I call it a perpetual Bitcoin machine. So, I literally have the government buy my Bitcoin for me.

Okay. So, what does that mean? Go into that, please.

Well, so let's say for example I use debt however I get it a credit card or I borrow against my Bitcoin and I buy Bitcoin miners. I know you're found fond of that. I buy Bitcoin miners under Trump's one big beautiful bill. I'm allowed to depreciate those miners 100% in year one. So I use credit from some source $0 out of pocket. I buy Bitcoin miners. That those Bitcoin miners offset my income 100%. I pay zero taxes. I use the money that I was going to send to the government so they could pay the daycare centers in in Minnesota, but instead I don't send it to the daycare centers. I keep it and instead I buy instead instead I buy more Bitcoin.

Wait, wait, Mark. But it's just a matter of time. I I was thinking about this the other day. People are literally going out, especially here in Miami, right? People are literally buying properties just to sit on them. the rents from those properties don't even pay for the expenses the property something could you know uh something could break the property tax.

Isn't it just a matter of time before people realize what you just said that there's a better mechanism there's a better strategy they can implement no pun intended there is.

Yes. And so obviously the world is waking up to that. I started my career in real estate. I still own real estate but I started my career in real estate. At one point I owned over 200 doors, as we call them, units that were making rent rental income. In 2021, I sold the last apartment that I had to go into Bitcoin. I still own properties, like I talked about my ranch property you've been to in Austin. I live on a beach and but for utility reasons, but for rental properties, they're gone. I'm out. I don't make rental properties anymore. I'd rather just own the Bitcoin for all the reasons that you said. I do think that Bitcoiners are a little bit overly optimistic in the demonetization of real estate in a sense because it's not just that we need more homes. It's not just that Bitcoin is a better investment. Um there's there's real scarcity here. If you want to live in Miami Beach, there's only so many homes in Miami Beach. And so the law of scarcity applies there. To your point, there are potentially a lot of vacant investment homes and maybe a lot of that does go away. So that will change a little bit. But I think at the same time there always going to be someone wants to be downtown Manhattan, somebody wants to be lakefront in Lake Austin. Um, and so the scarcity is still going to be there. You can't get around that.

No, absolutely. I mean I completely agree on on the scarcity aspect of it but I do also see it like as if you are a property owner and you own multiple properties now there's a superior investment of which you don't have to pay property taxes you don't have to pay maintenance on and I think but but here's what's missing and this is what I want to fill in the blank for here's what's missing if I'm that real estate guy and to To your point, I have to pay the maintenance and I have to deal with all the issues, right? But at least it provides me some cash flow. Sure, Bitcoin should appreciate faster if I if I believe that. I do obviously, but not everybody is. I believe it will appreciate faster, but it doesn't provide cash flow. And I need money to pay my bills every month. And this is where Bitcoiners lose this. They they when they when they they don't understand what Sailor's doing. They don't understand where how big digital credit is. They can't even wrap their head around it because they don't really understand the the the real world. And the real world is you're 78 years old. You need money, like actual dollars every month to buy your freaking medication, man. You got to pay your electricity bill. People need income. And so digital credit solves income. Bitcoin doesn't. Bitcoin is an asset and Warren Buffett would say it's a nonproductive asset. So the first thing is and getting deeper into the treasury, I have to understand what assets do I own and then there's four categories I put those assets in. And Bitcoin is a nonproductive asset. That's why just like gold, that's not a bad thing. So, how do I take a nonproductive asset when I need income? So, I'll buy the rental property. It's not going to appreciate as much, but it gives me the income. But what I'm saying is I can turn Bitcoin into an income asset. I can take a non-productive asset like Bitcoin and turn it into a productive asset to replace real estate by harvesting the appreciation through debt leverage, not by selling the asset. Now if if real estate investors can catch on to that like I used to be a real estate investor then to go oh so Bitcoin doesn't have tenants there is no maintenance it appreciates faster and I can get income from it tax-free income at that because income from properties is taxed so now no maintenance no headaches I can move it wherever I want it appreciates faster and I get taxfree income I'm all in

Mark how complicated is what you said you mean borrowing your Bitcoin

Pretty dang Easy. It

It's just as simple as that. It's borrowing against your Bitcoin, being very careful with the the margin aspects of it. It's just that simple.

Yeah. And and and Nico, uh, there's always risk. How do I manage the risk? If I borrow 10% LTV against my Bitcoin, what is the probability I get liquidated?

Very low.

Like single digits low.

Very low. Because you can always just put on more put put up more collateral.

But at at 10%, what's the odds I'm going to even get a collateral call? Because extremely I mean unless unless Bitcoin goes to 10K it's it's like extremely low.

And what is the odds of that? Minimal at this point.

Single digit.

Yeah.

Okay. So what about So if I borrow if

But where but where are you going to get 10% LTV?

I would No. If I had $100,000 in Bitcoin, I'd borrow 10 grand. That's a

Okay. Gotcha. Gotcha. I'm borrowing 10. I understand. Loan to value. I understand. So I'm saying if I only borrow if I set a liquidity rule, I'm never going to borrow more than 10% LTV. The chance that I get a margin call is like single digits.

Of course.

And if I'm still worried about it, then I make sure liquidity layer 2 and three are built up enough to cover it. I have a home equity line. If I do get a margin call, I'll just pull a little equity out of my home. Liquidity. So, we can derisk this thing. Now, if I borrow if I borrow and so here's how it works. What do you What do you think? And if we

I'm connecting the dots on the show, Mark. Okay. Now, okay, this is it. Now I understand when you're saying, "Okay, so the the judo analogy makes sense now. The perpetual Bitcoin machine."

I think I finish that. I think Let me just finish that.

I'm It's I I'm having explosions in my brain, Mark.

Let me finish the perpetual Bitcoin machine. Okay. Okay. So, what I've done is I've used credit to buy Bitcoin miners. The Bitcoin miners offset my income, so I pay no taxes. The money that was going to go to fund the daycare centers, now I get a keep and I get to buy Bitcoin with it. So, the government funded my Bitcoin. Next year, next year. Next year, I borrow against the newly mined Bitcoin and the Bitcoin I bought to offset my income again. Instead of going to the daycare centers, I get to buy more Bitcoin again. And every single year, the the Bitcoin I say that the Bitcoin I acquired because I saved taxes plus the newly mined Bitcoin I bought for the tax depreciation is perpetually funding itself. And and what do you and it's and it's all with zero dollars out of my pocket, no extra hours worked, not working harder, having my money work harder. What I say, Nico, the reason why you have to work so hard is because your money doesn't.

Most people are willing to go get a side hustle or a second job, but your money is only going to do one.

No, no, no, no, no, no. My money is going to do three or four jobs. I'm going to do a job. Why do you think most Bitcoiners think like savers when Bitcoin actually rewards the Treasury?

You're thinking it's not just Bitcoiners. It's because we've all been taught to go to school, get good grades, save for 40 years, and then hopefully one day spend it down. Bitcoiners bring that lens in, but because now Bitcoin is a superior asset, I can just buy Bitcoin and do nothing and I can outperform everybody else. So, Bitcoin allows allows us to actually be the saver. But the problem is if you're making 100 grand a year and spending 40,000 in taxes, you're trying to live on 60. You're only stacking sats. If you do this, you can stack Bitcoin.

Absolutely. Now,

Which would you rather, stack sats or Bitcoin?

Stack Bitcoin, man. I just I'm I'm I'm digesting.

And and if if I might throw out, uh, we might have a moral obligation to stop funding daycare centers.

I mean, that was crazy, wasn't it? That was crazy. That was great.

We might have a more obligation to stop doing that.

Why do you think, Mark, they Why do you think it took a 23year-old kid with a cam with, you know, an everyday camera and an everyday, you know, like lapel mic for him to uncover that amount of fraud where legacy media literally some legacy media even denied it. They tried to discredit the

Trying to cover it up. Wh why why do you think like where are we in the movie? Like I'm seeing like from my uh from my perspective I'm seeing like this feels like end of empire type of days.

Yeah. I mean not to keep I guess I kept going back to that. I didn't want to go down the rabbit hole, but uh to answer the question I think to your point End of Empire days I think and I I maybe I'm hopefully thinking this is sort of the straw that breaks the camel's back. I think I hope um obviously Legacy Media has a million reasons why they wouldn't want to cover it. They need to protect that. They They're not interested. They only want to talk about the the current thing. Um they're really trying to use propaganda more than actual news journalism.

There's a Has it has it always been that way?

Uh no, certainly not. Certainly not. Um I think

Or was it social media that uncovered that the legacy media isn't actually in the business of telling the news?

No. I I I I would think that back in Okay, so first of all, I think there used to be real journalists who would really go break stories. I do. There's a show on Netflix or it's on it's on Apple TV. My wife's been getting me to watch uh and it's with Reese Reese Witherspoon and uh what's her name from Friends? Um anyway, but they're like uh morning show host or whatever. And the Reese Witherspoon character is like she's like real abrasive and I have to go for the truth and and they're like whoa, slow down. The network doesn't want that. She's like I'm only going for the truth. What truth? I can say nice truth. I can say bad truth. Why does the truth have to be antagonistic? like and when I watch her character I'm like I understand that's true but like you're just still not that's mean why would you say that you could say truth here too right like so what story are you choosing I guess is what I'm trying to say so I do think that people used to do a lot of undercover journalism and used to expose things like that um today they're certainly not well or maybe they're trying to expose things that don't need to be exposed um but but today we are the news right it's been democratized and I think that people are willing to you and I Americans we're willing to take a lot of abuse and punishment. But man, when you you you saw Mike Green put out that whole article about the new poverty line is 140,000, which got a big uproar, right? And one of the reasons why 140 is a new poverty line is because it takes two incomes to get there. Two incomes then require what? A second car and daycare. the single biggest the single biggest expense 30 I believe what he said in the report fact check me was 32,000 a year for daycare so the reason why the American people are in the poor house 140 is the new poverty line is because daycare has become the single biggest expense they have to deal with and then we see that the daycare fraud is going to illegal immigrants and funding overseas operations that is like the ultimate kicking the nuts It it totally is. And I mean it it makes you because you know you bust your ass. Uh you pay at least half your income. Again I'm averaging here to the government. The government has abs they answer to no one, right? If you don't pay your taxes, you're going to jail, right? Like you don't want to mess with the IRS. Um at least if if you live in the states and you know, but there's no accountabil accountabilty for them.

Right. Like they can just recklessly spend. They can recklessly debase. Um Elon tried to get in in there in the beginning of the year. They literally ran him out of town.

Um it's an unfixable system, which is why what you're saying regarding the judo aspect of it resonates with me so much. Right. Um because again, you're using pre-existing tools that are already there. You're leveraging them to not only grow your stack, right? not sell your Bitcoin, but you're actually speculatively attacking the system itself at simultaneously. Do you think that Michael Sailor was the first one that figured this out? And what do you think Bitcoiners misunderstand about what Sailor is doing? Could you kind of oversimpli oversimplify? Could you walk us through what Sailor is doing with the Treasury strategy? Because what I got and I love Danny Nles. I love what Bitcoin did. Amazing content. But I heard him I I heard Sailor get frustrated. But I heard the logic that he was using and it made sense.

