#1420 Phil Rosen & Anthony Pompliano | The Investment Case For Bitcoin

Phil Rosen, the Co-Founder of Opening Bell Daily, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss everything about bitcoin, why it’s the best performing asset so far in 2024, volatility, bitcoin as a savings account, the global impact of bitcoin being successful, and the recent documentary about Satoshi. ======================= Buy book: https://www.amazon.com/Live-Extraordinary-Life-Anthony-Pompliano/dp/0857199927/ ======================= Gemini is the safe and secure way to trade crypto. Gemini is offering eligible new users the opportunity to earn $100 in BTC when they trade $1000 in crypto within their first 30 days of signing up. Head over to ⁠⁠⁠https://www.gemini.com/partners/pomp⁠⁠⁠ and start trading crypto to earn $100 in BTC. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Bang, bang. I've got an awesome episode for you today. I'm joined by Phil Rosen, the co-founder and editor in chief of Opening Bell Daily. In this conversation, we dedicate the entire thing to Bitcoin. We talk about why Bitcoin is the best performing asset so far in 2024. What's going on with so much volatility? Is that a good thing or a bad

• 0:47Anthony Pompliano?

  thing? How does people think about Bitcoin as a savings account rather than a checking or an investment account? What would happen if Bitcoin is successful? What could the impact be socially around the world? Why is it such a powerful idea? And then we get into who is Satoshi Nakamoto? There's a recent HBO documentary that pontificates whether it is Peter Todd, and we get into why it's important that Peter, Satoshi, our opinions, none of it matters. I think you guys will really, really like this episode. Phil does a fantastic job as always. So here's my latest conversation with Phil Rosen.

• 1:18Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:42Anthony Pompliano?

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• 2:25Anthony Pompliano?

  They've been pioneers for the crypto industry since day one. And unlike many exchanges, they are available in all 50 US states. Gemini has tools for new and advanced traders. They've got an advanced trading platform called Active Trader, which is where crypto traders go for advanced charting tools, access to over 300 crypto trading pairs and multiple order types to trade the way you want. Head over to Gemini.com slash partners slash POMP and start trading with Gemini today to earn a hundred dollars in Bitcoin. That's right, Gemini will give you a hundred dollars in Bitcoin. If you head over to Gemini.com slash partners slash POMP and you trade a thousand dollars in crypto within the first 30 days.

• 3:08Anthony Pompliano?

  All right, Phil, what's the first question you got?

• 3:10Speaker 02

  So Bitcoin is the top performing asset right now, and it's returned about 50% this year, and that's more than double the S and P 500. That sounds pretty good as a headline. But I do think that it's worth noting, it's been pretty much flat since March. Bitcoin, I think it was at 70K in March, and now it's actually lower than that by a little bit. How do you reconcile it being the top performing asset, but also it hasn't made any progress for most of the year?

• 3:38Anthony Pompliano?

  I'll give the critics even a better argument, which is actually down over the last three years, right? It hit an all time high of 69,000 back in 2021. Now it's trading in the low 60s. And so I think that Bitcoin really is a volatile asset. That's, you know, a key piece of this. It's obviously sensitive when it comes to monetary policy, fiscal policy. And so we saw a tightening Bitcoin dropped from 69,000 down to, I think, 17,000 as a significant drop in price. Most people and most asset classes would sell the assets, say I'm done with this thing and move on. That's not what happened with Bitcoiners. So if you look today, you know, Bitcoin has fully recovered back. It hit a new all time high in the low 70,000s.

• 4:20Anthony Pompliano?

  Kind of gone sideways, as you mentioned, since March or so. Now, one of the things that people usually don't remember about Bitcoin is in these four years cycles, in the halving year, there are two things that tend to be true. Doesn't mean it's always going to be true in the future, but so far historically has happened. The halving occurs, there's kind of a run up into that event occurring. What we saw earlier this year was not only do we get the run up because of the halving, but we also had the ETF approvals. And so there was a repricing of Bitcoin by about a 50% increase going into those, that halving. So ETFs get approved in January, price goes up, halving occurs. And then there's kind of this like disillusionment for the next, you know, month or so, where everyone was so excited about the halving, they realized it doesn't really do anything. And so there's kind of a sell off.

• 5:03Anthony Pompliano?

  Now, the sell off wasn't really that bad, but throughout the summer, we have what I call the sideways summer. And usually in halving years, if you go back to 2020, that's exactly what happened. Kind of Bitcoin, you know, recovered from the quick drop in March with the halving in May, and we pretty much went sideways all summer long. And so if you go back and you look, Michael Saylor and MicroStrategy were buying Bitcoin at around the same price as when the halving actually occurred. Call it, you know, $8,500 to $10,000, somewhere in that range. And so if we look at what happened in 2020, we then got into the end of Q3, beginning of Q4. And really, it wasn't until the end of October, November, December, we then went from, call it, you know, $8,000 to $10,000, up to around $30,000 to end the year.

