EP #22 Why Bitcoin in 2023? w/ Anthony "Pomp" Pompliano

In this episode, Anthony and Peter discuss investing in Bitcoin in 2023, navigating the crypto market through drastic changes, and the potential of Bitcoin in the coming future. You will learn about: 09:53 | Is the ownership of Bitcoin becoming more accessible to individuals? 17:24 | What can you do when Bitcoin value changes so drastically? 29:32 | What is the potential of Bitcoin? Anthony “Pomp” Pompliano is an entrepreneur and technology investor well-known for his popular podcast, “The Pomp Show.” As well as hosting conversations with significant figures in the finance, technology, and business world, his podcast has been downloaded more than 50 million times. _____________ Resources Check out The Pomp Podcast. Enroll in Pomp’s crypto academy. Levels: Real-time feedback on how diet impacts your health. levels.link/peter Consider a journey to optimize your body with LifeForce. Learn more about Abundance360. Read the Tech Blog. Learn more about Moonshots & Mindsets. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:02Speaker 00

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• 0:30Speaker 01

  The ramifications of it working are very nerve wracking for people, right? If we were to sit here and not talk about Bitcoin and instead I said, Peter, you know, there is a likelihood, whatever the percentage, that the US dollar is going to not be the global reserve currency in the future. That would be a very scary conversation. That transition period historically has been very violent. It's not something that people want to actually happen, right? If you actually understand how it occurs, it's a nasty, bad thing.

• 1:03Peter Diamandis?

  And a massive transformative purpose is what you're telling the world. It's like, this is who I am, this is what I'm gonna do, this is the dent I'm gonna make in the universe.

• 1:15Peter Diamandis?

  Hi everybody, Peter Diamandis here. Welcome to Moonshots and Mindsets. And today we're gonna talk about a few different elements of Moonshots and Mindsets, but tequila around the whole Bitcoin world. I have with me Anthony Pompliano and I asked Anthony, who calls him Anthony? And he said, his mom. And I guess your wife doesn't wanna call you pomp. I'm gonna call you pomp, just because, you know, the world calls you that. Good to see you, pal.

• 1:41Speaker 01

  Absolutely. Great to see you as well. Thanks for having me.

• 1:44Peter Diamandis?

  Yeah, no, it's been a pleasure to build our friendship. So let's begin. I'm gonna actually ask you a question. The world... Sees you and knows you as one of the most respected thought leaders in the Bitcoin space. How does that, how does it actually feel? Do you feel like a level of responsibility there?

• 2:04Speaker 01

  Yeah, it's a great question. I definitely don't want to be seen that way because I feel like Bitcoin is one of these topics that you're constantly learning about. And it's not just learning about the software or the protocol itself or the design of the mining mechanisms, but you're also learning about economics and politics and history and many other topics as well. And so in some ways, it's a blessing and a curse to have kind of gone deep down this rabbit hole and done so in such a public manner. It has afforded me amazing opportunities. I've met an incredible number of people that I highly respect and really enjoy speaking with and learning from. I've been able to travel around the world because of it, but at the same time, people

• 2:49Speaker 01

  do look at you sometimes as the teacher and that's not really a role that I've historically been comfortable with because sometimes when you're the teacher, it stunts the learning because everyone thinks that you should have all the answers. And so I try my best to kind of remind myself, hey, I'm definitely the student and just trying to learn alongside everybody else.

• 3:06Peter Diamandis?

  Well, it's gonna be, it's gonna be fun. You know, it's interesting, right? Today, you know, Bitcoin is, and we'll get into all the details here, mostly a store of value, but there is a vision where I'm whipping out my Bitcoin wallet to pay for my airplane ticket and my travel and my pizza and my restaurant. How far away are we from sort of that element where Bitcoin is not just something I buy and hold on to like gold, but something that I'm actually going to be utilizing in commerce or some version of that, whether it be the Lightning Network and such?

• 3:45Speaker 01

  Yeah, it's a great question because I think you can look at this two different ways. You can look at it on a geographic basis and you can also look at it on a sequential basis. And so take sequence, maybe it's the first example. Most assets that end up becoming money, meaning that it fulfills both store value and medium of exchange, and then ultimately a unit of account, they start out as a store of value, right? If people don't believe that it is going to have value or hold value, they are less likely than to want to accept it as a medium of exchange and definitely to price assets in it in terms of that unit of account. And so you kind of have to be a store of value before you earn the right to move on to become a medium of exchange or a unit of account.

• 4:26Speaker 01

  And so Bitcoin so far has like done a pretty good job, I think, of capturing minds and on the store of value, you know, kind of framework. And so now the big question is when and if Bitcoin will also become that medium of exchange? And you referenced the Lightning Network and there's a number of other technologies that people are trying to push forward that can help do that. That then brings up the question around geography. And so in the United States, there's been a number of people, probably most notably Alex Gladstein at the Human Rights Foundation, who have talked about this idea of financial privilege. We don't think of financial privilege as a thing, but if you were to compare somebody sitting in the United States with somebody sitting maybe in Zimbabwe on the other extreme, we sure have it pretty good here in the US.

• 5:11Speaker 01

  We have a native currency that we generally believe holds most of its value over a long period of time. There's a liquid market in terms of medium of exchange. All the units of a good or a service are priced in that currency and there's not a lot of fluctuation on an hour to hour, day to day basis. And when you compare those two environments, the US is much better off. And so the idea in the Bitcoin community of where medium of exchange for Bitcoin will really kind of take hold is in the places that need it most. In the United States, we actually don't have a huge need for another currency as a medium of exchange. The dollars work to accomplish that kind of vision or that use case. But if you go to other parts of the world, that is not necessarily the case and we see Bitcoin beginning to gain adoption there.

• 5:55Speaker 01

  And then when you also talk about the cross-border components of it, right? When all of a sudden, it's not just for remittances, although that's a huge cross-border use case. But also imagine anyone in the world being able to set up a website and immediately start to accept payment and not have to have a bank account or not have to worry about foreign currency exchange or anything like that. And so ultimately Bitcoin has to be a store of value. I think that it's done a pretty good job of capturing that and found success. Now, as we move into this medium of exchange standpoint, one, we have to have the infrastructure and technology available. But also, two, is we should expect that really to story to kind of take hold in the places where the currencies and the payment technologies are really bad and people are looking for alternatives.

• 6:39Speaker 01

  And so I think that's going to be outside the United States in the short term.

• 6:41Peter Diamandis?

  Yeah, and I, when I think about that, it's really, it's for me, one of the abundance drivers out there, right? In terms of, in order for folks to have this concept of abundance where you're uplifting people across food, water, energy, healthcare, education, all of these things, having the ability to have currencies that hold their value and are utilizable is fundamental. Otherwise, it's, it's a difficult life. And so when people, you know, I equate the whole Bitcoin ecosystem with one of global increasing abundance.

• 7:20Speaker 01

  Yeah, the other piece I would say on that, Peter, which I find really misunderstood is that you and I, living in the United States, we actually have an advantage in planning our financial life, right? Yes, the dollar will lose value over the next, you know, two, five, 10 years, but for the most part, it will hold majority of its value compared to other currencies in the world. And so that gives us this ability to say, okay, I'm going to save. I am going to spend X dollars every, you know, 12 months on A, B, or C good or service. I am going to invest because I am looking for a specified rate of return that will outpace kind of the accepted levels of inflation.

• 8:00Speaker 01

  But if you all of a sudden go to a country or a geography where the currency rapidly depreciates, as we see in a variety of examples, it's really hard to plan. How do you plan your life? And so I think on the extremes, having a currency that has a slow depreciation versus a rapid depreciation, obviously, the people that live in the economy with the slow depreciation are just at an advantage from a planning perspective. And as we know, you know, we live much longer lives than than it may seem day to day. And so planning is a key component of it.

• 8:31Peter Diamandis?

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• 9:12Peter Diamandis?

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• 9:56Peter Diamandis?

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• 10:30Speaker 01

  I think that's directionally correct, somewhere in that range.

• 10:33Peter Diamandis?

