{ "episodeId": "SLP351", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "jeff_vandrew": { "name": "Jeff Vandrew", "role": "guest", "tag": "JEFF" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.31, "text": "Hi, you're listening to Stephan Livera podcast, a show about Bitcoin and Austrian economics. Today, Jeff Vandrew of Unchained Capital joins me on the show, and we're talking about Bitcoin for the very long term. So we talk about where Bitcoin is going over the long term, what happens when it starts to replace, say, gold or even becomes global money, and what happens if more and more states make Bitcoin legal tender. Tender. And we also talk about just thinking for the long term and how big that market for retirement savings is, and we talk about his expertise in the IRA and retirement world, the Roth versus traditional IRA question, the McNulty case and whether that stops self-custody, as well as future trends with retirement savings. This show is brought to you by Swan Bitcoin, and many of you know Swan for being able to set up your automated SAT stacking plan, but there's also Swan Private. We launched Swan Private because we have talked to- So many people that have had issues with the major exchanges. Some had accounts locked and customer service couldn't help them, some couldn't onboard their accounts, many have simply wanted to talk to an actual human being who could answer their Bitcoin questions but would never get a reply or this just wasn't an option. Swan Private is our one on one Bitcoin advisory service for high net worth buyers. Our team is here to actually support you in your Bitcoin journey. So remember, Swan Private is available in most countries around the world. If you're a high net worth investor or a business, get in touch with us. Go to dot com and sign up. Now, if you need some fiat liquidity but you don't wanna sell your Bitcoin, there's Lend at HoddleHoddle. They are a peer-to-peer Bitcoin-backed lending platform where you can lend or borrow stablecoins globally and anonymously. Sign up in just thirty seconds and borrow stablecoins without any verification. You deal directly with other people and the users control collateral together throughout the whole deal, with all the interest paid at the end. Now, if you have stablecoins, you can lend them out at higher returns. You are issuing an overcollateralized loan with the Lend at hodl hodl. Lend and borrow stablecoins on your terms at your desired interest rates. There are no hidden fees, the terms and conditions are transparent. Go and check it out, the website is lend dot h o d l h o d l dot com. Compass Mining is the world's first and largest online marketplace for Bitcoin mining hardware, hosting, and ASIC reselling. Bitcoin mining is only getting bigger and so is Compass Mining. Compass is adding over two hundred and eighty megawatts worth of hosting capacity this year alone, with more to come. That's over six times the current. hosting capacity. So this means more people can mine Bitcoin. With CompuS, anyone can mine Bitcoin. If you're in the US, you can have your ASIC shipped to your home and do home mining, or you can use a facility that has been vetted by the CompuS team. So start mining, go to CompuSmining.io today. On to the show with Jeff. Jeff, welcome to the show! Thanks a lot," }, { "speaker": "jeff_vandrew", "time": "02:50", "start": 170.14, "text": "man. It's great to be here." }, { "speaker": "stephan", "time": "02:52", "start": 171.85, "text": "So Jeff, I'm a fan of, what you're doing and, obviously, I know you're over at Unchained and, you know, you've been, a real pioneer in the space and wanted to get you on and, you know, get your thoughts about Bitcoin for the very long term, as I'm sure you're used to thinking about and, dealing with for customers and just for people you're working with in the space. So, yeah, maybe let's just start with a" }, { "speaker": "jeff_vandrew", "time": "03:21", "start": 200.71, "text": "Yeah, sure. So I'm Jeff Vandrew, I'm an attorney, a certified public accountant, and also a certified financial planner. I was in private practice on my own for a long time. most people in Bitcoin know me based on my prior work, setting up Bitcoin IRAs. So as a private practice lawyer, I developed a product which we called back at that time a Keykeeper IRA, which is a legal structure that would allow you to hold Bitcoin in your IRA, but still allow you to have, control over your private keys. So I started doing, you know, I've been in practice forever, I'm an old guy, but I started even pre-Bitcoin, I got into the Keykeeper I stuff in twenty fourteen, and I did that for, you know, years. And then, in twenty twenty one, Unchain Capital essentially acquired that product from me, and then I joined Unchain Capital as the head of the retirement and inheritance division." }, { "speaker": "stephan", "time": "04:19", "start": 258.88, "text": "Excellent. And so as we are thinking about Bitcoin for the very long term today, it's probably useful to think about where we're going. So maybe just as a bit of an open question for you, Jeff, where do you, where do you see Bitcoin is going? What's your A long term macro view here." }, { "speaker": "jeff_vandrew", "time": "04:34", "start": 274.47, "text": "Yeah, so I kind of look at this in a way, I don't wanna sound egotistical, but unique. and when I say unique, it's 'cause I kind of look at, look at it, I think more in of a caveman way than most people do that are probably guests on your show. Like everybody else, you know, I look at the price, right? It's kinda just like a natural thing that we all do. But when I look at the price, I don't do any sort of mathematical models or anything like Charting, but not in the sense, again, of like complex math models, more in like the Charles Dow old school sense where you, you just kinda take a look at it and you kinda get like a vibe or a feel for general sentiment, things like that. And when I say that, I should be clear that I don't use that to trade, because as we all know, you could, you know, if you-- I think the most of Bitcoin gains over, you know, a long period come in over the course of some tiny amount of days, like eight days. So if you" }, { "speaker": "jeff_vandrew", "time": "05:32", "start": 332.14, "text": "Shooting yourself in the foot a hundred percent of the time. I look at it more as sort of an idea of where we are in adoption. and the way that I do that is I try to compare when, when the Bitcoin price is going up, I don't consider every price increase to be equal to every other price increase. Specifically, I try to look at the sentiment that I feel is driving a specific, you know, let's say, run up in price over a one week, two week, month period, you know, whatever the case might be. And I tend to look at that by looking at other market sentiments and comparing them to that Bitcoin price and see if that's what's tying in. So to give you like a more concrete example, I tend to look at like the larger stock market. Do you know what a Matryoshka doll is? No." }, { "speaker": "stephan", "time": "06:21", "start": 381.48, "text": "Oh, I might have heard of it, but I don't know. Could you explain?" }, { "speaker": "jeff_vandrew", "time": "06:24", "start": 384.34, "text": "Yeah, no, so like a matryoshka doll, sometimes called like a Russian nesting doll or a babushka doll. It's the little, the little Russian dolls where there's the, you know, you open up the big one and there's a little one, and there's a smaller one in the middle and a smaller one in the middle, right? So, you know, my theory on like our general stock market is that like most of it's fake," }, { "speaker": "jeff_vandrew", "time": "06:50", "start": 410.5, "text": "My metaphor there is the, is the nesting doll, especially right now where we're coming out of two years of this sort of pandemic economy that was characterized by extremely easy money that was like inflating prices, plus, you know, with regard to a lot of tech stuff in general, we had an inflation, we had a, a rise in prices, I guess I should say, based on the fact that a lot of people took this, to mean like, \"Oh, people are gonna like never be leaving their houses forever,\" right? So there were like certain stocks that- Like Zoom, I'm not even, I'm not speaking about Zoom specifically, but only as a stock that really shot up in price, right? Because people thought, you know, this sort of video conferencing was gonna be here to stay, even as the, as the pandemic wound down. So, you know, right now, I look at the market as, you know, the little doll in the middle is the stuff that I consider like total junk. You know, things that shot up in price in this pandemic economy that like I have no faith in whatsoever. So what's kind of neat about that is we have almost an index now that you can track for, that I call like a junk index, and that's basically the ARK Invest ETF for people that are, that are, that are familiar with that. It's not a perfect product Proxy to an index because it's actively managed, and I honestly think sometimes she tries to catch some dead cat bounces and stuff like that. But I-- that's one sort of proxy, or you can look at specific companies. A good example