BTC226: Bitcoin Mastermind Discussion Q1 2025 (Bitcoin Podcast)
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You're listening to TIP. Hey, everyone. Welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. This week, I have the Mastermind members back for a discussion to close out the first quarter of 2025. There's plenty to discuss, especially considering the current price action is not what any of us had suspected since the start of the year. During the show, we talk about the current macro factors that might be causing some of the issues, the effects of the tariffs, the supplemental leverage ratios for banks, and

a current overview of the legal ramifications of the strategic Bitcoin reserve, and many other interesting topics. This is a discussion that you won't want to miss. So here's my chat with Joe, Jeff, and American Hodl. Celebrating 10 years, you are listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pysh. Preston Pysh

Hey, everyone. Welcome to the show. I'm back with the mastermind, Hodl, Jeff Ross, Joe Carlisari. Gentlemen, welcome back to the show. Hi, Preston. Preston Pysh : Good to be back. Trey Lockerbie : Hey, so I guess where we should start is all four of us were very bullish at the end of the last discussion. This was peak, what numbers were we hitting? Like 105 or whatever the last time we talked and you had the new administration coming in, there was all sorts of chatter. And

And all four of us were like, oh, this thing's going to be a rager. Like, hang on, because here it comes. And literally, I have to say, just probably the polar opposite of what I think all four of us were, or at least what I was expecting for sure. I'll let you guys speak for yourself. But let's just start there. Let's go around, Hodl. What's your one-minute take on why we were so wrong? Well...

This bull market sucks, Preston. That's just, listen, we weren't wrong. This bull market is wrong. It sucks. It is not giving me what I want as an investor. And we all know that when you're not getting what you want, you should just take leverage and double down because eventually the tide will turn. No, I'm kidding. I think that obviously, I mean, the trade war stuff, the trade war stuff is the big headwind here. And I think that the markets weren't really pricing that well.

I wasn't expecting. I was not expecting Trump to be like, oh, I don't really care about what the markets do, which is pretty much what we've seen so far. I didn't have that in the cards. I mean, that was a goose egg, basically. 100%. And so, yeah, there's a lot of uncertainty in the market and uncertainty is not good for asset prices. Jeff? I was too taken aback. I think at the last

quarterly update, I mentioned that I don't think that Doge will be able to clear 2 trillion. I think we all agreed on that. But I said, I think it will be very interesting and it's going to cause a lot more havoc, wreak more havoc than a lot of people are anticipating. And I'd say that was a fair call because I think a lot of people are kind of surprised to the downside or upside, depending on how you look at it with what's going on. I've been watching a lot of Scott Besson interviews, the Treasury Secretary,

And I think that what happened is Trump basically gave him the keys to the economy. And so there's the tariffs on the one hand. And from what I gather is Trump and Besant had a conversation and Trump said,

"What do we got to do to get rates down?" And Besson's like, "I can help you with that." And they've made that their number one priority. Screw the stock market, they're getting rates down. That's going to help mortgage rates, it's going to help lots of people who have debt. It's going to help the government who has to roll a lot of debt, and maybe we'll be talking about that, to be able to do so at lower rates in the very near term, March, April, May, June, July, these kind of months, we have a ton of debt to roll. And so I think that's a big part of it. And so

Yes, that had a much larger impact. In fact, I had an emergency briefing with HODL two weeks ago, which I was super bullish. And then it hit me like, oh my gosh, they really are, to use Darius Dale's term, they really are throwing the kitchen sink at the economy. And they're trying to tank this thing and they might actually succeed. So I had a panic moment. Thankfully, Joe came on last week and talked a little sense into me. So we can talk about Outlook now. But yes, that took me by surprise. Real quickly, because I want to get to Joe, but would

Would you say that this $7 trillion that they've got to roll within the year to reissue, and they obviously want to do that at the lowest interest rate possible, is the driving factor? Is that they've got to roll that at a much lower rate than what we've been dealing with for the last year? I think that it is a factor, but I'm not sure that's their primary goal. In fact, I think Besant is still going to issue some short-term T-bills.

So, you know, I think they're going to try to play this out for a little bit longer. We'll see. I'd love to hear what Joe has to say about it. Joe, go. Okay. So if you recall, I think we had our last podcast before the actual inauguration. Is that correct? Do I have that right? No, I think it was before. I think we did one around Christmas timeframe, I think. So we had it before the inauguration, right? Oh, I'm sorry. And Bitcoin made its high. In my head, I heard election. I'm sorry. Inauguration. Yes, you're right, Joe. Yeah.

No, sorry. So Bitcoin made its all-time high, if memory serves, on the date of the inauguration, right? And then the S&P, in terms of the broader risk complex, that actually made its all-time high on the 19th, no, February, excuse me, so about a month after. So the markets did have a bullish trend, not to say we were right, but I'm just saying for the point of view that we had sort of a nice little rally up across the asset classes going into the inauguration. And then...

In the inauguration, okay, we started to have resurgence of, I think this is really the tipping point, really growth scare. I think you saw some indicators. We can get into some of them. Jeff and I talked about some of those. I think those are continuing to accelerate this growth slowdown, which people had anticipated. And you're starting from a position where you have very little runway. You had spreads, very tight cred spreads. I'm really skeptical, though, of the meta-narrative that is emerging that this is all about rolling treasuries. And

And the reason for that is because Besson came in and if Besson really wanted to sack the economy, Jeff, all you need to do is look at the QRA. And he gave forward guidance that he's going to continue to do the Yellen game of issuing a lot of front end paper. So that seems at cross purposes, right? If your goal is really to sack the economy and to flood the market with longer term duration, that to me would be the way to do it. Because all you have to do is say, we're going to issue a ton of long-term paper. What's that going to do?

that's going to send long end yields up higher, and that is going to sack the economy. That's going to send asset prices rolling. To me, here's the real question right now. You're at a technical correction. I know that people are so used to assets only going up, but the S&P is down 10%. Bitcoin has had a little bit of the sell the news narrative, I think, that's coming from the SBR. I think there are very high expectations, totally unjustified because it is massively bullish, which we can get into.

the fact that there is a strategic Bitcoin reserve, that it is only strategic interest of the United States to hold Bitcoin, not these other digital assets, that is wildly bullish. But I think the market, for whatever reason, Bitcoin centric, thought that we're going to go in and buy a million Bitcoin, and that was going to start the nation state arms race to acquire as much Bitcoin as possible. But overall, you still have historically tight spreads. You still have a very strong labor market. I mean, I shared with you guys before the podcast,

some of the payroll data, the tax receipts. I could point to 10 different things, but clearly the Trump volatility from the tariffs is causing a lot of consternation. People just don't know how to position for it. So overall, to me, the question is, if you're really going to laser focus on where assets go from here, you have to say, are we going to run into a position where we actually get a growth scare turn into an actual growth slowdown that is manifesting in labor market? Or is this going to be a thing where it

We were just reading something right before we came on, some reporting that some of Trump's team is saying, "Let's slow down the tariff talk. Let's try to save face and pivot a little bit." I tend to favor the latter. I don't think they're going to drive the plane into the mountain. Other people can feel free to disagree with me. Preston Pysh : And here's the thing that you just shared with us tonight, Joe, and this is coming from, I don't know this guy, but I guess he's from Fox Business.

