The Bull Market & Bitcoin vs Real Estate | CJ Konstantinos

26:18Those people are enslaving us with debt slavery. Those people are committing usury. Those people are printing the currency units in partnership with the government and with other entities. Those people are empowering the cantillionaires. But I'm going to bring my Bitcoin to them and posted as collateral with them so that they can earn interest off of me for my savings. What? That sounds very hypocritical. That sounds like you haven't taken that much of a deep dive into what this movement is about. Like we said earlier, this is not just a monetary revolution. This is a financial revolution. There's a reason that they say, be your own bank.

26:56And that's so that you don't have to be dependent upon the existing infrastructure and systems. That's why smart contracts were created. That's why we see the test nets the way they are now. They'll eventually converge on Bitcoin and we'll have BitFi with Bitcoin as a pristine collateral and smart contracts through virtual machines built on top of Bitcoin, settling in Bitcoin with Bitcoin proof of work security and transaction finality. That's what this movement is all about. And you have to get behind entities like MicroStrategy, like MetaPlanet, like People's Reserve who You understand what we're doing here and understand what the mission is.

27:36And you have to vote with your money. The only vote that you have that counts, in my personal opinion, is the vote you make with your money. No other vote that you take in this world actually literally counts or is counted accurately. Maybe the vote that you can make with your feet in terms of just leaving a jurisdiction. Yeah. The vote with your feet, with your actions and the vote with your money. They're the only two ways you can truly express yourself in this world. I firmly believe that. And for some Bitcoiners to claim victory or to bring us off the path of where we came from and start to partner, like at People's Reserve, we have set up an infrastructure where we have a private fund.

28:21And we go and we source liquidity providers to participate in our fund. So as investors in our fund, they provide zero cost capital. And then since we have zero cost capital, we're then able to turn around and loan that money to Bitcoiners at whatever rate we deem is necessary to generate the proper return on the funds. But that's a really important concept because when you look at the rest of the marketplace, what are they doing? They've gone crawling back to the cantillionaires on their knees, begging for a credit line. Oh, can you please give me a credit line at 7 % so I can flip it to my customers at 10 and 12 and 15 and 16%.

29:01Yeah, the guy who walks into a bank and makes a promise to pay for 30 years and it's backed by nothing but proof of promise will give him 6.5%. But you posting Bitcoin collateral and you being over collateralized, no promise required, 16%, 14%. 12 percent. That's batshit crazy. That doesn't make any common sense whatsoever. Why are they doing that? Because they've married their business model to the traditional yield curve, because they forgot that this isn't just a monetary revolution. It's a financial revolution. This isn't just about free market money, because if you want free market money, you need free market interest rates.

29:39You can't allow your business partner to tell you what the price of the money is, or else you're not going to be able to redefine the risk-free borrower as the Bitcoiner. You're not going to be able to restate or at least offer free market interest rates based on the drastic risk mitigation of Bitcoin being a pristine collateral. I mean, that's the good news, though. I think LPs are waking up. And when I go talk to these guys, some of them, I go in there and I'm like, hi, how are you? They know I'm there talking about Bitcoin. They're like, son, I've been in markets longer than you've been alive.

30:14Let's make this a quick one. Right. And they think I'm going to talk to them about investing in Bitcoin instead of actually investing in a fund that lends to Bitcoiners. And then after, you know, some of the light bulbs go off, I tell them, look, you loan money to the government. They give you a cash equivalent. You're holding this cash equivalent over that period of the loan. In the meantime, they are printing more of those cash equivalents and they are printing them faster than they've ever printed them before. So the collateral that you're holding is going through massive supply expansion. And thus, at the end of the loan, when you get paid back your principal plus interest, what you can buy with that cash equivalent is drastically lower than what you could have when you just lent the original money.

30:56Forget the principal plus interest. You could just spend the principal and got more goods and services or more assets than you can at the end of the loan with principal plus interest because the interest isn't paying at a rate that's higher than the inflation rate or higher than the rate at which prices are increasing. And I tell him, look, why don't you lend that? You talk about diversification, diversification. Well, I don't want I'm not here to talk about diversification in your investment portfolio. Do whatever you want when it comes to investing. You invest to add risk, analyze risk as you'd like.

31:25But in your lending portfolio, you lend to mitigate risk. So in your lending portfolio, how are you diversified? Oh, well, I'm lending to the government because I want risk-free cashflow. And I'm lending to some municipalities because I want some tax-free cashflow. Okay, but you know what? You need to further diversify. You need to add Bitcoiners. You need to lend to Bitcoiners. Why? Because the collateral that they give you, it gains value over time. It cannot be diluted. There's only 21 million Bitcoin. There'll never be any more Bitcoin. And then as they continue to dilute those cash equivalents, the purchasing power of your collateral increases over time.

32:04So when you lend to a Bitcoiner, the loan becomes less and less risky over time. When you lend to the government, the loan becomes more and more risky over time, especially if we go into a random liquidity event, like a COVID or a bank term funding program or big, beautiful bill or deficit budgets increasing as they have. So I think the LPs are waking up and they're starting to realize, yeah, you know what? But there is a lot of, we do need to analyze what risk means. And looking at Bitcoin as a de-risking asset is not even part about monetization. That's the part of the financialization. That's the next step, right?

32:42Like the financialization of the asset class is everybody waking up and realizing, whoa, Bitcoin is not just like the perfect form of money. It's also the most pristine form of collateral. and if I wanna lend to somebody who I would consider risk-free, I'm not considering the person with the printer risk-free because they're diluting the collateral they're handing me. The Bitcoiner can't dilute the collateral. The Bitcoiner's collateral gains value over time. And then even further, when you cross-collateralize that collateral with real estate, now you're at the true risk-free point. And that's, again, education.

33:17We need to redefine risk-free borrower and redefine risk-free interest rate. And we're not gonna be able to redefine that rate or borrower if we marry our business to the traditional yield curve. And Bitcoiners need to embrace this narrative, understand this narrative. And just as strongly as we teach that you should hodl Bitcoin and never sell Bitcoin, especially right now in the middle of the ongoing transfer of wealth, you should teach that you don't trust people who practice rehypothecation. You don't trust companies that practice fractional reserves. You don't trust these types of setups and you align with your feet.

