{ "episodeId": "SLP777", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "julian_liniger": { "name": "Julian Liniger", "role": "guest", "tag": "JULIAN" } }, "segments": [ { "speaker": "stephan", "time": "00:01", "start": 1.0, "text": "Hi, everyone. Welcome back to Stephan Livera Podcast. Joining me on the show today is Julian Liniger. Julian is a co-founder and CEO of Relai, Europe's Bitcoin saving company, basically. So, Julian, welcome to the show. Thank you. Thank you so much, Stephan. You're always talking so fast. I hope I can keep up with your pace. Well, I'll try and slow it down then. Look, let's just start on the macro side of things." }, { "speaker": "stephan", "time": "00:23", "start": 23.0, "text": "You know, it's just a it seems like everything's happening so quickly, especially in the AI world. But obviously, you're based in Europe, a Swiss Bitcoin company. What would you say is top of mind for people in Europe nowadays, like when they're kind of thinking about the economy?" }, { "speaker": "julian_liniger", "time": "00:38", "start": 38.0, "text": "I feel like a lot of Europeans are, especially when it comes to capital markets and what's going on, as you said, in AI and the big IPOs and like where all the investment, the capital is flowing in, they're, they're still looking to the US. And I feel like many Europeans come to the conclusion now, to the realization that the US is really leading and China, US and China are both really leading in these new topics, AI, et ceterand innovation in general, in the capital markets where the, money is flowing, and Europe is really just, staying, staying behind all this, right? We regulate the shit out of everything and innovation is kind of kept very, very stable. It's really hard to innovate in Europe. And I think the other big point is the cost of living. I think now in Europe, of course in the US as well, but in Europe, we clearly, even in Switzerland, even in Switzerland, just this morning in the radio, I heard a, them, them talking about the cost of living going up a few percent as opposed to the 0.8% of inflation. Official inflation, but like clearly everything from health insurance to car insurance, nutrition, traveling, everything's just going up several percent a year, and people are starting to feel it, and in Switzerland, even less than in other European countries like Germany, Italy, France, the industrial. Collapse is really something that people also are feeling. There are less, it's harder to get a job, there are less jobs. So I think Europe is in a, is in a difficult spot." }, { "speaker": "julian_liniger", "time": "02:04", "start": 124.0, "text": "And even more so, it becomes really important for people to understand Bitcoin. Because I really believe Bitcoin long-term is a way out of all of this. The cost of living, the inflation of the, of Euro can just, if, if you save in Euro or Euro bonds, I mean, the bonds is another topic. Bonds, rates are going," }, { "speaker": "julian_liniger", "time": "02:23", "start": 143.0, "text": "Crazy and, the bonds, bond market is collapsing as well. If you are saving your hard-earned money in fiat currency, especially in the Euro, you basically, you're, it's not going to get anywhere, never going to be able to afford a house and a good lifestyle for you and your family in the next 10, 20 years. As opposed to if you save in Bitcoin, step by step, put more of your, hard-earned dollars and Euro into Bitcoin, and I think in 10, 20 years people will be doing well. but on that side, that's the last point. I also think the adoption And the understanding of Bitcoin in Europe is still is still very low. It's still like around 10, 15% of people that actually get it. Still the early adopters and the the big masses, the 80% plus don't get it yet, but that's what we, for example, are working on every day and you too, right?" }, { "speaker": "stephan", "time": "03:11", "start": 191.0, "text": "What would you say the biggest hurdles are for a typical European person, right? Obviously, you're speaking for a whole continent where we have to make some generalizations. We're talking about like what, half a billion people or something like, you know, at least 400 million people, three or 400 million people, right? What would you say the typical hurdles are for them? Is it just that they think it's like, do they think it's crypto is a scam or do they think, oh, it's just too volatile or do they just think, I don't have enough money to even save? What do you think, like, if you just talk to a random person on the street, what do you think they would say?" }, { "speaker": "julian_liniger", "time": "03:42", "start": 222.0, "text": "Feel like doing this for more than 10 years at this point, right? I discovered Bitcoin 2015, and for a long time I've been very passionate, and so I talked to a lot of people trying to get them to understand it. And to be honest, the realization I had 10 years ago when I tried to convince people is not much different than when I try to do it now. It's still, the fundamentals haven't changed, right? Bitcoin is just the best savings technology, best store of value ever, 21 million only, you cannot print more of it, banks cannot stop it, the governance cannot print it, etc. So it's all these amazing, this digital gold narrative, etc. It's still the same, it's still super valuable, and many people in many institutions got it, but I feel like still, if you go on the street today and you ask 10 people, 9 out of 10 just, they kind of understand it, but they, it's not exciting for them somehow. And whenever the price is up, they feel like they missed the train, and whenever the price is down, they're like, oh, like, I'm not going to touch this shit. so I think Bitcoin is just this thing. Where it, it probably sounds too good to be true, but it's also too complicated for people to grasp on so many different levels because obviously people don't understand money already at its core, the problems with money, fiat money, because they feel the inflation, the things getting more expensive. But on the day to day is kind of like, well, I have a hundred K on my bank account today and tomorrow as well and you know, the week after as well." }, { "speaker": "julian_liniger", "time": "05:07", "start": 307.0, "text": "So what's really the problem? So most people don't really understand the problem and hence not the solution of which Bitcoin is, which is just too complicated in this thing that is kind of too, on too many levels, too far away from daily lives of people. Because we need to remember that most people are not like finance and tech geeks like you and me, right? It's just normal people that work on building construction site, they work as as a taxi driver, Uber driver, et cetera. And I feel like Bitcoin is just so hard to grasp for these people. And then they work with proxies, like the price. So they tend to FOMO into the price when it goes up. They tend to be very fearful when the price goes down. And it seems very hard for people, and that's probably also like a blocker. It seems very hard for people to zoom out five years, 10 years. Like I lately checked the price, I think six years ago, because I wanted to make a comparison from 2020 to now. Actually, it's 10x. The price has 10x in six years. Well, six