  So if I think about this, there's been an interesting, if you look at the Bitcoin pricing curve, you know, we've seen these peaks and these lulls, and I'll never forget when it peaked back, and was it 2017? And then there was this massive sell-off, and would it ever come back? And in each of those sell-offs,

• 10:57Peter Diamandis?

  and those repurchases by, it feels like it's a leveling of the playing field, where we've gone from a bunch of crypto whales to a much broader base of ownership. Does that sound about right?

• 11:14Speaker 01

  Yeah, I think there's two data points that are really important when it comes to kind of ownership. The first is that the amount of Bitcoin that is held by whales has drastically decreased over time. So there's absolutely

• 11:29Peter Diamandis?

  As a percentage basis or as an absolute basis?

• 11:34Speaker 01

  On both. So I think there's two data points that are really important when it comes to understanding concentration ownership. The first is that in the beginning, there was very few people who wanted Bitcoin, or even knew about Bitcoin. And so they got a lot of Bitcoin. But over time, those people have slowly spent or sold some of that Bitcoin. And so you see kind of a larger dispersion of ownership. And so it's becoming more decentralized in ownership, which is important. The second thing you see is where are those Bitcoin going? And so even though Bitcoin over the last 12 months or so has dropped 75% in price, there are a couple of key things that surprised me. The first is that 67% of all Bitcoin has not moved during that 75% drop in price.

• 12:19Speaker 01

  So 2/3 of all Bitcoin that's in circulation, people are not selling, they're not spending. They're holding it even though price is going down. That would indicate a long-term conviction in either price recovering or never selling, and always kind of holding for that store of value. The second thing is that we have seen wallets on-chain, to give these as the Bitcoin addresses with at least 0.1 or 0.01 Bitcoin, kind of a couple hundred to a couple thousand dollars worth of Bitcoin. Those continue to hit all time highs throughout this last 12 months. And so as the price drops, what we're actually seeing is not whales or really large institutions. We're seeing mostly individuals on chain that are just buying up small amounts of Bitcoin

• 13:02Speaker 01

  and ultimately kind of accumulating what ends up being hundreds of dollars or thousands of dollars. And so those two stories, kind of the dispersion from the whales to everyone else, and then also kind of the all time high accumulation coming from these smaller accounts, tells a story of decentralization that I think is really compelling. Because ultimately, if Bitcoin is to achieve its vision and be this decentralized electronic cash kind of system, you need to have decentralization of the infrastructure, you need to have decentralization of the mining, you need to have decentralization of the ownership as well. And so I think that ends up being kind of a tailwind for the asset over the coming years.

• 13:43Peter Diamandis?

  Yeah, it's interesting. The long term, you know, holding, hodling, as the, as the community refers to it, feels almost built into the Bitcoin mindset. You know, it's interesting, when I was a kid, I remember for like graduation or birthdays or Christmases, I used to get these savings bonds, which would mature in 20 years, right? It would be like your uncle or aunt or, or, or parents, not my parents, but uncles or aunts would give me the savings bond. It would be like a hundred dollar savings bond. They paid, you know, 20 bucks for it and over the course of 20 years, it would mature

• 14:25Peter Diamandis?

  given interest to be able to be turned in for a hundred bucks. And, you know, recently my niece got married and I gave her a Bitcoin as a, as a wedding present with the mindset that, you know, this is for your long term future. And there is a fundamental belief that this is a long term play. It's not a near term speculation. And so folks who are getting into Bitcoin for early on, first of all, I'd love you to comment on, you know, the notion it's never too late to get in. And then if you're, if you're buying into Bitcoin, if you've been thinking about it,

• 15:08Peter Diamandis?

  but haven't yet, or have just started, why should you be thinking about getting into it? What's the mindset you should be going into Bitcoin with at the early stages?

• 15:19Speaker 01

  Yeah, a lot of people, obviously, over the years have asked me, you know, what is Bitcoin? How does it work? Why are you interested in it? And one of the secrets to maybe my efficacy in teaching so many people about Bitcoin is that I never talked about Bitcoin. I almost always talked about the problem first. And what I would explain to them is the challenges that inflation provide for the average person. And what you find in these conversations is that the average American, but also the average global citizen, was not taught anything about economics or personal finance.

• 15:51Peter Diamandis?

  Ever, ever.

• 15:54Speaker 01

  Never, right? And so when you say to them, hey, if you save your dollars and they continue to be devalued and you leave them in the bank for 10 years, you're losing purchasing power. Now, the number stays the same of the number of dollars in your bank account, but you lose purchasing power. And so when people start to understand kind of how the existing system works, they naturally then say like, well, that's not good. What can I do? Right? And so that has been a great way for me to then introduce the concept of Bitcoin. And so the way that I think of it, again, this isn't for everyone. There's many people who think of it differently, but the way that I've found it valuable is I essentially look at the conversion of a depreciating asset over a long period of time, dollars.

• 16:36Speaker 01

  And what I am doing is I am buying an asset that is a great store of value and an appreciating asset over a long period of time. That's driven by a finite supply and kind of the structure of the system. But that alone isn't good enough. I think that this mindset that you described around long-term hodling or holding, however you want to pronounce it, is I also said to myself, I am going to give the Bitcoin to my grandkids. And so what that did is it got me in a mental state where I'm not trying to trade, I'm not trying to time market cycles, I'm not even really caring what the US dollar price is. Instead, what I do is I just dollar-cost average into an asset that I believe over a very long period

• 17:17Speaker 01

  of time will be more and more valuable. And then my goal is to give that to, you know, a kind of descendants, if you will. Now, what's fascinating is this is a traditional financial principle, right? Warren Buffett and Charlie Munger will talk about, you know, buy great assets and hold them forever. Our favorite holding time is forever. And so I actually think although the Bitcoin community and the traditional finance community sometimes feel like they're at odds with each other or in competition, they're arguing on the internet, there's a lot more similarities than maybe people realize in terms of how these individuals look at the asset and what their plan is over a long period of time.

• 17:54Peter Diamandis?

  So how do you answer the person goes, you know, listen, I get it. I understand that it's not being inflated. There's a limited number of 21 million Bitcoin that will ever be produced, et cetera, et cetera. But oh my God, I bought it at 60 or 50 and it's down at 17. And I mean, what do you mean? This is dropping much faster than the dollar value. So how do you react to that for them?

• 18:17Speaker 01

  Yeah, I think it's a fair criticism if you were to look at, let's say, a one-year timeframe, right? Obviously in November of 2021 Bitcoin was $69,000. Today it's at 17. That's not a great store of value over a one-year period because it obviously has dropped significantly. But if you go back to January of 2020, kind of before the pandemic era, Bitcoin was $8,000. And so it's doubled over that kind of three-year period or so. And so it's outperformed most other assets, including fiat currencies like the dollar and others. Now, what I just did there was I allowed the critics to cherry pick a 12-month period and then I cherry picked a three-year. Right? And so two wrongs do not make a right.

• 19:02Speaker 01

  Instead, what it does is it just allows for fodder to kick off arguments on the internet. And so I actually don't think that kind of cherry picking short timeframes, whether they're one, two, three, five years, really matters. What I'm personally more interested in is if you look at the structure of the asset over very long periods of time. And I equate it to like maybe housing. Most people who grew up, you know, kind of before maybe the 1990s or so, would always be told, hey, real estate always goes up, right? You'll always make money, get into real estate, get into real estate.

• 19:34Peter Diamandis?

  A lot of the people I know made, you know, in Hollywood in particular, the actors, the writers, the musicians who made any money. Were the ones who took their paychecks and put into real estate. There was like just a formula over and over again.

• 19:49Speaker 01

  Absolutely, and and the reason why real estate has been so great is one, it's a hard asset. Right? Two is in short periods of time, there's absolutely housing bubbles and bursts. And we've seen that time and time again. But over a long period of time, it's actually that the dollar has been devalued. And so it takes more dollars to buy the same hard asset over a 10, 20, 30 year period. And so you're getting rich in dollar terms by holding non-dollar assets. And so that's really, to me, what Bitcoin is, is that Bitcoin is, it's a digital asset, but it's a hard digital asset. It's hard money. And what that allows for is for individuals to buy it. And even though in the short term, you will have price fluctuations that are very pronounced.

