Bitcoin is Generational Wealth | Peter Dunworth

23:38Peter Dunworth:But the world where Bitcoin and the dollar coexist for a long time is one that I'm not fully comfortable with yet. Yeah, I'm not fully comfortable with it either, but I think it's something we're going to have to get used to because there's an existing power structure revolving around that US dollar that is very, very difficult to dislodge. And the consequences of dislodging that, people are going to fight really hard if you want to dislodge that immediately. Now, I think the path of least resistance is giving them an education on Bitcoin and showing them why this is exponentially better than what they're currently using and how they can benefit on a personal level from it.

24:16But there are existing power structures in place that revolve around coercing people through the use of the US dollar. And as long as that exists, then the thought of hyper-Bitcoinization is going to be fought at every level. And I'd much rather a peaceful takeover of the world than one that requires a fight. And the curious thing about Bitcoin is this is the only thing I've seen that has the ability to ensure that everyone's interests are all aligned. Now, I find this quite unique in that at the same time that you are really greedy about buying Bitcoin and trying to get as much of it as possible, it turns you into a much better person than you previously were and one that's far more magnanimous than you might have been a previous iteration of yourself.

25:02So it's quite the conundrum that you come here to get rich, but you end up turning into a much better person who wants to do more for your community and help out in many ways. And this is where the ability to co-opt the decision makers who are, I guess, own and control the US dollar, I think is far more important than just taking it head on and having a fight with them.

25:25Peter Dunworth:Yeah, I think that's fair. And that element of Bitcoin, the fact that it does truly change you is the thing that makes us sound like we're all in a cult, but it is just a fact. I don't know what to say to you. That just happens. So back to the financialization of Bitcoin. So you talked about how Wall Street has financialized all these other assets and then gouged them. We spoke, I don't know, six months ago on the podcast, and that was all about Bitcoin financializing. Why can they not gouge Bitcoin in the same way that they have done with the stock market and real estate and things like that?

25:56Well, they can. And this is the beauty of working with people, not against them. They can gouge, I guess, a whole host of value out of the Bitcoin network. But at the same time, they're gouging that we're all better for it because it's being further integrated into the financial system. and a lot of people might push back on the integration of Bitcoin into the financial system but ultimately it's a great way of protecting Bitcoin until it actually beats the entire system from within. So I don't think we want to fight them. I think Wall Street monetizing and financializing Bitcoin is actually a wonderful thing.

26:30We've seen a recent announcement where BlackRock wants to introduce an income fund on the back of the Bitcoin volatility which I think will be an absolute killer product. They're effectively doing what YieldMax is doing with their MSTY fund, but they're bringing it to Bitcoin, I think on a much, much bigger scale. That will be a fund, that income fund will be one of, if not their best performing income fund by the proverbial mark.

26:54Peter Dunworth:I've missed this. Can you, what is it? How does it work? I think basically what they're doing is they're financializing Bitcoin by selling options in a fund. And what they're doing is they buy Bitcoin, they sell puts and calls, and they manage the Bitcoin in there, and they monetize that through the form of selling those puts and calls. And then they give that to the investors in a monthly dividend. And I think their target is close to 3 % per annum. Now, I can tell you 3 % per annum relative to all other investment or income options that they offer will blow everything else out of the water. So what would they offer on a normal product like that?

27:34A normal income product would aim to get somewhere between 5 % to 7 % per annum. And this is a product that is targeting close to 3 % per month.

27:45Peter Dunworth:3 % a month. Oh, damn. Okay. Yeah. And is there any risk in them doing that? Like can, I mean, BlackRock are huge. I don't expect it to blow the entire company up, but can they blow the fund up doing this? anything's possible, but I don't think they're going to do that. But how do you do, is this like a covered call sort of thing? A little similar. So how does that actually work? I've never fully understood that. Well, there's a number of different ways that you can generate cash on your Bitcoin. There's a whole host of ways, actually. Probably, I guess, the safest way is to sell a cash put. And that's basically saying that you're going to buy this asset for a certain price at a certain time, and someone is going to pay you to take that option and leave that available.

