{ "episodeId": "SLP223", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "preston_pysh_of_we_study_billionaires": { "name": "Preston Pysh of We Study Billionaires", "role": "guest", "tag": "PRESTON" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.31, "text": "Hi, you're listening to Stephan Livera podcast. Today for episode two hundred and twenty-three, Preston Pysh re-joins me on the show and we're chatting about this idea of Bitcoin's final cycle. What would it look like? How would we know? How likely is it? And will corporates be buying Bitcoin and be weak hands or strong hands? And what about governments trying to shut down Bitcoin? This show brought to you by Swan. In there Effort to spread Bitcoin knowledge and awareness, Swan is giving away a free book, Inventing Bitcoin, by Swan co-founder Jan Pritzkir. It's the best introduction to the Bitcoin system, rated four point nine stars on Amazon and highly recommended by Bitcoiners. To get your free e-book or audiobook version of Inventing Bitcoin, go to swanbitcoin dot com slash freebook. All Swan asks is that you pay it forward, share the book with at least three family and friends, and if you join the Swan Force at swanbitcoin dot com slash enlist, you'll get a swan Special link to the free copy of Inventing Bitcoin that will help you recruit new bitcoiners. You can share the book with anyone, and if they eventually start stacking with Swan, you'll get credit for that referral. It's really a great deal. Spread Bitcoin knowledge and Swan Bitcoin, the best and safest way to start accumulating Bitcoin. So head over to swanbitcoin dot com slash freebook now to claim your free copy of Inventing Bitcoin by Jan Pritsker. 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Knox will seek to obtain two hundred and fifty million dollars of insurance dedicated exclusively to that account and adjustable to volatility, no fractional coverage or narrow scope. Insurance for what it's worth, a tool to transfer risk. If you are a Bitcoin company Investment fund, trust, or family office, check out Knox for your insured custody. Go to knoxcustody dot com. Preston, welcome back to the show." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "02:40", "start": 159.89, "text": "Hey, Stephan. Always great to be here." }, { "speaker": "stephan", "time": "02:42", "start": 162.37, "text": "Preston, it's always a pleasure to chat with you, and, today we've got a few interesting themes that we can chat about. I think some of the discussion recently has been around this concept of, well, Bitcoin has these four-year cycles, and what's the likelihood that this is the final cycle? What would the final- Final cycle look like. Now we can make, you know, some of these different arguments for and against, and maybe we can explore some of those ideas, but I guess high level, how are you thinking about that idea?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "03:11", "start": 190.88, "text": "Well, I think the most important thing is that whatever idea you got, you better hold it pretty loosely, because, there's no way to really-- especially where we're at right now, to have any idea one way or the other. But I think it's fun to kind of tease out the, the various- courses that it could take. I know whenever I'm thinking about the value of a business, I'm always kinda using an analogy of a hurricane path, where you're, you're trying to project where it's gonna make landfall five days in advance, and with a stock or a, a currency like Bitcoin, you're trying to understand what that left and right boundary would be for your model, and then where you're most likely is. And so I love teasing out things like that and trying to con- Consider what the environment might look like as we kind of move forward." }, { "speaker": "stephan", "time": "04:04", "start": 243.74, "text": "Excellent. I love the idea of trying to think, well, what's the boundary left and right? So if we were to think in a Bitcoin context, what do you think the left and right would be? So I guess in this case, it would be something like, what's the earliest you could imagine the hyperbitcoinization process completing versus the latest? What do you see that as?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "04:24", "start": 263.74, "text": "You're saying like it going all the way, like," }, { "speaker": "stephan", "time": "04:26", "start": 266.26, "text": "yeah," }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "04:27", "start": 266.84, "text": "total, global adoption. I think on the early side, I think it could be this incoming cycle, this four year cycle that we're currently in. I think it could happen within this cycle. I think on the long end, I'd be surprised for it to go more than this cycle and the next one. So, you know, I'd say seven and a half years would be probably, m-m, the, the long end for me. And I think there's a lot of people that Disagree with that." }, { "speaker": "stephan", "time": "04:53", "start": 293.26, "text": "Yeah, I think a lot of people would, there might be a lot of people who would say, \"Oh, surely Preston, it can't be that early, right?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "04:59", "start": 299.0, "text": "\" Yeah, I think, I think you're, you know, I don't know, if you asked a hundred people, I think most of them would probably say, \"Oh, it's gonna be longer than that. \" And I, for me, the, the reason why I guess I'm more bullish, I think it could happen faster, is just because I think that the backdrop of everything that's I don't know how they're gonna be able to keep the trust glued onto what's happening. I, I don't know how that's possibly gonna happen for more than seven years or seven and a half years." }, { "speaker": "stephan", "time": "05:34", "start": 334.05, "text": "Right. And I think part of that, for me, comes down to, well, I think I've experienced in this, in following the Austrians and Goldbugs who have been saying the same thing for a long time, and I mean, I consider myself a, a student of Austrian economics, obviously, but the awkward position that many find themselves in is is criticizing the current system and saying it's unsustainable, and yet they find a way to keep the party going, right? So for example, people in two thousand and eight and nine were saying, \"Oh, look, this isn't a good thing,\" and then here we are with, you know, at all time highs on, you know, stock markets and things like that. So how do you sort of marry those two ideas?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "06:13", "start": 372.87, "text": "So going back to two thousand and eight, your ten year treasury was at five, five and a half percent before the, the two thousand and eight crash. So you Left on even the ten year and then you're, and that, the yield curve in two thousand eight, beginning of two thousand eight, was flat. So I, I was saying five, five and a half percent, it was somewhere in that range, but it was across the entire duration of the bond yield curve. Today, you're, you're nowhere near that. I mean, you're, you're pressing down below one percent on the ten year Treasury, and, and we're seeing the printing accelerate. So I don't know how they're gonna be able to keep the lid on that, Higher, especially the way that the-- on the fiscal side, they keep obligating money and obli-- debt obligations. So, you know, I don't, I don't know how they're gonna allow interest rates to go up. They're gonna have to keep them depressed and down. And so I think that that's really the big part to all of this that, and it's just not here in the US, most of the rates around the world are negative, and you didn't have any of that in two thousand eight. You didn't have any of that prior to two thousand eight. Significantly different. And if people aren't thinking about that, that piece of it, I mean, come on, think about it. If you have a negative interest bond, you're, you're signing up for a contract to lose money. You're signing up for a guarantee to, to have less money. So I just don't know how long that charade can last. And I mean, we're at the tune of negative sixteen trillion dollar-- sixteen trillion dollars of negative interest, debt out there, fixed income debt. So how long can they keep that charade going? Going. And, and I think this is the part that, that I, I think is really important to consider. In the past, you didn't have this thing that looked like a rocket ship of buying power right next to it, right? So two thousand and eight, yeah, you had gold, and gold went up a-- initially with the crash, gold got punished just because it's a liquidity squeeze, right? But as soon as, as soon as they pumped all the liquidity and the fiat units back into the system, I think gold did two or three hundred percent from there, right? It went way" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "08:22", "start": 502.0, "text": "Absolutely nothing, a speck compared to what I kind of expect out of Bitcoin in the coming year as far as a percent in nominal fiat terms, how much it's gonna go up. So when you, when you're comparing something that's a guaranteed contract to lose money to something that is-- I, I don't even know if a rocket ship is the right term, I mean, it's like a warp, it's like a buying power warp of what I suspect we're about to see. And so how can the market keep trust in something when it, when that's the contrast?" }, { "speaker": "stephan", "time": "08:53", "start": 532.98, "text": "Yeah, and so I guess maybe the only other point would just be something like, \"Well, you know, maybe they managed to keep us in financial repression for a little while longer, right? So people, they just sort of try to keep the economy in a sort of stasis, and we have this sort of Japanification or zombified companies that are just kind of lurching forward, but they're just not-- they're not really doing really well, unless the-- unless they're the obvious kind of standout, you know, Amazon. And Google and so on, but we just have a whole heap of companies who are just kind of staggering forward. I guess that's perhaps one scenario. What do you think about that possibility for sustained financial repression?