33:56You move from one platform to another and then you vote with your money and you use the products and services of the platforms who are moving forward what Bitcoin really is and what this revolution is about, which is not just about becoming rich by holding an asset. It's about freedom. it's about having a better future for our kids and our grandkids and our great grandkids where a small group of men cannot dictate whether or not the value of their time and labor should increase or or decrease the free market itself dictates that value based on the contraction or expansion of the global economy that's what this movement is about and you must you must vote with your money and your feet to support those people who understand what's going on oh i'm so bullish cj this is great um so you mentioned how kind of real estate fits into this there just briefly um but can you expand on that a little bit because one of the most surprising to me at least pieces of news that came out recently is bill pulte um who's director of the federal housing association something like that um he came out and a couple weeks ago he was like we're looking into the idea of using bitcoin for mortgages um and then a day later he was like okay let's do it let's go So how big news do you think that is?

35:11I think that's huge news. It's a great first step. Now, I think there was a little bit of confusion in the marketplace because what the order was is that if you're a Bitcoiner and you have been a responsible saver of the apex asset on the planet, then that should be considered when you go to get a loan. Like if you went to go get a loan before Pulte so ordered, Fannie and Freddie to take in, they called it cryptocurrency wealth, but really it's Bitcoin wealth. And you went to the bank and said, hey, look, I don't work. I don't work. I don't know how else to say it. Like I, you know, I have no taxable income.

35:54However, I bought Bitcoin when it was$150 and I have nine digits of wealth. They wouldn't care. They would say, we don't care. It doesn't matter that you have 100 plus million dollars of Bitcoin because we don't account for that. We don't take it into account. It means nothing. Your credit score is more important than that wealth. It might as well just erase it off your balance sheet like it doesn't exist. So that's just a crazy concept, right off the start to begin with. So I think that's what this news was about. This news was about getting rating agencies to understand that, yeah, beyond a credit score, you can look at a person's balance sheet and whatever's on that balance sheet can strengthen their credit score.

36:40It's not just the proof of promise and whether or not this person was able to maintain those credit promises over their financial history, but also the wealth that they accumulated. And it doesn't make any sense that somebody could, you know, Michael Saylor calls it land banking. How could you own a$20 million estate in Martha's Vineyard, go to a bank and say, hey, I'd like to borrow$5 million against my$20 million property. Well, with that low of LTV, any financier would say, absolutely, no problem. Come on in, we'll give you a great rate. And they automatically account for that wealth regardless of the credit score because it's$20 million of real estate backing a$5 million loan.

37:25It's a low risk, no brain financing opportunity. But the same thing is for Bitcoin. And that's what Bill was able to do, to get Bitcoin into a position where at least people who are underwriting mortgages are saying, well, hey, you're a less risky borrower because you have been a responsible saver of Bitcoin. And that's a huge first step. Now, there is a big difference. This is not integrating Bitcoin as collateral into a mortgage. This is not opening up any doors that allow for innovation with the securitization of Bitcoin-backed mortgages. everything that goes, everything that connects Bitcoin to a mortgage, there's still a lot of red tape there.

38:05And we're nowhere near getting standardized, qualified mortgages integrating Bitcoin. It's been hard enough just to get Bitcoin associated with non-standardized, non-qualified mortgages. But it is a great first step. So I think it is really big news. I think it's on the same level, actually, as like strategic Bitcoin reserves. Strategic Bitcoin reserves and this announcement are on par because what it does is the strategic Bitcoin reserve is the monetization confirmation and recognizing Bitcoin as a form of credit worthiness that allows you to get traditional financing is a financialization realization.

38:46So they both complement each other and are really a signs of the time of how fast the market is moving. Do you think we'll get to a point where Bitcoin is used as collateral for these mortgages? Because I imagine for the people listening to the show, I would assume that most of them have a disproportionate amount of their wealth in Bitcoin. And so people may not be able to afford a house in terms of their fiat savings and their fiat income, but they might be selling a huge stack of Bitcoin. Do you think we'll get to a point where you can collateralize that Bitcoin, buy a house and the rest of that is just not even part of the equation?

39:20Yeah, I mean, absolutely. I mean, that's that is one of the things we're doing at People's Reserve. So I know it's coming and it's coming fast. We're probably going to be up by Labor Day. So this is this is coming in the next 50 or something days for sure. But on a wider scale, I think it's going to become popularized as well. And I think, you know, going into the financialization of the asset class poses a new risk for Bitcoiners. And the biggest risk moving forward is actually liquidation risk. So at People's Reserve, we like to say, choose your counterparty wisely, because the contract at which you use is going to dictate the amount of risk that you take if you borrow against your Bitcoin.

40:06And at People's Reserve, we think it's not a good value proposition to be in a position where your Bitcoin could be liquidated. So you want to operate within contracts that mitigate liquidation risk. And at People's Reserve, the way that we've done that is we are actually going to be a first market mover to introduce variable interest rates. and I love to use the COVID example for this. Like if you went to a traditional lender and you posted Bitcoin as collateral right before COVID and price is at 10 ,000, price starts going down towards 5 ,000, you're getting margin calls. If you post a little extra margin to protect an extra 10, 20 % or whatever, and you say, no, I'm gonna sleep on this to make sure I don't know what I wanna do.

40:51Well, overnight it went from 5 ,000 to below 3 ,500 and you were liquidated because these lenders, they don't view Bitcoin as engineered money. They don't view Bitcoin as savings technology. They view it as a risk on tech stock that you bar against on margin. And that's unacceptable because you now, because of an unbeknownst liquidity event, you now lost the most important asset on your balance sheet. When you say lenders there, let me just clarify that. Sorry. Are you talking about the people that are posting the dollars on the other side of the trade? Yes, Yes, the LPs, the liquidity providers who are putting up the dollars, they do not look at Bitcoin as a pristine collateral, as an engineered money that strategically was designed to leverage the natural laws of economics to properly store value through space and time.

