BTC250: Is This Bitcoin Bull Market Over w/ Tuur Demeester (Bitcoin Podcast)

25:54Yeah. Yeah. At the beginning of the year when all this was coming out, I made a video back in, it was like probably January of 2025. And I said, this is literally impossible what they're trying to do simply because if they are like reducing the expansion of the units, they have to replace them. They have to put, the whole thing is literally a Ponzi scheme. And if you're removing units out of that, you're going to get so much impairment across debt instruments that the market's not going to be able to handle it. But there's just not going to be enough money or currency in the system to service the demands and the flow of commerce.

26:31And it seems like they've figured that out. And it seems like, and you write about this in your report with the M2 and how Bitcoin tracks the M2 growth rate. And back when I was talking about this, I was just looking at the M2 and I'm like, hey, they've aggressively contracted on a global scale, the M2, and they're kind of at the limits of where everywhere we've looked in the past 20 years where the trend line has to keep going up and to the right was where we're at right now. So I just don't see it happening. Talk to us about this idea of M2 growth and anything else that you want to kind of unpack with some of those ideas.

27:09And I guess my question to you in all of that is, is it really a Ponzi? Is the fiat system just a total Ponzi scheme and they have to keep expanding it or else things start melting down. Yeah, it is in my opinion. And, you know, I really respect you and other people who go into the nitty gritty of like, you know, Lynn Alden and like really understanding how it functions. But that was that realization back in 2006, seven for me was, was the start of trying to find an alternative place to go and finding real scarcity really, because yeah, it does. There's just more debt than can ever be serviced.

27:44So the only way to keep doing it is to extend them to roll it until you hit a wall and that's for inflation. And then of course the debt gets washed out and you get a huge restructuring of society. Certain people, there's all these stories of course of people borrowing huge amounts of money in Weimar Germany and getting away with it. Like just buying real acid just because they had the right connection. They made the right decision at the right time. But then at the same time you get the mass of the populace who just gets impoverished. And that's a new problem. It It means they get angry, they have very little to lose.

28:15You can get revolutions, those kind of things. And then the government has to try and find a way to keep finding revenue sources just to try and keep the machine running, at least from a governance point of view. Maybe the Ponzi scheme is broke. But yeah, you've got to find a way to keep it going somehow. Or you just, you have a literal civil war and the country falls apart, something like that. So it's very hard to, there's so many moving pieces, right? There's just so many moving. I'm also surprised to see how fast the international tensions are ramping up. And I think it is because once the Ponzi scheme comes to an end, all of a sudden, you realize how weak you are.

28:55It means that even in the past, outside forces that were considered to be weak, like these gangs or whatever, all of a sudden, they can make their way in because they're profiting off of your instability. Like when Russia had their hyperinflation, it was so hard for Moscow to get even some revenue. You probably know this, but Yeltsin did organize a commission to figure out why are the tax revenues not arriving in Moscow? What's going on? We can't raise money. And what had happened is that, and this is way down the line, I'm not saying this is for tomorrow, but what had happened is that these provinces, technically, they were paying their taxes in kind because the ruble was worthless, But it was so hard to oversee all that, that literally, like, for example, the province of Samara in Russia was paying taxes, quote unquote.

29:46And what it was is they had filled a container with toxic waste, just literal toxic waste, like chemical waste, and send it to Moscow and be like, this is our payment, you know, deal with it. or like you'd have the local construction company and they would have to pay taxes. And then the city would be like, you know what? How about you guys build us a metro system? You know, just do that. And that we'll consider that to be your tax. So it's just, it's not the end of the world, but it is like, it is a difficult environment. Once the money is the blood of the economy. Of course, you and I agree there's anemia, there's all these problems.

30:21And so once that really hits a certain critical point, the coordination becomes so hard in the economy. And now in the world economy, it's probably the first time that we're seeing a fiat crisis on a global scale. um yeah i don't know the details about china either but like they're probably going to run into issues with the yuan europe obviously is going to have issues with the euro the yen is already toast pretty much so now i'm seeing news that it looks like france is going to need an imf bailout the uk the same like that is it's moving out that's acceleration yeah yeah it really is Talk to us about gold.