28:31And depending on the volatility of the Bitcoin market will determine how much per month that they get back. And so what's been interesting for me is looking at the options market around micro strategy because it's a very well-developed market. It's an asset that's more volatile than Bitcoin. and there were periods of time where people were offering nearly 10 to 12 percent per month to basically take on the risk of buying that stock at a certain point in time in the future and I look at that and think that's a great way to generate cash but there are some I guess inherent risks with that but BlackRock with a professional team literally the resources that they've got they will effectively become the market and then they'll just squeeze that volatility to deliver whatever it needs on a monthly basis and then you know that basically will create a whole host of lower volatility until such point in time we just get a big kick up and it'll rip people's faces off but this is this is how they do it and this is where um what's really interesting and um i'll if i haven't already i think we've talked about this having dave dredge on to talk about volatility and risk and how to manage risk he is the best in the world at it.

29:44And he's exceptionally generous with his time. I think your viewers would love to listen to Dave because he's probably got the best outlook on risk in the markets that I've seen. He's ultra well connected and Bitcoin is going to start becoming a much bigger player in this global risk market. At the moment, it's not there because it's too volatile and no banks have built products around this. But as this creeps into the financial system that we talked about and goes deeper and deeper into it gets more and more integrated you're going to have banks that are taking more and more risk with these products around bitcoin and therein lies the opportunity for the for the likes of dave dredge to basically buy really cheap volatility on these these assets and he gets to monetize that at a future point in time but for the retail investors they're effectively putting money into a managed fund that's going to produce a yield of somewhere between, probably at the end of the day, somewhere between one to three, four percent per

30:43Peter Dunworth:month. I would love you to introduce me to him if you can. I'll try and get him on the show. Okay. So back to your call that in 10, 20 years, however long, 0.01 Bitcoin is generational wealth. I don't know what the dollar figure of that means. I don't know what you think of as generational wealth but um what presumably that's bitcoin at tens of millions more in fact hundreds of millions of dollars if not more um what does the world look like at that point like if i go to the petrol station what's my petrol cost to me what are my groceries costing me like how what what does the world look like at that point i don't think things are going to suffer hyperinflation i don't think we're going to have a$50 a litre petrol and things like that.

31:29I don't think that happens because I sincerely believe we're about to enter an age of deflation, which is going to ensure that prices come down across all of those commodities. The advent of robots, AI, all the rest of it is going to mean that cost of living pressures are going to come down dramatically. And we're going, well, those in charge are basically going to be highly incentivized to make sure that the cost of living comes down. At the same time, as that's coming down, the cost of living is coming down dramatically, the value of Bitcoin is going to be ripping because we've got a deflationary monetary asset for the first time in history.

32:03So I look at this as a really a perfect storm that cost of living is going to get much cheaper. And this is where if you look at cost of living throughout the ages, it's never been cheaper to live than right now. We've got less people in poverty, low percentages in poverty. We've got higher living standards than we've ever had, unless you're living in Australia where the last five years has gone down, but every other country's gone up. I say that facetiously, but this is the best time to be alive and it's about to get better. So all of those things, those concerns, we're going to have a price that goes through the roof in Bitcoin at the same time we're getting cheaper costs of living.

32:43So I don't think we need to be concerned about that. the ultimate hitch on that is actually just having Bitcoin. As long as you have it, you'll be hitched. You won't have to worry about it.

32:52Peter Dunworth:It's funny because I think I remember listening to a podcast. I can't remember who said it, but someone said, objectively, we live in the best time ever, but subjectively, it's the worst. And I think that's kind of an interesting because like you say, the stats say that there's never been a better time to be alive, but it feels incredibly polarized, like there's massive wealth inequality. Like, do we continue to have those things into the future? Because presumably dollar debasement doesn't go away in this time period. I think it's going to get worse before it gets better. But this is the hope that Bitcoin offers to anyone of the 8 billion people out there.

33:29If you want to protect yourself from debasement, you want to protect yourself from inflation. The only way to do that across the board for 8 billion people is to buy Bitcoin. And this is fundamentally missed on a whole host of people. I think in Western countries where we live, it's completely lost on our friends and family because they don't see it. Sure, they get sticker shock with the printing of money over the last five years, but relatively speaking, they're not interested in addressing or even acknowledging the problem. But for 4 billion people who live in hyperinflationary countries, this is a life and death situation and this is where bitcoin really only only gets adopted when it's a need not a want and for four billion people it's a need but maybe 10 million people on earth really understand and comprehend what this is so i look at this and think sort of putting a bow on the question around how does it really get to these outrageous numbers of billions of dollars per bitcoin i fully believe that there's absolutely no doubt in my mind we're going to get to billions of dollars per Bitcoin.

34:32It's just a matter of when, not if, because there's 8 billion people on earth who need it. And there are maybe a million people on earth who act like they actually need it. So what happens when the other 7.99 billion people turn up and say, we desperately need this, like we need water or air. Something's going to happen and it's going to be glorious to watch.

