#998 Will Clemente & Mitch Askew On How Bitcoin’s Adoption Is Just Getting Started

Will Clemente and Mitch Askew are from Blockware Solutions. This past week, they released the "Bitcoin User Adoption Report" to give an update on user adoption on the network today, and where we are headed from here. In this conversation, we break down the report. Will and Mitch compare previous technological adoption curves, explain why we are still so early, and tell us how Bitcoin will reach 10% worldwide adoption by 2030. ======================= BCB Group is the leading payment services partner for the digital assets industry. BCB Group provides payment services in 30+ currencies, FX, cryptocurrency liquidity, digital asset custody and BLINC, which is BCB’s free, instant settlements network for the BCB client ecosystem. Find out more by visiting bcbgroup.com/pomp ======================= The number one name in NFT domains and the world’s most powerful wallet are teaming up to bring something new to the crypto and Web3 world: That’s right, Unstoppable Domains and Blockchain.com partnered to create NFT domain names ending in . Blockchain. It’s the perfect ending to show that you’re a believer in a decentralized future. The Blockchain.com community can get one, for free by signing up for the waitlist here. Free NFT domains provide all the benefits of premium Unstoppable Domains, including fee-free, lifelong ownership. Don’t have a Blockchain.com wallet? No worries, these new domains are available to everyone for as low as $5. Either sign up for a free blockchain.wallet or visit Unstoppabledomains.com to buy your domain today. ======================= Crypto is all about giving the power back to the people and our sponsor, Pipe, is doing that in a big way. Pipe is the world’s first trading platform that allows you to trade recurring revenue streams for up-front capital. And with Pipe’s new API, companies with recurring revenue can build seamless, embedded financing options into their platforms. One of the most interesting uses for Pipe’s new API right now is Compass Mining’s “Mine Now, Pay Later” which powers payment plans on bitcoin mining hardware so more miners can start or scale with a smaller up-front investment. Whether you’re looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with: No loans. No dilution. No restrictive covenants or warrants. Just growth on your terms And right now, Pomp Podcast listeners can access tens of thousands of dollars even millions fee-free for 12 months. Whether you are a bitcoin mining company looking to enable financing for your customers or a SaaS, DTC, or any business that has recurring revenue, sign up at http://pipe.com/pomp to start trading today. =======================

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. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Will Clemente and Mitch Askew are from Blockware Solutions. They recently put out a brand new Bitcoin user adoption report. It's fantastic. In this episode, we talk about the growth rate of Bitcoin, the historical technology adoption cycles, and much more. I really enjoyed this conversation with Will and Mitch, and I hope that you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by BCB Group. With a dedicated focus on institutional payment services, BCB Group provides business banking, cryptocurrency, and foreign exchange market liquidity for many of the world's largest crypto-engaged financial institutions.

• 0:46Anthony Pompliano?

  BCB's business accounts allow businesses to load fiat currency and cryptocurrencies for payments, operations, and trading purposes. BCB's clients can trade FX and cryptocurrencies quickly and at scale with market-leading value. BCB's Blink network is the European crypto industry's first instance settlements network, and one of the first real-time payment networks of its kind to allow free, real-time transactions across fiat and digital currencies. BCB's vision is to empower the global financial revolution through sustainable and innovative banking. You can find out more by visiting bcbgroup.com/pomp today. Again, if you want to learn more, go to bcbgroup.com/pomp today. This episode is brought to you by Unstoppable Domains. They recently launched an awesome

• 1:28Anthony Pompliano?

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• 2:10Anthony Pompliano?

  com right now to get started. Today's episode is brought to you by Pipe. Crypto is all about giving the power back to the people and our sponsor Pipe is doing that in a big way. Pipe is the world's first trading platform that allows you to trade recurring revenue streams for upfront capital. And with Pipe's new API, companies with recurring revenue can build seamless embedded financing options into their platforms. One of the most interesting uses for Pipe's new API right now is Compass Mining's "Mine Now, Pay Later," which powers payment plans on Bitcoin mining hardware so more miners can start or scale with a smaller upfront investment. Whether you're looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with no loans, no dilution, no restrictive

• 2:54Anthony Pompliano?

  covenants or warrants, just growth on your terms. And right now, Pomp Podcast listeners can access tens of thousands of dollars, even millions, fee-free for 12 months. Whether you are a Bitcoin mining company looking to enable financing for your customers, or a SaaS, DTC, or any business that has recurring revenue, sign up at pipe.com/pomp. Again, pipe.com/pomp to start trading today.

