Monetary Reset Is Here: Bitcoin, Gold & the End of the Fed?

What you're telling me is that music is about to stop and we're going to be left holding the biggest bag of odorous extra ever assembled in the history of dumpers. 1974, 1987, '92, 97, 2000, whatever we want to call this. It's all just the same thing over and over. We can't help ourselves. I say when we sell. >> Hey, Muhammad. I say when we sell. >> We are no doubt living through a monetary reset. In this week's episode, we dove into all things gold and Bitcoin. The two of these assets are moving in parallel with gold typically leading and Bitcoin following. What are some of the catalysts for that? Well, we discussed the political pressure that is mounting on the Federal Reserve by the Trump administration. We discussed in Russia how one of Putin's advisers compared stable coins and their role in extending dollar dominance and purchasing US debt to the 1930s and the 1970s when the last big revaluations and resets happened in the global financial markets. Then we also dug into some news topically as it relates to Bitcoin custody. There was a supply chain attack that was large in scale that was reported earlier this week. So we ultimately talked about how there is a reset happening. Gold and Bitcoin really are the best ways to preserve your wealth. It really depends on the individual to determine the allocation between the two, but you need to have a really reliable and secure way to manage that asset for the long term. And so if that resonates with you, I'd certainly recommend reaching out to me at on-ramp or just go to our website and book a consultation. learn more about how we're helping investors like yourself navigate the next decade. How we're helping them protect themselves, their families, their businesses, their purchasing power, and just staying ahead of digital and physical threats. So, hope you enjoyed this episode. Thank you for tuning in and appreciate your support of the show. Should I say it? Should I say that we're back for another week of the last trade? There's plenty of things to discuss. I think this will be more of a global macro. We're going to be taking a a bigger lens on what's going on um behind the scenes, some of interesting things that have come out of the uh the Treasury and then also some thoughts over in Russia and among many other topics as well. But we're kind of at this reckoning point now where you have the US, China, Russia and other global superpowers trying to find a seat at the table uh trying to place the chips as they may in this monetary shuffling. So excited for this conversation. Brian, Michael, nice to see you guys. What's going on? nice to see you as well. Not not a lot going on in the Bitcoin world. Outside of the Bitcoin world, there there seems to be a lot going on, but um kind of a quiet news week in terms of Bitcoin specifically. Uh but as you said, there's sort of a lot of um minations or or movement and developments on more of the macro side of things. Uh what the Fed is doing, how the Treasury is um pressuring the Fed in in many instances. So, there's a lot to talk about. Um but uh yeah, the the price itself is kind of uh we're just still in a range. What is it? 110 right now. >> Yeah, I think uh you know those kind of like lols that you get put to sleep in the market generally. This is why trading is generally a fool's errand because the market always takes the the path of most resistance and most people aren't prepared for it psychologically. It's this right now I think what we're feeling where there hasn't been a lot of news um a lot of like updates and things that people are working on. The price has been stuck. market looks like here for about like four to 6 months. Um, but I would say that we're going to be probably expecting volatility for the remainder of the year and just that preamble and we were chatting before this um, reminded me of that. It's like right when you think everything's going to stay the same, it it will drastically change. And feels like global macro is going to be the canary in the coal mine with a lot of the things that with the markets breaking, inflation, um, the Fed independent stuff we'll talk about. is like there's a lot happening behind the scenes that are going to kind of leave with this indicator of devaluation of the dollar and then being long hard assets. >> Yeah, it does kind of feel like a sleepy time. It feels kind of like a gradually moment before the suddenly starts to happen here. And so Brian, why don't we pull up the first topic of the week? I want to talk about the op-ed from Treasury Secretary Scott Bessant in the international economy. Never heard of this magazine before. Um but it was a good piece. Brian, I know you have prepared some thoughts. So, let's dig into this. It's it's um you know, it's quite timely. >> Yeah, absolutely. I uh admittedly had not heard of this publication either. Uh but it seems pretty legitimate, pretty reputable. Um and this is really an op-ed that that Scott Bessant, US Treasury Secretary, penned. And the title itself off the bat is like pretty bombastic. the the Fed's new quote unquote gain of function monetary policy, overuse of non-standard policies, mission creep, and institutional bloat are threatening the central bank's monetary independence. Um, and so, you know, I I encourage people to read the whole thing. It's it's about nine pages long, but really what he's walking through here, um, is really looking at the Fed's post 2008 playbook. So quantitative quantitative easing, mortgage back security buying, balance sheet engineering. Um, and it really, you know, as he describes it, became this complex quote unquote gain of function regime. Of course, referencing, uh, you know, purported COVID origins in a lab, etc. Um, but that the the ramifications of this were really, you know, a lot of unintended side effects and effectively, as he positions it, like the root cause for why they're, you know, always late, as Trump says, and always wrong. Um, because they're operating with this playbook that they themselves don't even really understand. Um, and so he also argues, you know, what they've done post 2008 has really distorted price signals and really favored asset owners. Um and so you know if you think about sort of the the dynamics of what people call like the wealth effect um and assets uh appreciating or inflating by virtue of effectively debasing the currency. So he's he's calling out that directly. Um and then he also calls out how they've just been wrong over the past several years. So they you know misread sort of growth trajectory and you know the whole transitory inflation deal. Um and so it's it's he really lays out a lot of evidence of the Fed being overconfident and ultimately wrong on on a lot of um what they've done over the past really almost two decades. Um and so he's also he's calling out a lot of the implications and ramifications of this. Um balance sheet expansion creating, you know, all of these fiscal burdens and risks. Um operating losses at at higher rates, unrealized losses at banks. Um de facto debt monetization effectively and really blurring the lines between monetary and fiscal policy. And really the the net result of all of this in his mind is just greater sort of regime uncertainty around inflation um deficit spending etc. and really how the market is functioning right like a lot of what he argues in here is around you know what we've talked a lot about in the past is like the the actual you know fiat debt based monetary system inherently distorting price signals in the market. Um and due to those distorted price signals, it's very hard for the Fed to react appropriately or accurately or in a timely fashion. And so he's really calling out a lot of things in here. And um the other way that I kind of read this was, you know, it's it's a shot across the bow of the Fed. It's, you know, it's also calling out the Fed for being politicized over the years and not being um as independent or nonpartisan as as, you know, they're supposed to be. Um, but you could read this another way in that, you know, he's basically saying the Fed, you know, can't handle the responsibility of independence is is really how I read a lot of this and and almost a covert way of saying like you guys can't handle this. So, we actually need more power um in terms of like the executive branch sort of pressuring