Noded 0.70.0 with Preston Pysh

Link to the podcast: https://noded.org/podcast/noded-0700-with-preston-pysh/

Note: The Bitcoin price was around $6,600 at the time of this recording.

Preston Pysh (Intro): For many a years, I’ve been — before the Fed — a long time advocate for the need for the United States to return to a sustainable path, from a fiscal perspective, at the federal level. We have not been on such a path for some time which just means that the debt is growing much faster than the economy. This is not the time to act on those concerns! This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer run productive capacity of the economy as possible. The time will come again—and reasonably soon I think — where we can think about a long term way to get our fiscal house in order and we absolutely need to do that! But in my personal view, this is not the time to let that concern — which is a very serious concern — but to let that get in the way of us winning this battle, really.

Pierre Rochard: Welcome to the Noded Bitcoin Podcast! I’m joined with Michael Goldstein a.k.a. Bitstein. How are you Michael?

Michael Goldstein: I’m doing just fine! I’ve survived this exponential, we’ll see if I can survive the Bitcoin exponential.

Pierre Rochard: It’s a roll of the dice everytime. And we’ve got here as our 3-time repeat guest, Preston Pysh!

Preston Pysh: No I’m only I think only twice?

Michael Goldstein: There was a time that we rebroadcasted an interview that you did with Pierre, so you have appeared two prior times!

Preston Pysh: Oh! Got it! So yes, it’s the third time.

Pierre Rochard: There you go! Alright, we’ve got you back because you’re one of our favorite guests, and you’ve got a good bridge between the traditional financial world and the Bitcoin world. And I feel like that’s often missing in a lot of the conversations about what’s going on in the macro landscape. And I love listening to your podcast even when you have non-Bitcoin guests on! It’s always very informative!

Preston Pysh: I appreciate that, guys!

Pierre Rochard [02:50]: The Investor’s Podcast (TIP). So there’s a lot going on in the traditional financial system. It seems like it is basically either falling apart or prospering depending on the day, but I guess we should start first of all with this Coronavirus stuff. Preston, do you believe in viruses? Do you think they’re a real thing? Or is this a sham?

Preston Pysh: No I don’t think it’s a sham! Back in January, when I started tweeting about this at the end of January—maybe at the beginning of February when it actually came out — with Eric Townsend, I mean we were laying into this saying this was gonna be a really big deal. And dude, we got so much — I mean everyone was furious! I mean furious! I had people just — you just can’t imagine the feedback we were getting! Saying, You’re an alarmist! Nothing’s even happened! Oh that’s only in a small town in China, and this and that. I mean I was just watching the video feeds out of China, in Wuhan in particular, which is a town that’s bigger than New York City. And people just have to put that in perspective. This is a town that’s bigger than New York City! And the firsthand account videos that were slipping out underneath of the firewall were crazy! Just total madness! You know, in the military, they send you through biochem exercises. They’ll take you, they’ll throw you in a tent, it’s got CS gas inside there, they’ll take, Take off your mask. And you gotta breathe this CS gas in. You’ve got all this snot, everything is just coming out of your nose, because what it is effectively is like really fine shards of glass that you’re breathing in when you’re breathing in CS gas. So I’ve been through these types of exercises. I’ve done that in the military, and let me tell you, I know exactly what it looks like. And everything that I was seeing coming out of China was that! It was these kinds of exercises! [05:37] So whenever I saw everybody geared up in that type of equipment, in this — they call it Mopp level 4 or 5 or whatever that they were wearing over t here— to me I was saying, This is really bad! And if this goes where I think this is gonna go—and you were looking at the supply chains just completely shutting down in China — this is gonna be really bad! So early on I was very concerned about this! Now that it’s here in the States, do I think that every single state should be shut down in the way that they’re shut down based on the amount of the cases that are there? Another reference to the military — they say, Distribute the authority to the lowest level possible, let those people make informed decisions. And what you’re gonna find is that you perform the best that way! So I think when you look at how it’s being handled here in the U.S., I think New York has major issues in the hospitals. They’ve gotta push that — I mean because it all comes down to your bottleneck, which is at the hospitals right? Their hospitals are at max capacity, they’re having all sorts of issues. So in that area it’s terrible! You go to other parts of the country it’s not bad at all, so why are these people not having the ability to work? And I think it really needs to be governed by the governors of each of these states, then it needs to be pushed down to the local communities as to how they’re dealing with it. And I think if they just took that approach they might find that maybe the impact to the economy wouldn’t be nearly as bad. Is that what you’re getting at with your question?

Pierre Rochard [07:16]: Yeah absolutely. It was a deliberately vague and wide-ranging question! On the point of the pushback that you got from people about accusing you of being an alarmist — why do you think that is? Do you think it’s because we’ve had false alarms before? With I think Ebola, you know, they made a big deal out of it and then that was like nothing. So people maybe were trained to think that the boy cried wolf? Or is it just a hard concept for people to understand?

Preston Pysh [07:40]: No one’s experienced it in their lifetime! Here in the United States — I’m talking about that specifically. In other parts of the world you might see something different, but I think here in the U.S., they haven’t seen anything close to this in their lifetimes! So for people to see images of that overseas or over in Asia, and you look at how many people have even traveled outside of the United States — which is very few, in a ratio percentage relative to Europe and other parts of the world— they’re just looking at it and they’re saying, That’s never happened! That never will happen! It’s the definition of normalcy bias. Normalcy bias — and I’ll probably talk about this more because I was listening to Mark Cuban’s interview with Pomp and I mean it was like the definition of freaking normalcy bias!— because it didn’t happen before, it won’t happen in the future! [08:51] End of analysis! End of thesis! There isn’t even an ounce more of critical thinking. I don’t even know if I would characterize that as level one thinking it might be level zero thinking. I love the grin on your face Pierre!

Pierre Rochard: Michael has actually gotten into it with Mark Cuban. Michael is a Mark Cuban debater OG!

Preston Pysh: Michael I want to hear the backstory on this! Because I don’t know the backstory. I just know that you basically told him to buy it years ago and he obviously didn’t take your recommendation and that you always go back to the date and beat him over the head with it. But tell us the entire — I want to hear this whole story!

Michael Goldstein: Okay! It started in 2014 during South by Southwest.

Preston Pysh: This is aged very well!

Michael Goldstein: Oh yeah! Oh yeah. South by Southwest 2014 I think was the first time that he was first publicly speaking about Bitcoin. It’s at least what I grabbed for the Nakamoto Institute skeptics page. He was saying run of the mill stuff like, Oh it’s great technology but at the time he was saying it was like baseball cards. Like, It’s not gonna work as a currency. He’s making these really lame tired statements about Bitcoin. I was getting into it on Twitter with him then and I even offered to meet up with him — I was down the street from downtown at the time. He didn’t take me up but we got into this fight on Twitter. And then a year later I was at a steakhouse during South by Southwest in 2015 and I’m outside and a mutual friend of Pierre and myself spotted Mark Cuban standing outside the same steakhouse. He was just like, Hey look! It’s Mark Cuban! You should go get him! Or whatever. And I just turn around and was like, Yeah! There’s Mark Cuban!—

Pierre Rochard: Uh oh! We lost Michael! Right at the climax of the story!

Preston Pysh: No! Are you kidding me?

Michael Goldstein: Can you hear me? So I tell him, I won and I launch into a whole rant about Bitcoin and why he was wrong with his analysis and stuff. Well a lot of people would hear that and probably think, What a dweeb—not being able to shut up about Bitcoin. It’s true! But at the same time Mark Cuban was actually quite interested in the discussion! We ended up having quite a long discussion, it was like 15 minutes standing outside going back and forth. But he was taking positions like, The Federal Reserve is doing a great job, and we don’t even really need to replace it. And Bitcoin can’t replace it anyway. The real thing is blockchain technology, yadda yadda yadda. He ended up giving me his e-mail address to follow up, but by the time I got around to getting over the fact that I was accosting billionaires in the street and getting their e-mails for telling them they’re wrong, it dawned on me that, Eh! I’m a broke college kid! I really don’t need a billionaire buying the Bitcoins that I wish that I could buy! So because of that I never even e-mailed him! But the years go on and he pops out and continues to say stupid things. And it’s in this really annoying fashion! Because he does give lip service to the technology! He says like, Oh! The blockchain technology! At the time in 2014 he was pumping Cyberdust or something, and it was some chat app based on the blockchain, and we’re supposed to take that seriously. I can even imagine him trying to paint himself as not really being anti-Bitcoin, but he’s such a normie about it, it’s disgusting! I finally made use of his e-mail back in September where I sent him a long e-mail talking about stock to flow and saying, Look, we can see Bitcoin be $100,000 by December 2021 and I left it at that. He actually responded quickly, I sent an even better response to him, never heard back from that of course. But I just needed an on-the-record, like, Remember who told you! I just always want to dangle that over him because that’s just how it is. Also, he owns the Mavericks and I’m originally from San Antonio, so he was just unacceptable on all fronts!

