Bitcoin’s Most Explosive Phase Starts Now | Anthony & John Pompliano

Anthony Pompliano and John Pompliano discuss what is going on with bitcoin, what we think will happen the rest of this year, why everyone was wrong about tariffs, is the ethereum rally legit or not, metrics to keep an eye on, current investing trends, and why bonds are more risky than bitcoin.========================Markets are at all-time highs. Public equities are outperforming. And individual investors are driving it all. It’s officially the rise of the retail investor. On September 12th in NYC, I’m hosting the Independent Investor Summit — a one-day event built exclusively for self-directed investors. We’re bringing together some of the smartest public market investors I know for a full day of macro insights, market predictions, one-on-one fireside chats, and actionable investment ideas from each investor. This is going to be an absolute banger event. Join us if you like markets and think retail is two steps ahead of Wall Street. TICKETS: https://www.independentinvestor.co/ (use promo code POMPYT25)========================Check out my NEW show for daily bite-sized breakdowns of the biggest stories in finance, technology, and politics: http://pompdesk.com/========================Listen to The Pomp Podcast on the audio platform of your choice: http://pomppodcast.com ========================Pomp writes a daily letter to over 270,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at: https://pomp.substack.com/========================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/========================Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join.========================Core is the leading Bitcoin scaling solution, enabling you to lock in yield by locking up your Bitcoin. Simply lock it on the Bitcoin blockchain to secure the Core network, and get rewards. No bridging. No lending. Just holding. Still your keys. Still your coins. Now your yield. Start at https://stake.coredao.org/pomp========================0:00 – Intro1:33 – Bitcoin sitting around $120k and going higher10:46 – Data points to keep an eye on24:28 – The narrative around ethereum34:22 – How to think through the market and investing45:45 – Why treasuries are more risky than bitcoin

• 0:01Speaker 00

  Into the wild, the Caltea Panther encounters a shimmering crocodile, a lonely lovebird, a breathless zebra, and a restless tiger.

• 0:16Speaker 01

  Your vehicle doesn't just get you from here to there. It's a bridge to the people and places that matter most. It's how you show up for your family, your community, and everyone else that depends on you. That's why for 125 years, Firestone has been building tires with one thing in mind, to deliver products that are as reliable as you are. Firestone, always dependable, since 1900.

• 0:48Speaker 02

  What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode.

• 1:16Speaker 03

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

• 1:39Speaker 02

  What's going on, guys? Today, we've got a great episode with John Pompliano. In this conversation, I explain what's going on with Bitcoin, what I think will happen the rest of this year, and why I think Bitcoin is going to go up, down, and then back up again. On top of that, I also talked through some of the metrics that I'm looking at to see whether Bitcoin is going to actually have a top and the four-year cycles will continue, or are we just going to continue to see this grind up? And then, lastly, John and I finish up by talking about how I'm thinking about investing, what's in my portfolio, and what are the things that I expect to happen in the future that will impact the way people allocate their capital? All this and more in this great conversation, tons of things I haven't talked about publicly before, so please watch till the end and let us know what you think. Here's my latest conversation with John Pompliano. All right, John, was first topic.

• 2:19Speaker 04

  All right, Bitcoin's price, we're sitting around 120,000, give or take a few thousand. Where do we go from here? What's going on?

• 2:26Speaker 02

  Higher, higher, much higher, much, much, much higher. You know why higher?

• 2:30Speaker 04

  Why?

• 2:30Speaker 02

  Because every single thing that people continue to say is working against Bitcoin, it'll pass with time. Let me give you a couple of examples. First, inflation's been lower because tariffs are deflationary, not inflationary. People are now starting to realize that. Remember when they were telling us the recession, the Great Depression, the empty shelves, the world was going to end, people would stop trading with the United States, consumers were going to be all broke, all that nonsense. Throw it out the door, wrong. So now enthusiasm has come back in the market. We're back at all time highs of stocks, Bitcoin, gold, etc. Now, I do believe we are going to see higher levels of inflation, but it's not because of tariffs.

• 3:12Speaker 02

  So if you go and you look, I recently saw our friends over at Wasteland Capital, what an incredible name. They did an analysis. All the things that are driving inflation don't have tariffs associated with them. For example, shelter. Nobody is tariffing your house. Used cars. No one is tariffing your used car. So you go through these things, that's what's driving inflation. The things that are being tariffed are actually going down in price as predicted. If you remember a couple of months ago, when I went through steel, solar panels, washing machines, 2018 tariffs, I told you the prices are going down on these things, not up. I mean, I'm not going to say it, but you could say he told you so. And so if you look at that-

• 3:57Speaker 04

  He wants me to say he told you so.

• 3:58Speaker 02

  No, it's just true. Because you know why? I got a lot of heat for that at the time, right? People were really saying how stupid I was. And yeah, I mean, still, some people think I'm stupid. Some people watch this video, think I'm stupid, that's fine. But- I told you what was gonna happen. The only reason I wrote February 3rd, I went back and I read it this morning. On February 3rd, I wrote an entire piece. And what did I say in it? I said, I used to think that tariffs were inflationary. That's what I was taught in economics class. That's what every single investor I'd ever talked to had told me. That's what the mainstream media had told me, all this stuff. And when they started talking about tariffs, I went and I said, let me go read the source material for myself. Let me go check it out. Let me go see what happened 2018. And I was surprised. And when I got that new information, I changed my mind.

• 4:42Speaker 02

  And that's why it came out so vehemently and said the tariffs are gonna be deflationary, not inflationary. Now, what does that do with Bitcoin? Once people realized the tariffs aren't this big boogeyman that they thought it was gonna be, people started to pile their capital back into the market. And so now you see stocks up, Bitcoin up, gold up, et cetera. Now, people will yell and scream like, oh, he didn't do 150% tariff against China. Oh, he didn't do a 57% tariff, whatever. There's still very large shifts. There's a 10% blanket tariff on all US imports. That is a real tariff. Look at the tariff revenue, we're breaking tariff revenue records every month. And so I think that the thing that now is gonna happen with Bitcoin is everyone's starting to say, wait a second here. There's a lot of manipulation going on in the traditional financial system. And so I need to find something that is going to actually perform.

