Did the Bitcoin Bull Market Just End? | Checkmate & Alec Dejanovic

29:27And that's stuck with me for a long time. And like the reason I have gold is like, it's almost like a ballast in my portfolio where it's the same trade. It's just not as volatile. I can tap it when I want it. And also I just sometimes want something that's not going to go down from 125 to 80. That's where it sits, like a ballast part of my portfolio. And in fact, I always try to get gold to 10%, but as we know, Bitcoin runs too hard. So I'm always chasing. I literally have to continue to buy gold to get it to 10%. We might have finally hit it now at Bitcoin. I think the interesting thing about Luke, like Luke's clearly a genius.

30:01Like I love talking to him. I get his newsletter. I don't think there's really very many people that are better than him at doing what he does. But in one of his recent newsletters, he basically said, you need to start trimming Bitcoin. I think he might have even said, time to get out of Bitcoin. Do you think the fact that the bull market was obviously completely different, if it even was a bull market, the bear market is going to be completely different. Do you think if you're selling now on cycle expectations, that's a mistake? That's my view. So there's no reason that the four-year cycle has to play out.

30:33A lot of people are going to say that it has played out, but we are down 35%. My base case for now is, and I've been saying this for a long time, there's a model called the true market mean, which is 82K, which we tagged overnight. So the true market mean, again, Dave Poole and I built this in CoinTime Economics. There's a model called the realized price, which is the average on-chain cost basis per Bitcoin. But the problem with the realized price, we've actually traded below it way back in 2015, way back in 2018. It's always been we trade below it and that's when bottom formation really starts.

31:08I was of the view that we shouldn't actually have hit it in 2022. And the reason why Satoshi, lost coins, early miners, they're sitting on tremendous unrealized profits, but they're not going to take them because they're lost. All right, put the quantum thread aside as a potential for bringing back to life. Those coins are not going to come back to market in just normal participants. So in order to hit the break-even level of the realized price, you need, let's say Satoshi's up $25 billion. People who are active in the cycle need to be holding$25 billion of losses to offset it, to get to break even.

31:42So the higher the price goes, the larger the market gets, the more those unrealized profits swell, which means the larger the damage has to be for people who are active, and what happens when people go underwater? They sell. They capitulate out. And those losses actually get kind of tempered because people respond to the sell-off. So the true market mean uses liveliness, and I won't go into all the details, but it basically zones in on active investors, the older coins that haven't moved and have just huge amounts of coin days within them. We start to discount them the more that they have. And from that perspective, that's like the average cost basis for active investors.

32:17And it's, statistically speaking, the price oscillates around this thing. It is the middle, statistically speaking, of the entire Bitcoin market. It's at 82K. You know what else is at 82K? The average inflow cost basis for the ETFs. Saylor, who I would say is, broadly speaking, the average dude in terms of like they buy all the time in a bull. His cost basis is at 74, which is not too far from 82. And the reason it's there is because they've been struggling to buy more coins, which if there's one challenge I'd give to Saylor, it's like you need a bear market strategy here because these coins are cheap.

32:50And for me as a hodler, I'm happy as Larry, right? I'm going to keep buying down here. But the average hodler is about 82K. The average ETF investor is 82K. That also tells you that the ETFs are also kind of the average market participant. The average market participant is around 82K. If we were to bottom them there. It was at 30K back in the previous cycle. What did it take to get us below that level? Because we bottomed there in like mid-2021 that we bounced off it. We came back down to it. We needed Luna to market sell 80 ,000 Bitcoin in distress. We needed three arrows capital to be a fraud.

33:25We needed Genesis and Celsius and then finally FTX. That's the kind of damage we needed to get below down to the realized price. So I actually lost a$100 bet with my colleague from glass node because like i don't think from first principles i don't think we get to the realized price i didn't know that fraud was there um and that hundred dollars is worth a whole lot more now bitcoin with it um but for now i unless sailor implodes i'm not sure where that gfc grade deleveraging comes from that could take us down to the realized price of 56 yeah could it happen yes it's not my base case so my base case for now is that we probably hammer out a bottom somewhere like we might tag the 70s i think getting down to the 50s is you know bitcoin's a trillion dollar asset now if you have 50k it's you're almost undoing the etf so like can it happen anything can happen is it my base case no this episode is brought to you by river and they've just launched a very cool new product where you can automatically buy every price dip their zero fee recurring buys are a proven way to build wealth with bitcoin and you can now supercharge them and buy up to 100 % more bitcoin if the price is dipping at the time of your order.

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36:35This episode is brought to you by Bitcoin Mina. On December 8th and 9th, I'll be in Abu Dhabi for Bitcoin Mina along with 10 ,000 other Bitcoiners. There's an amazing lineup of over 200 speakers sharing Bitcoin insights and innovation from all over the world. And if you're looking for the ultimate VIP experience with exclusive networking plus premium food and drink, then grab the whale pass and the whale night party even includes surfing so you know i'm going to be there tickets are on sale now use code wbd to get 10 off at checkout on all past types the website is mina.b.tc and use code wbd for 10 off i think in a lot of ways the market is far more healthy than it was back in 2022 like i can't think of besides some treasury companies imploding anything that could do that i don't think there's any i can't say i mean touch wood I don't think there's any like fraudulent businesses in Bitcoin at the moment.

37:25Like it seems like everyone's learned their lesson from 2022. And if we have a bear market, let's just say for argument's sake, we bought them at the true market mean, 82K. If we bought them at the true market mean, it's 35%. Is everyone going to reset their cycle chart at the same way that they did FTX? At the same way that they did, and this has been my case for a long time. I think the bull isn't going to be that, like we didn't have a blow off, but generally speaking, the bull market did exactly what a bull market does. Price go up, old hands sell. It's how they use things generally play out.

37:54My view was always that the bear was going to break people because they're not going to know when to reset their chart. And if we bottom at 35 % down and in six months' time we're toying with all-time high, is it a new cycle or is it a super cycle? Is it a four-year cycle or is it a five-year cycle? And again, this is all speculation, but I just wonder if you have to be so flexible in your thinking moving forward. You've probably seen people sharing. there's like a big table of all the metrics that didn't hit zero out of 30 hit their on-chain top and it's like yeah but that doesn't really matter because there was a tremendous amount of sell side um when we started talking and i think it was about 113k i wrote a piece called on the cusp and on the cusp is where i sold my mstr at 300 bucks and i said i think check the analyst who's supposed to be very objective said something doesn't smell right here we're below the short term cost basis we've failed two all-time high attempts something's wrong i'm selling my risk position because I want cash for the road down.

38:51And I started highlighting, and we were talking about it before that, 95K. 95K is where we got about 60 % of all the money underwater. And I said, the road from 115, we're down around the first line of defense, 100K is the next line of defense. Once you get down to 95, we're really testing the waters and the trip from there to the 80s will be swift. So we've kind of watched this thing devolve over time. And again, no one can predict the future, but what we can see is where is everyone's cost basis? And just drawing that line in the sand and saying, and I called it the bull's last stand. And when we got to 95, what happened?