• 3:21Speaker 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.

• 3:44Anthony Pompliano?

  Will, Mitch, how are you guys?

• 3:46Speaker 02

  What's up, Pomp?

• 3:47Anthony Pompliano?

  I'm doing great. How are you guys? For those that don't know, Mitch, this is Moist. For those that don't know, Mitch is Moist. Moist is Mitch. Welcome.

• 3:56Speaker 02

  Thank you. It's good to be here.

• 3:59Anthony Pompliano?

  Started from the YouTube comments, now you're here. You're on the show and not as Moist. You're on the show as Mitch and like delivering information.

• 4:07Speaker 02

  I'm glad, you know, it's, it was a kind of a childish name, but you know, it got me here. So I'm grateful for it.

• 4:13Anthony Pompliano?

  But listen, Will, Will's head's in a blender right now. He's like, I cannot believe that this is all happened, but Will.

• 4:19Speaker 02

  Yeah, they, they had no idea what they were getting into and they brought me onto the team.

• 4:25Anthony Pompliano?

  All right.

• 4:25Speaker 03

  Yeah, I had no idea.

• 4:26Anthony Pompliano?

  Let's go through this report. I think the best way probably to do it is let's just go graphic by graphic. And then we can kind of talk about what each one of them is describing. The first one is this penetration of the target market. And it also has an overlay of time. So help everyone understand how you guys think about this.

• 4:50Speaker 03

  Sure, we can first start with just, you know, what is a technological adoption curve? So with all technologies that kind of move through these phases in the graphic here, we have them labeled as innovators, early adopters, early majority, late majority, and laggards. And so each kind of subset has a different amount of conviction. And you know, you'd say some of the early innovators are perhaps much more forward thinking, more willing to take risk, etc. And that allows them to reap great reward as the technology moves into the later stages of the adoption curve. One thing to note amongst, you know, this kind of takes place for all major technologies, this S curve of adoption. Once these curves pass that 10% threshold, that's where you see really the most aggressive growth.

• 5:35Speaker 03

  And as we'll get to in a moment, where we think Bitcoin adoption is, I think we're getting ready to hit that kind of main S curve of adoption, but we still are in that early adopters phase. But before we move on to that, we'll continue with some of these other historical technological adoption curves.

• 5:52Anthony Pompliano?

  That makes complete sense. And obviously, I think each one of these cohorts of people ends up spreading the word to the next, right? The early adopters basically tell the early majority and you kind of continue to spread it. And then obviously, another piece of this that I think usually goes unspoken of is like money is the most viral product in the world. And so naturally, people are sending it to each other, they're receiving it from each other, and it ends up driving like this network effect. You've got another chart here from Blockware that says technology adoption curves. And you've overlaid a ton of other technology and their adoption curves. What is this showing us?

• 6:26Speaker 03

  Yeah, so something to think about here is like Bitcoin is growing on the rails of the internet. So it's going to grow faster than the internet, which spread on analog rails and mostly word of mouth. But basically, the big blue and pink lines is a weighted adoption curve of all the other past technology adoptions. And that's what we use to apply to forecast the future adoption of Bitcoin.

• 6:48Anthony Pompliano?

  Got it. And so when you look at something like this, like I think it is the landline, maybe is the green line, the one that's kind of taken the longest to go there. Is that mainly it took a longer time because it was one of the earlier technologies? And then as each one of these technologies gets built, like you mentioned Bitcoin is being built on top of the internet, we should expect these adoption curves to actually accelerate?

• 7:08Speaker 03

  I think, I think that's correct. And as you just alluded to, you know, when we look at like the landline at the lower end of the spectrum versus we look at, excuse me, like the smartphone or social media or up on kind of the upper echelon of these adoption curves. I don't think that's by coincidence whatsoever. And the reason is kind of what you just alluded to that you basically have before the internet, technology spreading on these analog rails, very similar to like a dirt path versus spreading on the internet, which is analogous to like a superhighway of of adoption spreading. And so with that, you know, with Bitcoin, very similar to like social media, it can spread much quicker because the rails that it's spreading on are

• 7:49Speaker 03

  much faster, let alone all of the kind of monetary incentives that we all know very well. But, you know, I think in this report, we tried to focus on rather than convincing you what the what the value proposition of Bitcoin is. Obviously, there's there's several, including Bitcoin being the ultimate bearer asset, you know, Bitcoin scarcity, it's decentralized nature, censorship resistance, you know, all these different things that that we talk about, you know, the inevitability of, you know, more debt expansion in the fiat system. All these things that we talk about of what makes Bitcoin valuable, we decided to exclude from this report because we think there's been a lot of work that's eloquently been put together on describing what the bullish case for Bitcoin is. And so with that in mind, we really focus