• 5:27Speaker 02

  That's why I see Bitcoin and gold both going up. Now, why do I say that inflation is going to come? It's not because of the tariffs. We are going to get higher degrees of inflation over the next, call it six to nine months, because they are going to print money. They're going to cut interest rates, they're gonna print money. Now, you can make the argument that we do need that, right? Why? Trueflation, the alternative real-time inflation metric, shows that we are currently sitting at 1.8% as of today. Now, why is 1.8% important? Well, it was at 3% in December. So if you zoom out just six months, all the noise, all the chaos, all the doomsday predictions, all the nonsense, we went from 3% inflation down to 1.8%. If we're at 1.8% and unemployment is just over 4%.

• 6:11Speaker 02

  That tells the Fed, "Cut rates." Guess what's gonna happen? They're gonna cut rates later this year. The market's pricing in up to three rate cuts. They start to cut rates. They don't know how to cut rates without printing money. They're gonna start printing money. And so if you get rate cuts plus printing of money, guess what happens? You're going to see inflation start to tick up. Now, I don't think that inflation's gonna go to 5% or 6%, like all these people are predicting. I think inflation may go from the 1.8% that is the real-time metric today, to maybe goes like 2.2, 2.3. Doesn't sound like that much, but it starts to be 20% to 30% increase from where we are today. So what should that do? Asset prices are going to go up. You're going to see Bitcoin, gold, stocks, everything continue higher in the second half of this year. Now, why else is Bitcoin going up? A lot of people are buying it.

• 6:56Speaker 02

  And you're now starting to see the ETFs. You're seeing these treasury companies. And you're also now starting to see a bunch of other types of funds. One of the most interesting ones are these real estate Bitcoin funds. So you have Newmark that's come out and said that they're going to have real estate plus Bitcoin. They've got a unique way to think of the Bitcoin as collateral, as part of the loans. You've got people like Grant Cardone who are coming out and they have real estate funds that are taking some of the money and they're putting it in Bitcoin. So you're starting to see Bitcoin getting stuffed into every corner of the financial system. And they want to figure out, "How do we take this asset that brings new users, new clients, new assets, new revenue, and put it into our traditional products?" The last thing I will say is that a lot of the money that has gone into these Bitcoin treasury companies,

• 7:41Speaker 02

  most of them, the capital has been contingent on closing, which means that people have said, "I will give you 100, 500, 700 million dollars." But they have not actually given it to the company yet. So if you go and you take a look at a bunch of these companies, for the most part, the funding is contingent on closing. Guess what's gonna happen in the next 60 days? People are gonna start closing. Today, reportedly, the Nakamoto deal's gonna close. They're gonna get access to their capital. What do you think they're gonna do? David Bailey's out there tweeting, saying he's gonna go buy a lot of Bitcoin, right? What do you think's gonna happen in these other deals? So there's a lot of buying demand that is coming. On top of that, what you are going to start to see is that the people who did buy Bitcoin and they were using- Using certain capital, a lot of that capital was hedged, meaning people are going long the

• 8:25Speaker 02

  stock and they were short spot Bitcoin and they were trying to lock in the premium exposure. As those things get taken off, those hedges, you are going to see Bitcoin continue to rise in value. And so my prediction is the following, that we are going to see from our 120 ish thousand mark today, we're going to run in to the end of Q3, September. Why is September? When we get close to the end of September, you're going to have the options expirations all start to happen. There, there will be some volatility and likely potential downside pressure. Once we get, I don't know, seven to 10 days past that period, I could easily see mid-October, up only, baby, Q4,

• 9:10Speaker 02

  into November and maybe December, and here we go. So what you're going to see here is you are going to see the real start of what I would consider the second half of the bull market. It's going to start sometime either at the set to last two weeks of August, or the first two weeks of September, sometime in that four-week period. You're going to see a run-up into the options expiration. You're going to see some relief that happens around the end of September, early October, and then you're going to see a much higher leg up in second half of October, November, and maybe even into December. And then where we go from there, I think, is a very interesting conversation, because I could see two different arguments. I could see, hey, four-year cycles don't go away. There will be these drawdowns. It will be less volatile, meaning that you're not

• 9:52Speaker 02

  going to get an 85% drawdown. Maybe you get something more like a 50% drawdown in the bear market. But I also could see an argument where you are going to actually watch Bitcoin continue to kind of grow at this 45-degree angle, which has been happening since the ETFs got approved. And if that is true, that means that we now have broken the four-year cycles. We have this persistent bid, and you should see Bitcoin continue to kind of grow in value. Now, the reason why I say either or, I don't have a strong opinion about that yet. I think we need to see more data to understand how parabolic is the move in the second half of 2025. If we get a

• 10:31Speaker 02

  Kind of explosive growth and it looks more like a parabolic move. Then I would expect at some point us to get overvalued, overhyped, right? There's too much frothiness and then you'll get somewhat of a larger correction. Because you need to get rid of that frothiness. If we continue this kind of grind up, which is kind of crazy. If you think we were at $70,000 on November 1st last year. So we've ground from 70,000 to 120,000, $50,000 per Bitcoin increase in price. In less than a year. So if we continue this grind up, then you never get the frothiness. You never get the, you know, exuberance and enthusiasm that then would create the scenario and environment. To then get a big correction. So I don't know, it's like, what's, uh, which way, Western man?

• 11:16Speaker 02

  I don't know which way yet until I see what happens in the second half this year. But the faster and higher we go up, the more that I think we'll have the four year cycle and we'll get the correction. If we do not see that and we just continue to grind up. Valala, I think is what they call that.

• 11:32Speaker 04

  A lot to unpack there. How much do you weight the different indicators, right? So M2 money supply is obviously something people track. Rate cuts are another thing, something people track. Inflation is another thing like, how much do you weight these different indicators of like? If they never cut rates, but they end up printing money, right? What does that look like and like, which is more important for Bitcoin?