Yeah. It made sense what he was talking about. So could you talk about that? Like what did Sailor discover? I would love to talk about that. So first of all, Sailor's not the first person that's done this. Um the the big story that I usually reference is Hugo Stenz from Weimar Republic of Germany. And when they were going through hyperinflation, he used the failing currency to go buy hard assets. He bought factories. He bought um all types of hard assets. And he became the richest man in Germany. I'm sure you've probably heard of Higgost Stenis. That was a speculative attack. Uh Pierre Rashard wrote about speculative attack I think in 2014. Um so Sailor didn't invent it obviously. Um but what he did invent was creating a Bitcoin treasury company. So using Bitcoin and a treasury to build asset bases. Now the wealthy have been using assets for tax depreciation to lower taxable income and to fund their life with debt for a long time. But it's Bitcoin that allows you and I to do that because typically to do it with traditional assets like real estate, we'd have to be billionaires because because with with real estate you only depreciate over 27 and a half years and you and so you're only getting little bits of depreciation. So to get enough depreciation to write off an income of 100 or 200 grand, you need a lot. But Bitcoin allows us to do it very quickly. That's why it's the cheat code. Now, back to Sailor. I think what if if I summarize one big statement, um, Bitcoiners, Bitcoiners are very smart and they very quickly caught on to the fiat monetary system, the leverage in the system. They understand in what inflation really is, how it affects us. They understand that sound money can be um can can fix a lot of this. U societal pressures are breaking down because they understand that. What they don't understand is is the financial system. They don't understand security analysis. They don't understand credit markets. They don't understand that. And so what happens is they bring a Bitcoin lens in and try to understand what he's doing in the credit and the equity markets and then they can't comprehend it and they try to bring the stay humble stack sats into that and it just doesn't work. It's like you're speaking a different language. But I can I can break it down and and very simply. So, what most Bitcoiners don't understand, again, I made the comment here earlier, what a 70-year-old person needs is income. They got to pay their bills. They can't hodddle Bitcoin. They can't they they're not going to be alive long enough to have Bitcoin compound. They got to pay their freaking bills, man. So, most of the world needs income. There's a there's a massive demand for yield. The fixed income markets are the largest markets in the world. They dwarf commodity and equity markets. So you you know that. Okay. So most Bitcoiners don't even understand what that means. They why would you need income? Just stack sats, bro. Dude, most people can't. Okay. So most Bitcoiners can't even get past that. So if we can agree on that. The biggest markets in the world are fixed income and Bitcoin doesn't change that. A lot of times Bitcoiners think that credit goes away. There's two types of people in the world. There's creators and there's consumers. Creators will always create more than they consume. That's why Warren Buffett stayed working active until he was 93.

I call it a perpetual Bitcoin machine. So, I literally have the government buy my Bitcoin for me.

Okay. So, what does that mean? Go into that, please.

The problem is if you're making 100 grand a year and spending 40,000 in taxes, you're trying to live on 60. You're only stacking sats. If you do this, you can stack Bitcoin.

I'm connecting the dots on the show. Mark, what the wealthy do is they make income and buy assets, don't pay taxes on that, and then they have the assets pay for their life. Are you saying this is a viable strategy for most people?

Everybody could do this and I can break it down for you. Break it down. So, holy cow. Yeah. As a Bitcoiner, I think that my life should be represented by a block of proof of work. Why would I want to die with zero? I should leave the proof of my work of my life here. And then why should my kid start from zero? Why can't they add the next block? The reason why you have to work so hard is cuz your money doesn't. Most people are willing to go get a side hustle or a second job, but your money's only going to do one.

No, no, no, no, no, no.

Most Bitcoin conversations stop at price predictions, macro takes, and just huddle. Today, we're going to take a different approach with this conversation. And of course, I have the one, the only, the legendary Mark Moss in the Simply Studio with me today. And we're going to be talking about all of that. How you should be building a personal Bitcoin treasury for your life. Build liquidity. So, uh, volatility never threatens your lifestyle and retire without killing compounding by selling your Bitcoin. Mark, you've got that line that nails the whole thesis. Bitcoin isn't the inheritance, the system is. So, let's start right there first. Mark, welcome to the Simply Studio. Happy to have you on today, brother.

Yeah, Nico. Super excited to be here. I just found out I'm the first person in the Simply Studio, so I'm even more excited about that. Chrising it with you right here. Always a pleasure sitting down with you, though.

Yeah. Let's go.

Absolutely, man. Dude, I I Mark, uh, bro, seeing your presentations and then seeing your your the way that you make content throughout the years, it's been so inspiring as a content creator. But I you you sent me this this this document and I and I would it blew my mind because again, I think Bitcoiners are approaching this completely wrong. I think they're approaching this incorrectly. And that was a major part of what you're talking about. And the line here that I love is Bitcoin isn't the inheritance. The system is. What does that mean?

So the system is it it a lot of people think that Bitcoin is the end. Just buy Bitcoin and do nothing. And it is the cheat code. So it does allow you to do that. But I think a better way to do it is to think about building a system around Bitcoin. And so if that line specifically the inheritance um what I sent you was an entire thesis from A to Z. How do we start and where do we end? And we end with the inheritance. We end with passing that down. A lot of people today and in the Bitcoin community today think that passing down an inheritance is a bad thing. I could hurt my kids, damage my kids. I don't want them. I want they need to go earn their own way. Those types of things. But as a Bitcoiner, I think that my life should be represented by a block of proof of work. Why would I want to die with zero? I should leave the proof of my work, of my life here, and then why should my kids start from zero? Why can't they add the next block? But the problem is that it's not the money that gets passed down to the generations that make them bad, right? Money just amplifies behavior. So rather than passing down assets that the next generation will probably just sell. I need to pass down the system that built the asset. I need to pass down the system that uses the asset to pay for their life and continues to compound without having to be sold. I'm not going to sell my Bitcoin ever. And I don't want my kids, my great-grandkids, or my great great grandkids to sell the Bitcoin either. So, what I want to pass down is the system that created the Bitcoin, the system that uses Bitcoin to fund their life, to um do all the things they want to do without selling it.

And let's talk about that for a second, Mark, because again, I think the mentality of most Bitcoiners, at least my audience, is stack, accumulate, and wait.

Yeah. You're basically saying, "No, no, no. That's not how you do it at all. You should actually be focusing on cash flow, on generating cash flow, building that stack, and then using that cash flow to accumulate more Bitcoin. Why do you think so many Bitcoiners get it wrong?"

Well, because everybody gets it wrong, not just Bitcoiners. Bitcoiners bring the inherent problems that everybody else has. So, here's a quick reframe for everybody that's going to make sense. We can talk about Michael Sailor. Uh, your audience knows Michael Sailor very well. Now, what Michael Sailor is doing is what people have been doing for a long period of time. It's not new, but it is new in the Bitcoin space. So, for example, let's just look at Micro Strategy. Um, he did, we've probably listened to dozens or hundreds of his interviews, but he did one with Jordan Peterson that was pretty good. I'm sure you saw that. And he said, "I sp I" He said, "I did 10 trips around the world in a decade trying to grow Micro Strategy and I couldn't grow it. I couldn't compete against Microsoft. I had $500 million of cash capital of Treasury. But what am I going to do? Buy another company, merge? Nothing I could do could increase my revenue. Okay, so let's take that to a personal level real quick. So what happens is for most of us, we're trying to earn money. But what happens is hustle culture tells us we have to work harder. We have to save harder. Skip your coffee, work harder, save harder, get a side hustle, start a new business, get more skills, do more sales, work extra hours, work overtime, work harder, trying to make more revenue. That's what Sailor tried to do. He couldn't make more revenue. At some point, we max out. We can only work so long. At some point, we max out. So what sailor decided? You know what? Instead of trying to grow more revenue and make micro strategy more profitable by revenue. Instead of that, how about if I change the name of the company to strategy and instead I build the treasury and not make more revenue. So he used tool two tools to do that which all of us have at our disposal, credit and equity. And within five years, he took Micro Strategy from a $3.6 $6 billion company to 50 billion. So he was unable to grow it chasing revenue but when he worked on the treasury it went from three to 50. So us as individuals we can only work so hard. I can't increase my revenue. But that's what everyone tries to do. I need to work harder. I need to save harder. But we have assets. We have equity and credit. And if we want to go from three to 50 we can do the same thing if we focus it that way.

Absolutely. And again I I think it's really interesting Mark. Why do you think that it was so difficult for Sailor to break free? Because essentially, you had a 20 years of him going sideways. Credit to him for surviving the dot crash, right? But 20 years and I remember in so many of his interviews, he's basically, look, I tried everything and it just wouldn't work. Microsoft just would out compete me. It seemed like Bitcoin was really his breakthrough. And then one of the things that I remember in the Danny Nolles podcast that went pretty viral the other day, um he kept saying, he was like, "Look, like if you're a struggling company or if you just kind of want to get ahead and and you don't have a monopoly, this is a way for you to be competitive,

Right?" I think what people miss and uh I just recorded with Danny, we went into that and I gave him a more layman's term to try to answer the questions that he was trying to get from Sailor but couldn't. So I gave him layman terms that I think made more sense. Sailor just talks at a at a higher level. But anyway, back to answering that question. The problem that we have and you know this because you study this, but the fiat system is stealing from us, right, by inflating the currency. So the problem is is that the cost of living is going up faster than your income. So if you're trying to build wealth with income, you're always going to be behind because you can't keep up with the rate. Okay? Okay, so let's just say with some numbers, let's say the cost of living is going up by 10% a year, but your pay is going up by 3 or 4% a year. So you're falling behind, but your assets are going up by 30% a year. So the switch that Sailor's talking about to become more competitive is like you can't increase your revenue and profit margins fast enough for the rate of debasement that's happening. So you need to use an asset that can outpace that. That's what he's saying. And so for us individually, we can do the same. Now again, Bitcoin is a cheat code. Buy the Bitcoin, wait 10 years, you're going to have plenty of money. You can sell it off, you can die with zero, and that works. But that's terrible. Why would you want to die with zero? Why would you want to live poor? You know, modern portfolio theory tells you to save up for 40 years, sell 4%, hopefully you die before you run out of money. And I just I think that's a fiat mindset. And so what Sailor's saying is use Bitcoin to outpace that inflation and then we can build wealth and push that value forward.

What do you think is the actual inflation rate, Mark?

10%.

10%. So even if you just buy, you know, an index fund, the S&P 500, you're you're underwater.