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36:40Peter Dunworth:Iron are not just powering the Bitcoin network they're also providing cutting-edge computing resources for AI all backed by renewable energy. We've been working with their founders Dan and Will for quite some time now and have been really impressed with their values, especially their commitment to local communities and sustainable computing power. So whether you're interested in mining Bitcoin or harnessing AI compute power, IREN is setting the standard. Visit IREN.com to learn more, which is I-R-E-N.com. It's interesting you say that people aren't really acknowledging the problem because I definitely see this.

37:11Peter Dunworth:And even for the people that do acknowledge the problem, I don't think they ever really acknowledge the solution. Like in Australia, especially, the housing market is absolutely wild here. And the people who are seeing the issues, their answer to it seems to be leverage myself more and buy another house rather than just do the easy thing of buying Bitcoin. I still think that's a huge hurdle that we need to get over. The housing market in Australia is absolutely wild. It's the craziest housing market on earth, to tell you the truth. No other housing market has got a, I guess, a bigger delta between the average Sydney median house price and the average income.

37:48That's currently close to 20 times. Now, in the US, I think it's something like about five times and people talk about housing being expensive over there. It's like, hold my beer, come to Australia, check this out. It's 20 times. It's just completely outrageous. And this is where I can tell you on a day-to-day basis, talking to clients, the people who are picking this up the quickest, who are understanding this is not sustainable are baby boomers. They're realising that, hey, I live in a five or a $10 million property or whatever the number is, right? And they've had three kids. They look around at the kids and they think, holy dooly, the three of them combined don't have enough savings to put a deposit on this house.

38:27And the three of them combined couldn't afford the mortgage that's required to pay for it. So they're doing the numbers in their head thinking, this is not sustainable. And immigration isn't going to solve the problem across any of the Western countries because through immigration, you're actually lowering the per capita GDP. And if you look at sustaining these property prices, are basically sustained through credit growth. And credit growth is fuelled by per capita GDP. And sadly, in Australia, we've had the lowest growth. We've actually had negative growth or loss in per capita GDP. This is a problem across all Western countries, is that we're trying to solve that capital gain problem in our property markets through importing people, and that has been a key driver for sustaining asset prices.

39:13But if the immigrants you're importing don't have the capital to buy into the system that you've got, then you're actually going to have to either lower the interest rates to make it more affordable, or alternatively, the property prices are going to fall. And this is something that I'm seeing living in New Zealand at the moment. The property market over here is probably off somewhere between 10 % to 30%, depending on the areas that you're looking at. and truth be told there's probably the ability for this to drop another 10 or 10 to 30 percent from where we are now the prices seem outrageous Australia hasn't seen that yet and I think America is trying its absolute hardest to avoid coming face to face with that problem of a

39:54Peter Dunworth:slowing housing market I mean just to put some context on it I live in the third biggest city in Australia which if you put that into American terms are probably like the 25th biggest city or something and where i live to buy like a three-bedroom apartment you're looking at somewhere between two and three million dollars like it's absolutely outrageous um but do you think that the property market here is gonna collapse at some point what i'm about to say is not going to be popular good say it well i think there's two or three things that you could change the government could could um enforce that would completely boost the property market and probably double or triple prices from where we are now.

40:35Now, I don't know if anyone wants to have property prices that are trading at somewhere between 40 to 60 times your average annual salary, but there's a host of things that they can do to juice the property market to get that happening. Now, why I would never bet against the property market is that everyone is in on it. And what do I mean by that? I mean, the government, the government's, well, a large chunk of their revenues come from stamp duties and capital gains tax. So if property prices start falling, all of a sudden their revenue dries up. So they're invested in making sure that happens.

41:10If you look at particularly the Australian stock market, nearly 40 % of the Australian stock market is made up of banks. And the number one profit driver for banks is residential mortgage lending. So if that drops, if property prices drop, all of a sudden 40 % of the stock market has a huge problem. The bond issuance in Australia. All of that revolves around housing. You look at it in the US, the majority of the bonds issued are around residential mortgage-backed securities and commercial-backed securities. The commercial market in the US is cactus, so too in Australia. Dare say it's the same in New Zealand or the UK.

41:45All of a sudden, there's a whole host of sort of cracks in the wall appearing if they don't sort that out. So what I'm saying is everyone is invested in making sure that property goes up, and it's very difficult to bet against the consensus bet.