Preston Pysh [14:30]: I mean, this is the moment where we’ve gotta brand what the fundamental flaw is. Because — in my very humble opinion — there’s a very obvious flaw in his thinking. Viewing this narrative — this is the Cuban paradox. It’s this idea — and it goes back to the Twitter war I had with him I don’t know how long ago. But his comment all revolved around this idea that he allowed people to pay in his stadium with Bitcoin. And at the end of the first year he had like $600 of people that paid to go to his game with Bitcoin. So his deduction at that point is, Nobody’s using this! And therefore it’s never gonna catch on! And therefore the price will never go up! And that’s his thesis. And I think for anybody who — I guess this is me throwing him a bone and like empathizing with his position because I think for most people that are just at the micro-level, they’re at, Hey I own this billion-dollar company or I own this $500 million dollar company or I own this $1 million dollar company. The only thing that really processes in their brain is this, Well if you don’t have people using it and there’s no utility well then the price is never gonna go up, there’s no one that’s going to bid the price up higher, and then that’s the end of their analysis. But I think on this one there’s a very deep fundamental flaw in that thinking, because they’re not understanding what it’s trying to achieve at its most root and intrinsic level. And so what I would tell you — in my humble opinion — what it’s solving is it’s pegging global central banks. All of them — it’s pegging them. It’s literally pinning them to a wall, and saying, There’s not gonna be any more of that! And if there is, you’re gonna be held accountable to it! That’s what this is all about! That is Mission One! If you’re gonna list out all the missions on a piece of paper, Mission One cannot be triumphed by anything else! You cannot put the idea of, All these people in third world countries paying with Bitcoin above it first pegging global fiat money that these global central bankers continue to debase —

Michael Goldstein: It’d be at the expense of those people by the way.

Preston Pysh: Yeah exactly! You cannot out-prioritize that! That mission has to be accomplished — no matter what — before anything else can take place! So if you don’t understand why that’s important—which I would argue, tons of people do not understand why that’s important because when you dig into it it’s really complex as why that has to happen — I have been promoting the living hell out of this book, but I’m gonna do it right now, but that’s why people need to read this flipping book: this book is called The Price of Tomorrow by Jeff Booth. And when you read this book you’ll gain an understanding as to why Mission One has to be accomplished first and foremost before anything else. You can’t compromise on that! At all! If you compromise on that, there’s gonna be some other protocol that’s gonna rise up and be more important. [18:04] So when you look at, Well why does Bitcoin accomplish that over everything else, you can get into a lot of the reasons why, but if I was gonna summarize real quickly: Bitcoin just annihilates all the competition! And so going back to the Cuban paradox: the idea is, Well, if people aren’t using it in my stadium and if there’s no utility for people to use it then how in the world is the price gonna go up? Well I’ll tell you how the price is gonna go up. We’ve got this quantitative hardening happening here in May: the halvening, right? So these miners that are gonna mine the living hell out of this. Look at how much hashing is coming online in this two-week adjustment that we’re at right now. We’re over 10% leading into this thing, and the price has been, not spectacular. I mean it took the big hit, it had a significant bounce, but the price has just been kinda hanging around. So you have to ask yourself: Why in the hell are all these people bringing more rigs online to the tune of 10% of the entire network on this two-week difficulty adjustment that we have. What is it that they know that no one else understands? Well here’s what they understand, is that as soon as that halving event happens, all these people that are spooling up these S17 mining rigs—guess what? They’ve got huge margins! Massive margins! And guess what? They don’t have to sell! They do not have to sell even after you take that reward and you cut it in half! You’re pumping out half as much reward and guess what? They’re still in the money! [19:48] They still got margin! And they’re gonna continue to mine. They’re gonna mine the living crap out of it! And not only are they gonna mine it, but they’re gonna sell less in order to offset and pay for their electrical bills than the people running the S9s that dropped out of the market beforehand. And guess what that does to the price? It drives it higher! Okay so everybody who heard me say that, what pops into their head is they say — the argument that I constantly hear whenever you spew that narrative that I just spewed — they say, Well, when you look at how much the miners are selling on the market, it’s a pittance compared to the overall transactions for the whole network. That’s what you hear! Well guess what? You’re using the wrong ratio when you’re talking about that! The real ratio you need to talk about is, How much are those miners putting onto the market to sell to recoup their electrical costs versus the amount of fiat that’s coming in versus the amount of BTC in people that are leaving that network? That net difference between the people coming and the people going is in the denominator of that ratio. Not the total transactions. And so when you change that denominator to the thing that actually matters, which is the net difference between people coming and going out of the network, all of a sudden you have a very big number relative to the amount of selling that’s taking place to the miners. Which therefore means, they’re driving that floor in the price! And I can’t tell you how many people miss that. People do not understand that, at all! That’s my opinion as to why this event that’s getting ready to happen in May — and it might take a month, it might take two months for the gears to really click and to ratchet in, but when they do, the thing just takes off! Because the miners that are inefficient are completely out of the game at that point. That flow is not being sold into the market like it was before.

Pierre Rochard [22:33]: On the demand side I think a good way of visualizing it is Unchained Capital’s HODL waves, where they show the aging schedule of Bitcoin outputs basically showing that, These coins have not moved for more than a year. And you see that percentage increasing! That to me is a better way of thinking about the demand side than when people look at like the exchange trade volume, and they say, Oh okay, well Bitcoin mining is a tiny percentage of exchange trade volume — the trading going on. Whereas to me the Unchained Capital HODL waves of people withdrawing from the exchange and putting it on their cold storage, that is real demand! That is the reservation demand for cash.

Preston Pysh [23:26]: Totally agreed! And if you’re using the wrong metrics you’re gonna come up with the wrong thesis and the wrong opinion every single time! And people that are listening to this might say, I completely disagree with what you’re saying! And that’s fine — I encourage you to disagree and to find maybe a better metric. But for me, that’s the only thing that I can think of that makes sense, and why you consistently see this floor being set. When you plot this price chart on a logarithmic scale since the inception of Bitcoin, why in the hell does it plot so perfectly in mathematical terms as far as the curve that you see? The only thing that I can come to the conclusion is, is that these miners are setting the floor. And the floor is completely based on that flow that’s being dropped into the market.

Pierre Rochard [24:42]: Very bullish! Very bullish, Preston!

Michael Goldstein: And if you understood all of this, maybe even a $600 investment — because people bought basketball tickets — would be getting you some good gains!

Preston Pysh: It’s funny that you say that because my comment back to Mark when he kept bringing this Cuban Paradox up is I said, Mark, you’re gonna change your mind when the market cap of Bitcoin passes $1 Trillion, and you’re continuing to collect $600 at your games, if you’re assuming that he can continue to accept Bitcoin as a transaction. Because the thing that’s driving it is not necessarily the utility at sporting events or at coffee stores or any of this stuff! The thing that’s driving it — going back to what I described earlier — you have these miners that are running new equipment that have huge margins that accept this reduction in the amount of coins that they’re mining, and so they’re selling less back into the market and then the price starts going up because you don’t have as much selling pressure. So now once it starts taking off, guess what? All these speculators then step into the market! And then it becomes a speculative thing at that point. So where that transition occurs — I have no freaking clue! I have no idea where that transition occurs! But it’s just human psychology! It’s just how humans react when they start seeing the price go up and you’ve got every freaking person on the street walking up to you and saying, Hey! You know something about Bitcoin doncha? Right? That’s when you know that the speculators are in the game! Is when that starts happening! When you start getting the e-mails from people that you haven’t talked to in 15 years and they’re like, Hey dude! How’s it going? Right? You know that the mining is not driving the price at that point! The speculators, the people that want a quick turn, a quick buck, the people that have no clue how any of this works, but they just want to make a quick buck! And that drives the cycle for a significant period of time! I have no idea how long! But it drives it from that point. And I would tell you, anytime it passes the previous all-time high, it gets wild! It gets crazy!

Michael Goldstein [26:48]: Yeah last time I think near the top by $15,000, I was definitely hearing from people I had not heard from in quite a while. And my gut instinct whenever that happens is to check the Bitcoin price! Just to see if I missed some big upward swing.

Pierre Rochard: So that’s assuming also that everything is hunky-dory in the fiat world, and that we’re just looking at Bitcoin as just an endogenous process. Which I think has been the right way to look at it for the past decade. But we haven’t seen Bitcoin go through a financial crisis yet! And there’s been speculation that Bitcoin is a risk-on asset, it’s basically just like the tech-Tamagotchi thing that — if there’s a liquidity crisis in the system — then Bitcoin’s gonna crash. That I think has been reflected by its correlation with the S&P500 since the start of the real reaction to COVID-19 and the financial markets. But I actually think that if you look at, for example, the Sharpe ratio for a 4-year holding period: the Sharpe ratio for stocks has crashed! Whereas the Sharpe ratio for Bitcoin hasn’t really moved very much at all. That to me is like, There is in fact a disconnect here, and Bitcoin is actually proving to be a better store of value even if the short-term people on Twitter can’t really see it that way. And that it did bounce back so quickly after the March 12th liquidation that went down to like $3,600. The leverage in the Bitcoin system had already been wiped out in December of 2018. And then it kind of got rebuilt April to July of 2019. Then it got wiped out again March 12th. But now at $7,000 and holding steady, it feels like Bitcoin is undervalued, while stocks are still overvalued! [29:42]