• 20:34Speaker 01

  I mean, when you talk about 75% drawdown or 100% plus on the upside, these are incredible amounts of volatility compared to other assets that are denominated in dollars that the average person would hold. But over a very long period of time, what you essentially are looking at is a finite supply asset that as more and more people, which is the trend, continue to find out about it, they seem to find it valuable, and then they seem to want to actually go ahead and hold some themselves. And so if you're a student of economics, you don't have to be in 201 or 301. You could have attended just 101 of supply, demand, right? Fixed supply asset, demand goes up. Ultimately, the price has to go up to accommodate everyone.

• 21:14Speaker 01

  Where I think a lot of the debate happens is, one, how and when will it go up? How fast will it go up and when? But also, two, is a lot of critics believe that demand for Bitcoin will not increase. And therefore, that would not lead to kind of that long-term price appreciation or store of value. And so, you know, people can debate that. I think that is probably where the debate is. But if demand does increase over a long period of time, then the structure of it would tell us that the price has to go up. And all the details are up for debate.

• 21:43Peter Diamandis?

  And I'll come back to that in the conversation of how how high could it go? But before then, a couple of a couple of points to make. You know, interestingly enough, if you buy housing and you buy housing that is in a great location, right? Central Park, you know, on the shore in Malibu, you know, that is sufficiently scarce and the price goes up. The fact of the matter is, over time, that housing is taxed. And you, if you, you know, if you do nothing, um, you'll eventually lose the house back to the government because your tax bill will eventually overcome the value of the house. And, and one of the challenges that is, is that, but you know, we're not, there's nobody

• 22:28Peter Diamandis?

  taxing Bitcoin, uh, which is another point to make. And then over the last two or three years, people have put their money into real estate and they've seen this appreciation of their real estate and they feel like they're incredibly smart for having invested in that real estate. What they don't realize is it's inflation has been driving the pricing up, right? The actual value of the real estate hasn't really changed and you aren't as brilliant as you thought you were. It's like the government's just been over inflating the money supply. Um, any thoughts on, on those two points?

• 23:02Speaker 01

  Yeah, there's a lot of friends that I have who spend much more time than I on, you know, what's the true rate of inflation? And I've, you know, for a long time, thought that, uh, it was likely that the official CPI numbers were undercounting inflation, even when it was at one and a half or 2% uh, and less to do with malice or a kind of nefarious activity and much more just the methodology at which it's calculated means that it's very much backwards looking and lags and has a bunch of complexities that, that aren't worth getting into. Um, but when you look at housing, housing is probably a pretty good signal to tell you, uh, definitely directionally, but even kind of with sensitivity as to how much inflation is going up or down. And so when you see housing prices up 20% year over year, when you see rent prices

• 23:47Speaker 01

  up about the same, that's probably a good sign that inflation is not, you know, six or seven. Now again, is real inflation 10, 12, 15, or even 20? People will debate. I, I think it's less important to nail the exact number and it's more to understand that by holding real estate, uh, in the general sense in the United States, what you're really doing is you're just combating the inflation. So you're getting richer and richer in dollar terms, but is your purchasing power going up at a faster rate than inflation? Questionable. Um, and then really if you can pick the right places, as you mentioned, Malibu, I think Miami, there's a couple of others. That have outperformed kind of the national average, then you're getting a little bit of

• 24:28Speaker 01

  alpha, if you will. But for the most part, I think real estate, the reason why it's been such a great asset, and I think it's like 90% of millionaires in the United States made it in real estate, is because it's dummy proof to some degree, right? Is, okay, so you're basically telling me I gotta have enough money to buy an asset, and then I just hold it. Like, that removes so much complexity for people. If you think of the stock market, people are trying to pick which stock, they're trying to pick when should they buy it, how should they sell it, when should they sell it, you know, oh, there, I saw a headline that it's gonna scare me into selling, right? It's easy to just press a button and I'm out. And so ultimately, I think that real estate has a number of different components to it that make it a great investment class for the majority

• 25:10Speaker 01

  of folks. And then what that means for Bitcoin is, you know, when you really think about the United States economy, about 50% or so, depending on which survey you look at, 50% of Americans have no investments, they live 100% cash in the bank, paycheck, paycheck.

• 25:27Peter Diamandis?

  It's insane.

• 25:28Speaker 01

  Yeah, what we're basically saying to those people is, we have not done a good enough job educating you on how you are losing purchasing power year after year after year. And so those people are literally getting poorer and poorer in purchasing power terms every single year, while wealthy people understand, get out of the dollar, invest, hold assets that appreciate, and they end up actually becoming richer and richer. And this is where you get the wealth inequality gap and a bunch of the issues that I think people have identified. But the other thing that we are asking is because the dollar is being depreciated and you can't simply sit with the cash in your bank account, is we are asking people to go be police officers and firemen and account managers, be accountants,

• 26:09Speaker 01

  to be marketers, operations, customer service, whatever role that they have at any company in our society. Go be great at that role. And then when you go home on nights and weekends, we need you to become a professional investor. We need you to become a capital allocator, because if you just save your money, you are actually going to be hurt. And so the financial incentive is for you now to learn investing. Now, investing is great, but I don't know if we want to have an economy predicated on the fact that every single member of it, in order to stay ahead and not fall behind, has to become a professional investor. That seems like a really, really hard kind of situation to be in. And so the promise of Bitcoin is it can be used as a savings technology. We can go back to the idea, just save money. If you save money in the right asset, then over time, you actually have more purchasing power

• 26:54Speaker 01

  rather than less.

• 26:55Peter Diamandis?

  Yeah, and then the, you know, the general public of any nation puts their faith in the government as the stabilizing force and keeping the value of their currency. In fact, I think the average citizen doesn't think about that at all. I want to hit on one point before we lose it, which is for folks who did buy Bitcoin at 50 or 60 or 65, and it's now at 17. There is something called the wash rule in investing that doesn't apply to Bitcoin. And let's talk about the important action folks should be taking if they haven't yet. Do you want to describe that?

• 27:36Speaker 01

  Yeah, so the way that the wash rule works is in the US stock market, if you were to hold Amazon and you bought it at $100 and it's now down at $10, you have an unrealized loss of $90. But in order to be able to use that as a loss on your taxes, you have to sell the stock to capture the loss. And so when you do that, the government has put rules in place where they don't want you to simply sell the stock and buy it right back, right, for a number of different reasons. And so I think it's 90 days, basically, you have to sell the stock and not buy it back for that 90-day period.

• 28:10Peter Diamandis?

  And if you do that, you can, you can take the loss and apply that to your taxes.

• 28:16Speaker 01

  Yes, you say to the government, hey, I lost ninety dollars, right? Because it went down that ninety percent. Now, what many people do that have become sophisticated in the stock market is they sell Amazon. And they have realized that there's a high correlation between Amazon and another company. And so they just buy the other company in the ninety day period to keep the same type of exposure. But they captured the loss. Super sophisticated technique. And so with the Bitcoin and crypto world, what people realize is that that wash rule does not apply. You can actually sell Bitcoin and buy it right back and capture gains or losses. Now, I'm always careful to tell people, make sure that you talk to your accountant. Make sure that somebody who is probably smarter than you when it comes to taxes actually looks at this

• 28:58Speaker 01

  and understands your specific situation because there's a lot of nuance and kind of ramifications for decisions you make. But the general premise is that if you had bought Bitcoin at a higher price, the price has dropped. You would be able to sell it, capture the loss, and then you could buy the asset right back. You don't have to wait that ninety day period. And so in essence, you would end up with about the same Bitcoin, but now you could use that loss on your taxes. And so again, it's not a perfect example. There are some nuances that people should pay attention to and talk to professional about. But I do think that it's worth understanding how the wash rule works and going and seeing, is this something that you could use to your advantage as we hit the end of the year here?

• 29:37Peter Diamandis?