42:02There are so much easier ways to make money than betting against the consensus view. And one of those is just buy Bitcoin.

42:09Peter Dunworth:Well, yeah, that is the great thing about Bitcoin is if you want your house to get cheaper, just buy Bitcoin now and wait a little bit. But I agree with what you're saying. The best thing is not to go against consensus on these things because it doesn't often pay off. But when it does pay off, it pays off massively. And we saw that in 2008. Like this is literally what happened then. Do you think there is potential of another 2008 style housing crash at some point? Yes, there is. The financial markets have gotten a little bit savvier. I think in Australia there is, but we've got a very different finance market, how they do the funding in Australia.

42:46The US, I think, is about to, could potentially go through it if they don't sort out the interest rates. It looks like that US housing market is completely stalled. Are we going to see a rerun of the GFC? In all likelihood, no, I don't think we will. And this is where, from a personal view, and this is where the conversations I think most Bitcoiners are looking at is, you mentioned a$2 million to$3 million property for a two to three bedroom. I'm sure it's lovely. But if you were to rent that, it's probably not going to cost you more than, let's say,$90 ,000 a year to rent that, less than$2 ,000 a year.

43:20Would that be a fair assessment per week?

43:22Peter Dunworth:I don't know, but wait, how much would that be per week? $2 ,000 per week for a$3 million property. Yeah, yeah. Yeah, that would probably be less than that. Maybe$3 ,000 a week? I think it'd be less. Yeah. So let's just say it is$3 ,000 a week. That's circa 5%. But you would much rather pay the$3 ,000 a week to live in that property than you would to own it. Because to own it means you're going to have to sell down probably about$500 ,000 worth of Bitcoin. And then you're going to take on a mortgage for a million dollars, which is going to cost you 6 % per annum. If you're living in it, it's gross money that you've got to earn.

43:59So, sorry, net you've got to pay. So that's going to be$60 ,000 per annum. If you've got to pay that out of net money, you've got to earn$100 ,000 to pay that 60. So before you've got out of bed, you've had to sell$500 ,000 of Bitcoin and you've got to have earned over$100 ,000 a year before you've put food on the table. And I look at that and think, If I'm Danny, I'm thinking maybe we just rent for a year or two and see how that goes because it's only going to cost us 100 grand a year. And we don't have a mortgage. We don't have to sell Bitcoin. We can let that thing roll. And what I'm finding is more and more Bitcoiners are starting to have that realization that maybe property isn't the best property or the best use case for our money.

44:42But that is a very real concern.

44:44Peter Dunworth:So is the Bitcoin mantra here, we'll owe nothing but Bitcoin and be happy? It looks like it, doesn't it? isn't that terrible well as long as you're a bitcoin that i think that's uh that's the best place you can be um so back to bitcoin everything we're talking we've talked about here um is really about bitcoin as this savings vehicle this generational wealth things that we pass down um we touched briefly on the idea of using it as like a medium exchange in a unit of account but do you do you still believe in that narrative because it sounds like you are you're coming at this much more from like the saving side do you think that is the ultimate use case for bitcoin or do you think it needs to evolve into being all elements of money uh i i think we're going to have and this is an unpopular opinion but i look at the breakdown in market capitalization of each of the use cases so you store a value medium exchange and unit of account store value is circa 25 to 30 trillion dollar market in you you can blur the line on that by saying that the stock market and the real estate market is now the store of value, but let's just go with gold at being circa 30 trillion.

45:54I definitely think those other things are a store of value though. I do too. But for this example, let's assume it's 30 trillion. The mean of exchange market is somewhere between a hundred to$200 trillion worth of value that it basically looks after. That's a huge market that's protected and has, I guess, a competitive moat supported by armies, tanks, air force, governments, police, you name it. It's a very difficult use case to, I guess, to cajole into Bitcoin. And sometimes I look at this on the media exchange market and wonder if the juice is worth the squeeze, because you have to take those governments head on and disrupt their business model, which is printing dollars, to replace it with Bitcoin.