• 11:50Speaker 02

  Part of the reason that people got the tariffs wrong is because they were looking at it in a silo. The academic view of a tariff is if you increase the amount that it is for someone to bring their product into the US. Then the person in the US who is selling that product is going to increase their price, which then will create inflation. But as people now are learning, you can't evaluate a single policy in a silo. There's the world, it's a complex economic machine. So for example, if you went back and you looked at the China tariffs, what you saw was actually there was only a 4% increase. In the price of Chinese goods in America back in 2018. Why was that? The tariff was like 25% or something, right? Well, what happened?

• 12:34Speaker 02

  All these different people along the supply chain ate a piece of the tariffs. The end consumer was only 4%. So the second you realize. That you say, oh, this isn't an academic exercise. This is a real world analysis. And so the same thing then starts to say, well, what if consumers shift their behavior? What happens if interest rates are moving at the same time? What happens if they're printing money? What happens if there is some sort of technology advancement that actually brings down the cost of the product? Even though there is a tariff, let's say TV prices are crashing, but there's a tariff in place. What if the demand for solar panels is so exponential? That people aren't going to stop buying the solar panels regardless of what the tariff is. And then all of a sudden, the next president comes in and he changes the tariff on Chinese made solar panels from 25% to 50%, right? It's a big, complex economic machine. So go to Bitcoin.

• 13:20Speaker 02

  There's not one single indicator. You can't just look at money supply. You can't just look at interest rates. You can't just look at, uh, let's say a hash rate. You can't just look at OTC or exchange, uh, you know, number of Bitcoin available. You can't just look at social enthusiasm and like the, the social chatter. All of these things are data points and part of what makes it difficult to be an investor in a very dynamic world like Bitcoin is if you are going to try to choose when to buy or sell, then you are going to have to constantly take in all these data points, synthesize them and make decisions. It's very, very difficult. That is why the people in Bitcoin who have simply dollar cost averaged into the asset and said, I'm never selling, have done the best because they're just complete. It doesn't matter what the data says.

• 14:03Speaker 02

  I'm going to keep buying this thing. And as long as it goes up over the long period of time, I'm going to be okay. So if you say to me though, what are some of the data points that I think are most interesting to pay attention to? Maybe the data points that I would put more weight on, given their historical relevance. M2 money supply is obviously very important. Sam Callahan and Lynn Alden did a fantastic study. I think it's probably a year or two ago where they went and they looked at the sensitivity of all of these different assets to global money supply growth. And what they found was Bitcoin was the most sensitive. So when, uh, global money supply grows, a lot of assets go up. Bitcoin, gold, stocks, real estate, et cetera. But Bitcoin goes up the most. It's the most sensitive to that growth. I don't think that that has changed. And so if money supply continues to grow as it has been,

• 14:46Speaker 02

  I'd expect Bitcoin to follow that. Now, is it a perfect? You can pinpoint where it's going to go from a price standpoint. Maybe somebody can. I can't do that. I just look at direction. The second data point that a lot of people don't usually talk about, which I think is pretty important. If I remember it correctly, it is, um, the 200 week moving average.

• 15:07Speaker 02

  crosses the previous all time high. So the previous all time high was $69,000, right? In the last, in the 2021 cycle, the 200 week moving average has been moving up, up, up. Last time I looked, it was somewhere around like $55,000. So in past cycles, a great top signal has been whenever that 200 week moving average crosses, what would be $69,000. Now, again, it goes back to, that doesn't mean it's going to work this time. Doesn't mean there's gonna be a top. It may just grind up all the stuff. But I think that's a very interesting data point. I don't hear a lot of people talking about. Another data point that I usually like to take a look at is I actually put a lot of weight on the social

• 15:52Speaker 02

  conversation. When you start to see people who historically have been bearish capitulating. So the second that I see people who have been like anti Bitcoin, or maybe even like cautious, and all of a sudden they flip to exuberance, I get very nervous. And historically, I've not sold in those times, but I've started to maybe, hey, in general, I should slow down investing. You know, people forget, and you can go look this up online. I published it publicly. November of 2021, I wrote a letter to all of the LPs of their capital. I was managing an adventure capital fund at the time. And I said, I'm returning all the uninvested capital. November 2021, top of the market, right? I mean, I couldn't have nailed it to the month. I didn't sell

• 16:36Speaker 02

  anything. Dump me, right? I'm not the smartest guy in the world, right? So I don't really get credit for feeling like this is crazy, right? But I started to realize this is really hard to deploy capital in this environment and make a lot of money, right? Now, in hindsight, if I was smart, I would have also sold a bunch, whatever I could have sold, right? Because it was top of the market and you could have bought back lower. So I think that what you're looking for is, again, a couple of data points. And with Bitcoin specifically, global money supply, and then this 200 week moving average that crosses over the previous all time high, I think are two like pretty important data points. And then the third one, and maybe one that I don't

• 17:17Speaker 02

  think people always appreciate as much, is not only is the social chatter important, but also find smart people. And talk to them. And guess what usually happens? You will see a lot of smart people start to say, I think that we are overvalued. I think we're in bad shape, right? Now, you got to be careful because the stock market right now, 3.15x valuation multiple. Okay. That's the highest in history. There's a lot of people saying the stock market is overvalued. This is the worst overvaluation we've ever seen, blah, blah, blah, whatever. Well, we've also never seen companies like Facebook that are printing billions of dollars.

• 18:00Speaker 02

  We've never seen companies like Palantir that are saying, we are actually going to produce more revenue and profits with less employees. We're going to go try to fire 400 or 800 of our employees, right? The AI story, the technology story is making everything more efficient. So naturally, they should get a higher multiple or a higher valuation. Bitcoin is a little bit different. Bitcoin does not have some huge tailwind because AI is now going to be like on the blockchain or something, right? There's a lot of tailwinds that are external to Bitcoin that make Bitcoin more attractive. But I think that what you have to start to really look at is say to yourself, okay, if a lot of the smart people in Bitcoin are starting to say, this is, this is getting crazy now.

