E141: Mark Moss: How to Get Rich With Bitcoin (without getting lucky)

24:47However you like to invest in crypto, Bitwise has something for you. Thank you to our friends at SWE for supporting this show. SWE is a scalable layer one blockchain that's fast, secure, and affordable, built by previous Facebook developers, and that delivers the benefits of Web3 with the ease of Web2. To support this show, please check the sponsor links in the description down below. You're talking about the taxes, but... Oh, whatever you want to call it. At some point, it might happen. It happened already, depending on the country, but even in first kind of first world countries, right? Developed countries.

25:21It could happen that with what happened in the next couple of years, property rights are at risk in general. And therefore your house that you bought and on which you pay taxes might not be yours anymore. It's always a risk. It's, um, it's sort of what we'd call like in the, in the Bitcoin or crypto space, like counterparty risk. And that kind of even goes back to the stock in your account or the money in your account. So there's the counterparty. You could say, you know, in the real estate example that the county the government is the counterparty in that i don't think that's a big i mean obviously depends on which country you're in um in in america even in mexico where mexico did nationalize all the property i don't know 150 years ago they did take all the land from everybody and then they redistributed um i don't see that as a big risk but it but it is something that you should be you know concerned about or think about at least do you still invest in real estate?

26:13I'm not really investing in real estate that much right now anymore. And let me, let me rephrase that. So a couple, couple of things. Number one, I think I said earlier, I started my career sort of investing in real estate. I like real estate. If I won a billion dollars in the lottery tonight, I would probably go develop some giant pieces of marinas and golf courses in Mexico. That's probably what I would do. Not because it's the highest and best use of my time or highest return on my money, but that's just what I like. It's like tangible. You feel it. I love as a creator, I love seeing a piece of land and then grow this development.

26:51So I like it from that perspective. I love buying real estate and seeing it come to life. I owned over 200 rental properties at once at one point, but I sold all my rental properties. I think I sold the last one in maybe 2021. So I sold all my rental properties because they weren't giving me enough return for the amount of work effort and risk I was taking. So I was better off taking all of that equity and putting it into Bitcoin. So Bitcoin since 2021 has been compounding about 60 % per year. Real estate is going to do five to 10. And there's this thing that we call hurdle rate, right, which is inflation plus money printing, which is about 12, 15%.

27:37Yeah. Where basically pretty much no asset class beats. So you would own real estate. People would think, ah, real estate, I'm making money. No, you're not. Oh, I own S &P 500. I make money. No, you're not. Right. Yeah. And so at some point you start to understand, I think it was, when says Casares, the Silicon Valley patient number one in Bitcoin, who basically was telling, uh you're telling rao pal i mean actually rao on this podcast told me that he was like when says told me that he put whatever two or three million dollars in bitcoin when it was like three dollars and then ever since every investment decisions he wants to make he puts it versus bitcoin and he realizes it's never as good so he doesn't do his investment decision yeah right and so it then you get to the point where which is my question for you why would you own anything else than Bitcoin.

28:25Okay. A house, because you want to have your house for your family or vacation home. But why would you own anything else? Yeah. So the first thing I would say to this, it's a great question. And it's a question that we get asked all the time, but there's levels to this game, right? So Michael Saylor, the biggest Bitcoin maximalist that there is, his goal in life is to acquire as much Bitcoin as he possibly can. I've been to his house. It's massive. He has three boats, not one, three boats out there. Why does he own boats? Why does he own, and he owns multiple houses around the, like, why does he own all these houses?

29:01Why does he own all these boats? So there's levels to this game. So I think certainly, you know, in the beginning, you're starting out and you're trying to really sort of think of it like Maslow's hierarchy of needs, right? Like I need to take care of my base level of needs. So I need to build up enough wealth so I can start to secure my future. And so in the beginning, it's like YOLO all in on Bitcoin, like let's go and you know some people want to even go even more risky and they want to get into the memes or crypto because like i don't have much money this is my shot like let's just go and see what i can do so that's sort of where you're at in the beginning in the bitcoin space there's like memes of like sell your chairs just put it all into bitcoin but as you make more money then you start wanting other things and so there's levels to this game right and so eventually you start to realize that we don't want money none of us want money humans don't want money what we think what we want are the things that money buys us.