Charles Gasparino. Lots of talk in the Trump circles about the need for some grand plan to resolve the tariff disputes with Mexico, Canada, and Europe. That is cut a deal via one universal settlement. This started bubbling after today's market losses and the growing sentiment that the market upheaval isn't over until this stuff is settled. I have no clue whether this is something the White House is working on, but the chatter among the outside Trump advisors in and around Wall Street and DC is real. The idea is that a compromise

Trump saves face with the base. The trading partners who are now hurting economically because of the uncertainty all get relief. The administration then can move on and focus on broader parts of its economy plan, i.e. doge budget reductions, tax cuts, and deregulation. Story developing." Preston Pysh : Yeah. So just one thing on that. A lot of the first, say, 60 to 70 days of the Trump administration has been a lot of the, you take your medicine, like here's the stick, we're cutting this, we're getting rid of this.

is, we haven't gotten to the good stuff, right? Which is the tax cuts. And I think they did that purposely. I'd love to hear other people's thoughts on it. But it seems to me you would do that first, right? Before you give a massive tax cut, which the media is going to run with and say he's blowing up the deficit, you kind of want to have some of this window dressing with the Doge programs that Jeff and I had talked about and Adil as well. So I'm curious if you guys agree with that. I do agree. I think they're hitting us with the stick first. They're hitting the economy with the stick, and then they're going to come in and soothe everybody with tariff talk, tax cuts, more deregulation.

I will also say, since we're talking macro, that I do think that what we've been seeing are primarily the delayed effects of the super strong dollar that peaked in mid-January. And it obviously had super huge effects on global M2 monetary supply, right? And like we talked about last time, I said, as soon as the dollar turns, we're going to see global M2 turn higher, and that will be bullish. But there's like a two-month delay for these effects. So the way I look at it is the Dixie, the dollar peaked on...

January 13th at about 110, and then has been since just plummeting, which is pretty amazing, by the way. Yeah, there's a great chart. I'm very, very bullish and constructive on that. And I think that based on how oversold things are, how fearful everybody is, how everybody knows now that Trump is taking the economy and throwing it into the gutter, I just think we've reached just massive oversold and bearish levels now. And I'm very bullish heading forward at this point. Oh, wow. You're very bullish.

So it changed. It pivoted. It was last week? I did. Sorry.

Joe, you rehabbed him. You rehabbed Dr. Joe. I don't know if that's possible. I feel like I got him down. The title of my thing with you, Joe, was things are turning bearish. Is it time to buy bonds? And then I even told you, I bought bonds. I bought TLT for the first time in my hedge fund for years and years for a trade, like a short-term trade. And instantly got stopped out. And so I'm like, well, why did I get stopped out? So I spent some more time looking into kind of things. And every forward-looking indicator that I look at

is pivoting. It looks like it's bottoming and it's pivoting bullish. So the US economy is one thing, right? The world economy to me looks very good. Currencies are rising against the dollar because the dollar is falling. Everyone is starting to do easing now. That's very bullish for M2 monetary supply. And that's very bullish for Bitcoin. I'm very bullish here for Bitcoin. We may see another couple of weeks of sideways shop, but very bullish. Robert Leonard

What is it? We're going to see $600 billion spent by the German government on infrastructure. Wow. Talk about stimulus. I hadn't heard that. Oh, yeah. Did you see the German? I didn't see this. I don't know if you could pull up a chart of German bunds, the long bund, but what is it, a 30-year high, Jeff? I think we saw 2%. I haven't followed German bunds, but yes, I heard that news. I have to build that one. I don't think I have that. Also, lots of people on NOSA were asking about Japanese government bonds, if anybody has an opinion on that. I don't. So,

So Joe, you should. Joe Carlasare : I mean, look, there's a new regime in Japan, right? Preston, you were tweeting out about this. They've got inflation, they've got economic growth, they've got spending and yields are headed higher. So I think it's a different era. And it's interesting to me because everybody is fixed in the US cutting cycle and rates coming down. But unlike prior periods where we had this globally synchronized either growth or globally synchronized cutting, we kind of have different patches globally where you've got

Japan and Germany, where their bond markets are selling off. And potentially here, we could see some rally in the 10-year. I don't know. My base case is that we hover around these levels. I don't expect us to break down to 3.5 on the 10-year now for the next six months or a year. I think you hover in the low fours maybe, maybe high threes if growth slows down a little bit more. But I don't know. To me, it seems like that you're stuck in a range for a while now. Preston Pysh : The thing that I think has surprised me the most is the dollar.

the direction of the DXY, which we had the chart up earlier. All this tariff talk, the treasury, the US treasury bonds getting bid and everybody else selling off. I guess I've been watching macro for quite a few years. This one's just kind of mind blowing to me. This doesn't make any sense. I don't understand it. I was working with a, I took a Luke Grohman report. I pumped it into AI. I was saying, how is he explaining how the dollar is weakening here? I just don't understand how they're doing it. And you

And the response I got back was basically that the US is basically looking at all foreign investors and shaking them out of equities is one, which that makes sense. But at the same time, you have...

Treasury is getting bid. So I would think that that would totally offset it, especially with the market cap size of the treasury market for the dollar to at least hold its value, let alone be going down in the face of all this tariff talk. So I'm not sure if you guys have wrapped your head around it, but I sure as heck haven't. I'll just throw in there real quick that I think rates and the dollar front ran Trump's policies. So I think he came in talking about how he was going to throw on my favorite word is tariffs, right?

And all of this stuff happened. And I think that front ran it caused rates to spike, caused the dollar to spike.

And now similar, like again, exactly the same as 2017. We're just going to have this slow petering out now of dollar strength and treasury rates, I think for the rest of 2025, similar to 2017. Preston Pyshenko So you think the dollar strengthens from here? No, I think it continues to weaken throughout 2025. Preston Pyshenko Okay. So like, what's the mechanism? Like, how are they going to be able to continue to do that? How are they going to be able to continue to weaken the dollar from here? That's, I guess, I'm just not understanding how they can do that. So if you look at the Dixie, right?

right? Which everybody calls that the dollar, right? That's really just the exchange and it's balanced heavily with the Euro. And then you have to wonder why is the Euro appreciating? I think you look at the European forward expectations for growth and they explained a ton of that story while also you have to look at European spending, right? So you're going to go into an environment where there's going to be greater European spending, which will cause a growth impulse. And if the Euro is appreciating, that's going to be the biggest single component currency of the DXY index.

So to me, that explains the story. If the growth slowdown is really happening here in the United States, and you have that juxtaposed with a acceleration or rebound in Europe triggered by excessive government spending, they're supplying the stimulus, the same sugar bowl that the US has been addicted to for the last couple of years, that can explain that differential. That can explain that growth acceleration versus a growth slowdown that you would expect the dollar to recede in that environment.

I'm pulling up the global M2 chart here. I know, Joe, you're not a big fan of this because you can give your rationale. I know you didn't in previous shows, but- Well, Michael Howell's the guy you want to listen to for the M2 debunk, but- Bitcoin is lagging M2 at the moment, right? That's what all the Bitcoiners are saying. Yeah. Yeah. That's the chart that keeps being the hopium chart that just keeps on being charted. Yeah. M2's up here and we're down here and it's like, we're going to catch up. Don't worry. And it's like a 60, which-

I don't think that there's... It wouldn't surprise me at all if that was a valid take that Bitcoin, and I think it harmonizes with what Jeff was saying earlier is that he thinks it's going to rip from here. But yeah, according to this, we're looking at all M2 across all the major economies, all put into dollar terms, and you can see, and this is only updated monthly. So this bar that was just thrown on there is a couple of weeks old.