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "09:35", "start": 575.47, "text": "I think that's exactly what they're gonna try. They're gonna have to, in order to try to keep things calm. And I mean, that's how these, these types of situations, now, granted, we've never had it on a global scale, but we've had it on a national scale all many a times throughout history. It's exactly what they try to do. They To print, they try to provide that liquidity, they try to, choose the, the least of all the bad options, the, the, the w- the least bad option that's out there amongst all bad options. And, I think that's exactly what they're gonna try to do. That's what they've been trying to do since really 2008." }, { "speaker": "stephan", "time": "10:12", "start": 611.69, "text": "Yeah, and perhaps the other aspect of it is also how much will they be able to corral people into the central bank digital currencies or the, the, the their own little controlled, contained system that enables them to carry on the financial repression for a little bit longer and keep the party going just that little bit longer." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "10:33", "start": 633.01, "text": "Well, I think that to, to do that, they have to have something that's probably already in the works or in a testing phase. I don't know how How familiar you are with government acquisition work as far as procuring and standing something like that up. But my experience is that it's pretty darn slow. And now we're talking about doing that for a currency that can't fail and can't have mistakes. If that system is going to somehow rise to the occasion, I would suspect it'd almost already have to be, have been built. On top of that, and I think more importantly than that, let's just say it did exist today, they're still gonna debase the- The units inside of that protocol or, or whatever you'd wanna call that system that they'd have, I mean, it'd be a closed loop system that they'd be controlling the, the units, they have to continue to debase it simply because the habits of those elected officials, not just in the United States, but all over the world, is to spend money to debase the currency in order to promote the cost of their goods and services to be lower than everybody else. So that's not gonna change. So whether you're using a digital cur- I mean, we already are using a digital currency that they're already manipulating the, the baseline to. So, the fact that they're gonna put a fancy branding on it, calling it a cryptocurrency or whatever, I mean, I-- that's pretty much all I see the difference being is that it's a different branding that, that ironically or unironically, depending on how you're looking at it, they're doing that to create trust, right? Why else would you call it something different other than to, to garner trust, which implies that the, the, the system that- has been used, doesn't have trust. So I find that really interesting." }, { "speaker": "stephan", "time": "12:15", "start": 735.27, "text": "Yeah, and it just seems a little bit of cargo cult science, right? So that people are talking about Bitcoin, and then you see, you know, the ECB and these big central banks come out and talk about, you know, CBDC, like it's a big new innovation, when really it's essentially lipstick on a pig. So it's a funny way, it's a funny world that we're living in that that is part of the conversation now, and, you know, Jerome Powell is openly talking about CBDC and With anything on that, and it's just a very funny thing." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "12:44", "start": 764.09, "text": "If anything, Stefan, if anything, it speeds it up, because now you get faster clearance of settlement times than what you had before. So if they're now doing digital currencies and doing it through a blockchain or, you know, if it's, if it's, if it's centralized, can we even call it a blockchain? But they're gonna speed up clearance times of, of being able to pay people, the people are then gonna be able to transfer that into whatever else they, they wanna put it into. So if they wanna move Bitcoin, they can just do it quicker. So one could make the argument that they're actually gonna accelerate the speed of adoption to a truly decentralized protocol that is acting as a form of store of value, which is Bitcoin." }, { "speaker": "stephan", "time": "13:26", "start": 805.58, "text": "Yeah, I'd, I'd like to see, definitely more and more people coming into the Bitcoin world. Obviously, I think you and I and many of my listeners are obviously already there in terms of wanting a Bitcoin standard and so on. I guess maybe one idea that comes to my mind also is my friend Vijay Boyapati. And he's spoken about this idea around waves of adoption, right? So every wave, it-- each time it's, it-- you can access more people, right? So in the early days, it was cypherpunks and, you know, drug markets and libertarians, and then it became kind of macro people, and, you know, over time, it's kind of that circle of users is growing. And so it's kind of like each wave, there's only so many people that you can attract in, because there's only so many people who are mentally ready to take that leap to, coin and to hold it and to use it and do all these things with it. So I guess probably in my view, that's the strongest argument I can think of of why this coming cycle, let's say the next year or two, isn't the final cycle. However, I, I'm curious what you think in terms of people being mentally ready to take that Bitcoin, you know, orange pill." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "14:31", "start": 871.29, "text": "Well, at the end of the day, it comes down to trust. When do we feel like you're gonna have such a headline in the news and trust is, is so eroded that it place discussion in every single household around the world that people were saying, \"Hey, these currencies are broke, and this other thing over here that just keeps gaining value seems to be the solution to this.\" That, that day is gonna come, and it's just a matter of when it's gonna play out. So, for a historical reference, you can go back and you can look at Germany in the nineteen twenties when it had its hyperinflation event. And when you look at the chart, and anyone can Google this, just type in Germany nineteen twenties gold mark, you know? A price chart, and when you see the, the chart, it just goes parabolic. It has a lot of growth early on, and, and it really kind of started in nineteen eighteen, you had a lot of growth, let's just say, a, a one, one gold mark when compared to paper marks, one of those in nineteen eighteen, through nineteen eighteen was around the, the, a one, and it went up to about a five. Then by nineteen nineteen, a year later, the end of nineteen nineteen, you were at about ten. Then by the end of nineteen twenty-one, really kinda getting into nineteen twenty-two, it got up to a hundred, and you still didn't have this scenario where the Germans were, were saying this is hyperinflation, they were just saying, \"This, our...