29:51That's real wealth. That's the goods and services. So money is just a thing that we use to get the things that we want. It's a thing that we use to store our wealth, our energy until we're ready to deploy it. And so we want to build that Bitcoin up. And to your point, we want to maximize that return, but eventually we want other things. So for example, I told you, I just built this beach house in Mexico. In Mexico, it's not like America. So we don't get like 30 year debt. We have to pay cash. And it was expensive. I spent a lot of cash on that, right? And a lot of people are like, Mark, why would you do that?

30:21Don't you know that in five years that Bitcoin is going to be worth 10X and look how much Bitcoin you have? And I said, so what? One day I can buy a beach house? So one day I can get the, no, I want the beach house. I have my kids. I want my kids to grow up in the beach house. The time that we spend as a family in that beach house, the memories that we create are worth more than any amount of money I can make. But I'm at a point in my life where I can make that decision. I wasn't always there. So if we rewind the clock back to 2008, I told you I'd sold two businesses. I had built the big, the big beach house as well.

30:50I had all the cars, the whole thing. And I had to start over. So for years, for, I think it was probably at least six or seven years. I have to add it up. But in that range, I didn't buy another house because all my money was going back into investments. It was just reinvest and reinvest and reinvest. And I'm like, why would I take this money and put a down payment on a house? And then, and then to get the same payment I could just rent for, I'm just going to rent. And so I did. And so we built and we built, but I finally got my money. I got my capital base up enough where I'm like, okay, I can buy a house now.

31:20And the house is buying that house for my family. The home, the home was a terrible financial decision, but it wasn't a financial decision. You see what I'm saying? So it depends on where you're at. Certainly I sacrificed, I built my capital stack and a lot of people need to do that. But eventually we realized it's not the money that we want. It's the relationships, it's the memories, it's the experiences. And so I want other things and then we'll get those things. You said once you buy some Bitcoin, your life changes. Yeah. Why? Well, Bitcoin changes your life for a bunch of reasons. But I think ultimately it starts to shift your entire mindset to what we call, you know, let's just call a long term time preference, right?

32:01A low time preference. And so what happens is when you start to realize that the fiat system is meant to turn us into consumers, consume, consume. One of the reasons why they have inflation is they want people to spend money. The government thinks they have to stimulate people to spend money. The reality is people should be stimulated to save. They don't need to stimulate people to buy, but they want to stimulate the economy. You talked about the velocity, I think earlier about the money. And so like during the COVID pandemic, everybody started hunkering down and saving money. That was terrible.

32:33So they injected trillions of dollars of stimulus to get people to start spending again. So humans just want to spend. And part of that is sort of ingrained into us being the consumers, but also because our money is losing value so fast. And once we get Bitcoin, we realize that, oh, my money can actually buy me more goods and services in the future. And so if it can buy me more goods and services in the future, then maybe I should wait. You see, on a fiat system, my money is going to buy me less. So I should probably spend it as quick as I can, because if I wait, it's going to cost me more money in the future.

33:06But with Bitcoin, it's the opposite where it's like, oh, it'll be cheaper for me in the future. Maybe I could just wait. You talked about the hurdle rate. So the hurdle rate is that if Bitcoin is going up at 50 or 60 % per year, then why would I buy anything else that's going to cost me that? So what happens is it changes the cost of capital. So then it's like, do I really need that vacation? Do I really need that new house? Should I get that new car? Because I could just hold it in Bitcoin. And that Bitcoin, whatever, it's$115 ,000 a day. I think it'll be a million dollars in five years from now.

33:40That's a 10X. If I just wait five years, it'll be a million dollars. Every Bitcoin I saved or spend today or don't buy today would be a million dollars. It'll be$15 million in 15 years. Am I willing to spend that$100 ,000 a day that could be 15 million in 15 years? Now, if it's the beach house for my kids, hell yeah, I am. I'll trade all that money in the world for that experience with my kids. Yes, I will. But if it's that vacation. Because you have a lot of money already. Because I've gotten there. Of course. But what happens is we start to look at things through that lens. And it's like, do I really need that?