is like Roblox. I don't even understand what they do. and on the day we're recording this, the, the stock crashed thirty percent yesterday. you know, you know, in a day, short, and they, they IPO'd not that long ago. So that's the kind of stuff that I look, you know, as being And by the way, just for ethics reasons, I guess when you're talking your own book, you should say this. If I say anything about a specific company and ETF, whatever, just assume that I'm shorting it if I say that I don't believe in it, and assume I have a long position, if, if I, if I say I do. But I don't, I don't think I'll be giving any, encouragement to take long positions during this podcast. So, you know, you've got that in the middle, and then the next dol out" }, { "speaker": "jeff_vandrew", "time": "09:05", "start": 545.15, "text": "Tech industry stuff that is like better than that, but not still long term. It's not, for instance, it's not Microsoft, whatever you think of Microsoft, but it's not Microsoft, it's not, Google or anything like that, right? So a good, you know, you can think of a proxy for that sort of stuff is like being the, the FANG Plus Index, right? Which is like about fifteen companies. They're certainly more solid than, you know, the, the little doll in the middle, but they're- There's more junk in there, and it's more overinflated because of this pandemic economy, right? and then, you know, the next doll out you could think of as something like, say, the Nasdaq 100, which is still very tech-heavy. It's still got more of like that garbage in it, but there is all-- there are all-- there is like more of the quote-unquote real economy in there. Next doll out would be something like the S&P 500, say, right? Or if you wanna even go, you could Use like, a total market index like the VTI, they tend to move hand in hand since the S&P 500 is such a large part of something like the VTI. So, the reason I bring this all up is, you know, when the Bitcoin price goes up If the price is going up and the sentiment to me looks like the same sentiments that are driving price increases in one of those little dolls, to me that's not a valuable price increase, right? Like I don't think that that, that anything in there is related to adoption, it's just that people are buying anything they can find, and a lot of the people that are buying in during those periods are probably people that don't have a very long time preference. They're probably a lot of the same people that are buying like Roblox or, you know, they're driving up Peloton prices to ridiculous levels, you know what I mean, things like that. So this most recent price increase, you know, that we've seen over like the past month, I haven't been, you know, my take on that has been like, I don't think this is really a signal of much of anything, you know what I mean? because it was sort of tied to a lot of those sentiments that we've seen over the past three Like that. Whereas if I see a situation where, say the, you know, the FANG Plus index is down or even the Nasdaq 100 is down, and Bitcoin is at, is, is like, even if it's not increasing, if it's holding steady, if it's not falling along with that, like if, if we're seeing like, you know, over the course of whatever the time period might be, you know, FANG Plus is down five percent, say, you know, ARK is down more than that, and the Nasdaq 100 I don't know, a few percent as well, and Bitcoin is sort of hanging in there or it's increasing. That is something that I view as like a more positive indicator, for bit-- for Bitcoin's long-term future than I would a ten percent Bitcoin price increase that seems to be driven by the same sentiments that are driving a price increase in, you know, what I would consider garbage. So that's a very long explanation, and it's a kind of a caveman level explanation, right? Because I'm, I'm kinda, I'm not giving you like hard math behind it or anything, but that's the way I tend to look at things. And again, I don't use this for trading or, or anything like that. I don't, I don't hold Bitcoin for the short term, but I still find it interesting, is it kinda, I feel that it kinda gives me a picture as to where we are in terms of, you know, is Bitcoin really becoming First of all, I mean, before we even talk about becoming like a global reserve currency, just it's got-- I mean, to me, it's got to become a hedge against inflation first, right? So, you know, even just to get to that first, like, you know, it's a solid hedge against inflation as opposed to something that runs up in price during speculative financial manias." }, { "speaker": "stephan", "time": "13:01", "start": 781.09, "text": "So, in other words, you could think of it like if it's de-correlated And bullish or at least neutral, that's a good thing in your view from a Bitcoin point of view, because you think that we would say that's more genuine adoption of Bitcoin, right?" }, { "speaker": "jeff_vandrew", "time": "13:18", "start": 797.55, "text": "Right. I mean, that's an accurate way to do it and, and to, to, I think phrase it. And it's not even, you know, I don't even look at correlation on the mathematical level, I look at it even more like woo-woo than that, as in terms of trying to, to get an, a feel for like the way people feel when they're purchasing. Like, what, what are their motivations? What's their drive? You know, what's the driver? That's kind of what I'm looking at, for that kind of stuff. Like the way people did technical analysis in like nineteen twenty, not the way they do it in, you know, twenty twenty-two." }, { "speaker": "stephan", "time": "13:54", "start": 833.5, "text": "The TA traditionalists, Jeff. Yeah, exactly. No, but, in some ways, we are like naturally momentum chasers, like humans are momentum chasing. Of course. So we sort of see it going up and we're like, \"Yeah, yeah, try and buy more now.\" So maybe that's a, maybe that's a little bit of what you're tapping into there. so- If we project out over the longer term, what kind of changes do you think we can see laws and regulations-wise? Like, do you think the gov-- as an example, do you believe the government will have to change tax laws in a Bitcoin world?" }, { "speaker": "jeff_vandrew", "time": "14:26", "start": 866.3, "text": "Well, so are we talking about, I guess it depends on what level of adoption we're, you're asking about. Are we talking about where Bitcoin's actually being used as money in everyday transactions, or are we talking more where Bitcoin sort of is just, say, is fully replaced gold as like people's primary inflation hedge?" }, { "speaker": "stephan", "time": "14:44", "start": 884.26, "text": "Yeah, I'm curious actually, what do you-- what would you say at the replacement of gold, and then what would you say at the, you know, global money level?" }, { "speaker": "jeff_vandrew", "time": "14:51", "start": 890.98, "text": "So at replacement of gold, like, I think we're gonna-- I mean, arguably we So we'll see, we're gonna learn a lot more over the past few years, right? I don't think much is gonna change in that regard, 'cause Bitcoin isn't taxed much differently than gold. And, for everybody that's listening outside the US, I'm speaking only with respect to the United States. You know, Bitcoin isn't taxed radically differently than gold. Both are treated as property under the tax code, both are subject to capital gains and loss rules. Gold actually interestingly has less favorable capital gains rates than any other asset does, because it's considered a collectible. for sort of strange historical reasons, it's considered a collectible under the code and collectibles, they get special capital gains rates, but ones that aren't as favorable to, to everything else. I don't think there's a, a reasonable argument that Bitcoin could be categorized as a collectible, so I don't, I don't, I don't think we'd have an issue with that. The change really comes, you know, in the event that Bitcoin starts being used for day-to-day transactions. So for right, right now, just for people that aren't aware, the reason that Bitcoin is classified as property rather than currency under the tax code isn't statutory. the IRS basically just issued what's called a notice, which is one of the lowest levels of guidance that says, \"Hey, this is our position on what Bitcoin is. and this is how-- this is the position we're gonna take in enforcing the tax code.