• 8:33Speaker 03

  on this report of just the monetary network effects and adoption network effects that we believe Bitcoin has in context of why why people are adopting it. So instead of looking at, I guess, the way to frame it would be, why are people adopting Bitcoin? We're more looking at the rate of which they are adopting Bitcoin and comparing that to traditional network effects because Bitcoin, at the end of the day, is a growing monetary technology. So yeah, again, kind of long-winded answer here, but I think it's paired with social media in the basket of it's growing on the rails of the internet. I would make an argument that it's growing even faster because of the monetary incentives of kind of the economic backdrop backdrop of what's going to unfold over the next five, 10, 15 years.

• 9:16Speaker 03

  But even out of out of that context, just just saying that it's growing on the on the rails of the internet means that it should be growing in that kind of upper at least 10% 10th percentile of all these other technological adoption curves that we see here.

• 9:29Anthony Pompliano?

  Makes complete sense. And then we've got the Bitcoin user data, specifically cumulative sum of new entities. What is this showing us?

• 9:37Speaker 03

  Sure, I could I could take this one. So for for this report, we decided to go with on-chain data for a few reasons. One of which is just kind of our bread and butter and and one of the forms of analysis that we feel most comfortable with. The other one is we feel like this is the best way to get hard data on the user adoption. You could do things like look at, you know, exchange user estimates. You know, there's there's some public companies such as Coinbase who discloses their their user data, but then we have other private companies that don't have to disclose their user data. And we felt that by looking at the number of unique wallets, that was the best way to have hard data on what the user adoption growth looks like. With that being said, though, this does likely underestimate the actual value by

• 10:23Speaker 03

  a fair amount. And the reason is because one wallet or one unique cluster of entities that we're looking at here in this graph could actually be a custodian or an exchange. Now, with that being said, though, we do, we do want to just disclose that nuance. But with that being said, we do feel like the number of unique wallets at this time is still a very good proxy for the number of users and a good conservative estimate as to how many users are are or have been on the network. So in this chart, we're looking at new entities. So new entities is solely telling you the cumulative sum of all the unique entities that have ever been on the network. And as you can see, that's just over 253 million users that have ever been on the network.

• 11:06Speaker 03

  And so the reason I'm emphasizing that word is because then when we next, when we get to the next chart, which is net entities growth or entities net growth, I should say. This is instead looking at the number of entities that are on the network now. And so a bit of a distinguish between the two. Because the former is looking at how many have ever been on the network. This metric is taking into account the entities that have left the network and therefore is telling you how many are active, how many are on the network today. And according to on-chain data, we estimate that's about 30.8 million unique entities. And for our sake of the report, we're using this as our users metric. And again, that we feel like this is a good proxy for the number of users of the network,

• 11:51Speaker 03

  although it likely underestimates the value if you are including, you know, exchange users or users of custodians. And in the future, the, our view on this being a good enough proxy for that, for that user number, the real user number will go down because we think over time, less people will interact with the base chain. But we do feel like the, the kind of, the validity of this as a proxy for the number of people that are using Bitcoin is still very strong.

• 12:22Anthony Pompliano?

  Yeah, I mean, look, it makes sense to me. And your point about more and more users will start to use the Lightning Network or other Layer 2 sidechains, et cetera, may change the base chain. But, but still, there's a very clear trend here that user adoption is increasing. And these measurements are probably the best that we have to identify that. You guys included a data point that I was actually, I've never seen anyone go ahead and take a look at. It's that 0.36% of the global population are users of the Bitcoin monetary network today. Walk us through this one.

• 12:53Speaker 03

  Yeah, this is simply taking that cumulative sum of entities net growth and then dividing it by the global population, which is about 8 billion users. And I honestly, I expected this to be higher. I expected, you know, global adoption around 2% to 5%, somewhere in that range. But still being less than 1% is incredibly bullish. And we already have, you know, El Salvador is a nation state adopting Bitcoin. And we've got Michael Saylor putting in billions of dollars and we're not even at 1% adoption yet.

• 13:18Anthony Pompliano?

  Yeah, and then we've got this like percent of global population and you tried to actually forecast using the old adoption cycles or the historic adoption cycles. When I see something like this, I mean, it is pretty crazy to think about if this is accurate, which I think you guys are saying, hey, look, there's a forecast here. Again, could be inaccurate. It's really hard to kind of assign these these adoption curves. But if only 0.36% of the global population is actually on the Bitcoin network as a monetary network, there's a lot of people left to get on, right? Like, like, how did you guys kind of come up with this this chart here?