41:40You say that to them, they look at you sideways. They're like, what? You know, like, no, it's magic internet money. It's a risk on tech stock. so you can borrow against it on margin and you can start at a 50 % LTV. And if it gets to 82 % LTV, we're going to start liquidating you. You're going to start getting margin calls. And if you don't post margin, you get to 85, you're getting liquidated. So you don't even get to, it doesn't even get to the point where you're like 100 % LTV, you get liquidated. Or DeFi where it's like 97, 98 % you get liquidated. It's like at 80%, these people are starting the liquidation process because they consider Bitcoin a high risk asset class.

42:19And that goes back to what we were talking about earlier where it's like, no, this is a financial revolution. You cannot take your business, whether you believe in Bitcoin or not, you cannot take your business and go shake hands with these people and go use their ability to create circulating credit units to print money out of thin air to then bring back into the Bitcoin ecosystem. And at the same time, practice rehypothecation or whatever other crap fiat practices they have going on in the background. So Bitcoiners really need to choose their counterparty wisely and understand where is the liquidity coming from?

42:56Who's providing that liquidity? Is it in the vision of Hal Finney's Bitcoin bank vision? Or is this a fractional reserve practice that is actually empowering the very system that we know is the root cause of the problem. And I think what I was saying about earlier before with the liquidation risk, these people are happy to liquidate you because they just get the money back from the principal and they'll collect the interest and penalties. And liquidation is our biggest risk going into a financialized future of the Bitcoin asset class. And that's why, you know, at People's Reserve, if you are borrowing through that same scenario and the price is at$10 ,000, it starts going down towards$5 ,000.

43:37What we're so excited about is that you don't get a margin call. You just get a call that lets you know that your interest rate increased a little bit. And then it went down from$5 ,000 to$3 ,500, your interest rate increased. So for the next couple months, you pay a higher monthly payment based on a higher interest rate. But at no point in time were you at risk of being completely liquidated. And then as Bitcoin goes back to$10 ,000 just a couple months later, because everything's too big to fail, your interest rate is right back to where you started from. And when it goes to new all-time highs, your interest rate actually gets lower and lower over time, reducing the burden of the debt and reducing the amount of interest over the life of the loan.

44:17This, I think, is a new model that we couldn't be more excited to introduce to the marketplace because no Bitcoiner who's been a responsible saver of the most pristine form of collateral in the world should put their Bitcoin up for collateral to buy a home and then not be able to sleep at night in that home. or to put their Bitcoin up for their business and worry that the next day that all of their business revenues over the last three or four years could be lost because of some market event that they have no control over. To me, it's just, it's not a good value proposition. And we need to, and that's what this financial revolution is about.

44:57It's not about using all the same old tools that have existed for hundreds of years. It's about innovating. It's about creating new tools that are powered by Bitcoin. That's why we call it Bitcoin powered finance. You have traditional finance that doesn't incorporate Bitcoin that creates debt slavery. Right. The promise of your time and energy is what backs the debt. And it's so bad that they have to actually let you claim bankruptcy. You can get to a mathematical point where debt is inescapable. And that is debt slavery. And the law actually realizes that, recognize the mathematics and says, yeah, you can get to a point where we'll let you claim bankruptcy and start over because otherwise you'll never escape it.

45:45Well, Bitcoin powered finance says, forget about that. We don't want your promise. We want your proof of work. We want you delivered value to the economy. In return for that value, you received Bitcoin. And now we're going to take that proof of work and we're going to use it to back the credit that we're going to extend you. And even if it is a fractional reserve Bitcoin, like you mentioned earlier, like that value is still backed by Bitcoin. So when the house of cards collapses or the promises fail, you fall back into equity. You fall back into Bitcoin. You don't fall back into an empty promise.

46:20You fall back into 24-7, 365 liquid equity that can be settled in 10 minutes with transaction finality. And that is just common sense where it's like, what's more safe? What's more secure? What do we want to build our economy on? Do we want to build on a house of cards, on a house of promises with derivative on top of derivative on top of derivative and 1000x leverage? Or do we want to build it on top of foundation of equity, on a foundation of liquid proof of work that can be tapped into 24-7, 365? It's a common sense answer. Unfortunately, some Bitcoiners are choosing the uncommon sense answer because it's just too different.

46:59Or they don't understand that, you know, Hal's vision of a Bitcoin back bank, like micro strategy and hopefully one day people's reserve being the echelon and the corner and the foundation of the marketplace to help understand the price of money, to let the free market dictate the price of money. So it's I love your questions because they all come back to what Bitcoin did, right? What Bitcoin did? Like, what did it do? It brought us back to the basics. It got us out of this crazy fiat monetary experiment that has just like the education system, sometimes by good actors, sometimes by bad actors, has just been led down the wrong path.

47:40And at this point in time, we need to stop. We need to exit the path and we need to revert and move back to the path of common sense. And one reason I love Bitcoin so much is because it's not just that it's a financial revolution. It's a peaceful revolution. No violence required, no pain and suffering required. You can just simply vote with your money to choose Bitcoin and opt out of the madness, opt out of the non-commonsensical TradFi setup that they have and literally be your own bank. And if we can do that, we can win without a shot ever being fired, which to me is really important, too. I mean, I have my fourth kid coming, so I don't want my kids growing up.

48:25Thank you so much. I don't want my kids growing up having to fight for their freedom. Our founding fathers fought for that. Let's choose the peaceful revolution. Vote with our feet, like you said, by choosing the right platform and vote with our money by spending our money on goods and services with people who support the Orange Peace Revolution. And if we do that, things are going to accelerate even faster than they are right now, because as the light bulb goes off, I see even these LPs, right, even the guys who are providing the liquidity. They've been there. Maybe it's like a family office and they are just sitting on piles and like mountains of cash, like unfathomable amounts of cash.

49:05Like people think Apple is sitting on a lot of cash. There are other entities in the world that are sitting on more cash than these publicly traded companies. There are private institutions and private wealth funds that sit on mountains of cash and they have nothing to do with it. But you know what they can do with it? Lend it to Bitcoiners. Create the Bitcoin centralized bank economy backed by Bitcoin, secured by proof of work, ignoring proof of promise and putting in a commodity credit, an equity backed credit. And if we can do that, I think the economy will explode like we've never seen before.