Preston Pysh: I just think that when you look at the volatility that you’re gonna see in the stock market moving forward, it’s gonna be way higher than what we’ve seen historically. Just because — now that they’re not just using QE, which was the primary means of insertion for the last decade, now they’re using UBI! And now they’re gonna have to coordinate both of those together. I was always of the opinion this was gonna happen! This was just a matter of when it’d happen. I would have that conversation with some people when I told them, Hey! Even if Trump would be re-elected, it wouldn’t surprise me in the least bit that UBI would become a thing! And people would look at me and they’d say, You are off your rocker! You are nuts! I said, It’s just a function of the math, man! There’s only so much you can insert into the markets and everything that’s happening, because your typical person is looking at this and saying, Oh! Well this is just because of that virus that all this is happening! Whereas, Dude — this has been in the works for decades! For just flipping decades! So now it comes down to — I mean, look at the NASDAQ. The NASDAQ’s booming! I mean it has a Bitcoin-like bounce to it! I think people that are looking at this and saying this is gonna be a Great Depression-like scenario, I think they’re forgetting that when you look at the charts from — and it absolutely could be that, so please don’t take this comment as me waiving that, that it couldn’t happen — I just think that the range of potential outcomes is much wider as to what we might see moving forward. When you go back to 1929, you didn’t come off the gold standard until 1933. So you had this peg in place through that downturn, that 3-year, 4-year grind from 1929 to 1933, and during that entire period of time you were working with a pegged currency. You don’t have that right now! Not only do you not have it in the US, you don’t have it anywhere! [32:30] So that’s where I think people that are immediately going to an analogous comparison to that, I don’t think that they’re necessarily widening their aperture far enough! I think it’s wider than that! And the fact that they’re throwing as much money as they’re throwing at this, and — I hate talking politics, because I am politics agnostic, 100% — I don’t think you can be successful in the markets unless you’re politics agnostic. I prefaced that before I say this: When you look at how Trump’s gonna respond to this, I think he’s gonna respond to this with literally everything he can possibly throw at it, times 10! And so if that’s a true statement, I mean, you could see people out of the labor market, highest unemployment numbers you’ve ever seen in your life, and I think you could see the market come back to numbers that you saw before any of this happened, even with people out of work! And I don’t think anybody is pricing that potential in! And I think that that is a potential! I don’t think that it’s a high potential, but I think it’s a potential. So what does that mean? And this is going off of what Pierre was saying earlier: this means crazy volatility! So if you’re looking at risk-adjusted returns compared to that volatility — yeah! You should see the Sharpe ratio for the stock market get crushed! Right? Because not only are you not making any real returns from where this thing started, but now you’re clocking in this massive amount of volatility, and no one knows where the hell it’s going next! It’s completely dependent on government intervention! I mean it has been for the last ten years whether people want to believe that or not! That’s just a fact. I’m not trying to be tinfoil anything, it’s just a pure fact that when you pump that much QE into the system, you haven’t let up since 2009, you go clear up to the brink where everything falls apart, and then you’re not only doing QE but then you’re doing UBI to the tune of $2,000 a month until unemployment goes back to the lowest levels we ever saw since the 1950's-1960's — is how long they’re saying they would keep that on — this stuff is crazy! This is total, absolute, unprecedented debasement at the nth degree that will literally make people’s minds explode! Like that’s how much debasement we’re talking about!

Pierre Rochard [34:38]: And it’s not even political in the sense that it’s extremely bi-partisan! You’ve got everyone from Nancy Pelosi to Ted Cruz agreeing on, This is what needs to be done! The only person that disagrees is Thomas Massey, and he was savaged and attacked by both the president — who is of his own party — saying that Thomas Massey needs to be kicked out of the Republican party, to obviously the Democrats piling in on that. Yeah it’s extremely bi-partisan that this is the right course of action, because this was what the whole system was designed to do in a crisis! In an Austrian economics system, where you have a deflationary money, people would be holding much higher real cash balances. And I think the inflationary system has actually ironically pushed down cash balances relative to crisis, and then when you enter into a cash-flow problem like we have here, there’s no reserves! And so you have to create new money to pave over the problem.

Preston Pysh [35:59]: The thing that no one talks about, especially those in academia do not talk about this — and that’s where it needs to be addressed — this is where all of this should be learned, is counter-opinions to the status quo! The thing that no one talks about is when you have an inflationary monetary policy which we’ve had for eons, basically since Bretton-Woods. Even when we were on a gold standard from 1944 up until 1971, I would aggressively argue that you were on an inflationary monetary policy because of the debasement that took place through the money multiplier against the gold that was sitting in the reserves. That’s a whole other conversation. So if we buy that argument that we’ve been in this inflationary monetary policy since 1944, well what happens is you set up this incentive structure around that inflationary monetary policy. And when you have that incentive structure set in place for that long, you get the craziness, especially at the tail end of this thing, which is exactly where we’re at right now, you have this incentive structures that are not pointing towards each other and that are self-reinforcing, but now that are actually the opposite way and they’re self-ripping apart of each other! And the only way that I can possibly see that fixing itself in a way that doesn’t involve mass social unrest, is for some type of deflationary force to step in from a monetary policy standpoint in order to slow that down. Because you’re going so fast you’re literally hitting the speed of light as far as productivity — sliding productivity to the left due to inflationary monetary policy. Because that’s what it does is it slides productivity to the left so that the spaceships’ doors are ripping off, the whole thing is basically coming unglued. You’re going so fast, you’re approaching the speed of light, that everything’s being ripped apart!

Michael Goldstein [38:32]: Well Preston you’re in luck because I have the product for you! And it’s uh, it’s called Bitcoin. It’s a decentralized digital currency. Yeah so I actually kind of agree with you Pierre in many ways. I have this meta-feeling towards history where considering how much of politics has always been about getting your hands on control of the money. I know there’s the classic Rothchild quote about, Give me control of the money and I care not who makes the laws. But Nick Szabo had a great set of Tweets once about, All of the wars that were really just plundering gold vaults. You go forward to the 19th century and people don’t talk about this much but one of the pillars in the Communist Manifesto was literally full state control of banking and credit because they wanted to do things like what we see today! And a lot of these sort of battles of political ideologies in the 20th century were also — as far as I can tell — almost like trying to control the banking system, the money underneath that. In today’s world you’re going to want to have control of that and keep doing whatever you need for this thing to survive, and anything that goes against what you’re saying is going to put a halt to this system, so you’re gonna keep doubling down on that power unless you see that alternative, which is why it’s so embarrassing to see people like Thomas Massey, who’s actually usually like a great defender of freedom and stuff, but it’s embarrassing to take that frame of trying to stand athwart fiat money saying, Stop! Instead you need to just look for the next gold vault, the next monetary system, so that you can just exit altogether! And that’s what Bitcoin’s for!

Preston Pysh [41:01]: You’ve never had this in the history of mankind! You’ve never had anything that could overpower that or step in front of that and make invalid! So you can see why this has repeated itself time and time and time again throughout history, is because there’s never been a force that’s been able to step into this and call those government entities that adopted these policies, that acted in self-interested ways in order to benefit their domestic nation, you’ve never had anything in the history of mankind that’s been able to combat that! And now you do!

Michael Goldstein [41:46]: Yeah! And I think someone like Thomas Massey or whoever else wants to step up to the plate, big risk big reward — if you’re the one that’s standing up for that change and it all succeeds because you can’t beat that stock to flow and whatnot, you can’t beat Number Go Up — then you get to lead the charge on that! There’s a huge political opportunity to be able to just exit it all and take on full dollar accelerationism as part of a 100% Bitcoinist accelerationist platform!

Preston Pysh [42:29]: I’ll tell you what’s really interesting about what’s gonna happen here on this next cycle versus all the cycles before, is in the past you had QE was the only way that the Fed and every other central bank was debasing the currency. And for 99.9% of the population that means nothing to them. They’re just like, Q-what? Quantitative Easing? That’s just like some — is that an engineering problem? It makes no sense to them!

Michael Goldstein: There’s that nerd-talk again!

Preston Pysh: There’s that nerd-talk! Like, who is this weirdo? Get them away from me! Now you’ve got something that’s very different. Which is: with universal basic income and everybody receiving a paycheck of $2,000 a month until we get back down to the unemployment numbers from 1960, people are starting to say, How is that possible? Huh? Uh, how are they doing that? And how can that last? Um, how is that possible? How does that not have some type of impact? And so their guard is up and they’re saying, This could be bad, but so far it doesn’t seem like it is! So when that guard goes up they’re looking for, Where could this go bad? Where is something that just doesn’t make sense? And then all of a sudden a year from now you’re gonna see Bitcoin blow through $100,000 probably next summer, right? And when they see that, and they see all this printing that’s been taking place every single month, and they know not only all these companies getting bailed out, but you’re gonna see municipalities getting bailed out, to the tune of billions, trillions of dollars! People are gonna say, This don’t add up! There’s something wrong! Why in the world is this Magic Internet Money going over $100,000 and it’s not even real? Like, what is that? And I think it’s gonna be the narrative and it’s just gonna drive further interest, so many of the things that are not even understood at this point!

Pierre Rochard [44:49]: And I don’t even think it takes Consumer Price Inflation at the grocery store to make that happen! Where you’ve got people who day to day, they’re like fighting over whether it’s at work or with their spouse over a budget of $100 here, $1000 there, and then they turn on the TV and Congress has just passed a $4 Trillion bill! $4 Trillion dollars? What? And it’s unconscionable to the average American!

Michael Goldstein [45:17]: I don’t even know what that number means, to be honest!

Preston Pysh: No one does!

Pierre Rochard: It’s a Googleplex!

Michael Goldstein: Yeah! They could just like — I don’t even know why they should say Trillion, they should just make up numbers at this point. I’m still waiting on my coin!

Preston Pysh: You’re talking about the $1 Trillion coin?

Michael Goldstein: Yeah I want my $1 Trillion coin! I think every American should get one!