  Yeah, and so it's something that I just, full disclosure, I did because I was, I've been buying Bitcoin all along. I just bought some again when it was down at sixteen, but I bought Bitcoin when it was sixty. And when it hit twenty or so, I sold it and purchased it back so I could take that forty K loss on my taxes this year. And I just think it's something important for folks to know if you don't. I had Kathy Wood on my stage at Abundance three sixty. And I've had Michael Saylor, who was my fraternity brother at MIT, on this podcast. And one of the things I spoke about with both of them is, okay, how high could it go? What is the potential for Bitcoin?

• 30:22Peter Diamandis?

  Because depending on, you know, it's at 17,000 now when we're recording this. You know, if you put your money in and you lose it all, you could lose 17K per Bitcoin purchased. But on the flip side, if you understand what the potential upside is, that helps you in the calculation of do I play in this ecosystem or not? So if you don't mind, I'd love to hear how you think about it. How high, how high could it go? You know, what is, what are some metrics on store of value as compared to, you know, gold or real estate? How do you think about it?

• 30:59Speaker 01

  Yeah, it, it's a fascinating question because I don't think-

• 31:02Peter Diamandis?

  And this is not investment advice. This is just a conversation between friends and, you know, I'll tell you what I do. You tell me what you do and that's about it.

• 31:09Speaker 01

  Absolutely. I, I think that there are multiple outcomes that determine what the US dollar price could be. And so let's just walk through three of them, right? We, we mentioned earlier that Bitcoin could be a store of value, could be a medium of exchange, or it could also go the distance and become a unit of account. And so the way I kind of look at it is-

• 31:27Peter Diamandis?

  And by the way, what do you mean by, I understand store of value, right? This is like where I put my cash to hold it, you know? People could buy gold, they could buy stock, they could buy real estate. I understand medium of exchange, like I'm going to buy stuff with it. The third category, what does that mean?

• 31:43Speaker 01

  Unit of account. So if I ask you, you know, how much is the box of cereal at the grocery store? You would tell me it's $3.50. So you're using dollars as the unit of account. There is a subset of the Bitcoin community that believes Bitcoin will become the unit of account. And so you may say it is one Bitcoin or it is, you know, half a Bitcoin.

• 32:03Peter Diamandis?

  That's an expensive cereal.

• 32:05Speaker 01

  Yes. The, uh, there's nuance, obviously, in terms of, uh, just as the $1 equals 100 pennies, there are smaller units of Bitcoin called satoshis. And so the idea would be, you know, it's 1,200 sats or whatever. And so I basically look at this as a probabilistic outcome. And if you said to me it becomes a store of value on a global scale, it's probably worth, at the high end, a million dollars. If it ends up being a medium of exchange-

• 32:32Peter Diamandis?

  A million per Bitcoin.

• 32:33Speaker 01

  A million per Bitcoin, correct? If it ends up becoming a medium of exchange, it's probably worth millions of dollars per Bitcoin. And then if it ends up becoming a unit of account, there's actually no price for Bitcoin, which is a very interesting concept. So the reason why I say about a million dollars or so, if it was to become a global store of value, says two times the size of the gold market. And frankly, I'm probably being conservative in looking at it. If you think of Bitcoin as at least a 10x improvement on gold as a store of value, it's more divisible, it's virtual, it's more portable, it's more secure, all these different things. The gold market's about 10 trillion or so, which is about 500k of Bitcoin if Bitcoin just reached the 10 trillion market cap.

• 33:17Speaker 01

  And so a 2x would put it at a million bucks, and then obviously anything above that would kind of just move in lockstep. Now, if it became a medium of exchange, the reason why the price per Bitcoin is higher is because more people want to use it, not just the people who want it for store of value, now it's people using it to actually purchase things or accept it for the goods and services that they create. And so I'll use a broad brush and I'll say millions of dollars, because I think it's really hard to put an exact number on it. Is it 2 million, 5 million? What? I don't know. I tend to think that if it becomes anything more than a store of value, people who are holding Bitcoin are probably pretty happy. And the difference between 2 and 4 million dollars almost doesn't matter at that point, given where the price is today. Now, the last category, this unit of account, is when I say no price, it's because if I

• 34:02Speaker 01

  said to you right now, how much is a dollar worth? You would say, well, the dollar is worth a dollar, right? 1 dollar equals 1 dollar. And so we don't think of the dollar as volatile, because everything is priced in dollars. Actually, what we do know is that according to the official numbers, the dollar has lost 7% of its value over the last 12 months, right? Probably more than that on the unofficial numbers. And so the reason why we don't think of price of a dollar is because we're using an asset to buy a good or service that is priced in that asset. And so if Bitcoin was to become the unit of account, we would no longer think of a Bitcoin price, right? What is price? Price is the exchange value between two assets. And so if I have one Bitcoin, as we've been talking, what's the price of Bitcoin? Seventeen thousand dollars. Meaning,

• 34:46Speaker 01

  if I go to the market and say, who wants to buy my Bitcoin from me? They'll pay you seventeen thousand dollars. Well, if you do that with dollars, other people with dollars will say, well, I have a dollar, you have a dollar, like, I don't want to buy it, right? What they will do is they may want to buy it in other currencies. They may want to buy it in the price of a home or something like that. And so ultimately, if Bitcoin is to achieve this unit of account, the price becomes non-important, right? Because now it's all about purchasing power, which is where the dollar has been.

• 35:17Peter Diamandis?

  How many Big Macs or Starbucks lattes can you purchase with it?

• 35:21Speaker 01

  Correct, correct. And so the only really path, I think, to a true unit of account on a global scale is if Bitcoin was to ascend to become the global reserve currency. Now, the dollar is the global reserve currency today. That is why we price things. If you ever go to another country, there are many countries around the world where they accept their native kind of home currency, and then they will also accept dollars, right? It serves kind of that purpose of kind of an international currency that everyone uses as the reserve. Now, for Bitcoin to get to the global reserve currency and to ultimately become that global unit of account, I think there are two paths that are worth mentioning. The first is what I call the internet path, which is just more and

• 36:03Speaker 01

  more commerce and GDP gets onto the internet and somebody wants a native currency for the internet, and therefore Bitcoin serves that purpose in a way that fiat currencies struggle to. And so it just naturally eats up more and more of economic activity, serving as that kind of global reserve currency. The second one is a little bit darker, which is the failure of the fiat currencies, or kind of the failing of the fiat currencies at the foot of Bitcoin. Now, as we know, fiat currencies throughout history have failed over a long period of time. The average currencies somewhere ballpark around 250 years or so, depending on who you talk to and which currencies they're looking at. And so when you see that as kind of the historical context,

• 36:45Speaker 01

  that doesn't mean that there aren't outliers. Some currencies could last many years after that, and some currencies last, you know, two years, and then they fail. But what I think the Bitcoin community believes is that Bitcoin is this automated central bank. It is something that is programmatic. It exists in a virtual world, but it is decentralized. No one controls it. And so what it has done is it has mitigated many of the risks that fiat currencies have, most namely the fact that if you have a fiat currency, that means someone can create more of it, and humans are greedy, and they create more of the currency, which ultimately devalues it, which then leads to its demise over very long periods of time. Well, if you have Bitcoin and no one can create more of it, then therefore it is likely to continue

• 37:28Speaker 01

  to ascend in popularity and adoption, which means that at the same time that the fiat currencies are dropping in value and popularity, this is ascending, and so it looks like it could become a replacement. What are the odds of that? You and I don't have enough time to sit and debate all the different viewpoints, but literally there are people who think that there is a negative percent chance, all the way to people who think there's a hundred percent chance and everyone in between, but that it would be one of the paths that it could get there to be that unit of account and ultimately kind of have no value in price terms.

• 37:59Peter Diamandis?

  Amazing. And, you know, that's what makes the future so fun and exciting is you don't know. And in retrospect, it's going to be obvious. How could you not have seen that coming? Yeah, I remember in the 2008 financial crisis, there was, everybody was screaming, "The sky is falling and we're screwed and the world is ending." And I remember all of these ads, I was bombarded by ads to buy gold, buy gold, buy gold. And I actually bought some gold. And I was like, "Okay, you know, listen, if the world's going to end, I can't eat it, but I can like trade it." And so I had in my safe a number of ounces of gold. And then in 2004, I made a decision to

• 38:44Peter Diamandis?

  sell my gold and buy Bitcoin. Now, I wish I'd held all the Bitcoin I had purchased. I didn't, but you know, I got in and I put out a blog saying, you know, I've taught about the six Ds of exponentials, that when you digitize something in the early days, it's deceptive and then eventually And it digitizes, it dematerializes, demonetizes and democratizes products and services. And Bitcoin is the perfect 6D analog, right? We've digitized currency in that regard. It's dematerialized the central bank and dematerialized physical currency. And it's begun to demonetize the transactions and democratize access here.