39:31Straight to 82. And that's not because I can predict the future. That's just because there's a lot of people suddenly underwater, we can see all of their cost base and you go, it's a sensitive spot. It's where people's sentiment is going to shift to, oh shit, we might've just flipped over and I could be late to this party now. So what's the check on chain take now? Is it that we're going to hammer out a bottom basically where we are? Or do you think we go lower? Yeah, so my base case for now, there's two elements. One, I do think, so for the longest time, I think in 2024, I wrote the true market mean, wherever that was at the time, 40K or 30K or something.

40:04I said, I wrote a piece called Rethinking Bears. And I said, at some point, when the bear shows up, here's the fundamental reason why I think the true market mean is more likely, which I was describing before, more likely to be that floor level. It's at 82 now. That doesn't mean that we bought them at 82, but that's kind of the realized price. I think we chop around it. It's kind of a center of gravity. I think the ETFs being there is also a very good confluence. We also have, unfortunately, in the very, very near term, so probably by the time people are listening to this, we've probably already seen this, there's a ton of people longing the bottom with futures on leverage so what i suspect happens is we probably get a wick we probably tagged seven something but i do think that gets bought up so i would be very surprised if we go down too far below the 2024 chop zone um my base case and again we can only work in scenarios my base case is that 2024 chop you know 70 plus i think that's going to work as support i mean you're going to give me coins at 70k i'll think about this in the shower this morning if price goes down to 50k you can now with a 5k slug buy 0.1 corn to me give it me i'm sorry i'm sorry you're going to give me five grand and i could buy 0.1 corn suddenly people can start being whole coiners again i'm sorry that that it's too cheap it just doesn't make sense there's too many people like me i'm going to step in before that so my base case is somewhere between when we've tagged 80 um could be the low probably get retested because of futures but this zone this air gap between, you know, 70 to 80, I suspect we'll find a base somewhere in there.

41:36That would be my base case. Yeah, I would take that all day, every day. It's too cheap otherwise. Have you guys been following this winter mute Binance thing? No, I'm sure there's bodies out there, but, you know, this is the thing. Everyone goes looking for a boogeyman. You know, from my perspective, we broke below the base of what I call the Hodler's Wall where all that supply is. A bunch of people are now scared that they bought the top. They start responding. There's no support between there and 85. So you don't think it's down to these market makers? So just for anyone listening who's not aware, I've not been following this super closely, but from my understanding, it's that Wintermute, when crypto, like the broader crypto market, had that big crash a few, like a couple months ago.

42:17Binance's API stopped working for Wintermute and they lost, I think, billions of dollars in it. And so Wintermute are now suing Binance, I believe. And like one of the theories that I've heard is that market makers are like pulling liquidity from the Bitcoin market. I don't know if you - Yeah. I mean, look, I'm sure all of that's true. I think generally speaking, there's 50 different things that are going on, right? So they all have different components. But, you know, from my perspective, we got below 95. We got below the bull's last stand. That was my thesis. Next thing you know, we're at 80K.

42:49Whatever the cause, the thesis was, there's too many people who are underwater. Keep it simple. So you talked a little bit before about who's buying here, because like someone's buying in massive size, volumes are high. Who do you think that is, if you had to speculate? Because you mentioned before banks, I could believe that. I think, especially in the US, the banks are going to be stepping into Bitcoin in a pretty big way over the next few years. I think they'll start custody in Bitcoin, offering loans and all this kind of stuff. Who do you think that might be? It is very interesting because it's not happening via the ETFs.

43:20That to me is the most intriguing part of it, which also means we don't know. So you can never know the buyers until later on, but what I suspect we will see, long-term holder supply takes five months till a coin reaches that level. The amount of buying that's occurred over the last six months, so we're probably getting close to it, I would say that long-term supply starts bottoming soon and starts moving significantly higher. If it breaks to a new all-time high, this is the only way we can really speculate about this stuff. It feels to me like it's got to be banks and it could be sovereigns because it's in the spot market which is a strategic position and the size the size of it is just extraordinary and how do we know it's big because we saw the selling the sell side was massive like three billion two billion dollars a day i'm not bringing that in i'm talking about being happy with a 5k clip you know what i mean so like the average investor is not bringing tens of billions of dollars a week and it's in spot markets, it feels meaningful.

44:20Like, I'm buying here, but the market doesn't care that I'm buying here. I want to know who the big buyers are. So, yeah, very interesting. One sold Bitcoin is one sold Bitcoin. Doesn't matter who's selling it. That's why we use that six-month cutoff because at least it's a sold Bitcoin that we know wasn't just, you know, transacted day-to-day and part of the noise. Well, all these long-terms that sold at above 100, they could buy back in. And they will. They just made the best decision of their lives to sell at 120, 110. now they're going oh okay i just clean that profit jump back in slowly um props to mr 80 000 bitcoin oh my god he literally could just have a bid now what a go like why wouldn't you like you can now rotate right back in like that sell side could literally just go okay thank you imagine the tax on nine billion oh my god that's a good problem you need a legal i always think about like the prep you need to sell that much bitcoin would be a nightmare like you're just sitting there with spreadsheets and just talking to accountants and being like, how do I get, like, I need to find the right OT, I need to find the right desk.

45:23How do I even sell this thing? I mean, is it hard though? Or is it literally just like, Alex Thorne, I'm going to send you loads of Bitcoin and sell it to you. No, but with tax men, like thinking about the tax part, I think that's what's really hard. If you think about it, if you're cashing out that much, you're setting up an estate. That's a job. That's like a whole thing. And there's a lot of people who are like, why didn't they sell the first time we got to 120K? It's like, because, These decisions take time. It's a big job. It's a huge job. A lot of stuff to do. Yeah. Alex Thorne is the reason for this bear market.

45:55Cheers, Alex. Thank you, Alex. Obviously, while Bitcoin's been crashing, it's not like the whole macro world has been super healthy. Everything's going down at the moment. I don't know what gold's at the moment. But how much of that do you think is playing into this? Oh, macro's a huge part of it. So I would generally just go and listen to your podcast with Lynn, who's going to have far more of you. I consider myself a macro tourist, so I certainly rely on other people to think about it, but I also like considering these ideas. My general view is that liquidity just hasn't been ripping. There's been a whole bunch of things, TGA, sucking liquidity and all that stuff.

46:29My kind of, if I was to give it a general description, we're at the very tail end of all the money that got pumped in in COVID. And it's now, as Alec was saying, trying to just find the place where it's being treated best. And it's a bit of a dog-eat-dog world. I think actually, if you look at the way that the Bitcoin crypto world has operated this cycle, there's been Bitcoin that's run and like the occasional pump somewhere. Meme coins. Well, they had their time in the sun. Then what do you hear about them anymore? Solana had a time in the sun. Then who cares? Like ETH got there within like 50 bucks of its all-time high and is now in a horrendous bear market.

