but they're not going to participate in 99 % of the industry that's existed for the past 10 years. Brian Cubellis (01:02:05.485) Yeah, I think the way I would frame it is like there's always a new narrative. There's always a new shiny thing in the broader crypto space. to your point, Jackson, I think what you're getting at is like it is different this time in the sense of it's not we're going to decentralize the world. And there's sort of been a bending of the knee to these centralizing forces. Let's just build faster, cheaper databases that aren't necessarily purporting to be decentralized, which has been the theme of prior crypto narratives and cycles is like, know, decentralized the world, all these different types of things, which never had sound fundamentals. But now there's sort of a tacit admission of like, no, we're just going to do stable coins, real world assets, prediction markets, which are marginal innovations in terms of the maybe access to various rungs of investors, but also just the the speed and efficiency of transactions. Like there's these marginal benefits to these different crypto projects, whether it's in the stable coin, real world asset or prediction market space. But it does have a different flair or flavor to it, which I think is what you're sensing, Jackson, is like it's not it's not as much of the crypto native decentralization, cypherpunk type vibes. It's more like, no, it's just like let the banks and TradFi and fintech people come in and kind of take over a lot of this stuff and run with it and it's gonna look and feel a lot more like centralized systems and look and feel a lot more like traditional fintech than what the crypto people had been saying for like a decade. Michael Tanguma (01:03:46.108) Yeah, I mean, I kind of agree, but I think like the North Star for these people is Coinbase. And Coinbase is gearing more towards decentralization. They're obviously offering other products, but when you think about launching base and they're that ICO platform for everyone at a lot. I know, but the point being is it's a new, they were all centralized. It doesn't matter. They're all centralized. Like they're all. Brian Cubellis (01:03:58.948) Yeah, but bass is centralized. Bass is not... It's not... Michael Tanguma (01:04:11.149) centralized databases, including Solana, that could be turned off, but that's not the narrative that they're explaining. And they're also developing a token on it where people can get warrants to make money. So the point I'm trying to get at is that institutional allocators are looking, it's inherent to investing $200 million into cracking as you're investing in the casino. And that casino is marrying what Coinbase did because Coinbase is the darling with its market cap and what they've done. And so the story is, well, we're going to be another type of Coinbase. There's other institutions. that's the point of like, they're just not equipped. Like if Kraken came out and said, we're just going to be a Bitcoin custodian, like who's interested in that? Because they believe that there's other things happening in this sector. Brian Cubellis (01:04:55.021) Yeah, no, I agree with that. Jackson Mikalic (01:05:02.113) All right. Let's see. Anything else you guys want to chat about? Nothing really strikes me. Brian Cubellis (01:05:09.581) You pull the terminal back up, where's the price? Let's just get a little pulse check. Michael Tanguma (01:05:15.557) It's just going lower. Brian Cubellis (01:05:17.881) Cool, cool, cool. Jackson Mikalic (01:05:19.425) Yeah, let's see. Let's see the grand reveal. All right. Boom. Yeah, we're about 1,000 lower than where we started. And when this comes out tomorrow, will we be higher or will we be lower tomorrow? Should we get a prediction on Cauchy going for that? Brian Cubellis (01:05:25.679) 86 handle. Well, we tried, we tried guys. Brian Cubellis (01:05:43.321) More bets, more speculation, speculation on top of speculation. Jackson Mikalic (01:05:50.435) Just like a cam, cam still smiling through the bear market. Brian Cubellis (01:05:50.52) You Jackson Mikalic (01:05:57.825) Alright. I think we'll call it. Thanks, gentlemen. Brian Cubellis (01:06:00.953) Thanks boys. Michael Tanguma (01:06:04.658) Jackson's beeping.