• 18:43Speaker 02

  One of two things is true, either they're right or I tend to think that revolutions don't happen overnight in financial assets. I tend to think that they are kind of this grind up. And I think what you're seeing now is that, uh, that's pretty much exactly what, uh, what's been happening is Bitcoin has just constantly got this bid and you see it, 401ks, those are coming, eight, nine trillion dollars now are going to be able to be put in Bitcoin. You obviously have the ETFs. You're going to have billions of dollars coming in from Bitcoin treasury companies. I expect full well that the Harvard endowment, which bought over a hundred million dollars of ETF exposure, a lot of various endowments, hospital systems, insurance companies,

• 19:26Speaker 02

  you know, private foundations, they're all saying to themselves, well, wait a second. I don't need to invest in these crypto funds anymore. I can just go buy spot myself, right? Maybe we should make it a 2% allocation in our portfolio. All of this is persistent bids on the asset. And so I think that is where you start to really just pay attention and say, you know, the, these are the data points that are driving me to say Bitcoin is going higher over the next, you know, five months or so.

• 19:51Speaker 04

  Yeah. One of the things that you mentioned that I've always found fascinating about Bitcoin specifically is it's one of the first technologies in my time that I've seen so many people that are considered smart, right? Have different views on an asset class, right? Gold is normally like, everyone knows what gold is. Everyone knows it will probably go up over time. It's sound money, whatever. But Bitcoin has so many people on both sides of the fence and we're still kind of playing this game to figure it out. One of the things I want to talk about is that zero of 30 bull market indicators have been hit, but it seems like we're in a bull market. It feels like we're in a bull market, both on a technical basis and then also like a vibe basis.

• 20:28Speaker 02

  Zero of 30 bull market top indicators has been hit. So yes, we are in a bull market, which is what you feel, what you see, the price, you know, the enthusiasm, all that stuff. But those top indicators, none of them have been hit yet. Now, how much credit do you give each one? What's the importance? People are going to all have different things they want to look at. I told you, you know, what I like to look at. But I don't think you got to hit all 30 of them, right? But if all of a sudden you had 10 or 15 of them, that's a little bit, you're closer to the top than you were before, right? And so I think that, you know, it's just this very interesting market change where, I mean, look, Bitcoin is at $120,000. I don't see, outside of financial

• 21:12Speaker 02

  television, I don't see the mainstream media talking about Bitcoin. You know, we've seen CBS News recently did a piece on like the Bitcoin conference. We've seen, you know, every now and then there's kind of a story. It's more of like a human interest type story, whatever. But you don't see the like frothiness, right? You don't have people from high school texting you being like,

• 21:36Speaker 04

  Your barber asking you,

• 21:37Speaker 02

  Yo, you got some of them coins, right? Like, you know, if you think back to 2021, I told a story before, right? I was at dinner with a very well-known investor. I got in the car in December of 2021 and Plano was with me.

• 21:52Speaker 02

  Today's episode is brought to you by Simple Mining. Have you ever been interested in mining Bitcoin? As a miner myself, I've been using Simple Mining for the past few months, and the experience has been nothing short of seamless. I mine with the pool of my choice and the Bitcoin is sent directly to my wallet. Simple Mining, which is based in Cedar Falls, Iowa, offers a premium white glove service designed for everyone, from individual enthusiasts to large-scale miners. They've been in business for four years and currently operate more than 20,000 Bitcoin miners, including mine. Their electricity is over 65% renewable thanks to the abundance of wind energy. Not only do they simplify mining with their top-notch hosting and onsite repair services, but they also help you benefit financially by running your operations as a business. This approach offers 100% bonus depreciation to optimize the profitability of your investment.

• 22:37Speaker 02

  Do you ever worry about the completion of maintaining your mining equipment? They've got you covered there, too. For the first 12 months, all repairs are included at no extra cost. If you experience any downtime, they'll credit you for it as well. And if your miners aren't profitable at the amount, simply pause them with no penalties. When you're ready to upgrade or adjust your setup, their exclusive marketplace provides a seamless way to resell your equipment. Join me and many satisfied miners who have simplified their Bitcoin mining journey. You can even get started today with a seven-day miner trial. Visit simplemining.io/pomp to get started today. That's simplemining.io/pomp to get started today. With Simple Mining, they make it simple. Today's episode is brought to you by Zappos Bank, where eligible members can unlock the power of Bitcoin without selling it.

• 23:23Speaker 02

  Need cash fast? With Zappos Bank's Bitcoin-backed loans, you can access 40% of your Bitcoin's value, borrowing as much as $1 million for a full year with low interest rates, zero fees, and no early repayment fees either. Now, here's the best part. You keep your Bitcoin, meaning you get to watch your holdings grow as the price of Bitcoin increases. Whether you're looking to buy a house, fund your child's education, or seize an exciting investment opportunity, these loans give you the flexibility to access cash without selling your Bitcoin. Unlike traditional loans, Zappos Bank's Bitcoin-backed loans have no minimum repayments, no early repayment penalties, and the flexibility to settle your loan in USD or Bitcoin whenever it suits you. It's liquidity entirely on your terms. Zapoo understands the unique needs of Bitcoin holders. That's why they have developed a product designed specifically for you.

• 24:08Speaker 02

  With over a decade of experience in the Bitcoin space, Zapoo Bank has been a trusted partner for those looking to make the most of their Bitcoin while keeping it safe. Your Bitcoin stays safe in your vault, untouched, never lent out, and secured in a global network of military-grade bunkers with cutting-edge security technology. Head to zapobank.com/pomp to learn more. That's X A P O B A N K dot com forward slash pomp. Go check them out at zapobank.com/pomp today. And the Uber driver got to a stop sign or a red light, and he switched from the Uber app to what I eventually realized was Robinhood. And I asked him, I was like, oh, you like do investing? It was like 11 o'clock at night, right? And he goes, yeah, yeah, yeah, I started getting into investing recently.

• 24:52Speaker 02

  I said, oh, cool, what do you invest in? He was like, right now, I'm looking at Dogecoin. And I was just being like, got it. Like, the Uber driver is, you know, putting some money into what are kind of further out on the risk curve. And again, it's just like that stuff will, will happen as we get deeper and deeper into the bull market. Now, one thing we could talk about, which I don't know if it's on your list of things to discuss or not, you know, talk about Ethereum? Yeah, let's do it. A lot of people, very bullish on Ethereum, right? Before all the Ethereum folks come after me and try to put my head on a stake. Be careful, Bitcoin folks are probably coming after you, too. I, that's fine, I'd sit in the middle. I started out mining Ethereum, Ether.