47:06So there's all these things where like money just kind of rotates. So if you think about if you're awash with liquidity, rising tide lifts all boats. Yeah. if there's a limited amount and it's starting to get scarce this is also why i think and txmc and i have a very same opinion here that altcoins were a zerp phenomena yeah we are now there's no narratives left there's no reason for anyone to like be bullish on this stuff so they're just kind of chasing that final pump um everyone's now decided the z cash is because like we can't pump all the tokens we can't pump 10 tokens let's all just get a marketing team and just pump one it's just a vc company it's a vc company so everyone just goes for the one thing because like at least we can pump one coin right can we do that have we got enough money left for that so i really think we're at like the tail end and also interest rates aren't zero yeah and that's a hard like it's not a hard money environment the dollar's still a shit coin but it is a hard-earned money so as a result of higher interest rates people have to be more you know they have to think about i mean if interest rates went to 20 you better believe that people would only be buying stuff that's worthwhile yeah It's the same idea of moving to a Bitcoin standard.

48:12People are only going to invest their Bitcoin if it's a good idea. So in a harder money world where it's not Zerp, Fartcoin doesn't make as much sense. So I think people are going to start having to think that way. I think when I was speaking to Lynn, she said a load of interesting stuff that I'd not really considered before. So she, first of all, was talking about liquidity potentially drying up. She actually said it's not at that bad a spot right now. But QT is coming to an end. And she was talking about this idea of QE, but following GDP. Obviously, in Bitcoin, people like to talk about these huge print events.

48:47And if we're not going into that world, and instead it's just going to track GDP at 3%, 4%, or whatever that is, I think that's going to change Bitcoin's market dynamic completely. And I think it might look more like 2025 for a longer period of time. Potentially, but at the same time. So I do think that everything about rate of change. So a lot of people like to look at absolute value, but in reality, the rate of change is in most things, engineering systems, in markets, the whole lot, rate of change is actually more important. So we haven't seen an explosive growth in liquidity. But if you think about what is likely coming down the road, QT comes to an end.

49:24So at the margin, the rate of change is that's going to be less restrictive. They're going to have to go back to balance sheet expansion. And my general thesis, like in the macro world, I don't have the skills and the chops to like get into the plumbing and understand sofa rates and all of that. I certainly, I mean, we work with the Bitcoin layer. We rely on Nick for a lot of those things. Nick's the guy for that. Nick's the guy for that. Lynn's for that. Luke, understanding the plumbing. But I'm just, I'm a simple dude. I just look at gold and I think gold and Bitcoin are two very special assets because their prices are not just a price, they're actually information.

49:58when you see something happen on a sunday night you see all the trad fi guys posting the bitcoin shopping like look at shitty store of value this is i'm like that's your equity portfolio tomorrow so what you're looking at is a lens into what's coming down the road so gold doesn't move until it wants to move and when it moves you should pay attention and it's clearly moved uh the most overheated has been since 1979 uh in terms of distance from the 200 week moving average no matter how you want to cut it, it's telling us that the system is bankrupt and we have to move to a new reserve asset. That is a very important signal.

50:32In my world, gold tells me where we're going. Bitcoin is much more sensitive to the near term. And the near term, the rate of change of liquidity hasn't been great. It may actually be kind of hairy moving forward. You get any weakness in equity market, that falls off. Suddenly collateral goes down, bond volatility goes up, and everything just gets squeezed. That doesn't mean that the follow-up is not going to be tremendously on the side. So I do believe there is a convergence between Bitcoin and gold that shows up, but I think Bitcoin goes the road to get there. And it's been telling you that the equity market probably is due for a pullback as well, kind of front runs that liquidity profile.

51:07So my base case is that Bitcoin will probably lead us back out of this thing when all the equity guys are going, shit, call Jay Powell, it's all over. And Bitcoin's going to start bottoming out and moving and say, here it comes. Do you know one of my favorite, this might be a really stupid take but one thing that i quite often watch is so uk markets open five hours for new york um and it seems like for those first five hours all that those markets are doing is basically guessing what the us markets are going to do when they open yes so there's no signal there it's like we think it's going to go down so everything goes red or whatever but if you watch that happen and then you compare it to bitcoin like bitcoin is actually the signal yes and i don't know why the people trading uk equities aren't just looking at what bitcoin's doing and be like today's going to be a green day.

51:50Absolutely. No, I fully agree. And like on Mondays, I often see the Australian stock market doesn't know what to do because it's been the weekend. And then on Tuesday, America's done something in Australia. It's like, oh yeah, we got to sell off as well. Like something wrong. So it very much, it's a response type factor. I love the idea that Bitcoin is basically just a global prediction market. It's the index. And I think that is coming more and more into people's view. Like again, let's think about where we are right now. We're at a point where sovereigns are taking positions in Bitcoin, right?

52:20We're 16 years into this experiment. We don't have to convince anybody that Bitcoin is going to stick around. Even the bears that are out there are like, okay, now it's starting to get a bit undervalued versus gold, right? It's probably going to come back. It's a cockroach that keeps coming back from these 80 % drawdowns. Like, oh, it might go down further. It's like, yeah, but they also know that they should probably buy that dip too. I think even Andy Constance bought this dip. Yes. No, even guys who don't like it, like Peter Schiff, eventually he's going to realize that he should probably just approach it to stack and a couple of uh or one of our orange subscribers said something very interesting which is um i don't care about bitcoin tops at all i care about the bottoms that's all and these these guys are like serious serious traders and so that's a really interesting way to start thinking about bitcoin especially as a hodler investor where is the but like as long as the floor keeps rising over the long arc of time, that is actually the success metric of Bitcoin.

53:15There's always a fair value of Bitcoin and the price is oscillating around it, up and down, up and down. We're kind of a bit too high. This is the way I frame it in my mind. And now we're just finding that fair value and all the smart money, they literally just go, where's the bottom? That's all I want to know. I just want to know when it finally, after this really human organic hype cycle comes over and they're finally back at that fair value, which Bitcoin should probably have just been priced at that level this whole time anyway, if it was like not a human market, that's all they care about.

53:43So it's super interesting to think of that way. There's just, which is why this bottom formation period is going to be like super exciting. Like I'm super, I'm super keen to just watch this bottom happen and be hammered out because that is the fair value of Bitcoin that is now being reset. So we're in like a new chapter now. So it's kind of cool. And this is where you start thinking about the psychology of resetting cycles. We were talking about this morning, there's this process where everybody over the next like a couple of days, you were using the term you're going to have to grieve this red candle.

54:12We need to grieve a little bit. So people are going to grieve, but like even just having this - What does grieve mean? Go sideways for a bit? No, no, no. People need to like come to terms with the fact that we're at 80K. Okay. Yeah, yeah. They're going to come to terms with it. So I think people are going to go through that process. I mean, even just having this conversation, I'm like, fuck, I'm actually more bullish than I was this morning and I bought the dip this morning. I don't know. When you see a 30 % down and you've invested and been watching this thing and like being a fan and really excited.

54:34And then you kind of get denied and then Thanksgiving's coming up. Christmas is coming up. You have to see your family that you've been bullish to. You all just, you have this heavy, heavy heart. You sold them on it last year at a hundred and something K. Exactly. And you have this heavy heart, like especially men. We don't take the time to just sit and feel that. Oh, yeah. I kind of have to like feel the loss and like breathe through it, talk to some friends. But you need to do that ASAP instead of sitting on X and just watching all these charts. because every single person who was saying it's going to go 250k is now calling a bottom and calling something we're going to go straight back up it's fine we're going to be 100k in no time like you need to stop looking at all that you need to grieve a little bit i think yeah and it's okay it sucks it's okay it's a new chapter it's going to be exciting and that's the thing bear markets and i think the correct way to think about this current market structure is to think about it as a bear market and do not anchor to bear market must go down 75 or must go down 55 drop those type of metrics.