And what it has been since, I have no idea. But you can see it's bidding yet again, which should be bullish. But who knows? I don't. You know, I mentioned this at the last, I think, two episodes we've done, but I think the story of this year is going to be similar again to 2017, where everybody's watching for the Fed to

to come in with a liquidity boost. But I think most of the liquidity is actually going to come from China and from the Eurozone and from other nations. And that's what's going to drive... Because Bitcoin is a global asset, it is very sensitive to global monetary supplies and conditions. So I think everything is starting to ease. All the chips are starting to fall in place. We've reached max bearishness. So maybe we chop around again for another month or so, but I'm not waiting for lower prices. We could get

Who knows? Maybe we hit 70 to fill a CME gap. People are talking about that because we basically ripped from 70 to 80 back in the fall, I think, or whenever that was. Preston Pysh : Jeff, check this out. So this is the S&P 500. And look at the RSI down here on the bottom where my cursor's at and look at what level it's hitting. The pace of this sell-off has been really aggressive compared to other drawdowns. This is

This is on par. I think we're right now about a 19 or an 18 on the RSI. And during the COVID spike down, we got to 14, but we're in a similar range. We haven't been in this range from an RSI standpoint for since 2020, surprisingly. Like I'm very surprised that it's been that. And the fear and greed and indices are just so low off the charts as well. Like everyone is so convinced that this is it. Yeah.

which tells me that this isn't it. Because the max pain right now is for a huge spike higher, I think, in the Qs in NASDAQ stocks and in Bitcoin. Robert Leonard I'll give you an anecdote here. I mean, just to show the uncertainty in markets is I took a cash position recently when Bitcoin was in the 90s, and I haven't had a cash position in almost seven years. That's a small cash position, but the uncertainty was

so much that I was thinking like, we might have a horrible market here for the next two years. And now I got kids and I got to pay for their private school, right? So I took a small cash position. But I think that I'm emblematic of a lot of the uncertainty that's being felt in the market. Because I haven't made a trade like that in seven years. Yeah. What was the trigger that you were sensing that gave you that? It was just sentiment. I was bullish. That was the trigger. When Joe's bulls over, he's like, dump it all. That's your awesome.

No, it was just sentiment and the possibility of the trade war getting exacerbated and becoming a real thing. And I thought to myself, "Hey, I can reverse the cash position quite easily if I need to." And it's very small. It's like under 2%. Preston Pysh : Yeah. You know what the amazing thing is though, Preston? You've got this real sharp self on par with COVID type moves, right? Very aggressive, no relief, no bounces along the way. And then I always look at some of these things like the Chicago Fed Financial Conditions Index

which you can breathe the breakdown here, but they're looking at financial conditions, money market debt, equity markets as a whole. They built this model out and you got like the reading last week. It's like comparatively to what we went through in 2022, 2023, it's like nothing. It's like barely moving. The same thing with, I'll show you the option adjusted Bank of America spread, like for credit spreads. People were posting today about credit spreads are blowing up, but in reality, here's the one that I want to show you.

This is a- Preston Pysh : I think, Joe, what it shows you is a lot of the uncertainty in the market is a type of uncertainty that we haven't seen in decades. I think because of the tariffs, I think that's a huge part of it. But what is this here? Joe Carlasare : So this is the Bank of America high yield index options adjusted spread. This is my favorite gauge of trying to look at credit spreads and how they're produced.

So you have like a five-year chart here, right? And like, yeah, it's balanced up a little bit. It came from a historically low levels here in February and January, but you're really back to like the range we were hovering in for most of the early part of 2024. And you have this, this is the carry trade blow up right here back in August, early August, but you know, like nothing crazy, nothing just bizarre. I think it's amazing how quickly narrative spread. I mean, I've heard this narrative that we talked about at the top of the show,

about, oh, well, Trump's trying to crash the economy. This is all about the bond market. Everybody seems to be parroting this within days. And it's just information travels so quick, whether it's true or not, right? Sometimes perception governs reality. And that's where the market just glams onto it. You have to trade around it if you're investing. Oh, 100%. Let's take a quick break and hear from today's sponsors.

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All right, back to the show. I want to talk to you guys about the SBR. I know that this topic has been covered ad nauseum on podcasts and whatnot, but I guess I'm more curious about it from a legal standpoint and whether you, Joe, as you're looking at the method and the way they went about this, what are your thoughts? Was this the right way to do it? Should they have just waited for all of this to clear through Congress? No.

I think it's an amazing feat. I mean, just stepping back for a second, okay? If you're in the world where you're talking to professional investors or you're talking to just regular people, and you are able to use as a talking point, a truthful statement that the United States has a strategic fund of Bitcoin, I don't care where it comes from. I don't care how it's funded. That narrative, okay, from a communication standpoint, from an optic standpoint, is incredibly valuable.

I honestly don't think they could have done it a better way because there would have been huge fights even within the Bitcoin world, the Bitcoin community, if you will, about like, okay, should we use taxpayer money for not? Do we want the US government to have a whole bunch of Bitcoin? Do we want to be a player in the marketplace buying Bitcoin? Maybe we'll get to that bridge eventually. But we got Bitcoin that's sitting on their books, right? That is already appreciated a lot of it that has been seized. And you're going to tell you, we're not going to sell this into the market. We're just going to hold it.

That's massively bullish. And to separate out all of the other crypto assets, if you will, from that, and they're in a stockpile that can be sold. I honestly don't know why anybody would be upset about this. I know that the market in the short-term price action, like I said earlier, it wanted a bump. It wanted that there's going to be another bidder here in an uncertain environment.

Think about the confidence that gives if you're putting on big leverage positions in Bitcoin. Putting on big leverage positions that you know that the government has to come into the marketplace and buy, of course you're going to be bid. So I think you saw a lot of that front running positional unwind as that news dropped. But man, from a talking point standpoint, I could not be more bullish about how they execute this. I think it was a brilliant move and execution and everything. My only consternation about it is that I don't think Bitcoiners realize how big of a deal this is and they weren't giving it the proper respect.

in terms of just our internal messaging about it to other people. So yeah, I want to totally co-sign everything Joe said. And I think via executive order, this was one of the best possible outcomes. The only better possible outcome in my mind would have been if they had done a secret executive order and then started buying massive amounts of Bitcoin without tipping their hand at the geopolitical game theory here, right? But that's a dream case there. In a realistic scenario, this was the best possible outcome we could have got on the SBR. And

it is now, strictly speaking, illegal for Treasury to not develop a strategy to buy Bitcoin. That's law. They have to come up with a strategy in order to buy Bitcoin. That's one of the craziest things I've ever heard. And so to me, I'm a Bitcoiner who's been around for 10 years now. We prophesied some of this stuff. We thought this was going to happen. This is a Sputnik moment.

This is the moment where the Russian satellite goes over your head and you have to look up and go, biscuits, the world just changed, right? And then you have to develop your own strategy for how you get in the space race. Except this time, it's a sat race, right? You're going to have to figure out what you do with hash power

You're going to have to figure out what you do with Bitcoin as an asset, as a commodity, how you hold it, how you manage it, what your policies are for it, where it fits into your national strategy. Every nation on earth has to come up with that. The day after the SBR got signed, a packet was put on the desk of every president, central bank head, finance minister in the world.