• 13:55Speaker 02

  Yeah, so with the the past data, it wasn't until around 10% adoption that we had most of the data. So up until 10%, we're using the compounded annual growth rate of that cumulative sum of entities net growth. And then from there, we applied the past adoption curves. And like, for the reasons we laid out before Bitcoin, we we kind of expect to grow faster because of all the it's just growing on the rails of the Internet, the speed of information. And there's the direct financial incentive to adopt. Like, you can see the benefit of early adoption, like nominally. For example, if you if you were an early adopter of like the car or the Internet, you might have some increase in your efficiency, and that's going to help you out financially. But you don't see an actual number. Like, I bought Bitcoin

• 14:38Speaker 02

  at X dollars, and I have gained 100x in in value just by being an early adopter. Like, that that mental framework of like, you can see how much you're benefiting financially is going to encourage more people to adopt it faster.

• 14:51Anthony Pompliano?

  Got it. And then the last graphic that we have here, Will, you tweet out and said, this is the ultimate bullish case for Bitcoin in one simple visual exponentially growing user growth juxtaposed with Bitcoin's preprogrammed increasingly deflationary monetary policy. And you've overlaid those two here. Describe it like kind of how you think about these two things and their relationship to each other.

• 15:10Speaker 03

  Yeah, for sure. So again, this this green line is, as Mitch just said, we use the Kager up until that 10% threshold where we have the data for all the historical adoption curves. We then applied that historical data for the adoption curves that we have to Bitcoins future projections of of what we think we'll see the user growth at, and that's that that green line. And then in in the yellow, we have the supply issuance. And of course, that's pre programmed and is already set in stone. So we do know exactly what the supply issuance will be for sure. And so when you when you plot these two and kind of juxtapose the two, you get this really beautiful graphic, in my opinion, which is kind of a visual for the ultimate bullish case for BTC. And as you can see, we have, you know, an exponential

• 15:54Speaker 03

  amount of new users that will come in over the next several decades. And we still are in very early days. And as we believe, as we mentioned, we believe earlier in in the segment, we think we've yet to hit that real S curve of adoption. And then you pair that with Bitcoins supply issuance becoming increasingly deflationary, which means, you know, if you if you combine the two over a long term, it it kind of builds the perfect recipe for for number co up over over the long term. And so with that being said, I think this is a very simple graphic for kind of illustrating the high level bullish case for for a long term Bitcoin investor.

• 16:30Anthony Pompliano?

  When you think about the inflection point of users there, are there specific things that you all are looking for that you think can drive it? Or is it just a matter of time and allowing a network effect to kind of do what network effects do and and spread globally?

• 16:44Speaker 02

  I I think number go up is the biggest factor there. And that's personally what brought me into Bitcoin. Like last, late late 2020, I saw it going up. I'm like, what is this? And I think a certain amount of people who who find out about Bitcoin actually do the due diligence and figure out like the technicals can go beyond just the price chart. I think a lot of people just look at the price chart of Bitcoin. They don't, they don't dig in. And anybody who digs in, they they become a full like full fledged Bitcoiner. Like Michael Saylor says, there's no informed critiques. So I think it's sort of like, does the price going up lead adoption? Or does adoption lead price? And I think I think it's price leads adoption, because even if nobody else was to adopt Bitcoin, due to the increasing scarcity of the halvings, like every four years, the marginal cost of production is

• 17:29Speaker 02

  going to double. And even if it's just you, you, me and Will buying all the Bitcoin, it's going to force the price up because I want all the Bitcoin. You guys want all the Bitcoin. So the price will go up and then adoption is going to follow.

• 17:40Anthony Pompliano?

  Yeah, it is this thing where price ends up in the marketing department. You have a decentralized entity. How does price going down affect that? Does that push people out and kind of churn users? Or what have you all seen there with the relationship between user growth and like the actual downward price, given that the asset is volatile?

• 18:00Speaker 03

  I think what's interesting, I mean, you can go back. If you go back up to this entities net growth chart, not the cumulative sum, but the one before that, this will illustrate what you're talking about. And as you can see, like, obviously in bull markets, that's as Mitch alluded to, kind of the ultimate marketing campaign for BTC. And when the price is going up, it's the chart before this one, not the cumulative sum, just the raw value.