34:15And so what happens is, again, we don't want the money. We want the things it buys us. But it helps us make better decisions. And that's why it changes our life. It starts to show us. It changes our value system. It shows us what's important or not. And it will also change the world. Because in the world, we have so much misallocation of capital. so much malinvestment we're invested into all types of things that are never going to work we're spending money on things that we probably shouldn't be working on money chasing problems that don't need to be solved but when you start thinking about it in terms of bitcoin it makes you much more selective and i think that's a good thing you said my money is losing value very quickly yeah how quickly is my money in my bank account losing its value yeah a lot faster than people think.

34:59The money is losing value much faster than people think. The government reports what the CPI or consumer price inflation is for us. And so basically they take a basket of goods, they track that basket over time and they tell you how fast prices are going up. But that's not what's actually happening. That's the result of what's happened, right? So it's the increase in the money supply. That's what's going on. And so rather than the CPI in the US, it's two to three percent, the target's two percent. The target is to steal only two percent of your wealth per year through inflation. Jerome Powell, head of the Federal Reserve, just had their meeting and they basically said as much that they're going to sort of abandon that two percent target, meaning like let it run hot.

35:43But the real rate of inflation or debasement or the amount that you're losing in your bank account is really the rate of the increase in the money supply. So if you think about actually the word inflation, it's like, if I was going to blow up a balloon, I'm going to inflate a balloon. I'm increasing the volume of air in that balloon. So inflation is increasing the volume of money in circulation. And so what happens is when they increase the money supply, price is changing as the result of that. So we're trying to track CPI. We're looking at the result, but we want to understand that. So what is that?

36:15So over the last five years, globally, the M2 money supply has gone up about 8 % a year. In the US, it's gone up a little bit faster. So it's somewhere in the eight to 10 % per year range is the amount that you're being debased or you're losing that purchasing power. Then you could add in say a 2 % risk premium. So now you're 10, 12%, you know, somewhere in that range, but that's the rate that you're losing. That's back to the hurdle rate. That's your hurdle rate. So now if I'm going to lose 10 % per year, then everything I do has to go make me more than 10 % a year. And so I think once people realize that it starts to, again, sort of like almost, as I said earlier, once you set your sight on what you want, it starts making your path much more clear.

37:00Once I realized that I need to beat 10 % inflation, it starts making all my business decisions and my investments decisions much more clear. Because now you have this basket of things that you can invest into. If your rate alley is going to tell you 17 things in your portfolio, Well, of those 17 things, 15 are not going to beat that number. So let me just go focus on these two things. And that's NASDAQ, that's tech, and that's Bitcoin. And this 10 to 12 % compound every year. That's another thing, right? Even when you said before, our goal is only to steal 2 % a year, which sounds like it's not that bad.

37:35Just 2 % a year compounded over a few years is a lot. 10 to 15 % compounded over a couple of years is 40, 50%. It's a lot. It's a lot. Yeah, that's back to the law of compounding. And what happens is a lot of times we overlook, again, right, we think of things linear and forget that it's compounding. And so, you know, some of the things that I also help on some of these coaching programs is help people think about wealth a little bit differently. And so if we could just keep 10 % more of our money and invest that over 20 years, that could be life-changing money. But it's like, ah, that's like six, 7 ,000.

38:07It's not worth my time. You know, I'm focused on making money. But it's, again, you're overlooking the power of that six or 7 ,000 that you save and keep and can compound and how that could grow. There's a question that every new person in Bitcoin has themselves. How can I get rich with Bitcoin without getting lucky and without falling from all those scams? The get rich quick mentality. I think it's a symptom of the fiat monetary system. It's a symptom of the debt-based system that's constantly stealing your wealth. And real wages don't keep up with the rate of cost increasing. And so what happens is then humans have to try to get more extreme, move further out of the risk curve to try to offset that.