years ago was also COVID, and there was a bit of a drop, but it went from seven something K to more than 70 K. It 10x in six years. But the, and less than a year ago, Bitcoin was at an all-time high of 125 K. That, of course, went down quite rapidly. Now it's climbing up again. But it was not even a year ago. People, Bitcoin was at 125 K. People seem to forget really quickly, and they just use price as the proxy for their actions." }, { "speaker": "julian_liniger", "time": "06:36", "start": 396.0, "text": "So when it goes up, they might ape in a little bit. When it goes down, they fear out again. They panic. And then they go into the next thing that moves, right? They, they tend to go into oil that moves depending on whether the trade is open or not." }, { "speaker": "stephan", "time": "06:49", "start": 409.0, "text": "Yeah, so it's like they're naturally momentum traders almost." }, { "speaker": "julian_liniger", "time": "06:52", "start": 412.0, "text": "Momentum traders, yeah. Most people are" }, { "speaker": "stephan", "time": "06:54", "start": 414.0, "text": "In that. Number going up? Okay, pile into that. Oh, it's going down? Okay, run away. That's kind of like, I guess that's naturally what it is. And then I guess obviously we believe in, you know, DCA Bitcoin, buy Bitcoin and hold to the long term. Obviously all these things that we as Bitcoiners have been saying and promoting for a long time, but it's hard to get through to people, right? Now I'm curious what your sense of it, obviously living in Europe, talking to your, you know, watching European news and talking to people. What I would say from, you know, not endorsing, but just what I've seen in the US is kind of this strong push into things like gambling and DGN kind of behaviors because there's kind of this vibe of like, you know, they feel like they can't get ahead any other way, so they try to hyper gamble. Is there, is a similar thing in Europe or no?" }, { "speaker": "julian_liniger", "time": "07:37", "start": 457.0, "text": "Yeah, that becomes more of a thing. I think it has been, it been a thing in Asia for a long time in Latin America and in the US as well, because it's almost the, for people it's the only way out. I need to get rich really quickly because, because there's such a big gap between the poor people and the rich people or the working class and the capital. And you want to make it from working to capital very quickly. And this gap feels so big that you're like, just saving for 10 years won't get me there because the inflation is also going so, going up so quickly. So I need to get there super fast because you're seeing like real estate going up 10, 15% every year. How am I getting, how am I going to, going to be able to afford a house in 10 years when the prices are going up every fucking year? So I need to, I need to get rich really quick, right? That's kind of the mindset because of the high inflation, because of the high time preference that is just, you know, prevalent in the fiat money system. And so I think that's also coming to Europe. That's also coming to Switzerland. Everywhere we're just fiat money. If, if there's the, if we live in a gold standard, Until, until 56 years ago, we left, we lived in a gold standard. There was no such thing as such high inflation, or at least when there was high inflation of eight, nine percent, there was also interest rates of up to 10 percent. So it also, there was always a way to just put your hard-earned money aside, and you know you actually at least stay or increase your purchasing power a little bit over time, so you could save for better times." }, { "speaker": "julian_liniger", "time": "09:04", "start": 544.0, "text": "And one guy with, like one man with, maybe a wife and two, three kids and can afford a house, can afford a car, and can afford to go on vacation once or twice a year with his salary. That's not possible anymore, right? Because everything goes, all the prices go up so quickly, so people are kind of raised in this internal race, I need to make it, and I need to make it fast. I can't just wait 10 years to save. And it's true in the fiat system that you can't do that. If you save in euro or US dollars, it's true that you're not going to get ahead. If you're just saving, unfortunately, even if you're saving in bonds, it's not going It's not going to get you there. But if you save in Bitcoin, I think that's the realization that people need to make is that if you save in Bitcoin for 10 years, you are going to make it. I started saving in Bitcoin 10 years ago, you too, I think. And then we bought Bitcoin every week, every month for less than, way less than 1K a coin, right? So we did make this 100X, 200X over 10 years, but you need to have this conviction. You need to decide in which store of value asset you put in your money, and then you need to have the patience. And that's what many people, unfortunately, have unlearned in the fiat system, in the fiat world, and now need to learn again in a thing like with Bitcoin, where you have this digital gold, digital capital, where you can actually save on the long term, but it requires patience." }, { "speaker": "stephan", "time": "10:31", "start": 631.0, "text": "The other obvious thing that the world is going through now is this kind of AI boom or bubble, some might believe, right? That might be the other question for some people. They might think, oh, Instead of buying Bitcoin, they should be trying to trade these AI stocks or AI things. Is that also something you're seeing? And that's obviously, how would you compare that then? The idea of, hey, just DCA Bitcoin versus play the AI game, AI trade." }, { "speaker": "julian_liniger", "time": "10:55", "start": 655.0, "text": "Yeah. It also goes back to people are attracted to whatever moves quickly and obviously AI moves a lot. One, it's just a crazy revolution and innovation that obviously is going to create a lot of value and a lot of productivity and obviously, you know, the stocks move quickly. We're seeing, I think, in the US alone, I've seen a number this year, more than 400 billion in venture capital has been invested in AI startups. Many of them go public, get bought. The SpaceX IPO was one big one. There will be the Entropic IPO later. That's, of course, going to attract a lot of capital. The big hyperscalers like Google, Meta, etc. are raising and deploying a lot of capital. Nvidia, etc. So these are the companies and stocks that are moving. And so, of course, People are aping in with their money. They have less money to invest, but that money that they have to invest, again, they want to make, two, three, four X quickly, so they have the hopes, in investing in these AI, direct or indirect, also with the hyperscalers, tech companies, they're, they're trying to invest and participate in this AI. Hype, which might also be partially a bubble, right? Because the numbers that, you know, the revenues that these companies need to create in the next few years in order to legitimate their, their, or justify their valuations now are just crazy. But that's one thing that it moves and people go there with their capital. I think long-term why this is good for Bitcoin." }, { "speaker": "julian_liniger", "time": "12:22", "start": 742.0, "text": "Short-term, I think