the Fed and and wanting to wanting them to lower rates um faster and and uh sooner than they've actually positioned over the past year or two. Um and so I I kind of read it as that of this is sort of Bessant's way of saying like you guys can't handle it. Clearly, here's all this this evidence of really the past 20 years of you guys screwing this up. Um so, do you actually deserve Fed independence? is kind of how I read it. >> Yeah. It's like um it's almost like he's saying, you know, hand over the keys of the car, Jerome. You've had a little bit too much to drink. Yelling too much to drink. Time for Scotty to step in. We're going to take over the Fed. We're going to not only work our fiscal policy, but also monetary policy. And I agree with you, Brian. It certainly it resonates because there are a lot of themes that people in this Bitcoin space have been talking about for a number of years. Like we ultimately cite the fact that there has been so much intervention in the markets. There's been so much liquidity pushed into not only US markets but globally by central banks and the the governments that they cooperate with. And so naturally you do have so much distortion in the markets and you have this wealth inequality that um you know we've talked at nauseium about on this show and it's kind of interesting now to see that being the the focal point of this debate or uh battle between two of the most the two most significant institutions as it relates to just the fiscal or the the financial trajectory of this country. And so I was thinking a little bit more about this because I don't know about you guys but I've certainly heard the idea that well you know the Fed needs to remain in markets at this point otherwise there is there could be such a sign significant correction in asset prices like US equities home prices that if their correction did happen there would be a curtailment of US tax receipts which would ultimately enable or accelerate the the doom loop that we're currently kind of you at at the early stages of from a US fiscal position. But I looked into it more actually and it's kind of interesting that only about 9% on average the only 9% of the tax receipts in any given fiscal year on average are due to capital gains. And so I think there's a little bit challenging of that narrative where the Fed could actually step out of their the the level of involvement they currently have in the markets without really putting at risk the fiscal position of the United States, especially if there's other mechanisms for absorbing the debt, such a stable coin. Something we'll talk about on this episode today. But it's interesting just cuz I've heard this narrative for a long time. You know, markets cannot drop. We can't afford them to drop. But, you know, rest assured, there's always a way to find new buyers of debt. There's always way to get the paper um off the balance sheet and onto the balance sheet of other entities. So, um I do I do think it's just interesting that this has really entered the main discourse um between the Federal Reserve and the government now. And uh not quite sure where this ends up, but it was a you know, timely piece nonetheless. Yeah, I think that's my biggest question is uh why now and what is the purpose of entering it into the discourse because I know it seems crazy but the reality is there are very smart people across all levels of government and traditional finance that has known this is unsustainable that the Fed isn't independent and ultimately quantitative easing requires more liquidity and always will. Um but why now to to present that case? It reminds me, I think I brought it up before. I don't know if you guys have ever seen it. Um, I can share it, but of uh Parker Lewis back in the day was doing some research for Hayman Capital and he had sent this to me. This is before it was like really public um Enders Game and it was it was just looking back at the Fed meetings from I believe 2000 I want to say roughly 8 to 10. Um, and I believe the Fed meetings minutes come out 5 years post the actual meeting. And so I was doing a retrospective of uh looking at what they got right or wrong. And um everything was consistently wrong. And I wanted to pull up two things here. This one just because I've always found this interesting and never had a chance to pull up where you can see amount of um credit expansion and how you know relative to pre71 obviously it wasn't you know much. and then ultimately 71 to like the 2000s. uh when you look at it from a you know back in 20 to date to previous it looks like nothing but there was that liquidity being injected into the system that leverage back in like call it mid80s where it really kind of went parabolic leading into the financial crisis and I don't think most people kind of assume that they kind of look back at maybe post08 but this is what led to the 08 crisis was the injection of uh credit expansion but then um the other part is referring to certain quotes from Bern Bernanki uh before the '08 crisis. So this is January 2008 saying the Federal Reserve is not currently forecasting a recession. Uh strong labor force sounds very you know similar to today. Excellent productive and technology deep and liquid financial market that is in the process of repairing itself. Um the point in showing this is that this is been a consistent narrative or juxtaposition of everything's fine. We obviously know it's not financial crisis happens, but it's very interesting that they're now taking this tact of like going it's not independent. Um, and they're trying to do something about it, which is the thing that I I haven't fully heard a very good um answer. I know there's some probably some thoughts. I don't know, Brian, if you have any on this like merging of the Treasury and the Fed and also just kind of almost um maybe it's it is just truly at once and for all taking away any independence that the Fed may have had. >> I think that's what I that's kind of what I think it is. I think it's this is the way that they rationalize wrangling control away from the Fed um by by painting this picture providing you know almost 20 years of evidence of them being wrong um in various ways right um but what I was also going to say about the piece is like you know he he goes pretty far in in attacking the Fed specifically but he doesn't actually attack like the root problem which like is the debt based fiat system that like actually perpetuated and caused the Fed to do all these things and make mistakes and be behind the curve and um you know overreact uh when they're injecting liquidity post crisis. Like all of that all of those mistakes are a function of the actual money being broken and and the debt based fiat system actually requiring um long-term debasement um and monetization of the debt. So, like he goes pretty far, but he doesn't actually call out the root cause. And I think that that's obviously purposeful. Like he doesn't want the dollar to die. He has a plan. Part of that plan is stable coins um to basically continue to monetize the debt, you know, hang on to the dollar as, you know, some form of global reserve because you're going to spread stable coins all over the all over the globe. Um, so he has this sort of like backhanded pocket plan, but he's not actually calling out the root issues. And I think that that's purposeful. The to your question specifically, like I think the purpose of the piece itself is like just to really, you know, uh, pretty overtly call out everything they've gotten wrong and just put it all in one place so that people recognize like, oh, maybe these guys actually don't even deserve the Fed independence that they purport to have. Even though we know the Fed isn't truly independent, it's it's largely a facade. I think in my mind, this is a the administration in Bess's attempt to like put it all out there and actually wrestle away um some of that power and have a justification for it basically. >> Yeah. Yeah, I mean to tie it back to Bitcoin, there couldn't be in my view ever more important time to not only understand it, learn learn about it, figure out how to, you know, get some exposure to it, but also like the thing that I think most people forget u in the traditional finance space is like this liquidity bazooka only requires a ever larger amount of liquidity to be inserted into the system when the deleveraging does happen. And