• 25:37Speaker 02

  I think I was mining somewhere in the like $6 to $8 range. It's like $4,000 now, like that would have been a lot of money. I was dumb, I sold most of it, or all of it at the time, at $150 or some crazy number. And then eventually, you know, tried to like make up for my mistakes, all stuff. But.

• 25:59Speaker 02

  I think that there is this narrative that Wall Street is going to put on an asset, which will lead to some flows. But there's one thing that Wall Street has historically shown that they do not understand, which is the disruption via innovation of technology. And I think that's what we're watching play out here. So I publicly have come out and said that I believe in December of 2023, I sold Ethereum that I had and I bought Solana. I'm probably not going to be holding Solana 10 years from now, right? Probably not even two years from now.

• 26:38Speaker 02

  But from a pure, short-term speculative trade, I said Solana is going to go up more than Ethereum will. That has played out, right? But I understand where the narrative is coming from. The reason why I understand where the narrative is coming from is because Wall Street is driven by narratives. But narratives can disappear as fast as they appear. And I think what you are going to watch here is you are going to see an assault on the Ethereum narrative over the next three to six months, where a lot of the things that they've been hanging their hat on are going to look very, very wrong. So I saw recently, somebody went on television in the Ether community and they said that Ethereum

• 27:23Speaker 02

  could be bigger than Bitcoin. Stop. The flippanting. Stop, stop it. I think that Ethereum over the last year is still down like 20% against Bitcoin, right? It has crashed against Bitcoin over the last, you know, five years or whatever. The Bitcoin rate of return of most altcoins is negative. Now, that doesn't mean people can't make money today, right? There's a lot of people who are going to go buy this. There's yield. There's all these stories to it. I think that what we are going to find out, though, is specifically in the public markets.

• 28:02Speaker 02

  If you are going to use an asset as a reserve asset,

• 28:07Speaker 02

  you want something that is built to store value. That is not the role of most of the altcoins.

• 28:15Speaker 02

  They are more technology platforms. They are, you're trying to do other things. It's not good or bad, just is what it is. If you want to put all this like morality and tribalism and all this like, it's technology, right? And you may agree with it, you may not agree with it, you may want in your portfolio, you may not want in your portfolio, whatever. I don't blame any of these people. I know people who have made an absolute killing holding Ethereum. I know people who are like, I lost a ton of money, I'm an idiot, and they went and they did something else, right? Like everything in between. But I do think that people are drastically underestimating Bitcoin's potential to serve as a global reserve asset, which means that if it is valued at $2.3 trillion today, it's going to be worth a lot more than that in the future.

• 28:59Speaker 02

  Simultaneous to that, I think that they are overestimating this whole like world computer, blah, blah, blah, whatever. And what I think you're going to start to see is general purpose is not going to be a thing. Because what you're going to start is if you tried to build a general purpose blockchain, you want people to use it for all these different reasons. There will always be someone who can show up and build something specific for a use case that will likely serve that customer base better, right? If you think about marketplaces in the traditional world, forget crypto for a second.

• 29:41Speaker 02

  Name one general purpose marketplace.

• 29:45Speaker 02

  People might say maybe Amazon, right? Or whatever. Well, I would argue that Amazon actually is not a general purpose marketplace. Amazon sells a lot of stuff, but there's a lot of stuff it doesn't sell, right? How many people are buying sports cards on Amazon? How many people are buying antiques on Amazon? How many people are buying cars on Amazon? How many people, right? We can just go through, oh, there's a lot of products that aren't sold there. Now, they do sell a lot, but what do they specialize in? Usually, things that are lower value, things that if you press a button, you want them to show up quickly, right? Things that if you have a logistical network that is efficient and kind of very adept at being able to get to you.

• 30:29Speaker 02

  Amazon is really, really helpful, right? There's a price component to all these different things. But why is it that eBay exists? Well, that's a different type of marketplace, specialization, right? Why is it that maybe, let's say, a marketplace where you can go and buy cars? Or even Craigslist, right? Now there's a geography specialization. Like, there's all these different things that people, you know, they look at and they're like, oh, general purpose. Usually, general purpose does not work. And so Marketplace, one example, you look at payment systems, all this stuff. So what I think you're going to start to see here is that you're going to see people start to pick away at these narratives. Bitcoin ultimately is the single best store of value available in the market, in my personal opinion.

• 31:14Speaker 02

  Could it become a currency one day? Maybe, right? But right now, it's a great store of value. Bitcoin rate of return, right? If you denominate your investment portfolio in Bitcoin, it is very difficult to beat Bitcoin. Some people can do it, but that is Bitcoin's, you know, narrative. That is why Bitcoin is very successful. It's got a very clean, clear, concise story.

• 31:35Speaker 02

  If you look at right now, what some of the enthusiasm around, let's say Ethereum is, and some of the other altcoins, but Ethereum in particular. Stablecoins.

• 31:44Speaker 02

  Tether. A lot of activities happening on Tron. I don't see a lot of people being like, let's go buy Tron because it's really, you know, Tether's really popular there. So why would you then go buy Ethereum? Because stablecoins are supposedly going to be popular there, right? The thesis should apply in both cases, right? But if you're like, oh, well, we don't like the Tron thing, then why would you like this one? So I think that's one whole thing. The other thing is that there is going to be an absolute assault on Ethereum coming from stablecoin-specific blockchains. These are blockchains that are purpose-built for stablecoin usage. And people will say, well, I don't think that's going to be successful. Let's see. I've been doing a lot of work looking into these. There's a couple of them, right? I don't know if they're going to work. Pretty interesting, though.

• 32:30Speaker 02

  Pretty successful teams, the right people backing some of these. Like, I think that that's going to be a narrative that people need to pay more attention to. Then you look at something like Yield. Okay, well, if people want yield connected to quote-unquote crypto.