Bitcoin is just not exciting and sexy enough compared to the AI hype, as long as the bubble is still going, as long as it's still hot, this attracts more capital to mid-range is what we exactly, that's what we're seeing. That's why Bitcoin price went lower and volumes are getting lower. So, why I think it's good for Bitcoin in the long-term is because AI, it will create returns for investors and it will create more productivity and it will create more prosperity and wealth and like capital. Money is going to be made. A lot of the software industry, which is like 45 to 50 billion market, it's a huge market. And a lot of this software industry is going to be disrupted and a lot of value is going to be created. Companies and individuals will make a lot of money. And then this money, this hype is not, not going to stay forever and this money and this productivity will need to flow somewhere. It will need to be stored somewhere long term and the store of value is Bitcoin. And so a lot of this money that is going to be made this year, next year, the year after will step by step flow back into Bitcoin where people are looking for a more long term safe haven to store their money and purchasing power. And there is no better thing than Bitcoin because Bitcoin is the digital commodity that is just fixed at 21 million. There is no other asset in the world that cannot be just produced and expanded and printed and created or found in some way." }, { "speaker": "julian_liniger", "time": "13:50", "start": 830.0, "text": "It's the only asset that is truly scarce and it has this demand because it has the great, great characteristics of sound money. So long term, this is I think all noise. Long term All this productivity, all this money that is being made in the high-risk stock market trades will go back into more long-term low-risk. And the best store of value as it is Bitcoin, and that's just the fund, fundamentals haven't changed for 10 years. And over the 10 years chart we're seeing, the demand and hence the price going up a lot, I think we will see the same line going up and up and up, for Bitcoin as well in the next 10 years. So that's why, what, what I think short-term capital is being pulled into these AI trades, but long-term they will be stored again in Bitcoin. But there, there will always be these hypes in Bitcoin crypto, outside of it with AI, with robotics, with space mining, and whatever the next big thing will be, right? People will always try to go there to make quick buck, but then they will always long-term allocate and increase their position in Bitcoin as a long-term store of value part of their portfolio. So that's why Bitcoin will always go up, in my opinion." }, { "speaker": "stephan", "time": "14:58", "start": 898.0, "text": "Yeah. I like this idea as well, because it's kind of It's like, to paraphrase what you're saying, it's like Bitcoin is where you keep your winnings, right? Like Bitcoin is where you, you know, you might have made some money elsewhere, but Bitcoin is where you store it for the long term. That's at least how you and I, probably many Bitcoiners think about it, but obviously this, it's about how do, how do other non-Bitcoin people today learn that idea. And I think historically in Bitcoin, we probably all, you know, many of us are Austrian economics influenced, and so many people who are kind of Austrian or Austrian adjacent would be talking about like, oh, big print, high inflation, like that side of the story. But the other side of the story could also just be, look, even if they don't print, right? Like, I think obviously, if the, if some big event, you know, like a COVID and there's a big print, I think, hey, everyone knows what happens to Bitcoin then, right? Like we're going to get a big number go up, right? But even if that doesn't happen, the normal, probably the standard case is more just like They just kind of keep grinding along and they do like kind of a gradual print, like like say a Lin Alden might explain. But then the productivity gains are going to float because again, the productivity gains will then come back to it because again, where do you keep your winnings? Even if you've made some gains, you got to keep your winnings somewhere and I think Bitcoin is going to be a natural place for that." }, { "speaker": "julian_liniger", "time": "16:12", "start": 972.0, "text": "So" }, { "speaker": "stephan", "time": "16:12", "start": 972.0, "text": "I don't know, I guess we got to we got to play that out a little bit because some people might see it like if you're like a serious, you know, AI bull and you're like bullish on whatever, Anthropic or OpenAI or SpaceX and some of those people might say, no, just keep holding, keep holding the winner, keep holding the AI stock." }, { "speaker": "julian_liniger", "time": "16:29", "start": 989.0, "text": "Yeah, because, I mean, it's complicated. There's not only one also thing where you should and can keep your winner. There might be some assets that are better, some assets that are worse, and in the end, most financial advisors would say just diversify because they're all pretty good. Some are better in these situations of the market, some are better in these others. But I think every financial advisor today would say should keep some, okay, some smart financial advisor would say you should keep some Bitcoin because it's amazing." }, { "speaker": "stephan", "time": "17:00", "start": 1020.0, "text": "So I guess what you're really getting at there is like this idea of the percent of Bitcoin you should hold in your portfolio is going to rise over time, as in what a normal advisor or a normal person will think of, or especially for high net worth people, right? Like a high net worth person who's made this money might be like, oh, instead of keeping 1% in Bitcoin, I'm going to keep 10 or 40% in Bitcoin. And then that, once you multiply that out across many people, that's going to create a big impact on the price over time." }, { "speaker": "julian_liniger", "time": "17:24", "start": 1044.0, "text": "I think so. Bitcoin is on the long term, it's still the new kid on the block, right? Not even 20 years that Bitcoin even exists and institutional big serious investors are only really considering it for maybe five or 10 years. The ETF is only here for two years, right? So it's really still at the very beginning. So that's why yes, to your point, I think the percentage in the portfolio will rise. But to the crazy hyperbolic Bitcoin bulls who think like this is going to be hyper Bitcoinization and Bitcoin will suck every dollar out of every other asset class, including all stocks, all bonds, all real estate, all commodities, all the, what is it? 900 trillion of money around the world that is stored somewhere. I think that's directionally correct. And that's a very nice catchy phrase, right? But it's never going to be all that because people have made, people have become billionaires with all sorts of things and stay invested in that asset class. Like Grant Cardone has become a billionaire in real estate and he still bets big in real estate even though he's now discovered Bitcoin and he's allocating more to Bitcoin because he sees the Parallels as well. people have become billionaire in, gold. I don't know if it's a billionaire, but