this notion of merging the Fed and Treasury or whatever, you know, kind of like kneecapping any last um independence ultimately reminds me of like the Intel aspect of you're just kind of like you're you're going to accelerate um the collapse of the dollar effectively because any more liquidity to be injected in the system means more inflation um you know more disparity from wealth and ultimately more need for the frankly it sounds crazy but it's like the end of the dollar. Sure stable coins can come in and we'll see how long they exist. But the reality is um we've talked about this before you can call it post 2020 depending on the date. How much Bitcoin is just keeping pace with inflation let alone getting you ahead of it. And until like this is only going to increase and people are going to naturally need to be able to preserve their wealth. Um it's kind of scary when you think about this is only going to accelerate. It's already accelerating incredibly fast. Everyone feels it, which maybe I don't know, Jackson, where you wanted to go. There's just a lot of discussion around the status of the economy. I don't think anybody living in the real world would feel confident where we're sitting from an economic perspective. And the common notion is we're going to like somehow inflate our way out of it. You know, everyone always uses the caveat we're going to let AI in some form of GDP miracle as a tale of risk. It's like there is a zero chance like not a non-zero chance. There is a zero chance that some GDP miracle comes to like get us out of this. There's like structural problems here. Um because the GDP side nobody ever brings up that the deflationary aspects of it. So like you get this GDP miracle but well then how many jobs are reduced and how can those people go and immediately get back into the workforce especially in a world that's increasingly becoming digitized. Um so it is a very big problem. >> Yeah. Maybe maybe before we move on from that, just one other thought on the best in peace. Like I I think um it's worth pointing out that like he doesn't necessarily like provide a solution to all of this. Like he says basically you guys can't be trusted and um sort of indirectly asserts that you know the the executive branch should have more uh direction or control. But if you're reading between the lines and you know you have some cursory understanding of sound money, Bitcoin, gold, like it does read as you know basically a brochure or a template for why you would want to own something outside this system. Um because he's not really providing a solution. He's pointing out a lot of the flaws of the system. Um, and so it's it it really is a, you know, a great advertisement for for owning owning sound money, golden Bitcoin. >> Yeah, 100% is. Um, to both of your points, I think what a lot of people miss is that at the end of the day, this is all just experimental, right? So, Michael, you mentioned there's a 0% chance that there's a GDP miracle, blah blah blah. It's like well everyone who opines and says how this ends doesn't really know because there aren't many uh you know there aren't in a sense it's uncharted waters right we we've just to totally detached the financial system from any sort of scarcity for the past 54 years and we know that we we in some ways know how it ends in the sense that there has to be a return to sound money in one shape or form but we don't really know what that looks like in terms of inflation numbers and you know the economy booming or busting? Is it hyperinflation? Is it great depression? Like all these things are on the table one way or another just depending on how policy makers choose to navigate it. At the end of the day, you just want to own something that is scarce and in your control. Um and maybe you want to have a couple of different ways to own it physically, digitally. And so that's why a lot of the themes that we've been discussing recently are not only around Bitcoin but also gold because it's becoming quite interesting what's happening um the conversations that are happening not only in the United States. It is kind of unprecedented to see how uh Bessant PY others around Trump I mean Trump himself of course as well are putting a lot of political pressure on the Federal Reserve. But then also something that caught my attention this week was one of Putin's adviserss speaking about essentially a reset of the US monetary system similar to the 1930s and 1970s. Now, I'm not going to play the audio because it's in Russian and and people who aren't on video won't understand it, but essentially the gist of what's being described here is so one of advisor one of the adviserss to Putin and he's talking about uh Washington DC's actions in these two areas which he described as gold and crypto are to urgently address the declining trust in the dollar. and he specifically cites the 1930s, you might remember when there was a a revaluation of the US dollar to gold and then the 1970s of course when uh the Nixon shock happened and and there was no longer any peg of the dollar to gold. And so he mentions the US plans to solve its financial problems at the world's expense this time by pushing everyone into the crypto cloud. I like that terminology. He said they'll move it into the crypto cloud and devalue it and start from scratch. And so this is an acknowledgement of what's happening in DC with uh particularly stable coins, right? Because we always talk about how much debt there is in the system. You need to roll over x amount of trillions of dollars of debt. Uh this year I think it's about 10 trillion or so in the next 12 months. And so who buys that debt? I mean there are private market participants, there are public market participants. The Fed has certainly had a big seat at the table in purchasing US debt since the great financial crisis. But of course, the stable coins are uh I believe Tether was what the fifth largest purchaser of US Treasury debt in 2024. And so it's kind of interesting now to see that there's a lot of acknowledgement that stable coins are going to play a crucial role in this monetary reshuffleling. essentially trying to move US debt into the crypto cloud as he referred to it as and maybe strike some sort of deal um or you know force some sort of deal to revalue the debt accordingly. >> Yeah, I think I honestly think the stable coin deal is a bit of noise from the debt perspective. Um so a few things like there's a reality of we know that they have to print like we're in a state state of hyperinflation. uh it's just how fast the hyperinflation is. So the example is if we increase the money supply to keep pace with any kind of deleveraging um lower interest rate, increase more credit into the system, we'll you know kick this can down the road and it'll be a progressive inflation and and there's to your point, it's an experiment. We we we know how traditional currencies um that aren't the um world reserve currencies go and this is just on a longer time horizon. But then there's a common notion if we let a deleveraging or like global financial crisis happen that it'd be deflationary and I think that actually would accelerate in inflationary aspect because for every dollar that exists in the system it's been levered up anywhere between call it 30 to 50 times. Point being is if there was a a deleveraging event, people are going to get rid they lose all faith and confidence in the dollar and they're going to naturally look for hard assets whether it's gold, silver, bitcoin, real estate. They're going to sell everything for the thing that so they can get their hands on hard money or hard things. And so that's the first deal. The second one was um I think the guy Mel Matson who's been making the rounds had a really good point on you know BENT is a gold guy, right? and he's obviously like now turned into a Bitcoin guy. And there's something very elegant that they like about gold and Bitcoin that they're non-productive assets. Meaning when you have this inflationary environment on the natural, let's call it the ordering into inflation. You don't have them as real estate or productive assets that are going to increase inflation and go up and be out of reach and increase that disparity. So they're the perfect like battery to absorb liquidity and anybody can get exposure to them. So I think that's where gold and Bitcoin come into play. uh which is which this guy