• 32:47Speaker 02

  All of a sudden, strategy just released something that pays 9% annual yield. How many staking platforms give you more than 9%? Not many. Okay, right? So like you start to see where you're getting all of this fractional kind of interest, energy, attention, etc. Now, bring it back. I'm not saying that somebody should buy or sell something. I'm not saying that something is good or bad. What I'm calling out is that whenever I see this very rapid shift in a narrative, I immediately say to myself, is the underlying technology, network, statistics, users, transaction,

• 33:31Speaker 02

  is it changing to warrant that rapid change? I don't see it. By the way, I don't have skin in the game. I'm not short and I'm not long. I'm merely a market commentator. So maybe I'm wrong, right? I'm not going to get punished if I'm wrong. I'm not going to be rewarded if I'm right. But very quick look, I think that a lot of the enthusiasm and the narrative shift, I just don't see what is supporting that other than, okay, the Bitcoin thing worked. What's the next biggest one? It's what's the silver to the gold? By the way, worked out pretty good for silver.

• 34:09Speaker 02

  Like, still working out. 100% could work. So then if you go further down the line, there's a lot of chains that are trying to figure out what is their thing? Should we be general purpose or should we be specific? And I think that's part of what the market has to figure out here because as the technologists figure that out and try to find product market fit and start to get usage, etc., then you're going to start to see, I mean, think about it, we have a Ton Coin Treasury. We have a BNB Treasury, Tron, I think, I believe is going public in the United States. Right? You go through all of these, like, this is going to happen whether Bitcoiners like it or not. The question becomes what's going to happen to these things? Are they going to be successful?

• 34:52Speaker 02

  And the market will decide. The market is ultimately going to be the referee here. And I find it fascinating that in order to do these, somebody had to raise the money. Somebody's given them the money. Let's see what happens.

• 35:05Speaker 04

  How should investors think about it? Right? Like, there's so many different assets. You can put your money so many different places right now, whether to generate yield, see the asset appreciation. You can go and say, hey, look, I want to be, you know, I'm a long-term holder of Bitcoin. Okay, cool. I have my, you know, pillar of wealth, call it there. And I would like to build up some other assets in my portfolio. How should they think about like entering the market, being a market participant?

• 35:29Speaker 02

  It's nearly impossible to describe, you know, one size fits all. I think a lot of it really depends. I mean, look, I'll, I'll explain for maybe how my mind has changed over time. Don't think it was a secret that, you know, 78 years ago, I didn't have a lot of cash. I had a lot of Bitcoin on a percentage basis. Like it was, you know, hey, look, uh, I like the Bitcoin thing. You know, um, I'm pretty much all in, you know, a very high percentage of my net worth. Let's see what happens.

• 36:00Speaker 04

  Your risk appetite was also.

• 36:02Speaker 02

  Risk appetite was through the roof, right? I basically had, you know, a small New York City apartment. I had a girlfriend and I had to eat.

• 36:13Speaker 02

  That was pretty much my expenses, right?

• 36:15Speaker 04

  Everything else went into Bitcoin?

• 36:16Speaker 02

  Yeah. And by the way, you know, I, people have seen the photo, right? Like, Poena was amazing. There was times where I was an idiot. And I was like, oh, we shouldn't get a couch for like another month because I want to like buy more Bitcoin. Like, I mean, in hindsight, yes, great financial decision. There's a balance between like living your life, not like a moron that doesn't have a couch, right? So, um, but when you're young, like you kind of, I mean, yeah, it would have been nice to have the couch. But like, you kind of don't care, right? You're like, this is like more important. So think about that now, right? I got kids, I'm married, I got responsibilities that I didn't have before, all that kind of stuff. And so you say to yourself like, Cash becomes more important. Having liquidity is way more important, right?

• 37:00Speaker 02

  If you have higher monthly expenses. I don't know anyone who is 25 and, you know, single or maybe has like a boyfriend, girlfriend, right? And has very low expenses that doesn't have higher expenses by the time that they're in their mid 30s. Right? If they're married, got kids, all this kind of stuff. So liquidity, right? How do you manage that liquidity? What is everyone's comfort level? I have some friends who keep three months of cash. I have one friend that keeps two years of cash and everything in between, right? It's just, what is your comfort level? What are your expenses? What are those numbers? Right? By the way, I know people who live in New York City, they spend, you know, not a lot of money. I know some people in New York City that spend like millions of dollars a year just on like living expenses, right? And everything in between. So I think that cash is actually a part of quote, quote,

• 37:45Speaker 02

  your portfolio that a lot of people don't think about. The second thing is if you think about the stock market, the stock market has now become this way to insulate yourself from inflation. So you're getting this monetary premium on stocks. But one of the things I think is really interesting, and I've been spending a lot of time thinking about this and talking to people about this, et cetera, is we are for the first time seeing retail investors start to really become activists. So before it was kind of like retail investors were piling into stocks in like this like meme function. And it was just like, we know the company's bad, but like screw it. Me and all the boys are going to go buy it and like, hopefully it goes up.

• 38:29Speaker 02

  That is more gambling. That is more speculation. That is more, you know, kind of this like meme craze. What you're starting to see now is actually people are showing up to stocks and they're saying, hey, we as shareholders have a voice. We think you guys need to do A, B, C, D things differently or better. And there's almost this like external governance and the crowd is holding the company accountable. Right? And so, you know, Open Door is a great example of this. I think there's a couple of others that people are looking at. That is very different, you know, style of investing than buying the S and P 500. And so, you know, one of the things that's got a lot of attention in the stock market

• 39:14Speaker 02

  is that the S and P 500, the top seven to 10 stocks are dominating all the returns. Well, like they're the best businesses ever created in human history. Just look at the operating leverage and the just the scale and the growth, right? And my, I mean, it's incredible what they have built. They probably should be dominating the returns, right? There's nobody else like them. And so I think that that is, you know, another part that people are trying to figure out is like, is it a MAG7 story or is like a US stock market story? I recently wrote about, I found it very interesting. In 2000, Catherine Boyle from A16Z pointed out that three out of the 10 largest companies in the United States were American. Today it's eight out of the top 10.