So why would I say 10%. So you know, I would look at the the original and what I consider the real definition of inflation is the money supply increase. So uh inflation is always a monetary phenomenon, right? Um and so when you think about even the term of de inflation, if I what does that word even mean? So if I inflate a balloon, what does what does that word inflate mean? I'm increasing the volume of air in the balloon. So inflation is increasing the volume of money. That was the original definition. Around the 1950s, they started to change that to CPI or consumer price inflation. And uh Von Mises was very vocal in this period. And he said, "Hey, hey, watch what they're doing. They're trying to change the definition of the word." And he warned us of that. And the reason why they wanted to change it as he told us and now we see it today is because if we if we tie it to CPI, price inflation, well, we don't know why. Why do some prices go up and some prices go down? It's certainly not the money. And so then they can distract us. And now today, uh, in the last presidential election cycle, inflation was probably the hottest debated topic, but nobody understands it because they've changed the definition. We can't really tie it back. So anyway, if it's the money supply, then we just look at how fast is the money supply rating going. Now, since um I think 2008, it's gone up by about 8%, but since about 2020, it's been going up at 10% a year. That's the number. We can also look at another way, and this is a little bit different, but gold today is at 4600 an ounce, which is insane, which means $1 represents 14600th of an ounce of gold. In 1913, when the Federal Reserve was created, it was 120th. So, that means in 113 years, it's gone up by 5% a year. So you could say 5% a year, but the problem is it's accelerating. So it's 5% a year for 113 years. It's about 10 10% for the last five. Man, that's first of all, again, it's absolutely crazy because everybody who's been thinking that they've been getting a return have not been getting a return whatsoever. They've just been literally treading water at best. Um, but again, let me break that into math. So at 5% that means every 40 every 14 years your money gets cut in half. So if you're 25 years old, you get out of college, you start your career, and at the at the time you're 25, you start saving, you save a million dollars by the time you retire, it's worth 130 grand. If you save 2 million, it's worth, you know, whatever, 230, 240. So like, you understand like it's stealing so fast. And so that's why half of baby boomers today have zero. And of the half that do have money, it's an average of $240,000. That's wild. That's wild. Now, uh, Mark, one of the things that really stuck out to me in the document that you sent me is the strategy is to build a personal Bitcoin treasury with layer liquidity, cash for safety, cash equivalents for stability, Bitcoin as the core engine, and a higher beta Bitcoin business or treasury companies. You also said that part of your thesis was this treasury thinking which is the same frameworks that institutional uh that institutions use. What do you mean by that? And what can Bitcoiners do today? What would what would be the advice that you would give to Bitcoiners? Because I said all of this stuff most of my audience is like all right stay humble stack hats. What would be the advice that you would give to, you know, the everyday Bitcoiner to uh to implement this thesis so that they could actually truly build wealth?

Yeah. So, stay simple uh stay humble, stacks, great advice, everyone. Again, it's a cheat code. You can just buy Bitcoin and you can outperform Wall Street, private equity, venture cap. You can just do that and then you can sell it off little chunks at a time and you probably won't run out of money because it's compounding faster than you're selling it depending on how much you're spending. And that works, sure. I'm a surfer. I'm from Southern California. Most people haven't ever gone swimming in the ocean when there's big waves. And they probably shouldn't because they could drown. If you wanted to surf, you wouldn't go to like Pipeline in Hawaii and jump out into 30ft waves because you'll probably drown. But yet there's hundreds of people in the water there every day surfing having fun. So the reason why I bring that story up is that the first thing that people hear when they hear this, especially Bitcoiners, is Mark, isn't that risky? Are you saying that I should use debt? Are you saying that I should use leverage because what if I get liquidated and what if I lose my money? And Dave Ramsey said that I should never use debt and I should never use I should pay off everything. I should pay off my house. Mark, what you're saying sounds extremely risky. Sure, like going in the ocean is extremely risky, but I could learn how to swim. I could put on a life jacket. I could make sure there's a lifeguard there. I could have a jet ski follow me. And so we can derisk the situation. So the first thing I would say is we have to understand that there's never an absence of risk. There's only difference of risk. An easy analogy would be if I go to the gym because I want to get in shape, it's risky. I could get in a car accident on the way there. I could uh get in a fight when I'm there. I could drop a weight on my head when I'm there. That's risky. I could hurt my shoulder lifting overhead. So, I'm not going to go to the gym because that's too risky. So, I stay on the couch. But then I get obesity. I get heart disease. I get cardiovascular disease. So, there's always risk. So the risk is you either learn how to leverage the fiat system and use credit and equity, the treasury model, or you try to save your way and that's guaranteed loss. So what do we do you want to break down the treasury model?

Keep going, man. Keep going.

So the treasury model is basically just like what Sailor did and it's what the wealthy have been doing forever. The problem is that these tools have only been available to the 1%. Bitcoin is the cheat code that allows all of us to do the same thing. So what the wealthy have always done, so let me the traditional path that everybody's on is go to school, get good grades, save for 40 years for retirement, and one day have enough money to sell, right? So what they do is they earn, they pay taxes, they live on whatever's left, and then hopefully save a little bit and stack a couple sats. What the wealthy do is they make income and buy assets, don't pay taxes on that, and then they have the assets pay for their life.

Are you saying this is a viable strategy for most people?

Everybody could do this, and I can break it down for you. Break it down. So, you have to make This is not how to make money. You need to figure out how to make money and and get credit. If you can't figure out how to get a credit card, just end the podcast right now. So, let's say that you're making $100,000 a year. you know how to get a credit card, you have a home, you have a business, whatever. Okay, so step number one, whether you're 100,000, 100 million or whatever.

Wait, wait, Mark, hold on. Sorry to interrupt you. Now I'm connecting the dots. Now I understand by the jiu-jitsu uh the jiu-jitsu analogy that you used. Now it's all coming together in my mind.

What I said was a judo because judo is about like throwing your opponent, right? So what happens is when you attack me, you have energy moving towards me and I would transfer your energy and throw you using the very system of credit against the system itself.

That's a speculative attack.

So what happens is in the game of building wealth, the two main penalties that we have to deal with are taxes and inflation. So taxes steal half of our wealth and inflation robs us 10% of our wealth. So we have to offset those two things. So how can we minimize that? So, step number one, if I make a $100,000 a year and uh let's just say 40% tax rate, depending on what state you're in, whatever, uh for easy numbers, I'm not good on the fly with my math. So, 40% tax rate. So, I make 100 grand, I pay 40,000 in taxes, I have 60,000 left. I live off 60,000, which is tough. And hopefully, I save a couple I stack a couple sats. Okay. So, what step number one would be would be to access credit and I would use that credit to buy an asset that gives me tax depreciation. Now, I use credit. So, there's no money out of my pocket because I don't have any. I'm broke. I'm barely stacking sats. So, I use some credit that gets me an asset that gets me tax depreciation. And let's say that I get $20,000 of tax depreciation. So, now instead of um ending up with 60,000 after taxes, I end up with 80,000 after taxes. I have an extra 20,000 without working a single extra hour, without working harder, and I just made an extra 20 grand, which gets me more sats. So now I buy $20,000 worth of Bitcoin. Next year I do the same. The next year I do the same. When in five years without m without working an extra single hour, without making an extra single dollar of stacked $100,000 in Bitcoin, and that's not accounting for any appreciation. All right. So now I've gotund 100,000. You're following me. I didn't work harder, but now I've got a treasury that's being built up. Okay. Then I can start to leverage the treasury to get more tax depreciation.

Okay? and I can use the treasury to now pay for my living expenses. And the goal, let let me fast forward to the end goal to connect the dots and I'll stop. But the end goal that we want to is, as I already said, is I want my earned income to be offset. So there's no taxable amount. And 100% of my earned income goes into Bitcoin. And then I leverage my Bitcoin to pay for my living expenses. And that's taxfree because I'm using debt to do that.

Man, this is this is first of all, this is blowing my mind. Um, and again, I I want to I want to talk about the judo aspect of it, right? How is it a speculative attack on the system?

Yeah, because I'm using cheap credit, cheap fiat credit to buy a harder asset. So, I am using both the cheap fiat credit system and the tax system to lever up and stack a giant Bitcoin treasury. So, I'm speculative attacking using credit buying using cheap money to buy a harder asset. And you said it's exactly what Sailor's doing. Sailor is borrowing stretch the iPhone moment. He's paying 11% yield today. So, he's borrowing money at 11% to buy Bitcoin. Most of us can get money for cheaper than 11%. And we can buy Bitcoin. I could borrow against my Bitcoin at 10% and buy more Bitcoin. I'm getting money cheaper than Sailor is. We can all do the same thing.

Okay. So, but but what's the downside here? What's the downside risk?

The downside is if you go to the gym, you can get in a car accident. You could drop a weight on your head. You could hurt your shoulder when you lift weights. The downside is if I go in the ocean, I could drown. So, what can we do to mitigate that? That's the That's the right question. The question again is not it's risky, I shouldn't do it. The question is, but I want to surf. So, like, how do I just learn to swim, man? Right? So, okay. So, we want to mitigate the risk. Now, Sailor just built up a $2 billion cash war chest. He is now has multiple levels of security before he'll ever have to sell his Bitcoin. So, for example, most of the the debt doesn't even encumber the Bitcoin, right? There's actually no forced mechanism to even get him to sell. So, how could we derisk the situation? There's no absence of risk, but we can derisk it. So, a couple things we do. Number one, we want to understand that liquidity and cash is not the same thing. I'm sure you've talked plenty about Michael How and uh you know uh Nick Ba, shout out to the Bitcoin layer. They have a beautiful global liquidity um lay um um model as well, right? But how do they come up with global liquidity? So, it's a proprietary model. So, that's why they had to build their own. And it's not just M2, it's the total amount of available credit that could create more money, right? So think about this. So we don't want to think in terms of cash. We want to think in terms of how much liquidity do I have. That's step number one. Cash and liquidity. Cash is liquidity but liquidity is not cash. Copy me? Okay. So we want to understand liquidity from four layers. Number one, I need to have my level one liquidity is my operating capital. So that's my total monthly expenses in including all my debt service. Everything I have to pay monthly. What is that? And then how much of a buffer do I need? One month, two months, three months, six months. Now, how do I come up with that number? It depends. If I'm a sales rep and my income is very lumpy, I probably and and I have high expenses, I probably want three to six months. If I am a government contractor, I get paid every single week like clockwork and I and my expenses uh are low, then maybe one month is fine. Okay? So, you have to figure where that layer one liquidity is important for you, one to three months. Okay? Level two liquidity is like cash equivalence. So this would be money market short-term treasuries making 5% it's stretch making 11%. So then I want to have some money in liquidity layer number two and that could be and this is money I could access in less than 7 days. So if I had a margin call, if something happened, I can get money quickly to solve that problem. So if I'm drowning, there's a lifeguard that can throw me a raft. Okay, liquidity layer three is then assets that I can get liquidity against, but it might take me weeks to months. A home that I could refinance, I could pull a home equity line against it, um stocks in my brokerage account that I could take a margin loan against, Bitcoin that I could borrow against. And then the layer four are assets that are non-liquid. So, I bought a a lot in Mexico. I can't really get liquidity out of that. So, I need to make sure that step number one, do I know how to swim? That's the operating account. Step number two, um, do I have a life jacket on? That's my short-term liquidity. Step number three, do I have a a lifeguard watching that could throw me a line? That So, that's the first step. Does that make sense?