• 5:46Anthony Pompliano?

  And that continued into Q1 of 2021, where we went from $30,000 all the way up to $64,000 in March. And so we had a 600% price increase from the end of Q3 until March of 2021. Now, there was a big sell off, we then went sideways for a while, and then there was recovery to hit the new all time high of $69,000 at the end of 2021. Why is that important? I think that we are following a similar trajectory in terms of trend. I don't know about severity. So we had the halving earlier this year, we went sideways. We're now getting towards the beginning of Q4. And so towards the end of October, beginning of November, I do expect the price to start to increase. It also will coincide with more rate cuts, and also it will coincide with the election. And so there's kind of a couple of different factors that are coming.

• 6:30Anthony Pompliano?

  Together that I think will push Bitcoins price higher. Now, how long will that last? Are we going to go from November to March again? Maybe. Is it going to be a 600% increase? That seems unlikely to me. And so maybe it's something like, hey, it is going to be kind of a six month, you know, kind of upwards movement in price. But over that six months, maybe we double in price or we have a 50% increase in price, or maybe it's 150%. I don't know what the exact severity is going to be. But I do feel like a lot of Bitcoins price movement is much more tied to timing of the year of the having schedule, etc., than it is to, oh, my God, you know, it went sideways. We need a net new buyer to come in. It's just, we continue to see this pattern over and over again.

• 7:12Anthony Pompliano?

  And there's probably something about the having takes about six months or so to kind of work itself out. So that people start to feel that change in incoming supply. And so if you have the same demand, the supply drops by 50%. It works itself out, then bam, here you go. You've got something that seems to be more scarce in terms of that incoming daily supply. And that ultimately leads to the repricing of the asset, you know, kind of the end of that year and into the beginning of the next year.

• 7:39Speaker 02

  So something you mentioned right away was how volatile of an asset Bitcoin is. And I think your explanation makes a lot of sense. But one thing that is difficult to reconcile is how I think 65% of holders have not moved their Bitcoin in the last 12 months. So my question is, why then is it such a volatile asset? If more than half the people are not even touching or moving their Bitcoin?

• 8:03Anthony Pompliano?

  Yeah, well, it's a great question. The reason why it's volatile is because 65% of people haven't moved their asset in the last 12 months. So if you think of, just use a company, forget Bitcoin for a second. If you use a public company, there's a famous example of this. There was a cannabis stock called Tilray. And I don't remember all of the exact details, but basically they took this company public. It was one of the first cannabis companies to go public. I think it went public in Canada. And what they did was they floated a very small percent of the equity. So the founders and the executive team said, hey, we believe in the company. We want to go public. We want people to be able to buy the stock, but we're going to hold a bunch of it ourselves. We're not going to float that stock. And so I can't remember if it was 2% or 5%, but it was a very small percent.

• 8:45Anthony Pompliano?

  So call that, you know, 90 plus percent of the stock is being held illiquid because people that hold it aren't going to sell it. And so there's just a little bit people can buy. Well, there was this massive demand. It's one of the first cannabis stocks. So all these people come in and they want to buy it. And so you can think of, let's just say that they had 100 shares, right? If for the hypothetical example, but only five were available for trading because the 95 were being held. Now everyone's trying to buy one of these five shares and so the share price skyrockets. And so I think that that stock went up something like 1,000% in a couple of months. And so in that example, you're saying to yourself, oh my God, this stock went up 1,000%. But whatever, it's just market structure. Because if they took the other 95% of the stock and they put it into the market, it wouldn't have gone up 1,000%.

• 9:31Anthony Pompliano?

  It was just that there was a mismatch of demand for the available shares. So you bring that example to Bitcoin, 65% of Bitcoin is not available. It's being held by long-term holders. They're not willing to sell it in the market. And so even though there's more than 19 million Bitcoin in circulation, there's really only 35% of Bitcoin that is available for trading. And so as you get this increase in demand or decrease in demand, it is exasperated or kind of exaggerated because you have such a small float compared to actually all 19 plus million Bitcoin that are kind of in circulation. And so the reason why that becomes important is as price goes up, you will see that number trend down.

• 10:11Anthony Pompliano?

  It actually hit 70%, I think earlier this year, and it's come down a little bit, or maybe in December of 2023. So seven out of every 10 Bitcoin in circulation did not move in the trailing 12 months. That's insane number, where only three out of 10 are available for trading. Now, as price has moved up, we've gone from 70 down to 65%. So it's still pretty healthy, but by the end of the bull market, that number will go from 65, probably down closer to like 55 or 50%. And so what people are doing is as price rises, you can think of it as it's a daily bid for their Bitcoin. So right now, somebody is saying, I'll buy your Bitcoin for $63,000. 70%, 65% of people say, I'm not selling. But all of a sudden, if somebody says, I'll pay you 80,000.