\" Currency is just getting crushed, right? They, they still felt like it could be salvaged at that point in nineteen twenty-two, and this all started in nineteen eighteen. And so you went from a debasement of one to a hundred, right? But where it really started coming off the tracks is whenever it started getting up to a thousand, and then the ten thousand mark, after it went from one to ten thousand, which took one, two, three, about, five and a half years, when it passed through that ten thousand mark is when it really came off the rails, and I pulled A, this is a obviously translated from, from a newspaper, from a Frankfurt newspaper in nineteen twenty-two as this passing through like the ten thousand mark occurred. And this is, this is what was written back then. \"German economic life is dominated by a struggle over the survival of the mark. Is it to remain the German currency, or is it doomed to extinction? During the past few months, foreign currencies have replaced it as units of account in domestic transactions to a wholly unforeseen extent. The half- Habit of reckoning in dollars especially has established itself not only in firm internal accounting practice but above all as the method of price quotation in trade, industry and agriculture. When I'm trying to think about what are gonna be the cues of this thing potentially going all the way, I think the cues are something that we've talked a lot about, I know you and I, Stefan, in this past year, and that has really kind of become a theme in the Bitcoin community. Currency, especially on Twitter, which is this unit of account. When, I think whenever you start seeing CNBC discussions, Wall Street Journal articles with this in the headline that is Bitcoin the new unit of account, is the dollar dead? Is the euro dead? Those kind of things in the news, if Germany's any indication of, of where that separation occurred, where, where all trust was lost, that's what the headline sounded like right as that happened. so I think- I think that that's an important consideration, that's what people need to be paying attention to, because as soon as that narrative starts to take hold and it's, and it's commonplace in financial news and business, you better believe people are thinking about, \"What can I do to protect myself?\" Do I think that those headlines could happen this summer, in a year from now? I do. I think that those headlines could happen. Especially if we watch Bitcoin go to a hundred thousand. I don't know how the financial news, I mean, you, you're seeing how they're handling this recent run, right? Like it just hit thirteen thousand, and it, and it came from like eleven thousand, and it was all through the news. Paul Tudor Jones was on Squawk Box, they were talking about how much he likes it and all this kind of stuff. That move was nothing. I mean, you, you were in the game in the twenty seventeen bull run, right? Like this is, this what we've And if history is any indicator as to how much this is gonna run in the coming year, watch out and get ready for those headlines. And I, I kinda suspect if those really start to take root, the trust is the part that I'm really paying close attention to. I'm paying close attention to big bond investors talking about how they're taking a portion of their bond position and reallocating it to act as a hedge against inflation. Those kind of things are gonna be the things that really are good indicators as to where this is potentially going on this, on this incoming run." }, { "speaker": "stephan", "time": "19:25", "start": 1164.89, "text": "Right. And so, yeah, that's a really interesting way to parallel, to look back into Germany, the history, and a, a great book I'm sure you've read also is When Money Dies by Adam Ferguson, and there's some really interesting cultural shifts and things that were happening during that time period. So, at one point, the internal- Appreciation of the mark was lagging behind its fall abroad, and so Germany was actually a haven for tourism, right? And so it's kind of a funny cultural phenomenon, I guess, that we'll see, and perhaps we see this in other countries around the world also, where they are going through currency trouble. In the first few years, it actually is a really cool place for tourists to go, because they can go there and get, you know, really fantastic service, best hotel, excellent restaurants, all for very cheap, but then later it, it gets worse and worse. I think it's different in this sense because there's a few different factors here. Because firstly, we're looking at a global phenomenon here as opposed to just what's going on in one particular country. So in your view, how does that change it? For example, if it's happening in a more global context, people could argue that, okay, fine, I, I just, I won't use my local fiat money, I'll just use the US dollar instead." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "20:41", "start": 1240.54, "text": "Yeah, and I think that that's where this might even be more profound because the narrative Isn't just gonna be in a single country, you're gonna see the narrative just slowly trickle through the countries that are finding their currencies collapsing first. So Turkey, Argentina, you can go on, there's, there's a bunch of them, Venezuela. When you look at these price charts in terms of their fiat currency, Bitcoin's already making new all-time highs, right? My opinion is, as this continues to play out, those price charts are gonna be commonplace amongst all nations. They're all gonna be looking at these price charts and saying, \"Why is every single- Local currency on the planet getting debased relative to each other, right? It's, it's, it's gonna be a crazy experience, and it's gonna be something that the, the news stories are gonna start in some of those locations, and they're just gonna compound and proliferate around the globe as this continues to amplify." }, { "speaker": "stephan", "time": "21:34", "start": 1293.63, "text": "Yeah, and so I think as people in those countries that are already hitting Bitcoin all-time highs in their local currency, they're gonna start thinking, at least some of them will start thinking about Bitcoin and holding Bitcoin and so on. but then that opens up the question around technology, ease of use, how easy is Bitcoin to use and secure today, versus that versus the necessity, right? So when someone really, really needs something, they'll go and spend the time to learn, but, you know, Bitcoin today can be difficult to pro-correctly secure and do all these things. What's your thought there on the level of technological progress with Bitcoin and the ease of use, the user experience, versus the- Necessity." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "22:17", "start": 1337.12, "text": "Well, when you look at the, the general population, most people don't have any type of positive earnings power. Your typical household, not just in the US, but literally all over the globe, they've, they've been conditioned into spending whatever they've got as fast as they can, and then if they can borrow beyond that, they will, because they've been, they've been incentivized to, to act that way. Where you look at the locations where free cash flows are being generated in any type of meaningful way, it's On businesses' income statements and then being plowed into their, into their balance sheets. That's where the meaningful amount of, of, movement of free cash flows is actually at. And like we talked about, oh my gosh, probably six months, nine months ago, Stefan, that's where I've kind of suspected it's gonna end up. And so we're starting to see that. I don't think we're seeing it in any kind of meaningful way. We've seen a few companies that have done it in, in meaningful ways, but as far as collectively, in publicly traded businesses, You're just now starting to see that become a point of discussion in boardrooms, and, you know, when you, when you think of it from a technical standpoint, how hard is it to secure bitcoins or have some company secure them on your behalf? I don't see that as being any type of roadblock for this incoming cycle, because when I'm thinking about how companies are gonna buy these, I mean, it's just, it's, it's kind of a non-issue as far as I'm concerned. And then on the individual level, the people who, who have a significant amount of money, way to, to, to stack them. I don't think that that's gonna prevent somebody who has any type of meaningful money to put into it, is, is gonna stop them from doing it." }, { "speaker": "stephan", "time": "23:54", "start": 1434.17, "text": "Yeah, you're right to point out the distinction there between individuals and companies. And also in these high inflation environments, if we look historically, as you mentioned, the nineteen twenties Germany, or if we look at, Zimbabwe for example, a re-more recent historical example, we can see examples where people try to pre- protect themselves against the, depreciation of their, of their currency and potentially of their net worth. And so they, they look at things like buying real assets or potentially taking out loans in the local currency, which is in some sense kind of going short. And so listeners, you can check out my recent episode, with Russ Lambert and Philip Haslam, we talk about their book When Money Destroys Nations. but those are some examples that, Individuals and businesses can undertake to try and protect themselves, do you have any thoughts around the most likely ways that people will do this? I mean, is it just gonna be kind of like a Michael Saylor style, just buy Bitcoin and hold it in the treasury?