And it said, Bitcoin is strictly limited to 21 million. This is absolutely scary. And the United States is taking this deadly seriously. The world just changed, right? And I don't care that the price is $80,000, because I know where this is headed over the next 10, 15, 20 years. And so, yeah, this is a big deal. Preston Pyshenko You know, having been in this space for as long as you said, Hodl, if I told you out of the blue that

the US was going to have a strategic reserve and you had to project which way the price action responded up or down, what would you have said? Jay Gould : Oh, I would have said, "We're at a million tomorrow." That's crazy. Preston Pysh : Oh, no. Really? Okay. See, my experience having been in this space is that whatever you think is going to be the opposite every single time. Every single time guaranteed. If it's terrible news, well, it just happened to be up 1% on the day. If it was

News like this and it's sold off, that's just kind of how this seems to always go. And the irony is, is it's almost like gold will do the polar opposite at these moments. Like right now, gold's making a new all-time high and everybody's, your gold bugs are posting their charts that are two weeks old showing how great the performance is relative to Bitcoin. Only for two or three months later, it's just going to stomp the living hell out of it yet again. Preston Pyshenko Yeah.

Anyway, sorry. I just find it really amusing. At this point, having watched it as long as you have, it's borderline hilarious how- Preston Pysh : Listen, we know as long-term hodlers that Bitcoin takes the path of maximum pain for the maximum amount of market participants. So it's going to cause the most amount of pain to the most amount of market participants for the most amount of time possible. And when you hold Bitcoin,

every day feels like this sucks i hate this i want to sell this position right and then there's like three days a year where you're like yippee right yeah it's horrible yeah jeff your thoughts on the sbr i agree with everything you guys are i don't really have much to add it was you know kind of sad how it was initially funded right legally but unethically seized i would say bitcoin probably in some circumstances

But everything about it, to all of your points, was fantastic. I can't believe how great the order is. I spent a bunch of time combing through it. It's just perfect. The way it's written, what that means for the future, the stockpile, and the fact that you can sell ETH to buy Bitcoin in the reserve, I think that's just brilliant. So I'm very excited about it. And I think once the delayed effects of the dollar and Global M2 start to pick up again, which I expect within the next couple of weeks, I'm

a month at the most, then suddenly everybody's going to be talking about what a big deal this is. So just delayed effects, but it's coming for sure. And this is going to be a huge propellant for the actual bull market, which should be starting soon. Trey Lockerbie : By the way, the reason it's written so well is because of the guys at Bitcoin Policy Institute. So we all as Bitcoiners owe a huge debt of gratitude to them. And also David Sachs' team for listening to the smart people in the room and doing the right thing. So I think Sachs, I had reservations about Sachs when he first came in as the crypto czar.

I think he nailed it. He really split the baby down the middle on this one in a way that was palatable to basically everybody. If he's listening to this, he's probably not. But if he is, like, hey, a way we can do some budget neutral strategies is to dump those coins in the coin stockpile and buy more Bitcoin. And he stuck...

Brad Garlinghouse in the corner of the room where he could barely be visible on his account. Preston Pysh : It's been a little surprising to see the Brian Armstrongs and some of the others that came out and were like, "Yeah, no, it really just needs to be Bitcoin in the strategic reserve." I was kind of blown away. I wasn't expecting that. But thank God. David Collum : I think it's a self-preservation thing because if you

If you try and get the US government to buy your bags, your heavily traded insider coin bags, illiquid altcoins, then Elizabeth Warren and the AOCs of the world, when they get power, are going to come in and they are going to punish you. And they will have another turn at the yoke of power. And it will not be a good day for you when that happens. What the guys like Brian Armstrong want is they just want to operate their business and be left alone. So it makes sense why they would come out for Bitcoin like that. Preston Pysh : Can I ask a question of you three?

because I'm interested in this. So you have a stockpile. Let's just for one second entertain this. The digital asset stockpile that is not Bitcoin, that stockpile under the executive order can be sold. There's no prohibition on selling it. So I guess my question is, what is the point of the digital asset stockpile? I mean, that was already the existing state of affairs of government seized a

digital quote unquote assets other than Bitcoin. So why did that even get included? Yeah, I'll tell you what it is. It's a mea culpa to the industry. That's what it is. But it's not even that, right? Does it? I mean, it's a fig leaf, right? Like they just, they gave them a trinket. It's a, it's a trinket.

it's like an honorary mention like award right brad was in the room he was just he was just facing the corner he was in the room i'll tell you another i'll tell you another thing here that politically i think the lummis bill has a has a high chance of succeeding because i think the democrats do need to do an about face on cryptocurrency broadly because they basically attack a diverse young coalition of rich voters i mean it

for no political gain. It was one of the stupidest things they could have possibly done, right? So they need to mea culpa here and supporting Lummis in a bipartisan way, supporting the Lummis Act,

would be one of the best mea culpa's they could do. So that's why I have like a high degree of confidence that that could actually get through. Joe, why were you laughing? What was your smirk there? I just think it's hilarious. Like it is an honorary mention. It's like there was this floating idea out there. I mean, even the president tweeted about acquiring in a strategic... Yeah, that was weird.

And they talked him off of it, which is Bravo, again, to your point, Howell, about David Sachs. I just think it was like, "Okay, we got all these people coming from the industry. We have to give them something. We have to do something. So we're just going to label this the digital asset stockpile," which basically just does nothing. It's no different than the existing state of affairs. But now they can say, "Oh, there's a digital asset stockpile for the US government." They're not buying any more of it. They could still sell it.

They could sell it for Bitcoin, right? There's nothing to say they can't dump all the seized Ethereum, which they should before it goes lower, and buy Bitcoin. So yeah, I mean, I just, I think it's hilarious. Well, it's great because the Ripple guys and their lobbyists were out here acting like real scumbags trying to, you know, basically get rid of the SBR. And so you get what you get, Brad Garlinghouse. Enjoy the corner seat.

Joe, what do we need to do on this SAB 121 to get this fully into gear? Because it seems like Hester Pierce's announcement was only part of the equation.

What else needs to happen? What do you think on the timeline of that before banks really kind of start showing up and doing custody, maybe borrowing lending? I mean, so I think this all gets rolled into the market structure, Bill. Obviously, just to update the listeners, the SEC did rescind it, right? But the SEC rescinding their bulletin, their staff bulletin, doesn't necessarily give a lot of the entities the confidence that a law would.

right? And this is always the trouble because if you get guidance from IRS or you get guidance from any regulatory agency, that can change with the wind, right? That can change with every administration and arguably the Congress can change it, right? If the Congress decides that they want to go a different route when they pass some formal market structure bill, that too can be an issue. So if you're an entrepreneur, if you're a bank, which are by their nature risk averse,

You really want to see something in clear law, knowing that it will be very difficult for any subsequent administration to undo it.

that gives you the confidence to go forward and actually build out whatever product you're trying to do. So to me, I think we're going to have a market structure bill. I definitely keep hearing interest about a stablecoin bill. They've already held hearings about some of this stuff that I'm sure you've followed. So I think you're going to get that. And then the real question, as Haddo pointed, are we going to be able to get things through the Congress? It's still to be determined on that. I am optimistic as he is. I think that you have seen some indications from Ro Khanna and other Democrats that

in Congress saying, look, guys, you really need to stop fighting a losing fight. There's no advantage. There's John Reed Stark, who is a friend of mine. I know some people don't like him, but he will tell you, there's no advantage for a Congress person to be anti-Bitcoin or anti-crypto. It's not like you get funded with a bunch of money other than maybe Ripple Labs. You don't get funded from a bunch of resources if you're anti-Bitcoin. So why would you be against this? A lot of the other interest groups that are in Washington, there's

there's a clear reason, because there's a constituency and there's money behind it. For example, the pro-choice, pro-life movement, right? There's huge interest groups that donate depending on which group you affiliate with. You don't really have an anti-crypto lobby that's funding tons of money against it. If anything, the Wall Street money- What was that? You don't think the big banks were initially maybe the funding source? Initially, right? But that's sort of, I mean, I think that's dissipating with every quarter. I think it's probably the opposite now.