• 10:55Anthony Pompliano?

  One more person than probably right now will say, you know what, 80,000, I'll sell you the Bitcoin. Then 90,000, 100,000, 110, 120, 130, 150,000. There's some portion of the people who are not willing to sell at 63 that are going to be willing to sell at 100,000 or 150,000. And so that number will start to kind of trail down. What's fascinating to me is still more than 50% of all Bitcoin in circulation has not moved in two years. So the one-year number is impressive because during that time period, what we saw is Bitcoin's price has gone up substantially. But over the two-year timeframe, Bitcoin's price has tripled. So we went from, you know, kind of sub 20,000 to over 60,000 in a two-year timeframe. Yet one out of every two Bitcoin has not moved. Now, some portion of those are lost.

• 11:40Anthony Pompliano?

  We don't know how much. I don't think it's as high as the number as some people think it is, but some portion for sure is lost. But one out of every two Bitcoin has not moved in two years, even though the price has tripled. Those are long-term holders. Those are people who are saying it's going higher, right? They're expressing their view in the market because they're not willing to sell at these prices. And so that is a huge reason why I think some of the best investors in the world, like the Paul Tudor Joneses, the Stanley Druckenmiller, etc. Are so excited about Bitcoin is because they realize these people are nuts. They're going to hold the Bitcoin. They're going to make it a much less liquid supply and therefore increases in demand like an ETF are going to skyrocket the price.

• 12:20Anthony Pompliano?

  Now, what's fascinating to me is the ETFs are also a net new buyer of Bitcoin and they're holding it. Yes, there is a redemption feature, so they can have to sell Bitcoin from time to time. But what we see so far in the data is they are usually a net buyer, not a net seller. And so as Bitcoin goes into those funds, it usually doesn't come back out. And so if that continues to happen as well, they're just pulling supply out of circulation. They're holding it in their funds and that should continue to lead to higher and higher prices over time and more volatility.

• 12:53Speaker 02

  So you said something there. You said Wall Street's sort of buying in because they realize how nuts the holders are, how long-term committed these holders are. Do you think that undermines the value of Bitcoin if it's just maybe big buyers on Wall Street want to come in? Because you have this grassroots investing, investing movement where people will hold Bitcoin forever, no matter what?

• 13:20Anthony Pompliano?

  One of my theories in markets is that money wants to find courage. And this is very counterintuitive. Most people think that money wants to find where is it safest? Where is it going to be kind of cared for best where I can't lose it? That's not what happens. Usually what happens is that investors are risk takers. They want to find risk. But the best place to take risk is when you take risk in a crowd. And so what they see is that the Bitcoiners are maniacs. They're like, these guys buy this thing and it doesn't matter if it goes up hundreds of percent. If it drops 90%, they just hold. And so when you have a massive group of people, and remember, we're talking about hundreds

• 14:05Anthony Pompliano?

  of billions of dollars worth of Bitcoin not moving regardless of where the price goes. As an investor who wants to seek and capture risk because the risk you take is the return you earn, then you want to go find places like this where you are alongside shoulder to shoulder other maniacs. And so I think that's where people kind of get it confused. They think that Wall Street is going to run away from this asset. Wall Street likes volatility because volatility means there's potential return. Wall Street likes risk because the more risk they take, the more return they can capture. Wall Street likes the maniacs because every person on Wall Street is a closet maniac. They're just trying to do it inside of an institution with risk management, et cetera.

• 14:47Anthony Pompliano?

  And so Bitcoin was almost purpose built for resonating on Wall Street. It's just that in the early days, a lot of those financial institutions couldn't adopt the asset. But now they look at this data and they say, you're telling me if this asset drops 80 to 90%, these guys don't sell? They just buy more? Sign me up. How do I buy some of that? And I know this because literally Stanley Druckenmiller and Paul Tudor Jones have gone on CNBC and explicitly said that after the 2018 crash, they called each other and they had a conversation and they said something like, did you know that, you know, 70% of the people who held Bitcoin at 20,000 are still holding it at 3,500? They said, I gotta get me some of that. Let me go find the maniacs. Let me invest alongside them.

• 15:31Anthony Pompliano?

  That's how they got into Bitcoin and obviously that's worked out very well for them.

• 15:35Speaker 02

  What do you think happened to the argument in the last couple of years that a lot of traditional finance folks would say, well, with the stock, you can buy a real asset in the real economy and you're contributing to something in the real world?

• 15:49Speaker 02

  But Bitcoin doesn't really have those characteristics, but that has really faded out of the narrative. Why do you think that is?

• 15:55Anthony Pompliano?