• 39:25Peter Diamandis?

  And I remember thinking about what are the stages that are going to cause it to become more and more useful and adopted? Because the early stages, it was really the tech entrepreneur. It was the early Bitcoiners, what became known as the whales. But then we started seeing institutional investments. So what are the stages of its ascendancy, if you would? What should we be looking for next?

• 39:54Speaker 01

  Yeah, most disruptive technologies actually come top down. So what you get is military, you get universities, you get governments. They really are the ones who are doing kind of innovative technology research and pushing things forward. They begin to use some of this new stuff and adopt it. You then see it kind of trickle down into the commercial or business world. So you'll then start to see businesses say, hey, we should use this computer thing or we should use this internet thing. How can we make money with it? And they start to adopt it. And then last and usually kind of an afterthought is the individuals themselves. And so if you look at the computer, it literally started, you know, from the military all the way down to the businesses.

• 40:38Speaker 01

  And then eventually everyone got kind of a laptop on their desk. Same thing with the internet and access to it and computational power, all of that. Bitcoin has been the exact opposite. Bitcoin has actually gone from being an asset that was adopted by individuals first to now businesses. And we are just starting to see the light at the end of the tunnel where countries will start to play in the game as well. And so I think directionally, understanding that sequence is important because it means that this is kind of an individual led revolution, if you will, or a technology adoption story. So that's one milestone. I think it's just you got to make the jump from now businesses starting to adopt it to eventually getting the countries.

• 41:23Speaker 01

  The second thing that I think is really, really important is that Bitcoin is this Trojan horse for financial education. And so I think a lot about how many people around the world are financially educated. And whatever that penetration is today is quite small compared to what it will be in the future. And so as we get a higher penetration of people who understand how fiat currencies work, then you will see a higher degree of adoption of Bitcoin. And so kind of that penetration point is important. And then the last thing, people don't like to hear this answer because it's something that we don't control, but actually, one of the most important kind of milestones is time. We simply just need to let time pass. And as we know, humans are horrible at this.

• 42:07Speaker 01

  We like to do things, we like to feel in control, but just sitting on our hands and simply allowing time to pass is important for Bitcoin's development. It shows a longer and longer history of it having survived without any issues, without being hacked. It allows for the idea to kind of gestate and eventually kind of infiltrate into people's minds. People get comfortable with it. I've heard about it. I understand how it works.

• 42:31Peter Diamandis?

  It hasn't been hacked yet, it hasn't gone away. My friends who invested are investing more. It's just, it's changing the mindset there.

• 42:41Speaker 01

  Yeah. And then the last thing is, and this is a little bit morbid, but the people who will never understand or never want to learn about it, as is the circle of life, they will eventually pass away and younger people will then ascend to the positions of power, influence, and decision-making that those individuals have. And so I've said for a long time that, you know, a Bitcoiner will be president one day. I don't necessarily think that's because a Bitcoiner is going to run on the Bitcoin, you know, kind of party standard, if you will. Instead, what is likely to happen is that that individual who becomes the president will simply own some Bitcoin. We see other politicians that own Bitcoin today, and just like there's a stock investor that is president today, right?

• 43:25Speaker 01

  That doesn't mean that they ran on the, the party of, "We are going to invest in stocks," or "I believe everyone should own a stock." No, they just happen to have a financial asset. And so I think that time is a really key component of it. It's just, you know, for better or worse, we can't speed it up, and so we should just sit back and let it do its thing.

• 43:46Peter Diamandis?

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• 45:16Peter Diamandis?

  Peak Rest is my go-to supplement. Hope you'll enjoy it. Go to mylifeforce.com/peter for your discount. So you mentioned going from financial investors to governments utilizing Bitcoin, and we've seen El Salvador. But in between there, what I think about is family offices, making large investments, and financial institutions, and sovereign wealth funds. Where are we in that gradation? Because the more real money investing, the more I think we're going to see stabilization and demand. Is that on an increase, or, I mean, you know,

• 45:56Peter Diamandis?

  Kathy Wood is someone we see we see MicroStrategy is Michael Saylor investing. We've seen Tesla and you know, put their putting treasuries into Bitcoin and so forth. So I see those as signals of stabilization, adoption and long-term diversification. Talk about that if you would.

• 46:20Speaker 01

  So I tend to think of Bitcoin in 2020 until today is really just in the second inning or second quarter. The first inning or quarter was going back the first 10 years of Bitcoin. Bitcoin was adopted by individuals and really drove kind of everything from who was holding it, who was talking about it and who thought that it had a future. But once we got to 2020, we then started to see whether it was public companies, whether it was hedge fund managers, family offices, private businesses. They all started to get excited about Bitcoin. And so as we continue to see this kind of path forward, eventually there's going to be a third inning or a third quarter, which will really be the governments. And so El Salvador is one of them.

• 47:02Peter Diamandis?

  But before but but Pom, before that, we're going to see from the individuals, I mean, larger private institutions, right? Are we going to see, I'm looking for when our family office is going in deep? And when are corporations putting it in, you know, putting their treasuries into into Bitcoin? When are financial institutions, right? We've seen financial institutions like say, this is this is a sham. We're never going to invest. And then all of a sudden they're flipping, you know, Jamie Dimon's been all over the place on this. And so where are we in that subsegment, subsection of the second or third quarter, whatever?

• 47:47Speaker 01

  So I would say that family offices that are interested in the stuff they're already in. They've been in now for a couple of years. They kind of came in when Stanley Druckenmiller and Paul Tudor Jones came out and publicly said, hey, we're buying it. We think it's interesting. Most of the family offices said, well, if it's good enough for two of the best investors of the last 30, 40 years, we should take a look. And most of them came to the conclusion that they wanted it. When it comes to the financial institutions, each one of them is a little bit different. But what I can tell you, we've got a business that does a lot of corporate training. So we go into the large companies, large financial organizations, and train them on these technologies. They all have dedicated teams. Now, some of the teams are more Bitcoin centric. Some of the teams are more kind of crypto centric. Some of them are looking at how do we build products and services to actually generate

• 48:31Speaker 01

  revenue. Some of the teams are interested in should we buy it and put it on our balance sheet. There's kind of different focuses, but they all have dedicated teams looking at this and trying to figure out what's their strategy. And then some of them that are financial organizations, like a fidelity, have now created the ability for their customers to buy and sell, or to use some of those products and services. And so you're seeing them kind of go deeper and deeper into this world. The last one, companies, is pretty interesting. Back in 2020, we saw MicroStrategy, we saw Square, now known as Block, and we saw Tesla be three of the larger companies that were non-Bitcoin native, but ended up putting Bitcoin on their balance sheet and did it with relative size, millions of dollars,

• 49:16Speaker 01

  tens of millions, hundreds of millions, or even billions of dollars. And so many people thought, including myself, that we would see a cascade, and we would see that kind of very quickly spread throughout the public markets. And unfortunately, we haven't seen that yet. Instead, what we've seen are those three companies continue to hold some of or all of their assets. There's a lot of what I'll call kind of crypto native firms. Some of them are Bitcoin centric. Some of them are miners or whatever. They obviously have Bitcoin on their balance sheet. But outside of that, there's been very few companies that have actually gone ahead and done it on the balance sheet. The private market, there's probably more in terms of just the volume or aggregate number. But there still

• 49:57Speaker 01

  aren't, as far as we know, outside of maybe a SpaceX, which is now public that they've put Bitcoin on their balance sheet. There's still not companies that are worth tens of billions of dollars in the private market that appear to be doing it either. And so some of the question is just like, how much of that is fiduciary duty versus, hey, that the executives of the company don't actually believe that it's a good idea or that it could be valuable for the enterprise?