55:32Bear markets are things that reset investor expectations, right? I think most people, after we hammer out this floor, will have reset their expectation to say, okay, we're probably not going to a million dollars on the fourth year of this halving cycle, right? People are going to have reset expectations. In fact, people are going to probably have expectations that go too far the other way. Everyone's going to converge and you'll start seeing those dudes on Reddit being like, I've sold everything. I'll buy it back at 12K, right? That's what we saw back down there at 15k when fcx blew up when you start seeing everyone over correcting in the wrong direction we have now reset expectations which is the job of bear markets probably a few treasury companies have to puke as well but that's a different topic do you know can you remember what we closed the year out in 2024 what yes it was 92 something i think okay do you know the thing that i'm most concerned about is that huddle's green green green red is wrong we need to get above 92k by the end of the year to keep that meme alive if we get above 92k i mean that's a pretty significant bounce i mean again 95 is a very important level the bulls have a lot of work to repair this price chart no question not impossible but i'm not i'm not anticipating all-time highs this year i know some people know me neither no and um however i also wouldn't be honestly i wouldn't be surprised i mean my base case has been the true market mean now again true market mean 82k that doesn't mean that's like the wick of the bottom with historically traded below it, but that is the zone where investors are going to be so sensitive that they're going to have to reconnect.

57:05So if you think about an ETF investor, they've been DCAing since they went live. They are now underwater or at their cost basis. They now have a decision to make. Do I still like Bitcoin? I liked it at 95 and 100 and 110. And I liked it at 70. And I liked it at 45. Do I still like it? And if the answer is yes, we'll start seeing the ETF outflows slow. We'll start seeing realized profits on chain slowing, which we're seeing already. We'll see the people who bought the top and don't have the conviction realize losses will spike higher. We saw a billion dollars yesterday. I'm sure it's higher today.

57:38We'll start seeing these signs of like a reset. People who bought high are going to get out. The people who bought high and kind of don't care are going to hodl. Long-term supply will start climbing. We'll probably start seeing bear market formations, I think, hammering out now. I thought back in 2022, the 17K, the first time we got them, three arrows blew up. That's when I think bottom formation started. And every metric I look at says that that's when bottom formation started. I have a feeling that this might be, and perhaps with that wick to just get rid of all the leverage, I want to see all the degenerate leverage guys get washed out first.

58:16I have a feeling somewhat similar to that. We still went down lower because of FTX, But it was like down sideways and then straight back up. It was like a hyper extension. And a lot of buying happened there. But bottom formation, I don't think we're too far away from starting to hammer out that flaw. That's my base case. Again, base case is just base case, but that's where I sit at the moment. Based on nothing analytical, I think we might be getting close to bottom just because I've started seeing the flood of texts come in from people. I actually got my favorite one yesterday from one of my friends.

58:44He's been in Bitcoin for a little while, but he's not like a full-on Bitcoiner. I just got a text from him saying, why Bitcoin cheap? I think when you start seeing that, you're probably getting towards the bottom, at least from a sentiment perspective. Yeah, yeah, exactly. And bear markets aren't a drawdown percentage. They're not anything other than resetting investor expectations. What reset expectations? People flying high and then being brought right back down to reality. Once your feet are on the ground, you then go, okay, we're at 80K. I'm going to accept that we're at 80K. You're telling me if we go down to 50K, I can buy 0.1 with a 5K slug?

59:21I don't think we go there. So therefore, am I happy with 60? Am I happy with 70? Am I happy to start just like DCAing now and like taking nibbles? Like you start making decisions accordingly once you have just come back to reality and said, well, look, we're not at 100K anymore. So one thing's for sure. The top may be in, but we're not at the top right now. Yeah. Once people start doing the calculations to figure out their net worth, that's normally a sign that we might be getting close to the top. Well, I mean, for me, I knew that the gold had hit its top of 4 ,300. Why? Because I updated my precious metals spreadsheet three times in a single day.

59:53Normally, I update it once a week at most. Did you sell any? No, I didn't. And the main reason is a tax thing. I still think that gold's going to have a good year. So for me, it's not a good year for me to sell the gold. I thought about it for sure. I'm actually kind of thinking about like even can I make the tax work because I like would rotate the gold into bitcoin now so I'm actually playing around with that idea that's certainly where I sit but I knew that it was the top for the meantime because I changed my spreadsheet three times I'm like that's it so far. So going like there'll be a lot of people out there panicking at the moment.

1:00:24Sure. What would your kind of message to them be? So I think really you got to just why are you here in the first place right. Most often, your expectations don't align with your time frame. So a lot of people who buy and then the price goes down straight away feel bad. But you have to remember, who did you buy that for? When I'm stacking sats, I'm buying them for my future self in many, many years. I'm buying them for my son, who's 10 weeks old. I didn't know you said you had a son publicly. No, no, no. So I'm a 10-week-old boy at home. Congratulations. He's going to be 18. It's the best fucking thing ever, isn't it?

1:01:01It is. No, it totally is. So he's going to be 18 before he starts seeing any of those stats. I'm like, if I'm buying at 80K, 82K, and it goes to 70, where is it going to be when he's 18 years old? Yeah. Substantially higher. We talked about this when we were moving our retirement fund across to Bitcoin. That was the case. It's like, okay, I'm going to retire in 30 years. I'm going to need this in 30 years. Where the hell is Bitcoin going to be in 30 years' time? Much higher. Much higher. I mean, I do the same thing. since the day my daughter was born, she has a DCA that just hits every week. And like, if you're buying Bitcoin for that long term, just who cares about this?

1:01:37Exactly. So I think first things first, just accept what has already happened, right? Go through the grieving process. If you bought the top, it's okay. There'll be many tops. There's always many tops in Bitcoin. And you have to then make, I think really the right way to frame this up, no one can predict the future, but if you prepare for it, I've been talking about this 82K level ad nauseum when we're up at 100 something, and it seems completely irrational to get there. But the idea is that by the time we get there, our subscribers have already mentally processed it. So the grieving period for a lot of people who have no idea what's going on is going to be months.

1:02:14And what's going to happen is they're going to get increasingly bearish as the bottom gets hammered out and every sell-off goes down lower and lower and they're going to get, I'm disillusioned. I'm out and they're going to walk away. what you actually need to do is think about what would happen if we go to 80k what if you can't control the markets like the tide you get sucked out to see if you swim against it the only thing you can control your decisions i've already made my decisions at 115k when i sold my msdr i said i'm going to start allocating that capital if we get anywhere within a sniff of true market mean here we are what am i doing all the money i sold for my msdr is now allocated and now any income that I kept coming in, straight in because I believe this is a good place to buy.