  I think people are realizing with the rise of AI that the single most valuable commodity in the world is computing power. And I've said for a long time that people think it's oil or they think it's something else. It's computing power. And so Bitcoin is the strongest computer network in the world. And so when people say Bitcoin's not backed by anything, it is backed by something. It's backed by the strongest computer network in the world. How valuable do you think that is in today's day and age? It's pretty damn valuable. It's worth more than a trillion dollars for sure. Right? And so I think that when people start to understand this currency is backed by a commodity, the commodity is the most valuable commodity in the world, they are starting to realize, wait a second, maybe I should get some. And so if you start to look at kind of that argument,

• 16:38Anthony Pompliano?

  you then say to yourself, well, how much bigger and stronger is the Bitcoin network? If you take all of the computing power of Amazon's AWS, Google Cloud and Microsoft Azure and combine it, Bitcoin is multiples bigger than those three computing networks combined. And so it's hard to fathom just how big the computer network is, how strong it is, how decentralized it is, how resilient it is. And so not only is it a valuable commodity, it's also the greatest form. Think about if I said to you, a bunch of people around the world came together and they created something that's never been created in human history before. They created the strongest computer network ever invented by humans.

• 17:22Anthony Pompliano?

  And I said to you, what would somebody be willing to pay for that? And you told me a trillion dollars? I'd laugh at you. And so I think that's what people are starting to realize is this is going to be worth a lot more. How much, when, it's all up for debate. But a trillion dollars for a price tag of the strongest computer network in the world is probably too low. And I think that's where you're starting to see a lot of people say, okay, you know what? Maybe it is backed by something. Maybe there is something here that is kind of driving the value, not just the price. And it took the explosion of AI, the return of data centers and computational power and all of that stuff to then convince people, wait a second, this is a computer network. This is data centers all around the world. This is something that I can just go and buy, you know, kind of in the open market.

• 18:08Anthony Pompliano?

  And so maybe I should get some.

• 18:10Speaker 02

  The thing about AI data centers and AI computer networks, they're powering, you know, in theory, tools that we can use in our everyday life and make work easier and, you know, all these different tools we have. But the computer network for Bitcoin, I hear what you're saying, but I also don't know what the application is other than creating these tokens or assets that the price is expected to go up.

• 18:36Anthony Pompliano?

  Yeah, it's a great question. I think that Bitcoin's computational network is doing the single most important computational work in human history, which is it is protecting economic value. There is nothing else in the world that protects economic value like this. And so in a world that is littered with central banks and governments who have spending problems, who have national debts that are exploding, that are devaluing their currency, who are punishing 50-plus percent of their populations and pushing them into poverty, and they're eating away at your economic value, they are essentially stealing from you. It's a silent tax, it's a silent theft, but if you think about the McDonald's

• 19:15Anthony Pompliano?

  worker who's been getting paid $12.50 an hour since 2012, they think they're still getting paid $12.50 an hour, they're getting paid less and less every single year. Don't even worry about the last decade, just go since 2020. The purchasing power of the US dollar is down more than 25%, depending on which estimate you look at. So that means that for every dollar that you had in 2020, today you can buy 75 cents worth of goods and services. They stole 25% of your purchasing power. How do you protect yourself? Bitcoin is not the only solution. You can buy real estate, you can buy gold, you can buy a lot of different assets. But Bitcoin is the best at doing it over a long period of time so

• 19:57Anthony Pompliano?

  far. Now, it's an early experiment, it's only 15 years old, still got a lot of time to go. Gold's thousands of years old, real estate, obviously, very old as well. But Bitcoin is probably one of the most promising ones as well, because if it continues to get repriced by the world as the best asset to protect economic value, one of the things that I think finance people have a harder time kind of wrapping their head around compared Maybe the tech people is what are the implications of this? And so if I said to you, if the root cause of poverty around the world is the fact that there are billions of people who earn economic value every day. They leave it in cash, whatever their local currency is, and their government devalues that currency. And so they fall further and further behind. They can't get ahead.

• 20:40Anthony Pompliano?

  The wealth inequality gap widens and these people get punished. But there's a solution. They simply can save that economic value in a different currency. That currency can't be devalued. It can't be created out of thin air. It's not controlled by anyone. And it's going to protect their economic value and their purchasing power. All of a sudden, it's not very hard to see a world where maybe this one asset could actually lift people out of poverty. Could actually have this global impact that would change the lives of billions of people. Now, there's a lot that has to happen between here and there, but I think that's part of the promise of Bitcoin and why so many people are excited about it. Because they say to themselves, wait a second, is this a root solution to a problem that has been around for centuries?

• 21:23Anthony Pompliano?

  You can go all the way back to ancient Rome or anywhere else and people were devaluing these currencies. They were constantly trying to figure out how do we steal value silently from the people to enrich ourselves? Bitcoin is an asset that you can treat as a savings account. You simply continue to save in it and you don't have to worry about what is it going to happen over the next week, month, year, et cetera. Now, one of the things that people look at that and they say, wait a second, but it's volatile on a day to day basis. Yes, but in the same way that one Bitcoin is worth one Bitcoin, if you go back and look, one of the best examples of this in 2016, the median home in America costs 664 Bitcoin. Today it costs six Bitcoin.