• 50:20Peter Diamandis?

  It's interesting, right? Because I've had the conversation with some of my organizations. I mean, I know for Abundance 360, my CEO summit, I've said, I'm happy to take payment in Bitcoin. And we've had a number of members do that. And then I'm just holding it in that regard. But I am curious what you think the next big shoe to drop in this field will be?

• 50:48Speaker 01

  Yeah. I think there are...

• 50:52Peter Diamandis?

  And what does it mean for a shoe to drop? I don't know, but it sounds good.

• 50:57Speaker 01

  Well, there's two different things that I think are worth paying attention to, maybe. The first is the halving cycle. There's a lot of people who think the halving doesn't matter. For those that don't know, Bitcoin has an issuance schedule. So basically, how much Bitcoin is coming into circulation every single day until we reach the full 21 million? Every four years or so, that number drops by 50%. So it used to be 50 Bitcoin every 10 minutes, then it went to 25, then 12 and a half, now 6.25. And it'll get cut in half again about 18-ish months or so from now. Now, again, I'm just a student of economics and supply and demand. And so if you have an asset and there's a change to the supply, it becomes more scarce, and demand stays the same, then price has to move. Now, how

• 51:42Speaker 01

  big it moves, you know, is up for debate, but price has to move. And so I think that that moment has proven in the past to be a large catalyst of price. I think it will continue to be a catalyst of price.

• 51:53Peter Diamandis?

  Which means the price has gone up when it halved?

• 51:56Speaker 01

  Correct. Usually, we have reached a new all-time high within about 18 months of it happening. So it happens, and then within the next 18 months, we hit an all-time high. For context, back in May of 2020 was the last halving. We hit an all-time high in November of 2021. Right? And so, again, history is not a perfect guide for the future, but we would be dumb if we did not pay attention to history. And so I think that that moment has some impact, although you could argue the impact is lessening as more and more people kind of come into the market, and it's less pronounced. But I think it's worth paying attention to. The second thing is actually what I will consider the government adoption.

• 52:41Speaker 01

  But the government adoption is not just should we buy Bitcoin? I actually think there's two other things governments can do to drive Bitcoin adoption. The first is that they can go ahead and create either adversarial or sympathetic rules when it comes to actual regulation, law, and taxation. And so as they kind of pick and choose what their strategies are going to be, in countries where we have seen them ban Bitcoin ownership in the past, we've actually seen adoption go up. So in countries like Nigeria and Pakistan, the government steps in and says, no, this is not allowed. We're going to outlaw this. And people go and buy Bitcoin. And there's an element of like, those people already didn't trust their government. And so when their government tells them not to do something, they become very interested in, why do you not want me to do this?

• 53:26Speaker 01

  But the other thing is the launch of central bank digital currencies known as CBDCs. And the reason why I think these CBDCs are going to be kind of a watershed moment for Bitcoin is that CBDCs provide a couple of things to governments they previously weren't able to do. One that many people have talked about is surveillance. So now all of a sudden, they don't need to go to a FISA court, as an example, in order to be able to see what's in your bank account. They can instead just look on their version of a blockchain and see what every single person actually has in their bank account. A little scary. But the second thing is it introduces personalization to monetary policy. And this is actually one of the biggest risks that I see moving forward that a lot of people aren't yet talking about.

• 54:06Speaker 01

  And what this risk entails is, right now, if a central bank makes a decision on monetary policy as one size fits all, they raise interest rates, you, me, and everyone else in the country, we all experience the same kind of severity of the interest rate increase. If they decide to actually pursue loose monetary policy, the same policy is applied evenly to all citizens that hold that currency. But if we get central bank digital currencies, now they may be able to say, Peter, you've been a good boy. We are going to give you a lower interest rate. We're going to give you a new monetary policy, right? We actually want you to be able to do A, B, or C things. But Pomp, you've been a bad boy. We're going to give you the opposite. And so you can see a world where personalization of monetary policy, although theoretically

• 54:51Speaker 01

  it may sound good, could be very slippery slope.

• 54:54Peter Diamandis?

  Manipulative, sure.

• 54:55Speaker 01

  Yes. And so I think that people, just as they learn more about central bank digital currencies, they see them in action. They realize what some of the powers that have now been granted, kind of unilaterally to these governments with central bank digital currencies are. There's a lot of people who say, hey, digital currency is a good idea, but I want the one that the governments don't control versus the one that they do. And so that leads to kind of more adoption, or more, as the Bitcoin community call it, orange pilling of a large portion of the population.

• 55:21Peter Diamandis?

  Yeah, I mean, we're going to see continued digitization and, and dematerialization of systems. And governments, I think, are going to find it far too appealing not to play in this, in this field. Let me take it back to those listening who are just thinking about, about getting involved in, in Bitcoin and cryptocurrencies and ask a question, again, not monetary advice, but if people have money in the bank, if they have money in, in different forms of savings, you know, the rate of interest has been ticking up slowly as central banks

• 56:05Peter Diamandis?

  increase the numbers and you can get in, in 90-day, you know, sort of treasuries, anywhere from like 2% to 4%, which is better than 0% or negative percent that it was in the past. But

• 56:20Peter Diamandis?

  How, you know, if, if your friend is asking you, you know, out of a hundred dollars, how much should I put in, if I have a hundred dollars that I don't need for some period of time, how much should I put in Bitcoin? Should I invest some of it in Ethereum or other cryptocurrencies? How do you think about that? I mean, I'll share what I'm doing and how I think about it as well. But I'm curious, Pomp, if you'd be willing to do that.

• 56:47Speaker 01

  Yeah, I, I've always said, um, there's really two different types of people, uh, that are asking this question. There's what I'll call the professionals, the people who are focused on this day to day and, and they, they've chosen to specialize in this field. Those people are going to have a very large portion, right? That this is what they see as their day to day. I liken it to a venture capitalist who has overweight exposure to venture capital, or I liken it to a public stock hedge fund manager who has way too much money probably in their hedge fund. Um, and so I think, uh, you take those people out of the equation for a second, and let's just talk about, again, the teacher, the firefighter, the, the accounting manager, whoever. Uh, and really, it's just like any other kind of asymmetric asset. It's probably somewhere between one to 5%. Uh, it's some

• 57:32Speaker 01

  value that you're willing to lose if it doesn't work. Uh, but it's enough that where if the asymmetry actually works, it has a material impact on the portfolio. Uh, and then it's money that you're actually willing to have be illiquid for a long period of time, which is a key component. Yes, it is still liquid because you could go sell the Bitcoin at any time. But if you are thinking about it over the long run, you basically would then dollar cost average into the asset. So buy, you know, periodically a certain amount. And then essentially just think of it as illiquid. You're not going to touch it for, whether that's five, 10, 15, 20 years. And so naturally, it's got to be a small percentage to kind of fit that criteria for most people.

• 58:10Peter Diamandis?

  Yeah. So just to, to, to slow this down a second and use what we talked about before, um, you know, Bitcoins at 17,000, if you're putting, if you're putting one to 5%, um, and you have to be willing to say, I'm not going to touch that for five years at least, 10 years probably, right? Maybe for even longer. So can you afford to put that amount away? You have to have in the back of your mind, probably low probability, but still, could I afford to lose this? But on the flip side, if it's going from seventeen thousand to, just for ease of mathematics, you know, one point seven million, if it's gone from the million to the millions, right?

• 58:53Peter Diamandis?

  Then you have a hundred X increase in potential value there. So that's the disproportionate, like I'm willing to lose it all, but if it goes a hundred X, it's a home run, and so I'm going to take that, that bet. Is that the way you should think about it?

• 59:11Speaker 01

  That's the way that I've always thought about it. And, and I think that's the way that majority of the folks that have told me, hey, I've got some Bitcoin, or I bought some Bitcoin, or I'm dollar cost averaging into Bitcoin. I think that's how they think about it, right? And, and it's really just, it's an easily accessible asymmetric opportunity. And there's other asymmetric opportunities, right? I mean, obviously venture capital and, and many other kind of asset classes provide asymmetry. They may just not be as easy to access. They may not be as liquid. They may not be kind of as simple to understand what the value is and, and things like that. And, and so I think people just say, you know what? Maybe it works. Maybe these crazy people on the internet are right. And I'll put, you know, one percent of my assets into it, and I'll forget about it for ten years, and let's see what happens.