1:02:55The funny thing as well is like when Bitcoin is flying, when it's 120K, people are like, oh, I wish it was 80K still. And then it gets here and everyone panics. Like instead of grieving, you should just celebrate the opportunity to buy more. If you're buying for the right reason, you're buying for the right timeframe, then just buy more. Absolutely. And for me, like I'm a simple dude, I don't trade. A lot of people think that you should trade. Trading is a horrible sport. I don't. It is a horrible sport. Everyone's tried to do it. I learned my lesson in 2017. Yep. You've got some stories for it.

1:03:21Oh my God. Same. Same. So trading is a horrible sport. It consumes, like for me, if I put a$100 perp on, I don't care about my net worth, which is 90 % Bitcoin. I'm the same. It's so weird. I'm worried about the 30 bucks that I'm down on my perp. It's because it's gambling. I was talking to, me and Pete were in Vegas recently. And he was like, we were talking about betting, you know, $100 on blackjack or whatever. And he was like, why am I more worried about this when my net worth in Bitcoin is fluctuating in orders of magnitude more than that every day. Because you believe in it. So a few kind of tips for people.

1:03:53One, if you're levered and you're looking at a liquidation level that's like anywhere close to this, just sort it out. Don't dick around with it. Sort it out. So as the market belts at a bottom, work out who you're buying for and what timeframe. Allow yourself to just realize that we're not at the top anymore. So you now have to ask, are we going much lower? And if so, by how much? And as a hodler, you never buy and it goes straight up from there. You always go down 5%, 10%. So work out what your pain threshold is. There is a thing called pain to the upside. It's rare. It's rare. Most of the time, pain is always to the downside because you're allocated.

1:04:32And the people saying that pain is to the upside generally is because they're super long and they want to tell Peter Schiff that he's wrong. Pain is usually to the downside and markets love to hunt pain. So if your liquidation level is close, get rid of it. If anything in your portfolio, and this is just like a general piece of market advice. If anything in your portfolio has you unable to sleep or you think about it every single day, you are overexposed. It's just really simple. if you are thinking about this thing and it is like drawing your your mind power for me i don't think about my bitcoin my gold ever yeah honestly so i avoid buying the tops right that's for me if i just stopped buying high and really i didn't buy very much above 100k if i stopped buying high i have cash to buy when it goes lower because it always does um so that's the same thing as selling the top just minus the tax bill just understand who you're buying for what your time frame is if your position is keeping you awake you're too exposed make some decisions and try and make the months ahead of when you actually need them totally and we're i don't know how long ago it was it was maybe was it about two years ago we made our bet for the end of this year it would have been 2024 because i think we would have just started check on chain when we had so it'd been early 24 so maybe 18 months ago a bit more um and mine and pete's guesses look absolutely moronic at this point.

1:05:49I think I said 282k by the end of this year. And it was the maximum price by 2025. Yeah, Pete said 350k. And mine was 250, which to be fair, I think like back then, it's much harder to read this thing, right? The ETFs have just gone live. 250 was where I kind of said that's probably as high as we go in 2025. However, I would say, you know, a couple of months later, a lot of people have been calling me bearish all cycle because I said like 150. I'm one of the people that's been calling you bearish. I was saying 150 is, and to be fair, I wrote a piece at the top right where I said it's called at another trillion where I was like you know honestly I think we deserve a run at 150 and that was because back in January this is looking at capital flows and how much money had come into the ETFs and whatever and my view was when we're at 100k in January I don't think we deserve a run at 150 I don't think we've had the the inflows yet when we got to like it was like 118 we're going for the second all-time high I wrote a piece saying look I think we deserve a run at 150 we got to 126 and that was the end of it the reality is we then have to adjust.

1:06:48And by the time we had that second all-time high fail, we had the liquidation event. By the time we got to 115, 113, 112, I'm like, I think something's up. So you've got to update your prize and say, look, I still think we deserve a run at 150. People call me a bear because that's not high enough. It's like, yeah, but that is also the level where statistically speaking, people were going to offload. It just turns out they were offloading at 126 rather than at 150. And to be honest, through the whole 100 zone. So you've got to be flexible, right? You've got to be flexible when you're thinking. And like Lynn said in the show we did, there's probably some amount of self-filling prophecy that people think of cycles to their lives so they start selling.

1:07:26But I think here right now we should make our prediction for 2026. Ooh. So I owe you 100k sats. Pete owes you 100k sats. I'm willing to concede that here. You're conceding December already. I don't think we're going to go to 282k by the end of December. What are you thinking? Honestly, I actually think 2026, I mean, it's going to be driven a lot by macro. no question i think 2026 is actually gonna be constructive um honestly because i can't see a world where the liquidity doesn't come back in i do think the fed's going to have to expand their balance sheet so if we think about like 150 i think is i think probably happens honestly um and the thing is now that we've had this at another trillion we've had the capital flows in my mental model to actually justify a run to 150 i don't think we had that in january let's have another year of bottoming out 100 you know 80k maybe it takes a couple of months by the time we start drifting up towards the all-time high the capital flows that i personally i stand by this i still think that the capital flows justify that move to 150 there's gonna be more capital coming in by that point so then you start talking about well maybe the levels start drifting higher so look 200 would be fantastic um i do think it's gonna be a positive year and it's a positive year coming off something like 80k so for me if i'm buying 80k and we're going to go up to like 150 160 i'll take it so look let's stick with 150 as a level because we're talking about a 12 month time frame i think we could probably get there truthfully i hate price predictions but they're quite strong um but it is a bit of fun like the the thing when i look at next year drone pals out someone's going to come in step in at the fed who is probably going to be more in line with Trump, if not just an outright Trump stooge.

1:09:10They've got midterms. They're going to want the economy flying. Like I can see a lot of reasons why macro starts going ballistic. Show me the incentive and I'll show you the result. I'll go higher than you just because I may as well keep the feedback. You want to get 100k sats back? I'll go 190. Ooh. Yeah, well, I mean, you mentioned midterms. I think Trump and the Republicans are going to have a really rough 2026. Like I don't know. if they're going to be able to keep the house, they have a stacked house, right? And Senate. If that flips to Dem, I don't know if that's looking good, especially for AI and that type of trade.

1:09:46So for me to make a prediction, where Bitcoin bottoms is super important. If we bottom around the 80s, yeah, easily we're going to surpass all-time high next year, I think. I think. But it depends how low we go. So my prediction is going to be 126k. Just tag the high. Just tag. Just tag the hype. By like end of year, by this time. I'm pulling ETH. Get 50 bucks below your end of the fire. And then we're going to have this discussion again and we're going to be like, so now what? It's the same as last year. What the hell? I feel like that's the type of vibe that I'm feeling. Probably statistically, that's probably the best guess.

1:10:23I'd say so. Yeah. That's good. We've got a nice spread actually there. So there's enough gap between them. I hope you're right. That's nearest to me. I do too. Like if I would never have guessed we were going to end this year below 100 when we made that. No, that is surprising. Yeah. It's exciting. Especially inflation adjusted. Yeah. And to me, like, that's the thing, right? When you're at 126, it's actually not the worst year, right? I think a lot of people expected substantially higher, but like 126 is still within like reasonable bounds. But coming down to 80, I think that's surprised a lot of people, no doubt.