I think is referencing the stable coins feel like more of a they get discussed but it's less around the liquidity around the debt. I know it plays a component there but it's my understanding the debt and the amount of liquidity that they absorb is going to be like incremental. It's not a crazy amount. My view would be it's more around uh almost like a national uh security slash like um it's almost like instead of instead of managing nukes and warheads, you're managing uh the dollar and the system that it's it's being moved around or manipulated across the world. And we know that China and the BRICS nations and settling in yuan with um the Middle East is a a growing concern and component and it's basically a race to exert uh dollar dominance is the idea behind stable coins and I think the second order would be obviously a demand for treasuries but I think that's the real angle with stable coins is you're effectively prolonging and inserting your control into global econ the global economy much more and they obviously can't control BTC. Um, so I think that and they're go they're both kind of like one side uh different sides of the same coin and that like as Bitcoin grows do the stable coins grow and vice versa. Um, and that's more malleable and that would if you take that a step further. I'm just thinking out loud but like that's a component of why you would vertically integrate the Fed and the Treasury because now you can start to have access to the dollars, what they do, where they're inserted because they're in digital form versus like, you know, banks, credit funds. Um, so I think that would be the angle where you start to see these things coming together. This the byproduct is you're buying debt. >> Yeah. The set another way, I think like what that uh Putin adviser describes is sort of like part of the picture. And what I mean by that is like to your point, Michael, like the debt doesn't go away just by issuing trillions of stable coins. like it is this this broad plan that we're sort of describing has multiple facets and the other component outside of stable coins is hard assets right so like and I think you know I think it's a lot of signaling and game theory that we can take away from this like obviously they are going to talk about their love for stable coins and uh allowing those to proliferate all all around the world that's logical that's expected uh for them to take that stance I where they're being more cautious and careful is on the hard asset side, even though that is sort of the the second order um or the sort of second part other side of this plan. Uh but they're being more koi about it, right? Like they're not necessarily saying they're going to revalue the gold. They're not necessarily saying they're going to buy more Bitcoin, but they have put out these general signals that, you know, like you said, like Besson's a gold guy. He likes Bitcoin. he recognizes the the importance of of hard assets and sound money. And so I think that's the other side of the equation, but they're just for obvious game theoretical reasons being less overt about it. If that makes sense. >> It makes complete sense and it's also why we've been talking about individuals in traditional finance can't talk about these things, especially at this level because of the amount of capital in bonds and equities. if you start having the highest at the highest levels uh explaining a revaluation or just speaking in a positive light with these assets, it has to be done in an orderly fashion or it can get messy really quickly. And I think that'd be another component of where there's a level of coiness from anything related to gold and bitcoin. >> Yeah, I saw something interesting as well. Well, we don't need to read through the whole post, but the gist of it was that gold has broken through all-time highs, inflation adjusted, and I take that take it uh CPI. So, take it with a grain of salt, but interesting post nonetheless because gold, like any market, rallies, corrects, etc. But you see this chart here, the inflationadjusted spot gold price has broken through, I guess, the the resistance of 45 years ago um back in the the last big bull market which which followed the the end of the gold standard. So if you if you studied this period before 1971 to 1980, there was a tremendous rally in gold because of the deping of the dollar, the global financial system from gold. And really what ensued was people fleeing for hard assets, things that they could tangibly own and gold uh being you really the the main benefactor at the time. And so this rally is really similar in the sense that you know again like anything gold is going to rally uh to macro asset. It rallies under c certain circumstances but it doesn't have the magnitude of rally that we've seen this year and last year which I I believe this year we're up close to 40% year to date on the gold price. uh Bitcoin just for reference is like 20% 21%. And so gold by far is leading all of their asset classes, which in my opinion is really signaling that there's something more going on here. And it really ties into everything that we just discussed with the the political pressure at the Federal Reserve with other countries recognizing and having recognized for a decade now the US and also most Western nations have a massive debt problem. And so naturally this has to go back to some sort of scarce asset, some sort of sound money. And so one of some of the themes that we discussed more recently on the podcast were that central banks globally have been accumulating gold um at a rapid clip certainly in the last couple years both because of the debt but also because of the sanction of the Russia reserves in 2022. And we had an interesting chart I believe we put it up last week or maybe the week prior looking at the global international reserves. And you can see that gold was only 10% more more recently in the past decade of international reserves whereas if you look 100 years ago closer to 90% and so I think that's really just aligning you know people are at the highest levels aligning around gold as part of this monetary reset. There's one thing to call out um that's interesting is in in a different life we would be sitting here talking about gold as like the the kind of like new world you know currency or whatever but it we wouldn't actually because in the same way most people look at Bitcoin we look at gold right in the sense of these concepts people have been talking about forever everything we're saying here and um including our good friend Larry Leard but the reality is it It's almost like gold was a defeist asset in most people's minds because we know we didn't use it and it kind of failed for a lot of individuals. Um, and so that's what's fascinating around Bitcoin is Bitcoin appeared to appealed to a different level of investor. There was very few gold bugs there, gold people that got it, but it was somebody that basically had a back into these problems and like Austrian economics, but it had the tech layer. And so it was like that that the timing was right to start to like rethink this. Um and then there's also where it ties into like the beauty of the supply schedule and just the uh the cycles because that notion of reducing the supply schedule in half and really providing those jolts every couple of years is what's accelerated for us to get here in 15 years for somebody to understand this and start building different like in parallel you know a monetary uh base layer. And I think all those things we just kind of like missed because these concepts were already understood. It's what you know we've talked about a few times with the difference between gold and bitcoin is not really exactly 21 million or it could be 19 or if there was a little bit of inflation or not. It's really this notion of multi-IG and really the aspect that you can insert governance at the underlying level u at the asset layer because if you play this out long enough, gold ultimately becomes centralized in the same way Bitcoin becomes centralized and if it was only Coinbase and a few other custodians, you still have the same problems with paper gains uh paper games being played. Uh, and then the other side of it would have been like, okay, well, if you just hold your, you know, if there was no vault, you say, you have to like hold it yourself um in self custody. Well, that has a a top line where people