\" Now, by following that, you're in kind of a good spot because you end up in a spot where, you know, you're taking the same position as the IRS, therefore the IRS is unlikely to go after you if you follow its position. But it doesn't have the same force that, an actual passed law, say, that, that went through Congress has. Meaning, you can take a contrary position. If you do and you're audited, the IRS can, make an assessment for additional tax against you, and then you would have to go to tax court to fight that out with the IRS, which you, you have the right to do, you certainly have the right to do in the United States. We have a, we have an entire court system that's there for you to, you know, pursue that avenue Realistically, don't wanna do that. That takes time. You have to hire lawyers. You know, it's like a whole thing. It costs you a lot of money. At the time where Bitcoin's being used and dated, and I should say that the IRS notice isn't unreasonable, based on the way that Bitcoin is used today, or even the way that it would be used, let's say, at that sort of gold replacement role, that probably is the correct interpretation of how Bitcoin should be taxed under the Internal Revenue Code as it's written today. If the way Bitcoin is being used on a day-to-day basis changes and people are using it more frequently as currency, then that notice start-starts to become not a reasonable interpretation, right? So one of two things happens. One, the IRS can issue a new notice Or it can even go to what's called a higher level of authority and, and the, they can issue what's called a treasury regulation. So a treasury regulation carries more weight, it carries more authority. If you challenge it in tax court, a treasury regulation, isn't, is entitled to a higher level of deference. It's actually at law called Chevron deference. Chevron was a, a case a very long time ago about administrative regulations and the, the level of deference they're entitled to. So, you know So that would carry Chevron deference. So either by a notice, a revenue ruling, which would be a slightly lower than regulation but higher than a notice, however they do it, the IRS could change its position, right? So that would be one thing. Or number two, the IRS sort of drags its feet on changing its position and then someone actually decides to challenge it in tax court, and then they win or lose, right? So assuming they win, that would be another way that the categorization of Bitcoin moving from prop- Property to currency could potentially happen. That would not-- Hopefully that's not the way that it happens, because that's an ugly way to do it, in that it takes a lot of time, it creates a lot of uncertainty while those legal cases are pending. If the ruling happens in a specific circuit, so the US federal courts are broken into circuits for appeals, if it happens in a specific circuit, legally speaking, that ruling is only binding on taxpayers that live in that circuit. So Bitcoin could end up being treated differently for tax purposes in, you know, let's say Florida as opposed to New York, right? That could happen. Now realistically, most of the time, if an-- if the IRS loses at the circuit level, they'll what's called formally acquiesce to the ruling, meaning they just say that they'll follow it nationwide, but they're not required to do so, and sometimes they don't. There have been historical examples of them not acquiescing to a ruling like that, and then you- It can end up in a situation where the tax, the federal tax code isn't administered equally throughout the United States, potentially. So those are all reasons why hopefully when that change occurs, it will change, it will come from the IRS level rather than through, you know, the court system. If it becomes currency, all the gain and loss rules change. It would be, it would become treated sort of the way that, like, you know, if you were buying and selling sterling in the United States or something like that or euros or whatever would be changed. From an IRA perspective, you know, which is what I work in, it wouldn't matter. you know, both currency and property, broadly speaking, assuming that they're not otherwise specifically prohibited somewhere in the tax code, are, you know, acceptable investments for IRAs. The only way that it could become, you know, not permissible as an investment within an IRA would be a situation where, it would, it would require an actual act of Congress, is the short story." }, { "speaker": "stephan", "time": "20:54", "start": 1253.82, "text": "And while we're here, we are starting to see different ideas around legal tender. So we've seen, as I'm sure you've seen, I think there was an Arizona legislator who did a Bitcoin legal tender bill, and I believe Don Huffines He's a candidate for Texas, is proposing that and saying, \"I wanna make Bitcoin legal tender.\" Do, do you have any insight you could share with us on what that would mean for Americans in those states? Like, would that mean they aren't, like, they have a lot less of a capital gains tax to worry about, or will that really depend?" }, { "speaker": "jeff_vandrew", "time": "21:30", "start": 1289.94, "text": "It would, it would probably be mostly symbolic, and I don't oppose those efforts, I mean, I think they're great. the major difference would, that, that makes is that the govern- the state government in that state, and likely also the municipal governments, that are, that sit under that state government, would be required to accept Bitcoin in payments for taxes, so payroll tax, sales tax, if you're in a state that has state income tax, they would have to accept it. In theory, like if enough states started making it legal tender Then we get into sort of that subjective determination of whether at the federal level it can be properly classified as property versus currency. So it does have an effect of being a factor in that subjective sort of sliding scale between property and currency, but beyond that, it wouldn't affect the-- it wouldn't per se. It's not like, you know, if I live in Arizona and Arizona makes Bitcoin legal tender at the state level, that doesn't change the federal taxation. Bitcoin, you know, on its own, as an independent factor." }, { "speaker": "stephan", "time": "22:35", "start": 1354.87, "text": "Understood. And so that's going to be a, a longer term, discussion, and, you know, I think over time, maybe it eventually does get there if, if it does happen, let's say at a federal level or maybe over time, if let's say some states were to sort of soft secede over time, maybe they might start to try to have their own views on how Bitcoin should be taxed or regulated or, et cetera." }, { "speaker": "jeff_vandrew", "time": "22:57", "start": 1377.46, "text": "Yeah, and states can do that. States could change Change, so they can, they absolutely can change the way that, Bitcoin is taxed at the level of state income tax, if you're in a state that has income tax, right? So, for instance, Texas was one of the states you mentioned, they don't have income tax to begin with, so it wouldn't matter. But Arizona does. So as part of that le- I haven't read the bill, so, but as part of that legal tender bill, they absolutely could change the way that Bitcoin is taxed at the state level. Yeah." }, { "speaker": "stephan", "time": "23:25", "start": 1404.66, "text": "Also, when it comes to Bitcoin Option, right? And as we were saying, we were talking firstly about this idea of replacing gold and then, you know, someday becoming global money. Along that journey, do you see ETFs playing an important role? Should-- Are they good or bad for Bitcoin? You know, is it better for, you know, the coins to be held in self custody as opposed to ETFs, or is the trade-off more like, well, you're gonna access more people who can put their money into Bitcoin? How, how are you seeing that?" }, { "speaker": "jeff_vandrew", "time": "23:57", "start": 1436.68, "text": "Well, I mean, you know, for anybody out there that Holding Bitcoin in an IRA or retirement account, right? Probably two of their big choices are gonna be, do I just buy, you know, a Bitcoin ETF within my, You know, regular brokerage IRA account, it's very, very easy to do. Or do I, you know, come to a product like Unchained where I can hold real Bitcoin in my IRA and actually have control over these? So, you know, the factor there at the individual level, and then I'll kind of move to like a, like more of a systemic thing. at the individual level, it's like anything else, it's the difference between holding your coins in your Coinbase account versus, you know, holding your own keys in general. Same analysis of not your keys, not your And there are, there are be-- beyond the ETF, there are other custodial Bitcoin, i-- well, all IRAs are on a legal basis custodial, but I should say, Bitcoin IRA products which don't allow you to have any control over your keys. And I would point out that one of them recently just had its Gemini account hacked. We don't have all the details yet, but it appears there were very significant losses of customer Bitcoin. it was not just, you know, like some sort of like Bitcoin that the company itself had in reserves. So that's always going to To be a risk, and it remains to be seen whether they'll be able to be made whole, right? 