• 22:07Anthony Pompliano?

  So what ends up happening is in dollar terms, we actually saw about a 50% increase. It was like 250, $300,000. Now it's over 400,000. Right? I think whatever it is about 40, 50% increase in dollar terms for the median home between 2016 and 2024. So eight years, 50% increase in that home. How many people's wages went up 50% or more? Probably not as many. In Bitcoin terms, there was a 99% reduction in the price of the median home in America priced in Bitcoin.

• 22:40Anthony Pompliano?

  Bitcoin literally made housing more affordable. And so when you think of it in those terms, what it does is it requires you to break the mold of thinking in dollars and now think in terms of Bitcoin. And so if you hold dollars, everything around you gets more expensive over time. Your coffee gets more expensive, your house gets more expensive, the clothes that you buy, when you go out for a night to a Yankee game, or everything gets more expensive. When you hold Bitcoin over the long run, everything gets less expensive over time. Your purchasing power increases at a faster rate than the rate of inflation, and therefore, literally, every single good around you gets less and less expensive. And so that is something that we haven't had before. And I think that's really what is driving so many people to say, wait a second, this Bitcoin thing, if it works, this thing could really, really be special.

• 23:25Anthony Pompliano?

  And so far, so good, but, you know, let's wait another 50 years and then we'll decide, you know, was it successful or not?

• 23:31Speaker 02

  The housing comparison is crazy.

• 23:34Anthony Pompliano?

  99% reduction.

• 23:35Speaker 02

  That is something I've never heard before. I mean, it makes sense, you know, obviously Bitcoin's price has gone up a lot.

• 23:41Anthony Pompliano?

  Another way to think about this is in 2016, Bitcoin was a couple hundred dollars to maybe a thousand dollars. I think it's starting to begin in 2017, if I remember correctly, it's maybe like a thousand bucks. So let's just use a thousand. You could have bought $6,000 worth of Bitcoin and held it for eight years. Your $6,000 would now buy you a, a US median home, eight years later.

• 24:07Speaker 02

  Yep.

• 24:07Anthony Pompliano?

  And so you think about that, if you had take that same $6,000 and put it in cash, you might not be able to buy the door for the house in today's terms, right? Who knows? And so I think, once people start to realize this idea of protecting the purchasing power and everything getting cheaper around you, it completely shifts your view of how to think about where am I putting my economic value? Stocks, obviously, do very well. There's things like gold and real estate, they do well as well. But something like Bitcoin, this idea of it being a asset that not only protects, but grows your purchasing power over time, is something we really haven't seen before. And I think that's where Bitcoiners have done a lot of work in terms of trying to educate people on why is this different?

• 24:52Speaker 02

  So would you say a good approach or you know for investors that want to get involved in Bitcoin? Is it just dollar cost averaging like you would to a stock?

• 25:04Anthony Pompliano?

  I really think of this as a checking account and a savings account. And you know, in the traditional system, you put dollars in your savings account. You try not to touch them. Then you have your checking account and you got an investment account. I think that a lot of people use that framework to understand. I get paid, you know, my W two salary, taxes get taken out, have my after tax dollars. Where do I put my money? I need living expenses in my checking account. I have a savings account because I like to have an emergency savings fund and a little bit of extra cash. And then I've got an investment account that I like to go buy stocks or commodities or real estate or whatever. To me, what is going to happen and what is already happening is that people are going to realize they get paid my salary. They take the taxes out.

• 25:48Anthony Pompliano?

  I have after tax dollars. I'm going to put some money in cash into my checking account so I can pay my living expenses. I'm going to put money into my digital savings account, which is Bitcoin. It's going to do a fantastic job of protecting my purchasing power and increasing it over time. And then I also, you know what? I want intellectual stimulation. I want to make some investments as well. I don't expect people to put a hundred percent of their savings and investing in Bitcoin. I actually think of it as it's just a savings account. Buy some, send it in there, you're good. You still want dollars. We live in a dollar economy in the United States, right? You go buy your coffee. You're dumb if you're using Bitcoin to buy coffee in the middle of Manhattan because you're going to get taxed and you're losing out on the future appreciation of that dollar or excuse me, that Bitcoin. The dollar is going to lose value over time.

• 26:32Anthony Pompliano?

  So you should spend the thing that's going to lose value and you should save the thing that's going to gain value. And so then you look at the investment account. Well, people are going to go buy stocks. They want diversification. They want safety. Going back to the conversation about the Wall Street folks, they want risk. The average American doesn't want to go seek risk. The average American wants to know, hey, if I work hard, I spend less than I make, am I going to have enough money to be able to live the life I want to live? And you know what? If I can use my investment account to make a little bit of extra money, that'd be fantastic. But I don't have time to stay in tune with what's going on. CNBC, Bloomberg, Fox Business, read 10 Ks, go on Twitter and understand what's going on there. What's the latest, greatest investment strategy? What's the Fed gonna do? Right? Well, oh my God, China liquidity is increasing. That must mean that there's going to be this knock on effect to the US. Oh, the election's coming. What are the two?