don't want to do that cuz, you know, there's the risk of getting kidnapped or all the other things why people use goldsmith and banks. But it's just a point of like we have this like new level invisibility and people are increasingly waking up to it where it didn't occur with gold. And that's really what gives us this like valve to actually have a chance to like, you know, transition into something better. Yeah, it's a good point. Like it's very interesting timing um just in terms of the emergence of Bitcoin almost revitalizing the gold thesis, right? And so like to your thought experiment like if Bitcoin just didn't exist, does gold have this run? Like probably. Um but I I think the the zeitgeist or the conversation is less um less normalized I would say um around these ideas like I I do think that there's a component of of Bitcoin's emergence post post 2008 and really you know being a gauge or a reflection of the basement over the last 16 years. I think it's really served a purpose in in highlighting the sound money thesis and bringing people back around to it. Um, so yeah, that that's that's an interesting thought. Like would we be in the same place uh if Bitcoin didn't exist in terms of like would we just be doing a gold podcast right now? I don't know. Yeah, I would make the case we wouldn't because we just we would grow we'd have grown up as millennials and we would have um it's the point of like most people came to Bitcoin because of tech or some other thing like number grow up and the speculative nature and it was a new uh similar we grew up with venture capital in Silicon Valley and so you're looking at it in that aspect and then you back into these concepts where it would have been generally the similar individuals that for whatever reason their grandparents parents they had that bent to go study Austrian economics. But the point being is there would still be shows like this and the asset the gold price might even be higher because there's liquidity that BTC's taken. But even if we we would still have continued down this path, but the outcome would have just been brought us back into a similar flywheel of centralizing the gold creating these other currencies against it. The other currencies can be inflated because you don't have eyes on the underlying gold. Um versus actually that's an interesting thought experiment. If it was if it was only gold that existed and you you produce digital assets on top to make claims, eventually some would fail and then you'd have almost like a free banking style deal, but it being efficient. It's a different track, but there's it'd be very interesting to see where we're at without Bitcoin today. >> Yeah, it it is interesting. And I think to to make to take the most simplistic take of all this is at the end of the day I do think that the United States has a relative advantage as relates to Bitcoin whereas with gold it seems like the playing field's a little bit more aligned. Um there's certainly been cultural reasons we've discussed with like China and India for example have cultural reasons and and an affinity for gold in particular and precious metals but these central banks have been accumulating for a number of years whereas China for example has tried to ban Bitcoin a number of times and 2021 was an interesting inflection point where with banning or attempting to ban Bitcoin you you know you can't really do it but you could attempt to do it all that hash rate or most of that hash rate ended up in Texas. And so the United States has a really interesting relative advantage to other countries as as it relates to Bitcoin. And that's why I continue to think that both of these assets play an incredible role going forward for personal portfolios, but also for for nations and their reserves. But I do think that Bitcoin will be favored by the United States just because they have well, we're still waiting for the audit audit, but they should have more Bitcoin than any other sovereign by a wide margin. And then a lot of the Bitcoin owned by private citizens sits within the United States. A lot of the Bitcoin companies are headquartered in the US. And so I ultimately do think that both of these assets are incredibly important going forward. they're going to be they are at the center of the monetary reset. But I do think that the United States recognizes there's an advantage that they have with Bitcoin, with stable coins on the debt side and dollar dominance. And so the other thing to always point back to is the fact that, you know, the Trump media company, they they have to step their game up because now they're only the eighth largest public company uh in terms of corporate holdings. they were the sixth like about month or two ago. But you don't accumulate Bitcoin for your company unless you want to be positioned for a future where Bitcoin is going to continue to succeed where it's going to be um you know treated as a reserve asset within the federal jurisdiction, state jurisdiction, within companies as well. So, I do think that people sometimes like um I I I think maybe sometimes we over complicate things where if you just like kind of look at a few different signposts, you get a pretty good sense of where this is going. If you're enjoying the episode, please don't forget to leave a like, a comment, subscribe, rate five stars. All of these actions really help to continue our show. It helps with the support of the show. It helps to get the show out into the eyes of more viewers and ultimately get the message out there. So, if you're enjoying the show and appreciate the work that we're doing every week to record and show up and book guests and edit and distribute the podcast, let us know. Uh, just leave a comment, leave a like, subscribe if you haven't done so already. We're releasing the last trade every single week and so if you can just take a few seconds, we really appreciate it. It's it's nice to know that the show is being supported and I always like to read the comments as well. So, let me know your thoughts on the show, good or bad. Always looking to improve and thanks again for being here. >> Yeah. Can you uh maybe pull up the the I don't know if this is where you wanted to go, but it ties into it as the U Binance and Franklin Templeton partnership because I think what you just said is also um referenced or supported by uh the regulatory apparatus and um everything that's embedded in the traditional financial system and deeming things as um kosher or not. where pre2024 call it 2030 the approval I believe 24 was when they launched in the ETFs that this asset class was still um very much stigmatized nobody wanted to get close to it and then you naturally had to have the collapse TVD on what you know was the uh incentive or or cause of it but we've seen this notion of tether um derivatives the CFTC ETFs getting approved and then here this just came out $1.6 trillion Franklin Templeton. Uh the headline joint forces with Binance to expand digital asset products. I believe they're looking at some tokenized stuff. But the point really is uh it's less around Binance or Franklin Templeton. It's just that if anybody has been around this industry for a while, Binance was was looked at as like the most speculative insane thing for somebody to be on. They got hit by the DOJ. The CEO went to jail for eight months and now they're partnering with one of the largest financial institutions. that is the canary in the coal mine of like the US regulatory apparatus going to greenlight or has already green lit this thing and it's a it's a canary in where we're going um and how they're going to play kind of digital assets with this whole framework to get us out of whatever we're in. >> Yeah. If you if you had showed that line to someone 5 years ago, they would be shocked. Like absolutely in shock. Wouldn't believe it that Franklin Templeton has has partnered with Binance. Like to your point, it wasn't just that the assets or the investments themselves were were perceived as toxic. It was, you know, Binance specifically was like, you know, uh called out in lawsuits, etc. Um and so yeah, would be a shocking headline to to someone from 5 years ago. >> Yeah. And the other two um with the Binance aspect was because they were rumored around uh very loose if not, you know, no KYC. So, they didn't necessarily know who was leveraging the system. It was rumored a lot of terrorist