'Cause obviously there's no FDIC insurance on Bitcoin, there's no SIPC insurance on Bitcoin, when it's held in that manner. Now, the ETF is a little bit different than that, they probably have, I would presume, well, in fact, I will, well, I know, the current ETF we have in the States isn't even a physical Bitcoin ETF, right? It's a, it's an ETF based in Bitcoin futures, so there aren't necessarily Hacked, but, you know, it still ha-- it still, you're participating in the legacy financial system, you're dealing with a futures market, which isn't necessarily going to track the actual price of Bitcoin all the time. You know, it, it seeks to be as close as possible, but it's not, that's not a hundred percent. And, you know, at a mo-- at a more sort of, I should say, systemic level, whether in terms, you know, whether or not the, the ETF is good for Bitcoin, I don't have a particular opposition to it. That are, that's going to be their initial exposure to Bitcoin, right? I mean, they're just, they're just learning about it. They may not be true believers yet in like sort of, let's say, the long term future of Bitcoin, but they view it as something, let's say, on a shorter time frame than you or I do that could be positive in their portfolio. Well, that's not the end of the world, because oftentimes those people buy in, and the longer they hold something like that, the more that they learn, and the more that they learn, the more analyze sort of, you know, how powerful Bitcoin is as more than just, you know, a hedge during times of higher inflation, right? You know what I mean? That is not an uncommon thing, you know, both before I came to Unchained and, and, I saw this, and now, you know, our Unchained team sees this when they're out talking to clients about IRAs. A lot of people that are coming over to our product that are rolling over are coming from GBTC or the ETFS. ETF, right? A lot of GBTC because the ETF is fairly new, so a lot of-- I mean, GBTC was sort of the only option that they had at that time. So that's not uncommon, and that people start there, and then the more they learn, the more they research, they sort of, understand the importance of holding their own keys, and then they're ready to move in that other sort of product. The other, I guess, potential upside to ETFs, and I, you know, this isn't my area, is that people that are gonna trade, which In and out between Bitcoin and other assets, the ETF is an easy way to do it, and in theory that should make the, let's say, long term price rise in Bitcoin a little bit smoother, right? You would, you would think at least, anyway, it has the potential to do that. So that also, I mean, is a, you know, is a potential upside to Bitcoin. So I'm not like an anti-ETF person, but, you know, I don't view it as a substitute for obviously holding your own keys for, I mean, all the reasons that I About on this show all the time." }, { "speaker": "stephan", "time": "28:13", "start": 1692.67, "text": "Back to the show in a moment. CoinKite dot com are the creators of my favorite Bitcoin hardware wallet, the Coldcard, and this is becoming more and more important now with all of, that's going on in Canada with financial account shutdowns and seizures. You need to get your Bitcoin keys and learn how to secure them. The Coldcard is my favorite because it has so many features and you can use it at so many different levels, whether you're beginner, intermediate or advanced, you can use it easily with wallets like Specter, Sparrow, Electrum. Or others, and you can use it in various modes, single signature, multi-signature, or others, and they've got the MK4 coming out also, the new version. And on their side, they also offer other products like metal backups, like the seed plate, and other tools and things that you'll use along with your cold card. So that website is coinkite dot com, go and order your cold card gear there. Have you thought about removing single points of failure? Unchained Capital can help you in your Bitcoin security setup, and it's becoming more and more important now that we- improve our security situation. So with Unchained, you can use collaborative custody. You hold two hardware wallet keys in different locations, and Unchained can hold the third key for you. Now, if you're not sure about doing this, how to do it, well, you can use the Concierge onboarding program. So you can pay that money for the program, they'll ship you some hardware wallets, they'll do video calls, give you some ongoing support, teach you how to recover your keys, and also deposit a thousand dollars of Bitcoin in your vault. So this is a great way to Some peace of mind. Go to Unchained dot com, select the concierge onboarding program, use code Livera for a discount there. And lastly, Brains. Brains are a Bitcoin mining company through and through, and they've got unique and cutting edge projects in the mining industry. So if you're involved in Bitcoin mining, you've got to check out Brains OS Plus, which is custom firmware that you can install on your ASIC mining machine. Go to Brains dot com and check out which models are supported. This is really good because it optimizes your performance, you get more hash" }, { "speaker": "stephan", "time": "30:11", "start": 1810.51, "text": "Also the operators of Slushpool, this is the first Bitcoin mining pool, especially if you use BrainsOS Plus on your machine and then you point your hash rate to Slushpool, you get zero percent pool fees, so that's a really cool benefit. And they've also got the Bitcoin mining conference coming up where I'll be attending also. So that website is brains dot com, it's brains with two i's. Now back to the show. Of course, yeah. And you could see it, like you said, it's almost like there's a sales funnel, and some people start at the Sees the top of that funnel, and then hopefully over time, they go down that funnel and, Yeah," }, { "speaker": "jeff_vandrew", "time": "30:46", "start": 1845.99, "text": "you know what, it's not all that different from where people that buy their first Bitcoin on Cash App or Coinbase or whatever, and they just leave the coins on there. I mean, they may leave their coins on there for a year before they figure out why that's not a, a good idea, right? A lot of what we do at Unchained is like we're, our message is sort of reaching out to those people to tell them, like, \"Hey, awesome that Right? And I'm, I'm sure just even on this show, that's a big part of, what you guys do is, you know, by putting this information out there is sort of getting people to take that next step." }, { "speaker": "stephan", "time": "31:21", "start": 1881.48, "text": "Yeah. So when it comes to the size of these big markets, can you give us some context roughly how big is this retirement market, the market for saving for, you know, retirement and then, the tax advantaged accounts aspect?" }, { "speaker": "jeff_vandrew", "time": "31:39", "start": 1899.34, "text": "Yeah, so it's huge. it's important to keep in mind, you know, particularly for, you know, some listeners that might be younger and are newer to this sort of stuff, in terms of how-- I mean, in investing, I mean, or, you know, even people outside the United States. So it's-- In the United States, it's thirty-five trillion dollars of assets are locked up in tax advantage retirement accounts. The, the reason for that is pretty simple. It's just sort of, you know, at your employer, it's sort into that sort of thing, and there's big tax advantages to doing it. So it's a very common thing that people have the bulk, you know, people my age and older, tend to have the bulk of their net worth in tax advantaged retirement accounts. It's just not an unusual thing at all, for a variety of reasons, particularly if you were like, you know, if you started accumulating those assets as I did and people older than me in an era where Bitcoin didn't even exist yet, right? So, it, it, the- A big part of what I've been doing for the past eight years is helping people sort of unlock those assets and be able to bring them into Bitcoin while still maintaining all those tax advantages, and not having to sort of, you know, in the States, when you liquidate your retirement accounts, there's like a massively negative tax consequence to doing that. you have to pay regular ordinary income tax rates, both the state and federal level on the liquidation, and on, on top of that, you have to pay a ten percent percent penalty. So that can be pretty brutal, and that's gonna drastically reduce the amount of Bitcoin that you're able to acquire, right? You know, it's, it's not at all unusual if you were to liquidate a retirement account, that you're paying like forty percent on that if you're liquidating it before you're in the, in the US, age fifty nine and a half is the, the magical age where the ten percent penalty goes away. So, you know, if you're doing that before age fifty nine and a half, even if you don't have to be a" }, { "speaker": "jeff_vandrew", "time": "33:39", "start": 2019.1, "text": "Income tax, the ten percent penalty, and then if you live in a state that has state income tax, and that's like forty percent less Bitcoin that then you'd be able to buy, right? So the whole goal in terms of what I've done all these years, and now what I'm able to do so much more effectively now that I'm part of Unchained, is to be able to get people, you know, to get those assets unlocked, do it in a way that they're able to have control over their private keys, but still comply with all of the tax laws and regulations so that Yeah." }, { "speaker": "stephan", "time": "34:11", "start": 2050.78, "text": "And something, I wanted to touch on as well, because people might be thinking about, how do I think about strategically taking the hit per se if I wanted to try to stack those coins outside of the IRA and retirement accounts system? And I think you were, you were spelling out some of those costs for people, but