38:49Vladimir Lenin told John Maynard Keynes, the father of the Keynesian economic system that we have, that the best way to destroy capitalism is to debouch the currency. And through a series of inflation, they can arbitrarily steal wealth and they can continue to steal wealth until all relationship of that is lost. and the best way to get rich will be gambling and theft that's where we're at now and look at where we're at right now right and so the best way to get rich today is gambling yolo but let me put it all into into a into a meme let me go to vegas perceived way to get rich today the best the best perceived way yes thanks for the clarification or theft and unfortunately we have a lot of theft whether that's fraud on wall street or that's you know theft theft on the street and so I think we're there but I think that's not the best way to get wealthy it's a way to get lucky sometimes but the fact is that 75 percent of lottery winners end up bankrupt in less than five years and and so that proves to us that getting lucky making that making that big the big gamble and and winning that is not the way to wealth 75 percent of lottery winners are bankrupt in five years.

40:02You see it all the time. Musicians and pro athletes that make 30, 40, 50, a hundred million dollars and they end up bankrupt. And so you could certainly hit it lucky on a meme stock or a crypto token or something like that. But the chance of you holding onto that is very slim. And in a lot of cases, it destroys their life because we have to build up the muscles. We have to build up the ability to hold it. And part of that, unfortunately, nobody wants to hear this. Part of it, unfortunately, is that you have to make it and lose it. 100 % and you have to make it and lose it and you have to make it and lose it so you value it so you built up the muscle you talked about it earlier it's like I have to lose it so I value it and then I'm like okay I'm not going to do that again and if you just make it lucky the one time you're going to lose it and you don't know how to make it back this is so underrated you have to build the muscle absolutely and I just look at my own life it's the same you just you're not ready if it comes too quick you're not ready for it yeah and even if you think that you understood to investing principle and that stuff.

41:03First, if it came too quick, there's probably a reason why it came too quick, right? Yeah. And so that's the reason why you're gonna lose it also. And 100 % you have to build the muscle and and this is so underrated. And it's so true. Yeah. And that's what people don't want to hear or don't want to basically, there's no get rich, quick scheme and crypto crypto or Bitcoin in this case, is a get rich slow scheme, get wrecked, quick scheme. I want to just challenge that though for a second, right? It's a get rich slow scheme, if you will. The stock market has been the best way to build wealth in the world.

41:36Obviously, the best way to build wealth is through a business. That's the best way to build wealth. And that goes back to what I said, being a creator, solving problems, and pushing value in the world. That's the best way to get rich. All the wealthiest people in the world, Elon Musk, Jeff Bezos, Bill Gates, they've all built businesses that solve problems. That's the best way to get wealthy. wealthy, but then we either put it into real estate or we put it in the stock market. So that's where wealth is made or multiplied after you've made it. So the real estate market has made more wealthy people in the world.

42:06And then also that's the P500. If you look at the return rate of those over a 30 year period, they're seven, 8%, seven, 8%. So the wealthiest people in the world, the Warren Buffetts, the Ray Dalios of the world have gotten wealthy in those markets, making those types of returns 70 percent now with bitcoin per year and per year and and i think warren buffett had like a million dollars at like 31 or 32 so it shows that with this you can still become multi-billionaire yeah throughout whatever 60 years right but i do want to point out with buffett and dalio so what happens is i see a lot of people that come into this space and they want to quit their job and be a full-time investor and i'm going to get wealthy being a full-time investor because look at Warren Buffett and look at Ray Dalio.

42:52But I want to remind people that Warren Buffett didn't just build his wealth investing. He built a business. The business is called Berkshire Hathaway. And he goes to work, well, he did go to work there every single day. Ray Dalio didn't get wealthy investing. He created a business called Bridgewater Capital. And he went to work at that company every single day. So it wasn't just that they're investors, they built a business. So we need both. But back to the point that they built this wealth in these markets, real estate and S &P 500 that are doing seven, 8 % per year. Bitcoin in the last five years has done 85 % per year.