• 27:17Anthony Pompliano?

  They don't think like that. Most Americans just say to themselves, you know what? I want to take some of my money, I'm gonna put it in the S and P 500. Warren Buffett told me, never bet against America, and I'm just gonna let this thing compound. And so they're still gonna do that. But if Bitcoin can service that savings account, that alone would be a pretty, I think, kind of epic innovation and advancement for a lot of people's personal finances.

• 27:40Speaker 02

  That is such a good analogy, the savings and checkings.

• 27:43Anthony Pompliano?

  Yeah. Well, it also goes into the crypto world where people are like, is Bitcoin gonna be the only asset? And what I say is, you know, traditional finance industry, you have a checking and a savings account. If Bitcoin is a savings account, stable coins are your checking account. People want to spend fiat currency that is going to be worth less in the future. It's still a dollar. Yeah, it's in this digital form, but it's just a dollar. And so you still want to spend the dollar, you want to save the Bitcoin. And so this whole idea of like, spend your Bitcoin, to me is insane. I never want to spend Bitcoin. Why would you ever want to spend your Bitcoin? Right? And so, yeah, sure, maybe we get to a point, at some point in the future, where all fiat currencies have died, everything's priced in Bitcoin, it's like hyper Bitcoinization, and then you spend your Bitcoin

• 28:25Anthony Pompliano?

  because there is no future appreciation of Bitcoin, it's just one Bitcoin equals one Bitcoin. That's not the world we live in today. Is that gonna happen? I have no clue. All I know is today, that the Bitcoin that you hold, it's gonna be worth way more in the future. If you spend it, it's like an idiot tax. Right? You're literally doing something that is stupid. Don't do it. Especially in the United States, where it's not only about future value, then you get taxed. And so it's just checking and savings, your new digital savings account, it's this Bitcoin thing, whatever percent of your net worth you would normally put in your savings account. Well, put a little bit of it in Bitcoin. Have an investment account, have a checking account, right? Just use timeless investing principles, but rather than have your quote-unquote savings sit in an asset, dollars, in a savings account that pays you 0.3%

• 29:09Anthony Pompliano?

  or whatever they're paying these days on a savings account at a bank, in a currency that is going to be devalued at 25% over four years, maybe you should try a different currency.

• 29:20Speaker 02

  Yeah, that seem, when you break it down like that, it does seem fairly a no-brainer. Something that I read in your newsletter, actually, one of the guests you had on the podcast this week said, "When Bitcoin's price goes up, its volatility also goes up", which I believe is opposite to most stocks, maybe take out Nvidia. But higher prices generally mean less volatility. And I think if people saw the Bitcoin behavior, that would be a deterrence. What do you say to that?

• 29:56Anthony Pompliano?

  It's volatile in dollar terms, it's not volatile in Bitcoin terms. But I think that you need volatility to capture return. Like, everyone thinks of volatility and they say volatility equals bad. I look at it from an investor's seat and I say volatility equals good. Because there's a lot of assets that are not very volatile. Why do I not buy the S and P 500 for me personally? Because it's not volatile enough. There's not enough upside return. It's compounding at, let's say, 8%, 10% a year. When you put in the real inflation rate, the real return is maybe 5% or 6%. Okay, that's fine. But I could have got that in treasuries last year. And so what I'm looking for as a 36-year-old

• 30:40Anthony Pompliano?

  who is trying to compound capital over time and build wealth, is I need things that are volatile. And so I'm seeking out that risk. I'm seeking out, looking for these financial assets that have more volatility. Now, I have to be comfortable with stomaching the volatility, because volatility works in both directions. We like volatility when we're long an asset and it goes up. Yeah, it's amazing, we're smart, we're geniuses. But when we're holding an asset and it goes down and it's volatile to the downside, now all of a sudden like, oh, the Markets wrong, right? But no, volatility works in both directions. And so if it is volatile, that usually means it goes up and down quite a bit, which Bitcoin obviously does. So if I had told you in 2010, hey, here's 10,000 Bitcoin. You're going to hold this. It's going to go up thousands of percent. It's going to drop 90%. It's going to go up hundreds of percent. It's going to drop 90%. It's going to go up hundreds of percent. It's going to drop 90%.

• 31:26Anthony Pompliano?