if you could just spell that out for people, like what What kinds of, what kind of things should they be thinking about? does it matter where Bitcoin's price is going, or is it more just about what is the tax you pay for taking it out now?" }, { "speaker": "jeff_vandrew", "time": "34:42", "start": 2082.38, "text": "Yeah, I mean, right. So I mean, if you're gonna liquidate, I mean, it's a very easy calculation, it's whatever the US dollar value of your account is now. And in terms of where the price is going You know, I don't typically advise people to sort of, take that into account because Bitcoin, you know, in the shorter term is very volatile. You have to think about it like, you know When I need these coins in retirement, which for a lot of people is like thirty years from now, forty years from now, for some people it's shorter, it might only be ten, you know, whatever, where is the price gonna be then? Regardless of next year, two years from now, where is the price gonna swing over the short term? Trying to time that stuff is crazy. So I, I think that you're generally just better off once you realize the importance of this, roll it over, buy in at whatever the price is on that day when the rollover- Over happens. you know, in the short term, maybe you caught a good period to buy, maybe you caught a bad period to buy, but that's all gonna wash out over such a long time period." }, { "speaker": "stephan", "time": "35:45", "start": 2144.83, "text": "Of course. And so for most people, I mean, obviously you're the expert, so you tell me, but so most people would have some, some form of retirement savings with their, based on their employer already. And so this question in their minds is, do I roll that over into a Bitcoin IRA or, you know, or- And they're also thinking about, should I make more contributions into that IRA? And I guess that's also coming into that conversation of whether it's Roth or not, because I believe one is like, you've already paid the tax upfront, and the other one is like, you haven't paid that tax upfront, you're gonna pay it at the end." }, { "speaker": "jeff_vandrew", "time": "36:19", "start": 2178.67, "text": "Right. So, yeah, there's a few things to keep in mind there. So one is if we're-- there's a, we have to make a diff-- we're talking about employer-based retirement plans, which aren't IRAs. So those would-- that would be like a 401k, a 403b, a TSP, a 457, plans like that. Those typically you can't roll those out into an IRA until you've separated from employment. So most of the clients we see, they've changed jobs at some point, it doesn't even have roll that to us, they're good to go, right? in terms of, excuse me, an employer based retirement plan when you're still employed, some employers will allow what's called an in service rollover, but most don't. So that's a situation where you may have to wait to be able to roll that over, and that creates a decision in terms of, do I, you know, I'm getting tax advantages by contributing, does it make sense for me to, you know, keep contributing through work? Maybe buy the ETF through my work based retirement plan, and then when I separate from employment, roll that out, bring it over to, you know, a Bitcoin IRA like what we offer at Unchained, where you're able to hold your own keys. That's one method. Or you could stop contributing altogether, stack your bitcoins outside your IRA. You're not gonna get those tax advantages, you know, with regard to contributing, but that might be worth it to you in order to sort of hold your own keys right off the bat instead of having- Having that lag period where you're just, there's not, you'll be able to take advantage of the price increases over that lag period, but you're not gonna have those benefits of, you know, holding your own keys. So that's, that's one decision, and that's a very personal decision. I don't think there's a, a right or wrong answer with respect to that. But to answer more so your, your traditional versus Roth question, that's an important one. So for people who aren't aware, for assets in a, in a traditional IRA, what that Means is those, those at, those are pre-tax dollars that you're investing with, meaning you got a tax break up front when you contributed those assets. E-uh, you probably contributed them to a workplace plan and then rolled them into a traditional IRA. That's the commonplace way to do it, but because you got that tax advantage up front, when you withdraw them someday in the future after you retired, the amount of the withdrawal is what is taxed, and that's taxed at ordinary income rates. If we're talking about a Roth IRA, which- Which you can fund on your own outside of your employer up to six thousand dollars a year, or, you can make Roth contributions to a workplace-based employer plan and then roll that into a Roth IRA when you separate from employment. The advantage there is that when you withdraw those funds in retirement, they're gonna be completely free of all types of tax. So you're giving up that upfront income tax benefit But you're gaining that benefit on the backside. So if you're very bullish about where the Bitcoin price is gonna go between the time, say, that you're making the contribution and when you project that you'll be sort of withdrawing them in retirement, Roth is certainly the way to go." }, { "speaker": "stephan", "time": "39:33", "start": 2372.91, "text": "that's an interesting point." }, { "speaker": "jeff_vandrew", "time": "39:34", "start": 2374.21, "text": "Yeah. And if you have, you know, non-Roth funds, either like non-Roth funds in a workplace re-retirement plan that you wanna roll over, or you have traditional IRA funds that aren't, you know, that, that would also be non-R You can do what's called a Roth conversion. So a Roth conversion converts non-Roth retirement funds to Roth retirement funds. You take an upfront income tax hit for doing that. It's not as big as the income tax hit you would take if you had liquidated the account, because if you liquidated the account, you pay income tax and a ten percent penalty. If you do a Roth conversion, you pay income tax, but you don't pay the ten percent penalty. The other advantage to doing a Roth conversion as opposed- To liquidating is those coins after you do that Roth conversion are tax free forever, whereas if you had done a liquidation, in addition to paying the extra ten percent upfront You're also in a situation where, when you spend those coins at some time in retirement, you're gonna pay capital gains tax on the appreciation, which would not be the case if you had done a Roth conversion. So one of the things we tell people, you know, that are thinking like, \"I'd rather take an upfront tax hit to be done with this,\" well, the way to do that, honestly, is to roll your coins into an unchanged Roth IRA. You'll take a smaller tax hit than you would have if you've done in liquidation, which means you're gonna acquire Acquire more Bitcoin, right? You're gonna acquire ten percent more Bitcoin, and also you're gonna get a tax benefit in the future on the back end, when you actually retire." }, { "speaker": "stephan", "time": "41:08", "start": 2468.28, "text": "Yeah, and that could be huge, right? So let's say you believe the price is going- As many people do, millions of dollars per coin in today's terms, maybe ten million, fifteen million, twenty million, who knows? You might be much more incentivized to go for a Roth instead of traditional, right?" }, { "speaker": "jeff_vandrew", "time": "41:22", "start": 2482.44, "text": "Yup. I mean, to me, the Roth conversion, if you're young, particularly if your account balance isn't very high because you're young, the Roth conversion's kind of a no-brainer, just do it. You're not gonna be eating that much tax, even, right? And you're gonna have all this future appreciation. you know, the math becomes different if we have a client, and we don't give advice on whether to do Roth conversions, 'cause we're, we're, you have to talk to your CPA or, or other tax advisor about that, but we Seventy years old, your time preference is different, right? That may be a situation where it makes sense for you to leave those in non, non-Roth funds, pay zero upfront tax, acquire as many Bitcoin as you can, and then you're only paying the income tax as you withdraw, you know, year by year." }, { "speaker": "stephan", "time": "42:10", "start": 2530.11, "text": "Yeah, interesting. And so that's really fascinating because your age will really change how you think about that question, and, totally, it makes total sense the way you're explaining it. Now, another question that I think age comes into it also. Many of us in the Bitcoin world are libertarian leaning, not everyone is, but they might be thinking, they might be more skeptical about what's going to happen years and years, decades down the line with the government. They may be thinking, \"Look,\" Could the government look at this huge pot of funds and try to raid that, or could they try to forcefully repurpose some of that retirement money into government projects and say, \"Look, look, Jeff, you need to contribute to the roads of your nation, so we've redirected some of your retirement funds to this.