there are people that have become billionaires in gold, right? And they still believe in gold. They, some of them start to shift in Bitcoin, some not. many have been, become billionaires in stocks, and they stay mostly in stocks. I mean, it's, it can all work. I think with Bitcoin, the really interesting thing is this is already one of these asset class where people can become and stay very wealthy, and you can just, if it develops" }, { "speaker": "julian_liniger", "time": "19:00", "start": 1140.0, "text": "As we think, you can just stay in there most, with most of your wealth. Many that, many people we know do for last 10 years, and they will keep doing it the next 10, 20 years, and they will be super successful. It doesn't say, doesn't mean that all the other asset classes go to zero. I think there's always going to be, and you can be, stay valuable, very, wealthy by just diversifying. I think with Bitcoin, the asymmetric upside compared to the very, very small downside, because it's so young and it's Because it's, because it's new kid on the block, he's particularly attractive to me where it's like, yes, I can buy the ETF, I can buy gold, et cetera, but, but the downside is really, but they are all real estate, et cetera, it's all super high already. It's like very overheated. All these asset classes are just being pumped for decades now with, all the money that is being printed. So they're super high. The PE ratios of stock don't make any sense anymore, right? So it's kind of fragile to buy in to these asset classes, whereas Bitcoin, especially after this 50% drop now, is super attractive. Like, how much lower can it go short term? Maybe it can go lower, but long term, it's just quite clear. The question is not, will it go up? The question is how much, and I think the answer is it's going to go up more compared to the other asset classes because it is still so under allocated, under discovered by like 90% of the investors." }, { "speaker": "julian_liniger", "time": "20:26", "start": 1226.0, "text": "And fundamentally, it is the best. Like, I think Almost no one that argues that just if you start from scratch today on a blank white piece of paper and you design the best store of value asset, it's going to be something that is very close to Bitcoin. So it's just the best compared to real estate, compared to stocks, compared to gold, which all of them you can find or produce or print more of, and Bitcoin you just can't. So they all, all of these asset classes are great, but they have certain flaws where Bitcoin is pretty purely just very, very good store of value asset. And so yes, I believe, it will go up, not only price, but also in percentage allocation, because exactly as you said, that's where you want to, want to store your gains that you might make in other asset classes." }, { "speaker": "stephan", "time": "21:15", "start": 1275.0, "text": "Yeah. And to the other idea of" }, { "speaker": "stephan", "time": "21:19", "start": 1279.0, "text": "You know, people going for a higher, you know, looking for they're trying to hyper gamble their way to riches and things like this. And they're trying to use, let's say, leverage on things to juice the return, right? A common thing in prop, like the standard thing that most, many people do is buy a property. And guess what? They're using a mortgage, they're using debt, so they're using leverage to try to do better on that. And so I think that's also bringing that question of like debt and Bitcoin. And should people use leverage and amplification? And of course, some of this is like the treasury company stuff, some of this stuff is like the collateralized Bitcoin loans, or even, you know, people out there might be able to find ways to get fiat loans to buy Bitcoin with. What do you think people are going to do in terms of using debt to buy Bitcoin to kind of accelerate or lever the returns there?" }, { "speaker": "julian_liniger", "time": "22:04", "start": 1324.0, "text": "I think many of us have been surprised in the last 9 to 12 months of how much leverage there was in the system. And the system got deleveraged quite drastically. That's why Bitcoin fell in a few months 50%. Because many People have bought into the all-time highs, into the hype with leverage. Like they maxed out, and then they decided to take leverage, get a, credit or debt with Bitcoin as collateral or something else as collateral, just get more money to ape more into the rising price of Bitcoin, which goes well until Bitcoin goes up and stays up, right? But when it goes down, you then either need to bring back more collateral or you get liquidated. And many people did get liquidated because they couldn't really, when Bitcoin goes down 20, 30, 40 percent, they didn't have other collateral, other money to bring it back. That, that happened. That's also then why a lot of the industry, including Bitcoin treasury companies and their adjacent financial products like MSTR went down a lot. Stretch went down to below 80, where it's supposed to be at 100. Because people had to sell all this," }, { "speaker": "julian_liniger", "time": "23:14", "start": 1394.0, "text": "To avoid their margin calls or to, follow through on their Margin calls. So there was a lot of leverage in the system. To me, surprisingly, but again, the nature of human beings, it's all about fear and greed. when they're greedy, they're going to find as much leverage as they can find money somewhere. And, What about," }, { "speaker": "stephan", "time": "23:35", "start": 1415.0, "text": "I'm curious from a European perspective, do you know, was there a lot of debt taken out, like, for Bitcoin stuff there? Like, would you say that was a global phenomenon, not just like a US thing or Asian thing?" }, { "speaker": "julian_liniger", "time": "23:46", "start": 1426.0, "text": "Yeah, I think it was a global phenomenon. I think there are actually quite some European holders, for example, of publicly traded Bitcoin treasury companies. I know European Bitcoin influencers, people talk about it. We know it from our own business, where with Relai Private and Relai Business, we actually do offer loans as well, Bitcoin backed loans, and, many people took loans like that to actually increase their positions even more into Bitcoin. And I think it's a thing. I advise to do it. I'm definitely not a financial Advisor that is knowledgeable enough about it. I personally am always, I always try to be cautious on that. Like if you're playing the long run, then with leverage, you're adding risk. You might do even better in bull markets, but then also the other thing that you add more risk when the market goes down. So you should, from a more frugal perspective, you should mostly just invest the money that you can just keep there for, let's say, five years and you don't care if it does 50% up or down. When you add this leverage, you just add risk. But that said, on the long term, and that's why I find attractive what Bitcoin treasury companies, especially the big ones that are well managed like MSTR. What I like what they do is they found a glitch in the system where if you can actually take a lot of debt and put it into Bitcoin and not get liquidated with it and wait long enough for five years, ten years, obviously that debt, because of the inflation, is