• 59:55Speaker 01

  And I have a friend who always jokes with me. I asked him why he bought Bitcoin. He said, because I knew you were really into it. And if we all lost money, I want to be part of the party. And if we all made money, I want to be part of the party too. I said, okay, man.

• 1:00:08Peter Diamandis?

  That's amazing. How much Ethereum do you own proportionate to, to Bitcoin? Do you own any Ethereum?

• 1:00:15Speaker 01

  I think I still have some. It's very, very small amount that's left over. I actually started mining Ether. And it was, I think, ten dollars when I started mining it. Along the way, I actually sold, I think, almost all of it at about a hundred and fifty dollars. I thought I was a genius, you know, nice fifteen X and look how small I am. And then it went to fourteen hundred dollars the same year and felt really dumb. So there's, financial markets have a way of humbling you very, very quickly. And so I still have some, but on a percentage basis, it, it's fairly insignificant compared to, to Bitcoin. And the Bitcoin is where all of like net new dollars for years pretty much have gone in terms of, as I've been dollar cost averaging, I've just been buying Bitcoin.

• 1:01:00Peter Diamandis?

  Do you own any other cryptocurrencies besides?

• 1:01:04Speaker 01

  I have a couple of companies where I invested in founders very early. These are founders who, you know, two people in an idea type thing. And some of them have gone on and pivoted or changed their plans or done things where they've created tokens. I don't directly hold them. I don't do anything. I don't trade coins, anything like that. But that's pretty much the only other thing is in cases where people have kind of tried to figure out, hey, how do we build a business? Some of them naturally, over the last three or four years, said, hey, this crypto thing seems to have a lot of tailwinds. Like, let's go see if there's something here. Unfortunately, in many of those cases, it hasn't worked.

• 1:01:47Speaker 01

  So there may be a lesson learned there of just, you know, Bitcoin seems to be pretty valuable. There's question marks on some of the other large cap assets.

• 1:01:57Peter Diamandis?

  So you don't have millions of Dogecoin at the moment?

• 1:01:59Speaker 01

  Nah, listen, I'm not a funny person. So I actually, Elon, when he went on SNL and he was talking about it and kind of laughing and everything, I was saying, I think I'm old because I don't understand some of the jokes that everyone is saying. I felt very out of touch and I was scared that I'd be, I would mark the top, right? If I had bought Dogecoin, I would have marked the top for sure. So I just sat that one out.

• 1:02:25Peter Diamandis?

  Probably, probably was the top. So you've got folks like Warren Buffett and Charlie Munger who are like, dudes, don't understand it, don't want to buy it, don't, you know, stay away. I don't know if they're calling it a scam or they're calling it baseless. But how do you, how do you think about the old school, you know, sort of robber barons of the financial world, you know, dissing Bitcoin? What do you, you know, they just don't get it? They just don't understand it? Are they fundamentally wrong? Is there any arguments they make that should be, you know, heated?

• 1:03:05Speaker 01

  I'll tell you a story. It wasn't with Warren Buffett and Charlie Munger, but I think it will highlight how I've thought about this for the last couple of years. In 2019, I believe it was, a partner of mine, Mark Yusko, came to New York City where I was living at the time, and he'd set up an entire day of what I called the Wall Street Legends. And we went and saw a bunch of people. We're talking about Julian Roberts and Howard Marks and all of these individuals who Mark had known for a very long period of time. And in each one of the conversations, although each one was different, they basically followed the same track, which was, okay, explain this. That's interesting. They'd ask a question or two, and then it would be, great, thanks so much for your time. We'll take a look

• 1:03:50Speaker 01

  at it. Have a great day. And I think that there was two ways to kind of react to the conversations. It was very clear that they were not interested. They were kind, but they were not interested. If you could think back in 2019, the price had fallen, you know, 85% or so. Like, there was a lot of reasons not to be interested. And when I walked out of the meetings, Mark asked me, he said, what do you think? And I said to him, well, we could be mad and upset and disappointed that they don't, you know, aren't into it and all this stuff. Or you can be excited that you just saw the opportunity. And I chose the second one because it said to me, look, the people who have established careers, right, that there's the innovator's dilemma. There's all these things that we know in

• 1:04:32Speaker 01

  the literature that basically highlight the fact that they are incentivized for some of this not to work. They don't need to find the next great trend. They can actually wait for a long period of time. And then when they realize that is heavily de-risked, they could put a lot of money into it. And so somebody like an Anthony Scaramucci, actually, I remember talking to him about in 2019, and he was very articulate, very educated on the history of currencies and basically gave me a lecture, right, a quality, kind of crash course. And then he said, we're looking at it. But he didn't do anything. And then a couple of years later, all of a sudden, he bought $400 million worth of Bitcoin out of one of their funds, and they were in. And so I think that is very similar to the Warren Buffets and Charlie Munger's. Like, they're already wealthy. It's not their game.

• 1:05:17Speaker 01

  It's outside of their circle of competence, which they've iterated over the years as they want to focus on the circle of competence. And it also violates a lot of their worldview, right? If you look at these folks, like, they actually believe the world doesn't operate this way. And so for them to become sympathetic to Bitcoin, you would basically have to flip their worldview upside down, which I think is just very hard at any age.

• 1:05:41Peter Diamandis?

  I like to say, I like to say an expert is someone who can tell, who tells you exactly how it can't be done. And there's this massive disincentive to an expert for their field to become disrupted because they're no longer the expert. And people get comfortable and know what they know. And this has such disruptive, long-term implications that I'm sure it is scary for many.

• 1:06:16Speaker 01

  I also think that there's this piece of, the ramifications of it working are very nerve-wracking for people, right? If we were to sit here and not talk about Bitcoin and instead, I said, Peter, you know, there is a likelihood, whatever the percentage, that the US dollar is going to not be the global reserve currency in the future. That would be a very scary conversation. That transition period historically has been very violent. It's not something that people want to actually happen, right? If you actually understand how it occurs, it's a nasty, bad thing.

• 1:06:55Speaker 01

  There's another way to look at it, which is, the structure of these assets are causing bigger and bigger bubbles and bigger problems. There's stagnation when it comes to economic kind of growth. There are increasing levels of debt and it's becoming unsustainable. And so actually, we need the life raft. We need the path forward where there is hope. And so regardless of whether you look at it from a doomsday perspective or an optimistic perspective, it's an uncomfortable conversation in both scenarios. And so I think there's a lot of older folks who've just been around for a long time, been highly successful in a given world, that it's a tale as old as time. They'd have to do a lot of work to change their mind and it may not be worth it.

• 1:07:37Peter Diamandis?

  Yeah, you know, this podcast isn't in part about mindsets and I think there is very much a Bitcoin mindset. How would you describe a Bitcoin mindset?

• 1:07:52Speaker 01

  Depends on who in the Bitcoin community. Some of them see the world through the lens of memes and Twitter. To them Twitter is real life and they're up to date on the latest memes. We put aside the fun part. I think there's a terminology used quite a bit called orange pilling and it's a play on red pill, blue pill. But orange pilling is this idea that you start to see the world in a different perspective or through a different lens. And what you end up having is a lot more questions than answers. You actually are starting from a default position of skepticism when it comes to large institutions. And

• 1:08:35Speaker 01

  so things like the food supply now somehow get aligned with Bitcoin. And what I mean by that is there's a lot of people in the Bitcoin community that are sympathetic to the idea that the food pyramid is actually upside down. It should be mostly a meat diet. It shouldn't necessarily be so many carbohydrates and things like that. Again, whether they're right or not, you end up seeing-

• 1:09:00Peter Diamandis?

  That's the first time I've heard that.

• 1:09:02Speaker 01

  Yeah, oh yeah. There is a very large overlap between like the carnivore diet and Bitcoiners.

• 1:09:10Peter Diamandis?

  Is it keto diet?