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "24:58", "start": 1498.48, "text": "You know, that was, I think his example was not the common one for a publicly traded company. For private companies, I could see that all day long, but for a publicly traded company, he was in a unique position where he, he has a, an ability to outvote everybody, so he can do Bold things like that, but most publicly traded companies don't have, such a concentration of voting rights. So I think what you're gonna see is a much more Twitter, I'm sorry, PayPal like, I'm sorry again, I, I misspoke again, Jack Dorsey Square. The, that's how I think you're gonna see more of these publicly traded companies roll out as the way that Square did it, where they, they didn't take a huge position, but they took, an initial position where they purchased, what was it? One, there Coin. So they had a fifty million dollar basis, I think it's up to about sixty million, dollars today as far as its value. I think that's what you're gonna kind of see to be much more standard as the year goes on. And I think as you get more tech companies that do this, and I definitely think there will be more tech companies that do this, we just saw the PayPal announcement that they're gonna start offering it. Now whether they put it on their treasury or put it on their balance sheet or not, that's, you know, yet to be seen. I would We're gonna see companies that start off by dipping their toe in the water, and then next thing you know, they're gonna be putting their feet in the water, and next thing you know, they're standing waist high in the water. And most of it's gonna be just because of the, the performance that it gives their stock is just gonna be unprecedented. We've, we've seen what's happened with Michael Saylor's company, and I think that that is just literally the tip of the iceberg as to the performance that you'll start seeing out of MicroStrategy here in the coming year." }, { "speaker": "stephan", "time": "26:44", "start": 1603.65, "text": "And it does also open up that conversation around whether people will start buying MicroStrategy shares to have some exposure to Bitcoin also." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "26:54", "start": 1613.54, "text": "Yeah, I think that I think a lot of investors don't have access, like their, their only access is through GBTC, they don't necessarily wanna go create their own, they don't wanna go to like a Kraken or whatever 'cause it's just too much work, they don't necessarily think that they understand it, so they're just looking at an easy solution that they can do through their existing trading account. Account. And so they're gonna, they're, they're gonna find investors that are just gonna plow into things like MicroStrategy to get some type of exposure to it. Now, as my opinion is, is, is what, as the cycle matures and we really start to see the, the price run, I'm not so sure that, people are gonna be so lackadaisical in their, in their way that they're gaining exposure to it. I think they're gonna take a much more active approach. But yeah, that's, that's kinda how I see it." }, { "speaker": "stephan", "time": "27:41", "start": 1661.21, "text": "Back to the Check out BitcoinBlackFriday dot com, a project from the team behind Bitcoin Magazine and the Bitcoin twenty twenty one conference. It's a celebration of the growing Bitcoin economy. On the site, you can find active deals for up to fifty percent off on your favorite Bitcoin gear and other merchants that accept Bitcoin. 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Use code Livera for a discount there. And also, Unchained have a range of other open source contributions in the ecosystem such as Caravan and also Hermit. So if you're interested, go and check out my recent interview with Joe and Drew from the team and go to Unchained Dash Capital dot com to find out more. Yeah, so they may dip their toe in the water with this. Kind of orange, you know, orange coin exposure without actually holding any, and then eventually learn, okay, I ne- I actually need to learn how to take custody myself and do all those more advanced, things to sort of truly do Bitcoin. but another question that came to my mind as well is when companies are buying Bitcoin, there is that question of whether they will be strong hand holders or whether they will be weak hands who sell at the first sign of trouble. Do you have any thoughts on contrasting whether an- An individual who's an individual hodler who's ideologically or just interested in Bitcoin and is hardened through time versus a company holding where perhaps they will face pressures from their board or their senior, you know, executive management and directors and so on who will say, \"Oh, I wanna cut my losses and run,\" that kind of thing." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "30:05", "start": 1804.98, "text": "Yeah, I don't see them, them trading it like you've seen. People on Twitter that trade it. These decisions are very strategic, these companies, the boards, they meet, they're looking at things that they can buy and hold through a long period of time. If they're taking a position to have an inflation hedge, they're looking at that as something that's taking years to play out, so they're not gonna, they're not gonna just buy it and then a couple months later offload their position. They're, they're buying it to hold it for a long period of time, just like Michael Saylor said, \"I plan on holding it for a them trading around it hardly at all. I think when they take a position, they're gonna hold it, they're gonna see how it plays out through the quarter, maybe two quarters to see how it, how it matures, and then if they're ahead in the position, they're probably gonna be looking to maybe even increase their position." }, { "speaker": "stephan", "time": "30:54", "start": 1853.53, "text": "Yeah, so it'll be that, that dip of the toe in the water and then decide to take a bigger position. I suppose though, if this ends up not being the final cycle, as it were, and I'm just picking numbers out of," }, { "speaker": "stephan", "time": "31:09", "start": 1869.44, "text": "Hypothetically, let's say it, it gets to like a hundred and fifty thousand, and, you know, a whole bunch of companies all try to buy in there, and then it peaks at two hundred thousand, and then it crashes down to whatever forty thousand or fifty thousand, right? Again, I'm just picking random numbers just for the sake of discussion. But then would you see it like some of those companies who may have bought in at a hundred and fifty thousand are now really feeling the pinch because now it's down at fifty thousand?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "31:34", "start": 1893.8, "text": "Yeah, I think that could, that could change" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "31:39", "start": 1899.42, "text": "Because the, the time frames, if it's anything like previous four year cycles, that plays out in longer than a year's period of time, so you could see companies that would jump ship and sell their coins and, just go through the process, but just more on a, on a more macro level, it'd just be a fractal of what we saw in the previous four year cycle only, instead of it being individuals, it could be companies. Yeah, I could see that." }, { "speaker": "stephan", "time": "32:02", "start": 1921.72, "text": "Yeah, although there'd be some, although to that point, the companies who are earlier in, into it now Up on his investment, so" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "32:12", "start": 1931.67, "text": "that's for" }, { "speaker": "stephan", "time": "32:12", "start": 1932.05, "text": "sure. Yeah." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "32:13", "start": 1932.71, "text": "Yeah, it, the value, you know, if I was gonna get into talking about the value of businesses, 'cause I was seeing a lot of comments on Twitter about this, is like, how do you value, MicroStrategy when they're sitting on so much Bitcoin, and, especially when you compare it to how much free cash flow is they're kicking off? How do you value that as a stock, and people are buying it to gain some exposure to Bitcoin, but how much exposure to Bitcoin? And, and like all Things. And, you don't mind me getting into this, part of, just going in this direction, do you, Stefan? Of" }, { "speaker": "stephan", "time": "32:46", "start": 1966.11, "text": "course, no, no, let's do it." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "32:47", "start": 1967.35, "text": "Yeah. So when I, when I think about value, and, and this is something that I've noticed in the community, a lot of people are technically oriented by price charts when they're looking at things and not necessarily, looking at a company and doing, you know, a strong analysis as to what the value is that the company's actually able to produce in the marketplace and then compare that Invest in. So when I'm doing this, the, the example, and I think what I'll do, just to kind of illustrate this, I'll talk about microstrategy before Bitcoin, then I'll talk about microstrategy after Bitcoin to kind of compare and contrast the valuation process. So the way I like to talk about valuation, whenever I talk to somebody who's just learning it for the first time, I like to use an example of a money machine. So let's say that I was gonna sell you a money machine. Most people, when they hear that, they get all excited and like, okay. Sure, I'll, I'll pay anything for that, right? But the, the question really comes down to is how much money is the money machine, producing in a year's period of time? If I'm gonna sell you a money machine, let's say I sell you a money machine for a hundred thousand dollars, your immediate question should be, \"Well, how much money can it print in a year?\" And if I come back to you and I say, \"Ah, the money machine can print a thousand dollars a year,\" that's it, right? It's a money machine, but" }, { "speaker": "stephan", "time": "34:10", "start": 2049.94, "text": "No. Payback" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "34:10", "start": 2050.42, "text": "period of a hundred years, and that's a one percent return, right, on an annual basis. And that's assumed, and, and we're obviously making this really simple that, like, all the costs and everything will just say that it, it, it never breaks and all that kind of stuff. But yeah, your payback period's a hundred years. So now if I, if I would come back to you and say, \"Well, it produces thirty thousand dollars a year,\" now it's, it's much more, appetizing for you to take on this, I always like to use that example because that's what a business is, it's, it's a money machine. At, at least if it's doing its job right, it should be a money machine that's, that's printing a certain amount of money every year. So when we look at MicroStrategy and we, we use that same exact example and we say, \"Well, how much are you paying for the MicroStrategy money machine? \" And today, if you were gonna buy every share out on the market, it's one point seven billion dollars to own all the shares. And so then the, The money is the MicroStrategy money machine producing every year, and the answer is about thirty million dollars, roughly, right? Every year it changes a little bit, but around thirty million dollars. So what's fascinating is in the example that I previously said where you're buying a, a money machine for a hundred thousand dollars and it only produced a thousand dollars a year, MicroStrategy, you could buy it for a hundred thousand dollars and instead of getting a thousand, you're getting one thousand seven hundred dollars a year based on the price and based on the net income or the profit that the company's producing. And so A person would hear that and they say, \"Oh my god, that's, that's pretty crappy, right? Like that, that's not that good.\" But what a lot of people that aren't intimately involved in the stock market don't realize is that's pretty much how the entire stock market is priced right now. It's priced at that multiple of, of that kind of return, about a two percent return is what the US stock market is priced at. It might even be worse right now after COVID. All your market participants that are holding stock today are signing up to buy a hundred thousand dollar- money machine, and they're gonna make about a thousand to two thousand dollars a year with their money machine. It's gonna take a hundred years for the-- for those money machines to, to basically retain the, the, the earnings that you're buying them for. Now, what's fascinating about Michael Saylor's company is he's done something very different than everybody else, and he went out and Michael was sitting on a tank load of free cash flows of, of retained earnings at this point, right? He had four hundred and twenty-five million- Million dollars of, of retained earnings, liquid retained earnings on his balance sheet. Let me tell you folks, not too many companies that have that type of market cap of a one point seven million dollar market cap have, you know, a quarter of it sitting in like cash And Michael did. And so he goes out there and he buys, he-- not only does he go and buy some Bitcoin, but he literally goes and buys, like, all of his liquid cash, he goes and buys completely all of it Bitcoin. Now, his company goes and, you know, since buying it, which-- what's, what's it been a quarter, three months, Stefan? Would you say? Yeah, roughly," }, { "speaker": "stephan", "time": "37:19", "start": 2238.87, "text": "yeah, yeah. I'd say a" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "37:20", "start": 2240.17, "text": "quarter. So in three months, now, granted, this is unrealized gain, so they could go down. But today, he's already made in unrealized gains, sixty-six million dollars in three months," }, { "speaker": "stephan", "time": "37:34", "start": 2253.67, "text": "double the annual normal earnings." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "37:36", "start": 2255.58, "text": "That's exactly right. His, his bottom line for the year is thirty million dollars, and he's already doubled it. So you had a company that was, that was making thirty million a year, right? It was, it was basically making the one thousand seven hundred dollars in the money, machine example, and he's tripled it. Okay? So instead of getting, we'll just round it up and say he was getting a two percent return, now he's getting a six percent return. As a, as a, as a analyst, as a security analyst, how do you value a company that just triple A quarter, right? So if we were really gonna do this as an annualized thing, you'd multiply that by four. It's not triple, it's, it's way higher than that, right? Now we're doing all this public math, so I gotta be careful. But that's some serious stuff to think about. Now, when we think about, well, where would the company be in a year from now, based on what you and I know about scarcity and the halving and all that kind of stuff, and kind of what we suspect is gonna play out here in the coming year?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "38:36", "start": 2316.32, "text": "I Now, Bitcoin's gonna be at a hundred thousand dollars. That's, that's my opinion, right? I could be way off. But if that scenario was true, Michael Saylor is going to have three point eight billion dollars of unrealized gains in just his Bitcoin alone, okay? Three point eight billion dollars. That would take his company a hundred and eleven years to produce as far as profit, you know, all the assets on his balance sheet minus the Bitcoin that's sitting there, it would take those assets, those people performing the, the, those jobs, a hundred and eleven years to- produce that much bottom line profit and retain it. How do you value something like that? I, I don't have a good answer for you, but I, but I can tell you it's drastically different than how you're valuing everything else in the marketplace. Because everything else in the marketplace, you're buying the money machine for a hundred thousand dollars and you're only making a thousand or two thousand dollars. For every company, pretty much in the entire stock market In, in general terms like the S&P 500 and such. So, you know, where, where do I expect his company to be in, in a year from now? Well if, if the calculation we've got for the Bitcoin is right and it's three point eight billion dollars, then you stack on top of that how the market was valuing that thirty million dollar stream of cash flow before, you come up with around a four point three or four point five billion dollar market cap valuation which would put it at about a four hundred and thirty dollar share price, in a year from now, at a minimum. For me, at a minimum, that's how I would be thinking about the value of that business that I would expect to see in a year from now, at a minimum. So it's, it's pretty interesting 'cause, normally when you're valuing a business, it, it really comes down to how much are they putting off the bottom line on their income statement, and then the assets are just kinda looked at very differently. when, when you start getting into the balance sheet, typically you're looking at a business that's failing, and you're gonna try to repurpose or resell the assets and try to recuperate more than what you paid for them in, in the book value. but Man, it's, it's, it's a really interesting time in security analysis because I kinda suspect the companies that are sitting on these big balance sheets, on these big Bitcoin balance sheets, are gonna start to be looked at More closely and with more of a premium than the traditional assets of the company that they typically produce on the income statement side. And boy, we've never seen anything like that. It's really exciting as a person that likes to study this kind of stuff." }, { "speaker": "stephan", "time": "41:13", "start": 2473.06, "text": "Yeah, I, I think that you gave a really great explanation there, Preston, and I think maybe expressed in another way, people sometimes, people who are looking at the stock market and thinking, okay, what sort of stocks am I buying typically or a company? Common one is CAPE, right? Cyclically, cyclically adjusted price to earnings ratio. And typically, if the market is already very high, then people have, they logically their future expectation for the return possible by investing in stocks is quite low, and that might potentially be what causes them to start looking in these, looking at other possibilities such as buying Bitcoin directly or looking at companies that are taking this kind of approach, wouldn't you say?