You got to remember the banks were instrumental in getting the bill through that Biden vetoed SAP 121. So I think there's been a clear shift on Wall Street, probably with the advent of the Bitcoin ETFs, maybe even a little bit before that, where they're saying, "Listen, we want to co-opt this space. We want to run it. We want to kick out the kids and be the adults at the table." And I think you will see that. And to do that, you got to put money behind both Democrats and Republicans to get it across the line in the Congress. Robert Leonard :

It was a totally boneheaded move, and it showed that the Democrats didn't understand the state of play. I mean, like I said, this is a young, diverse coalition of informed voters who are going to be a factor in elections for the next 50 years. So why antagonize them? Makes no sense politically. Let's take a quick break and hear from today's sponsors.

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All right, back to the show. What are your thoughts on stablecoins moving forward here? Are the banks wanting to play in this space? I would imagine the answer is yes. Oh, yeah. But what do you guys think there? Well, you saw today that the Senate banking panel advanced the stablecoin bill. It's the Genius Act, I think it's called. So that's the leading bill in Congress, which if that language passes up, Tether's going to have to comply.

which is going to be a tall order, and otherwise they're kicked from US exchanges. So that's a really interesting story given Tether still has a huge footprint in our space. So that's what I'm looking at right now. I want to see- Preston Pysh : What do they have to update in order to comply? Jay Gould : Well, they're going to have to do more record keeping and disclosures with respect to their holdings. We don't have as much insight. We have some sort of indications at the margins, but that's the real big one that I think that they're resisting. But you got five Democrats on the panel. I was just pulling up Warner, Andy Kim, Galea, the new

Senator from Arizona and also Brooks and Bill Hagerty, all of them voted to advance it. So that's bipartisan. It's going out of the Senate floor. Senate's the bigger hurdle. So that's the real key. If we can get it through the Senate, they literally say in the presser today, crypto is nonpartisan. So it's interesting. We'll see if we get it through. Stablecoin bill signed by the president is massively bullish. I can't overestimate how important that will be getting through.

I think it's pretty crazy too that it's now smack dab in the middle of the Overton window, pretty niche conversation that we've been having for the last 10 years that stable coins enhance dollar hegemony. That was something that we believed as people in the crypto ecosystem in Bitcoin, but to hear it directly from the White House is pretty surreal and shows that we're in a totally new era of the crypto ecosystem. Yeah. Jeff? Yeah. I mean, it's another thing that feels inevitable, right?

It's interesting, Tether and these USD coins, they have fans in the government because they're buying a ton of treasuries. They're what, top 20 in the world now for a treasury purchaser, which is pretty amazing. It's the most incredible business model I've ever seen. Tether is literally, it's just an unbelievable how much money they make per employee. And then third, Bitcoiners like it because Tether, they're buying Bitcoin on their books too. So they're playing their cards very well. It's coming for sure. I don't think anything stops it at this point.

Hey, Joe, you sent over something about the SLR and basically using the SLR like a switch. Did you want to cover this at all? Joe Carlasare : So there is a liquidity ratio that banks have to maintain. And one of the well-regarded accounts that I follow, I think I know who it is, but I'm not going to say. He's Conks on Twitter. He's got a huge following. He's got a sub stack. He's talking about the rumors that he keeps hearing in some of the shakeups at the Fed and the potential that they exempt

treasuries from the liquidity ratios that imposed on the banks. And if they were to do that, that would instantly improve liquidity in the system. It would create no disincentive for holding treasuries. And the real rationale behind exempting treasuries is because they are money good, because they're backed by the full faith and credit, why are we counting them against liquidity ratio of the underlying institution? So if they were to do this, right, this could be one of these, he calls it a plumbing put that would be in place in the system

And it could be a better way to provide liquidity to the market in an environment where you're still dealing with relatively high inflation, closer to 3% than 2%, and you're going to have to roll a bunch of debt. So you're going to provide an implicit buyer for all these treasuries in this market, which is the banking institution, and you're telling them it's not going to hurt your liquidity ratio.

So in short, it's kind of a gimmick to free up the amount of holdings that the banks have to have, which then puts more liquidity into the system. Effectively, yes. The snap of the finger. Okay. Seems like a no-brainer, doesn't it? Oh, yeah. No, I mean, I think it is. I'm surprised they haven't done it so far. And yeah, I mean, I think it's one of those things where you don't see it, it doesn't get a whole lot of big headlines, but you're looking at why is the market functioning a little bit more liquid? It's got a little bit more of an implicit bid there for certain markets.

One of those things that could have a big effect going on for the next six to 12 months. We also want to get some guidance from Batson with the next QRA if he's going to finally move off the Yellen game of a lot of short-term paper. That's going to be huge, right? That's going to be a market-moving event, which I'm watching closely. Preston Pysh : Lynn has talked about adjusting the SLR quite a bit. Is this just an adjustment to it or is what this guy's proposing bigger than just this? Jay Gould : No, it's adjustment to it. Preston Pysh : Yeah. Okay. All right. Hodl, what's on your mind?

What do you want to make sure we cover? Something that's been interesting to me here is I think that sentiment in Bitcoin land has been just horrific. I mean-

People have been crying over what is basically nothing. It's a normal correction here. And I was wondering to myself why this is. And I think the reason is that the nominal has gotten so sky high that if you have one Bitcoin and we have a 20% correction, you're now missing $25,000, right? Like where did that 25,000, that's a car. You just lost a car. So I think this is driving a lot of the enhanced

or sort of a hysterical sentiment in the market. Because the fact that if you check the crypto fear and greed index, we're at extreme fear now, makes basically no sense if you've lived through some of these market cycles. And it makes me think like, okay, is everybody here a new market participant and they just don't understand how these markets function? Or is a lot of this OGs who are selling their coins because they are just the nominal is too much, they're worn out,

There's some data on this that says like hodlers from the last five years have been rotating out around 100K. Maybe you don't really consider that an OG or whatever, but like in on-chain data terms, we do consider that an OG. And so- Preston Pysh : Five years? What is the threshold? Jay Gould : Five years. So that'd be class of 2020. Preston Pysh : Oh, wow. Jay Gould : You know what I find interesting, Hodl, is I've talked this a lot too, is if you hold for any four-year holding period, the returns are pretty impressive.

And if you look at that four-year holding period right now, like you go back four years from now, it's really bad. It's maybe up like, I don't know, 20% or 15% or something like that, which is really- Not in real terms either, just not only. In just percent. Yeah. So that's what I was going to bring up is that I would say we haven't even started a bull market. I agree. Yeah.

Not even in a bull market. There is no bull market, right? We all were getting giddy at the anticipation of a bull market, but it's not here because we basically are, if you've held 100% of your net worth in Bitcoin, you're flat since 2021. That's pretty rough at this point in time. But I mean, we expect it to change going forward. But like right now, it's kind of, it's not great. Yeah. Yeah. So the chart that, I don't know if you can pull this up, Preston, it's a fun one.