• 18:26Speaker 03

  As you can see, like in the bull market, you have more users coming on. But in the bear, that that number does decline, although the cumulative value does go up. And that's just because, you know, retail investors, new market participants kind of lose interest, lose conviction, and you get a supply concentration back to those who are highly convicted in the asset class. But, you know, I think over the long term, the trend is clear that you have a growing number of new users, although, you know, kind of based on Bitcoin cyclicality, the rate of which that that's increasing kind of kind of fluctuates a bit.

• 18:58Anthony Pompliano?

  Yeah. And then when you guys think about mining as a part of this, obviously hash rate has continued to increase coming out of the China ban. It's the strongest computer network in the world. There's some geopolitical kind of shifting that's going on. Some people are very receptive. Some people are more abrasive, but pretty much the trend is up and to the right when it comes to hash rate. Is that what you would expect user growth and hash rate to move in tandem? So if all of a sudden we saw hash rate drop, we would see users drop or vice versa, users drop, hash rate would drop? Or is it, you know, not as correlated as maybe people may think just looking at it?

• 19:36Speaker 03

  I think it's kind of like a chicken or the egg type of type of question of it. Yeah. Because, you know, I think I think the price going up draws in the incentive for new people to come on and mind BTC. You do tend to see kind of this lag where after the bull run, that's when, because there's a lag between when people order machines versus when they actually can get plugged in. So you tend to see this lag of hash rate coming on after the major price move. That's just kind of how it's done throughout Bitcoin's history. So I would say, I think they're all correlated as to your point, I think, you know, the price increasing is goes in tandem with with the adoption. Although, you know, I think it's difficult to assign a certain value of price per user.

• 20:19Speaker 03

  And this is something we had kind of flirted with doing and we're going to do a part two where we're kind of applying this information to a price model. We decided to just leave it with solely the the user data. And, you know, the issue with that is you can do like a very long term kind of mean. But, you know, you could have like a, you know, the Saudi prince could throw in a couple of yards tomorrow and that's going to increase the price. But it doesn't necessarily mean that there's more users coming on the network. But I do think overall, over a long term, kind of outlook that those two things are very much correlated. And then as the price increases, that draws in hash. So I would just say it's kind of like a, you know, does the chicken come before the egg type of type of question? And that, you know, I do think they're all they're all correlated, though.

• 21:03Speaker 03

  It's just hard to say, you know, which one, which one is causing the other when they're all kind of, you know,

• 21:10Speaker 03

  causation of of the other. So I think, you know, I think back to your question about like, kind of the catalyst. I think it's difficult to to say exactly like what the catalyst for BTC will be. I think there's a lot of kind of theorized catalyst for for that kind of main S curve of adoption. But I do think the trend is clear is that you've got this network effect that continues chucking along and growing exponentially. And then at some point, that's going to continue pressing up and up and up. And then at some point, you're going to have some type of event that just releases that valve up. And you're going to see that adoption just kind of reach escape velocity. I kind of think of every time. We have one of these cycles and A the price increasing as well as adoption, you know, increasing in tandem with that.

• 21:52Speaker 03

  You're kind of knocking on the ceiling and every time we come closer and closer to reaching that escape velocity. But you know, finally, eventually we're going to push through. And that's when we'll reach that kind of main S curve of adoption. Maybe that's something breaking down in. You know, the current fiat system or some type of geopolitical event that has people flock to BTC as a safe haven, which. We didn't see earlier this year, which was a bit unfortunate with kind of the Russia Ukraine situation. I think a lot of Bitcoiners would have liked to see. Bitcoin be be used as a geopolitical hedge more broadly, but. Uh, you know, I think, I think one of those type of events could could lead to that S curve, but I think kind of the high level takeaway is. You know, there's, there's a risk to owning BTC through volatility.

• 22:35Speaker 03

  Um, and you know, you can, you know, investing one on one is you just adjust for volatility with position sizing. If you're uncomfortable with Bitcoin's volatility, you just. Make it a smaller portion of your portfolio, but I also think there's a risk to not owning Bitcoin. Because I think when you look at this uh kind of adoption projection that we have. One of, one of the biggest takeaways that I would say is that whenever this does happen. Uh, it, it will happen quickly. Uh, it'll happen in likely a matter of kind of five or 10 years where you'll see that huge gap in, in, in increase and, and jump in adoption. And so. I would say, you know, get off zero and, and if anything, this kind of illustrates the, the fact that there's a risk to not owning Bitcoin in the same sense that there's a risk to owning Bitcoin. Uh, through volatility.

• 23:18Anthony Pompliano?

  Makes.