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "41:54", "start": 2514.37, "text": "Yeah, well, think about if, if what we described is true as far as Bitcoin's ability to run, think about how much leverage he's gonna have to just do acquisitions of competitors, because you don't have to have the full amount to, to buy out a competitor, you just have to have a, a portion of that, and if you're sitting on that much liquid, buying power, three billion plus for a company that used to only have half a billion, I mean, that is a significant difference in their ability Ability to compete. Now let's just change gears, and I mean, MicroStrategy is a, it's a tiny company compared to the Apples and the Amazons and all these other big tech companies that are sit-- literally sitting on hundreds of billions of dollars that they could drop into the market. So like, Michael Saylor just bought four hundred and twenty-five million dollars worth of Bitcoin. Apple could step in and literally take a ten billion dollar position in Bitcoin, and, and it would be viewed as a- Conservative, I think, I think it'd be viewed, maybe not as conservative, because that would be, what would that be, five percent of their, I don't know how much marketable securities are cur-currently sitting on. I know it's over a hundred billion. Like Berkshire Hathaway would be, I, I know they're a little bit better, they're slightly over, I think they're at a hundred and fifty billion dollars in marketable securities. So if they step in and they take a ten billion, which I don't suspect is gonna happen with Berkshire, but just for So those companies have the capacity to do that. They ha- also have the technical prowess of people sitting there on their staff that can figure this stuff out. You and I can, can look at this technically and it makes sense to us. If you don't think that some of the smartest programmers sitting at Google and Amazon and other places aren't gonna take a closer look at this stuff as companies like MicroStrategy and many others start stacking it on their balance sheet, we're all crazy, because they are. And, boy, they've got the money to throw at this thing. And so I think" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "43:56", "start": 2636.27, "text": "Quarter of '21, I think it's gonna be the, the talk of talk of who's stacking most of this stuff as, as they, as much of this stuff as they can and putting it on their balance sheet." }, { "speaker": "stephan", "time": "44:09", "start": 2648.56, "text": "Yeah, so I think, I, I don't know the exact numbers, but I think, just from a quick search, it looks like Apple has something like two hundred billion in cash on hand. Yeah. And so, I mean, if they were to buy, what is that, ten billion," }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "44:20", "start": 2660.41, "text": "that's" }, { "speaker": "stephan", "time": "44:23", "start": 2662.73, "text": "like five percent, yeah, yeah, I guess my next question to you, Preston, is what kinds of companies are well placed? Like, is it that, as I think as you mentioned earlier, MicroStrategy were uniquely well placed in that Michael Saylor has a high ownership share of the company and thus can have a little bit more leeway in how he runs the show. I guess the counter might be something like some of these larger companies, they're, they're, they're more like the Titanic, they just can't turn that quickly." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "44:54", "start": 2693.57, "text": "Yeah, I think that, I mean, if there's one thing that- Valley has showed us it's that, you know, there's a lot of blood in the water and everyone's sniffing each other's tails, and they're all, they're all so innovative, but at the end of the day, maybe they really aren't, and they're just trying to keep pace with everybody else. So I think if one of them starts doing it, then all of them are gonna start doing, doing it, and then it's gonna maybe get a little competitive, especially as the performance and what it's doing to their, to their stock price and, and" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "45:21", "start": 2721.04, "text": "reinforcing of the decisions that were previously made. So I think that a really important consideration with all this is you have to have free cash flows, period. If you're a company, which half of 'em out there are not profitable, maybe even more now that we're through COVID, that was pre-COVID, half of the companies don't even make a profit. If you're not making money, you're either selling things to come up with money to allocate into this or you have positive free cash flows, right? So The companies, and, and this is where I think this is really exciting, because the, the big issue that we have is since two thousand eight, the zombies have been kept alive at all costs. I mean, the amount of manipulation that has happened by central bankers, not just in the US, all over the globe, to keep zombie companies alive is, in, in my humble opinion, disgusting. Part of this thing that we call capitalism is you have to let businesses that don't add value, that don't- The market doesn't value their products and services to fail. That is what creates the creative destruction of something else to rise up out of the ashes and produce something that is valued. One of the things that I'm so excited about with Bitcoin is if you're not, if you're not making free cash flows and you're not profitable, well, guess what? You can't freaking buy it, right? You can't buy it. And, if you're not stacking them, in my humble opinion, you're about to get just decapitated. I mean, I look at Michael Saylor's company Issues whatsoever of something like that happening to him. But when you look at some of these other companies that aren't producing a bottom line, they're gonna just get clobbered." }, { "speaker": "stephan", "time": "47:00", "start": 2820.29, "text": "Yeah, so it's, certainly going to be very kind of polarized then between the, those able to invest in Bitcoin and those not able to invest in Bitcoin. Maybe one other point is that, let's say at a professional money management level, there might be people who are reluctant to buy into a crazy bull run. So for example, you know, people might be like, you know, they want A deal, they don't wanna be, buying, into something that they feel like they, they-- but basically, they don't wanna be risking that they're buying the top, right? So I guess what are the kind of main ways that people will try to manage that, right?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "47:33", "start": 2853.15, "text": "You can manage it with some knowledge. I mean, you, you posed such an awesome question because I can see this thing running through thirty thousand and people just being like, \"This is nuts, right? This makes no sense.