Kurt DeMeester tweets it out occasionally, so I'll credit him on it. He puts Bitcoin measured against gold, right? And you see, basically, there's this five-year-long top that we need to break through. And his view is that you need to break that top, that Bitcoin gold ratio. There you go. You got it. Oh, you already had it ready. Okay. Yeah. So that's Bitcoin expressed in gold. So you see this, if you're 2021, or even say you got in 2020 right there before that top,

You've been basically bouncing up against that top in real terms. That's why you put in gold as opposed to just nominal. I know Truflation says the all-time high of Bitcoin prior to the one we reached after Trump won, it was already like 76, 77. So to get back to where you were in 2021 in the spring and fall, you basically needed to get to 76. So we're sitting just over 81. I mean, it's okay, but it's definitely not a bull market. This really is a better chart.

than comparing it to the dollar or any other fiat currency. This is a great chart comparing it to gold, I think. Yeah. Yeah. Yeah. Yeah. Because it helps you get rid of all the monetary, the money illusion. Yeah. The other one, if you could put up, I don't know, he doesn't point it out, but put up Bitcoin against SBY. That's a fun one I look at frequently. I don't know if you can just put in the Bitcoin USD over SBY. So you're getting a context, right? So relative to people who

who their preferred store value is the SP500 ETF. I think it paints an interesting picture as well. I think it's more fun to do SPY over Bitcoin. So you just watch this super sad chart down into the right. That's a good one too. Yeah, I think that's what it is, Hodl. I think it's when you look at the four-year period, which has always just had like amazing returns, you're just seeing something a little different right now. That's very true also. Yeah, so you see that, like, I like this chart actually. So you're looking at basically just for the listening viewers,

You see us, we're kind of basing at the all-time high back in 2021. And of course, you know, if you're holding SPY, you do get a small, tiny little dividend that they pay quarterly or whatever it is, Jeff, right? What is it like? Quarterly, yeah, 1% or somewhere. Yeah. So you can make the argument like you're basically just keeping pace with SPY. Yeah. Oh man, that's a good point. Okay. So Jeff, what topic do you want to- Yield is 1.26, by the way, on the SPY.

I love all this, by the way. And I look at the Bitcoin to gold chart. Yeah, I think that's great. About once a week just to get reoriented. Do you have the Truflation chart? I do not. I do not have that. It is unbelievable. Let me see if I can find something. But yeah, go ahead and talk it. So all I hear from people are people in mainstream media screaming that tariffs are inflationary.

And I say, take a look at the Truflation chart that shows US inflation is currently, according to Truflation, and you're popping it up here, I think it's 1.37%. It is just falling off a cliff right now. Preston Pysh : Hey, Trump did the Fed's job for them. That's good. Nick Neuman : He did. And this is part of why I think people might be surprised to the upside that the Fed might be lowering the federal funds rate

rate more than people are giving them or anticipating at this point. Data come with the current data the way it is, inflation just ripping lower right now. It's making their job easier that they don't have to be battling with Trump. They can be like, "Look, unemployment's creeping a little bit higher. Rates are coming down. Inflation is tanking. Maybe we should think about lowering the federal funds rate a little bit." Trey Lockerbie : Well, Jeff, you know what's great about this chart is that so unlike the government CPI numbers, just for the listeners,

This Truflation, which we're showing the Truflation charts, it shows that in 2022, when the Fed was doing the rapid emergency 50-bip hikes on successive basis, we got up to 11% inflation. Now, I believe, correct me if I'm wrong, the actual government stat for CPI was in the eights. Is that right? Yeah, it was like seven or eight, somewhere in that range. I thought it was nine, but- Oh, I don't think it got that.

it tends to overestimate the inflation relative to CPI. Not relative to overall debasement, but relative to CPI, it tends over. So if they're printing 1.3 or 1.4%, it could actually be lower with the CPI stats. You could have CPI coming in even lower than this, which is fascinating. But here's your transitory inflation right here. Right. Hit 9.1% in June of 2022. Yeah. So they have it at 11, much higher. But

But I think what I want to bring about is all of these tariffs and these threats and this stuff, and Doge and all these kinds of things, we are being forcefully ejected from fiscal stimulus. And markets do not like being meddled with, and they are being strongly meddled with right now. So there's tons of chop, there's tons of uncertainty, people are very upset, markets are tanking, overvalued stocks like the Mag7 are tanking. And I just think that this

that this is what happens. So people who say first order thinking that tariffs are inflationary, they're not. Second order effects are the market does not like to be meddled with. It drives the economy lower. A lower economy leads inflation. And right now the economy is leading inflation lower. And so until we see a change, and I think we're getting close to a change, by the way, I think we're getting close to a bottom because I think the news is going to start shifting and we're going to start surprising to the upside with economic surprises, economic indicators. But anyways,

This is my answer for people who are yelling at me saying tariffs are inflationary. They're not. Preston Pysh : So Jeff, do you or anybody else, does anybody expect as we're sitting here March 13th, unemployment to start ratcheting up higher? I mean, there are federal jobs that are being cut, right? Are we going to see unemployment bearing down on 5% by the end of the year? Jeff Ross : If I had to guess, I'd say it's going to trickle a little higher, but not

but not go get out of control. So I don't know what's at 4.0 or 4.1 right now, maybe up to 4.3, 4, 5 at the most. I don't think it's going to spiral out of control personally. Preston, any thoughts? I'm trying to pull up the chart right now just to see what the trend has been. I don't have an opinion off the top of my head. So there are people, just anecdotally, there are a lot of people talking about layoffs and layoffs are a big deal and people are forecasting more layoffs, etc.,

But if I had to guess, I would say that I agree with Jeff's take. We'll be largely flat. You must have a point to that question, Joe. Well, I'm just curious. Look, so we have the Treasury Secretary going out and saying that the economy has started to roll a bit, right? And I'm just quoting his statement. He's saying it's starting to roll a bit. He's also said, as have others in the administration, that, look, if we start to slow down here, if we contract or potentially head into a recession for the next six months, it's the Biden economy. It's not the Trump's economy, right? It's not Trump's economy.

So, I don't think they make statements like that. Maybe it's kind of an insurance policy, like a hedge, you're making that statement in case anything goes wrong. But they have to realize that when you make those sort of statements, people get jittery and they get a little nervous, and then you get these growth scare discussions that we have on these podcasts and other podcasts. So, I'm just curious, are they seeing something in the data that gives them pause where perhaps we are headed for a real strong slowdown, and if that's the case, then asset prices are going to get hit, at least in the short run?

So, I'm just curious if anybody believes that narrative or if... I mean, when we were last talking, it seemed like, Jeff, that you were more in the camp that that's real, that that's not just baseless, that we could see that sort of slowdown materializing into actual growth weakness. Yeah. So, I had like my two days of panicking where I'm like, oh my gosh, they're actually intentionally throwing the kitchen sink at the economy. And then I spent...

So after we had that show, Joe, the next day I turned off everything and I just studied the data, like got all my autism on like full cranked up to 11. And I'm like- That's the way you do it. Exactly, exactly. Like no, nothing distracting me. And I looked at it, I said, you know what? They're front loading the bad news, right? I think we all agree on that, but they don't have enough in their arsenal to really tank the economy. And then when I was looking at all of my other indicators, I think everything is overblown right now. There's way too much fear and-

Regarding unemployment, that tends to lag the economy. It's a lagging indicator by about six months or so. And so when I see the current numbers that come out, I look back at the ISM about six months ago and say, where was that? And so if we look back in, I think, an August, September-ish range, I think that's about when we hit a shorter-term low in the ISM, and then it has been creeping higher ever since.

So because the Fed looks at that, that gives them fodder to be more dovish. But looking ahead as we do as investors, everything looks bullish. In fact, one of the things I was just looking at earlier today is CEO confidence. It had a little dip, and then it shot higher again in February, the reading we just got. CEO confidence is hugely important as a leading indicator because it tells CEOs are the business makers and the decision makers. They're the ones deciding should they hire or not. They

They're the ones saying, do we spend more money to grow our business? Temp services are off the charts high. Overtime workers are off the charts to the upside. All of that, those are all leading indicators saying we are going to grow as an economy heading forward, and we've probably bottomed right around now.