organizations were using it. So, that that's to help contextualize how crazy it is for a US regulated uh multi-trillion dollar asset manager to partner with them. The other one um which is also super timely was the uh Tempo launch, which is the partnership between um Stripe and uh Paradigm launching effectively. We'll see what it turns into. It's it's a blockchain layer for stable coins. But there's no reason where it can't be, you know, more. But point being is basically Stripe Tempo very similar with the Libra launch and working to build a consortium globally to bring a digital dollar or some basket um of a stable coin. Back in the day, they went into hearings. They got completely shut down by the US government among other governments. And now it looks like they're going to get the green light along among others. It's just a completely different u setup that we're in now. But there's a lot of not only infrastructure but just like regulatory clampdown on having direct oversight um into all this and also the ability to monetize and to Jackson's point that the Trump group uh among many others are going to benefit from kind of the growth of this asset class. >> Brian, did you have any thoughts on this Tea Digital Chart and Bitcoin relationship? >> Yeah, I I threw it in the chat um if you want to pull it up. I just thought it was interesting in the context of uh what we were just discussing. around gold's outperformance particularly this year. Um but what we know is that historically um you know Bitcoin follows through uh a lot harder and faster on gold's moves. And so what this chart is showing is basically the Bitcoin to gold ratio um and where that tends to bottom out. So basically where um Bitcoin begins to lurch farther ahead uh than gold in these in these moves. And so it's showing basically 2023 24 and then this year um and sort of lining up the bottoms uh of these these um ratio charts here. So I just thought this was interesting in in the context of what we were just saying. Um would expect to see uh a move in Bitcoin here post this this pretty large move in gold. >> Yeah, this is the uh this is the time historically. We did have Chris Kyper on on scarce assets last week and he seemed to think that the particularly with Bitcoin the the four-year historical patterns are dead. Not to say that cycles are over for Bitcoin because cycles you know are natural in in economies and and in markets but um you know if things were to mirror what they have in 2021 and 2017 this coming up on Q4 this time September is typically an exciting time to be in the space and I'm really curious how this will end up how we'll wrap up the year because again it's been kind of a tepid year for Bitcoin performance. I mean 21% uh for an asset through 8 months is certainly great. I mean if you compare it relative to traditional asset classes, but it's incredibly muted compared to what people are used to in the Bitcoin space. And so I just think going forward it'll be interesting to watch um Brian if if that plays out, you know, with with Bitcoin rallying behind gold. We did see that in the spring for what it's worth. I I do remember that where gold had a hot start, Bitcoin picked up and then, you know, had a lot of that tariff volatility and since bounced back. But nonetheless, um we'll have to see what happens. You know, your favorite influencers are still throwing out 300, 400, 500k price targets uh by December. And so, >> didn't Michael say 750? >> He did. I can't find the episode for the life of me, but I I could have sworn he I could have sworn he said that. >> Michael, I have a couple other things on your side if you want to run through any of them. Um I saw here you included some information on nation state adoption. You you'd referenced the UAE, India, some countries in Apac. Um there's also something I think we should talk about. It doesn't need to be right the second but the uh supply chain attack because Michael when we met on Monday this was kind of breaking news and I hadn't really looked into it yet. So I didn't even know exactly what happened, what it meant. And so I think a lot of people quite frankly are still in that situation where they they see this like kind of um worrisome news online as it relates to just uh you know software and signing devices and you know wallet management and whatnot is at least how I interpreted it. But they actually don't know how it relates to their situation. So they're just kind of like hiding in a corner not plugging in the devices not using Bitcoin on chain. And so maybe we could talk about that because I ultimately think people are looking for peace of mind and you'll want to know what what that means for them. >> I think on the first thing you just referenced um there was a few just notable things that came out this past week around um just global adoption of Bitcoin and digital assets. One was the UAE. There was a Arkham Research that was doing chain analysis and reviewing um wallets and the UAE's um they they had like even images of the data centers and that they had been mining. I think it was close to 700 million in um BTC. And I thought that was very interesting because one of the reasons we've talked about um where these cycles could potentially not be, you know, how they how they've occurred before is because of sovereign adoption. And really, I think sovereign adoption is usually looked at as a SPR and and coming out and saying you're making it a you know, a reserve asset or um um your currency like what El Salvador did. But it can come in different forms which it can be mining and leveraging natural resources from your country which we've known Bhutan, UAE among others are and I think that's just a key indicator to to keep you know eyes on. Um and the other aspect of that was I believe it was chain analysis that came out with Asia Pacific specifically India and I don't know if it was another country they looked at the region but uh leading global adoption from wallets and just chain analysis and so it's just more of a macro trend of um digital assets growing on the other side of the supply chain attack. I think where this ties into uh a it's pretty wild and we talk about it with clients that we got to a $2 trillion asset class with really custody not being figured out and it's a testament meaning Bitcoin specifically. It's a testament to how great product market fit Bitcoin has that it got to $2 trillion with most people not feeling or almost everyone you could probably say didn't know if the next day the asset would completely go up in smoke. And what I mean by that is if it was in self- custody, whether somebody got hit by a bus, somebody messed up, wildfire, whatever it might be, that that might be completely lost, um, but it was still a better product from a store of value. And then the other side of it was leaving on a third party exchange. Didn't know if they were going to completely go away. And so we've obviously seen both sides of it, whether it's kidnappings, losses, the landfill incidents, North Korean hackers, all the way to exchanges that have gone down. And um that brings to light this recent um uh what were they calling the attack? A uh I forgot what the the >> supply chain. >> Yeah, supply chain attack. So it's effectively I've never heard of this resource because I'm not an engineer, but it's my understanding similar to a GitHub. It's a repository where JavaScript developers will upload uh content and some one of the main distributors um had been uh effectively compromised, a reputable developer. And this is the actual CTO of Ledger saying that the effective packages have already been downloaded over a billion times, meaning the entire JavaScript ecosystem may be at risk. Um, the point here is it's less around hardware wallets per se. It was mainly for software wallets or anything that would be leveraged on a traditional browser, whether it's via your phone or your computer that could have been manipulated. But the reality is the hardware device uh unless you're using a cold card and using an air gap fashion, most of these devices require you to download a type of software and then plug it into the computer. And so Charles at the or yeah, at the end of this post, he goes, "It's still unclear whether the attacker is also stealing seeds from software wallets directly at this stage." Why I think this is so important is ultimately if we go back to