Preston Pysh: So if I was gonna even add on top of that, so here’s another thing that’s gonna make people’s eyebrow go up and say, Huh! This just does not make sense! You could talk about it from the oil standpoint — I think oil is the easiest one to understand: right now oil’s getting obliterated, right? It’s down to $20 a barrel, the newest report out of the IEA International Energy Agency there, they’re saying that they’re gonna hit max storage capacity by the middle of the summer and that they expect the storage to continue to fill up between now and then, and then it’s gonna really get interesting! So what happens to the price after you can’t store it anymore? Well then it really starts getting punished! So if a lot of the consumption continues to be down — and I don’t know how it can’t be with this many people out of work, this many people not even traveling — I mean I know personally how many times I’ve gotten in my car and moved around in the last month, and it’s not even comparable to what I was doing before this happened! So when you look at that price and you look at the price getting punished, and then eventually people are gonna start traveling more, but in this time between now and these storage capacities hitting max capacity, these producers — now maybe not Saudi Arabia and maybe oil isn’t the best example, because they’re trying to take all the market share from North America right now so they’re laying on the capacity. I know they just did a deal but I don’t necessarily buy all that. But let’s just talk about any other commodity! [47:14] Those producers that are manufacturing this are pulling that capability offline. They have to! They’re gonna go out of business if they don’t do it! So they’re pulling their capacity offline I mean all of this is just totally similar to everything you see in Bitcoin. They’re pulling their capacity offline, and when they want to stand that back up it’s not like they just turn on a light switch — that’s labor that they had to lay off that went and found different jobs, it’s all this stuff — so when they do want to start ratcheting it back up, there’s quarter to two-quarter delay before they can produce at the capacity that’s gonna be demanded of them. Well guess what happens to the price of commodities when that happens? They shoot up in a major way! Well now if you’re talking about the Consumer Price Index it’s based off of the delta of the price that it was before. Well if you have these prices that are hitting levels that are like — not even understandable — like oil under $20 a barrel, which could get well under $10 a barrel, these numbers are crazy low! If you even have the slightest bump in any of that, guess what just happened to your CPI? Well dude it just shot to the moon, right? So that could very easily happen in six months to a year from now, you’re gonna see that playing out in addition to the Bitcoin price in addition to local governments being bailed out in addition to the government stepping in and continuing to print ungodly amounts of money, people getting their $2,000 check every month, to just — I mean this is the scenario that I’m playing through my mind as to how I see the world in 6 months to a year from now — that’s what it’s gonna look like! And I just don’t know how anybody who’s experiencing that and then watching Bitcoin go up by $1,000 a day sitting on the sidelines and saying, Ah! Yeah, that’s normal! It’s not normal — it’s insane, it doesn’t make sense — then they’re gonna start digging into, What the hell is this? Why has this thing not been able to die? Especially people in finance, when they see the market cap going over $1 Trillion, it’s gonna really attract a lot of eyeballs and a lot of people saying, Maybe I need to take a little bit closer look at this thing?

Michael Goldstein [49:31]: Thank God Bitcoin exists through all this! I don’t know what we’d be doing without it! You know, Pierre, you had a great Tweet — it may have been this morning or yesterday—about how debt holders would want to be hedging in Bitcoin because you don’t know that you’re gonna get your debt paid off!

Pierre Rochard [49:55]: Well you know that you’re gonna get your debt paid off, you don’t know that the money that’s being paid to you is worth anything!

Michael Goldstein: Yeah people got really — there was a number of people that got really butt-hurt about a Tweet I put out about Winbledon, because Wimbledon had taken out pandemic insurance for the past seventeen years, to the tune of $34 million and they got a payout of $144 Million. So that’s great! It worked out for them, and I’m glad they’re able to get that, but people got really upset because I was just like throwing the obscene numbers, if you’re daily cost averaging that into Bitcoin — the kind of returns you’d get would be over $4 Billion! And I would say that’s a little absurd but there’s deeper points to that which is like, Do you have a good contract with the insurance company such that you get payout in actual money? Because if $144 Million turns out to be nothing, how does that even help you to get that payout? You’re just getting like more firewood.

Preston Pysh [51:10]: But Michael, that’s assuming that the people that are making these decisions understand your vantage point, which — Dude! Nobody understands your vantage point, I hate to tell you!

Michael Goldstein: Which is why — hopefully they’ll come to understand — is, Bitcoin really is insurance, because it’s just cash that’s there for you, and it’s not gonna be shut down, and yeah you might have to take a 50% cut or something, but it’s gonna be there! It’s gonna be liquid, it’s gonna work. It’s better than nothing! So that can happen in another place in the economy if the dollar really goes haywire, and then for everyone on the other side, if you’re getting these checks — I don’t know what people are gonna be doing with those checks — I assume a lot of people have things they actually want to buy. Other people might see it as sort of free money and I guess like the sort of stated purpose of it is a sort of stimulus. They want you to go spend it anyway! Well if any proportion of them start putting it into Bitcoin at any amount, that has a disproportionate effect on the price of Bitcoin!

Preston Pysh [52:32]: Well the thing that people don’t understand about the impacts of UBI—well I think some might understand this — but when you have people collecting $2,000 a month and their previous paycheck was $2,000 a month which I would argue is a significant portion of the population way bigger than I think people in the middle class and upper class understand — what incentive do they have to work at all? And I mean some are gonna look at this and say, Oh wow! Now if I continue to do my job I’ll make twice as much money as I was making before! There’s gonna be a lot of people that do that! But there’s also gonna be a lot of people that just say, Hm! I’m just not gonna work anymore — I’m just gonna collect my UBI check. And that’s gonna happen! And that impact is — you’re just gonna see some real funky things happen that we have never seen in our lifetimes — at all!

Michael Goldstein [53:27]: I don’t know if I’m just a perma-bull, I look at everything through rose-colored glasses and all that.

Pierre Rochard: Orange-colored glasses!

Michael Goldstein: Yes! Orange-colored glasses. If you have all these people who are just sitting on that, would those also be the type of people who are very enticed by Number Go Up?

Preston Pysh [53:50]: Absolutely they would! But they have to have a position! They’re not gonna get incentivized to create disposable income until they have a place that they can funnel it! And right now I would tell you most people feel like, There is no hope! There is nowhere I can go that I can make any money by investing a dollar! That’s how most people that are middle-class and lower think about financial markets today.

Michael Goldstein [54:18]: But if those people also get into Bitcoin, I mean I had to talk to people in the last bull-market—guys fresh out of college, not too much money, throwing away money on a shitcoin casino at Binance, just buying up — they were trying to tell me about IOTA and whatnot and I’m like, Ehh, don’t do that! Like, I don’t think you should even be thinking about Bitcoin! You probably need to get your feet on something! I’m just thinking, I’m looking here — I opened up CashApp earlier, and there was a whole thing CashApp has it built-in now, there is a direct deposit you can do into CashApp, meaning that people can give the IRS their direct deposit information and the money will go straight to their CashApp and right on there on CashApp is also Buy Bitcoin! So like it’s almost trivial for these people to get their feet in the door if they want to! And based on the situation you’re describing, it doesn’t sound like people are going to be thinking prudently in terms of their finances which in this case because of the risks and rewards, could actually work out for them! If you want to talk [inaudible 55:46] I can expect some crazy things happening around Number Go Up!

Preston Pysh [55:54]: I totally agree with that! It’s just gonna take a little bit of time to kick in, and that goes into a whole speculation phase that you were talking about earlier. But rest assured, if your friend is making craploads of money from even taking $500 of their UBI check and putting it into Bitcoin, you better rest assure they’re gonna be telling everybody under the sun about it!

Michael Goldstein [56:15]: And implicitly there’s lines between investing and saving, but I do have a sort of optimism that that would be getting people into a savings mindset, because it’s like, Okay, well let me put some of my check, the UBI, into [Bitcoin] because it’ll go up.

Pierre Rochard [56:38]: That’ll be at around $25,000! That’s when we’re gonna start seeing the momentum traders.

Preston Pysh: Totally!

Michael Goldstein: By the way, Jack — I know you’re listening — I’m sure plenty of people from CashApp are listening. You should make it so that people can put on a setting that as soon as they get a direct deposit into CashApp it buys the Bitcoin! Just the UBI to Bitcoin pipeline!

Preston Pysh: I agree with your price point Pierre — $25,000.

Michael Goldstein: Well like you said, hitting a new all-time high — that’s a psychological game-changer!

Pierre Rochard [57:22]: It’s game on at that point! Now so the other part of the equation is that there’s going to be continued demand destruction, right? Where employers are laying people off, and then Mnuchin is being very stingy, he said that everyone has to survive off of $1,200 for ten weeks. Which people did the math: that is 50% under the poverty line! So he’s really asking people —

Michael Goldstein: And that’s not even taking inflation into the equation!

Pierre Rochard: Yeah! That’s not a ramen diet! That’s like fasting for ten weeks! So I really think that there’s kind of a risk on the side of governments not being inflationary enough, where they are penny-pinching and the SBA loan program just ran out of money today. And they’re not in the full accelerationist MMT mindset — they’re still in the old-school, Well you know, we’re gonna have to pay off this debt someday, so let’s cool off here a little bit! And I fear that that might cause some deceleration in the short term.

Preston Pysh [58:49]: It’s so hard to be able to say one way or the other. I just have no opinion and when it’s not something that I feel like I have a lot of knowledge points on I just default to 50% — I have no idea.

Pierre Rochard: The Federal Reserve on the other hand has actually been more responsive and faster than the Congress, and I think that’s probably the case as well in the previous financial crisis where TARP got voted down the first time around, and so there actually is ironically more willingness to bail out the banks than there is to bail out main street, and I just don’t think that the banks themselves are going to go, Why would they go out and lend money? And the Fed has opened it up to AAA-rated companies and we’re gonna go down the yield curve and find worse and worse credit to buy in their facilities. But are they gonna go Japan-style and start buying equities as well? There’s been noise about that!