43:27In the last three years, it's been averaging 60 % a year. So when we go like, it's a way to build wealth slowly, like what? Slowly, 65 % a year when the markets are doing eight? But slowly in this hyper gambling kind of mindset where they want everything in three weeks or three days. Right. But people need to chill on that. 100%. People need to chill on that. So they they've lost all perspective in life and they, they have no relation or no education or foundation of what wealth is and how wealth is built. Because I, of course you're right. And I see people all the time. Bitcoin is too slow. I need something that can make money faster.

44:07I need to triple my money in 30 days. You said 10 X in the next, you know, a hundred K to, to, to a million 10 X in the next, uh, five years. most people would come here and say no way 10x no they would say they would say i don't want a 10x right it's a classic they want 100x yeah it's a classic i didn't want a three to five x so i went for the 99 minus 99 instead yeah it's this hypergaming mentality and it's really yeah it's sad some call it financial death wish yeah and you know what um michael saylor said that in everyone's portfolio, there's typically a little bit of room for risk. So kind of going back to the hierarchy of needs and the levels to the game, like get your foundation built, secure some capital.

44:57And if you want to gamble with some of the money, go for it, but you compartmentalize it, right? You take a small percentage of that. And what wealthy investors and professional investors understand is that we always think of things in terms of risk adjusted returns. So things that are more risky have a higher return profile and we put less amount of capital in there and things that are less risky and have a lower return profile, we put more money. So we don't put the same amount of money evenly across the board. We allocate it differently. And so if you want to take those 99, you know, nine and nine, 99, or let's call them moonshots.

45:32If you want to take those moonshots, do it. If that's fun for you, do it, but just do it with a small percentage of your portfolio. You said, I think Bitcoin will be worth a million dollars by 2030. So in five years, why? Yeah. So there's a few ways that we can look at Bitcoin. And what's really interesting about Bitcoin is that almost everybody thinks that it's too late. It's too expensive. I missed it at 10 cents or$10,$10 ,000. So it's too late. But the, but the interesting thing with that is that people buy stocks based off of a future value. So you're going to buy Tesla today at a, what is it?

46:1080 times PE ratio. So that means it's going to take 80 years of profits to get the price that you're paying today. 80 years. You're going to buy the mag seven is around a 30 to 50 times PE ratio, right? So I'm buying these companies based off of a value I think it'd be worth in the future. But for some reason, you're looking at Bitcoin in the past. So that makes no sense to me. So what we want to do with Bitcoin is just like any other stock. What do we think? it'll be worth in the future. Well, how do we back into that number? So stocks have earnings. And let's just think about the absurdity of this because Bitcoin is going to change all of this.

46:43The absurdity of this. So I'm going to buy this Mag7 company based off what I think their earnings will be in 30, 40, 50 years. Their earnings. Not their capital base. Not their assets. Their earnings. Okay. Well, tech changes really fast. How do I know they'll be earning that in 30 years? number one. So if we think about where will Bitcoin be in five years, 10 years, 20 years, well, we can look at it from a couple of different angles. So there's a couple of ways that I look at this. So I can run you through some math. One way I look at it is sort of like through a venture capital lens. So I've been deploying venture capital for over a decade, five years in just the Bitcoin space alone through the Bitcoin Opportunity Fund.

47:23And when we're investing money into a venture capital, let's use an example most people would understand, like, let's say Uber. So whatever it was now, 15 years ago in Silicon Valley, we sit down, I'm like, Hey, I have this app and you can, you can call a ride anywhere in the world. And you're like, Oh, like a, like a cab. I'm like, yeah, it's like a cab, but it's better. It's an app and it's seamless. And it takes all your payment in there and you can get black cars and whatever. And you're like, okay, I guess, uh, how much is it worth? I'm like a hundred million. And you're like a hundred million.

47:51Like, where'd you get that number? So what we would do is we'd say, well, the taxi industry is this big and the limo industry is this big and the vans are this big. And if I could get 5 % of each of those markets, then I would get this valuation. So Uber did that, right? Airbnb did that, right? They took a little bit of market share from hotels. Hotels are still there today, obviously, but they took a little bit. Uber and Airbnb both captured 10 % of their markets in less than 10 years, right? So that's how venture capital looks at that. So what we would do with Bitcoin through that lens is we'd say, okay, well, what markets is Bitcoin disrupting?