So you're saying we actually are entering Raoul Pal's, the banana zone, like it's still coming. The banana zone is- I actually do think that. Yeah. I mean, I think like we all say, the bull market hasn't started. It's going to start and it's going to be one of these moves again that we're all like, I can't even believe this is happening. This is crazy. Including the altcoins and all that? They're all going to run? Yeah. Ethereum? I don't know.

i sure hope not but who knows talk about the period is without narrative they didn't find it we got to talk about that that i mean that's amazing preston if you've been you've been in as long as you have right like the ethereum narrative has come oh it's closed

Preston Pysh : Well, I think it's interesting. I remember, oh man, maybe it was 2019, 2020, Adam Back, I was having a conversation with him and a couple other people. I forget what we were talking about as far as smart contracting. Oh, I remember what it was. Binance had just came out with their smart chain, basically their Ethereum, their version of Ethereum.

And we were all having a conversation about it. And I just remember Adam saying, I just don't see how Ethereum is going to be able to compete with them because they're talking as if they're decentralized as well, but they're clearly more centralized, which is an advantage in this particular space to be more centralized. And I don't think that anybody participating in these markets actually even cares whether it's decentralized or not.

And as a result, that nobody really cares, I think that they're going to outperform Ethereum and that they're going to be kind of caught in this no man's land or dead zone of competing against the more centralized version that's going to be faster and cheaper and all these things, but not actually decentralized at all. But since nobody participating in these markets even cares about that, they're going to cater to people that want that. Preston Pysh :

and they want more programmability, but they don't even care that it's not decentralized. So sure enough, here we are. It's probably, I don't know, again, I think it was maybe five years ago or four years ago that we had this conversation, but here it is playing out in full steam where Ethereum was trying to be somewhat decentralized and somewhat

not as centralized as the other solutions, and they're just getting clobbered by Solana or BNB or whatever. Trey Lockerbie : The big problem with Ethereum here is that it pushes costs onto the users, and the users are just getting squeezed out because they can't afford these costs anymore. And so people are fleeing to greener pastures, et cetera, "greener pastures," in quotes, in air quotes. To me, it's fascinating to look at the price though. The price is the real indicator here because it is down 50%,

50% in Bitcoin terms over the last six months or something. It is just absolutely getting clobbered. Bitcoin's at 80K. Ethereum's at under two grand or something right now. I mean, last time during the bull market when Bitcoin was at 69K, Ethereum was approaching $5,000, and here it is under two. Trey Lockerbie : This is, I think, drawing on the sentiment. The sentiment is really bad even in the Bitcoin circles, because if we're honest, a lot of "Bitcoiners"

they lever up on the altcoins going into quote unquote bull markets, and the altcoin complex has just completely imploded. So those people are seeing horrible losses across the board. They would have been better off just probably buying Bitcoin,

And it even comes through some of the Bitcoin proxy plays, like the miners are just really struggling. Even MSTR, right? The darling of last year, man, what a brutal year so far with MSTR. Hopefully that rebounds. Preston Pysh : The thing that I find really interesting about the whole BNB or Ethereum or any of them, right, is the only use case that has popped out of all of this after all of these years is tokenizing sovereign debt.

That's the only use case. I haven't found a single use case beyond tokenizing fiat is what it does. Well, gambling with the meme coins, gambling. Well, I would just say that that's just rug pulls, right? Just rug pulls on a token that literally represents just a person's name or something silly or funny that Dave Portnoy can make a coin that's, what was it? Jail coin or something like that, or prison coin. I don't even know what it was.

And he talks about it and then just rug pulls his entire audience. I don't even know what actually happened there. I see stuff on Twitter or X or whatever on the fringe. And that I don't even see as a use case. I just see that as a scam. And then the use case is just tokenizing sovereign debt. And so when you think about the act of tokenizing sovereign debt, let's call it Tether, let's call it USDC, they're the issuer that are buying an underlying

And they can claw that back if they want to, since they're the issuer. And then on top of that, you have BNB or Ethereum or whoever that can also get the tap on the shoulder if they don't like what's being issued on top of it or roll it back. Look at that, the last thing in Ethereum where there was a serious conversation as to whether they were going to roll back this supposed North Korean hacker that, what was it, a couple billion dollars?

that was hacked. Preston Pysh : 1.4, something like that. Jay Gould : Yeah, there was a serious conversation about rolling back the chain. So when I'm looking at that, I'm just saying to myself, okay, so how can anybody, especially when you get into governments that are making decisions about a "strategic stockpile" of this stuff, how can they take a strategic stockpile of these tokens that are clearly just centralized garbage that are just

just enabling a turnkey way to tokenize sovereign debt. And this isn't my pitch to create a CBDC by any shape of the imagination. I'm just looking at it from, I guess, from afar and saying, what's the value of the underlying token other than just kind of using it to fund or to, they call it gas fees in Ethereum, to fund the continued use of these turnkey

turnkey ways to tokenize sovereign debt. I don't know if you guys have an opinion on that or not, but... Trey Lockerbiesen : In theory, they should fall to their utility value. Most of these platforms have absolutely no users. People are just not using these things. The average DAU or NFT project, it's a ghost town. It's like Google Plus. Remember Google Plus? There's no one using that thing. It's propped up by all these bad monetary incentives. And so I

I don't see any reason why Ethereum will continue. Solana will take its place and then something will cannibalize Solana and add Infinitum forever. That's the thing that makes Bitcoin special is Bitcoin's not a part of that conversation. Preston Pysh : What are your thoughts on Tether saying that they were going to use the Taproot asset protocol to tokenize Tether?

sovereign debt over the Lightning Network. Any thoughts there? Nick Neuman : I mean, it's pretty interesting, right? We would expect that people would want to be closer to Bitcoin as Bitcoin continues to be the monetary center of this universe. So yeah, I mean, it would make sense that things would want to be as close to Bitcoin as they possibly could. So I think right now it's kind of like small ball for Tether, but we'll see if that program grows for them over time. Preston Pysh : Yeah, I think it is too.

I'm just looking at it from an engineering standpoint and it's like, well, it should be able to route it faster and it should be able to route it with lower fees than any of these other. And I think with time, you're going to have much better reliability with more nodes on the network. And it's super cheap to run nodes where if you're doing Solana, it's basically the foundation that's running all the existing nodes. So I don't know. Preston Pyshenko I think this is an important point for the average investor, which is basically that there's nothing that you can do on an altcoin that you can't do on a Bitcoin side chain. Yeah. Yeah.

So educate me on this because I had always heard right or wrong that right now, Lightning, although it's really promising, obviously I'm very excited about it, it can't withstand a billion dollars of transactions on a route currently. Is that true? Is that- Preston Pysh : It comes down to the channel capacity. So if you and I wanted to open a 100 Bitcoin channel, we can do that. And then you have all that capacity in order to conduct those transactions between the two of us.