31:00You've covered gold quite a bit through the years. Bitcoin is still not breaking out to a new all-time high against gold, which I think is an interesting discussion point. How do you kind of see the coming five years with Bitcoin and gold and how it's kind of treated on the international stage with all this institutional adoption happening now on Bitcoin? Yeah, this is a little pet peeve of mine. And maybe looking back, it'll be some kind of bizarre coincidence. But when I look at the Bitcoin chart expressed in gold, I see these psychological points of resistance. One gram of gold, one ounce of gold, 100 grams of gold, and now one kilo, a thousand grams of gold.

31:44We hit that point in 2020. And now five years later, we're still at a kilo of gold. And so I do think we're going to break above that just because Bitcoin is more provably scarce than gold. There's a lot more you can do with it. It's not as geographically constrained. It's more auditable, all that stuff that we all know. And so yeah, I do think it'll be very meaningful once Bitcoin breaks up in terms of gold. I think the next obvious target is 10, 11 kilograms of gold because 10 is maybe a psychological target, or maybe like how many kilos is 400 ounces? Because I think that's like a good delivery industrial bar.

32:21That's also somewhere around that. Maybe that's 12 kilos. And then people estimate that 11 kilos of gold is pretty much parity for Bitcoin in terms of market cap. So if we get 11 kilos, then the gold market cap and Bitcoin market cap are going to be the same. So that would be an excellent next point of resistance where people just, they don't think it'll go above that. Maybe eventually, of course, I think it will, but for the coming cycle, or for the coming 24 months even, that might be an interesting target. So yeah, I think it's very important to look at those graphs because, I mean, I don't know if you're into technical analysis, but it's just, it's become impossible to look at long dated charts expressed in dollars.

33:00I can't see rhyme or reason in them. They're all just going parabolic because the denominator is being destroyed. On the gold front, I mean, it's, do you, or I guess this is the question, do gold bugs look at that chart or is this Bitcoiners that pretty much look at that chart? I think somehow they have to, you know, because it just, it's been such a, like I said, that one ounce resistance, that was also a three year resistance. That was not, you know, not a small potato type thing. That was a big deal. I remember, yeah, in 2014, people were really talking about coin at one ounce of gold, and this is important and meaningful.

33:37And I do think gold bugs, at least the informed ones, probably the movers and the shakers, you know, they, why wouldn't you? Why? Because that's been a tradition, a longstanding tradition in the gold world is to express all kinds of asset classes in terms of gold and to look at resistance and support and those kinds of things. So my bet would be, yes, absolutely. Maybe not every retail investor, but I think the long-term, very dedicated gold investors are looking at Bitcoin in terms of gold. Let's take a quick break and hear from today's sponsors. Curious about online trading, but haven't taken the first step yet.

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36:58NetSuite Next is the next huge leap because now AI is built into everything you do. It surfaces custom insights throughout your day. AI agents work alongside you on the routine stuff. And anytime you've got a question about anything, you just ask, like you're talking to a colleague. And I use it. And really, I think you should too. For the first time ever, you can try NetSuite Next for free. If your revenue is at least in the seven figures, go to netsuite.ai slash tip. Built for every industry, ready for every boardroom, netsuite.ai slash tip. All right, back to the show. So something that you and I have talked about for what feels like almost a decade is this difference between Bitcoin and crypto when it comes.

37:43And I guess now that we have nation states involved and the potential adoption, Eric Trump was, I guess, on stage saying that there was some nation state out there that bought tens of thousands worth of coins. How damaging, in your opinion, is the conflation of the two for Bitcoin's political acceptance moving forward? Well, I mean, the more they are conflated, Bitcoin and all these centralized crypto coins, the more you can try and sell the illusion that Bitcoin is just another fiat currency and that it's the same thing and that anybody can just be a victim of the endless pump and dump and dilution.

38:23Because a centralized coin, it can very easily be influenced by political actors who do have the guns and the intelligence and everything. So even if you're like, oh, but you know, yes, we're 10 guys, but we're spread around the world. It's like, it's not that hard for an intelligence agency to track those people down and say, hey, let's partner up. Kind of like how the mafia knocks on your door as a shopkeeper and be like, let us protect you. Protection rackets. So I do think these crypto coins are going to stay in existence. I think hopefully the separation is going to continue. I think Bitcoin dominance is just so huge now.

38:57And I feel that people are seeing Bitcoin increasingly as a conservative investment. And they're not saying that about Ether or Cardano or any of the other coins. Those are not conservative investments. So I just feel like that fits in the zeitgeist where the whole world is looking for safety. Like what is safe? What is permanent? What is universal? What is apolitical? And Bitcoin fits that to a T. Of course, now, interestingly, within Bitcoin, we're starting to have that debate of like, hey, like, are these latest upgrades? Is that actually conservative? Should we be doing that? So, but I think that's just a sign of the times that that kind of speculative mania type zeitgeist versus the newer counterculture of conservatism.