Preston Pysh [1:00:07]: I don’t know. But the fact that they’re already buying junk debt tells me that they’re probably being a champion of that idea. Which is just totally insane! As far as I’m concerned, you are so far off the rails of capitalism at this point already, not even buying the equity market, but the fact that you’re stepping in and basically saying, Yeah that’s junk debt! Let’s buy it and keep these zombies alive! Is effectively what they’re saying! I mean dude it’s scary! I think that’s the best way I can describe it is it’s scary that you’re seeing that! But let’s look at why they’re doing this. They cannot allow interest rates to go up. That is a fact! If interest rates go up, well now all of a sudden, they can’t issue the debt at the volume that they need to issue it at. So they’re gonna do everything they can possibly do to keep interest rates at 0%. So that’s where the calculus for them gets really difficult because now they’ve gotta do UBI. They realize there’s social unrest at this point with the amount of people that are out of work and that’ll continue to be out of work. So now we’ve gotta do UBI. But we also have to continue to do QE, because we can’t allow interest rates to go up or this whole thing goes boom! Now they’re in this tricky situation where they can’t turn off either one of those spigots! They can only basically turn them off. So I’ve had a couple Tweets and it’s hilarious because I don’t hear a peep out of a single solitary Wall Streeter on my account, and I have a lot of Wall Streeters that follow me. Not a freaking word about the idea that, You’re gonna get inflation, but you’re gonna get it all at once. And it’s gonna come like a flippin’ tsunami! And what it is, is it’s total trust in the bond market breaking down.It’s at that point where everyone says, Hold on a minute! Oh my God! This is a tsunami coming at us! Oh my God! I gotta get up on a tree or I gotta get up on a building or I’m gonna die! Right? And then everyone exits those positions out of these bond markets, and it’s gonna be a flippin’ tsunami. And they’re gonna continue to do QE and UBI and all of a sudden there’s gonna be this breaking point!

Pierre Rochard [1:02:43]: It’s just interesting to see the parallels between that and the virus, right? Where in both cases there’s a period of denial until the ICU is full of people on respirators and you can no longer deny reality! What is that going to look like in terms of the ICUs being full of people on respirators? From the monetary inflation perspective, how do we know that we’re starting to hit that point of — there’s no denial anymore?

Preston Pysh [1:03:22]: For me personally, I think if we break the upside of the stock to flow model, you’re there. I mean I don’t know how else to look at it! But I think that if you see that model break, which I would argue seeing it break to the upside is probably around a $300,000 price — something like that right? If you see that happening, you see the price go beyond that and you see people running, you’re probably witnessing that event.

Pierre Rochard [1:03:56]: I like this metaphor: Bitcoin is the monetary ICU. People who need the best care in the world from a monetary perspective, end up in the Bitcoin ward. And then we can think about the stock to flow second standard deviation as kind of the overflow capacity of this ICU unit! In 2021, we’re at $500,000 as the upside of this second standard deviation, which today sounds like, Okay well that’s just pure hopium, and Pierre’s being crazy! But really I’m just looking at the exponential, right? I’m just like you in January saying, Hey look! This is what’s going on in Wuhan right now! Why do you think it’s going to be different in New York City? It’s not. It’s gonna be exactly the same!

Preston Pysh [1:05:10]: The way I would like to describe these halving events is, They’re attempts at basically escape velocity. So each time you go through one of these halving events, these quantitative tightening events, it’s Bitcoin’s attempt at trying to escape gravity and exit the orbit! And so last time we saw that, we saw the attempt, the speculators could have taken it to $100,000 and then you could have maybe gone further. But, all the market participants were not at a point where you had enough buy-in for that to occur! So what happens? Well the gravity of the two-week difficulty adjustment took hold, and it brought it back down into its orbit where it needed to remain, until it could ramp itself up and go through its immunization in order to get ready for the next attempt of its exit velocity! So right now we’ve got the quantitative tightening happening — it’s gonna make another run at it! It’s almost like watching a high jumper: he’s going there, he’s gonna jump over it. If he doesn’t make it he comes back and he does 1,000 reps on the legs and then cools off for a couple weeks and then makes another run at the exit velocity. So what we’re watching is we’re watching the next attempt! And whether it makes it or not I have no idea! I kind of suspect based on the backdrop of everything that’s happening in the other markets, that you probably have a pretty high probability that it’s gonna make it this time! Probably a lot higher than a lot of people wanna give it credit for! But if it doesn’t, no big deal! It comes back down into that stock to flow level that you’ve got all that difficulty adjustment that’s gonna pull it back in there if you can’t get enough market participants to join the network and bring it to total dominance. It’s gonna come back, it’s gonna ramp up, it’s gonna get stronger, it’s gonna get more security on the network, you’re gonna have new miners that are gonna enter — all of those things are happening, which are just making it that much stronger! It’s completely antifragile! And there’s plenty of people that have said that before. So if it doesn’t make it this time it’ll make it next time. It’s not going away! And it’s just a matter when it reaches its escape velocity! I’m kind of hopeful that on this next one it’s gonna make it!

Pierre Rochard [1:07:35]: And the bear case is that it’s gonna oscillate around $100,000 if it doesn’t make it out.

Michael Goldstein: I think the real bear case at this point is a measly $30,000 using Nick [inaudible] latest stock to flow model based on some — I don’t remember. So that’s the bearish number. I can only imagine people are giving a shit because it’s only $30,000! But yeah at the same time using the $100,000 model, even $300,000 actually is completely within the range of the stock to flow price points. I fact I think $300,000 would be pretty equivalent to the $20,000 this past round in terms of the scale. If I remember correctly Plan B said about 3x-10x the S2F price is within bounds before you’d be really breaking that model. There’s a lot of room for velocity, but if you’re getting it to 10x to $1 Million, I do have to wonder what brings it down!

Pierre Rochard [1:09:05]: Well, miners! There would just be so much money going into mining at that point that that’s what is the mean-reverting causal mechanism.

Preston Pysh: It just gets too difficult! So there’s too much competition, I mean it’d be like if the price of gold shoots to $7,000 you’d have everyone and their kid’s sister trying to mine, super competitive as the time goes on.

Michael Goldstein: I guess what I meant is if it was getting up to $1 Million, if everyone was still fine with the dollar at that point, what you’re describing could happen. But if it gets to that point, what is the point in which everyone in the world looks at it and goes, Okay, well we’ve gotta capitulate?

Preston Pysh [1:09:54]: So historically when you look at the thirds in the four-year cycle — so take 365.25 times four, whatever number that is, then you’re gonna divide that by a third. Those are the key inflection points in the four-year cycle — the thirds of it. So if you look at the first third of the four-year cycle, which takes you out to like the 10th November 2021, that’s where you should see the price really hit its fever pitch through all the speculators and everyone stepping in. If you see the price continue to run way past that date, I would tell you things are really starting to get interesting as far as escape velocity goes! Then you take the next third. The next third you should see the bottom, whatever date that comes out to — I have not tried to quantify what that date it. But if you take another third of that next four-year cycle, that’s where your bottom should be based on too much competition, the miners bringing it back down into reality, and then you’re gonna see a bottom there because the difficulty adjustment’s gonna assist with so much competition entering the space for hashing power. And then the next third takes you to the next halving event. Those are the dates that I pay close attention to.

Michael Goldstein [1:11:11]: I like that heuristic!

Pierre Rochard: Yeah I wanted to go back to the point Michael was making about the primal importance of money historically in terms of conflict. And the amount of plundering — really should that be surprising? Because you’re talking about the most liquid good in society? It makes sense that that would be the crown jewel that you go for every time.

Michael Goldstein [1:11:41]: People took to the seas, and subjugated entire new continents of people to get their hands on it! Only to destroy their own economy in the process.

Pierre Rochard: The golden calf! Now so you’ll hear people say that the US dollar is backed by the might of the US military, and I think that the naive way of thinking about that is that the US military is holding a gun to people’s heads, forcing them to use the US dollar. I think that the more sophisticated way of thinking about it is that the US military creates an environment where it is safe to use the US dollar, right? And they are able to repel opponents, adversaries, that are trying to undermine the US dollar and try to seize it. So to me the US military actually adds to the seizure-resistance of the US dollar, and that’s why it is strategically important to have aircraft carriers around the world, securing trade routes and having a global financial system that is dollar-centered. And the way Bitcoin challenges this is not by challenging it head-on, but rather by flanking it in the sense of, Okay, we’re going to do this in cyberspace. And it’s interesting because the US military could attack Bitcoin in cyberspace, right? It could try to prevent nodes from getting online and essentially work with ISPs to kick people off. And it would be very challenging to route around that! We would have to have Adam Back’s [inaudible 1:13:43] and Nick Szabo’s short-wave radios to go pirate. But it’s like, because we’re operating on a different battlefield than the 21st century battlefields, we’re able to dominate from a monetary perspective and now state actors are playing catch-up. And this isn’t the US, even. It’s like, China’s trying to come up with their digital currency, but I don’t think that they fully understand that the importance is in the networks, the peer to peer network, is the biggest advantage that we have as a user of Bitcoin. And I don’t think Mark Cuban understands this either! Running a full node! I don’t think Mark Cuban understands the game theory of running a full node, which is really far more important than the number of ticket sales you have for the Mavericks!

Michael Goldstein [1:14:54]: Another aspect that I always like to bring up with the military whenever people try to make the chartalist claims around money and the legitimacy of money and all that is, In order to have that military, you do have to pay them something, you know? And right now the military generally I guess by law they accept US dollars but at some point unless you plan on inciting people which requires paying some other people to take control of those defectors — maybe they’ll demand another currency! Or just devalue the US dollar by putting their payment into a different currency.