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Again, I'm coming from the traditional Bitcoin uh mindset, but you're basically it's it's a layer it's a it's a layered system um that allows you to essentially not only live off your Bitcoin, but accumulate more Bitcoin. And it's also a system that allows it it becomes multigenerational. So this is something that you can pass on to the next generation. They can implement this themselves and rather than like the traditional, you know, uh the saying which is like within two generations, you know, they gone, the money's gone. Um you're building a system, you're leveraging Bitcoin in order to just, you know, create this flywheel. That's what I'm seeing.

I call it I call it a perpetual Bitcoin machine. So I literally have the government buy my Bitcoin for me.

Okay. So what does that mean? How go into that please?

Um isn't it just a matter of time before people realize what you just said that there's a better mechanism there's a better strategy they can implement no pun intended there is.

No, absolutely. I mean I completely agree on on the scarcity aspect of it but I do also see it like as if you are a property owner and you own multiple properties now there's a superior investment of which you don't have to pay property taxes you don't have to pay maintenance on and I think but but here's what's missing and this is what I want to fill in the blank for here's what's missing if I'm that real estate guy and to To your point, I have to pay the maintenance and I have to deal with all the issues, right? But at least it provides me some cash flow. Sure, Bitcoin should appreciate faster if I if I believe that. I do obviously, but not everybody is. I believe it will appreciate faster, but it doesn't provide cash flow. And I need money to pay my bills every month. And this is where Bitcoiners lose this. They they when they when they they don't understand what Sailor's doing. They don't understand where how big digital credit is. They can't even wrap their head around it because they don't really understand the the real world. And the real world is you're 78 years old. You need money, like actual dollars every month to buy your freaking medication, man. You got to pay your electricity bill. People need income. And so digital credit solves income. Bitcoin doesn't. Bitcoin is an asset and Warren Buffett would say it's a nonproductive asset. So the first thing is and getting deeper into the treasury, I have to understand what assets do I own and then there's four categories I put those assets in. And Bitcoin is a nonproductive asset. That's why just like gold, that's not a bad thing. So, how do I take a nonproductive asset when I need income? So, I'll buy the rental property. It's not going to appreciate as much, but it gives me the income. But what I'm saying is I can turn Bitcoin into an income asset. I can take a non-productive asset like Bitcoin and turn it into a productive asset to replace real estate by harvesting the appreciation through debt leverage, not by selling the asset. Now if if real estate investors can catch on to that like I used to be a real estate investor then to go oh so Bitcoin doesn't have tenants there is no maintenance it appreciates faster and I can get income from it tax-free income at that because income from properties is taxed so now no maintenance no headaches I can move it wherever I want it appreciates faster and I get taxfree income I'm all in

Mark how complicated is what you said you mean borrowing your Bitcoin

Pretty dang Easy. It

It's just as simple as that. It's borrowing against your Bitcoin, being very careful with the the margin aspects of it. It's just that simple.

Yeah. And and and Nico, uh, there's always risk. How do I manage the risk? If I borrow 10% LTV against my Bitcoin, what is the probability I get liquidated?

Very low.

Like single digits low.

Very low. Because you can always just put on more put put up more collateral.

But at at 10%, what's the odds I'm going to even get a collateral call? Because extremely I mean unless unless Bitcoin goes to 10K it's it's like extremely low.

And what is the odds of that? Minimal at this point.

Single digit.

Yeah.

Okay. So what about So if I borrow if

But where but where are you going to get 10% LTV?

I would No. If I had $100,000 in Bitcoin, I'd borrow 10 grand. That's a

Of course.

I'm connecting the dots on the show, Mark. Okay. Now, okay, this is it. Now I understand when you're saying, "Okay, so the the judo analogy makes sense now. The perpetual Bitcoin machine."

I think I finish that. I think Let me just finish that.

I'm It's I I'm having explosions in my brain, Mark.

Most people are willing to go get a side hustle or a second job, but your money is only going to do one.

No, no, no, no, no, no. My money is going to do three or four jobs. I'm going to do a job. Why do you think most Bitcoiners think like savers when Bitcoin actually rewards the Treasury?

Absolutely. Now,

Which would you rather, stack sats or Bitcoin?

Stack Bitcoin, man. I just I'm I'm I'm digesting.

And and if if I might throw out, uh, we might have a moral obligation to stop funding daycare centers.

I mean, that was crazy, wasn't it? That was crazy. That was great.

We might have a more obligation to stop doing that.

Trying to cover it up. Wh why why do you think like where are we in the movie? Like I'm seeing like from my uh from my perspective I'm seeing like this feels like end of empire type of days.

There's a Has it has it always been that way?

Uh no, certainly not. Certainly not. Um I think

Or was it social media that uncovered that the legacy media isn't actually in the business of telling the news?

Right. Like they can just recklessly spend. They can recklessly debase. Um Elon tried to get in in there in the beginning of the year. They literally ran him out of town.

years old. He just creates. All billionaires are still working today, not because they don't have enough money, because they're creators. So, there's always going to be people who have created more than they've consumed and want yield. And there's always going to be people that need to borrow money. So, there's always going to be people that want to borrow. Hey, I need to expand my factory. I need to build this new plant. There's always going to be a demand for borrowing. And there's always going to be yield available. That Bitcoin doesn't change that.

Now, we would lend from our savings, not fiat money that we print from thin air. Bitcoin changes that, right? So, can we agree on that? Okay. So, number one, we've established the biggest market in the world is the fixed income market. There's always going to be a demand for yield. Now, currently, the bond market has created yield instruments on a dollar standard. What Sailor's doing is he's creating yield products on a Bitcoin standard.

Now, where where I believe some of the misunderstanding between Danny and and Sailor were was what what Danny was asking, I believe, was two questions. Number one, when the if or when the MNAV drops below one, why would it ever come back? I think that was his main question he was trying to get to. And number two, why why why does there need to be more than one micro strategy? Like how many can there really be? Are those the two questions?

>> Those are those are the two questions. I love the answer to the second one, which is like look like if you're in Brazil, you don't have access to the American markets, right?

>> That's that's like so small. That's barely scratching the surface. So, let me answer those two questions.

>> I hit it.

>> Okay.

>> Wait, let me let me ask you let me ask you a a a question before that. Mark, again, I've been in this industry for 10 years. I would like to think that uh I know what I'm doing, right? I have I have a business. I employ 15 people. Why is it so difficult for me to understand this?

>> Yeah. Um because you've never two reasons. Number one, you've been living life on a pre-programmed track that everybody goes down because since you were a little kid in school, they asked you what do you want to be when you grow up? Not what do you want to do?

>> I dropped out of school and I became an entrepreneur at 22 years old.

>> Yeah. So um so that and then we were just taught to just save save and then retire one day. And then the second reason is most of us don't have people around us that we can see doing something different. So, uh, the story of the four-minute mile is that humans thought it was impossible to run a 4-minute mile. Um, but as soon as one person did it in a short period of time, then multiple people started doing it. So, the very fact that someone else could do it, the very fact that I can see someone else do it, then all of a sudden makes me believe I can do it. And most people just don't know billionaires and you just don't know how they build wealth. And so, you just haven't seen it. Your parents are not good. I don't know your parent. Well, I just met your mom. Uh but like my my parents, most of our parents are not good role models for this. If you want to get in shape, you talk to somebody who's in good shape. And if you want to build wealth, you talk to someone who build wealth. And most of our parents are not that. So the model that's been set for us, the education system that trained us and what we've seen on TV and the news, etc., has not trained us. And we don't have access to the billionaires.

Really where my mind started shifting on this was about 10 years ago. But where it really got kicked into gear was in 2021. I left California, went to Puerto Rico. Partly because California was locked down. and I was tired of being locked in my own. Part number two was the tax situation and I was speaking at a bunch of conferences and uh I spoke at several conferences with Robert Kiyosaki, you know, on the same stage and he would call me out from stage. These guys like Peter Schiff and Mark Moss, they got to move to Puerto Rico to get out of taxes. Doesn't don't they know that we don't pay taxes? Donald Trump doesn't pay taxes. Robert Kiyosaki doesn't. And and I've got to know Robert Kiosaki, our friends are now. And I'm like at dinner I'm like, "Okay, Robert, break it down, dude. Like, break it down for me." Right?

>> Because they take loans against their assets at very low interest rates.

>> They use depreciation to write off against the income.

>> Okay. But now, now that this is getting out of the bag, wait, no, let's take it back to let's just let's go back to to to the Danny and Sailor. Go back to the

>> So, the two key questions.

>> So, so do you want to answer the MNAV first and then we'll get to why there can be 10,000 or 10 million of these companies?

>> Yeah. So, let's talk about the MNAV first.

>> Okay. Let's talk about the MNAP first. So, first of all, there's a gross misunderstanding of the global financial system and different types of businesses and funds and all of these things. And so, to ask that question shows that you don't I want to be careful. I love Danny. I just ripped with Danny. We we talked about this. Uh most people that ask that question don't really understand what they're asking. So, two reasons why. First of all, why would it trade for less than one times MNAV? So, there's a truth. If if you and I both buy one Bitcoin and Bitcoin goes up 5x, who makes more money?

>> The person the same.

>> We just Yeah. The same. Why? Why? Because we both bought one Bitcoin. Yeah. Right. Okay. If I borrowed 50% of my Bitcoin value and bought more Bitcoin and you didn't and Bitcoin went up 5x, who made more money?

>> The person who borrowed

>> the leverage.

>> Yeah. Of course.

>> So, we can establish that if I use leverage, I will outperform people who don't. Yes.

>> Okay. So, what's Sailor doing?

>> He's using leverage.