\" So does going into this system place the hodler at a little bit more of a risk from that point of view?" }, { "speaker": "jeff_vandrew", "time": "42:57", "start": 2577.41, "text": "Here's the thing, I don't see the distan-- I, this is a thing that early in my career doing these, I used to hear this more Or I don't hear it as much today. And the reason for that is I don't see the distinction between an IRA versus any other asset you might have, right? I don't, I don't see why it would be somehow more likely that the IRA would, the, excuse me, the government would go after your IRA as opposed to your real estate or anything they could seize, your gold that you, you know, that, you know, obviously there's a precedent in the United States for seizing that. I, I don't see if you're doing that- Calculus, and I'm, I'm certainly wouldn't ever tell anybody to not think about that, but I don't think you should consider your retirement account any more risk than any of those other assets. I don't see why you would. I think the-- that narrative initially was created by, you know, in the pre Bitcoin era, by certain promoters that were trying to get people to invest their IRA assets offshore, and I, I think that that was just like sort of just like kind of like a, I, I don't think they had any particular rationale or reasoning as to why IRA assets were some, somehow more at risk than any other asset that you have. But, you know, the narrative helped them, you know, sell offshore IRAs. Yeah, exactly. So I think that's where that came from, and, you know, and the Bitcoiners naturally being skeptical kind of picked up on it, which I don't blame them for. I think it's just more of a thing like, well, if that's the case, then I don't, you know, I, I don't think If you have coins somewhere that no one knows anything about, right? That, I mean, if you're willing, like, if there was a law that you had to turn over your coins or whatever the case might be, you know, and you're in a position where you've decided that if that happens, you're gonna break the law and you have coins that you don't believe the government knows about, that is a different calculus, right? But in terms of, you know, any coins that the government would have any level, level of awareness of or anyone out there that's like, \"Hey, Kind of thing, then I don't see the IRA as any more risky. So that's, it's a personal decision. I don't object to that analysis. It's more just that I don't think you should analyze IRAs as any sort of like a specific thing that's different than any other kind of asset. I mean, in, in recent times, the only thing I can think of that would be similar to that was the-- Was it Cyprus? There was a bail-in during the financial crisis. Yeah, and that was not limited to-- I don't think, I don't even think it Holders, like it was, I think" }, { "speaker": "stephan", "time": "45:33", "start": 2732.96, "text": "it was, that was just basically people just took a haircut, haircut meaning you, you lost money." }, { "speaker": "jeff_vandrew", "time": "45:39", "start": 2738.77, "text": "Yeah, it wasn't anything specifically directed at, you know, at retirement accounts" }, { "speaker": "stephan", "time": "45:43", "start": 2743.15, "text": "or anything in specific. It might be, I mean," }, { "speaker": "jeff_vandrew", "time": "45:45", "start": 2744.95, "text": "if you're in a country where retirement accounts are, tend to be held, I mean, there are some countries where that, those are held by the government, like the government, it sort of holds them as trustee, that's a different calculus. I mean, I could see that's a situation where, like, yeah," }, { "speaker": "jeff_vandrew", "time": "46:02", "start": 2761.5, "text": "Like these are now, you know, X percent of these retirement funds that we're holding in trust for our citizens are gonna go to our own government bonds to make these supposed improvements or whatever the case might be. That's a real low-hanging fruit. That's sort of a different situation." }, { "speaker": "stephan", "time": "46:16", "start": 2775.93, "text": "Yeah. So I, I think that's a good point that it, you really have to think about if you're operating in the fully legit KYC-compliant world, well, it's not really that different whether you're in IRAs, ETFs, and some other above-board assets. Exactly. It would only change somebody's calculus if they were thinking non-KYC, basically. That's kind of right." }, { "speaker": "jeff_vandrew", "time": "46:38", "start": 2797.75, "text": "Yeah, yeah, that's exactly right. If you're acquiring your bitcoins just completely outside the KYC world, or however you're doing that, then right, then that is a different sort of-- That are, those are different considerations. Yeah, but that's kind" }, { "speaker": "stephan", "time": "46:49", "start": 2808.92, "text": "of a different kettle of fish. That's another whole bucket. So, yeah, that's, interesting for people to know. And I think the other one I really wanted to ask while we've got you on today is" }, { "speaker": "stephan", "time": "47:02", "start": 2822.02, "text": "Been asked a thousand questions about Mcnulty, but, if you could just give an overview for listeners, like what is the, what is this Mcnulty case?" }, { "speaker": "jeff_vandrew", "time": "47:10", "start": 2829.57, "text": "Yeah, sure, that'd be great. So for people who are interested in this, by the way, I should first say that we just recorded a one hour webinar on this case at Unchained, myself and, Connor Dolan, who is the head of the IRA product on the client solution side, which is sort of, those are our client-facing people. So Con- Connor's the guy if you you're listening out there that you'd probably be dealing with at your first con- contact at Unchained. So he and I recorded a, a one hour webinar, on the Mcnulty case, actually just yesterday. this is a, a lot, a lot of talking for me over, over the, over the past couple of days, which should be on our YouTube channel. We, we get the link in the show notes. Oh, great, yeah, it should be on our YouTube channel within, within a few days of this being recorded, but The, the taxpayer in Mcnulty didn't have Bitcoin at all. she had a certain type of IRA structure called a checkbook IRA structure, which was the structure that I used when I was in private practice for clients in order to hold Bitcoin and hold their own keys. It isn't the structure that we use at Unchained. I just wanna be clear about that. So she had a checkbook IRA structure that was holding gold, and it was-- she used that to effectively hold gold in a safe in her house. I say her, because the taxpayer was Mrs. McNulty, that's why it's called the, the, the McNulty case. So what was interesting about that, there's a couple, one thing that's very interesting is she was always gonna lose this case, because Gold has- Special rules under the Internal Revenue Code that don't apply to other assets. Precious metals must be in the possession of a licensed bank or trust company, is the short story, if you're gonna hold them within an IRA. that's section four oh eight M of the Internal Revenue Code. What is interesting about the case is the court didn't just say, \"Oh, well, she violated four oh eight M, so she loses, end of story.\" They didn't do that. They actually took it a step further and said, \"Oh, by the way, if she hadn't, violated, section 408M of the Internal Revenue Code.\" She still would've lost, and that's because, you know, IRAs have the-- are-- well, there's this concept of constructive receipt that needs to be applicable to IRAs. So for those that aren't aware, IRAs are all legally structured in such a way that they have to have a custodian that's a licensed financial institution. Okay? So at Unchained, for instance, Salera National Bank is our IRA custodian. We couldn't do that at Unchained because we're not a bank, we're not regulated by a, a state department of banking. In our solution, the custodian, through a special tri-party delegation agreement, delegates key control to you as the client, and with one of those keys going to us at Unchained. So you always have a quorum of keys, you're always in control of your coins. We hold one key basically as a backup in case one of your keys is compromised, lost, et cetera, just like any other unchained vault for those that are familiar with our product. So, just going back to the Mcnulty case in terms of constructive receipt, they said, \"Well, you know, the IRA custodian wasn't holding this asset, and she could have used these, these gold bars to buy stuff at any time and nobody would have known.