Preston Pysh [1:15:41]: I think it’s just an old argument, that’s been said so many times. Prior to Bitcoin it was a very strong argument, you could go with that all day long because in my opinion it was a valid argument. But now you just got a different situation so templating that into this situation I don’t think is a direct correlation and it doesn’t work anymore! Let’s say China or the US has a major problem with this and they want to wreak havoc by shutting down Internet service providers causing issues with the satellites — all that kind of stuff. They can absolutely do that, and if they did that you would see the price in the interim absolutely suffer. Where I think that it’s gonna run into an issue on the long haul is a lot of these governments right now are having issues with maintaining support of the general population. Just because of the situation we’re in right now! So if they step in and they punch something in the face that was actually providing substantial returns to people, to your people that have never been able to make any type of return at all in any type of market, I think you’re gonna potentially cause some social unrest, potentially cause — especially from some of these smaller nations that have been a victim of dollar dominance — which living in America a lot of Americans don’t understand what that feels like or what that experience is like. But for every other country in the world they know exactly what that experience is like! And I think that’s gonna potentially cause problems if you see some of those antics. So is it a risk? Absolutely. Is it a long term risk? I’m not so sure. Is it a short term risk? Absolutely, if it would be implemented. So I’m just trying to look at it as objectively as possible. I suspect this thing’s gonna be moving out at a clip that’s so fast that you have people — I mean let’s face the facts: there’s some people with substantial wealth in this space that can influence politicians, decision makers. I think a lot of that might already be taking place and it’s only gonna get stronger in the year to come as this goes in the direction that we think it’s gonna go.

Pierre Rochard [1:18:17]: If it would be implemented — let’s bring it back to the virus. In November, the army intelligence services notified the White House and the national security apparatus that COVID-19 was a problem. In November six months ago! And they didn’t pay attention to it because they just didn’t — again that normalcy bias. And I think that you could have the Federal Reserve tell Congress, Hey uh, this is a problem! We need the US military’s cyberspace capabilities to shut down Bitcoin! And I don’t know that Congress would even listen to them in the sense of agreeing with their analysis, because first of all I think that the only people that would come to this conclusion is the Federal Reserve! They’re the only people who employ enough Keynesians that you could develop that view!

Preston Pysh [1:19:27] So going back to what I was talking about earlier as far as the bond market blowing up all at once, my opinion is that this is gonna happen so quickly that there’s not gonna be really too much that can be done in the time span because everyone’s opinion on this is gonna be, especially on Wall Street—Everything’s fine! Nothing’s changed! The bond market’s fine! Look at the volatility in the yield, they haven’t moved an inch! Because that’s how they measure stability, they’re looking at how much of the yield’s changed? Well the yield’s still pegged at 0% so there must be nothing wrong! Meanwhile if you look behind the curtain, the Fed is buying all of the selling on that fixed income at such a pace that — I mean the money’s catching on fire it’s coming in the door so fast as they’re swapping the cash for the bonds! That market is in total chaos! But the only people that are seeing that are the few people in that room handling those transactions that are buying all that selling. So I think you’re gonna have the price going up, there’s gonna be a lot of people talking about it and then there’s just gonna be a moment like this snap of the finger that everything’s gonna be moving so quickly that you’re not gonna be able to out-maneuver it because the pace is happening so fast!

Pierre Rochard [1:20:43]: Yeah I think a concept that came out of the US air force: the OODA loop. Observe, Orient, Decide, Act. I think that markets and Bitcoin especially has an OODA loop that can just not be competed with by any bureaucracy or even by traditional markets where in that liquidation day of March 12th, this is where Bitcoin’s volatility is its strength! It is able to discover price far more quickly than any other asset that is of proportional liquidity. Per unit of liquidity. And that’s the 10-minute settlement period. There’s no competing with that! And that’s the beauty of the 24/7 blockchain global network, that no government entity can compete with. And they can’t even compete with the virus. That was outside of their OODA loop! And yeah I agree Bitcoin is going to move far more quickly than they will ever be able to catch up to!

Preston Pysh [1:22:10]: I think that’s the thing that’s gonna blow everyone’s socks off! That transition is gonna happen so fast, so it goes back to the question I had for Mark Cuban in Pomp’s Twitter feed which was, Where does all this money go when the $100 Trillion bond market blows up? And of course he had some snide, dumb response — it was beyond — it was such a weak response I shouldn’t have even replied back to it! That’s the question that, If you understand how that’s gonna resolve itself and more importantly the speed with which it’s gonna resolve itself, I think you can understand why a lot of the arguments of, Well it’s backed by military force, and all that kind of stuff is, in my brain and the way I think about it, is just kind of noise! Because of how this thing is gonna resolve itself!

Pierre Rochard [1:23:05]: And then everyone else wakes up to it the next morning and it’s like, Okay, well here’s the reality! And it’s been interesting to see how quickly people will accept a new reality, right?

Michael Goldstein: Such as we’ve seen!

Pierre Rochard: Yeah! There’s resistance to it, the resistance breaks, and then they just fully accept it!

Michael Goldstein: In fact — yeah! Considering just looking at the Coronavirus stuff, the amount of backlash there was against people very worried about, so many of these people so quickly became vehement anti-anti-alarmist people! Where if you hold any skepticism about anything, they will come after you! And that happened just overnight!

Pierre Rochard [1:23:57]: We saw the same thing with the masks! The people who were anti-masks suddenly became mask enforcers! Now it’s legally required! And we’re gonna see people that are like, Well, now Bitcoin’s legal tender, okay? You have to use Bitcoin!

Preston Pysh: Three months ago, Pierre came out with the Tweet that says, Cut your own hair and save some money and buy some Bitcoin! And I was like, Okay he’s off his rocker! This dude is losing it! But here I am cutting my own hair and buying Bitcoin! That’s why I got a hat on tonight!

Pierre Rochard: Well I did cut my own hair, and this is what you see now, is the result. This mess.

Michael Goldstein: I said it a while back that people should be thankful for the Bitcoin maximalists that we have now, because in the future they won’t be so peaceful!

Pierre Rochard: Yeah. When the Congressman Brad Sherman becomes a Bitcoin maximalist, the shitcoiners are not going to think about us as being toxic! They’re gonna think about us as being moderates! While Brad Sherman is finding ways to DDOS Ethereum!

Michael Goldstein: The quote that I pull up when I say this would be like, there’s this old Thomas Paine essay where he was talking about how, if you even so much as argue that there should be paper money, then you should be executed! It’s like, Guys! If Bitcoin maximalists are not toxic, you should go check out these bad motherfuckers in the 18th century!

Pierre Rochard: There was a similar thing about insolvent fractional reserve banks and the death penalty in Spain.

Michael Goldstein: Yep. In Catalonia.[Jesús Huerta de Soto’s] I think it’s like page. 73 for those who want to know — I’ve referenced it so many times I’ll never forget.

Preston Pysh: That’s why I like Michael so much!

Pierre Rochard [1:26:19]: Well Michael will become one of these people! I won’t be speaking out against Michael’s tyranny!

Michael Goldstein: Well what’s fascinating about that story — I wrote a quick little article about it back years ago 2015 or so, and I was just pointing out how basically what was happening in Catalonia is they were having a problem with banks going bankrupt. And at the time it’s very obvious what it means when a bank goes bankrupt — it’s because they were doing fractional reserves and they went bust! So the state was having to get more and more draconian about it. First there was something about you had to go on a diet of bread and water until you could pay back everything. And it didn’t stop so there was another like, If you do not pay back the debts within two weeks we’re gonna ride around town telling everyone how evil you are and then we’re gonna chop your head off! And there was still a credit crisis, meaning, even with that! So my takeaway from that was, the drive to print money when you have your finger on the printer button, whatever time you are, the human drive to hit that print button is just so strong that the literal Sword of Damocles can be hanging over your head and it won’t stop you! And that’s why we need Bitcoin!

Pierre Rochard: You need to be cryptographically prevented from printing your own money.

Michael Goldstein: It’s for your own safety!

Pierre Rochard: It’s kind of a sad testament to humanity that it took until getting to 2008 and having the ability to have telecommunications networks, semi-conductors, and hard cryptography, to finally get an actual sound money.

Michael Goldstein [1:28:45]: I mean I don’t even know if it’s a failure of humanity. It’s just like, that is how difficult it is to create such a massive coordination game. So it’s really a testament to human technology that we’ve finally put all the pieces together to allow us to be able to do this!

Pierre Rochard: I still think God is disappointed that we weren’t able to figure it out without the technology! And it’s funny because I think we got very close to it with trying to create “independent” central banks! And the independence though is so easily pierced that it really didn’t hold up very well. I think it was Arthur Burns under Nixon that got bullied around, and I think that Jeremy Powell got bullied around by Trump as well where — let’s remember, before COVID-19, Jeremy Powell was cutting interest rates because Trump was pressuring him into doing it — I think! I don’t know if there was any kind of strong reason to be cutting rates at the top of the cycle.

Michael Goldstein [1:30:02]: Do you remember when Trump was Tweet-shaming you if you haven’t made 50% returns?

Pierre Rochard: And I think it was Eric Trump that was saying, Hey it’s a great time to be buying stocks now! He was like, YOLO! I just put it all in!

Michael Goldstein: I think he deleted it by the end of the weekend!

Pierre Rochard: That’s okay! Who hasn’t done that? I was telling people to buy Bitcoin in December 2017 — it’s all good! Now to Preston’s credit, I think that you had the sanity and the sober-mindedness to not.