becoming Less" }, { "speaker": "julian_liniger", "time": "25:22", "start": 1522.0, "text": "And less valuable. So if once you have to pay it back in five years, ten years, it will be actually much less purchasing power that will flow out. And at the same time, you held it in an asset that is appreciating. So in ten years, we believe Bitcoin will be two, three, four X from now, right? And actually the debt, if you take it in US dollar or euro, would probably worth half. So that taking money on that is cheap to get because the interest rates are super, super low, and then you can hold it and basically it inflates away. And at the same time, you can buy Bitcoin with it, which goes up, like who wouldn't do that deal, right? It's kind of a no-brainer deal. But you need to be able to manage that leverage, which, huge multi-billion Bitcoin treasury companies, for example, or other companies that are managed by financial experts, can do. As as a private individual, I would be much more hesitant in taking too much leverage." }, { "speaker": "stephan", "time": "26:21", "start": 1581.0, "text": "Yeah, so maybe it's more like if you have a large enough balance sheet that you can sustain conservative levels of leverage or amplification in the case of some of these treasury companies, maybe it can make more sense for them, but for everyday individuals, probably not. But at the same time, here's the thing, a lot of those individuals, if they don't do this, then they're going to be off gambling and, you know, they're going to be off either gambling or engaged in some other kind of high risk, you know, strategies at the same time. So it's kind of like there's a bit of a dilemma there that people will feel because if you are somebody who is still trying to, you know, generate your first bit of wealth, then that's always going to be the temptation for people, right? To kind of look for the either very high volatility, high risk thing or the levered thing. To try to, quote unquote, catch up." }, { "speaker": "julian_liniger", "time": "27:09", "start": 1629.0, "text": "Yeah. But the thing is, you can just never know where Bitcoin goes in the short term. So always have this, whatever you do, even if you go leverage, whatever you do have in mind that, you know, for five years you need to be able to sustain prices as they are now, or even stomach a 50% short term, and it shouldn't like liquidate you. I think also there's smart ways in how you can use Bitcoin collateral loans, for example. It doesn't necessarily mean you take like a 50% loan on your Bitcoin and reinvest it in Bitcoin. That's not smart because then when it goes down 50% as it did in the last, six to nine months, then you definitely get margin call. You definitely need to, take serious amounts of Bitcoin, put it back. Otherwise you get liquidated and you lose your Bitcoin. That's really bad. You, you put your Bitcoin at risk. If you, let's say, take a 10 or 20% debt," }, { "speaker": "stephan", "time": "28:00", "start": 1680.0, "text": "Collateral," }, { "speaker": "julian_liniger", "time": "28:01", "start": 1681.0, "text": "Loan, yes, LTV, then use that money, for example, to pay your bills, to finance your Lifestyle or to make very safe, like, let's say fixed income investments or whatever, that's a different topic because then the risk is much lower, but it's, it basically, you can avoid selling your Bitcoin to finance that other thing. Let's say you need to make a big renovation in your house, you need, now you have a Bitcoin worth of 100K, you can either decide to sell, 10% of your Bitcoin to finance that roof, the, that you need to renovate, or you can take a loan, 10K, you pay some percent, low percentage, so you can finance your roof now, and in five, and you keep all your Bitcoin in five years, if Bitcoin doubles or triples, well, that was the better deal than selling your Bitcoin, right? So there's smart ways to use Bitcoin collateralized loans, and there's very high risk that involve this big leverage, trades that can really break your neck in bad times." }, { "speaker": "stephan", "time": "29:03", "start": 1743.0, "text": "Yeah. On the user side of things, I know you recently got MiCA compliance as well. Talk to us a little bit about that process. What does it entail for you as Relai?" }, { "speaker": "julian_liniger", "time": "29:13", "start": 1753.0, "text": "Super long-term, high effort process. Took us a lot of capital, a lot of sweat and tears, and a lot of our resources, even development resources, had to go in that because basically you have to build a backend of a bank with all the monitoring, the risk management, fraud detection systems that you need to build, and like it's all the data collection as well for users, unfortunately, like the onboarding process has to had to blow up. We are also always keeping at limit the constant tension or struggle to find the right balance between what we want to offer our users, like the easy onboarding and fast, and what the regulators want, but we need to find the middle ground there. It was a lot. It is like really, really hard to get a MiCA license, I can say, and that's also why many smaller companies get it, but struggle to maintain that overhead cost. As well, and the whole effort and the resources that continue to go, even once you have the license, that continue to go within. And this is also why we see small Bitcoin companies in Europe not getting it and becoming irrelevant, because if you don't have the MiCA license, you can't really be active on the market in the EU. So we are at this size where we can fortunately afford it, and we can maintain it and grow, even in a Bear market where we have this high overhead costs, you definitely, the consequences, you need to become bigger." }, { "speaker": "julian_liniger", "time": "30:39", "start": 1839.0, "text": "The bigger, the better actually. So this overhead gets lower and lower, hopefully from like 50% if you're small to 40, 30, 20, 10%. companies, big companies like Coinbase, they also have a lot of regulatory expense, but it's maybe 10, so they can, of their whole capital space, so they can still spend a lot into innovation, which the last two years we have struggled through, due to getting that MiCA license being such a big effort. Now we have it, we found also very low cost, highly efficient ways to maintain it. So I'm really getting back to investing in innovation and product. Bear markets are here for building, right? So then the next bull market, we're ready to exponentially grow. But yeah, MiCA is a It has these two sides, right? From a pure business perspective, obviously from a Bitcoin perspective and from an innovation perspective, regulation is never really positive. From a business perspective, it has these pros and cons. The pros are that actually smaller competitors and new competitors are being kept out of the market a little bit, right? I mean, with AI today, you can build something like a wrap really, really quickly. So two guys locking in their bedroom for two, three weeks can probably build something that comes pretty close, but then they don't have the license to actually do this financial intermediary business that is behind it, and they don't have the brand as well and the customer base that we've built the last six