  How many people can hold through all that? Very few people, right? And so volatility is something that people seek when trying to create value. But also it is something that is incredibly hard for humans to go ahead and kind of stomach. It's why that fidelity study where the people who had the best performing portfolios either died or forgot their password. Because it didn't matter what the volatility was. They weren't looking, right? And so that is one of the reasons why like just buy the S and P works so well. Or just, you know, dollar cost average into Bitcoin works so well. It's like, don't look at the price, just every week or every two weeks, buy your set amount of Bitcoin, just keep buying. Don't worry if it's up, down, whatever, you're fine. Don't look at the price on a day to day basis. Just hold it, have this, you know, kind of plan.

• 32:09Anthony Pompliano?

  My plan with the Bitcoin is I'm just going to give it to my grandkids, right? And so if I'm just going to give the money in Bitcoin to my grandkids, psychologically, there's nothing you can tell me that is going to change my mind to sell. Because I'm just saying to myself, well, this is my grandkids, who aren't even alive yet. I'm giving it to them. And so now the price goes to 200,000, goes to 10,000. It's just whatever. If it goes to zero, sorry, kids, like you're not getting anything, right? If it goes to millions of dollars, grandpa's a genius. Congratulations. Anything in between, just this way you're going to get. And so that psychological change for me really allowed me to stop looking at the price, stop worrying about, am I selling, am I buying?

• 32:54Anthony Pompliano?

  Where's the price going to go? It's just cool, calm, collected mentally now. It's going to my grandkids. Let's see what happens.

• 33:03Speaker 02

  Okay. Something I want to ask you before we get off the pod here. HBO released this documentary and they claimed to reveal who Satoshi was, the inventor of Bitcoin. They said it was a guy named Peter Todd. I watched the documentary. I was not that convinced that it was this guy, Peter Todd. What do you make of this?

• 33:25Anthony Pompliano?

  HBO is in the entertainment business, baby. And I'm sure, I didn't watch the documentary. You know, I just can read Twitter for five minutes and the internet sleuths quickly had all the clips up and were explaining, you know, what they got right, what they didn't get right, et cetera. I don't know who Satoshi is. I don't think it's Peter Todd. Peter Todd says it's not him. I think that if somebody had uncovered Satoshi, I don't think they would make a movie about it. I think they'd be breaking news. I think that it would be kind of a smoking gun. It'd be on CNN and CNBC and Bloomberg and those places, not in an HBO documentary that took, you know, months and months and months to edit and cut. I also think that people want to know who Satoshi is for all the wrong reasons.

• 34:11Anthony Pompliano?

  One of the things that would be most interesting to me, and I've thought about this, is if I had the chance to interview Satoshi, what would I ask? And I think one of the first things would just be like, why did you create it? Why did you walk away? And

• 34:27Anthony Pompliano?

  why did you not tell anyone? And I think if you ask those three questions, you could learn 80, 90% of everything you need to know about Satoshi. Because why did Satoshi create Bitcoin? Will tell you a lot about their view of the world, where they thought was going on in the world in their late 2000s, how they looked at things like the global financial crisis, how they thought about technology and its impact in society. There's all these things that kind of are around. Why did this person create this thing? Imagine if the answer was just like, oh, I was just screwing around in, you know, my dorm room and created this thing and it seemed to work. Right? That'd be a way different answer than some profound philosophical view as to why Bitcoin was important. So I think that's a great one. Why did you walk away? Was that out of fear?

• 35:10Anthony Pompliano?

  One of the things that people will talk about is Satoshi walked away around a time where somebody had said that they started to talk to governments and intelligence agencies about this. And I think it was a presentation that was given. Satoshi disappeared. Was it fear? Was it always the plan? Was there some sort of self-sacrifice saying, hey, look, I know that this is important, but I need to disappear for it to be successful? Be fascinating to understand that. And then. Thinking about why Satoshi made so many of the decisions in terms of how it got launched, created, holding the coins, made the first 50 unspendable, you know, all these like different details will tell you a lot about how they thought about the actual technology and whether it was intentional or not for it to be successful. So I don't

• 35:52Anthony Pompliano?

  think I'll ever get that chance, but it's an interesting thought exercise. I will say that a very well-known investor one time told me that he thinks he knows who Satoshi is. And so I was very surprised that this person had a theory. And I said, you know, who do you think it is? And he said, well, I think it's one of 200 people. And I said, that's a lot of people. How did you narrow it down to these 200 people? And this individual was involved in digital payments in the early 2000s, late 1990s. And he said, well, there was a conference that happened, I think in Antigua. And at that conference, there's about 200 people. And it was everyone who was interested in digital money, or digital

• 36:34Anthony Pompliano?

  payments, etc., and cryptography, and like all these details that ended up in Bitcoin. And he says, the odds that that person who created Bitcoin was not on that beach at that conference, very low. And so he's like, I think it was one of the 200 people that were there. Which, pretty fascinating way to think about, you know, who was Satoshi? Did they come out of the blue and nobody knew who they were? Or were they hiding in plain sight for years? And it was somebody who was actually very involved in kind of the cypherpunk movement, digital payments, you know, digital currencies, etc. I have no clue. But it's fun to think about.