48:24Well, it's not competing against MasterCard or Visa. It kind of is, but it's not. It's really competing against value itself. So where do we store our value? Where do we store our wealth? Certainly we spend it, but at some point the creators get more than they consume and they save it. And so typically those are in what we call store value assets. And that'd be real estate, that'd be stocks, that'd be bonds, that'd be gold, that'd be collectibles, fine art, things like that. That basket of store value assets in the globally is about 1 ,000 trillion, one quadrillion dollars today. Now, just to put this into some terms people can understand, to understand the magnitude of this.

49:03In 2010, that was$300 trillion. Then it was about$800 trillion in 2020. It's about$1 ,000 trillion today. By 2030, that should be about$1.6 quadrillion. Where do we come up with that number? Well, we can look at, again, nobody wants money. So what happens is we want the goods and services. So what we have is the goods and services of the world are wealth and money is what we used to get that. So it's all the goods and services of the world, all the wealth of the world divided by all the money in the world. And as they increase the money, the asset prices, the value goes up. So what we do is we look at the rate of the monetary increase we talked about, about 10 % per year.

49:44Now, in the United States, the Congressional Budget Office, the CBO, projects out for the next 30 years through 2054, what the debt will be, what the deficit will be, what the annual budget will be. So we know for the next 30 years what they project and they're going to undershoot the target. But let's just go with the numbers that they project so we can see how much money they expect to inject in the system over the next five years. And then we can extrapolate that number to how much that store value assets should rise that basket. So I think it'll be worth about one point six quadrillion. So how fast is gold going up in that?

50:17How fast is the bond market growing? How fast are stocks going? Each one of them has a little bit of a different sensitivity to the global liquidity. So Bitcoin is the most sensitive asset. It's going up faster than other assets in that basket because it's a limited supply, 21 million, et cetera. I believe that Bitcoin will capture 1.25 % of that basket by 2030. 1.25 % by 2030. Now that's 20 years after Bitcoin came out. 1 % of the basket. Uber and Airbnb got 10 % in less than 10 years. So I think that number is extremely conservative. We've also looked at that. So Bitcoin, again, as I said, in the last three years, it's been going about 60 % a year.

50:58I think it'll continue the rest of the decade at about 50%. And so that puts it, if we capture the 1.25 % of the basket, that puts it at 21 million, which puts it on par with gold. So it'll be about the same size as gold at that point. And divided by 21 million Bitcoin, that's$1 million per Bitcoin. And then we can continue to extrapolate that number into 2030, 2040, 2050. Why does BTC stop at 1 million? It doesn't stop. big kind of and it's the next big kind of round number but there's no reason for you to stop there if it doesn't everything we talked about is true which yeah it is true so the cbo projects through 2054 so i've run the numbers all the way to 2050 and tell me about so that store value basket goes from 1.6 in 2030 so 1.6 i think it's 3.8 in 2040 and then it's like uh eight around eight quadrillion by 2050.

51:53It's been a while since I looked at those numbers, but it's somewhere around. So I think it's, yeah. Oh, it's yeah. Around 3.5 in 2040 and about eight quadrillion in 2050 based off of what the CBO tells us. And again, I think it'll probably be more than that. So looking again at the rate, the sensitivity of each basket in that basket, the rate of growth of that basket and how much Bitcoin can capture by 2040 at the rate that Bitcoin's going up, the CAGR will continue to probably slowing down. I think it'll accelerate a little bit, maybe slow down. Maybe it averages in the next decade around 30%.