39:39Yeah. One of my frustrations with the institutions and Wall Street showing up right now is I haven't seen or heard anybody from that, from those institutions really kind of laying out Bitcoin from, especially as they're comparing it to call it Ethereum or Solon or any of these other things. They don't get into any of the tech or why it's more decentralized or why it's more secure at all. It's just kind of like a wave of the hand. Here's Bitcoin, here's these other blockchains. we think you, and they're clearly incentivized to just sell product. They just want to sell ETFs that are wrappers on top of all of these things.

40:17And so maybe the reason we're seeing that is they're incentivized to just kind of like not really get into it because they have more to sell, but it's - Sure. But then again, they're no longer, the Wall Street is no longer the only game in town. Like they might believe that, they might want to believe that, but you know, look at Tether, they're making more profit than JP Morgan. Yeah. Yeah. The new generation is here and they don't need to live in New York City. at all yeah yeah and so i think it's like to the extent that they will you know that wall street will just continue on this road it'll just be digging its own grave yeah you know similar to how london was supposedly the financial heart of europe and everything is happening from there and maybe there is still that to an extent but it feels increasingly like it's a kind of a pretend thing like it's already gone like people have already given up on london so you know new york has that risk as well.

41:09And I think that's a little bit of the Achilles heel that maybe Trump has, is that he grew up in that environment. He has that New York DNA of just like deal-making and whatever's moving, like we want to be involved in that. And of course, there's a lot to be admired about the entrepreneurial spirit. Doing the 10 ,000 hour type study of one particular platform or technology, that's usually not really part of the New York mentality, I would say. Yeah. Yeah. My frustration, and we talk about this on the show quite a bit, is just like when you look at the Lightning Network and you look at if Bitcoin layer one is optimized for decentralization and security and not optimized for scalability, that's, and this is the trilemma that we're talking about here, the scalability is pushed off into subsequent layers that are above it.

41:55When you do go to those subsequent layers, the scalability is the thing that shines when you get into the layer two, and it still comes with the security and decentralization of layer one. And so when I'm looking at all of these stable coins, and we had Tether back in January say that they were going to try to use, I believe the Taproot Asset Protocol from Lightning Labs to issue Tether on Bitcoin Lightning, it's going to move faster. It's going to have lower fees. It's going to have the decentralization of the node network and not for people running a quote unquote full node. It's going to have tens of thousands of nodes that are running and having the reliability and all of that that comes with it.

42:41And so I'm looking at it and I'm saying long term, it just doesn't make sense to me that something that has better incentives would lose. I'm assuming you agree with that, but do you and are we just impatient? Do we just need to give this more time for real world assets being tokenized on top of Lightning being a better use case with no native token, unlike Ethereum, Solana, Tron, you name it? Well, there's probably a bit of, you know, there's a test phase that kind of needs to happen. And I think there was a little bit of overexcitement maybe early on about Lightning. I think it was not realistic to think that everybody would just run a Lightning node and do it well enough to keep doing it.

43:23similar to maybe early on people thought anyone is just going to run a an email server their own email server in their basement so yeah you need to kind of build that infrastructure it does seem maybe that lightning needs to be interoperable with one or more other protocols to really become like that performance juggernaut and that also takes time to do it well we need people that that have the knowledge and the risk appetite to invest in those companies to make it happen so So I'm not surprised it's been, I think 2016 was the lightning paper maybe. So I'm not surprised it's been nine years. Also because the real trunk of Bitcoin is that store of value property.

44:04Like that is the real kind of the root, the strong foundation of it all. And then the branches and the leaves, like that's more retail, that's more that high speed stuff. But I do think, you know, especially now that we're seeing the middle class is kind of disappearing, something that used to be very easy, like, oh, pay$20 for a wire transfer, you know, wait for four days for the money to arrive. Maybe younger people especially are not going to be willing to endure that anymore, or just not be able to afford it anymore. So, you know, maybe those people will just kind of become Bitcoin natives increasingly.