• 39:57Speaker 02

  And then also, I believe now 22 of the top 25 largest companies in the US today are American as well. So this has been a American-led technology revolution, where the American capital markets, American entrepreneurs and American innovation has really driven a lot of growth. And so one of the arguments that people have is like, well, emerging markets will catch up. Emerging markets, like the, a mean reversion will happen and you'll see that. I'm not so sold on that, right? Yes, are there companies around the world that will do well? Of course, right? I mean, one of the funny things that happened in the last two or three years is like German defense stocks exploded, right? And there's war going on in Europe, right? All this stuff, but like, they kind of like became almost like meme stocks to a degree.

• 40:39Speaker 02

  But they obviously, you know, the defense related, and so they all went up. So there's pockets. There's just nothing like the American companies, right? And so I think that they're just dominating in a way that we just historically did not see 25 years ago. And then you start to look at some other assets. So real estate is one example. Ray Dalio just came out and he said he doesn't think real estate is a good investment. Today's episode is brought to you by Core. You can earn yield on your Bitcoin by just holding your Bitcoin. It's simple. Core, the leading Bitcoin scaling solution, will reward you for not selling your Bitcoin. It's not magic. Here's how it works. Core is a protocol secured by elected validators. You can help elect validators and secure the network by simply locking up your Bitcoin on the Bitcoin blockchain. No bridging, no lending and just holding.

• 41:24Speaker 02

  When your validator secures Core, it earns rewards fueled by network activity and passes them back to you as yield. With a minimum lockup of just one day, when the time lock ends, you get your Bitcoin back. Untouched. Still your keys, still your coins, now your yield. For even higher rates, stake core alongside your Bitcoin and multiply your yield. And if you want to see what your Bitcoin is securing, join millions of others in exploring the largest Bitcoin DeFi ecosystem. There are over 100 live apps in the network and the deepest liquidity in all of Bitcoin DeFi. Get off zero and start earning yield on even just 1% of your Bitcoin by going to stake.coredao.org/pomp. Again, that's stake.coredao.org/pomp, or go click the link in the description.

• 42:07Speaker 02

  His point was, uh, it's easily taxed in a kind of a non-attractive way. You can't move it, right? There's all these things that happened. And then he was pointing at the fact that real estate is very interest rate sensitive, not just inflation insensitive. And so he thinks that actually the real return on real estate is going to be much lower than people historically have thought because of the interest rate situation in the United States. There's plenty of real estate investors that will watch this or her race comments. They completely disagree. That's fine, right? There's tax incentives in terms of depreciation and all that kind of stuff, but like it goes back to how do you think about investing and what are you trying to do? Now you asked what I think.

• 42:49Speaker 02

  My entire world now is predicated around two things.

• 42:55Speaker 02

  I have talked about this idea that every investor gets one good big idea. And then your job as an investor is to find that one good big idea and try to find as many ways to express that idea in your lifetime. Warren Buffett, I can buy things for less than they're worth. It's like the simplest idea of all time. He did it over and over and over again, and put together one of the greatest investing track records of all time. Great. Carl Icahn, Corporate Raider.

• 43:25Speaker 02

  They figured out activism. They went and did it over and over and over again, built $4 billion net worth. If you go and you take a look at maybe somebody like a Steve Cohen. Research-driven multi-strat hedge fund. Figured it out, started investing all these different assets, use research, bam, owns the New York Mets.

• 43:46Speaker 02

  I think that my one big idea, they're never going to stop printing money. Okay. How do you express that?

• 43:58Speaker 02

  Bitcoin rate of return. That's it.

• 44:02Speaker 02

  Are you outperforming Bitcoin? Denominate everything in Bitcoin. Since 2020, the S and P 500 is up something like 100%. Great. In five years, you doubled your money.

• 44:15Speaker 02

  If you denominate the S and P 500 in Bitcoin terms, it's down more than 85%.

• 44:21Speaker 02

  So now all of a sudden, maybe it was just an optical illusion that you thought you had doubled your money. It's all about the denominator. And so for me, that Bitcoin rate of return becomes my denominator. I want to outperform Bitcoin, or if I can't beat it, I gotta buy it. And so to me, that is now how I evaluate everything. And guess what? A lot of investments that I otherwise would have been interested in quickly become less interesting because Bitcoin has a degree of asymmetry to it. It has a degree of resilience to it, and it has a degree of liquidity to it that other assets don't bring. And so for me, that's how I start to think about asset allocation.

• 45:02Speaker 02

  And it doesn't mean that I always optimize for, and it doesn't mean that I always optimize for how to make as much money as possible, right? You know, it's always funny, like, there's things that I own.

• 45:15Speaker 02

  Commercial real estate, right? I don't own a lot, but I got a couple of things dabbled here, there. Is it going to outperform Bitcoin? Probably not. Should I, if I really was like, hey, I'm optimizing for every last dollar? Should I go sell it? Probably, right? Take it, buy more Bitcoin, whatever, right? At some point, you're like, look, there's work involved, there's taxes involved, right? There's all these components to it. And also frankly, like, although it's not a lot of diversification, a little bit of diversification never hurt anyone, right? And so I think that that's really what you're going to start to see here. There's a lot of the like hardcore terminally online Bitcoiners.

• 45:56Speaker 02

  As they get a little bit older, they start to get married, they have kids, they get more responsibilities, et cetera. A lot of them will say, hey, the Bitcoin that I have, I'm going to continue to hold. And then every net new dollar that I'm going to deploy. Maybe it used to be 100 cents on the dollar that went into my investment portfolio went to Bitcoin. Maybe that'll be 80, 80 cents, 20 cents I'm gonna go put in cash or, you know, in fixed income or, or something that is, has some other purpose than let me buy the asset that's gonna go up the most, but whatever. Um, cause I just don't think there's a replacement for Bitcoin.