• 1:09:12Speaker 01

  Kino would be another version of it. Yeah, absolutely. So there's a couple of things and I'm always careful, like you can't put an entire community of people in a single box, right? There's also vegetarians that like Bitcoin and all that. But I do think that those two communities tend to find each other. The other one is what I'll call like the libertarian community that encompasses quite a bit, but questioning institutions, questioning governments, trying to advocate for small government and things like that. You see them. But ultimately, I think it's, if I had to sum it up, like the Bitcoin mindset is one of self reliance. How do you build resilience, right? How do you do that mentally, physically, spiritually,

• 1:09:53Speaker 01

  and financially? And if you can build self reliance and a high degree of resilience, then you are closer rather than further from that Bitcoin kind of promise. And Bitcoin is a way to do that financially with a piece of open source technology that's decentralized, not controlled by anyone. But what it does is it ultimately offers the opportunity for you to take some sort of personal responsibility for your own financial well being. You have to opt in, right? You have to go and learn about this. You have to take control of your private keys so that you control your assets. And so naturally, as people learn about that in their financial life, they say, well, what about my physical life? What about my

• 1:10:35Speaker 01

  spiritual life? What about my mental life? And so you just start to see kind of an increase of independence, of self-starter, of resilience, which I think, you know, on a net basis and a general way is pretty positive for society overall.

• 1:10:50Peter Diamandis?

  The two places I've seen a correlation in the Bitcoin mindset is individuals who are interested in longevity. I think that's a natural, you know, if you're, if you're looking to add 50 or 100 years on your life, having an economic system that can last you that long, where you can accumulate your wealth and not have it sublimate or vaporize away, as the case may be. And that makes sense. The other place I've seen it is in the space community. Basically, people who are interested in where the human race goes next. You know, I was having a conversation recently and asking the question as we move into

• 1:11:35Peter Diamandis?

  outside the confines of Earth, as we go to the moon, we go to Mars, we build, we build O'Neill colonies. We're going to bring with us different elements of the human race. We'll bring forms of government, we'll bring languages, we'll bring societal structures, we'll bring monetary structures. And the curious question is, is Bitcoin well positioned to sort of be the baseline monetary structure for, for the human species beyond bounds of Earth? And I tend to think yes. I'm curious about your thoughts.

• 1:12:08Speaker 01

  Well, you can start from the other side, which is, none of the other forms of money can do it. Right? So like, so process of elimination gets us to Bitcoin is a maybe, and we have no, nothing else at the moment. Now, will somebody invent the space rocks, you know, currency and then it's something we've never heard? Sure, maybe. But, but I think just literally process of elimination leaves us with, at the moment, maybe it's Bitcoin and we don't have any other good ideas. And so I think if you believe that we will reach multi-planetary kind of life and that is the, the path of progression, if you will, there's a strong argument that we better make sure that Bitcoin survives and thrives

• 1:12:50Speaker 01

  and can ultimately be used in kind of these other economies and civilizations, because we don't have a better idea right now. Right? And so I think to your point about space, but also we don't have a better idea of what's going to be around in 100 or 200 years either. Right? And so we, we should probably work on this.

• 1:13:09Peter Diamandis?

  So speaking about what's going to be around, one of the questions that people who are just getting to Bitcoin are, need to be thinking about and asking is like, where do I store my Bitcoin? You know, where do I put it? You know? Because I know where I store my stocks, they're in Schwab, they're, you know, whatever trading account you use, or my accountant has them someplace. And I store my dollars in this particular bank. And we've seen just, you know, a recent meltdown in with FTX and a number, I mean, I've had lots of friends who have lost their cryptocurrencies, you know, one friend of mine lost it in Voyager. So I guess the question is, what, how do

• 1:13:53Peter Diamandis?

  you answer someone? You know, right now, I keep my cryptocurrency a little bit in Coinbase, so I can trade it and send it. And then the majority of it's in Abra, which, which I know the CEO, Bill Barheit, and, you know, full disclosure, I'm an advisor there, but it seems pretty, pretty stable. I have some cryptocurrencies on a hardware wallet. Mask where you keep yours?

• 1:14:18Speaker 01

  Yeah. So my, my best piece of advice for folks, and in bear markets, we all get the reminder of one of the value proposition of Bitcoin being your private keys. You can hold the private keys. There's a saying, not your keys, not your coins. And I, just like everyone else, I'm lazy, right? So like, I get reminded every bear market as well of, of the importance of it. But I, I think that being able to actually hold those private keys are super important, the idea of self custody. And so when you do that, it's pretty simple. You can go to Ledger, there's a couple of other companies, and you can just buy a piece of hardware. They now have gotten to the point where it's like, pretty simple. I suggest that you start with like $5 worth, so you can move it off of the exchange, onto

• 1:15:01Speaker 01

  the device, move it back, right? Like, get comfortable actually, understanding how to move this stuff. Get comfortable, you know, checking every day, hey, is it still there? Build your confidence, all of that with small amounts, that if you make a mistake, you, you won't kind of beat yourself up over. But I, I think that that ultimately is the best long-term strategy is to-

• 1:15:19Peter Diamandis?

  So it's basically holding it on a hardware wallet that you have, and you're safe. And that hardware wallet is a digital container, if you would. And if you, if you, there are ways to recover if you lose your password there. I guess the advantage of going on an exchange like an Abra is a, you get interest rates there. So you can earn, you know, two to 5% depending where things are.

• 1:15:46Speaker 01

  Correct, yeah. And as many people know, I've used those platforms in the past that offer interest. And you have to really understand the risk that you're taking, right? I'm somebody who believes in personal responsibility and kind of you make individual choice. And so people will 100% use them whether folks like it or not. I think you just have to make sure that you understand the risk that you're taking when, when you use those types of platforms. Because what they're ultimately doing is they're lending out on the back end, right? To be able to generate the yield and they share some with you. Very similar to what happens in the banking system or wherever else. And so just, you know, wherever you keep it, just understand the risk. There's risks with everything, but I think just doing your homework is, is important.

• 1:16:26Peter Diamandis?

  Pomp, listen, I'm just grateful for the Bitcoin 101 and getting people knowledgeable about this. I do think it's something that I advise my friends and families to get involved in to some degree. And like I said, I've been giving this sort of as latest as wedding presents and birthday presents, which I think just forcing people to get a wallet and to, and to accept it and think about it. Where do people find you? What's the best way for folks to follow your work and your advice?

• 1:16:58Speaker 01

  Yeah, well, listen, I really appreciate the conversation. You've built an amazing community of people that, that I'm excited to see their reaction and get their feedback. The best place is probably just Twitter, at A Pompliano on Twitter. I tend to, to share too much there and blab along, along with everybody else on the internet. But that's probably the best place.

• 1:17:18Peter Diamandis?

  And do you have any final predictions on Bitcoin price? Everybody's making predictions these days.

• 1:17:25Speaker 01

  It will survive. That is my prediction.

• 1:17:29Peter Diamandis?

  It'll be greater than zero. Yes, it'll be greater than zero. That's a good way to put it. Yeah, well, okay, I'll take that much.

• 1:17:38Peter Diamandis?

  Anthony Pompliano, Pom, thank you so much for your time. Grateful to have you in my life and excited to see, have this conversation a year from now. And let's see, does it get from seventeen to back up to seventy? We'll see.

• 1:17:54Peter Diamandis?

  Take care, my friend. All right. Thank you so much, Peter. Everyone, this is Peter again. Before you take off, I want to take a moment to just invite you to subscribe to my weekly tech blog. Today, over 200,000 people receive this email twice per week. In the tech blog, I share with you my insights on converging exponential technologies, what's going on in AI, how longevity is transforming, adding decades to our life. In the tech blog, I often look at the 20 meta trends that are going to transform the decade ahead and share the conversations I've had with incredible tech thought leaders on how they're transforming industries. If that sounds cool to you and you want to try it, join me. Go to dmantis.com/blog, enter your email and let's start this weekly conversation. Let me share with you the incredible

• 1:18:39Peter Diamandis?

  progress we're seeing in the world of technology and the positive impact it's having on our lives. Again, that's dmantis.com/blog. Looking forward to sharing my insights and incredible breakthroughs I'm seeing with you every single week.

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