44:40But that's then also a generational thing. So that takes some time as well, like boomers are not going to run their own nodes, but they still have the majority of the money in the economy for now. I keep saying it, but their next year, boomers are going to be between age 62 and 80 years old. So it's really kind of getting to that point where they're going to be liquidating, they're going to be gifting, you know, sometimes just to stay afloat, sometimes just to kind of do family planning. That's coming in the next five to 10 years, especially if the pain in the real estate keeps increasing. Yeah.

45:15Speaking of pain, what institutions or industries do you think will be most disrupted coming in the next five years, 10 years? I mean, within Bitcoin or - Within Bitcoin. And also, I think when you combine that with AI, what are we in for coming here in the next five years as far as disruption goes? Well, I think from the highest possible level, I think, yes, I do think robotics is going to be huge. Like you're just seeing what they can do. Like really they can get into human environments and just take over. Like the work that I used to do as a job student in a factory, like, you know, you can just put a machine there, but at the same time, you know, they are maybe more vulnerable to supply chain disruption, those kinds of things.

46:01Like you have to maintain the robots, you have to get all the parts. And then what if there's trade wars happening where you know there's delays like you wanted to do business in latin america you were facing all those problems even in the past 50 years so i think it's important to not be too rose you know put your rose colored glasses on too much of like oh robotics is going to solve it all especially if you know look at the us there's there's so much stuff that is not being produced here anymore and maybe we'll lose access so i don't think the boom in blue collar jobs is is going to be stopped by AI or robotics anytime soon.

46:36Like definitely the next 10 years, I think we're just going to see more and more people get into welding, get into all these kind of productive production type jobs, maybe go back to agriculture to an extent. Also because the core of the economic machine is just going to be focused on that more. Like people just won't be able to afford so much a cruise ship or a Netflix or those kinds of things. It's tightening the belt. that's kind of the macro idea and then sorry what was the question oh yeah the new what new things are coming up yeah i do think mining and ai is a marriage made in heaven like these data centers like they can just switch from one to the other if they're close to a cheap energy source if they have political stability on relatively around them they can really flourish and we can even see new towns new cities be built around that i think that's gonna be huge i think there will be new financial centers around the world.

47:30I'm not really sure where yet. It's a little bit kind of wait and see. I was looking into, maybe this sounds a bit overly dramatic, but when Rome fell, wealthy people, elites, they had to go somewhere. And so there was a flourishing of this city called Ravenna. And like, it was kind of in the area of Venice, but it was protected by the coast on the one hand, and on the other hand, the mountains, and then also the river, I think it was the Po River. So So very kind of unintuitive, like, oh, you know, it wasn't the obvious answer, but it just kind of gradually became the answer to these bigger centers.

48:07And so who knows what, I think in the US there's a lot of room. So who knows, maybe it's the, the Appalachian mountains, or maybe, I don't know, like, you know, and it doesn't mean that everyone's going to live on a farm or something. Like we could actually have cities that start to flourish in unexpected places. I'm just kind of open for that. That's why I've been trying to follow Argentina as well. like that might be an area where a lot of capital could find its way eventually if they can maintain their stability in some way. I mean, people have been betting on El Salvador to an extent. I don't know how sustainable that is.

48:40But yeah, so because there's so much inertia with these big centers that are built around a different philosophy that I don't think it'll be very easy to just say, we're going to revive New York. You know, we're just going to pivot New York and it's going to be, I don't know, there's just so much inertia there. It seems like the simpler, the more opportunity there is. Right. Because if you want to be in from, if you're a Bitcoiner, you know, like let's punt some money there and we'll see, you know, let the younger people build it out and then we'll kind of join them. And, but yeah, and then specifically industry-wise, I mean, I've long been bullish on the insurance sector.

49:15Like I think it also fits in that people want stability. There is that more conservative mindset nowadays. So how do you protect your family? It's going to be life insurance, deposit insurance, those kinds of things. Very boring sounding, but an insurance sector that's built around paying out claims in dollars might not be sustainable if we're going to get 30, 40 % annual dollar inflation. So I think that's really going to need reinvention. And it's already happening. We're starting at the beginning of that. But yeah, I'm curious, what areas are you looking at? No, I just, your point on if there's natural resources, particularly on the energy domain, that's huge just because of the data centers and the Bitcoin mining and just kind of what energy means at its core, right?