46:36And I think if you can control and are the number one use case in a store of value function and a unit of account function, then by default and in time, you will end up with the mean of exchange. So I look at this and think 95 % of the market cap is tied up between the bookends of store of value and unit of account. So do we really need the mean of exchange market right now? Why don't we just consolidate control and use case of store of value and meet and unit of account and through time we and just adoption you'll end up owning the meet of exchange account anyway that makes sense so

47:16Peter Dunworth:and when it comes to the store of value you threw out 25 to 30 trillion is that the number yep give or take do you do you think bitcoin captures the entirety of that market and more how more i think it has the ability to to control substantially more on that and if we look at this on a micro level i think we might take um let's take a really wealthy person pick one and and we'll do a use case on them and use that as a micro micro version of what's going to happen at a macro level. Let's go really wealthy. Let's go Elon. Okay. Elon, probably worth two to three hundred billion dollars. What would he spend on an annual basis?

48:06Peter Dunworth:I've had no idea. Let's say, I'm sure he has a pretty great life. 50 million? Okay. 50 million. What's that as a percentage of his assets that he's spending on an annual basis? Don't make me do math live, please. Let's just say it's less than 1%. Is that fair to say? Yeah. And this is the curious part that we're all going to get to when it comes to holding Bitcoin, is Bitcoin will make up 99 % of the assets because we won't want to spend it all. We want to have our savings. If you look at Elon as an extreme example here, he's lucky to spend less than 1 % of his wealth on an annual basis. We all get there if we just hold Bitcoin, buy Bitcoin and sit.

48:53That's literally all you have to do for generational wealth. And I look at this and think, this is the curious part that a lot of people really don't comprehend is that the market for Bitcoin can be 100 times bigger than all of the other assets combined. So if you look at a pie chart, it looks like an entire white pie with a tiny little orange sliver down the middle, which is the 0.2 of a percent that currently made up of market cap of all the assets that we hold. Once people understand what you and I know about Bitcoin, they're going to hold 99 % of their wealth in Bitcoin. So that entire white pie is going to turn orange, and there's going to be a little sliver of 1 % that is all other assets, stocks, bonds, commodities, property, you name it.

49:36That's how it's going to work. but it's probably going to take the next 20 years to achieve that. But what happens to the value of all assets on earth when that happens? We go from being worth, say there's a quadrillion dollars of assets on earth right now, and it turns into a hundred quadrillion dollars worth of assets. But 99 of those hundred are made up in Bitcoin because guess what? People want the optionality of future purchases and they can't find a better device to do that than Bitcoin.

50:06Peter Dunworth:And is this when Bitcoin demonetizes things like the housing market, the stock market? 100%. And people think that demonetizing the housing market and the stock market and everything else is going to mean that those things are going to collapse in fiat terms. That's a total misconception. They're not going to collapse in fiat terms. They're going to continue to go up and they're going to continue to be inflationary and they're going to continue to go up through time. It's just that if you benchmark and denominated in Bitcoin, all of those assets are going to be crashing relative to Bitcoin. And this is the point that I think our good friend Jeff talks about and does the best job of talking about, that we're going to have hyper deflation, where as long as you're saving in Bitcoin, you're going to afford and be able to do whatever you want because all other assets relative to that will be crashing.

50:53But if you're living in the fiat world, then all these assets are still going to be inflationary and they're going to go up in

50:59Peter Dunworth:value. So we just need to be pricing absolutely everything in Bitcoin, which I already do. And this is like back to the point you made earlier, like you said that we're already living on a Bitcoin standard. And that's absolutely true. Like when I go out and buy coffee, I'm not thinking about that in terms of how many sats it costs me. But if I make any kind of reasonable purchase, I'm always considering like what that is in Bitcoin. And so I think what you said earlier, where you kind of hyper-Bitcoinize one person at a time. I think that's probably the most likely path here. It's just, I don't know how long it takes to scale up to being 8 billion people.

51:36Peter Dunworth:But I do think we're going to get there. I do wonder though, why this cycle, we've not seen a renewed interest from kind of just retail participants. Because like every previous cycle, we've seen massive upticks in things like Google search trends, like exchange volumes, things like that. And this time, it seems pretty quiet at the moment. I think it's a combination. Bitcoin's no longer novel. So people don't have to research and look up what Bitcoin is. They know what it is. And sadly, I think a lot of people had a really bad experience in the last cycle. They were promised a million dollar Bitcoin or a hundred thousand dollar Bitcoin in the last cycle.

52:16I think that was going to be a fair mark to achieve. but there was a whole host of skulldowery that went on that ensured that we didn't get there the the whole ftx blow up was just incredible to watch i mean we had a ringside seat to watch this absolute carnage in the markets play out and a lot of people confused what happened in the ftx scandal with there was a compromise to the bitcoin network and nothing could be further from the truth and i remember having a conversation with um with vj boy patty maybe six months before FTX blew up. And I asked him the question, what's the thing that could really derail Bitcoin?