49:44I think the quality of goods and services will increase like we've never seen before because it's literally the opposite of fiat fiat is about maximizing supply maximizing prices who gives a crap about quality right you think about building a car i like to compare it to like a ford versus like a ferrari right the ford is like we're mass producing these things and if something goes wrong with it just do a recall and give them back some money who cares there's no care about a few people might die but yeah a few people might die, but collateral damage. That disrespect for life and quality is a fiat disease.

50:26Bitcoin eliminates that disease and brings it back to Ferrari, where they say, look, we're going to build so many of these per year because it needs to be of the best quality. It needs to be hand crafted. And every single person who buys this car is going to get the best supercar in the world. Now, I don't know who the heck needs a supercar. There's no need for that. But the focus on quality, right? The focus on, forget about the pricing. We're not pricing these to mass produce. We're pricing these based on the time and energy that went into it. And when all of that happens because of Bitcoin, everybody's quality of life and standard of living is going to go up.

51:07Everybody. I know here in the States, and I'm sure you can testify this as well, the quality of even services industry, like waiters and waitresses and bartenders and cashiers, it's falling off the cliff. 100%. You used to walk into stores and the cashier would be like, hi, how are you? You know, you go up to a cashier now and the cashier is just like scanning the stuff, looking at you, judging you. Maybe not even looking at you. Yeah, it says nothing. And then she's like, all right, next, next. Like people are not happy at their job. And can you blame them? They're working longer, they're working harder, and they're making less money.

51:43Well, actually, they're making more currency, but they can buy less with the currency. So they are making that currency. When it gets translated into money, they are making less money because wages are crashing against Bitcoin. Everything is crashing against Bitcoin. But when Bitcoin is your unit of account, your purchasing power is going through the roof. Your quality of life is increasing. Your standard of living is increasing. The stress is rolling off your shoulders, not by anything that you've done, but by the engineered design of the money itself. so we can leverage this engineering. We can leverage this eighth wonder of the world to make life better for each and every single human.

52:23But it all starts with number one, education. And then number two, Bitcoiners having, like what you do with this show, having these conversations so that people can start to learn and understand, oh, you know what? The way I thought about that was wrong. The way I was taught about that was wrong. I need to change my mind so I can switch my feet and vote differently with my money. And fortunately, we are seeing that happen. We are seeing this accelerate. And that's what's most exciting to me. This episode is brought to you by AnchorWatch. Now, one of the things that keeps us Bitcoiners up at night is an idea of a critical error in your Bitcoin cold storage.

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53:34That's AnchorWatch.com. This episode is brought to you by Ledin, the global leader in Bitcoin-backed loans. Since 2018, Ledin have issued over$9 billion in loans and were the first lending platform to do proof of reserves With Ledin, you get full custody loans with no credit checks, no monthly repayments just easy access to dollars without selling a single SAT And as of July 1st, Ledin is now Bitcoin only which means they exclusively offer Bitcoin-backed loans all collateral is held by Ledin directly or with their funding partners and your Bitcoin is never lent out to generate interest I recently took out a loan with Ledin The whole process was super easy.

54:10It took me less than 15 minutes to apply. And I had the dollars in my account in just a couple of hours. It was super smooth. So if you need cash, but you don't want to sell your Bitcoin, head over to leden.io, which is L-E-D-N dot I-O. This episode is also brought to you by Iron, the largest NASDAQ listed Bitcoin miner using 100 % renewable energy. Iron are not just pairing the Bitcoin network. They also provide cutting edge computing resources for AI, all backed by renewable energy. we've been working with the founders dan and will for a long time now and have been really impressed with their values especially when it comes to their commitment to local communities and sustainable computing power so whether you're interested in mining bitcoin or harnessing ai compute power iron is setting the standard visit iron.com to learn more which is i-r-e-n.com i mean i love what you said there um american hodl said on the show once that like bitcoin is both innovative but very restorative and i think that's exactly what you're saying and the one thing that i know bitcoiners love is quality like they'll argue about their pans that they put their stake on on it it's like quality runs through this deeply um but i do want to kind of talk about how bitcoiners should be looking at using bitcoin as collateral for loans um because there isn't it's not zero risk i recently took out a loan with leaden just full disclosure they our sponsor now.

55:30It's the first loan I've taken against my Bitcoin. I've done it in what I consider a very responsible way in the sense that it's not a massive amount of my stack. If I need to top that up, I can. The liquidation risk is limited. But how do you think just your normal Bitcoin should be looking at these products? Yeah. So when someone asked me the question, should I lend against my Bitcoin or should I borrow against my Bitcoin? When the question comes, should you lend your Bitcoin, the answer is always no. Never introduce counterparty risk for any reason whatsoever. You should never be depositing Bitcoin and earning interest.

56:07That is a hard stop. Something's wrong. Something's not right. If you're ever going to, you yourself are the only source of counterparty risk. And that is when you're borrowing against your Bitcoin, not lending it. So lending it, hard stop. It's not going to work. It's never going to work. You should not give up 60 % compounding annual growth rate over the last five years, over 80 % CAGR over the last 10 years for four to five percent on your stack makes no sense. Stupidity. But when you want to borrow against your Bitcoin, you are the counterparty risk, right? Because you are the one who has to make the payments on the Bitcoin.

56:43You are the one that can determine the LTV that you're using. So when someone asks, should I borrow against my Bitcoin? The answer is yes and no. It's yes, because you can unlock the purchasing power of your savings without giving up ownership. And right now at the bottom of the S-curve, on the precipice of a massive acceleration of the transfer of wealth from the fiat world to the digital economy, you'd honestly be a fool to sell your Bitcoin at this point. But if you've been a responsible saver of Bitcoin for the past five years and you've experienced the 60 % CAGR, which that's a 10x, like 60 % CAGR of five years is 10x.

57:25So if you were saving$100 ,000 and it's now worth a million dollars, you have outpaced your peers by pretty much 10x. It's been an unbelievable experience for those responsible savers. But now that you have a million dollars worth of Bitcoin, how does it make your life better? Like at some point in time, like I remember for me, I'm like, I'm looking at my phone. I'm like, this is great. This is cool. But nothing's changed. I still have to take the trash out. I still, you know, I still my relationship with my wife and my children still nothing changes just because of the number on the screen. And if you're like cash flow positive, you live within your means, that's fine.