>> Using leverage, right? So, his goal is to get a 30% leverage ratio, right? So, he he has his charts. He shows if Bitcoin averages a 30% ARR and I do a 30% ratio of leverage and I pay out no more than 10% coupon yield, um, we'll do a 2.8 times factor. It's math. It's freaking math, bro. So, if if I if I lever my assets up 30% and Bitcoin goes up 30% and I don't pay more than 10% on the debt, I make a 3x return. So what he's doing is he's levering the position. That's why it will outperform Bitcoin. Now why will it trade for more than one times? Then we have to also understand the actual financial system. So there are what's called close-in funds. Close-in funds are sort of like ETFs. They're like rappers, right? They buy assets. And then what I can do is I can buy into that basket of an ETF. I can buy into that that fund. There's about there's about a thousand funds in the United States that are sort of like these business development fund corporations or or some sort of funds right now. Why why is there a thousand? Why isn't there just one? I don't understand that. Why do we need more than one fund? I So why do we need more than one treasury company? We're going to come back to that. But just that even the line of thinking, why would we need more than one fund? Why do we need 10,000 ETFs, Nico? Like why isn't one ETF an like okay we'll come back why do we need 32 flavors of ice cream can't we just have vanilla actually why do we need 30 flavors of vanilla oldfashioned vanilla vanilla bean like how many flavors of vanilla like okay we'll come back to that but so there's all these types of funds now we have ETFs ETFs are like a rapper where I put a dollar in they buy a dollar of Bitcoin now that that ETF should trade below one times NAV because I'm losing money because they're taking fees. They're doing no operations to grow that. Okay. Now, I don't think that's a good a parallel. A better parallel to compare a Bitcoin treasury company would be a bank is a better parallel. It's not the best. I'll tell you what the best is, but it's it's better. So, what a bank does is a bank receives deposits. It pays you a yield for the deposits. It invests the money and it makes the difference. Sort of like what Sailor's doing, right? So he takes the money, he pays you a yield and he invests the money into Bitcoin. So sort of like a bank. Now a bank would typically trade between 1.5 to 2.5 Zimnav. Why? Because they have an operating business that can apply leverage. Depending on who the management team is and their connections and JP Morgan, whatever, it's going to trade at a higher premium. If it's a bad bank, a local community bank that can't really do much, it'll trade at lower premium. But it's always going to trade one and a half to two and a half times. So why would it ever trade for more than one times? because that's what these types of businesses do. But a better a better parallel would be like another asset heavy type of business like a like a gold mining company. So a gold mining company has gold in the ground. It's assets, right? Um but it's an operating business that's bringing the gold out of the ground, but it gets a better premium because it's got gold and gold's going to be worth more in the future. So because gold will be worth more in the future, I'm going to give it a three and a half times. Well, they they don't trade it at MNAB. They trade it a book value. Okay, it's the same thing. So when I look when I understand the world and I go, well, what what's a parallel? Well, I understand an asset heavy business that uses the assets of the business and provides some sort of operational leverage should trade somewhere between a two and a half to a three and a half times. So I believe that Bitcoin is better than gold. I believe it's going to go up more than gold. So if a gold company like Bareric or Pneumont for example, if they're trading it three and a half times, then certainly a Bitcoin company should trade it three and a half times if not more. When I did an interview with Sailor, we we went down this path. He said he thinks the minimum should be a 3x. But then why does it go down to 1x or below? Because it's a freaking market, man. Like like an ETF or a closed-end fund should always trade a little bit below NAV because of the fees, but sometimes they trade way over because it's a market. And then people can arbitrage the spread and they can do things like that. So, so first number one I would just understand one. So to recap, number one, because there's leverage, it will outperform Bitcoin. That's just math. Number two, because of the operating company, the better the company, the better the team, the more I believe in the safety and the team's ability to use intelligent leverage without blowing up, I get a premium. And if I compare it to a bank, 2x 2 and 1/2x, or a gold company, 3 and 1/2x, that's where it should be.

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So, and I as a Bitcoiner, advocate for self-custody, Mark, you've known me a long time now, right? I'm, you know, cookie cutter Bitcoiner, right? Stay humble, stack sats, put into self-custody. I completely agree on the leverage aspect. Why? Uh, we saw this before. Sailor's been in this position. This is what people forget about this cycle. 2021, 2022, what happened to Micro Strategy? It got absolutely hammered, right? It reached an all-time high. I think it was down to 08, right?

>> Yeah. It it it got hammered. The stock got absolutely hammered. And then what happened? What happened in this previous cycle? It 30xed. So I 100% agree with the leverage uh uh aspect. I do think that once the price starts picking up again,

>> a micro strategy will outperform Bitcoin because of the reasons that you laid out. So that's topic one. That's question one, which is the MNAV aspect. the topic too which is what Danny was asking which is why are there so many treasury companies

>> maybe thousands or tens of thousands

>> why is that why is that necessary so um I do want to just say real quickly um two two things I had dinner with Sailor when I was in Prague a few months ago um awesome con conference by the way Bitcoin Prague go there if you can um and uh two things that he said there so one he said that people two well let me answer the Bitcoiner for it he said I've never targeted Bitcoiners. I I've never wanted Bitcoiners to buy this. I've never received money from Bitcoiners as far as I know. And so, let me ask you a question first. Um, Black Rockck has now started saying they may recommend Bitcoin for portfolios. We see like big big names like Paul Tudtor Jones talking about taking small allocations. What percent of people do you think have at least minimum of a 5% allocation to Bitcoin? extremely small, minute,

>> like 1% or less than 1%.

>> Okay. And and that's to take a 5% allocation, which we would consider pretty bullish, but

>> even so even those people that would reach that point, less than 1%, those people are pretty bullish. They did a 5%. They still have 95% not allocated to Bitcoin. And the reason why I bring that up is because you and I, we say, will this beat Bitcoin? And if not, then I'm not doing it because Bitcoin is my hurdle rate. And that is the right question. I believe that we should all be on that. Bitcoin is the hurdle rate. If it can't make more than Bitcoin, then don't buy it. Okay? But less than 1% of people even have 5%, which means 95% is not allocated to Bitcoin, which means they're not asking will it beat Bitcoin. What they're asking is, will it beat inflation or will it beat the S&P 500? That's all they're asking. And so for them, MSTR or whatever Bitcoin treasury that you want to fill in the blank with, they're not saying will this beat Bitcoin, yes or no, that they're not asking that question. And so for again, we we take this Bitcoin or lens into it. These are not products for Bitcoiners. Yes, just buy Bitcoin and put in cold storage. You don't need Bitcoin treasury companies, but that's not who they're going after. And then we'll get to the weather. There's 10,000 of them. So, oh, but I was going to say one more thing. So Sailor said uh so he said that and then he also said uh what what people want is MSTR to be a more volatile version of Bitcoin. You hear him talk about volatility is vitality, right? So they want it to be more volatile. So Bitcoin or Micro Strategy is one of the most heavily traded stocks. People love it because the the volatility, right? So professional investors love volatility. Uh most people think volatility is bad. They love it. Okay. So what they want is they want Micro Strategy to be two times volatile to Bitcoin. So if Bitcoin, we talked about it going up by 2 or 3x, right? So if Bitcoin goes up 2x then Micro Strategy should go up 4x right. But what it also means is if micro if bitcoin goes down 2x then Micro Strategy goes down 2x. So he said he gave us this story. He said um imagine imagine tonight in my sleep God comes to me and God says hey the market's going to crash tomorrow. And so I wake up and I hedged the positions of Micro Strategy. And sure enough the markets crashed but Micro Strategy didn't cuz I hedged the positions. He He said, "That'd be great, right? Right." No, it'd be terrible because the market needs me to be dependable. The market wants me to trade two times. If somebody doesn't want two times exposure, they'll hedge their position. They don't want me to be irrational. So, I'm going ask a rhetorical question. How much did Bitcoin drop by? About 30%. How much did Micro Strategy by? 60%. Two times volatile to Bitcoin. Isn't that exactly what we buy it for? a more volatile ver. So it's like like what did you buy it for? What were you expecting? It did exactly what you're expecting. Uh anyway, that's a sidetrack.

>> No, not a sidetrack. I mean, it is a sidetrack, but it it it hits the nail on the head. And it also to me it highlights that Bitcoin Twitter is not reality. It's not the markets. And I think us Bitcoiners um we we operate in a little bit of an echo chamber. Yeah. Right. Um, I I I think the the example that that you laid out, which is like look, like this was a product that was never designed for Bitcoiners. This was a product that was designed to tap into different pools of capital that otherwise would have no ability to get exposure to Bitcoin whatsoever. And I love the comment that you that you pointed out, which is like a lot of these people are really not they're not interested in outperforming Bitcoin. what they're really interested in is outperforming the S&P 500, which is why they would buy something like Micro Strategy itself. Now, I do want to focus on the second question, which is why are there so many so many treasury companies? 10,000 of them.

>> Yeah. And and is that necessary? And will it get to a point where we'll see a consolidation?

>> Yeah. Okay. So, this is the this is the good part. So, we've already made the case and we agree that the fixed income market, the demand for yield is the largest market in the world. There's about $300 trillion of fixed income. About 145 trillion of that is tradable securitized fixed income. 145 trillion. Um, that's the demand for yield. And as I said, currently it's the bonds are on a dollar standard. So what Sailor's doing is he's taken Bitcoin and built up a Bitcoin war chest and he's now that's he calls digital a digital capital and he's created digital credit on top of that. Okay. So what he's done is launched preferreds, right? Preferred strike strike stride and stretch by stretch is uh stretch is a they're they're all perpetual. So they're not termed they're perpetual. And they're different in far as their seniority, the yield, and then potential upside. Okay? I don't want to get into the details of that. You can if you want, but um they're preferred, meaning they're equities, meaning they're stocks. But most of the world that wants yield buys bonds. So funds that buy yield buy bonds by mandate, they can't buy equities. So most of the market can't even buy what he offers. So, so just by that alone, Sailor's like, he told me uh on the interview I did with him, he said, "You could make a hundred billion dollars just doing a 30-year bond. I'm not going to do it. You should do it. You could make a hundred million on a 10-year bond. I'm not going to do it. You should do it." So, let's just think about bonds. So, Apple or Google sells a bond and then they use that money to go build a new data center, right? Apple has a bond, right? All these corporations say sell bonds. That's debt. There's 10,000 bonds available in the US. I can buy an LA County municipal bond. I can buy an Orange County municipal bond. Why? Why does LA have one and Orange County have one? Why would I buy Why would I buy an LA County municipal bond or an LA County water municipal bond? Why Do I need a LA County water one and an LA County one and an Orange County? Why? Why? Why can't there just be an LA one? I don't understand. Each one has a different risk return profile. They have different risk return profiles. Uh I don't know. Orange County went bankrupt once before, so I don't know if they're as good, but they do pay a little bit better yield, but I'm going to put a little bit towards that. But I'm going to also get some LA County because I think they're safer. So, I'm going to do a little LA. But I also like the water. So, okay. I'm going to get a little of those those couple bonds, but Oh, shoot. But the water one's only a fiveyear. I kind of want a 10ear. So, I'm going to get a little bit of the 10 year. like, bro, like and and and and so there's like there's 10,000 bonds, man.