1:10:58Do you think that we're going to see a rotation from gold into Bitcoin? Oh, totally. Totally. I mean, I'm literally thinking about, do I take an extra tax hit to do so? But you're an outlier there because you're obviously, you're a Bitcoiner who has a bit of gold. Most people are gold bugs that maybe don't have any exposure to Bitcoin. Yes. But at the same time, people love momentum. And I think if we find a floor and then Bitcoin starts moving, because again, once the thing starts moving, everyone's going to go, oh, that cockroach didn't die. I get, oh shit, I sold one with Bitcoin. Maybe we should get back in.

1:11:28Smart money wants to find the bottom, man. Totally. They don't want to, they don't care. They want to find the bottom. I can't stop thinking about the just sheer magnitude of selling. Who are the buyers? Someone serious. It's someone very, very serious. And we're going to find out at some point, but it's someone very, very serious. Has to be, because otherwise we'd be at zero. You know what I mean? Like the scale of it is just too big. When you say sovereigns, you mentioned that a couple of times in the show. If you had to guess, what kind of sovereigns do you think are buying? It's not some peewee country in Europe.

1:12:00You think it could be like Gulf States? So my base case is it's going to be either the biggest countries or the smallest ones that have nothing to lose. They're the most likely. Like Australia ain't buying Bitcoin anytime soon. Yeah, neither is the UK. Neither is the UK. Neither is like probably Germany sold theirs. I think these like middle of the road countries, they don't have the incentive. The little guys have the incentive because they could get shut out of the financial system. They could also just like, you know, like El Salvador, they want to get ahead in some way. and then you've got the big dogs, the Chinas, the US, the Russias.

1:12:33These are like the big countries who are like they have a real incentive, which is we need to save our money somewhere. Do you not even think like Australia's sovereign wealth fund could be buying? I don't think they're that smart. Because it's interesting. Was it the Belgian sovereign wealth fund that bought something recently? I'm not sure. I could be wrong on that, but a country like that has recently come out and said they bought Bitcoin. Was it Czech Republic? That would make sense. Yeah, they're pretty bullish on Bitcoin, I think. I feel like any carbon neutral government government isn't going to be able to buy it yet do you think that they still care about that they don't understand yet like especially Australia like they'll get one bit of pushback just it burns all this and then they'll be like okay we can't touch it yeah I mean even though the economy's run on oil there's a good story there's um up in Newcastle which is uh about an hour north of Sydney there's uh there's a bit of an uproar because it's a little um bit old now but there's these wind turbines have been sitting on the docks for like years and there's all these like government proposals about they want to build offshore wind turbines people like no the whales and blah blah it's finally come out that those wind turbines actually aren't for the offshore they're actually for an on like an inland wind turbine but they can't fit them on the trucks because they don't fit on the roads so they're just these wind turbine blades are just rotting on the docks because they can't move them that's your australian government in a nutshell so i'm not too uh i don't think they'd be clicking to bitcoin anytime soon that's almost any government in a nutshell, I think.

1:13:53It's kind of sad. It's going to be, this year, even though it's been maybe disappointing from a bull market perspective, is probably the most interesting year in terms of what Bitcoin is going to look like in the future. Total reshaping of, and that's what I mean, the three pillars. ETFs changed a lot, not because they're like the biggest buyer, not because they've changed market structure or the way the on-chain works. Like from my view, they're 20 % of the demand. They changed the regulatory understanding understanding they allowed institutions to come in they can put on basis trades they can put on long positions um uh the ibit options are now 60 of the underlying so you've got 60 cents of uh of options i've been interested now they can buy bitcoin and rent it out with covered calls and we're going to see a lot of that so i think that the etfs just completely changed the perception and the access the hodler sell side and the great rotation has genuinely been a changing of the guard It'll take time to process it and for the market to hammer out a floor and find that new equilibrium, but that has changed the holder base.

1:14:55And then the world of options is going to be very, very interesting moving forward. It's going to change market structure forever, or it already has, arguably. But we're going to see a lot more of that. I mean, again, gold's options are 120 % of the underlying for GLD. If you look at IBIT, we're halfway there. So they're going to get much, much bigger. Well, I think, so we should talk about why we're here. Oh, yes. Because there's a shitcoin conference going on in Sydney at the moment. I had no plans to come, but a few of my friends were coming down. I was like, okay, I'll come to a show. We can hang out, have a few beers.

1:15:25But I went to the opening party last night, and it really surprised me. So this was a room full of shitcoiners. A couple of people came over, joined in with our group, and started talking. And they couldn't understand why we only cared about Bitcoin. Crazy, right? Like, I don't know. I think we're really into that. We're in a bit of an echo chamber with the Bitcoin community. Like we think everyone thinks like this. So being in a room with people that are like talking about meme coins and like whatever shit coin under the sun and then them totally not getting why you're into boomer coin. Like how weird is that that still exists despite the market just absolutely tanking.

1:16:04Totally. And I tapped it, Matt, because I very much view being here as a business maneuver because I just want to get exposed because the Australian Bitcoin scene is actually very strong. There's some great Bitcoins. The great Bitcoiners in Australia. The Bitcoin Bush Bash is fantastic. Bitcoin Alive is an actual conference, Bitcoin only. Really, really good. So the Bitcoin contingent, albeit small, right? The conference gets 400 people there. So it's a small, which by the way, makes them better. Yeah. Small, small. But they're like hardcore. Hardcore and really high signal. But the Australian crypto scene has no idea we exist and we don't care that they exist.

1:16:39So I very much view this as like, it's like going to the zoo. And we were talking this morning about like the impacts of AI and I'm a little bit more skeptical about how much AI is going to... It's going to be transformative, no question. I don't trust it for anything that I use it for. I could make mistakes all the time and I find I'm constantly checking it, but I also like to think. Thinking is one of my favorite things to do. So for me, I actually don't like outsourcing my thinking. So for me as a professional, AI doesn't help me. But then we talk about the zoo that we're about to go and see, you then realize where the actual bell curve is people still think that ripple is going to be a thing um i was talking to a mate the other day he said that like the solana and the ripple etfs had really really strong inflows like the best etfs of the year and i'm like okay so ai may be retarded but so are the people it's gonna replace i'm like it's actually not that ai is great it's that the bell curve is kind of challenging and we're about to go and look at it yeah the bar's not that high i know that's the scary thing about it i was there for like an hour last night and then people around me were talking about coins i was just like i'm just gonna go home i literally i just bailed and came home watch the cricket honestly it's just fiat they're just stocks that can pump and make aussies love just making money like we're a super rich country everyone just you just invest in etfs here or property and there's just this new thing that's just stock it's just stocks yeah so people just can get rich off of it's just rich guys doing rich things yeah they don't care about the fundamentals like there are no fun the reason they don't understand bitcoin is because they have never actually studied the thing all they know is that is this thing going to go up like that's kind of the questions that they have with each other is like is it going to pump like we don't talk about that with bitcoin really we like the fundamentals of bitcoin are why we're here and just a lot of people don't have the time or i don't know they don't have the uh long-term vision to actually buy into that so they just don't understand it like why would you buy that it's not it's not just going to rip a million percent it's like it's not about that well i've actually been enjoying because you've recently been going down the level six matthew mcconnell scale like getting into like the why bitcoin like you've been in the industry for years now ages yeah tell us about like going into the the actual bitcoin rabbit hole because it is you go through this phase and it's very nostalgic as you were telling me the stories like damn i remember when i went down the good old days yeah we like understanding mining and all that yeah no i mean i got a little too attached to the price with Bitcoin and short term.