58:04Like that's totally acceptable. And I think that's one of the key points of this is if you are going to borrow against your Bitcoin, it's what are you borrowing for? I think that's one of the big questions. Like if it's to improve your life in some way to buy a house, if you have just expenses that you need to pay or even buy more Bitcoin, like I think all of those are okay options, but don't just go and blow it because you have it. Yes, definitely. Definitely do not want to do that. and you need to have the cash flow, right? So at people's reserves, some people are like, so how do you pay back the loan?

58:35And it's like, well, what do you mean? You want to take out a loan and not have to make a payment at all? Then the trade-off to that, I mean, because those options do exist, not at people's reserve, but at other providers, you can get a loan, make no payments, but then you share the upside of the Bitcoin. So you'd probably be better making the payments because the upside of Bitcoin is tremendous. Again, because we're on the precipice of this transfer of wealth accelerating. So, yeah, you should borrow against your Bitcoin responsibly and you should continue to work to generate cash flows so that you could service the debt.

59:10And if you don't have those cash flows, you're going to be in trouble because you have to service the debt. But the other thing is, no, you should not borrow against your Bitcoin because I believe that even though liquidation, like if you set up an LTV of like 33 percent, right, you post one point five million dollars of Bitcoin collateral so that you can borrow five hundred thousand dollars to go buy your single family home. Your LTV is 33%. So your liquidation risk is extremely mitigated. It would take a big drop in Bitcoin to get to the point where you need to add margin. However, that can happen.

59:47We've seen it with COVID. You can have some type of event take place that drops price from 10 ,000 to below 3 ,500 or from 100 ,000 to below 35 ,000. And then just a couple months later, you're right back up at 100 ,000. We cannot control what happens in the Middle East. We cannot control the consequences of the fiat disease that we have let rot away our economy and society. So for that reason, these black swans that are going to pop up as the house of card falls, it's very risky if you're using a contract that has liquidation. And again, this is why we're so excited. We want to remove that liquidation risk.

1:00:27And with variable interest rates, we've been able to do that. If the value of Bitcoin goes down, your interest rate will go up higher. It's that simple. And then when the Bitcoin goes back up, your interest rate goes back down. Because it's not just about the supply of money and the demand for loans. It's counterparty risk. So if the value of the collateral goes down, the risk goes up. So to compensate for that for additional risk, you get a higher rate. But when you look at Bitcoin as engineered money, the only time your rate is going to go higher is when you're in one of those downturns. And historically and statistically speaking, the downturns are few and far between.

1:01:03It's Bitcoin's compounding annual growth rate over longer terms that empowers you, right? Like 10x in five years with a 60 % CAGR. If you post$500 ,000 of Bitcoin and you buy a$500 ,000 home, five years later, the collateral is now worth$5 million. And the debt is less than$500 ,000. So the burden of that fixed fiat denominated debt against your pristine collateral shrinks massively over time because of the collateral being an engineered money that was strategically designed to gain value over it auto deleverages you. I've never seen anything like it. And that's that's it's negative risk. Bitcoin is the advent of negative risk.

1:01:44And when you try to put negative risk into a TradFi credit model, you just get a whole bunch of blank lines, like a whole bunch of red error signs because it cannot calculate. It doesn't work. It's like if you're using an Excel spreadsheet and you type the formula in wrong, there's just a bunch of question marks and hashtags. It's like, oh, err, err, can't calculate. That's what TradFi is. They cannot calculate for, their models are all based on circulating credit backed by proof of promise. based on your credit score and based on some of the assets that you might have on your balance sheet that aren't perfectly liquid, like real estate.

1:02:18A lot of people have been trying to liquidate real estate for the past couple of years. They still haven't sold their properties because real estate is not perfectly liquid. And when interest rates are held high by a small group of men who get to state the rate and hold it up there, unless you're willing to take a massive price cut, you're not gonna be able to liquidate that property. So they don't understand negative risk because in a circulating credit market, there is no such thing except risk. It's risk on top of risk with rehypothecated risk and then derivative risk on top of the rehypothecated risk.

1:02:50In a commodity credit market backed by Bitcoin, there is literally negative risk because to initiate the loan, you're at least posting one-to-one. That's at people's reserve. I think the standard within the lending marketplace is you're posting two-to-one to get the 50 % LTV, right? Yeah. So it's over collateralized. There is more equity. There is no promise required. If you bar the money and walk away and never come back, we don't care. We will just liquidate the portion of your Bitcoin to close the loan. And you come back and get the rest of your Bitcoin and take it back into self-custody. It's negative risk.

1:03:27So that's what's so hard for these TradFi LPs to understand. They can't plug it into their models. Their models don't compute. But that's what's so exciting about monetization. The monetization is going to accelerate this understanding, and then the financialization is going to bring about these new revolutionary Bitcoin-powered financial products that will make Bitcoiners the risk -free borrower. And that will give Bitcoiners access to the cheapest cost of capital in the world because you are now the risk-free borrower. You hold the pristine collateral that is the foundation of the system. I love it.

1:04:08Can we also, so this is all kind of the maturation of the asset. Like we said at the start, this is all Bitcoin kind of growing into the kind of financial product that we know it may end up being. How do BitBonds fit into this? oh yes so i this is another great question you're you got some good ones danny so um i think this is one of my favorite products at people's reserve so let me start off by saying this huge fan of michael saylor uh he has opened the pandora's box of financial engineering and anybody building a bitcoin powered financial product is building on top of the shoulders of michael saylor he will go down in the history books as the person who opened Pandora's box.

1:04:51I'm a huge fan. I hold the micro strategy shares. They're in trust. They'll go to the great grandkids. And if the great grandkids try to sell them, they're getting out of the trust because you don't want to sell shares of a future central bank of the digital economy. And I'm just even here at People's Reserve, you know, I think Michael's focus has been on financial engineering for corporations and institutions and for, you know, sophisticated investors as well. But a lot of what you see with BTC Torque and all of the different offerings that he has, it's for that$300 trillion pool of fixed income capital.