52:54And he said, look, from a reputation perspective, one of the major exchanges blowing up would be really detrimental and could push us back five or 10 years. But that would be, even if the network continued to work perfectly, it would just be a reputational damage, even though the network was totally unscathed. And this was the problem that I think a lot of people have got ptsd from bitcoin a lot of people born in 2017 and then watched watched it drop 75 80 and then they came back around what was it um maybe november october november 2022 and thought oh great i'm gonna get on this it's gonna go up and then bang here's your next 80 drop or 75 drop it's just absolutely brutal and this is where it's really in a it's a case in emotional control being invested in Bitcoin because of the volatility.

53:46And this is where in making sure you're a success with this, you really need to have a really long timeframe and solve the volatility issue with duration. Just know that you're not going to touch it for five or 10 years. And then as my father and I have joked about in years gone past, he said, remember the mean with the monk getting kicked in the balls just continuously? And he's sitting there smiling as he's getting kicked in the balls. My father said it to me and basically said, this this is like bitcoin you get kicked in the ball for five years straight then you wake up rich so i think and you just end up enjoying it yeah that's the fun part which 100 yeah i do think

54:25Peter Dunworth:that last cycle was extra brutal as well in the sense that we had that initial pump then it dropped 60 so if you were new to bitcoin we had a lot of new people sort of post covid if you were new to bitcoin then you saw it go down 60 where you were like oh shit have i got this completely wrong It then pumped to new all-time highs, then dropped 80 % in a matter of months. That is a pretty brutal first bull and bear market to go through. And maybe what we need to see is Bitcoin to just either have a less volatile bear market or not have a bear market for retail to have the confidence to come back.

55:00Peter Dunworth:Yeah. It's just going to take time. And now that we've got the world's greatest salesman in Larry Fink on the team, alongside sailor i look at that and think it's just a matter of time before everyone comes around to their way of thinking but it is a it's literally ptsd from just the volatility whipping people in and out of positions and thinking they're going to be rich and then having you know the rude awakening that all of a sudden the expectations don't meet the reality this is probably going to continue to happen but i think we're going to have much more muted cycles moving forward i mean i think yeah a hundred percent this is something i was talking to joe and checkmate and matt pines about um on the show that went out yesterday like i think everyone is now under the belief that maybe cycles aren't gonna look the same maybe completely broken like i feel like that's becoming common consensus and whenever things like that come to common consensus we'll see it change and we'll see a big bear market like that's inevitable but like i'm at the moment at like 70-ish percent sure the kind of four-year traditional cycles are done.

56:05Peter Dunworth:I don't know where you stand on that. I just think we're entering a very different market from where we were. You look at the halving cycle is now a much, it's diminutive relative to its influence on what the market is moving forward. The size, the scope, the liquidity, and the players who are entering the market just means it's a very different profile to what it had. And to your point retail is not here that's right retail isn't here it's not being pushed by retail anymore now there's institutional investors and you know i think probably you know the best tip of the cap to to bitcoin that i've seen is vanguard now looking to create a bitcoin etf everyone bends the knee everyone is going to do that after they just shit on it for two years straight and then the funny part is i think the the person who's now ceo of vanguard had a huge part to do in the launch of the Bitcoin ETF for BlackRock.

56:58And so he's probably watched his baby become the greatest ETF ever invented or launched by BlackRock, thinking, well, I get a chance to do that here at Vanguard. So he's going to absolutely have a 180 backflip and distribute that to the people who've got$10 trillion of assets with them.

57:16Peter Dunworth:I mean, imagine being Vanguard and seeing BlackRock launch the most successful ETF in their history and thinking you've been doing a good thing by your investors. it's just insane. All right. So just to close out, I want to talk about, this is kind of in line with some of the stuff you do at Bitcoin Advisor, but for people who are like sat on their Bitcoin now and they are looking at this as something they want to have for multiple decades, generations passed down to their family, what are the kind of things that people need to have in place that you think is overlooked by Bitcoiners? That's a really good question.

57:50There are probably, I think there are five things that I'd like to share that I think will probably have the biggest impact in helping Bitcoiners keep their Bitcoin. And then I'll talk a little bit more on the self-custody side of things, which is completely separate to this. But I think, and this is a very unpopular opinion, and sadly, my job requires me to have really awful conversations with people who are very lovely. But in wanting to plan for the worst and hope for the best, there are certain things you need to do to protect your Bitcoin. And statistically speaking, the number one thing that you can do to protect your Bitcoin is ensure that you don't go through a divorce.