But to conduct transactions beyond that with another node, that node has to be able to match your channel capacity or else we have to find a bunch of channels that are out that all. So- Right. So Tether's got, I think, what is it? 140 billion market cap. If they wanted to deploy, let's say 10% of that on the Lightning, how challenging do you think that would be from an engineering perspective? Well, so- The counterparty, right? The Taproot asset protocol doesn't need-

that capacity in Bitcoin in order to set up this channel. So if we're set up, Joe, as far as a connection on the network, we can route Tether tokens through that without that monetary value being represented in Bitcoin. That shouldn't be a concern at all. Preston Pysh : And those Tether tokens are running on a separate Lightning? Joe Carlasare : It's running on the Taproot asset protocol, which was developed by Lightning Labs. Preston Pysh : Awesome. That's cool. Joe Carlasare : Yeah.

So I don't know. I think it's really exciting. I'm excited to hear that they're getting ready to stand that up and to start routing tokens there. And I think that overall, it just makes the network more robust. And I think it also creates more incentives for people to run Bitcoin lightning nodes. So yeah, we'll see. Yeah, go ahead, Joe. So no, just to pivot one second, because I always love talking to all three of you, but in particular, Dr. Jeff, while I've got him here on record, I want to know,

As you're going forward for the next two weeks, we get some new data here. And just to close out with this, what are you going to look at that would give you real concern? If our listeners are diving into this episode here and they look at some of the economic data that comes down, what in particular are you going to say, okay, this one's a little bit worse than I expected. Now I'm flipping back to Dr. Baer. So it's kind of just everything. Let's see, what would make me bearish? It's hard to think about what would make me bearish right now.

So if the PMI data came back and it looked like the economy truly... So that's what we were talking about. When I see actual data showing the economy is actually slowing, I would get concerned. If services went well below 50, PMI services and ISM, both of those, manufacturing went lower. If CEO confidence turned way... Which would be crazy because it jumped higher up to 60%, which is a pretty high reading right now. I don't...

know what would make me bearish right now. I mean, I'm very bullish right now. I don't really know how to express it. Preston Pyshenko I think this is an important point for people listening is anytime I've talked to a really talented investor,

Because I used to ask these questions of people, it's like, "All right, give me the one metric that is more important that gives you 80% of the value with 20% of the effort." They're always so hesitant to answer that question because it's a confluence of multiple factors that really build a picture. It'd be almost like telling an artist or somebody that you can only paint with one color, but you want to understand what it looks like in a full range color picture, right?

It's literally impossible to do unless you're doing the confluence of all these different factors that are pointing towards a common picture. But I really liked the couple that you did highlight, Jeff. And Joe, right back at you, do you have any confluence of factors that you think would be important kind of looking moving forward that would be telling that? Joe Carlasare : Yeah. I mean, the two for me always, I think that there's so much signal provided by the bond market. So if you see yields getting bid hard, okay?

Okay. That is telling me that is the bond market processing most likely a combination of falling inflation, but also the kicker of slower growth. Okay. Which I think is concerning, right? It's always about the rate of change. So if you wake up in two weeks and the 10-year is suddenly below 3.7, something, I'm like, that's real bad. Okay. That's not just inflation. There's a growth expectation that's being priced through that mechanism.

That, and of course, spreads. I look at spreads very closely. It's on my routine checklists, on my trading view charts. I look at the high yield market because that's really the first signs of stress. And you see that moving. Again, we showed the chart earlier. We don't need to bring it back up. But to me, that is in particular the key message you want to look at. And also the yield curve. The yield curve has been un-inverted. I think that is basically been pricing in some of the growth issues we've been talking about.

And I think that it's pricing and the inflation being successfully brought down closer to target. But overall, those are the three things I'm going to always be looking at on my charts. Nice.

I like to tell people too on this new channel, what I'm using is the economic data is great, but what do you do practically as a fund manager? If you're managing your own portfolio, I like to just really come clean with people. So say, I don't know when this is going to get released, it's March 13th right now. But say in the coming weeks, Bitcoin chops sideways and dips as low as 70K, which I think is actually possible. Personally, I will be buying those dips with veracity. I'm

I'm running low on cash personally in my fund. I will probably be borrowing to buy more using leverage, which I don't recommend to anybody. But as a fund manager, it's not that unusual to use margin. But that's the kind of things I do when I'm very strongly convicted about something, especially macro related, when I see these positive divergences forming in RSI, so technical divergences.

as well as global M2 and dollar-based divergencies where the price is going lower, but those things are all moving in the right direction. That gives me a lot of confidence that the next major move we're going to see is going to be to the upside. So that's what I do practically. Love it.

Toddle, anything to close us out with? I think it is likely that we get a down move on Bitcoin, which I'm only saying so that it doesn't happen. So this is reverse psychology. So now that I've said that, it can't happen, but it will happen, but it might not. So think about it. You're going to be right in there somewhere. All right, guys, this is always a pleasure. I love picking your brains and

And I just love the plenty of different takes in multiple different directions. And the fact that you guys don't mind making yourself vulnerable in some of your takes and positions. And I think that that's just really helpful. I know it is for me personally, and I'm sure it is for people listening. So thank you so much for making time. Let's go around the horn. And if you have anything you want to promote or point out, do it right now. Hodl, do you have anything? Join Noster. Set up a Primal Wallet. It's great. Join Noster. It

It's very easy. It's not that complicated anymore. Primal makes it pretty simple. It is really good. I agree. Download Primal. Go ahead, Jeff. This has been great. I don't care if you follow me or not, but I also agree that you should join Noster. Buy a Bitcoin. I don't want any more fun people, so don't join my hedge fund. I'm not looking for patients. Don't come find me.

I just want to live quietly in my little office here. So- Joe. Yeah. You can Google my name, Joe Carlisari, and you see my firm website. If you have a litigated matter, I've got tons of cases, but I will absolutely talk to you. And if I don't know how to help you, I can definitely refer you to the right person. But I want to leave you with something important here, which is that I do believe that some of the pullback in Bitcoin is clearly due to the macro complex, this broad sell-off of risk assets. There are just fund managers who

that dump it all when the price is moving against you. So you should look at that, if you're listening to this, as an amazing opportunity. I feel bad when I see people depressed about the price here because, "Well, why didn't we get the SBR pump? Why aren't we above 130K? Why aren't we doing this?" The reality is that you have a levered market across the risk complex. And when a huge chunk of it, like the S&P, the gold standard of this time, starts to sell off, it's going to pull Bitcoin down. Bitcoin cannot, it's not strong enough, it's not big enough, it's not liquid enough to just stand on its own.

in the face of what you were showing Preston, which is like really strong headwinds of global sell-offs. So take advantage of that, use that within reason. I don't recommend leverage, but there are people out there that have been waiting for a good entry and yeah, can Bitcoin go to HODL's target of 55K in the next week? I don't know. But even if it doesn't, these prices are great. I think I was excited. I was buying Bitcoin, full disclosure, and I hadn't bought some since I think the 40 to 50K range before

but I've been deploying capital and I'm excited. I don't think the pessimism is justified. We still have a strong economy and eventually the president's going to settle down and we're going to get going again. I like that summary. Can I just plus one what Joe just said about the different types of funds and fund managers?

when technical indicators point in a certain direction, tons of funds just automatically sell to Joe's point. So take advantage of it and don't get scared off by it. Momentum-based funds, when it goes below certain levels, they sell. When technical indicators do something, they sell. When volatility spikes, they sell. That is your buying opportunity. Take advantage of these opportunities. Plus one, Joe. Good point. I love that closeout. Bravo, Joe.

Bravo, Jeff. And Hada, we will not forget your very, very important guidance that you gave before we threw this over. Guys, thank you so much. This is always a blast and can't wait for the next one that we do. Thanks, Preston. Thanks for having me, man. Thank you for listening to TIP. Make sure to follow Bitcoin Fundamentals on your favorite podcast app and never miss out on episodes.

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