• 23:19Speaker 02

  To piggyback on that real quick, like as far as catalysts, it's, I, I would think it's definitely to be some kind of break in the fiat system. Or some, some event similar to Canada or Russia this past year. And the optimistic view is that something happens like that and people realize like Bitcoin is the only thing you can truly own that can't be diluted. And they flock to that, but then there's also the pessimist pessimistic view that when, when the fiat system breaks, they will. Roll out the central bank digital currencies and people will sort of flock to that instead of realizing like Bitcoin is, is the best option.

• 23:49Anthony Pompliano?

  So we've got some questions from the audience here and I'll just kind of rapid fire, shoot them at you guys and, and let me know what you think. Uh, somebody said, how can you classify a unique user as getting off the network? Would these just be dormant wallets or would it be wallets with zero Bitcoin in them?

• 24:03Speaker 03

  Yeah, um, so yeah, exactly. So there are wallets that have been zeroed out and that haven't been used in X amount of time. Um, it's, I don't know, the, the threshold for the amount of dormancy off the top of my head, it's in the report. But it, there's a certain time threshold for how long a wallet isn't active. And then paired with the fact that it's just zeroed out and then they say, okay, well, that, that, that entity has been deemed dormant.

• 24:26Anthony Pompliano?

  Got it. Uh, and somebody else said, won't billionaires or others, uh, conduct speculative attacks, uh, on Bitcoin and then try to buy Bitcoin at cheaper prices?

• 24:36Speaker 03

  I'm not selling them my Bitcoin, so that's not really going to work. And, uh, it doesn't like, they can do all the attacks they want. They can try and buy and sell and manipulate the market, but they can't change the protocol. They can't change 21 million. They can't change the difficulty adjustment. They can't change the halving. So they really, that, it's a moot point, in my opinion.

• 24:54Anthony Pompliano?

  Somebody said, any concern about miners losing profitability as time goes on? Patrick Ford asked that.

• 25:01Speaker 03

  Um, I mean, in the, in the short term, you are starting to see like miners margins get compressed a bit. And you are starting to see some selling, uh, both in the public market from some public miners, including like Riot. And then also in on-chain, we can see that some of the, the miners have been selling lately as their, their margins get compressed. But that's a pretty kind of typical, uh, Bitcoin bear market kind of dynamic that, that's played out. And you saw miners were kind of the capitulation bottom that was put in, in 2018. And I'm not necessarily saying that, uh, miners will be, be forming the bottom, but you are seeing that dynamic a bit, uh, playing out. You saw the hash ribbons cross recently, which kind of indicates that hash has been coming off a bit. Um, and this is when the 30-day moving average crosses below the, the 60-day moving average of hash.

• 25:46Speaker 03

  And then you've also started to see again, that, that minor net position change metric showing the, the net change, the 30-day change in, in those, uh, minor balances dropping a bit. Which perhaps indicates that, you know, their, their, uh, margins are getting compressed a bit and they're having to shave off some of their Bitcoin holdings to cover that.

• 26:03Anthony Pompliano?

  Max L. asked, "Nothing bad had to happen like increasing mistrust in government, etc., for cellphones with the internet to be useful. Is Bitcoin's accelerated adoption dependent on bad things happening?"

• 26:14Speaker 03

  I don't think so, and that's a very good point. And that's what I was kind of saying. Like, I think the adoption curve over time is kind of just this natural technological adoption curve, because Bitcoin is just an amazing technology. It's a kind of zero-to-one invention, in my opinion. So I think you just have this natural technological growth. But at the same time, it's built for bad events to happen, in that sense, in the framework that the question is said. So I would say, I think you have this natural network effect that chucks along, and then eventually, if we do have some type of event that could potentially be a catalyst, in that sense, it would send Bitcoin into that, you know, hypergrowth-esque curve phase. But I do think regardless, Bitcoin, just as a technology, will continue chucking along its exponential growth regardless.

• 26:56Anthony Pompliano?

  Somebody asked, "What price are y'all backing up the truck for Bitcoin?" Basically, how do you guys think about current price action, and are there certain things you're looking at there?