• 37:09Speaker 02

  So, one of the pieces to the theory in the HBO documentary for Peter Todd is that he was, I think, a college student when he coded this super program. And

• 37:23Speaker 02

  That would assume that this one guy as a nineteen, twenty year old was, you know, the smartest guy ever, maybe to incorporate all these details and have so much foresight. And I thought it was pretty funny, multiple times in the documentary, he was like, yeah, I am Satoshi, as if like, he would say that in a joke, but then he would also be like, that's exactly what Satoshi would say to throw you off the scent and.

• 37:53Anthony Pompliano?

  So he was basically like messing with the, with the camera?

• 37:57Speaker 02

  He, it was like, uh, it was like, okay, what would a spy say in this situation? They would admit to being a spy because of course they're not a spy, but then really it's like, there's layers and layers and layers, they are a spy. So I think the documentary was really playing into that. I don't, I wasn't convinced really, I don't think it was.

• 38:17Anthony Pompliano?

  I do think the young, the young person is a, is probably more likely than not. Again, you know, who knows? Um, one of the arguments would be, hey, you have to be a very seasoned programmer to be able to understand all these details, et cetera. Uh, I think more importantly is not so much, uh, being a seasoned programmer. Obviously you have to be, have, be skilled to do something like this. Uh, but I do think that it takes young people to be radically, uh, kind of thinking outside the box. Um, and so, uh, just like there's a calcification of your mind as you get older and you can try your best to fight it, but you know, again, I'm thirty six and already I talk to people who are in their early twenties and I'm like, oh man, I really got it. Like this is something I need to work at, is to make sure that I don't get set in my ways. Um, and so something as simple as if you see the same idea tried over and over and

• 39:01Anthony Pompliano?

  over again, you begin to convince yourself like that idea doesn't work, but there may be something that changes in the world and then all of a sudden the idea works. And so if you're the person who kept saying it's the idea that doesn't work and you didn't realize that this change happened. So for example, I think that, um, if I remember correctly, I think it was Adam Backed, uh, maybe it was Hal Finney, uh, but I think it was Adam Back, uh, there was like a reusable proof of work that was created in like two thousand and four or something. Well, if all the digital currency, uh, attempts that happened in the eighties, nineties, early two thousands, didn't have access to reusable proof of work and they didn't work, and then by the time you saw somebody trying it in two thousand eight, two thousand nine, then you're like, ah, this doesn't work, like we've, they've tried, you know, twenty times.

• 39:44Anthony Pompliano?

  Well, maybe one of the big breakthroughs was when now we have reusable proof of work. And so one of the things venture capitalists like to ask founders, which has now kind of become just like an intellectual, you know, contest, intellectual Olympics is why now? Why should this company exist now? And so Uber, as the quintessential example, like, why did Uber work in 2009? But it might not have worked in 2002. Well, it's because the iPhone was created and the iPhone had GPS in it. And so now the rider and the driver both had GPS. And so you could find each other with very granular detail. Which corner are you on? And so the second that you now have to not call and say, hey, can somebody come pick me up on the corner of whatever?

• 40:29Anthony Pompliano?

  Instead, you have GPS in both the rider and the driver's phone. You now can connect people and it unlocks this huge use case for something like Uber. And so the answer to why now with Uber was literally there's GPS in the iPhone. And so with Bitcoin, why now? A huge part was, well, there was proof of work. There's all these different things, but it probably took a younger person in my mind, right? To kind of think of, hey, how do I put all these things together and try to solve, you know, what has been a timeless computer science problem of the double spent?

• 41:02Speaker 02

  Well, Paul, on that note, thank you so much for having me.

• 41:05Anthony Pompliano?

  Thank you so much. We'll do it again. What's up, guys? I hope you're enjoying this episode, but I got a quick message for you. I just released my very first book. It's called How to Live an Extraordinary Life. In this book, there are 65 life lessons that I've picked up over the years. These lessons will teach you about money, investing, relationships, work, health, happiness, and much more. In this book, I wrote letters to each one of my children and I tried to share those life lessons with them. If you pick up this book, there's three things that I can promise you. The first is that it is very concise. The audiobook is only three hours. You can listen to it on a long drive or on a rainy afternoon. The second thing is that you're going to learn something. It's worth the price of admission just for the lessons themselves. And then the third thing is it will make you think more deeply about your life and

• 41:50Anthony Pompliano?

  how you try to live it. So go pick up How to Live an Extraordinary ...your life today. It's a quick read. It's very impactful. It's very concise and it would mean the world to me for the support. Go check it out today on Amazon, Barnes & Noble, or wherever you buy your books. Hardcover, audiobook, it all works. Thank you so much for the support and I'd love to hear what you think about the new book.