52:24And it would capture about 8 % of the basket by 2040, 8%. So now we're 30 years in, it's only gotten 8 % of the basket. Again, Uber Airbnb got 10 % in 10 years. That would put it at$14 million per Bitcoin. By 2050, it would get, I believe it was up to about 20 % of that basket. And that puts it at$45 million dollars per bitcoin sounds crazy but uh you know 45 million dollars per bitcoin but actually i had a david bailey the other day uh on this podcast and he said 50 to 100 million dollars per bitcoin is actually possible once in the future right it's not just possible it's i mean i think it's well yeah it's certainly possible i think that's where it's going i think i think it the gentleman here was asking me yesterday like oh bitcoin is 100k or whatever 120k whatever 130k is it too late i think i think by 2060 it's i think what happens so i do a lot of work on cycles and so we can look at um all four year eight year and 40 year 50 year 200 year cycles and we have these technological revolutions that happen every 50 years and so we're on the sixth one right now and what happens is when something happens two times or three times or four times it's more likely to happen the fifth time the sixth time so now we're on the sixth time and they have this very dependable framework or this blueprint that they follow.

53:50And so Bitcoin falls into this technological revolution cycle, Bitcoin and AI together. And there's four distinct phases that it goes through in this. And so we can look at like an S curve to see the diffusion of innovation within that cycle. And so we're in this parabolic part of the S curve, but we can start to look at where it starts to get full scale adoption. And that should be somewhere around 2050. 50. And we can look at also there's the evolution of money. So for thousands of years, money has evolved. So typically it starts as a collectible. So it's like a feather, a rock, a seashell. And that collectible then becomes a store value if enough people believe in it.

54:24So a lot of wealthy people store their value in collectible cars and art and things like that. But only if it has the right attributes, it could become a money. If it's portable, durable, divisible, recognizable, fungible, it could become a form of money. And then if enough people use it, it becomes a store value or a unit of account. So that's the final phase. So we overlay this into this 50-year chart with the S-curve and this four-phase process. And I believe Bitcoin could become the unit of account of the world by 2050. And there's other reasons we can look at this, but from a geopolitical lens, we can understand that the dollar has been losing its value, 99 % of value in the last 110 years.

55:01And the world has been trying to de-dollarize for a long time. And really what really pushed the world over the edge was when sort of the US and NATO decided to seize Russia's bank accounts when they invaded Ukraine a couple of years ago. So there's three superpowers in the world, nuclear weapons, Russia being one of them, and they had their money seized. So every nation in the world was basically put on notice, like, if it can happen to them, you stand no chance. And so you hear about the BRICS nations trying to start their own currency. You hear about China working with the BIS to create their own CBDC with this project in bridge.

55:32And everyone's trying to figure out this solution to get out of the dollar. And, you know, now we have this tariff war going on kind of a thing. And so all these nations are trying to figure out how do we work in this new world where we can't really trust each other. We can't trust the US dollar fiat system. We have to find another way. And really the only way that I think the world can continue is to find some sort of a neutral reserve asset. We have to go back to this neutral reserve asset like gold was. So under the Bretton Woods Agreement in 1944, the world agreed to have a gold standard, the gold being this neutral reserve asset.

56:04And so the world needs this neutral reserve asset. And of course, Bitcoin is this asset that can fit that bill. So when you overlay the technological revolution chart, the S-curve, the four phases, the geopolitical picture, I think by about 2050 to 2060, I think Bitcoin becomes the unit of account. Now, what does that mean? What it means is that that store value basket I was just telling you about, that's now eight, eight and a half quadrillion dollars, it's not eight and a half quadrillion dollars anymore. Now it's priced in Bitcoin. That's what that means because it's the unit of account. You see, right now we measure most things around the world in dollars.

56:43Obviously right now we're recording in Hong Kong, so they have their own currency here, but globally around the world with the petrodollar system, the dollar is sort of this globally recognized unit of account. But I believe Bitcoin becomes that unit of account. So then what happens when we take the 8.6 quadrillion dollar basket and reprice it in bitcoin 8.6 quadrillion divided by 21 million bitcoin i think that's like four or five hundred million dollar bitcoin and i know that sounds crazy he's there like shit i need to go buy some bitcoin and i know that sounds crazy but bitcoin is program programmatically designed to go up forever and the reason the reason why it's designed to go up forever is because we don't want money.

57:29The wealth is the goods and services. And what happens is if I had a business, why do you have a business? I says, let's say I have a million dollar business and you invest a hundred thousand dollars and you now get 10 % of my business. And I turned that business from a million dollar business to a$10 million business. And now your share in my business went up in value unless I diluted you, unless I created more shares. Right. And so that's what happens. Basically your$1 equals a percentage of the wealth in the world. But every time the governments print more dollars, you get diluted in your share of wealth of the world.