\" Your traditional money managers, they're gonna be like, \"This is idiot You know, all the, all the twenty fifteen arguments that we've all heard, they're all gonna be saying 'em at nauseum, and they're gonna be saying, \"Well, I'm gonna wait for the next dip, \"and then the next dip's gonna happen, and you know what's gonna happen in, in their mind? They're gonna say, \"Well, maybe these were the tulips, right? \"After, when the dip plays out, then it's, then it's becoming tulips, and then it has just a snapback next run to forty thousand, and they're And for somebody who's never, experienced one of these bull runs, and we were saying earlier, you hadn't seen nothing yet, when these things start to run like that, and they're moving, you know, this one's gonna move in, in multi-thousand dollar, five thousand dollar kind of days there, especially at the end, people are just gonna-- they're not gonna know what to do, because they're gonna feel like whatever they do, it's gonna be the wrong decision, and it's just gonna keep going up. And so I don't know what to tell those See some of these models and kind of understand where these, these price orbits, I don't know if anybody else is using that term, but that's what I started calling it. They might wanna understand where those are at to manage their risk. Now, if this thing starts running over a hundred thousand, I honestly don't know what to tell you. At that point, I, I'm just gonna stop doing interviews and I'm probably not gonna talk too much on Twitter or anything because I honestly don't know what to tell a person if this thing starts running over a hundred thousand. I would tell you to pay" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "49:20", "start": 2960.1, "text": "Talking about the failure of fiat currencies at nauseam, well, maybe it's going all the way, but I, I just don't know. And that's gonna be-- I think that's gonna be the really hard point for people to know whether they should buy or not. I think anything below that, I mean, I know I'll keep buying." }, { "speaker": "stephan", "time": "49:38", "start": 2978.2, "text": "Yeah, it's, it really mirrors the process for many individuals, as you were saying, that was a process for a lot of people who spoke to me, even in the last, you know, twenty seventeen and stuff, people would be like, \"Oh, is this the right time? Like, I'll just wait, I'll, you know,\" and they would just, you know, they would constantly trick themselves and just basically play themselves. Whereas now, I think, at least amongst the, let's call it the hardcore Bitcoiner set, I think they are more set on the Auto-stacking and regularly accumulating, and so maybe that is gonna be a similar kind of story where maybe it needs a cycle where companies make those kinds of mistakes and then in the next cycle, that's when they've kind of figured it out. Oh, okay, actually, the way you do this is you just regularly accumulate little chunks over time and that's kind of how you manage it." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "50:26", "start": 3025.8, "text": "But you're assuming there is a next cycle." }, { "speaker": "stephan", "time": "50:28", "start": 3028.38, "text": "Yes, I am." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "50:30", "start": 3029.6, "text": "I mean, that's the, that's the part that I, I have no, I have no confidence in telling somebody that, that Of course, of course. I mean, I'd put the odds at fifty percent, right, that we, that we'd do another one, but could it go all the way this time? Absolutely, absolutely. So I, I mean, yeah, it's, it's gonna be a hard one, and I think when you look at into these adoption S-curves, that's another important thing to think about is, you know, the, the magic percentage is two and a half percent, and then you start getting into the hockey stick section of these adoption curves, and, and let's not fool ourselves The value proposition that I just don't know how that's gonna get impaired between now and when I think this thing's gonna start getting to the two and a half percent mark. It'd be, it would be, it'd be insanely painful to see it go through a hundred and say, \"Well, I'm gonna wait for the next cycle, \"and then it, it goes to a million. \" I just, I mean, I don't know what to tell somebody. It, it's gonna be, it's gonna be some very, very hard decisions to be made in about a year from now" }, { "speaker": "stephan", "time": "51:32", "start": 3092.04, "text": "for" }, { "speaker": "stephan", "time": "51:38", "start": 3097.66, "text": "ninety ten, I think it's ninety percent chance that it's, you know, this isn't the final cycle, whereas I guess you're more at that kind of fifty fifty level, you think it's fifty percent chance that this isn't the final cycle." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "51:48", "start": 3108.21, "text": "I just think, I think that it's, it's gonna have way less to do with how the protocol is functioning. Everything to date has been based on the four year cycle and how it's, how it's executing fiat dollars, fiat currency. I think that on this next one, especially as it goes up into the, these really High numbers that have a deep psychological effect on a lot of market participants. You combine that with the fact that it's been around for more than a decade at that point. You combine it with the fact that the bond market is contracts to lose money. You combine it with the idea that universal basic income isn't going away and that everyone's just getting these, these checks in the mail all over the globe, every single country. They're in a race to devalue. You have social unrest. You have all these things that- The trend is suggesting are only gonna get worse, and the name of the game for currency is one word, it's trust. I don't know, I, I, I really think it's grossly underestimated that it could go all the way on the next cycle. Yeah, it's really crazy to think" }, { "speaker": "stephan", "time": "52:52", "start": 3172.43, "text": "about." }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "52:53", "start": 3173.09, "text": "Yeah, I'm, I'm definitely open to both scenarios." }, { "speaker": "stephan", "time": "52:55", "start": 3175.36, "text": "Yeah, yeah, I mean, absolutely, I think it's kind of, it's kind of difficult because here's the other thing, what about government reactions, right? So as an example, Raoul Pal has spoken" }, { "speaker": "stephan", "time": "53:08", "start": 3187.72, "text": "said, \"Oh, look, it's not at the size yet that I would even worry about that. But let's say, you know, it, it, you know, in this, during this next cycle, it starts to get to that size, are there actions that a government could take to potentially slow the adoption of Bitcoin? I think it's unlikely at this point that they could-- I think it's highly unlikely that they could kill it, but is it possible that they could take some action that slows the adoption of Bitcoin, such that it staves it off into the future, or perhaps there might" }, { "speaker": "stephan", "time": "53:38", "start": 3217.9, "text": "It might force governments to change on their side as well and find some way to be less inflationary. Maybe they would try to modify the financial system to try to sort of keep people inside it and give them some level of carrot or incentive to stay in the fiat world as opposed to coming into the Bitcoin world. What's your view on that kind of idea over this next cycle?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "53:59", "start": 3239.44, "text": "I would just flip it on its head and, and just say, what if governments are trying to-- 'Cause come on, we, we can't kid ourselves, these government- Officials are gonna realize that if they, if they start to do things to inhibit its adoption, and it becomes global money, they've literally just shot themselves straight in the leg in a race that they, they need two very strong legs for. Would we potentially see the exact opposite play out of what you just described? And I think that that's, when I think about the game theory, I mean, the last thing you wanna do is if, if you see something that looks like it's emerging as a new unit of account for the world, and you're saying, \"Ah, I'm gonna, I'm, I'm going to gimp myself out for this race, this epic race of proportions. I don't know that that's gonna be necessarily how it's handled. I mean, when you look at how all the legal implications of this are being handled right now, they're kinda suggesting the opposite of what you said." }, { "speaker": "stephan", "time": "54:53", "start": 3292.92, "text": "Yeah, I agree with you there. I think, the recent OCC news and some of these other kind of milestones that we are reaching, I guess we could say, it, it's very well possible that we start seeing governments get more involved in, say, Bitcoin And having their own Bitcoin mining operations or legally and officially having support for that kind of thing, where they want to try and promote it within their own country, and we're seeing that already in some countries around the world, just not in like many countries, but that potentially could have-- Maybe" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "55:23", "start": 3323.42, "text": "mining operations start to get nationalized. Sorry to interrupt you there, but yeah, maybe that's, maybe that's what they start to do." }, { "speaker": "stephan", "time": "55:29", "start": 3329.48, "text": "Yeah, that's, that's also a possibility. I mean, we've, we've heard those rumors of things going on in Venezuela like that or, Countries as well, potentially Iran. I mean, the challenge" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "55:40", "start": 3340.41, "text": "is, is you can't-- Everyone has to do the same thing in order for that scenario to work, and I just don't see that possibly happening, especially when you look at it in the context of every country in the world