>> It's different flavors for what you're looking for different use cases. So, you want to fix your car. I got a professional tool chest right here. You're like, Mark, hand me a tool. Okay. Did you want a hammer or a screwdriver? Like, what do you want? So, professional investors, allocators, think about, I'm trying to solve a problem. what tools do I need to help me solve the problem? And so then we build different financial products to serve different use cases. And again, most Bitcoiners just don't understand this, and that's fine, but like what what they also don't understand, most Bitcoiners probably caught this a little bit, but they hadn't really thought deeply about this. You remember when uh three banks collapsed in 2023, and what caused their collapse was a duration mismatch, right? So, they were locked up in 30-year debt, but they needed short-term liquidity. So they had a mi remember I talked about three layers of liquidity. They had a liquidity mismatch. They needed more short-term but they had it all longterm. Okay. So the way that the financial world works is we time duration. So most of the world has six month five year. How long is your auto loan? Five or six years. How long is your home loan? So we have term debt. Okay. And I match my liabilities and my assets and I try to match the duration. So Sailor has perpetual products. What do I do with that? My debt's 10 years. I just need a 10-year bond. I don't I don't even know how to price or use a perpetual. But it's not even a bond. It's a it's an equity. I can't even use an equity. So like there's a market for 10,000 bonds. And that's just in the US alone. We haven't even gotten to Brazil and the UK and every other currency. We're just talking about the US. There's 10,000. Let me give you another example why there could be 28,000 or 50,000. Nico, um, do you have insurance?

>> Of course.

>> How many types of insurance

>> for the car, for the house, for medical? Yeah.

>> For disability. Why do you need all those types of insurance? Why not just one?

>> Uh, cuz the house insurance ain't going to.

>> So, how many how many companies in the world offer insurance?

>> So many.

>> How many? Tens thousands.

>> Thousands and thousands. Like AIG was like the too big to fail in 2008, like the biggest Warren Buffett has insurance companies. Why not just Warren Buffett's insurance company? Why do we need all those insurance companies? We need competition.

>> But but we need thousands of insurance companies. Like why not just one insurance company? I mean because they're going to offer different prices.

>> But Nico, man, Warren Buffett's insurance company is the biggest and it's the most well-backed. So why wouldn't everybody just choose Warren Buffett? Maybe not everybody could afford Warren Buffett's insurance.

>> I'm making my case.

>> Yeah. Yeah. Absolutely.

>> So there's 10,000 bonds and so each company can create a security. They can. So right off the bat, you have equities and bonds right off the bat. Then you have a hundred different terms of bonds. And then each of those bonds is different risk return profiles. And I'm going to use them all differently for different types of debt that I have and different income needs. And then I l So then we can get into more complex financial engineering, but then we do lading of bonds. So then you start lading them so they all come due at different times. Like there's all types of strategies and I need all these different tools and um and then there's different products and there's insurance products and there's and and then there's there's like insurance companies sell income products. They're called annuities, but that's different than a bond yield pro. big pro.

>> I mean, I think you answered it perfectly and the uh the first part um you hit the nail on the head. It's just look micro strategy is a form of le it's it's a leverage on Bitcoin. Um and leverage on Bitcoin means that when price of Bitcoin goes up, everyone's celebrating, but when the price of Bitcoin goes down, it's going to be twice as painful.

>> Leverage cuts both ways. and the explanation on why there has to be so much uh so many uh Bitcoin treasury company because everyone has a different risk profile. Everyone wants a different flavor um and there's different opportunities in every single uh Bitcoin treasury company. And not only that, there's the jurisdictional aspect of it, right? If you live in the UK, if you live in Brazil, you might not have access to American capital markets, right? And not only that, the free markets are going to do what free markets do best and the Bitcoin treasury companies that aren't run properly are just going to go out of business, but those are the ones that probably have bigger risks if you want to buy them, right? So, I think you answered that question perfectly and I think again the clash here and this is why the that podcast was I think it was like a pivotal moment in Bitcoin's history uh because it was a reality check. It was kind of like a reality check of like what's going on and how Bitcoin has matured and how Bitcoin has changed and how Bitcoin is becoming part of the traditional financial markets. And again, for Bitcoiners that have been used to living outside of that for most of the careers, myself included, um a lot of this stuff we just we didn't even we didn't even realize it it existed, nor did we realize should we use this, right? I've gotten to a point where again I have a business. I have to make payroll. So borrowing against your Bitcoin that that's obvious, right? It's it's an obvious thing. Uh Bitcoin appreciates as time goes by. The amount of collateral that you that you need in order to fund that loan. Over time, you're going to be able to pull that collateral out, right? So, um, for me it's it's it's become obvious in that sense, but I think you're much deeper down the rabbit hole in terms of the the system that you've built, uh, for for basically for you to accumulate more Bitcoin, for you not to have to sell your Bitcoin. And that to me is fascinating. And when I asked you the question like what do people need to do to get started, you basically said like, look, you just borrow against your Bitcoin. But it's not as simple as that. I said I said use credit to offset your taxes first.

>> So could you if 101 they're tuning into this podcast or like Mark Moss is literally talking about a perpetual Bitcoin machine. What the f is he talking about? Could you break it down? Like what is step number one? Then what is step number two? Then what is step number three, etc., etc.

>> So I'm going to give you step by step from the beginner level, but what I want to do is tell you where the end goal is first. So I'll give you the goal and then I'm going to build the map. So the end goal is get to a point where 100% of my income buys Bitcoin. 100% of my income buys Bitcoin taxfree. So I'm not leaking 40% to taxes. 100% goes into Bitcoin which means I can buy more Bitcoin. And then what I'm doing is I'm using debt off of my income to live off of and that way I don't pay tax on that money either. All right. So that's the end goal. I I uh 100% of my money goes into assets and my assets pay for my life. All right. So that's the end goal. How do we get there? Step number one. Um, because I'm staying humble, I'm only able to stack sats because, right, that's kind of funny. Because I'm staying humble, I can only stack sats. If we get a little more aggressive, we can stack Bitcoin. So, what step number one is I have some credit available to me from somewhere, whether I borrow against my existing Bitcoin or I go get a credit line or a credit card or whatever. I borrow from a friend, a family, I get a home equity line, whatever. I get credit. First thing I do is I buy something for tax depreciation. It could be a piece of real estate. It could be a solar credit deal. It could be an oil and gas deal. Or it could be a Bitcoin miner. Okay. So, first thing I'm going to do is I'm going to borrow a little bit of money off a credit card or credit line. I'm going to buy some Bitcoin miners or some sort of depreciation. And I'm going to offset some of my income, whatever I can afford. If I can get 20,000 of credit, I'm going to offset $20,000. Um, and then let's say, so $100,000 paying 40,000 to tax, I have 60,000 left over. Now, instead of paying 40,000 tax, I only pay 20,000 tax. So, I I made an extra 20 grand that was normally going to go to the government, now I get to keep. So, step number one, credit to get depreciation, I end up with more money. I take that more money and I buy more Bitcoin. I buy more assets. Now I rinse and repeat on that until the asset base gets a little bit bigger. That now I can continue to borrow against my credit lines and my asset base to offset my income and also to start augmenting my lifestyle spending. So now it's offsetting my my taxable income and it's also paying part of my bills. And I continue in that hamster wheel in that rinse and repeat flywheel until the asset base gets big enough to now buy depreciation to offset 100% of my income and offset 100% of my living expenses. And at that point, I've broken free of the system. I'm out of the rat race because remember, my income cannot keep up with the pace of inflation. But Bitcoin is beating the pace of inflation. So once I start with the depreciation to get more money right now and I continue doing that until I've broken free reach escape velocity and at that point my wealth will compound faster than the rate of appreciation faster than my rate of uh spending and I will never run out of bitcoin. And then back to the first question you asked me. So now that I've created this system where every year gets me depreciation and then the depreciation allows me to put more cash into the assets and the assets pay for my life. Once I've built that system out and it's working, it's functioning, it's mapped out, it's written on paper, the accounts are up, that's the system I pass to my kids.

>> If I died today, if you died today, heaven forbid, I hate to say that. Um, if I died today, um, my wife or if my wife and I died, my kids would get my assets. What would they do? Now, we have like a trust and we have a will, so like they can call the attorney and whatever. So, the attorney's like, "Cool, you got all this money, but what do they do with all that money, which is why they go broke?" And sure, I could, well, I want to teach my kids about business and I want I can do that, but why not just pass the system down that just automatically runs for them?

>> Absolutely. So all of the this system requires a form of leverage, right? You're you're you're leveraging because

>> and and and and you've said that the real enemy isn't leverage, it's forelling. Yes.

>> What actually causes force selling in practice?

>> Yeah. One Warren Buffet said the number one rule in investing is don't lose money. Um he said number two rule is don't forget number one. I think it's different. I think number one rule in investing is never be a force seller. So a forced seller means right. So because assets are volatile, um what happens is let's say like in in the year 2008 I had sold a couple businesses I had I bought I put everything into real estate. Uh in Southern California real estate dropped 60%. I couldn't afford to cover the payment on those and I had to give some of those properties back, short sell them, give them back to the bank or whatever, right? So I was a forced seller at the bottom of the market. If I could have waited a couple years, the property values came back up. If I could have just waited a couple more years, I would have kept that was $20 million in real estate. I would have still had that. Now it would have been worth even more. But I couldn't. I was a forced seller at the bottom because I didn't have the liquidity available to ride the volatility. So we understand that Bitcoin is a volatile asset, which is what we want. I want Bitcoin to go volatile to the upside, but I understand that it es and flows. So, I need to have enough liquidity to ride the volatility without being a force seller. Back to Sailor as an example. You see all the pundits on Twitter that know what they're talking about. Oh, if Bitcoin drops to this price, he's going to be a force seller. He's like, no, I'm not. There's nothing that's going to force me to sell. So, that's what I mean by being a forceeller.

>> So, what mental framework do listeners need to adopt if they want Bitcoin to fund their life without killing the compounding?

>> That's a good question. Um, unfortunately, identity politics and just the education system today has got us thinking in this like victim mentality mindset. Um, so I think a lot of people will go that sounds too risky. That sounds too dangerous. I could get it wrong. Um, I don't need to do that. I couldn't do that. It sounds too complex. And so it's sort of like victim mentality. So what I would probably um urge people to do is think of the four-minute mile. The very fact that other people are doing it means that you can do the very fact of that. And so all we have to do is find other people that we can see a model of and then we just model those things. And so that would be the mindset. The other mindset I would say is that whether you take action and do this or not, either way you've taken action. You've you've taken action to not do it or do it. And there is no absence of risk. If I don't if I do it, it's risky. And if I don't do it, it's also risky. And so really it's about how do which risk do I choose and how do I mitigate either of those. And so I would just say you don't have to be risky. Um you can use little bits of leverage. I don't have to go surf 30oot pipeline. I can just go out to one foot waves here on Miami Beach and that's way less risky and I'm getting a little bit of leverage a little bit. The chance of me drowning in knee deep water in Miami Beach is very low. If I go into 30 foot waves in pipeline it's higher. And so then you can choose the level of risk that you want. It's not like an all or nothing thing. It's like sailor's goal is a 30% leverage. Maybe you target a five.

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>> Mark, let's talk about 2025, right? Um, this was what I call the year of victory for Peter Schiff. Um, yeah, you know, this was like one of the only Thanksgivings I can remember where, you know, that you know, that great uncle that you have, that grandfather, you know, is coming to you and said, "Huh, you know, the S&P, gold, silver, um uh took Bitcoin to school. Everybody was expecting this this amazing year, the Trump administration coming in, the first pro Bitcoin president, uh a more positive regulatory environment. What the hell happened?