the beginning of the show, we referenced that inflation's run rampant. the devaluation of the dollar will have to occur in all local or all uh regional, you know, fiat currencies as a byproduct of that. People are increasingly understanding gold and bitcoin are the way to store their value. But the problem is that because custody hasn't been figured out, most people have not been able to park a substantial or material amount of wealth because the custody problem hadn't been figured out. And so the easy mental model to use is, and this is not that it's right or wrong, it's just the status of how a general investor or individual would think about it is sure Jackson or Brian, like bonds are negative yielding. So in uh real terms, maybe I'm losing 2% purchasing power. And again, this is still have to be understood. And maybe they have to also get that inflation's higher than 3%. And so uh the S&P is, you know, returning 10%. that they feel like they're growing 7% in real terms, even though we know that's not true. But it's still having to do that mental exercise of jump through all that to realize that, oh wait, Bitcoin's this thing. It's outperforming everything else. But that's not the hard part. The hard part is, okay, so now what do I do about it? You're going to tell me I'm going to put 20% of my portfolio, 50% 75 75% of my portfolio into this like software wallet that can be hacked or manipulated. It's like, well, that doesn't make sense. It's like, I'm going to leave it on a custodial exchange. Well, it's like historically most custodial exchanges haven't lasted that long. It's like, oh, I'm going to go leave it on. You know, you see where I'm going with this? That this is just a fundamental thing that has to be figured out for the market to uh pick up with what we're putting down effectively that Bitcoin is the savings technology of the future. You have to have redundancies, fault tolerance, insurance around it. And um yeah, this this recent um supply chain attack is just one example. Uh, I joked, it shouldn't have joked, but it was it was referencing, you know, the u whatever happened in in the Middle East with the the ledgers. Uh, I'm not the ledgers, the uh >> pagers, >> the pagers and and uh MSAD. And I think they've actually, this isn't even like uh hearsay. They were proud and they were like, you know, loud about that they were able to infiltrate the supply chain of these pager manufacturers to uh insert detonation devices to blow up on quote unquote terrorists. And it's like there's infinitely amount more value to be derived from these hardware devices that are securing over a trillion dollars in total. Bitcoin, it's over like 1.5 because again that's the key point is like ledger holds the vast majority of crypto in the space. um that when bad actors realize this, it's going to be uh open season for you know a lot of the losses that happen and I don't think it's just discussed enough in this ecosystem. >> Yeah, it's all very well said. I think um ultimately the the solution comes back to fault tolerance which we talk about a lot but one other you know thing that you referenced I just want to put a finer point on is like you know there's the obvious um risks on either side of the the custody spectrum whether you're managing intel custody or you're trusting a single counterparty but what is less talked about is like just the mental burden of like Jackson you were saying like you know people who saw these headlines earlier in the week and then are questioning everything about their setup like do I touch the device or is my device compromised? Do I plug it in or is my software uh on my laptop compromise? Like when it's a material allocation or material percentage of your wealth, like that's terrifying. Like you you wake up and you see all these headlines on Twitter like don't don't make any onchain transactions. Uh you know your your setup might be compromised. like that's a huge ask for someone to, you know, be constantly vigilant against these types of things in perpetuity uh just to store their value. And so I think you're exactly right, Michael, that like that is just not an adequate um not an adequate environment for for someone to store meaningful wealth in this asset. And so there needs to be better solutions um because people just want to store their wealth. They don't want to have to defend against all these uh potential risks whether it's uh physical harm to themselves or you know a a firmware update that seems suspicious like you shouldn't have to be um this always vigilant uh you know defender of your your net worth in perpetuity. Like it it's just an illogical path forward. And we'll also continue to dampen adoption if that is the the requisite way or like the purported best way to store the asset. Like you're just going to stifle future adoption. >> Yeah, there that's a key point because I had a good conversation yesterday with a prospective client and they uh you know had heard about us on different pods and they were like that sounds really nice. I want is this I'm assuming this how a lot of wealthy people store their Bitcoin. they don't want to deal with keys. They're public figures. And we were going backwards and forwards around how it's not either or and that, you know, self-custody is still important and you can um park any amount of assets and you can test out and it's the prudent thing to do. Like we look at it even when we talk to pubos is like look at multi- institution as an R&D uh aspect and you can set it up. You can get that connectivity. You can start to get more comfortable with it and determine you know your risk profile or tolerance there. But when we got towards the end of the call, we were discussing, you know, self-custody and having to deal with everything you just referenced and it hit me. It was like because this was still a material position, but it was nowhere north of 30% of the individual's net worth. And it's like, well, the reality is it's going to grow, whether it's the price or you just getting more conviction in the underlying. But if you have all these issues, you're ultimately at a certain point, if you're already concerned at 110K, you're going to get increasingly more concerned at 150 200. And at the end of the day, what you're coming to us for is for peace of mind because think about all the mental tax and burden if you're always concerned and worry about this. And that's effectively priceless because forget about adding to your position or any of that is the price goes up and it's more to lose and you have kids, you have family, you have work, all these things that are burdens of life and then you also have to always worry about the underlying. It is the thing that has stifled adoption. It's the thing that people sell to early, take chips off the table if they didn't lose it via the other bad uh things that happened. And so that's really what's been lacking is just the ability for somebody to feel confident in whatever their position is and then if they want to let it grow or actually add to it. And so that's really what's exciting about kind of what we're working on. >> 100% agree. Yeah, it's it's all well said. Um I don't really think I have too much else to add there beside the fact that just anecdotally I do hear a lot of that as well, just general concerns about how to manage the asset long term. And so if that's you and you just want to have a conversation, feel free to reach out to us. Um I think we're coming up toward the end of this episode. I did want to just mention on-ramp institutional. So maybe I'll pull up an article here for anyone who's still listening and interested in how institutional allocators are going to be allocating to Bitcoin, you know, thinking about it from their portfolio construction. And when we talk about institutional allocators, really that means pensions, endowments, foundations, family offices, registered investment advisors. And so maybe I'll hand it over to Brian. Um any thoughts on the launch of On-Ramp Institutional? You know, what you're excited about, what you think this means for the industry? Yeah, there's a lot here that we could we could unpack, but I think you know part of the the biggest angle here is like institutional allocators for the past decade or so um have had to deal with a lot of noise when approaching this you know asset class quote unquote you know Bitcoin including all digital