49:58But you also have to have the policy and the government domain that's on the wrapper on top of that, that is wide open saying, yes, come here. Like it's whatever you can build, whatever you can capture and kill, it's yours kind of thing. And when you look at cities that are very established, you mentioned New York, right? I look at the policy and procedures of some of these cities and I'm saying they are going to have a very hard time competing, I think, in the coming decade or two, just because they're just not going to be agile to how fast all of this is changing and what incentives they need to be putting in place to attract the future businesses and what they're looking to do.

50:43And so I think the simplicity, if it's got a lot of energy and it's got a government with policies that are like, yeah, come on in here and do what you will, I think they're going to crush it. I think they're going to be really like far out in front. And I think Singapore has been a great example of something that's already been shown and proven. Yeah. When entrepreneurs would come to Singapore, they would be so surprised that like all of a sudden you get a visit from the government and it's not like, you know, how can we extract all the possible value out of you, but it's not like, what can we do for you?

51:14How can we help you? Like, what do you need? We want you here. They would even, the Singapore government, they would travel abroad and like have these diplomatic missions. I remember early on visiting Cathy Wood in her little New York office. This is like before they blew up and she had to cut short my meeting because she was meeting the Singapore sovereign wealth fund who was like, you know, coming to visit. Yeah. Yeah. Yeah. Because they're out there doing outreach, right? Yeah. Because it's a young, that's it. It's a young place. The founders are still alive. Yeah. Yeah. Right? Yeah. I think that's going to be huge.

51:47Hey, so at the end of your report, you compare Bitcoin to the power of the piece, and you have this artwork channeling technology towards order and harmony. And Bitcoiners are known for saying Bitcoin solves everything. But in this case, do you genuinely believe believe Bitcoin can reduce global conflict or is this just inspirational hope no I do think so yeah I really do think so it can reduce global conflict it's an incredibly powerful tool and also it's going to be the stage for this enormous wealth redistribution that we're seeing so we're basically going to have new kings are going to be made and then of course it's up to those kings to make it happen like you can't just assume they're going to be great guys like we're going to have to kind of try and be vigilant.

52:33And because to an extent, it won't just be the kings who decide, like, I'm the king now, like, it'll be because there is a critical mass of people who believe in them and their project. And so that's why when I look back at that edge from Vedic's from back in the, I think it's like the late 1500s, they don't just show technology and being like, oh, swords in the plowshares, and then we had this big furnace in the middle. The main characters are the virtues. So you see like fortitude and justice and they're personifying the moral virtues that are needed to make all that happen. Yeah, you see in the sky, you see peace and justice.

53:11And so, yeah, it has to be a collaborative effort. We're going to have to, you know, to the extent that we're critical of previous generations of like they messed up. It wasn't just because they had the wrong technology. It was also because there was a laxness, there was an indifference towards universal moral values. And so I think that that's why, you know, trying to go back to the core or the origins of Bitcoin, the cypherpunks, that was a really moral project. And so I think that's the rabbit hole to keep going into and for the source to keep tapping into. And I think thin libertarianism probably is not enough.

53:44Like just, I think property rights are very important, but it probably won't be enough to really kind of have a real renaissance, like a kind of a revitalization of society. But it's a fantastic start. Yeah. I love when you put some of this artwork out there. You are a master at finding awesome stuff from the past to kind of show the correlation and being hopeful for the future. Way worse of a master than the actual artist. But yeah. All right. Well, Tur, we're going to have links to the report. Anything else that you want to highlight? And we'll have a link to your Twitter account where you're active or your X account.

54:21I'm still calling it Twitter. I mean, I have a couple episodes still coming out on my podcast, but I'll publish that. No, I mean, I think it's just, it's still exciting to be in the Bitcoin ecosystem. And I think in a way, we were often annoyed at these cycles, like people are so ignorant, and then they get overexcited. But still, it's been a great gem to just kind of use personally to not get overly invested in the price too much and try to keep a long-term perspective. So I do feel grateful for all that. And then, you know, it's interesting how with the Bitcoin development, just to see, again, that moral debate is like, okay, what is Bitcoin actually about?

55:00Is it about these financial transactions and storing them as best as possible in a very lean ledger? Or is it an agnostic ledger where we should be able to put anything? Like the tools that people use to debate are, yeah, I mean, superficially, it's all technological arguments, but ultimately it's about that moral argument of like, okay, what is this really about? What is the higher goal of this entire project? So that's just very fascinating still and important. Yeah. We'll have links to the things that we mentioned there in the show notes. Tur, thank you so much for making time. And I obviously look forward to the next time we can chat.

55:36Always a pleasure, Preston. Always a pleasure.

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