\" So that's constructive- Constructive receipt, and it's deemed then that, you know, those gold bars were distributed to her, and she's taxed on them as soon as she had control over them. So what's very weird about this is constructive receipt is a tax law concept that's, that's not new, right? That's very commonly used in tax law. And the short story there is, if there's an asset that someone else is holding for you, but legally speaking, it's payable on demand, meaning you have the legal right for that person to turn it over to you. At any time, then you're taxed on that as soon as you have the legal right to demand that asset, even if you don't actually demand it. Okay? That, that's how constructive receipt works, and that, that makes a lot of sense if you think about it just logically. Otherwise, it would be very easy to do tax abuse, right? Now, the weird thing though is constructive receipt in the traditional sense can't possibly apply to IRAs because every IRA, even the most milk-toast, plain vanilla, legacy financial system IRA with Fidelity or Ameri- Trade or the most boring company in the world, right? they're all payable on demand. Every IRA owner has the right to tell their IRA custodian, \"Hey, I wanna withdraw my assets,\" and they don't like, do some determination about whether you need the money or anything like that. I mean, you, for most of them, are, are online nowadays, right? So you just log in, you put in your password, your password is all you need to get that withdrawal, and it shows up in your bank account the next day, like that's the end of it. Like like, you know, there, there's no like real custody there, it's, it's payable on demand. So that can't-- they can't have possibly meant constructive receipt in the traditional tax law sense, because I-- the court didn't obviously intend to just like create a year zero with regard to retirement accounts, in that like every retirement account is now suddenly invalid. So we kinda have to read through the lines with regard to the opinion. In terms of what they meant by constructive receipt, because they obviously didn't mean, as I said, the traditional tax law sense. And what-- the only conclusion you can draw if you read through that whole opinion is the thing that really irked the court was that the custodian didn't have eyes on the asset. They had no way to know whether she actually spent it or if it was still there, 'cause she could have just pulled it out of her safe at any time, spent it, and they wouldn't have known, because the only- The only thing they were asking from her is once a year, they were asking her how much gold she had as of December thirty-first, you know, each year, and she could have lied, right? I mean, you know, I-- There's no indication that she did lie in that case, but she could have, and that's sort of-- That seemed to be what this, concept of constructive receipt was based on. So the reason the Unchained IRA is a more conservative approach, that even if McNaughton were to become law of the land, and I have to be clear" }, { "speaker": "jeff_vandrew", "time": "53:37", "start": 3216.8, "text": "Opinion, it was not an appellate court opinion, so what that means is it's not legally binding on other taxpayers other than Mrs. McNulty. However, it could be persuasive if such a case were to go to court again, you know, for another taxpayer, and also the IRS like could choose to adopt it as its position on this matter. There's no indicate, they haven't issued any sort of a formal notice or anything like that in the-- I mean, the opinion dropped one, two, three, four months ago, as we're recording this, and they haven't done Could. So if you wanna play it conservative and play it safe, you wanna comply as best you can, you know, with this opinion. So our structure at, at Unchained is more conservative than the traditional checkbook IRA structure in that there's no sort of intermediary entity the way there is with a checkbook IRA that sort of obscures what's going on with the underlying investments. So what I mean by that is, at Unchained with our IRA product, all your IRA coins are held in a very specific designated Unchained vault. The custodian doesn't have any access to your private keys. You are the only person in the world that knows a quorum of your private keys. Unchained holds one of the three in a two of three multisig setup. and again, we hold that one of the three effectively as a backup in case to help you out in the event one of your two keys is somehow compromised. But what makes us very different from, like, a checkbook IRA, like Mrs. Mcnulty had, is we do have access to the public keys and the wallet can- configuration file. And with that, we and the custodian are able to monitor on a consistent basis all of those transactions. So if you were to in-- for instance, use your private keys to remove Bitcoin from that designated IRA vault that's titled to your IRA, we would know about it. And that makes it different from the Mcnulty situation. We do monitor for that for tax compliance reasons. You're absolutely entitled to do that whenever you want. When you do it, we report it to The custodian, the custodian reports it to the IRS, so everything's on the up and up. Nobody's doing-- there's no potential for, you know, tax fraud or anything like that going on there. so that's why we're a more conservative approach. You know, when I designed this structure in light of the Mcnulty case, we tried to design it in such a way that if a tax court in the future held our structure to somehow not be non-compliant under the rationale of Mcnulty, they would have to also hold that every- Discount broker IRA, the millions and millions of them that are in the system already holding plain vanilla financial sys- legacy financial system assets, they would have to also hold that those were also violative, right? Because just like an unchained customer, an unchained customer can use his keys whenever he wants to pull his coins out of that IRA and do whatever he wants with them, right? We would see that, we would report it to the IRS. That's exactly how a legacy financial system IRA works. You use your ac- Account password to withdraw at will, anytime you want, those assets out of your IRA and spend them on whatever you want. You're entitled to do that. It gets reported to the IRS. So we're trying to create a situation where there's, there's no distinction there, so that we couldn't be ruled to be non-compliant without, you know, millions and millions and millions of other IRAs that are in the legacy financial system also being non-compliant, while also of course, giving clients access to their own private keys so they know their Bitcoin is actually there, and if there were some If collapse in the government or horrible emergency or anything like that, you can absolutely, at the drop of a hat, you know, withdraw your coins out of that vault. No one can stop you from doing that." }, { "speaker": "stephan", "time": "57:16", "start": 3436.27, "text": "Safety in numbers, but yeah, really interesting." }, { "speaker": "jeff_vandrew", "time": "57:19", "start": 3438.79, "text": "Yeah, exactly." }, { "speaker": "stephan", "time": "57:20", "start": 3439.66, "text": "And I think it's, yeah, for people who are operating in, in the KYC world, as many people are It's, it's something to think about because you have to think about, well, I mean, just IRAs in general, right? Like using the tax advantage structure if it's available. Now, and I should just one point on" }, { "speaker": "jeff_vandrew", "time": "57:35", "start": 3455.03, "text": "that too before you move on is, look, I mean, if you've got like a bunch of money in your IRA and you liquidate and you buy Bitcoin, I mean, you're in the KYC system, period, because if, if, if, you know, if things really hit the fan, I mean, they're gonna be like, \"Well, Bars out of your IRA, like where'd that go? You know, think, you know, that stuff's all, you know, traced and tracked. So even if you were to use all that money, pay all that tax, and use all that money to buy Bitcoin, I mean, you're still, there's still risk there if you're talking about buying any sort of a substantial amount of Bitcoin. So that enters the calculus too, right? I'm not shilling for KYC, I'm not saying it's a good thing, I'm just sort of, I'm saying these things descript" }, { "speaker": "stephan", "time": "58:25", "start": 3505.46, "text": "And I think it's important for people to really think about the long term, because over the long term, the income you make is going to pale in comparison to the assets that you stack and let that compound for thirty or forty years. And so it is an interesting thing for people to think about, especially if you're young, the younger you are, the more you sort of have to think about at least the long term compounding factor, right? Because if we're thinking Bitcoin for the very long term, we're thinking on multi-decade, thirty, forty, maybe even fifty-year" }, { "speaker": "jeff_vandrew", "time": "58:55", "start": 3534.96, "text": "Absolutely, hundred percent. And that's what's kind of cool about working in the IRA world with regard to Bitcoin, is that everybody, just because of the nature of what an IRA is, everybody's got a longer time preference, right? Like, you, you have to, it's a retirement asset, it's not for next week, you know? So it, it kinda, Bitcoin fits into that world pretty well just by its nature." }, { "speaker": "stephan", "time": "59:17", "start": 3557.27, "text": "Yeah. And while we're there, maybe if you could comment a little bit around the inheritance aspects of it also. So let's say we're 40, 50 year timescale, what does it look like then, for people who are listening who might be interested, what does it look like for Unchained customers if they're thinking, \"I wanna be able to