>> Yeah, good question. So, what I would say, and actually this is the opening that Danny started with with Michael Sailor, and I think that's what put set the tone for the whole interview. And he answered, he opened with almost the same question, but he framed it different. He said, um, so 2025 was a pretty disappointing year for Bitcoin. And Michael S was like, disappointing? What? Um, so Warren Buffett would say that price is what you pay, value is what you get. Warren Buffett would say that I've never bought a stock. I buy companies. The companies happen to trade public, but I didn't buy the stock. He says don't ever buy one thing for a day that you wouldn't hold for 10 years. So, what does all that mean? And and to answer your question, he doesn't buy the he doesn't buy the the stock. He buys the company. So, I don't look at the the the price of the stock. I'm not looking at the daily marktomarket price. I'm looking at what the company is doing. I want to understand the value of the company because I believe that the company's creating value over the long term the stock price will adjust. So when we look at Bitcoin price maybe you're a little disappointed partly because you brought your own preconceived notions into that of where you think that price target would be. Now as Sailor pointed out on Danny so I'm not you know I'm repeating for what he said but it's true obviously we made a new all-time high in quarter 4. That's pretty much the end of the year. Yes we ended December down but in quarter 4 we made a new all-time high. So like come on guys, like really uh number one. But number two, back to the Warren Buffet lens, if we look at the value, the underlying value, we saw uh a massive change in hands of Bitcoin ownership, which I don't like, but it's unfort unfortunately it's an important necessary. We we shifted massive from weak retail hands to cold storage institutional hands. And I want Bitcoin for the people, so I'm not happy about it, but it's also part of the process of this. And so what we saw was this uh consolidation and a transfer from weak hands to strong hands. So that's positive number one. Number two, you mentioned we saw a 180 degree shift in the political winds. Aund we went from the bid administration operation choke point 2.0 or 3.0 or whatever we're on at this point right now. Uh Elizabeth Warren I mean if Camala would have won who knows what would have happened and now we have a pro bitcoin administration. the Trump I mean Trump who has controlling interest of DJ GJT media has been buying billions of dollars of Bitcoin his sons are not following in his footsteps and building a real estate empire his sons are building Bitcoin empires like we couldn't have a different shift so that is massively bullish um if you look at um the number of or let's talk about mining if you look at the hash power of the network it's never been higher it's never been more secure um I mean so from so many benchmarks we can see that the that Bitcoin itself the value has never been better. It was a massive year. Maybe the price should have got 150. Maybe it maybe at 126 it was a little low. I mean maybe it should have been 176. I don't know what number you had in your mind. So maybe the price should have been a little bit higher. But I think when I look at the underlying fundamentals, they've never been better. Not to bounce back, but just for a second with the Bitcoin Treasury companies, MetaPlanet is way down, but it's a way better company today than it was at its peak. Micro Strategies price is way down, but it's a way better company today. And so that's the way I'd look at Bitcoin as well.

>> Yeah. And and I agree with that. And I think it was it was it was it was a humbling year and you you buried the lead there, which is the aspect of expectations,

>> right?

>> And expectations in Bitcoin. Bitcoin has a way of taking your expectations and literally grinding it into atoms.

>> Humbling you.

>> Um yeah, absolutely. And I think a lot of people heading into the year because Trump was elected had very high expectations of what Bitcoin would do and then also previous cycle performances as well. And then if you take that combination together, right, um you you end up where where we are today, right? You end up with interviews like with Danny and Sailor. Um and but I think it was healthy. I think this is good for the community. Uh because once Bitcoin truly bounces back, all these treasury companies are going to bounce back or not all of them, but most a lot of them are going to bounce back two times, three times as hard. And I think that this cycle, and I want to get your thoughts on this, Mark, I think that last cycle, Michael Sailor and the country of El Salvador paid their dues. So for the first time, a nation state bought bitcoins somewhat at the top. It went down. Michael Sailor, a a big, you know, publicly traded company, bought Bitcoin, went down, both wrecked, you know, they survived the 22 22 bare market and then they got rewarded. This is a story that all of us Bitcoiners go through. We call it paying the price of tuition. I think this cycle is where Wall Street is paying their price of tuition. I think once we get over the hump and Bitcoin starts to pick up again, I think it's just a matter of time before the mag seven uh you know start to say, "Hey, listen, this could be detrimental to our to our shareholders if if we don't have Bitcoin."

>> Yeah, I would agree with that. I think um to your point, the um the cycles are brutal and um I I started buying Bitcoin in 2015, so I've been through a few of them. It gets a little easier, but it's not easy. Where I've made the mistakes paying my dues, when I look back to the 2018 bare market, 2022 was um I never sold. I never sold the bottom. I never sold at all. But I didn't buy with conviction in the dips because even me, I'm like, "Oh my god, I remember in 2018, right, I had a Bitcoin drop from 20,000 down to whatever was like $3,000 and was like, "Oh my god, is it ever going to come back?" I had all this money and now it's this much. What did I do? Right? I'm not going to sell it, but like I don't know. I kind of have enough. I don't need money to buy anymore. Right? And and and each cycle and

Now it's only down 30%. But the sentiment is so low. It's like, man, I don't know if it's going to come back. It may keep dropping. So, it's like the same thing.

Um, but I would I would agree with you, right? Like I said, the the network has never been stronger. The hash power is continuing going up. The institutional adoption is stronger. The institutional rotation has been stronger. I think gold took some of the shine. I think that um the Bitcoin four-year cycle became like a self-fulfilling prophecy. So many people expected it when the price dropped a little bit and you know it's a confluence of factors. Trump tweeted on October 10th that um that he was going to put 100% tariffs on China that caused the market to stumble. Then you had a cascading effect of of uh leverage get wiped out across the crypto exchanges. You also had JP Morgan start the attack on Micro Strategy all on the same time frame and then you had the four-year cycle people going, "Oh, this is it. This is it. This is it. We should sell right now." And I think it became a self-fulfilling prophecy.

Um, but shoot, if all we have is a 30% draw down, that's not so bad. If you look from the bare market of 2022, as you said, this is the third draw down of 30% we've had, and it held. And it held. So, um, you know, I think next year shows that that four year cycle is over. 2026 kind of shows that um and yeah all these people were vindicated the treasury companies will be the one that will come out on the other side having paid their dues.

>> I 100% agree. Now Mark uh you made this amazing presentation Bitcoin Mina uh last time you came on the show you talking about it but you were basically laying out uh you know the future you know decade or two in Bitcoin and what the potential is. And the reason I want to bring that up is I think this cycle because Bitcoin didn't perform to the expectation that people performed it to again keyword expectation. Um I think perhaps people still believe that um you know listen they missed the boat. Uh there's no opportunity here. The diminishing returns are are just too big. Um you know so they start to gamble a little bit. They start to buy whatever memecoin is the current thing. They get absolutely wrecked.

>> NYCcoin or

>> Yeah. They they they buy the the the latest and greatest whatever memecoin, right? The the the the you know because they feel like they they they missed the boat. Like Bitcoin is not going to give them the financial freedom that they have hoped for. Um I think they're wrong. I think the only difference is the time scales have changed, but I think the opportunity is still there. This is a subject that you've talked about at length. Could you break it down? Could you give the people a little bit of hope?

>> Yeah.

>> So, first of all, I think I think just that overall sentiment is uh very strange of I am too late, I miss the boat. I I I don't understand how people come with that mindset. And the reason why is back to the financial system. The entire financial system is about discounted future cash flows. You're buying stocks on a PE ratio. I'm buying the Mag 7 at a 30 to 50 times PE ratio. Meaning I'm paying a price today. It's going to take 30 to 50 years for them to make enough cash flow to be worth that. So I'm buying Tesla, Apple, Google, whatever because I think it's going to be worth more in the future. Nobody goes, "Oh, well Google used to be cheaper, so it's too late." Like, dude, you buy Google because you think it's be worth more in the future. I buy gold because I think it's going to be worth more in the future. So like I look at all financial assets as how much it will be trying to guess trying to speculate trying to put some model into what I think it'll be worth in the future if Apple Tesla Google makes this cash flow it will be worth this in the future but when they come to Bitcoin they go oh but in the past like that no I don't understand why they would bring that number one okay so what we want to do is think about where does Bitcoin go in the future so we need to come up with some sort of valuation models of where we think it can be now uh to the presentation I gave at Bitcoin Mina I sort of gave I think it'll be 2030, 2040, 2050. And the way that I did it was using economic models, but also I use like a venture capital lens. So the way a venture capitalist thinks I have a shout out to my Bitcoin partners, Bitcoin opportunity fund, James Lavish, Larry Lear, David Foley, uh, and we deploy venture capital into the into the Bitcoin space and help Bitcoin companies grow. And the way we do it is we go, okay, this company is starting up, but this is the market they're going into. These are the markets that it's disrupting. um how much do we think it can get from those markets? So, for example, if we were investing into Uber in early days, uh do you want to invest in this uh app where you can get a ride? You mean like a taxi? Well, it's sort of like a taxi, but you can get like a black car, but it's easy because your credit card's in there. It's like, but can't we do that now? Well, it's different. And how much is worth 100 million? 100 million? What are you talking about? Well, the taxi is this big. The limos is this big. The van. So, if I get 5% of that, right? So, then I come up with some sort of future valuation. So with Bitcoin, we could do the same thing. What are the markets Bitcoin is disrupting? How big are those markets? And what percentage of those markets do we think we can capture? So um there's two things that I use for this. Um number one, how big will the overall market or the PI get? And then two, we speculate as to what percentage we think Bitcoin can acquire. So that's how we do it from a venture capital lens. So what we do is we understand that when we look at assets, there's different types of assets. I mentioned that earlier. I like to break assets into four different categories. But these assets are what we call store of value assets. So unlike a car, RV, a boat, that's an asset on your balance sheet, but it's not a store of value asset. A store of value asset is where money goes and sits. So that's typically real estate is the biggest, but it's equities, it's stocks, it's bonds, um it's gold, it's collectibles, it's fine art. Those are things people put their money into and then Bitcoin fits into that. And so that bucket, that pie is growing at the rate of monetary debasement or liquidity increase. So as more dollar units are created, they buy less and then the valuation of that store value bucket goes up. So number one, we realize that that's not a static pie. That pie is getting bigger or more valuable or or in nominal terms anyway. So uh if I remember correctly, in 2010 that store value bucket was like about 300 uh trillion. Today it's about a quadrillion. um and at the rate of monetary increase. So the the CBO, Congressional Budget Office of the United States, they project out the um spending, the deficit, the budget, the debt through 204 for 30 years. So they tell us how much money will be printed in the next 30 years. And they're going to undershoot that. It's going to be way more than they're saying. But let's just if if we just use the numbers they give us and we're not going to talk about what AI could do to that and all that but just using the numbers that they give us. So we apply that the rate of monetary and debt increase to that store value buckets. And so we at 300 trillion we're at a quadrillion today. That's about it should be about 1.6 quadrillion by 2030. I believe it's like three and a half quadrillion by 2040. And it was like eight eight quadrillion by 2050. Okay. So then now that we know that how big that pie is getting, what percentage of that pie do we think Bitcoin can acquire? Now from a venture capital lens, they potential um you know um investment says, uh we think we can get 5% of the market in five years. Okay, sounds reasonable. Um someone else says I think I can get 80% of the market in one year. Okay, that's probably not reasonable. So we try to come up with what we think is reasonable. um to to to make this um a little bit easier to understand, uh Uber and Airbnb were both able to acquire 10% of their markets in less than 10 years. Okay. So, how much of that pie do we think Bitcoin can get? Now, it's certainly better, right? It's it's more portable than gold, right? It's more secure. It's more stable. Um we we we compared it to real estate, which is the biggest bucket. There's no maintenance, no tenants. So, so it's it's like a there's there's 30 to 40 trillion offro bank accounts. It's certainly better than offro bank account, right? So, how much can we get from offshore bank accounts for example? So, if Bitcoin can get to just one.25%. 2030 1.25%. Um, and that would be what would that be? Uh, 20 years of Bitcoin. 22 years of Bitcoin. Not 10 22 years. It gets to one and a one and a quarter%. Now, Airbnb and Uber got 10% in 10 years. I'm talking one and a quarter%. That would be $21 trillion or $1 million per Bitcoin by 2030 >> base case. I mean, yeah, obviously we have no crystal ball, but I'm using a venture capital lens, and I think that's more than realistic.