assets and there hasn't been a lot of um really strong sophisticated Bitcoin only um advisory educ education and guidance for a lot of these allocators to tackle the space in a in a pragmatic and and thoughtful first first principles uh sort of manner. Um and so you know what's historically happened is that Bitcoin gets conflated with uh the thousands of other crypto tokens and um people uh allocate via suboptimal products and vehicles um where there's layers of of counterparty risk. And so there's sort of, you know, these these easy button paths, right? Like with the onset of the ETFs, there's a there's a very, you know, um what is perceived to be the easy button path. The path of least resistance is you allocate via the ETFs. Um and maybe you do a uh a market cap waiting of of the top crypto assets because you're not sure about Bitcoin and um you have various entities telling you, you know, it's it's not just Bitcoin, it's it's all these other things. there's all these forms of utility. So, it's been very difficult for institutions to navigate this space historically and and I saw this firsthand having worked in the traditional finance space for many years and then um being at Coinbase institutional for a stint as well. Um it's very noisy and it's very difficult for these allocators to on one hand just come up to speed on the Bitcoin thesis. What is this? How does it fit into your portfolio? Um but then really importantly like how do you how do these allocators um avoid the missteps, avoid the traps of allocating to crypto project XYZ um that is only going to go down in Bitcoin terms over the next 5 to 10 years. How did they avoid um the layers of counterparty risk that have um screwed people's allocations in the past? like we've seen um you know a myriad of examples of this of picking the wrong custodian uh picking the wrong vehicle even um to allocate to this asset and so what we want to do with honor institutional is really provide that um domain expert guidance on specifically the asset of Bitcoin um as everyone listening to this probably knows you know we don't focus on any other assets outside of Bitcoin um and sometimes gold um but there really hasn't been an outfit u that has that domain expertise but also has expertise from the traditional finance world like myself and Jackson and others on the team who can speak to um this other world and really try to bridge the gap between Bitcoin and the institutional allocator world um in a way that gets them exposure in the right way which is you know obviously the the crux and core of our business and everything we focus on from the custody perspective. Um so really excited about this. There'll be more to come and and we'll be putting out a lot of um research reports that are specific to different institutional allocator cohorts. So whether you're a family office, pension, uh endowment um basically playbooks um and advisory and guidance into how to how to think about this asset, how to allocate, how to get exposure in the right way and then obviously we have products and solutions when those folks are ready to to make decisions. >> Yeah. Yeah, the only thing I'd add is at the end of the day like honor's goal is not only to provide peace of mind but to offer the a product byproduct of peace of mind is offering best-in-class uh execution and delivery of services to any any individual whether it's an individual institution. It's a reason why the first pensions in the UK allocated u via the on-ramp Bitcoin trust and I see uh whether it's on-ramp or other solutions that mar the the delivery of these um bitcoin products will be the ultimate winners on a long enough time horizon because institutions the governance process will require it and the best example or easiest is um the insurance and the counterparty risk associated with somebody building a material position. They cannot have Coinbase holding a substantial amount of their assets without the right um not only governance but asurances in place. And this dawned on me, it became really clear when we had Josh Far on scarce assets and he was referencing how with gold's price they had certain amount of insurance uh for their um bullion depository up in Wyoming and they were already getting to the top of that because of the price appreciation. That's physical security, but it's very similar to Bitcoin security where traditionally institutional grade custody is an omnibus fashion. So, it's all pulled in a single or multiple wallets and there's no insurance uh that covers, you know, a loss of that size. And as it institutions not only get more educated about the asset and the price appreciates, they're going to start to really do go deep into the diligence and require whether it's u named policies, segregated wallets, onchain, verifiable, all the things that we already do for our clients. And that's really where I think on onrip institutional shines is meeting the market where they're at and explaining where Bitcoin sits in a traditional portfolio. But then once they get that well it's like once you get from one to three to five to 10 to 15 to 25% and we've heard this from allocators nobody ever gets fired u generally if the allocation thesis is incorrect or something changes but they can't have the wrong counterparty and the wrong custodian uh because that's career risk and that's what we ultimately have seen happen and that's what's kept most people out of this ecosystem. >> Definitely. I had an interesting conversation earlier this week with a registered investment advisory firm. Been around for about a decade. They work with families that have like 50 to 75 million typically is like kind of the the average family net worth. And funny enough, some of their clients have made a substantial amount of their wealth through Bitcoin. And then they have a number of clients that are, let's say, coming in more recently in the past 3 to 5 years. And this is the first time I had spoken to this firm before. And I'll also add as well that they were acquired by a larger RAIA a few years ago. And so the conversation was centered around the fact that they have been dealing with some clients that have material allocations to Bitcoin already. But they also have clients that are looking to step in. And I told them really out of the gate of the conversation, look, we're you're going to find through this conversation that we're we have a totally different perspective and philosophy as it relates to Bitcoin as an asset class. And so it really speaks to our sole focus. We're Bitcoin only. If you look at other providers or let's say if you look at some of the ETF sponsors, they're going to market you, you know, the top 10 index weighted or market cap weighted um you know, altcoins in your portfolio as well. And it really resonated with them because they had noticed that a lot of their more serious clients were interested in Bitcoin but didn't really understand the rest of the space, weren't interested there. And then they also had, like I said, a number of clients that made a considerable amount of wealth. And funny enough, they were like, it's interesting because these people don't want to sell their Bitcoin either. And so we're talking like people have held in mostly in self- custody over the past 10 years. And so they really understood the value proposition. And I'm hoping just to get that message out to more people where you know if you're whether you're listening to the show and you you know someone in your network who's at a RAIA or at a family office or at some s sort of firm and you know you've been in their ear about Bitcoin and why it's different and why you need to own it. We'd love to meet them. Uh we you know certainly will be respectful of the introduction. will just be educators if anything and try to explain why Bitcoin is something worth considering in a portfolio and then ultimately how to avoid the pitfalls that most investors have historically fallen into. So, if that sounds like something you'd be interested in, please feel free to get in touch with us. >> Nice. Well said. >> Well, my last ask is please like and please comment, subscribe to the show. If you like the podcast, let us know. >> Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that Onra Media is forformational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/cont to schedule a consultation with one of our private client adviserss.