1:05:29And each tool that he's created has serviced or solved a problem for a specific pool of liquidity within that larger ocean of$300 trillion of corporate and institutional balance sheet wealth. But at People's Reserve, we build on top of his shoulders with financial engineering for the everyday person. And that's why our Bitcoin powered finance products focused flagship on the Bitcoin powered mortgage, because the real estate industry is also a$300 trillion industry. And a lot of that industry is being taken over by institutions. So we need to empower the small guy with the financial tools that they need to leverage their responsible savoring of Bitcoin.

1:06:10But then going back to what we're talking about, the teachers and the cops and the firemen and the EMTs, like, how do we fix this? Even Social Security. I don't believe in Social Security. I think we should recapitalize Social Security and then end it. So all the promises that are made can be kept, but then it should end and people should be saving for retirement on their own terms. Well, how do we do that? How do we recapitalize Social Security? You can't just keep issuing U.S. Treasury bills, notes and bonds and then using these bills, notes and bonds that pay an interest rate that is lower than the rate at which prices increase because now the next generation who receive that pension payment of the teachers, what retirement do they have to look forward to?

1:06:56The only retirement they have to look forward to is that they go in to do a drug bust and there's some gold sitting on the table and they all look at each other and they split it. But they can't turn it into evidence because this is the only chance they have to get ahead. This is the type of corruption that a broken money system creates. And it doesn't create it because those actors are bad. It created it because those actors are not properly remunerated for the services that they provide to society. So with our Bitcoin-powered bond, here's how we've structured it. And there's so many different ways to do this.

1:07:31We see MicroStrategy doing it with all their issuances from preferreds. I mean, all of the BTC-torque vehicles. And then you see it with this principal-protected note. And I think this principal-protected note is a very powerful value proposition, and I'll just give an example. Let's say a teacher invests$1 million or a teacher pension plan or fund invests$1 million into people's reserves' principal-protected note, which we call a Bitcoin bond. Right now, how we would allocate that million dollars is it'd be based on the interest rate of the U.S. Treasury note. So the U.S. Treasury note is a five-year U.S.

1:08:11Treasury note. It pays 4.5%. At 4.5%, the allocation model is split 80 % U.S. Treasury note, 20 % Bitcoin. Why? Because what happens is the$800 ,000 in the Treasury note with 4.5 % interest applied over that five-year period, matures with a value of$1 million. And that's why we call it principal protection because the original principal investment of a million dollars is protected by the cash equivalent. You're gonna get your million dollars back. Even if Bitcoin went to zero, which you and me and everybody watching the show does not believe, but even these TradFi guys, the pension plan runners, they do believe that's a possibility.

1:08:54So even if Bitcoin goes to zero, you still get back your principal. What you're gonna be able to buy with that principal, Well, that's the same problem you face by just lending it to the government with no Bitcoin element. Nobody knows what you're going to be able to buy. That's the problem. We can't get an interest rate that's outpacing prices. So whatever we're buying, we're buying less of. Now, what's left over, though, in this Bitcoin bond is the 20 % of Bitcoin. So$800 ,000 went into the treasury. It matures at a million. Over that five years, the$200 ,000 in Bitcoin, if Bitcoin maintains its 60 % CAGR, that's a 10x.

1:09:27That's$2 million. dollars. The Bitcoin bond matures with a three million dollar value in simple interest terms. That's 40 percent APY. Even if we go with Michael Saylor's 30 percent CAGR thesis, that's 20 percent APY. Inflation is around 10 percent. It's really hard to narrow down because inflation is based on your lifestyle. It's based on your business. It's based on what your business buys or how you live your life, but roughly around 10 percent. So you need to get a return above 10 percent to actually make sense to use that as a savings vehicle. Otherwise, you're losing in terms of purchasing power.

1:10:01But you take this Bitcoin bond or you take a micro strategy Bitcoin bond or you take a meta planet Bitcoin bond and you put this Bitcoin bond into a pension plan, into a social security fund. You are now recapitalizing the fund. You are now taking something that is creating liability and you're eliminating the liability. That is the problem here in the United States. We have $38 trillion of debt. We have another$220-something trillion of unfunded liabilities. You always hear people talk about, oh, we're at$38 trillion. We had to raise the debt ceiling. Well, what about the$220 trillion worth of promises we have to pay over the next generation or two?

1:10:40What about that$220 trillion? That has to be printed. And if it's not printed, then promises are going to be broken. And if promises are broken, Social Security is not just, Look, the quality of life and standard of living that can be supplied for by Social Security is crashing. It's absolutely crashing. The first people who received Social Security payments were able to live like they were working still. The people who get Social Security today, it's just paying a bill or two and they still have to go out and work an odd job. You see 65 plus year olds working at Home Depot and Lowe's and Walmart because they have to earn an income to supplement on top of the Social Security because there's been so much dilution of the cash equivalent, so much dilution of the fiat currency.

1:11:27How do you how do you eliminate that problem? You incorporate Bitcoin. And that's what Bitcoin bonds do. No matter who's structuring it, when you plug Bitcoin into a traditional finance product, like a bill, note or bond, and you create a structured product with Bitcoin integrated, Bitcoin's engineered design will create a positive rate of return. So Bitcoin bonds are going to be the only vehicles that people have access to that creates a real positive rate of return. In other words, a rate of return that is greater than the rate at which prices are increasing. So that at the end of the maturation of that note, you're able to buy more goods and services.

1:12:09You're able to increase your quality of life and standard of living. And we should be plugging it in to the teachers, to the firefighters, to the policemen, to Social Security. And I even had an idea what Trump is the tariff king. OK, let countries pay tariffs and let them get a discount if they pay in Bitcoin. Take this Bitcoin, package it into a Bitcoin bond. You don't even need to sell it to the public. Sell it to the pension plans. Sell it to the Social Security fund. Recapitalize the republic. This is a matter of national economic emergency. If we don't do something, we will no longer be the global financial leaders.

1:12:45We will not have the type of of of say that we have in the world right now if we just sit back and pretend that the dollar is going to be the king forever. We must integrate Bitcoin into our fiscal, monetary and economic policies. And we must do it immediately because other countries are already making their moves. Russia is talking about it. Thank God Bricks chose gold. I don't know why the heck they chose gold, but thank God they did. It gave us a chance. Imagine if they were already integrating Bitcoin, we would have already lost. The transfer of wealth would have turned into a transfer of power.