1:19:08And I really needed a way to zoom out a little bit because Bitcoin is not a 2025 asset. You do not buy it. I mean, if you're a hodler and you're trying to accumulate for your 10 year self, price movements today shouldn't affect you as much as they do. And they were affecting me a lot. So I was like, I need to study UTXOs. I need to study how the blockchain actually works. I need to go deep, read the Stoshi emails, really understand the fundamentals to like build my trust again in the actual asset itself in the system in the software in the group of nodes in the world and I just got like I reinvigorated my excitement for Bitcoin because I'm like no this thing fucking is amazing was there anything when you were doing that that was like holy shit like even if it was just like learning something again or was there something that really sort of settled you oh my god just like the brilliance of the design of nodes and mining and the how multiple nodes can have different copies of the ledger and then you you must require one node to decide that this is this is the next this is the next block is everyone happy with this yes if something goes wrong it auto corrects itself and it's just like and then And I was imagining how banks manage their ledgers and humans manage ledgers right now.

1:20:29And it's, no one knows it's a black box. Humans make wrong decisions all the time. It's not automated at all. They can shut down your accounts. They can move your money. They like so many governments just take people's money. Like I think Lebanon, like a bunch of places, right? All over the world. And just the brilliance of the Bitcoin network and software to just automate and take the human error out of that i was like no nothing can fuck with this because and and nothing will ever get the amount of broad reach that bitcoin has like i just don't think so there's a first mover advantage like the whole satoshi story is also just fascinating the fact that he hasn't come back the fact that there's no guy that's he can imagine satoshi could tweet like i feel like dude i swear like he would say some whack stuff and like tank the market i don't know i just i I love the entire, it's almost like a biblical story.

1:21:22Like the narrative of Bitcoin is so strong. So I think just it has all the elements to be a long-term stalwart asset. And price this year, it doesn't really matter. You know what's actually exciting? We can buy cheaper Bitcoin. Exactly. This is not something to be scared about. This is opportunity. The last bottom was, what was it? FTX was 16. 15.6. 15K. If our bottom now can be anything over that, that's fantastic. Again, if you zoom out to the 2028 when the politicians switch over in America, that's going to be a whole other world. Do you think Bitcoin will be up or down by then? It's like, I'm damn sure it's going to be up.

1:22:03Yeah. Let's fucking go. So, fuck yeah. Yep. Get bullish. I'm excited to go and see this, Sue. I'm going to go for exactly 20 minutes. I'm going to watch your talk, watch you dunk on the wall, and then I'm going to leave. And basically, a lot of the things I'm going to talk about is the ETFs, granted, mine excluding the last couple of days, the ETFs are bigger than, like in terms of capital inflows, just the dollars people have actually invested are bigger than every single ASX stock in the Australian stock market, except for the big four banks and BHP. So like the inflows are the sixth biggest company in Australia.

1:22:35And if you look at the AUM, where the AUM peaked, it was bigger than everything except ComBank, which is our biggest bank. So like the scale of it is just tremendous. And they've been around for - Since January 24. Yeah. So it's remarkable just seeing the scale of it. And actually, I should close with my favorite metric in all of on-chain data, and it's the backbone metric, is the realized cap. The realized cap values every UTXO at the time when it moved on-chain. If you bought a coin in 2019 at 10K, it's saved at that 10K price. The realized cap is how much we as Bitcoiners have entrusted to the asset.

1:23:09$1.12 trillion. dollars so whenever someone tells you that bitcoin has no intrinsic value there's 1.12 trillion dollars that disagrees with you where bitcoiners have gone no way i trust this thing to look after my savings it's a monumental amount at the all-time high we had more unrealized profit that's our cost basis we're two and a half trill we had the unrealized profit in bitcoin is bigger than berkshire hathaway right rat poison squared by r so get bullish because bitcoin's not going anywhere It's going to come back like a cockroach. Happy days. Let's fucking go. All right, this has been awesome, guys.

1:23:45We'll be back in a year together. Can I add one more thing before we close? Because something I think is actually important, Charles Edwards has been on about the quantum threat recently. It's very hard to handicap what is true and isn't in the quantum space. I do think it's worth, like Bitcoin is just generally speaking, having a conversation about what we do. because you know what would just destroy the final piece of FUD that's out there is having a strategy, working out what it's going to look like. Whilst, you know, I'm not quite sure that I agree with like that it's coming in a year or it's coming in two years' time, I still think Charles is very right that we should start talking about it now and we should just have a game plan.

1:24:26If we have a game plan by the end of 2026, let's use this bear market, put aside the price, let's work out what the strategy is and if the strategy is we need to do more coding, more work, more research, which we will. I'm in no way qualified enough to understand what needs to go into it. Let's have that conversation now because I'll tell you what, when you solve that problem, there ain't nothing left. Well, let's have the conversation because I think this is super interesting. I, again, have no idea what the timescale is on this, but let's just assume it happens at some point. And if over a long enough time span, it will happen.

1:24:59Yeah. So the question is like, what happens? We're going to move to an address format that is quantum proof. I don't think that will be contentious because everyone will have to do that so that part's easy the tricky part is what do you do about all the coins that are in these old paid pub key hash addresses or whatever do you freeze them or do you let them be stolen? So first things first I think separating those to their two separate issues it is an absolute mistake to put them in the same bit two separate issues we have to deal with them separately so first things first let's build, research, design, whatever we got to do.

1:25:36I know Bit360 is out there. Again, I'm not smart enough to understand any of it. Let's get the option, the option for people to upgrade, build first. Yeah. Ship that. That's happening. Like Hunts and Beasts is working on this. Like that's, maybe it needs more eyeballs on it. I think it needs more people to just understand what it is, how it works. So I think first things first, just get that done. Now on the second topic of what do you do with old coins? If you solve that first bit, this is law of the jungle until proven otherwise but at least you had people with an option sort that out first my personal view on the what do you do with the old coins they come back to market so i totally agree i don't think and the reason i i want to go down that approach there's there's two angles and we had a big talk about this in a cheat code last year there's the argument of if someone's coins get stolen the security assumptions of bitcoin get broken.

1:26:27But then the other side is if you free someone's coins, I think you taint the idea of Bitcoin, which is property rights. If someone has your private key, they legally don't own the coins, but they do own them. Possession is nine-tenths of the law. If you leave your private key in a desk drawer and someone gets it, or someone uses quantum to extract them, you have kind of made the decision to not upgrade. So if we take Satoshi, for example, if we freeze his coins, we are doing so before Q day because otherwise they would have been stolen. If we freeze Satoshi's coins, we made that decision for him.

1:27:05What if it was on a Monday and on a Tuesday he comes back from the dead or he is Hal Finney and he's frozen and he brings back man in the coma and he goes, whoa, quantum hasn't been invented or it failed and you bugger sold my, froze my coins. If we freeze other people's coins, irrespective of flag days and all of that, we made the decision to take someone else's coins. Yes. If, on the other hand, we build the system and allow people to migrate, which will take time, and that's a whole process, Q day comes along and they get taken. In that instance, they chose not to save their coins. That's their decision, not our decision.