has been a victim of dollar dominance for the last, since Bretton Woods, right? Since 1944. They have been a victim of dollar dominance when one entity has been able to just benefit from that currency driving everything. That many years, and now they're starting to see that system breaking down. I kinda suspect that you're gonna see all the other countries in the world going at this as hard as they possibly can." }, { "speaker": "stephan", "time": "56:19", "start": 3378.8, "text": "Yeah, look, I think I agree with you that it's in their incentive that you want to, you see this thing coming and you can't stop it, so you might as well try to have some and have power within the Bitcoin system. perhaps, maybe the only other thing I can think of is that sometimes governments do things that don't make sense, you know? Like even if they do make sense, even if it would make sense for them to support it, I think we, we'll see at least some governments that really come out strongly against Bitcoin, and then it becomes a game of jurisdictional arbitrage, I think. It becomes about going to those places that supporting Bitcoin because they know they can't stop it. but for those people who are stuck in a country that is very anti-Bitcoin or putting out a lot of rules and regulations that basically stop the adoption or criminalize it and things like that, it's a, it's gonna be a difficult" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "57:08", "start": 3428.25, "text": "I totally agree with you on that. I think if there's one thing we can count on, is that there are gonna be countries that really get this wrong. Which ones they are, I have no idea." }, { "speaker": "stephan", "time": "57:18", "start": 3438.32, "text": "Yeah, that's a tough one to think about. but potentially, the-- those small or medium countries might have more of an incentive to, because they're the ones kind of punching up, right? They're the ones who have more of an incentive to try to support this thing and to try and ride, ride the, you know, ride the wave. so maybe- They'll be the ones to try and have tax incentives or some other kinds of citizen incentives for people to come and set up a Bitcoin business or set up Bitcoin mining there, and maybe that's, something we see, but, I guess for me, it just feels too early, you know? Like even though we-- obviously you and I are very bullish on Bitcoin, we think it's going to, it's going very high, you know, medium to longer term, I just, for me, it just feels too early for all of that to be happening in the next Is when we might start seeing some of those things, but I guess that's, that's my view. But go on. And," }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "58:13", "start": 3492.57, "text": "and yeah, I, I would agree with that. It, this is gonna be-- If it would play out in this short duration timeframe, like I'm saying here, in the next three years, three and a half years, I think that that would be a real shock to the system, and I think it would be- Very painful for a whole lot of people. Is, is that what I want to happen? I, I don't know what it is that I want to happen. I just wanna see there to be a fair standard, in, for, for all market participants around the world. That's what I ultimately want, but I don't know necessarily the best way to achieve it is fast or slow. Do you rip, do you rip the band-aid off quickly? Do you rip it off slowly? Not that it's gonna be a choice. I, I just don't know what's gonna be better possibility that could be faster than what we might be, than what the market sentiment would be suggesting." }, { "speaker": "stephan", "time": "59:02", "start": 3541.5, "text": "Yeah. I guess if there were to be indicators that you thought, okay, it's not gonna be this coming cycle, what would those kinds of indicators look like? Like, would there be any kind of maybe irrational exuberance, indicators in your mind, or do you think those are actually just indicators, as you were saying, \"Oh, what the US dollar killer kind of aspect?\"" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "59:23", "start": 3563.33, "text": "Well, I think if you don't have the price go to To the levels that we were talking as far as like a hundred thousand plus somewhere in that range. I think if you don't have some of those numbers being hit within the timeframe that we're talking, then I, I definitely don't think that you're gonna see it play out on this cycle. like for example, let's just say the price went up to thirty thousand and then came back down into some low number like fifteen thousand or whatever, there's no way that something like that is gonna drive this to become global money with, with a move like that. I think you're gonna need some," }, { "speaker": "stephan", "time": "59:56", "start": 3596.46, "text": "Yeah, that's a fair comment, and it also comes to when people compare, say, Bitcoin and gold, right? And I think for Bitcoin to be comparable with gold, I think off the top of my head, I, I think I saw this number, someone posted this number, I think it was four hundred or five, around five hundred thousand, for Bitcoin to be comparable with gold. And so, I guess that would have to be the level before it even really reaches the same significance as gold, right?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "01:00:20", "start": 3620.55, "text": "Yeah. And, and I'm not so sure Would be the trigger? I think the trigger is more, just kind of the news cycle that's associated, the, the marketing that's associated with the abrupt price movement. I think that's what kind of has the potential to, to destroy trust. It all comes back to that word trust. If everyone's losing trust that they're gonna be able to retain their buying power, you can see people do some very crazy things and, fear-based decision making, FOMO to, to, to a T. That's the thing you gotta really- Watch closely and how much that drumbeat is being beat and how fast this thing is moving, I think is a, is a really key component of whether it's gonna be able to, to do this or not." }, { "speaker": "stephan", "time": "01:01:05", "start": 3665.94, "text": "Yeah, so I think, those are some really fascinating comments, and I really enjoyed, chatting. Preston, did you have any kind of closing thoughts on some of the themes we've touched on, this episode?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "01:01:17", "start": 3677.49, "text": "You know, the, the one thing that I really try to do is just try to, to educate. in my Twitter account, the One page paper for people that if they hear Bitcoin or maybe they have a family member that's, that is skeptical or whatever. I tried to put the, the, the really important or the essence of what Bitcoin's trying to achieve, which is a global peg, amongst some other things, I tried to put that in this one pager so that it's not too long and people just kinda throw it in the corner, but that they'll actually take the time to read the one pager. Anyone can download it, amend it, change it, whatever you want, however you think would get through to people. Family members, I would just encourage people to, to take a look at that, it's just right there on my Twitter, first, first tweet that sits there. And I think that we're, we're entering a time that's going to be really important to pay to-close attention to what the companies are doing, because I think they're the ones that are gonna be able to make the market move in this really abrupt fashion is when they start stacking it onto their balance sheet, 'cause they're sitting on so much, capital for a lot of these, these large tech Gonna be an important thing to watch, and then I think it's gonna be important to watch the headlines like I was talking about, like going back to the, the thing that I read from Germany in nineteen twenty-two. Something like that is, is what you're gonna be hearing, and that's gonna be the thing that would eventually maybe really kinda take this to a whole different level." }, { "speaker": "stephan", "time": "01:02:43", "start": 3763.19, "text": "Well, I really enjoyed chatting with you, Preston. It was very, really enjoyable. and listeners make sure you follow Preston and subscribe to his podcast. Preston, where can listeners find you?" }, { "speaker": "preston_pysh_of_we_study_billionaires", "time": "01:02:55", "start": 3775.8, "text": "You can Google my name, my Preston, last name Pysh, P Y S H. I have a podcast called We Study Billionaires, we talk a lot about, the asset valuation, stock valuation, kind of like what we were doing there with MicroStrategy and, just really an honor to be on your show, Stefan. I, I really enjoy conversations with you, you do such a fantastic job." }, { "speaker": "stephan", "time": "01:03:15", "start": 3795.17, "text": "Thank you, Preston. It's always a pleasure to chat with Preston, so let me know what you think and find the show notes at stefanlivera" } ] }