• 27:06Speaker 03

  Oh, man. I would say, check out our segment Pomp and I did the last two weeks. We talked about that a lot. I mean, look, I think, you know, kind of piggyback on a lot of things we've been saying, like Bitcoin is in the kind of the lower 10 to 15th percentile for all historical valuation metrics. I think this is a great time to dollar-cost average into Bitcoin heavily. Is it the Pico bottom? I don't know if you could necessarily say that, given, you know, some of these metrics aren't at these full reset levels that will reach kind of reset between 20 to 24K. But I think the question you have to ask yourself is, you know, over the long term, if you think Bitcoin's gonna, you know, do what we think it's gonna do, does it make a difference buying between, you know, 24K and, you know,

• 27:50Speaker 03

  25 to 30K? Perhaps the answer is no. I'm a bit greedy, and I try to strategically allocate, so I'm waiting for, you know, kind of getting below realized price and some of the other, you know, indicators that we talked about on the show. But I do think broadly, you know, if I'm talking to my parents, or whoever it may be, comes up to me on the street, you know, I would say, you know, it's, we're kind of in the, one of the lowest regimes of valuation for BTC in its history. And with that, you should be allocating more heavily in your dollar-cost averaging strategy, if that's what you're looking to do.

• 28:21Anthony Pompliano?

  Makes sense. Somebody said inflation is just transitory is the name on YouTube said, will Bitcoin de-peg from the dollar and it will look for daily users. Basically, at some point, will we not price Bitcoin in dollars and people will just talk about it in terms of satoshis or Bitcoin? Or do you think there will always be a dollar exchange price attached to it?

• 28:39Speaker 02

  As long as the dollar exists, there probably will be some kind of exchange. But I think more people are going to shift to pricing things in satoshis. I know I already do. I know you already do, Pom. Well, I'm assuming you do. I think as more people realize that Bitcoin is the ultimate asset, they're going to start viewing like charts like real estate and equities in Bitcoin. And perhaps there's still will be an exchange rate to the dollar if the dollar's around. But most people will use Bitcoin as their measuring stick because it can't move. One Bitcoin's always one Bitcoin.

• 29:07Speaker 03

  And also, like, if you're not consciously looking at something and saying this is X value of sats, you're also kind of subconsciously doing it just by realizing there's like opportunity costs. If you're saying, hey, maybe I'm going to hold back on buying this because I'd rather buy Bitcoin, although you're not necessarily saying like this is worth X number of satoshis, subconsciously, you're saying that you think Bitcoin is more valuable than that. Therefore, you're like kind of indirectly, you know, pricing things in BTC. But I think as Mitch alluded to, as more people do that, you know, it'll kind of become this organic thing that people price things in BTC. I think we're very far from not pricing things in dollars, including Bitcoin. Ultimately, as Bitcoiners say, you know, one BTC is one BTC.

• 29:49Anthony Pompliano?

  Lisa Cantares says, "A quick question for Will or Mitch, non-technical question. But how do you continue to help those around you understand the importance of Bitcoin? Most of my peers and even my kids think I am crazy for talking about Bitcoin."

• 30:02Speaker 02

  I wish I had the answer to that question. I try really hard myself. I mean, the best you can do is just sort of like hammer them, I suppose. But like, at some point, you just got to back off because like people, they're going to go to it on their own if they're curious. Like, I think at this point, it's so, it's viewed as such a risky asset for some reason. And it takes a certain level of intellectual curiosity to dig in. Like, in my opinion, it only takes two, three hours of research to fall down the rabbit hole. And once you do, like, there's no going back. Like, once you realize the technical aspects of Bitcoin. I think something that's a really good resource is Safedeen's, the fiat standard, comparing the fiat system to as if it were like a shitcoin.

• 30:45Speaker 02

  I think that's a really good analogy, just pointing at how broken the traditional fiat system is, is in my opinion, the best way to get people to see Bitcoin is the answer.

• 30:54Speaker 03

  I think that's right. I think, you know, looking at what the problem is versus the solution, I think as Bitcoiners oftentimes you come up to somebody at a party or whatever and you're like, hey, look, Bitcoin is the greatest thing ever. It's scarce, it's decentralized, whatever. People are like, okay, that's awesome, but like, why do I need this, right? And so like, I think it's more important to orange for people to focus on the problem versus the solution because they're not going to understand the problem that the solution is solving if you don't do that. And look, I think at the end of the day, you can only do what you can do, right? And I think like, some Bitcoiners feel this sense of like, you know, they're like Noah trying to get people on Noah's Ark, but you know, at the same time, it's like, people are going to buy into BTC at the price that they deserve. And although

• 31:38Speaker 03

  you should help everybody around you, I think to some extent, like you can only do what you could do. You don't want to, you don't want to annoy everybody in your circle, right? I think you kind of, you kind of gently shill to not overwhelm people. I think if you start just like, you know, going overboard, just like talking their head off, they're going to be like, okay, well, like this is like overwhelming and I just, you know, dude, like leave me alone. I think you want to, I think you want to like gently kind of just, you know, talk through it a bit, explain, explain the, the problem instead of the solution. And then kind of let them like come to the, the conclusion on, on their own as you kind of gently, gently shill.