1:13:19We need to get in front of this. And Bitcoin bonds is just an example of one of those Bitcoin powered financial products that will change the world and make the world a better place because it's able to produce a positive rate of return because Bitcoin can't be diluted. In a world where everything can be created and supply can be expanded ad infinum, Bitcoin cannot. And we need to leverage that economic reality to empower ourselves. We, the people, must empower ourselves. The government's not gonna do it for you. The big cantillionaires, the companies with the monopolies on the marketplace, they're not gonna do it for you.

1:13:58They're happy where they have you right now. We, the people, must empower, we, the people, by embracing Bitcoin banks like MicroStrategy and hopefully People's Reserve so that we can have a free, open and fair market, a true equitable market that provides equity to those who provide value to the economy. You don't get nothing for free. You provide value to the economy. You get rewarded for that value. And then as you allocate your wealth and you incorporate Bitcoin into those wealth vehicles, you are able to grow your wealth and preserve your wealth through time. And that beautiful website you mentioned earlier, what WTF happened in 1971, We can get a whole new set of charts.

1:14:41WTF happened in 2025 when we financialized Bitcoin and we plugged it in. We got rid of these traditional financial products. We created Bitcoin-powered finance. What happened since then? The quality of life goes up. The standard of living goes up. The quality of goods and services goes up. Everything gets better because you're now built on a strong foundation of rock where when something goes wrong, you fall into equity. You fall into value. You fall into proof of work. You don't fall into the nothingness that requires even more printing to pretend that nothing went wrong. I love it. So when you go out and you're talking to these pension funds or whoever it is and telling them about these Bitcoin bond ideas, what's the general reception been?

1:15:24Do they get it? I would say, you know, no, most don't get it because they still don't look at Bitcoin as an engineered money that is going to continue to produce the way it's been producing. They either they don't understand absolute digital scarcity or they have the Peter Siff syndrome where it's like, well, there's a million Bitcoin. Look at all the cryptos out there. Every single new crypto is an altcoin. It's an alternative to Bitcoin. They don't understand the network dynamics. They don't understand the computer code or the computational power that supports the network. they i would say probably three out of 10 are like sign me up send me over that ppm and i will uh i can't wait to get in you know i'm excited to get this on my balance sheet i'm excited to utilize this that's not a terrible hit right it's a really good hit rate because because when i first started people's reserve like in 2022 it was like one out of like 30 that would get it now it's like three out of 10.

1:16:31So the light bulbs are going off and people are able to realize, you know what? I think it has a lot of what's doing on the world. There's a line being drawn in the sand between truth and lies. And that line being drawn in the sand, forcing people to say, hey, does it make sense? Is it true that I could just put this chemical in my body and be safe? Does it make sense that if I just wear this mask over my face that I'm not gonna breathe in like these really small germs? Is that possible? Like, what about the, what if I just take it for a second? You know, why is that person like in the government, they cut like a hole out in their mask and they can play their flute and they're still safe?

1:17:12Like you have to determine what is truth and what is lie. And that is the difference from when I started. In the beginning, nobody was really discerning. They were kind of just going on and living life. Now people are saying, no, I want to take a deep look at this. And I want to understand what's truth and what's a lie. And that has led to a massive amount. I mean, three out of 10, 30 % is insane. That's an insane conversion rate. But three out of 10 are excited. And the other seven out of 10 are just like that one guy I said, they're like, son, I've been in these markets longer than you've been alive.

1:17:44Take a hike. We'll come back. Thank you for your time. They'll get Bitcoin at the price they as a they will and but the other 10 are like this is going to change my business this is going to change the future of my family this is going to change how i allocate my business revenues this is you know they're they're starting to see it for what it is which is a tool and and i think the dollar's been king for so long these cash equivalents have just been considered the pristine collateral for so long that that nobody really questioned it right it was like, I don't know. I actually don't even know how to explain it.

1:18:21It's just nobody questioned it. But after 2020, when they started printing a massive amount of these things to the tune where inflation, I mean, the government headline of inflation is way off, right? Like even today, they tell you like they target 2%, but we're at 10%, right? On average. So if you buy more luxury goods or your business is in a more luxury type domain, inflation is probably closer to 15 to 20%. But, you know, if you're in some of these Chinese markets and mass production markets, you're probably like in the 5 % to 10 % range. So it just depends on what your business does and how you live your life.

1:18:58But 10 % is a pretty safe number to say, hey, if you're not getting a 10 % raise, then you're actually making less money. If you're invested into a cash flow vehicle or a store of value derivative, then it better produce more than 10 % or you're losing purchasing power. And people are now finally coming up with that number. Whereas years ago, that number didn't exist. It was like you lend to the government and you don't think about it. You lend to the municipality, you get tax-free cashflow. There's nothing to think about there. But now people are really starting to think about it and really making sure, you know, and that's what happens.

1:19:34I talked to one business owner, just I'll close it out with this example. They, in 2017, they had a 10-year plan where in 2027, they were supposed to be able to build three factories. They were supposed to build three more factories. After 2020, and then after everything that happened since then, they need financing to build one factory. The cash flow that was created through the interest paid in 2017 would have been significant enough to build two factories and then use leverage on those to build a third. Instead, they need to get financing to build one factory. that's how much dilution there but that's what's forcing business people to sit wait a second who am i supposed to fire who messed up who ran the numbers on this and told me i was going to be able to do this and now the time has come and i can't do this who's getting fired the fed is who you got a fire exactly they say sir i mean we could not anticipate that the supply was going to be expanded so drastically that there would be so much dilution that that would force prices up and now all the land labor and material prices are so high sir we need to get financing just to build the one factory and then and and then that's that changes it now now when that guy goes to dinner and he's at a dinner at an awards dinner he tells the story to a friend and the friend has a similar story who then tells it to another friend and and it's just like fire and that and those stories spread and spread and more and more stories pop up until finally people say what's the solution and now those three out of ten people who heard that story are now looking for the solution and they find micro strategy.