years." }, { "speaker": "julian_liniger", "time": "32:06", "start": 1926.0, "text": "But mostly the regulation, yeah, it's keeping competition out, which from pure business perspective is something that is not bad, right? On the negative side, of course, it adds a lot of overhead cost to the business, and it's something that is not, you know, you have to do a lot of things that you would not just do. If I wake up in the morning and I To build the roadmap for Relai for the next two, three years without having regular regulation, legal and compliance in mind, it would look much different. The problem is a lot of the roadmap needs to be compliance work and it adds a lot of, a lot of stuff on our plate. so yeah, it's a problem and a con, but, I'm happy we did it because Bitcoin, you know," }, { "speaker": "stephan", "time": "32:44", "start": 1964.0, "text": "Bitcoin only, you're trying to, you know, because what we, what the industry has historically seen is, let's say, the bigger, you know, the Coinbases and the Binances of the world have a lot of altcoins and kind of historically they got a lot of money out of" }, { "speaker": "julian_liniger", "time": "32:58", "start": 1978.0, "text": "The" }, { "speaker": "stephan", "time": "32:59", "start": 1979.0, "text": "Trading on those things. I think even in the US, Coinbase are kind of, it looks like they're going towards this kind of prediction market sort of thing as well, because they're kind of, again, kind of in the gambling sort of, or gambling adjacent sort of world. how are you seeing that, you know, from a Relai perspective, like focusing on Bitcoin, kind of making enough revenue and getting enough, you know, money to make it worthwhile?" }, { "speaker": "julian_liniger", "time": "33:19", "start": 1999.0, "text": "Yeah, that's a very good question. I think these are two different businesses to just run. And set up. If you're a more an exchange and like a casino, you always need to be super fast and the next offer the next big thing. You need to offer Shiba Inu when it's hot. You need to offer Trump coin or Melania coin or whatever when it's hot. You need to offer prediction market now that it's hot. And you need to offer the next big thing. You need to offer agentic AI trading now that it's hot. You always need to offer the next big thing. And it's very profitable, I must say, right? But it's a different business model to when you're building this brand that we are building where it's all we want to enable people to save Bitcoin and accumulate Bitcoin and create wealth over long run. I think it's hard That's a hard sell for someone like Coinbase or Binance, right? That people who want that, people who want to become long-term savers and build wealth for themselves, their family, for the next decade and for the next generations. That's not the casino. You're not going to a casino if you want to do that. So we attract different People, and for them, in order to enable them and give them the best services, we have to build much differently, communicate much differently. So we are all about becoming this partner for people to build long-term Bitcoin savings and wealth, and how to make it work from a business perspective, though, because as you said, yeah, casinos and crypto exchanges that are always hunting for the next big thing are highly profitable." }, { "speaker": "julian_liniger", "time": "34:49", "start": 2089.0, "text": "We have a different kind of model where we, how we can become profitable and actually be a successful company that eventually can also go public and have very good profitable quarter numbers. We need to find the things that people are really willing to pay for, and basically take a cut on different financial services around Bitcoin. So our first phase is to make it super easy for people to onboard to Bitcoin and save Bitcoin, hold Bitcoin in self-custody, and accumulate Bitcoin automatically with a very nice user experience on the long term. So they get more and more Bitcoin. Wealth, and we make money out of this by the commission that we take a little cut on every," }, { "speaker": "julian_liniger", "time": "35:32", "start": 2132.0, "text": "Hundred bucks, whatever they invest through it, through us in Bitcoin. Then the more Bitcoin they have, already now we have more than a hundred thousand users owning in their self-custody. So it's not, under manage, asset under management, it's asset under our customers management, but it's more than twenty thousand Bitcoin that our customers hold in their wallets, right? So the more Bitcoin they hold, and the more valuable this Bitcoin gets, because the price gets higher, well, the more they will also ask for different services. And we already own their customer relationship. We own, we have their trust. They are with us. They have our app. They are registered with us. They are in touch with our customer support. And so that's a great potential to offer more financial services. So in the second step, what we aim to do is give them what they want. So maybe people want to actually," }, { "speaker": "julian_liniger", "time": "36:26", "start": 2186.0, "text": "Have a custody partner or some sort of a multi-sig customer setup because they have more Bitcoin. They kind of worry, yes, they have it on our secure, non-custodial, self-custodial mobile wallet, but maybe they also want a hardware wallet. Maybe they want a multi-sig setup, especially when they become private and business clients, or they even want a custodian. They might say with parts of their Bitcoin, they want the custodian to hold it for them. So This, what might be one service, the people ask for some sort of yield, like how can I make my Bitcoin, the Bitcoin work for me and actually put it to work, earn some yield on it. Then lending, as we talked about, how can I maybe avoid selling my Bitcoin, but take some fiat to finance my business, finance my expenses, my lifestyle, etc. So these are only a small number of many, many different financial services that people who become more and more wealthy will want from a company like us. And if we can serve them with these services, offer these services, we can always, have a, have a price tag on that, right? And especially as the amounts get higher, like stuff like prime brokerage, when people will want to buy and sell six, seven, eight digit amounts of Bitcoin, then, then these returns for the business also get very juicy and we can build a very profitable business case around it." }, { "speaker": "stephan", "time": "37:49", "start": 2269.0, "text": "I see. Yeah. And so I guess you've got a split then of like the Relai app. Which is, you know, like retail, I guess, or everyday, everyday people. And then from there, once you get to like high net worth, then now we're talking more like Relai Private. And then I guess you also have like the business side of it too. And then so I presume then for things like loans, you're going to offer that to more like Relai Private and Relai Business customers, right?" }, { "speaker": "julian_liniger", "time": "38:14", "start": 2294.0, "text": "For now, yes, but the goal is really to also have these limits more like intertwined. Like there, there, there should be no clear limit. Currently, yes, it's still the case because just the demand from private and