• 32:15Anthony Pompliano?

  So the last question comes from AWOK, says, any concerns on the centralization of miners to larger public entities or too much of hash being in the United States?

• 32:24Speaker 03

  Sure. I mean, I think that that's a valid long-term concern in terms of hash coming to the United States. I, you know, I don't think in the same way that people were worried about China. I think the US from like, you know, although I don't agree with like all the ESG FUD, but I do think like the US amongst other, you know, other regions around the world are going to practice higher kind of integrity around energy. Energy usage and just regulation in general. And so I think you'll have much more transparency on that side. So I think that's a good thing. But long term, of course, we do want to see hash rate get, you know, decentralized across the world. We don't want to see the majority come to the United States, even though at Blockware, we do personally see that as the best place to mine Bitcoin.

• 33:05Speaker 03

  But you know, over the long term, I think you'll, you'll see, you know, uh, natural incentives come up from, from nations that adopt Bitcoin, including El Salvador as kind of one of the first dominos. And, and with that, you'll start to see hash migrate to those places as well, especially some of those, those, those countries that have cheaper energy.

• 33:23Speaker 02

  And to add on to that, that's, this is why America is a really great place because we have 50 different states. If New York wants to shoot themselves in the foot and allow Bitcoin mining, okay, Texas, Tennessee, Kentucky, Pennsylvania, they're gonna be like, all right, come here, like, we want that business, we want that capital. So 50 different states that, like you saw with legalized marijuana, like some people just say, or some states just say no to that, the federal government, they do what they want to do. And I think that's a really great thing. As long as the states have sovereignty. I don't think we have to worry about over centralizing in the United States. But of course, like, mine Bitcoin globally, that, that's the best option, of course, but uh, United States is a great place just because the political stability and, and the power.

• 34:01Anthony Pompliano?

  Yeah, it's, um, it's crazy that we're, uh, that we're living through this. It could be, uh, you know, one, once in a millennium type, uh, situations. So I appreciate you two, uh, doing so much great work on this. Uh, the report, uh, looks awesome. I'm gonna dig into it this afternoon. Where can we send people to follow you both on the internet and also to download the reports so they can read it for themselves?

• 34:22Speaker 03

  Matt, you wanna go first?

• 34:23Speaker 02

  Uh, yeah, you could follow me on Twitter at Mitchell Hodl, H O D L. But also follow the Blockware team account, at Blockware Team. That's where, uh, the best Bitcoin one liners come from. And, uh, the report, I believe, i- it was emailed out with the, the newsletter. So if you subscribe to the newsletter, you can, uh, get the report.

• 34:41Speaker 03

  Well, yeah, sure. Thank, yeah, thanks so much for having us on, Pom. This is awesome.

• 34:45Anthony Pompliano?

  Thank you for sure.

• 34:45Speaker 03

  And helping us kind of get a, you know, a little, little PR boost after, after releasing it this morning. So, uh, you know, it's a, it's a pleasure talking to you as always. If anyone wants to see the report, tweeted it out about an hour ago. You can also go to, uh, blockwareintelligence.com and find the report there, whether you're subscribed to the newsletter or not. But of course I'm going to say to subscribe, but if you don't feel like, you know, subscribing, you could still check out the, uh, the newsletter through, through the website link, but.

• 35:10Anthony Pompliano?

  I, uh, I appreciate it. Everyone, please go subscribe, go follow these two, uh, moist, going from the YouTube comments to now Mitch at Blockware, man. I'm, I'm so proud of you. I'm so proud of you. This is awesome.

• 35:24Speaker 02

  Couldn't have done it without you, Pom. Thank you.

• 35:26Anthony Pompliano?

  Well, I, I mean, I just bullshit on the internet, so I don't know if I can take it very.

• 35:29Speaker 02

  You bet. Your course, you know, that's, that's how I found out about the job and, uh, it, it worked out. It worked out.

• 35:33Anthony Pompliano?

  It's perfect. So, all right, fellas. I appreciate both of you. We'll definitely do this again in the future. Uh, and until then, enjoy it and let's see what, uh, let's see what happens over the next couple of weeks.

• 35:43Speaker 03

  Thanks so much, man. I'll see you next week.

• 35:45Anthony Pompliano?

  All right. Later, guys.

• 35:45Speaker 02

  See ya.

• 35:46Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.