58:33So if you look at the marriage stats in Western countries, you're upwards of 50 % in divorce. And that is the surest way to halve your Bitcoin pile. And there are ways to mitigate that, but that's the number one thing that you need to be concerned with. The second thing that you want to try and avoid through time, and it's not a one-off event, it can happen multiple times through life, is ensuring that you minimize the effect of taxes on your Bitcoin. So how do you do that? Well, just have a look at the major taxes that you want to avoid. The first one is capital gains tax, buying and selling your Bitcoin.

59:11In Australia, we've got a 25 % tax rate if you've held your Bitcoin for more than one year. In the US, UK, it can be anywhere from 25 to 50%. Canada can be higher again. And I look at that and think, that's a really, really fast way to halve the amount of Bitcoin that you're holding if you're not prudent with it and you start trading. It's very difficult to get ahead if you're going to be basically giving half to the government every time you start trading. The other, I think, really important tax to avoid, it's not so relevant in Australia or New Zealand, but it is in the UK, US and Canada. This is an awful one, but it's probably going to come to the rest of the world is estate taxes.

59:48And the problem with estate taxes is that it's very difficult to get out of. You need to plan. And there are ways and means to mitigate the effect of this, but avoiding estate taxes can increase the amount of Bitcoin that you leave to your loved ones by 66%. And so I look at this and think, if you could talk to any Bitcoiner and say, hey, do you want to leave your loved one 66 % more Bitcoin? We'd all jump at it. But it just requires forethought and planning to ensure that you're putting those Bitcoin in structures that are going to avoid those estate taxes on death. And this is where the UK, the US, Canada, they all have remedies to avoid that.

1:00:28But it's just about actually having the conversation and making sure that you are structured in the best way possible to avoid that. The other one that I think is really important from a generational perspective, and this comes down to actually passing on wealth. And one of the problems that we see with, I guess, a number of clients is, you know, they pass on the wealth without passing on the values. They're too quick to pass on the value without passing on the values that actually created it. And if you look at statistically, the first generation makes it 70 % of the wealth is lost by the second generation and 90 % is lost by the third generation.

1:01:05So if you think that Bitcoin's an asset that can last the next thousand years and provide for generational wealth, ensuring that you pass down your values that actually created this wealth is probably the most important thing you can do. And I think a lot of that comes down to having educational, well, financial education around Bitcoin, what's the important or significance to it, how to adequately care for it, look after it grow it and most importantly ensure that you don't lose it and i guess probably the final thing that i'd look at um is making sure i guess you avoid the two key areas that can level any amount of wealth whether it comes to bitcoin or literally elon mask or anyone else it doesn't matter how much you're worth the two things to avoid um when you have wealth that you want to pass down and maintain for generations is to ensure two things.

1:01:57One is gambling in any form that it might take. It might be sports betting. It might be betting on shit coins. You name it, avoid it. And the other thing is ensuring that you don't take on any debt. And they're the only two things that can level any amount of wealth. And so ensuring that you prepare for those things, and most importantly, you educate the next generation on how to basically manage those things, I think is the most important thing for preserving your Bitcoin through time.

1:02:28Peter Dunworth:I think that passing down of values is super interesting because that has both negative ramifications for you and your family and for Bitcoin as a whole. If we don't pass down the values of what Bitcoin is and why it's important, then Bitcoin is also doomed eventually. And I can think about that from a personal level. So my granddad worked on the shipyards all his life. My dad ran businesses. He didn't do anything with his hands, but he was still very keen as a hobby. In fact, just complete tangent. But we were in Liverpool once. My granddad died before I was born. And we were in Liverpool once when I was 16 years old, me and the family walking around the docks there.

1:03:09Peter Dunworth:And my dad just stopped and was like, what's going on? He was like, I built that boat. and it was a boat that him and his dad had built like 40 years earlier just floating in liverpool docks as we were walking around it was crazy but the reason i say this is like so my granddad obviously worked with his hands like he was incredible with that passed a lot of that down to my dad who was also incredible with it and i can barely put a tv on the wall and like this is how these things can get lost through generations and i think with bitcoin we need to be really conscious of passing down the values of it to our kids and hopefully longer.