pass this on to my heirs,\" what does that look like at Unchained?" }, { "speaker": "jeff_vandrew", "time": "59:37", "start": 3576.79, "text": "Yeah, so I mean, you know, we're, we're at, at heart, a tech services company, so there's a lot that we can do for you there. You know, on the tech side, one thing that's-- one thing I always tell people, which In, you know, my key storage, security, like I've been doing this for a long time, I knew, I knew, I know how to do all that stuff without anybody helping me out. But I still have my coins that aren't chained. and the reason why I did that is because, like, if I died, no matter how much I tried to explain to my family members, like how, like all this complicate, you know, otherwise complicated stuff, like they need someone that, like, when I'm gone, that, that they can go to to handle all this, Squared away, get possession of these coins, do what they need to do. And that's a big part of the service that Unchained provides that we don't necessarily talk about as much, but if you are holding your coins in collaborative custody with Unchained and you pass away, you know, and those coins through your will or whatever estate planning device that you've set up, you know, with your estate planning attorney, go to a family member who, even if they know about Bitcoin and know how to custody Bitcoin, they- They may not know it well enough if they're inheriting more, right? Because the level of security you have if you hold one Bitcoin, may not be the same as if you hold fifty, right? I think that's, that's a fair statement. So even if the person that you're leaving those assets to has some Bitcoin, they may not really, you know, know how to deal with some, with, with the security aspects of a larger amount. So whoever that is, no matter what their technical ability is, they can come to us after you pass away, and our concierge team will hold their hand and walk them through the entire process in terms of, you know, what, how to access those coins that belong to you when you died, how to store them appropriately going forward, you know, now that they have access to them, all that sort of stuff. You know, we're always here to help on that point, and I think that's, that should be a big comfort to a lot of people in, in terms of, you know, Another part about that too is we're gonna make sure that your, your beneficiaries are comfortable with self-custody, 'cause otherwise, if they don't have anyone to help them with that, they may end up just throwing the coins on Coinbase, right? And not wanting to, to, to deal with it and just doing a custodial solution. So that's a piece of the picture in terms of what we do at Unchain that's, that's not legal, you know, in terms-- Well, Not legal. It's not illegal, I mean, it's not legal in nature, but it's very important in terms of how inheritance works. And if you, you know, with your estate planning attorney, if you've devised a, a trust or something of that nature, which there are a variety of reasons that you may wanna do that, our Unchained Vaults, we offer not only personal vaults, we also offer vaults for trusts, and we can accommodate multiple trustees of a trust, you know, the whole nine yards, however you, you wanna sort of handle that thing. Bitcoin that's held in trust for your loved ones." }, { "speaker": "stephan", "time": "01:02:46", "start": 3766.52, "text": "Yeah, and I think this is something where we often act as though we're invincible and we don't wanna think about our death and what are we gonna do on that. So it's something for people to, yeah, just every now and again, bring it up and really think about it, have you got a plan in place? The other area I was just thinking now is, are there any other areas as we look out in terms of the future regulatory, legal, are there any things that you see as being like a risk to, you Relatively, stable legally." }, { "speaker": "jeff_vandrew", "time": "01:03:17", "start": 3797.9, "text": "I see it as relatively stable. there have been a lot of proposals to change the way alternative investments in IRAs are handled, and, even over like the past two years, and none of them have really gone after Bitcoin. What they're more interested in right now are checkbook IRA structures, because I think that the idea is there they feel that those have, a potential for more tax abuse, although I don't know how much they're actually being abused. I mean, I set them up for years before Before I came to Unchained, and I don't, I certainly never assisted my, clients in abusing the tax code, and I don't get the impression that many of them did. But that aside, that's the, the perception. So there have certainly been legislative proposals around checkbook IRAs, and the thing they're actually really concerned about is, investment, like private equity type investments. there are a lot of proposals around, sort of, you know, prohibiting that, because what, what, what goes on there is like people with like a small- Balance in a Roth IRA, we're doing stuff where like, let's say that, you know, I have a startup and I know it's gonna be big, right, within the next few years, and I have like some real small amount in my Roth IRA, like five thousand dollars, right? And I'm president of this startup, so I obviously have like a large degree of control over it. I may use my role in this company to like sell like a boatload of shares in my company to my IRA, right? Well, I'm not selling them, but the company is selling them. Issuing a large amount of equity in this company to my IRA at ten cents a share or something like that, right? And there's like a legal argument to be made because it's totally illiquid and speculative, is that ten cents, fair? And it might be, right, at that time, in theory, in terms of valuation, and then, you know, the company's worth like a billion dollars, and that, you know, five years from now, and that billion dollars is now, if it's in a Roth IRA A removed from taxation forever. So the reason this came on the congressional radar is like ProPublica kind of did a hit piece on Peter Thiel with regard to this, because he did-- I'm not even saying he did anything wrong, but he did something, we'll just say very savvy, right? with his Roth IRA that acquired a large stake in PayPal when he was involved in PayPal, and then the massive amount of appreciation on his PayPal shares, went totally untaxed for that reason. That's the kind of stuff they're-- they seem to be very focused on right now" }, { "speaker": "stephan", "time": "01:05:44", "start": 3944.24, "text": "And aside from IRAs, do you see any other risks coming down the horizon, or at least as you look at, let's say, the political landscape from a Bitcoin point of view, do you see anything there?" }, { "speaker": "jeff_vandrew", "time": "01:05:54", "start": 3954.95, "text": "Just the KIC stuff that we're all aware of, you know what I mean? And, and that's not my area of legal expertise, but just the sort of idea where there have been like these legislative proposals around, like travel rules and things of that nature. I mean, at this point, I think that's probably the most important stuff to try and fight." }, { "speaker": "stephan", "time": "01:06:13", "start": 3973.04, "text": "Yeah. So So I'm curious your thoughts then there as well. Do you believe that, there should be some effort to lobby to try to, you know, change those laws or at least to minimize the impact of those kinds of laws?" }, { "speaker": "jeff_vandrew", "time": "01:06:25", "start": 3985.85, "text": "Yeah, I mean, I look, I mean, I'm really like pragmatic about this stuff, so yeah, I mean, I, I al- I mean, bad laws that are bad for Bitcoiners, I think it's worth time to lobby against them. I just sort of, you know, I kinda take it as, simply as that, and that's But I, there are people that are doing that, and I, I think it's a worthwhile effort." }, { "speaker": "stephan", "time": "01:06:50", "start": 4010.21, "text": "Yeah. Alright, well, yeah, so I guess, let's, let's wrap up then. If you've got any closing thoughts for listeners around, you know, Bitcoin IRAs, why they should think about it, let's leave it there. And of course, where can people find you?" }, { "speaker": "jeff_vandrew", "time": "01:07:03", "start": 4023.52, "text": "Yeah, so I mean, a couple things. One, I said we just did a McNaught webinar that's very popular. I'm sure Stephan will put a link into that. I also did, he'll-- there'll be a link in there for an article that I wrote on the Unchained blog that kinda goes point by point through the opinion if you're not a video guy and you wanna read something instead. And then if you're interested in talking to someone about setting up an Unchained IRA, if you go to unchained dot com, you can schedule a consultation with one" }, { "speaker": "jeff_vandrew", "time": "01:07:33", "start": 4053.3, "text": "What we have to offer, and, you can go from there." }, { "speaker": "stephan", "time": "01:07:36", "start": 4056.05, "text": "Fantastic, Jeff. Thanks very much for joining me today. Thanks for having me, man. It was a blast. Get the show notes at stephanlivera dot com slash three five one. Thanks for listening, and I'll see you in the citadels." } ] }