1:21:13They find the preferred offerings. They find people's reserve principle protected note. They're seeing Bitcoin being integrated into Bitcoin powered finance products. And they're saying, wow, not only do I need Bitcoin, not only do I need exposure to companies that are building around Bitcoin, but I need Bitcoin powered finance products. I need my business to be powered by Bitcoin. I need my balance sheet to be powered by Bitcoin. And if I don't do this, I'm falling behind. And then once they do it and they see and experience the results. Now they go back to that same awards dinner the next year and they say, how'd it turn out?

1:21:45Well, hey, in 2029, I'm gonna have my three factories because I rebalanced, I reallocated, I got into Bitcoin. I'm using this, I'm using MSTY, I'm using STRKD, I'm using MicroStrategy, I'm using Bitcoin, I'm using a Bitcoin powered bond. All of these products that incorporate Bitcoin reduce volatility risk, reduce just straight spot exposure to Bitcoin and produce a cash flow for me and a return for me that allow me to build my business and strengthen my balance sheet. You should check it out. And that is catching fire. And if they'd have just bought Bitcoin in 2017, they'd be building 30 factories with no financing.

1:22:21Exactly, exactly. So just to sort of close out, when we go through this monetization and financialization phase of Bitcoin, what does that mean for Bitcoin price? How quickly do you think those transitions happen? and where is Bitcoin at the end of it? Yeah, so Michael Saylor has this famous saying, he goes, all your models will be broken. So as the creator of the Bitcoin fair value algorithm, I took that to heart. I was like, man, is my model gonna be broken? But let me, yes, yes it is. It absolutely will be broken because what happens is the demand for Bitcoin will so far outpace the supply.

1:23:03and and all of those older coins like we just recently saw 80 000 coins move i'm sure that had something to do with some type of otc deal maybe it had something to do with those older wallet addresses having a little bit of a security concern and just getting into a newer type of address but i still think some of the older players you know hundred thousand dollars is a very psychological level. There is no technical resistance at this level, none whatsoever. It's all psychological. And that's what we've been doing. We've been flipping the hundred thousand psychological resistance into psychological support.

1:23:43And if we do have another bear market, we probably come back down to a hundred. So I anticipate what we see from here going forward is going to be that stair stepping, you know, distribution, reaccumulation, repricing. and I think the next stop is probably single family home. I think when Bitcoin gets above the price of say 440 ,000, the average price of a single family home here in the United States, a lot of people are gonna say, well, wait a second. I work my entire life. I made a 30 year promise to work my entire life to buy my home. Now it's harder to buy a Bitcoin than it is to buy my home.

1:24:21What? What? Okay, what? I have to work 30 years and I can't even buy one Bitcoin? What are you talking about? What the hell is this thing? And that's where I believe that once we get all these Bitcoin treasury companies and all the sovereigns piling into Bitcoin, kind of like they are now, where does the next big wave of liquidity come from? I think it comes from homeowners. I'm not a fan of Janet Yellen, but she had at least one good quote during her career, which was the most important source of wealth for the vast majority of Americans is in their home equity. And I think, you know, that's another important Bitcoin-powered finance product, our home equity Bitcoin line of credit.

1:25:00You need to transform your home equity into Bitcoin equity. Home equity, depending on your zip code, grows at 2 % to 8 % CAGR. Bitcoin, over a five-year period, 60 % plus CAGR. 10-year period, 80 % plus CAGR. You cannot outpace and grow your wealth if you're keeping your home equity in your home. You must transform home equity into Bitcoin equity. And the real estate market in the United States alone is like$40 trillion. And upwards of 50 % of that is owned outright. So we're talking about a$20 trillion liquidity pool, a$20 trillion pool of purchasing power that is going to exit home equity and enter Bitcoin equity.

1:25:42That's probably the next big wave. But that's not going to happen until people realize their home is worth less than Bitcoin and that Bitcoin is more important than their home. So I think that's where we go next. We go to single family home. And then after that, I think we go to gold parity. We go to the digital gold level where Bitcoin gets to a million dollars. And that's where I see it going over the next couple cycles. But beyond that, when you talk about the financialization of Bitcoin, you know, my mom always said, write your plans in pencil unless you want to make God laugh. So I don't like to project too far out because nobody truly knows.

1:26:21But I do think, you know, the price of a single family home, parity with gold, and then beyond that, through the mainstream financialization of the asset class, it's literally global wealth divided by 21 million. It's infinity divided by 21 million. Why is it infinity? Because we're created in the image of God. We have the ability to create. We have the ability to create something in this world that has never existed before. We can deliver value through creation, through ideas. So the upside of humanity is infinite through our ability to create. Therefore, the global economy, the value of that global economy is infinite.

1:27:03And we need to take that value, which is infinity, and we need to divide it by 21 million. Or actually, if you think like Hal and myself, you should be dividing that by 20 million instead of 21 million. And that's where we're going in the longterm. All global wealth will be priced in sats and settled on the Bitcoin network. And that is when we will have achieved our goal and increased quality of life and standard of living to the maximum. That is when we will have leveraged the power of the digital economy and the natural laws of economics to make life as good as it can be for those who choose to deliver value to the economy and value their fellow human citizens by participating in the economy and delivering value and finding ways to help each other.

1:27:48And Bitcoin at the core of that can actually deliver on that promise. There's never been a way to deliver on that promise ever before in the history of humanity. but with the, I don't even want to say creation almost, but with the discovery, with the 40 plus years of computer science that went into discovering how to create the perfect proof of work consensus protocol, we now have the ability to deliver on that promise and to move that promise forward. And I hope we all do. Let's go, CJ. I have really enjoyed this interview. Thank you so much for the time. Where do you want to send anyone before we close out?

1:28:27Well, thank you so much for having me. It was an absolute pleasure. And I hope we do get to come back and do that additional Bitcoin banking talk. I think that'd be fantastic. For right now, everybody can just go to peoplesreserve.com. Check out everything going on. Of course, follow me on X at CJ Constantinos and Peoples Reserve at Peoples Reserve. Perfect. Thank you so much for the time, man. Really enjoyed that. Appreciate you.

1:28:49CJ Konstantinos:Thank you. You too.

1:29:02Thank you.