Michael Goldstein [1:30:55]: Weren’t you talking to us about it? Making some bearish estimates using the Mayer multiple in the short-term?

Preston Pysh: Yeah so back then you didn’t have the backdrop that you have right now. So that’s why I was very skeptical whether you were gonna hit escape velocity on that run! And just looking at how the protocol functioned back then, and looking at that multiple and looking at, Hey! When it hits three standard-deviations on this multiple that’s not a good thing! Well I was of the opinion that the thing was not gonna be globally adopted at that point at all! Not even close! All the markets were functioning normally with the exception of all the QE that was being done, but that didn’t seem like it was causing any type of volatility waves where anybody was gonna jump ship from what they were currently doing. Now I think you’ve got a completely different scenario! I’m not saying that you’re gonna see it hit escape velocity this time, I just think that the probability is way higher than maybe most are expecting, simply because of the backdrop!

Michael Goldstein [1:32:06]: Yeah I can agree with that! In which case it’s extremely risky to try to be timing the top on this cycle!

Preston Pysh: Oh my God, yeah! I think it’d be crazy to do that!

Michael Goldstein: I had a Tweet once that’s like, Only buy the Bitcoin that you can afford to HODL. You gotta keep an eye on your expenses you don’t over-expose yourself!

Pierre Rochard: Just remember: scissors are cheap! And haircuts are expensive!

Michael Goldstein: Although, you don’t really need to cut your hair! That’s even less expensive, right? Just let it grow out!

Pierre Rochard: Yeah you know that’s true! I haven’t gotten a haircut since January. Because I kept pushing it off until I couldn’t get one even if I wanted to! This sounds like a process of de-civilization, Michael! I think that’s what we’re all in right now. It’s going back to caveman times! So we have the Mark Cuban paradox — I also think that there’s a Warren Buffett paradox! Where the focus is on owning assets that have a cash flow. And we see this in Bitcoin as well with people saying, You’ve gotta invest your Bitcoin with BlockFi or whatever to earn a yield, otherwise it’s not worth owning, basically is the view! Why is it that people have such an attraction to cash flow? It’s kind of the investor’s equivalent to the business mindset of having an obsession with revenue, right? Of, Okay, how do I get Bitcoin revenue, and then convert it into US dollars to pay for my expenses — how do I get cash flow out of Bitcoin as part of my portfolio?

Preston Pysh [1:34:14]: This one’s gonna be hard for people to change their mindset on I think for a very long time into the foreseeable future, simply because that’s what your taught in school, if you’ve been in the finance industry, if you’ve been on Wall Street, if you own a business! You know how vital free cash flow is to the business! Everything revolves around it! The valuation comes down to the free cash flow compared to the discount rate you’re using. And if I was gonna try to defend Warren Buffett, I would say: he is looking at owning good businesses that have a moat around them and what I mean by a moat is they have a competitive advantage against all of the other competitors in the space. If he owns that business and the currency changes, the business is still gonna be competitive moving forward in that aftermath or whatever that environment is afterwards. So if the currency changes from dollars to Bitcoins, well all of his businesses are now gonna start accepting Bitcoins and then he’s gonna continue to still have a business that’s kicking off free cash flow that has competitive advantage! So I think that’s just how simple his narrative is: he does not need to hit anything out of the ballpark at all! He just needs to make sure that he doesn’t lose money for all the people that have entrusted his leadership and his expertise going through this! And so I think he’s just playing a very very defensive game. I think he’s very skeptical because he doesn’t understand the encryption and all the technology and the mining. He doesn’t understand it, he sees it as being a bunch of millennials who are living on hopes and dreams trying to pump this thing. I think that’s just how simple he’s looking at it, and he’s looking at this massive hundreds of billions of dollars enterprise — I mean he has over 70 operational businesses, I don’t know how many non-operational subsidiaries that all have $10 Billion+ in market cap of how much ownership he has, so he’s just looking at it from that lens. And so if you’re a young Bitcoiner and you’re saying, Oh Warren Buffett, he’s an idiot! He doesn’t know Bitcoin! Which is very easy to says, because you’re looking at it from your lens, which is, I don’t have a lot of money, my house isn’t paid off, my car isn’t paid off, I mean hell I’m living in Mom and Dad’s basement, and I need to break through! I need something that allows me to break through from this disaster of a life that I’m living, and Bitcoin could go to $100,000 and I have 1 Bitcoin or I have 5 Bitcoins or whatever the number is, and that’s gonna be my out! And that’s gonna allow me to aggressively change the future and the life that I know there’s a better version of our there for me! You’re looking at things through two totally different lenses and I think that’s where the contrast and the bashing of each other—not that he bashes—yeah I think you could say Buffet bashes it! Charlie Munger definitely bashes it! So I think that’s the delta between vantage points.

Pierre Rochard [1:37:48]: It’s also like, what system are you operating under? In the 20th century system of inflationary money, holding cash doesn’t make much sense at all! And even when Berkshire Hathaway is holding cash, they’re not actually holding cash, right? They’re holding cash equivalents, or better! In the sense of yield-generating assets. And really when they say they’re holding cash, what they’re saying is they’re holding liquid T-bills or some other yield-generating asset. They’re not actually holding 0% physical $100 bills.

Preston Pysh: Yeah! But he can liquidate it at a snap of a finger!

Pierre Rochard: Right! So it’s very rational to have the view that you want to be in an asset that is generation yield when there’s inflation! Even “mild” inflation of 2%, because 2% over a decade 20% plus the compounding! And then 2% over two decades is 40% plus the compounding! You’re talking about losing half your principle in a couple of decades, and in Warren Buffett’s long term view, two decades is the blink of an eye, especially from an investor’s perspective of wanting to retire in 40–50 years. You’re talking about a very hefty inflation tax!

Preston Pysh [1:39:35]: Can I please have your permission to come off the top rope right now? My God! I just can’t tell you how much my blood boils when I hear people say inflation or just like give their spin on what they think inflation is! I just — I have a hard time containing myself! It’s a good thing people can’t hear what I mutter whenever I type responses on Twitter! So if you’re using CPI as your basket of inflation, well you can make inflation whatever you want! You just gotta change what’s in or out of that basket! So let’s just look at what’s happened over the last ten years: you had central banks that provided ungodly amounts of quantitative easing into the market. So all that is when you hear the fancy term, Quantitative Easing — you’re printing a bunch of money, you’re going into the fixed income bond market and you’re buying those bonds. You’re basically buying them at whatever price you want and supplying all that liquidity to the people that were holding those bonds, and then the government then takes on those bonds and they’re sitting on them. They’re pulling them off the market. The way I measure inflation is it’s the frickin’ simplest equation ever! It’s: the expansion of monetary policy balance sheets! So if you go and you look at all these central banks’ balance sheets across the globe and you add up whatever that delta is over an annual basis: Surprise! There’s your inflation! It’s that simple! So if you are buying these bonds and all that money that you’re printing is going into the fixed income market which then subsequently goes into the stock market — if that’s where all the printing’s going and you’re not measuring any of that — it’s not in your CPI basket, well guess what? You’re not gonna see any of it, period! Right? Like, how freaking simple is that idea? Just the simplest flipping idea on the face of the planet! But yet, I can’t find a flippin’ person that gets that! It’s mind-blowing to me! I just can’t understand it! Well now that you got interest rates at 0% collectively across the globe, across all durations for the most part. I can’t say they’re at 0% but they’re getting there really fast, and at the pace we’re going with all this printing, you’re gonna get there across the whole duration in the US, you’re already there in all these other countries. Once it gets there, now it becomes just a total farce! And that money is gonna start showing up — if they keep expanding the balance sheet of all these central banks at the pace that they’re expanding it, which they have not slowed down, they’ve accelerated! Guess what? It’s gonna start showing up in some weird places! Because you’re not gonna see it coming out of the fixed income market when the whole thing is purchased like you saw over in Japan. The rest of the world is getting there, right? Japan’s just the front-runner. They got there first, going into 1990 through the 80’s and everything, that place was booming! Well they got to this point, they got there, they won the printing race! Now everyone is just catching up, and it’s competitive devaluation in the basement. And all of that inflation is 100% there, you’re just not seeing it because you’re measuring something different. It’d be like, Pierre I’m gonna measure how tall you are but I’m gonna go into the kitchen and measure how tall an apple is and use that as a measure for how tall you are! It’s just total insanity! I heard it in the Cuban interview! I heard it halfway through the flippin’ interview, he goes, Well in 2008 we did all this QE — nothing happened! We didn’t get any inflation! So therefore — normalcy bias — it’s not gonna happen this time! And it’s just like, I want to bang my head against the wall! Well you go back to 2008, 2007, going into 2008 I can’t remember the exact number but late 2007 your 10-year treasury was like slightly over 5% and so was your Federal Funds Rate was over 5%. In fact the Federal Funds Rate was higher than the 10-year treasury mid to late 2007! Okay? So if that happens and you go through this situation and then they drop rates and then you do a bunch of QE, then they even buy stuff that’s not at the Federal Funds Rate but they’re buying stuff that further out on the duration of the bond yield curve. And they’re doing all this and they’re supplying all this liquidity into the system — well they can keep doing that until interest rates all get to 0% collectively all across the globe. Once it gets there, that’s why this situation right now is so different than 2008. Back then they had so much interest rate to play with and they had it across the whole duration of the curve, they didn’t just have the Federal Funds Rate left, they had the whole duration of the curve left! If you’re gonna bid the long tail of the curve on the bond yield curve, that’s a lot of flippin’ money to drop that 100 basis points! Like, people don’t understand how many trillions of dollars it takes to drop the 30-year bond 100 basis points! It’s massive! It’s ungodly! I can go in and do the calculations on some of these tools I have on my websites and figure out what that number is, but it’s huge! Massive! People don’t understand that!