58:01But when you have Bitcoin, you can't get diluted. So if I have one Bitcoin, I own one 21 millionth of all the wealth in the world. Now we can't be diluted in that. And so what happens is the wealth of the world always continues going up because we invent new things and we solve new problems and we create new things. And so as that wealth of the world continues to go up forever, I never get diluted. So my share of the wealth in the world goes up in value or purchasing power forever. You mentioned cycles before. Yeah. I have to ask you a question about the Bitcoin cycles. David Bailey, again, he thinks the Bitcoin cycle are dead.

58:36These four-year cycles. What do you think? Well, first I would say that, as I said, the more times a cycle repeats, the more likely it is to repeat. So I would say until proven otherwise, it's sort of an effect. It's still there until proven otherwise. So that's my base case. But what will the cycle look like? Like, how big will it be? So there's a couple of things within that. Number one, I think that we've been looking at this Bitcoin four-year cycle, this halving cycle. And we sort of look at the halving cycle as the trigger for that. And I don't think that's the ultimate trigger. What's really been going on is sort of that was the tail.

59:14But the dog wagging the tail is the four-year global liquidity cycle. And so I think that's really what's been going on. And it just so happens, coincidentally, that the four-year Bitcoin halving cycle is the same time frame as the four-year global liquidity cycle, which also just so happens to be the same as the four-year US presidential election cycle, which also just so happens to be like the four-year business ISM cycle. And so all of this just happens to be at the same time. So I think for me, the bigger question is not whether Bitcoin will go up or down, how far will it draw down in this four-year cycle.

59:50It's what's happened with the global liquidity. That's what we're looking at right now. Based off of that four-year cycle, it should top out somewhere here, Q4 of this year, maybe Q1 of next year. But it looks like global liquidity is still ramping. And as a matter of fact, in the United States, which sort of drives this global liquidity narrative, they've still been sort of tightening. President Trump has been fighting with Jerome Powell at the Fed to loosen, loosen, loosen. He's calling him now too late. Like, you're always too late to lower rates. One way or another, Trump is going to get rates down.

1:00:19whether he gets Powell to do that. I think Trump said he wants him down three or three and a half points from here. And so that's going to be massive liquidity. That's going to increase the liquidity on a massive scale and loosen the monetary policy. So I think it's possible that we could see the global liquidity start to accelerate through the end of this year and through next year. And then that will change that four-year cycle sort of outlook that we have. Yeah, absolutely. The other thing I would say about the four year cycle is a lot of times we look at it from a Bitcoin lens that because we cut the supply of new Bitcoin issuance or the inflation rate of Bitcoin, we cut it in half right every four years.

1:00:59And so what happens is economics 101, supply and demand. If the demand stays the same, but you cut the supply in half, the price goes up. But what happens is that because the supply gets cut in half every year, it starts to get smaller and smaller and smaller. And right now with the ETFs, the Bitcoin treasury companies, we see that they're buying depends somewhere between five to 10 times more Bitcoin than is being created on a daily basis. And so the amount of new supply is so small in comparison to what's being purchased. If you cut that new supply in half, it's inconsequential. And so each cycle sort of gets diminished because that, that, that, you know, the reduction in new supply means less and less and less.

1:01:45Absolutely. What's the one thing that people should remember from today's conversation? I mean, my message to the world is that everybody should think about what do they want their life to look like so they can focus in on what they're actually trying to solve for themselves. And then all of this stuff will start coming into play. It'll all start coming into peace for them. Thank you so much, Mark. For doing that. That was awesome. And thank you for this amazing educational content you put out there. That helped me a lot many years ago to understand Bitcoin better and investing in these frameworks better.

1:02:17Yeah, good. Thank you. As you probably know by now, I host some of the biggest names in Bitcoin and crypto on my podcast, but a lot of the best stuff never makes it on air. The Shift newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else. If you want the real inside take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.