>> I absolutely agree with you.

>> Yeah. Then we project that out. So, by 2040, so now we're at over 30 years, if it can get to 8% of the bucket, that would bring it to $14 million per Bitcoin. And I believe by 2050 I had it getting into like 15 or 20% of the bucket and that puts it at like $40 million per Bitcoin.

>> Holy cow.

>> Yeah. But again, it's not the the reason it doesn't sound unreasonable, Mark, is your logic behind it, right? The logic behind it.

>> If you break it down like that, because I see a lot of people do this is like, oh, these this price prediction and this and this and that. But it's if you apply that VC logic towards this type of thinking and it's like what percentage of you know I I love the way that you broke it down. It's like what percentage of the market could you get right like 1% is not it's not crazy. It's not unreasonable

>> but look at where the price would be if it gets to 1%.

>> And then you compare Bitcoin with all these other assets. Like the question is is Bitcoin better than gold? Absolutely 100% I could break it down. It's like look the physical characteristics you can tra you can transport anywhere around the world. It's censorship resistant. There's absolute scarcity. Gold doesn't have any of those things. Just for Bitcoin to reach the market cap, just for Bitcoin to reach the market cap of gold would put uh Bitcoin at $ 1.5 million per coin, right? Like that base case is not unreasonable. But I think because we got so chewed up because of the expectations that we had heading into 2025, I think that it it's it it seems like an impossible mountain to climb. I would say there's uh there's a few other metrics that I would have put over the top of it to really try to drive this home. So when you look at technology, I've started I started two tech companies. I've had big exits. I've been investing in tech for a long time. And so some other models we would look at is you would use something called a diffusion of innovation which is like a bell curve and then we'd use like an S-curve and an S-curve uh helps us understand how much market penetration we can get over a period of time. And so the way an S-curve works is it it's like a sideways S. The time it takes to go from 0 to 10% is the same time it takes to go from 10 to 90%. Typically about 80% penetration is considered full market penetration. There's still people today who don't have like uh internet and and you know cable TV.

>> Did you want to say that?

>> Where do you think we are in the S group?

>> Yeah. So, there was a there was an article that just came out about a week ago. I was going to make a video on it, but I haven't got a chance to write it out yet. But, um it showed a whole bunch of data and they believe we've now just hit 10%.

>> Bitcoin adoption

>> of it was crypto adoption. So, I haven't really got through the weeds to understand exactly the details, but they about 10% of Bitcoin adoption. Yes. And so um we've just hit that now in the US. I think we've gone past that quite a while ago, but this is like globally. And so what that means is that now we are I guess what 17 years into it. Um so now it could take another I don't know 15 years to get to 90%. But what that really means is the S-curve it turns parabolic and then so it's it goes up slow, it turns parabolic and then it evens out again. So we're entering the parabolic phase. And so and the reason why is in the beginning you had you had small retail money people bringing tens of dollars or hundreds of dollars and then thousands of dollars and then tens of thousands but today you have hundreds of billions coming in so we enter this parabolic phase and so while most people sailor talks about the law of law law of large numbers the larger the asset gets the lower the volatility drops because it's harder to move the basket. Um while that sure is the law of large numbers and of course that is the law. It's the bigger it gets the harder it is to move of course but when you think about um when you have a technological revolution cycle and you overlay financial capital onto that and you look at the way investors come into these cycles. Phase two which we're going into the parabolic phase is what's known as the frenzy phase. That's where the institutions come in. That's where the sovereigns come in. So we we went from retail bringing small checks to sovereigns bringing in massive checks in the S-curve parabolic part of the adoption cycle of the technology. Um we while I do believe obviously it's the law of large numbers of course that makes sense but we could potentially see Kaggar turn back up for a while.

>> I I would agree with that. And I was actually talking to someone who worked in like the corporate world and the way that he he told me, the way that he described it to me, he's like, "Look, Nico, there's one catalyst that if this catalyst happens, like we're going to a million dollars tomorrow." And I said, "What is that?" He's like, "Look, the moment the United States government announces that they are actively buying Bitcoin, you're going to see a frenzy the likes of which you've never seen before." Again, that would be the ultimate because right now it's like look, they've established the uh they've established the, you know, the the the Bitcoin strategic reserve, but it's via executive order. It's not via, you know, it's it's so it's it's fragile, so to speak. Um, but the moment the United States government announces, hey, we're actually accumulating Bitcoin, it's going to start a frenzy worldwide. I think Max Kaiser calls it the global hash war or something like that. Um, so I want to get your take on that because I I do agree with your theory and and and and it is ultimately a technology. So the S-curve adoption applies, but you need that catalyst, I would say. And I I think that catalyst would be, you know, the most powerful country in the on the face of the planet with the most powerful money printer basically saying, "Okay, we're going to use the money printer to buy something that has absolute scarcity."

>> Yeah. I think I think there's uh other catalysts as well, but we'll talk about that for a second. I think uh yes, obviously, right? So, um when you have a country like El Salvador start buying Bitcoin, they're not really an influential nation. They're like one of the poorest countries in the world. And so, because they bought it doesn't make other countries want to go buy it. Although, he did start meeting with other heads of smaller countries, right? I think he met with 40 other country leaders like shortly after that. But the United States, which is kind of funny because in my opinion, it would always be the last to move because it's got the most to lose, right? It's got the reserve currency of the world. So you'd think everybody would move before the US, but if the US moves, which is the top of the heap with the reserve currency. Then of course, yes, it's the most potential nation. Everybody would be forced to buy. So that would certainly be a catalyst. Um to your point, right, we got an executive order. I mean, what we just found out there's selling going on by I mean, so like who knows where that's at. We probably are quite away from from buying happening. But I think the the the other catalyst that's there is you mentioned gold. I mean, holy crap. 4,600 bucks an ounce. Silver hit $99. I mean, that is absolutely insane. And it's been smashing Bitcoin in the last year. Um, but what's happening on the gold front is what's going on in China, in Hong Kong, and uh yesterday Trump announced 25% tariffs against Iran. All of that is the story. So what what's happening is the US dollar is the reserve currency of the world. It's the reserve asset of the world. So what does that mean? That means that that's what central banks hold and FX um currency holds in they hold in their reserves. That's what they hold in their in their bank. Um but what we've seen is that's dropped from about 60% down to about 40% in the last 10 years. But that's what they hold in reserves. But it but the dollar isn't just the reserve currency. The dollar is also the payment network of the world. So it's the visa like you can go anywhere and use Visa. That's what they they have the benefit of that. So you have the dollar payment network. And so the US is able to slap sanctions on people like hey no no no network for you. Well what China's been doing is they've been actively working on setting up a parallel financial system a whole new set of rails that are on gold. And they've been doing it through Hong Kong with the Shanghai gold exchange. And what they're using is their own currency the R&B which nobody would ever use or trust that money. No one would ever reserve that money, but they're not relying on that. They're using the R&B for the liquidity piece, but they're settling in gold. People trust gold. And not only have they done that, it's pretty much up and operational in Hong out of Hong Kong. Um, they've already opened up swap lines with, I think, 32 countries, pretty much every country but the US. And so what that means is that now all these countries can do business with each other, settle in gold, and completely bypass. It's like instead of using the the fiat rails like Swift, I'm going to send you Bitcoin. That's basically what we're talking about here, right? So, when the US continues to sanction sanction sanction, now another 25% sanctions Iran did, which by the way, what's happening in Iran is terrible. And I I wish we could do something. I'm just not sure the tariffs are are the sanctions are a way to do that because what happens is every time we kick more people out of the party, they just go have a party somewhere else

>> and they're not coming back. You saw this with with Russia, right? The moment the United States built Russia, the whole theory was like, "Okay, this country is going to collapse. The government's going to go." That's not what happened. They just built around that, right? Like I saw crazy videos of like uh shopping malls where like they literally just changed the logos, but the products inside are exactly the same, right? So it it didn't work. And and again, do you think that Russia, even if the US drops the sanctions, do you think the United States is just going to go back and say, I mean, uh, Russia is going to go back and say, "Oh, you know what? Let's just use the Swift." They're never going to do that again. Not if there's an alternative, of course, which there is. So, if there's no other party to go to, I'm just kind of mingling outside, but oh, there's another party right here. I'll go over there and I'm not going to go back to that party because these people let me do what I want to do. So where that where that ties back to Bitcoin, the other catalyst I'm talking about is that's obviously causing gold to catch a big bid and gold's going to continue to pump really hard because central banks are now adding gold. So So the US treasuries in the reserve have dropped from 60 to 40 and gold's gone up to 30. Like this is a big shift, right? But while gold is going to continue to catch a bid because that's happening from a sovereign level, we the people, the individuals, institutions are going to be running to Bitcoin. We're going to be ahead of the curve. We understand Bitcoin is a higher beta than gold is. And I think go I think you know JP Morgan called the debasement trade was gold and Bitcoin together. And I think we'll see the more institutional adoption of gold for now, but I think Bitcoin is also going to be catching a bid with that.

>> Fantastic. Ladies and gentlemen, Mark Moss in the Simply Studio. First interview in the Simply Studio. Guys, go check out the Mark Moss YouTube channel. One of my favorite creators. The man is so talented. the personal inspiration for me. Uh Mark, thank you so much for joining me. Really appreciate it. I'll see you guys on the next Simply Bitcoin IRL. Take care everybody.

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How to Live Off Bitcoin Without Selling It | Mark Moss

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