business clients are much higher for some of these financial services. So we offer them first as a pilot basically to these small number of clients, the exclusive ones, but we aim to roll it out to everyone. So, and also most of the private business clients now use the web app. And as you said correctly, we have the mobile app for the hundred thousand retail users we have. But the goal is to make this fluid, right? To be able to, as a retail user, Start with fifty bucks a week, a hundred bucks a month that you're saving with the mobile app. When this gets more money or you earn more money or you inherit more money, whatever, you might want to start using also the web app to make bigger trades. You might want to put some of it in custody, get some lending, get some yield, whatever, and then you can do most of it with the mobile app or the web app and you get the premium support and all that kind of stuff through, through these two front ends. So the goal is to obviously serve all of our users in the same way and just package a nice pricing for all of these services for everyone. But yeah, I think that the real big difference to these Coinbase, Binance, et cetera of this world is they are very short-term speculative kind of casino-like, yeah, more like gambling companies and we're more a saving company helping people to really build long-term wealth." }, { "speaker": "julian_liniger", "time": "39:49", "start": 2389.0, "text": "It's a different category." }, { "speaker": "stephan", "time": "39:51", "start": 2391.0, "text": "I see, yeah. And then talk to us a bit about the self-custody side of it, like is it a phone wallet? Is it just a, you know, you get like 12 word seed? Talk to us a bit about how that part of it works." }, { "speaker": "julian_liniger", "time": "40:00", "start": 2400.0, "text": "Relai is a self-custodial wallet, so when you onboard, you get a wallet directly, you can buy Bitcoin and it goes into your wallet on your phone. and yes, you have your 12 words, you are the only person with your 12 words or with your face ID, you can get access to it. We can't get access to it even if we wanted to, so the good thing is of course if you lose your phone, new phone, Relai app or any other app, any other Bitcoin app that is self-custodial, you can put type in your seed and you get your coins again. So you're really independent of any service provider, even, even us. So that's the great thing of" }, { "speaker": "stephan", "time": "40:35", "start": 2435.0, "text": "Bitcoin. I see. And then I presume when you buy, it's automatically going to your self-custody, right?" }, { "speaker": "julian_liniger", "time": "40:39", "start": 2439.0, "text": "Automatically. It never, we never have custody. Now, with everything that is happening of, Coldcard and other, open source self-custodial Coin companies getting hacked, unfortunately, like the AI hackers really becoming a thing. We see that actually demand for custodial Bitcoin and ETF, Bitcoin ETFs printed crazy numbers the last few weeks. A lot of Bitcoin holdings flow to custodial and even ETF sorts of things, so and we need to meet people where they are. We are seeing that this self-custodial is still great for many people, but maybe not for all of their holdings. Parts of them they also want to park with a custodial just to also diversify the risk, etc. But yeah, we are definitely self-custodial first, and we really believe that the most benefits for Bitcoin come from actually holding them custodial. Right now is these 12 words. We're also working on making it much easier for people, for example, through a nice backup cards or through cloud and face ID to secure your Bitcoin, even from your own loss. So if you lose the 12 words, imagine you can just buy a new phone. Like if you lose your twelve words and your phone, you buy a new phone and with your face ID through cloud backup in the background, you have everything there again. Or you have a Relai backup card and you tap it once and you have your whole balance and transaction history there. These are things that we're working on making self-custody, self-custody much easier and keep it super secure." }, { "speaker": "julian_liniger", "time": "42:10", "start": 2530.0, "text": "On the other hand, we also want to meet people where they are and they might ask for more and more kind of custody-like solutions. might be between self-custody and full custody, something like multi-sig, collaborative custody, or even many still like the idea that they can put some of their Bitcoin into the hands of a trusted third party. it's just the reality, so that's also what we are thinking and talking to our users and making surveys of whether, whether they would want something like that. Currently, we're fully self-custodial, so yes, when you buy Bitcoin with us, you get it into self-custody. You can also connect your hardware wallet like Trezor, Ledger, BitBox, whatever, and then save directly. Savings plan directly going to your hardware wallet, so we're fully optimized for people who want to buy and hold their own Bitcoin." }, { "speaker": "stephan", "time": "42:58", "start": 2578.0, "text": "Got you. Talk to us a bit about, you went through a raise recently. I believe it was, what, 2.5 million dollars you raised. Talk to us a bit about that and, you know, what was that process?" }, { "speaker": "julian_liniger", "time": "43:10", "start": 2590.0, "text": "Man, fundraising is tough right now, as you, as you might know, right? so we have raised 12 million Series A end of 24, when the market was really bullish, that was, that was great. And now the bear market is tough. And I am not aware of any other Bitcoin company that has materially been able to raise this year. We now raised seven figures, which is great. We're also still open for, because we got quite some investor demand, we could raise more. So this was like a first closing and we might raise another million or two by the end of this year. So that's great. I'm really thankful that, because the brand we and the capital investor base that we We have built and the user base and the product and everything. in the last six years, we are able to, even in these very tough markets, was, I think, an important signal as well for us, for the team, for the market, for all the investors that we can raise, whether it's, good or bad. we wanted to raise this, bridge round to really then go for a big serious B and be ready for a big serious B. We had a lot of, things that we still want to do on the regulatory side and side, but of course, the product side, that now we have more time and resources to invest into more innovation and cool marketing stuff to really grow our user base and And pump all the KPIs and the numbers, even in the bear market, and of course, when there's a bull market, they're going to look even 2, 3, 4x better." }, { "speaker": "julian_liniger", "time": "44:35", "start": 2675.0, "text": "That will enable us then to raise a big Series B and move progress towards our IPO. That here, this round, I'm very happy that we were able to raise where almost no one else in this space can raise. Bitcoin venture capital is really tough right now. Owning a Bitcoin startup or a venture fund is really tough right now because all the venture money, as we said at the beginning, 