1:27:41Now, the one proposal, I think Hunter Beast talks about this, which I think is potentially worth thinking about, is a rate-limiting approach. Yeah, so he talks about only one transaction per block to be a non-quantum proof address. Yes, and I think of the legacy coins. And I think that his rationale there is a sound one, which is that if you look at the current performance of the chain, on average, it's less than one per block. So right now, the rate limiting wouldn't affect anyone on average. Could you break down the rate limiting just for their play? Yes, so the idea is that you could set a rule where the miners could only include the legacy addresses which are vulnerable to quantum.

1:28:18you could basically say that they're only allowed to include one of those spends per block. So quantum comes along, all the lost coins that we're going to upgrade, upgrade. The ones who don't, we presume they're lost and going to get stolen. Quantum shows up and they don't steal them all in one big chunk. They steal them one per block. They have to drip feed them out. Drip feed them. Now, the other thing I think is also worth thinking about. Just quickly on that, there's also an interesting dynamic where, say, quantum computers can steal coins from these old addresses. there's then a fee dynamic that goes into it where say you have a UTXO that has 50 Bitcoin on it you want to steal that as quickly as possible before someone who owns that Bitcoin upgrades so what do you put in as a fee to make sure you're the one transaction in the next block and it might end up instead of giving all those coins back to the market just give them to the miners well that's an interesting thing and I think that comes down to the next point which is who is going to invent this quantum computer because IBM invented it what are they going to do?

1:29:15steal satoshi's coins like what are you gonna launder it through binance like you're gonna get a benevolent dictator most likely it's gonna be chinese or u.s government it's gonna be a high flying tech company and if you're unlucky it'll be north korea yeah right it's not gonna be north korea exactly so you got to think about like who is actually gonna be the one to crack this quantum thing what are they gonna do start ripping into banks like i don't think so and again it depends on access and all these types of things irrespective i actually think all that stuff is kind of irrelevant the threat if you run the human experiment long enough we will eventually break elliptic curve photography because we're smart don't bet against innovation i also don't want to bet against innovation by you know i certainly don't think bitcoin's going to die i think the coins come back to market i think that's a separate conversation and it's a mistake to cloud the tech with that decision separate the two get the option for people to upgrade first do the requisite work Like, if we as Bitcoiners solve that problem in the next 12 months, just what we're going to do, have the plan, what's the FUD?

1:30:18Yeah. What FUD is left? On that point, though, I think there's a really short-sighted view on the sort of market impact of all these coins coming back to market in that, like, to me, I agree with you totally. Bitcoin enshrines property rights. That's like one of the absolute fundamental things to me. So if we as Bitcoiners say, we're going to freeze those funds so a bad actor down the road doesn't, then the property rights are broken. Agree. And so if that happens, what should the price of Bitcoin be? And to me, it's far lower. So even though there might be short-term impacts on the market, if these coins do go to bad actors, they dump them.

1:30:51In the other scenario, Bitcoin doesn't have the same future value anyway. So it's actually a really short-sighted way of looking at it. I would put it in the realm of reputations take forever to build and one bad tweet to destroy. And I think that's more or less the way I think about this. we've built such a tremendous thing with bitcoin it will take one mistake like that to affect you can't undo that from the idea you're actually hitting the idea of bitcoin and if you take that to its log for me if i take that to its logical conclusion i don't believe that the price is something we should can care about when we do make consensus changes yeah when we make consensus changes, that should be about the security and the decentralization and the properties that make Bitcoin worth something.

1:31:37The market will then value that. If we start making decisions because we're afraid of Satoshi's coins, which by the way, Satoshi's coins come back to market, they're going to auction. And I don't know about you, but I'm going to buy some for sentimental value. How many Bitcoiners are going to go buy a million stats of Satoshi's coins? Totally. Let's go. It's the ultimate ordinal. I don't, yeah, it's my rare set. I don't think, you know, I really just don't think that anyone's going to, aren't the Ordnance guys going to go nuts over that? There's your rare sets, right? No, look, I think the idea is build the tech, have the option, let's have the conversation now.

1:32:13I'm not smart enough to work it out, but I think more public discussion about this is going to be really healthy. It's going to set up Bitcoin for just a tremendous, tremendous road ahead. If Bitcoin has frees that, That's the equivalent of the US freezing Russian treasury. I fully agree. I fully agree. Same framework. If you freeze Satoshi's coins on a potential that quantum is going to come out, there's older coins that are going to be aging as well. So do you start freezing more? Well, it'll depend on the address format. Address format. Yeah. But it would be a monumental mistake. And more importantly, I actually think from a pragmatic standpoint, I believe we can come to consensus on this.

1:32:49I think there's zero chance we ever come to consensus on this. because immediately I'm not changing anything. So for me, my node says no. There'll be a lot of people in that same camp, and there's a lot of people who want to freeze it because they don't want the market impact. We will never hit consensus on freezing the coins. I'll take an airdrop. Therefore, exactly. Therefore, the base case for me is you spend time arguing over this. You're going to waste time. Let's focus on this. Yeah, makes sense. This has been fun. It's been really good. It's way better. It's way better. Way better than it's like, yeah.

1:33:17Well, I'll come down to Sydney whenever. Maybe we just refuse to do remote shows from now on. I'll fly to Brisbane. There you go. Done. Hell yeah. All right. Thank you, guys. Appreciate that. Oh, actually, before we close, CheckOnChain. Tell everyone about it. Yeah, mate. Send us off. Oh, well, CheckOnChain. So we run a newsletter on Substack and we basically help hodlers navigate the volatility. That's kind of our major kind of selling point where basically you're a Bitcoin personal trainer. We have a big community now. We have a couple of chats. We also have CheckOnChain Orange, which is for more institutional, larger investors.

1:33:50and we have a private telegram there. A lot of insights are shared. And yeah, we generally just want to give people that data-driven approach to stay calm, stop looking at the price charts, stop looking at X and believing any narrative and that big anxiety that builds up when kind of crazy movements happen. Our job is to help guide you through that. So yeah, we work every day. We fucking love it. We talk about this 24-7. And yeah, come join us, come along with the ride and it's going to be a fun next year. I mean, my main motivator, I don't make price predictions. I don't make price calls. I just want people to have made their decisions, which is the only thing you can control, months before you need to use it.

1:34:32And if you make a decision, like let's say we got to 95K and we just bounced to all-time highs. Totally was a valid thing. If we didn't need our bear market decision framework for what am I going to do at 82, that's great. I'll put it in my back pocket and I'll use it when it happens. Now that we're at 82, I don't want any of my subscribers to ever feel like a deer in the headlights. Not because I can predict that it was going to happen, but because we just thought about that scenario as a possibility ahead of time. So prepare. That's it. You prepare yourself. Can't predict, just prepare for it.

1:35:02I love it. It's one of the best newsletters in the space. I read everyone. Thank you. Thank you, man. Yeah, you guys are awesome. Thank you, man. Thank you for listening to, man. Thanks for inviting me. Of course.

1:35:21Thank you.