Pierre Rochard [1:45:12]: Yeah to me a 0% bond is basically the monetary authority saying, This is cash, right? Because cash is supposed to be 0%! And that as you go further out on the yield curve, you’re creating more and more cash, and then when you get into the stock market — same thing! If you’re backstopping the stock market, you’re saying, Tesla stock is cash in a FDIC-insured bank — it’s exactly the same because we are writing a put on it and here’s what the intrinsic value of it is from a monetary perspective. But that to me is like the inevitable slippery slope of fiat. If you have the ability to print money, why not monetize every asset and turn every asset into cash, because that is the most politically popular thing to do in any scenario, is to say that, No one can lose any money, and people can only make money, and that is the official policy of this government!

Preston Pysh [1:46:27]: It all comes back to what I said earlier in the discussion which is, There can’t allow interest rates to go up, period! That is why they’re doing what they’re doing — they cannot afford for interest rates to go up, because guess what? The price of everything, and I mean everything on the entire planet, is based on interest rates, okay? If interest rates go up — congratulations! The price of literally everything goes down. It’s just that simple. It doesn’t matter if it’s a stock, real estate, a bond, if interest rates go up, guess what — the price you pay to own it goes down. And more importantly the reason they can’t allow interest rates to go up is because then they can’t issue the debt and they can’t spend at the rate that they’ve been spending in the past. And guess what, every one of ’em wanna get re-elected and they wanna push that funding and all that money into their district so they’re incentivized because there’s absolutely no term limits for the people that are appropriating money! So if you really want to get to the critical variables as to what’s driving this incentive structure that we have, it all comes down to those key points. So yeah you’re gonna see more of the same because the people that are making decisions are incentivized to make decisions in that way!

Pierre Rochard [1:47:40]: And the only constituency that benefits from higher interest rates is new investors! All of the existing investors suffer from higher interest rates in the sense that their portfolios are decreasing in value if interest rates go up, right? And only new investors who are buying assets are benefiting from this. And just mathematically they’re a much smaller constituency than the base of the existing investors, and this is the same thing with the real estate market! The only people that benefit from lower housing prices is new house buyers! And the entire stock of housing suffers from it, and everyone leveraging up against that housing, and it’s the same across every asset class — you can generalize it — including 30-year treasuries.

Preston Pysh: Yeah the people that don’t benefit from this model are your millennials! Because your millennials don’t have the disposable income to invest! If you bought when interest rates were 5% and it got pushed down to 3%, if you had securities in whatever stock, let’s just say you bought the index — it’s just gonna go up in value! It just does because of how CAPM models work and how any type of discount cash flow model works. It’s gonna go up in value because your discount rate went down! And if you’ve got cap rates for real estate it’s the same thing! So if you own the securities, you’re loving it! But if you are a person who doesn’t have disposable income to invest, well you’re completely set over in the corner, you’re not allowed to participate, you just gotta sit in the corner and color your paper!

Pierre Rochard [1:49:34]: This is kind of off topic, but do you think that this secular trend from 1980 20% interest rates to today of 0% interest rates, is what has driven the popularity of passive index investing versus active management? Because it was so easy to make money by just buying the market?

Preston Pysh: I think the thing that drove that is your active managers couldn’t outperform the markets! I forget what the stat is — Tony Robbins had it in one of his books. But that number is as high as 97–98% of managers underperformed just the straight S&P 500 index! So because of that stat, because people can see the fees — and here’s the part that people don’t realize is that you’re paying a 2% fee for actively managed money. That 2% compounded over a 30-year period of time is something like one third of your value of your portfolio! So if the portfolio would’ve gone to $1 million, if it was actively managed and you had similar returns you would’ve had $667,000. It’s something crazy like that! It’s an extreme number!

Pierre Rochard [1:50:54]: It’s funny how that 2% matches the target inflation rate! Right? We’ve got the same kind of dynamic, and yet in both the financial industry and in monetary economics, both get downplayed as being, Oh well that’s a small number! You don’t have to worry about that!

Preston Pysh: No I agree with you, it’s a hidden — when you see it at face value it makes no sense, you just write it off as being nothing.

Pierre Rochard: Well we’re coming up on two hours now. That’s the longest Noded Bitcoin podcast.

Preston Pysh: For us it was fast! Maybe not for the listeners.

Pierre Rochard: No yeah. So I’ve gotta throw in an infomercial here. If this podcast made you bullish on Bitcoin and you live in the United States, you can sign up on Kraken and send a wire transfer same day, and start buying Bitcoin! If you’re in Europe you can do a SEPA transfer same day, and — now I’m assuming that you don’t do it at three in the morning. But generally on a business day it’ll be the same day, and you’ll be able to buy some Bitcoin! And subscribe to the Noded Bitcoin Podcast, share it with all your friends.

Michael Goldstein: Demand Twitter unlock our account so you can follow it!

Pierre Rochard: Yeah if anyone here is listening and is an employee — yes Jack we’re talking about you — is the CEO an employee? I guess technically he is!

Preston Pysh: Of course he is! Yes he is! No doubt about it!

Pierre Rochard: Alright Jack we’re talking about you Mr. Employee №1! Unlock our account!

Preston Pysh: It gets challenging when they’re the chairman of the board though as well.

Pierre Rochard: Oh yeah that’s true. That’s true. I think they’ve got good corporate governance. I don’t want to cast aspersions without looking it up.

Preston Pysh: Hey somebody was trying to take him down. I forget who it was.

Pierre Rochard: Oh yeah. It was that activist group. You know, a lot of companies would be upset if you’re the employee of two different companies at the same time!

Preston Pysh: That’s why you own your own equity, then you can go tell ’em to go piss off!

Pierre Rochard: Antifragile! So yeah it would be nice if we could get our Twitter account unlocked! And otherwise go subscribe to the podcast and give us a nice review on iTunes. And also go subscribe to The Investor’s Podcast that Preston Pysh is hosting, because he has excellent guests on! And I’m trying to think of — Tuur Demeester I know was a guest on, and I really enjoyed that one!

Michael Goldstein: Plan B was on there.

Preston Pysh: Yeah we had Plan B on there. I’ll tell you the one to listen to! So we had Jeff Booth come on the show, and guys I’m telling you. This guy is — oh my God! His book and his discussion around how technology is driving price deflation and this inflationary monetary policy being the crux of the issue that drives that price deflation. I mean he is crushing it on all fronts! Yeah I think I talked to him for an hour and a half, and it was a fascinating discussion!

Pierre Rochard: Awesome looking forward to that. I definitely want to read his book because deflation has gotten such a negative stigma around it, but it’s very unwarranted!

Preston Pysh: Just like we were talking about inflation earlier, people do not understand the terminology. They get the terminology all mixed up. They say this is inflationary when it’s deflationary. It’s just like, Oh my God! But this book is probably one of the best ways to level-set that definition for people, so that they don’t use the wrong meaning behind something when they understand what drives the other. Like I had a guy tell me the other day, Oh well how can you say all this when everything’s deflationary! It’s not inflationary! I said, monetary policy is inflationary, which actually causes the deflation in the prices. And he says, Well that’s just your point of view!

Michael Goldstein: Hey man that’s just your opinion, man!

Preston Pysh: Hey man that’s just like your opinion, you know? You just gotta shake your head and say, Hey man, whatever you gotta tell yourself! Whatever you gotta tell yourself.

Pierre Rochard: You pitched it well I just bought it as you were talking!

Preston Pysh: Good! I’m telling you you’re going to absolutely love that book!

Michael Goldstein: Well Preston thank you so much for coming on!

Preston Pysh: Love you guys, you guys are fun!

Michael Goldstein: We’ll have to get you on again when you can tell us if we should be bearish for hitting escape velocity!

Preston Pysh: I’ve already determined that when this thing goes over $100k I have no opinion. If someone asks me, Should I buy? — I have no opinion! Just figure it out yourself! I don’t know what to tell you at that point, it’s on you!

Pierre Rochard: Or we go into anti-evangelize mode of, No! Don’t buy any! I’m trying to buy as much as I can for myself! Alright well I was hoping to meet you in person this year but it looks like the odds of that are —

Preston Pysh: Dude I really thought that was gonna happen but you know, this is not looking good!

Pierre Rochard: It’s alright. Maybe next year we’ll meet at Warren Buffett’s shareholder meeting because we’ll be the majority owners of Berkshire Hathaway at that point!

Michael Goldstein: We’ll be at the table with Justin Sun.

Pierre Rochard: Yeah! Justin Sun will buy a lunch with us!

Preston Pysh: I thought it was funny how he came out and was like, Yes! Warren Buffett now owns Bitcoin this and that and so then Becky Quick asked him a couple days later and he goes, No! I don’t have that! I gave that to the charity!

Pierre Rochard: Womp womp womp. Well that charity’s gonna do really well for itself assuming that it did not sell it!

Preston Pysh: It liquidated it too as soon as it got it.

Pierre Rochard: Yeah. They always do that.

Michael Goldstein: They fall for the Cuban paradox!

Preston Pysh: Yeah they fell for the Cuban paradox! They liquidated the Bitcoin but they kept the TRON!

Pierre Rochard: Worst financial decision since Tony Blair sold the gold! Alright everyone have a good night and thanks again Preston!

Preston Pysh: Always fun guys! Love chattin’ with you!

Michael Goldstein: Alright! Have a good one!