1:03:44That raises a really good point. Apathy is probably the only thing that can ruin Bitcoin. And basically apathy will grow with those who haven't built it. So that's going to be a really tough thing for us to hand down to our kids. You know, they're going to inherit basically the internet and internet money and think that, you know, money grows on trees, but things couldn't be further from the truth. you know, we've basically experienced the last 10 years of Bitcoin and the fights that you've had to have to get to this point in time. And then it feels like, oh, the rest of the world's coming to the party now.

1:04:17But the generations that are going to inherit it aren't going to understand the struggles that everyone went through to preserve this network as we see it today. And I look at sort of the two biggest examples of conflict that I've seen in the last 10 years. One's a block size war and one's what's currently happening with call V-knots.

1:04:36Peter Dunworth:it's um it's going to be really interesting and like bitcoiners love to talk about the fourth turning like i just did a show with brandon quitton on it um but the fourth turning probably exists within bitcoin too it's like we we need to make sure like good the good times that the strong men make don't end up in a weak men making bad times how do we avoid that just i really don't know the answer to that do you know we avoid it by more bitcoin podcasts

1:05:06Peter Dunworth:um well okay so the last part that you i'm trying 40 hours a week um so the last part that you wanted to get onto there was the self-custody side yeah i think it's really important to self-custody bitcoin and i look at all of the bitcoin wrappers that we've got available today as really entry points they're top of funnel i look at the bitcoin etf i look at microstrategy metaplanet all the other Bitcoin treasuries or proxies, the Bitcoin miners, the ETFs, I look at that and think that's really top of funnel. That's kind of getting people interested in Bitcoin. And that's the teaser. That's the entree.

1:05:43The main is actually delving down into the rabbit hole and actually self-custening this Bitcoin. And this is where the rewards for self-custening your Bitcoin into the future, I think are going to be astronomical. And this is where I would urge people to say, They start wherever they start. You know, you do you is probably one of my most famous sayings that wherever you're comfortable starting, start there. But I urge everyone to go down that Bitcoin rabbit hole. Get into Bitcoin self-custody. Because the benefits of self-custodying your Bitcoin long term are going to provide literally for generations to come.

1:06:17Once you understand how to preserve your wealth, how to custody it safely, the benefits that are accrued to you who self-custody your Bitcoin are going to be enormous. particularly with the credit markets that I see building out on this, is that if you own your Bitcoin and you self-custody it, you'll be able to access any credit market on earth. And you look at, say, the Swiss have got near 0 % interest rates. You've got the Japanese central bank has got an interest rate of 0.5%. Bitcoin's the first globally ubiquitous asset. And being the first globally ubiquitous asset, you'll be able to access those markets with cheaper interest rates.

1:06:51Now, if you've got a Bitcoin wrapper like the ETF or a micro strategy, you won't be able to get a margin lending facility at those rates globally because you'll be stuck with the local jurisdiction and whatever interest rates are offered there. So purely from a self-interest, I think it's important to go down that self-custody rabbit hole. And this is where I spent the last 10 years trying to help clients self-custody that Bitcoin in a way that removes every single point of failure from their custody and ensures that they can't muck it up. Because the last thing I'd want to see is telling people how to buy Bitcoin and go down that rabbit hole and then they don't do it properly, they lose it and turn around in five years' time and say, hey, you know all those things you did, how do I recover it?

1:07:38And this is where I've been fortunate giving advice on this in the last 10 years. unfortunate to say we haven't lost a single satoshi helping clients self-custody their bitcoin because we do it in a way that offers multiple redundancies for their self-custody

1:07:54Peter Dunworth:so you've not lost a single satoshi i mean that's incredible we need to we need to keep that going um peter this has been amazing i think this is the least hair we've ever had on a podcast i might i might title this one but between two hairs um but before you go where do you want to send in Anyone who wants to find out more about you or Bitcoin Advisor or anything you're doing? I think probably the best place would be thebitcoinadvisor.com, and that's Advisor with an ER. There's a whole host of resources there. You can download a Bitcoin Advisor chatbot if you want a whole host of help with securing your Bitcoin.

1:08:31We give away all our IP for free. So we just want to make sure that everyone self-custodies their Bitcoin in the best way possible. And I urge everyone to take as much of our information as possible and apply it to themselves personally. And if you need any help on a personal level, just reach out and book some time with us. It's easy to do.

1:08:51Peter Dunworth:Love it. Thank you for this, Peter. You're the man. I know I bug you with a call every week asking you about different things that happen in Australia, different tax implications of whatever it is. You're my personal Bitcoin advisor. So I really appreciate it, man. And I will speak to you very soon. Thank you, Danny. appreciate you