400 billion in the US alone. AI and" }, { "speaker": "stephan", "time": "45:00", "start": 2700.0, "text": "AI related stuff, yeah." }, { "speaker": "julian_liniger", "time": "45:02", "start": 2702.0, "text": "All AI related. And even though we have AI in our name," }, { "speaker": "stephan", "time": "45:05", "start": 2705.0, "text": "We're" }, { "speaker": "julian_liniger", "time": "45:06", "start": 2706.0, "text": "Not a, we're not a pure play AI. We use a lot of AI. Almost. Well, that's the thing I" }, { "speaker": "stephan", "time": "45:12", "start": 2712.0, "text": "Was going to ask you about, actually. The AI side as a user, like, are you using it to build stuff? Thoughts on securing your stuff using AI? Obviously, now AI vulnerability scanning is a big deal, is a big deal. But it's opportunities and risks too, right? So talk to us a bit about how Relai is using AI. Huge" }, { "speaker": "julian_liniger", "time": "45:29", "start": 2729.0, "text": "Opportunities and risk as well. Yeah, the opportunities are, well, one thing is the attackers have AI, really strong AI models. So basically, they have now machine guns. So you also need to have machine guns. Otherwise, they will just roll over, which happens to a few Bitcoin companies, happened to a few Bitcoin companies the last few months, unfortunately. So we need to be prepared. And you need to use AI to internally audit your systems. Make sure cybersecurity is just on top. There's always new models coming out that actually discover new flaws and need to patch and fix them. So this is a continuous internal audit thing. And external pen testing of like white hackers that you hire that try to hack your system with the latest open source models and closed source models and all the frontier models, try to hack into it and find vulnerabilities that then they report and you can close. So this is something we do, we invest a lot in. You just have to, otherwise you're becoming a victim of these things. That we've seen in the, in the short term past. Now then, to build stuff, it's also, it's also amazing, right? To, to just bug fixes, refactoring things, make things more reliable, performant in the back end, of course, in the front end, just new features, you can build them much, much more quickly with less human involvement. That's great. The risks is that you start by coding shit that then is going to blow up, it's going to add tech debt, it's not really going to work in the front end for the user." }, { "speaker": "julian_liniger", "time": "46:59", "start": 2819.0, "text": "So that's a real risk. How to mitigate this is to have human gates, human reviews very strongly in the, in the process. So we have a clear five-step process on how we do product development, and the five execution steps are all being done by AI agents, but they all have between four or five gates in between where there's a human, be it a product manager, product designer, and, different types of Engineers that basically review and say, okay, that's good, can move forward, or no, you need to change." }, { "speaker": "stephan", "time": "47:35", "start": 2855.0, "text": "But I guess, have you found that you're able to build a lot faster this way?" }, { "speaker": "julian_liniger", "time": "47:40", "start": 2860.0, "text": "Yes, we have been able to build faster, have more output with higher quality, with much more testing quality and security coverage and scrutiny with less people. We have with like the same amount of people in the tech team are just like having a 50 to..." }, { "speaker": "stephan", "time": "47:59", "start": 2879.0, "text": "And perhaps that's interesting too because like now in the age of AI, maybe we're seeing more lean startups be a thing, whereas historically people might have needed these massive teams. Now you can kind of do it on a much smaller budget, at least on the labor cost employee side." }, { "speaker": "julian_liniger", "time": "48:14", "start": 2894.0, "text": "Absolutely. We do not need, even though we have more activity, more users, more regulatory requirements, more work from a security perspective, there's always more to do and we haven't have to grow this. I don't think we need to grow the team substantially at all. We're now around 50 people. I don't think we ever need to be like 100, 200 people because with AI it just can be so much more efficient. The output can be so much higher, and we're only at the beginning of this. The models get better and better. With every new model of cloud, we're fully working with cloud. With every new model, the engineers, the compliance people, the support people, they're like, fuck, I can do so much more now. The marketing people, it's so much better now. I can do more. I even, I can even feel it in my job. So everyone, the models get better, and we are getting better. A year ago, we were kind of figuring out how to use AI. Which tools to use? Should we use OpenAI or should we use Anthropic or Google? Which AI should we use? Notion AI, you know? And now a year later, we are so focused and very efficient in working, like the collaboration of human and AI. And in the next year, this will even improve much, much more. So I'm very bullish. There's, of course, a risk you need to take into account, like the security and the human review that still needs to be there. So you're not getting into vibe coding shit, but the opportunity and the potential is very, very massive." }, { "speaker": "stephan", "time": "49:40", "start": 2980.0, "text": "Yeah. So, last question, where do you think things are going for Europe and Bitcoin adoption? What do you think is gonna bring the next wave? Do you think it's just number go up and then people rewrite, you know, historically rewrite the narrative, or do you think there's like a thing that helps drive adoption, at least amongst the European Bitcoin world?" }, { "speaker": "julian_liniger", "time": "50:00", "start": 3000.0, "text": "I think the rise of living costs is really what gets people stopping and thinking and what pressures them into investing. So people that 10 years ago were still comfortable saving their Swiss francs or their euros on their savings accounts, they are now really getting pushed to, that's not working anymore. It's not gonna, I need to invest this money to at least stay put like, or get by, ahead. And so now at least they're thinking what to invest it in. And I think in that process, many, many people will start finding out that Bitcoin is actually the best long-term savings technology and investment. And so the Bitcoin, the adoption will come from there. It's not gonna be from today and tomorrow, but again, for the patient people, for those who have a 10-year time horizon, I think it's gonna do really well. And that's what brings people into Bitcoin and the Europe, European adoption will be driven by just this, Of living that, will keep going up, unfortunately." }, { "speaker": "stephan", "time": "51:02", "start": 3062.0, "text": "All right, well, we'll leave it there. so listeners, you can check it out. It's, relai.app. This is, Julian from Relai. Thanks for joining me, Julian." }, { "speaker": "julian_liniger", "time": "51:09", "start": 3069.0, "text": "Thank you so much. Thank you really for having me, for the great work you're doing, Stephan." } ] }