• 46:30Speaker 04

  Yeah. Okay. Let's end on this. Bitcoin, uh, will now be included in retirement accounts. It looks like that's going to access a lot of capital. The reason I bring it up is actually for a different reason. Um, treasuries are in people's accounts, uh, retirement accounts, and that's a big portion of their retirement accounts. People say Bitcoin is risky. I know you have a little bit of a contrarian view that treasuries are just as risky as Bitcoin, more risky than Bitcoin. Uh, explain your thinking there.

• 46:56Speaker 02

  Well, math. If you, if you look at, uh, the performance.

• 47:02Speaker 04

  You mind elaborating a little bit?

• 47:04Speaker 02

  The last five years, if you look at treasury, I mean, go look at TLT. TLT is I shares 20 plus year treasury bond fund, right? ETF. It's down 50% in the last five years. Uh, Bitcoin is up like 12x in the same time period. So which one did you want to own? Right? Now, why is that? Well, one has a structural tailwind Bitcoin and one has a structural headwind treasuries. And so if you go and you look right now on treasuries, depending on which treasury, the date, all this kinds of, for four and a half percent, right? Okay.

• 47:39Speaker 02

  Let's say pay no taxes on, uh, that four, four and a half percent. Okay. Do you know what the depreciation of the US dollar has been annually since 1971?

• 47:52Speaker 04

  I do not.

• 47:53Speaker 02

  Over 4%. So there's 2% Fed target inflation rate. Lie.

• 48:01Speaker 02

  The dollar over the last 50 something years has depreciated more than 4% a year, every year since 1971.

• 48:10Speaker 04

  But that's gotta be because of, uh, the recent depreciation over the last like five years has accelerated so much.

• 48:16Speaker 02

  Some of it, but still it was depreciating at more than 2% before that. So if you look at your real rate of return on the yield of the treasury, you're lucky if it's positive. It's probably break even, right? Okay. Then what happens to the actual asset itself?

• 48:38Speaker 02

  Well, that's down only because you're continuing to see people dump treasuries, right? Some of the biggest buyers. Now, there are some replacements, stable coins, etc., right? But there's a problem. And so if you are buying an asset that is essentially guaranteed to lose money on a real return basis standpoint, isn't that risky?

• 49:05Speaker 02

  We're not talking about an attractive return. The critics will literally are going to hear that and they will argue with me, it's not a negative real rate of return. It's a flat to slightly positive. Okay, let's say that you're right. You're not, but let's say you're right. Do you hear what you're saying? You're arguing with me over whether it's actually a negative rate return, or if it's a 0.5% positive return. Like, take that whole argument, throw it in the trash, right? It's risky. And so it goes back to who is claiming something is safe? It's the people whose job is usually, don't get fired.

• 49:45Speaker 02

  Again, they have a fiduciary responsibility, all this stuff, right? So like, I don't blame the people. It's a system that they operate within. Show me the incentive, I'll show you the outcome. I think that having the old 60-40 portfolio is highly, highly more risk than people will explain. Forty percent of your portfolio are usually in assets that are guaranteed to lose value over time. So I think that there's a modern 60-40 portfolio.

• 50:18Speaker 02

  60% stocks, 40% Bitcoin. Drop the bonds, buy the Bitcoin. Now people, oh, this crazy, this luddite Bitcoin or whatever. You ever heard of Rick Edelman? Rick Edelman, Hall of Fame Personal Financial Advisor. That is true. They have a Hall of Fame Personal Financial Advisor, Rick Edelman's right in there. He says, now, the most aggressive...

• 50:43Speaker 02

  People exposure to crypto 40%.

• 50:47Speaker 02

  Okay. Well, if you're a young person, you're supposed to be aggressive. If you're 70, don't be as aggressive, right? But his non-aggressive, I think his like most conservative is 10%. Don't take it from me, take it from the guy in the Hall of Fame. Right? I don't know what you gotta do to get in the Hall of Fame, but he's built a pretty good business. Pretty smart guy, right?

• 51:07Speaker 02

  So if he, as somebody who is regularly recognized for seeing into the future, for understanding technology, for seeing around the corner, is saying 10 to 40% exposure to, he says crypto, I say Bitcoin, right? 10 to 40%.

• 51:24Speaker 02

  Why are people still saying 40% bonds, 60% stocks? So retirement accounts, um, you know, there's this great saying, uh, that I've seen people say online, which is Bitcoin is my retirement savings or Bitcoin is my retirement plan. And, uh, one Bitcoin? I don't know. If people get to one Bitcoin, what do you think is gonna be worth more in their future? Their 401k, their IRA, you know, with traditional assets? Or the one Bitcoin? I don't know. Tell you what I would bet on though. And so a lot of people are starting to say, well, guess what? Now they're gonna let me buy Bitcoin in my 401k, right? Or I can buy the ETFs or whatever. Like, I think that's where you're seeing this is there's just a lot of people who say,

• 52:09Speaker 02

  the productivity of stocks may not be what we thought it was. Ooh, wait, what? Buffett, what? We wanna talk about him? He just stepped down, L. Most underperformance of the S and P 500 since he stepped down in Berkshire's history. Why?

• 52:26Speaker 02

  Remember what I used to say? Berkshire Hathaway was the boomer meme stock and it got exposed. Everyone was telling me how that was a crazy thing to say. People yelling and screaming at me. Warren Buffett stepped down and the stock cratered. The assets are the same.

• 52:45Speaker 02

  What happened? They were trading at a premium because Buffett's name, because Buffett was overseeing them. When he stepped down, the stock went down. That is the Buffett meme. That is the, that is the market value of the Buffett meme. The premium, the Buffett premium. So you can call it a premium, you call it whatever. Now.

• 53:06Speaker 02

  If you go and you take a look at gold for the last 25 years, gold is outperforming the S and P. If you look at the last 10 years, gold's outperforming the S and P. It's about equal over 10 years. The whole thing of the stock market is buy productive assets, don't buy non-productive assets. How's gold beating you for 25 years?

• 53:24Speaker 02

  World's changing, my friend. I think people are waking up. They're starting to see a lot of data. My guess is Bitcoin's going to keep winning.

• 53:30Speaker 04

  Awesome. All right. Thank you.

• 53:32Speaker 02

  Thanks, guys. Talk next week.