Real Conversations: Michael Saylor On Bitcoin - The Long-Term Bull Case

[Music]

hi

i'm keith mccullough and welcome back to

another real conversation i'm quite

looking forward to this one

with michael saylor michael thank you

for for taking the time to walk through

your thoughts on bitcoin in particular

economics fully loaded asset allocation

i think we got a lot to cover

thanks for having me keith happy to be

here yeah for those of you that don't

know who michael is his bio you know

just

is a rock star bio he's made a lot of

money and now he's putting a lot of

money

uh into a certain thing that that he

obviously uh considers an asset class

it's an interesting journey you've been

on michael and it's something that

i think people get pretty emotional

about a lot of things these days but you

know

when it comes to my job i think a lot

about asset allocation i think a lot of

the things that you've talked about

which is actually the volatility of the

asset class and um

that's what got my attention that's why

i wanted to have this discussion with

you because you were one of the first

people

uh to not only articulate it within a

framework but also

you know talk about the volatility of

the asset and maybe the flow into and

out of the asset

and the attributes so that that's where

i wanted to start i think

i want to also go back and like you know

you

like me um i'm obviously not as uh

as widely exposed to this as you but you

like me back in 2013 just you know

looking at a tweet i look at people

highlight all my tweets now the

anything i ever said about bitcoin which

i've said a lot of things like this

uh a long time ago and i don't know if

you can see that but i mean

to to be where you are today um back

versus then in 2013 or any bloody tweet

that i have going back to the

you know the beginning of twitter um you

know one would would

would say that you know you'd probably

be uh dogmatic if you maintain that few

but

just for you to get from there to here

if you if you maybe want to start

from a non-believer i guess to to where

you are today i think that that would be

really helpful

yeah i'd be happy to look keith if you

if you roll the clock back a decade

i was always a big tech investor

enthusiast so i

i wrote the mobile wave back 2011 i

published in 2012.

and the theme of the mobile wave is that

apple facebook amazon and google are

going to eat the world

and that's because all the things that

we have in our life that are physical or

dematerializing onto a software network

apple ended up dematerializing all your

mobile devices

google ended up dematerializing every

library and every piece of video

facebook ended up dematerializing our

social relationships

amazon ended up dematerializing the

storefront

so uh if you bought those and i i did i

bought a lot of

facebook and apple on amazon and google

10 years ago it's been a good run and i

think everybody today understands that

um i think uh i i would

say that i did not understand bitcoin

and uh

and you bitcoin is a thing where you

don't understand it until you do

and i think everybody that encounters it

their first reaction is

well this is it's kind of a tool for

gamblers and hackers and

cyber criminals and anarchists and the

like and that was the

the prevailing narrative back then and

and what i thought was yeah eventually

this will get shut down just like online

gambling

and i i'd seen what happened with uh

trade sports and the online

online odds makers and i thought they're

really cool but i just noticed the

regulators shut them down

so so you know i said that when bitcoin

was a hundred and eleven dollars

and uh then i ignored it when it went

through a thousand dollars

and we bought it at one one one

one one dollars eleven thousand one

hundred eleven dollars a lot of it

but what i'd say keith is better late

than never yeah

you know like uh a lot of people a lot

of people

said you know warren buffett mixed

missed apple

warren buffett missed apple for eight of

those 10 years

and then he must have made more money on

apple stock in the last 20 percent of

that run

than he made on any investment in his

entire life and he probably made it

without even noticing he made it because

ultimately

the thing about technology is figure out

the thing that's going to eat the world

if you're right own it hold it and wait

well that that i mean that's that's how

you became a billionaire like just to

put it on the table i mean you started

your own company you

you you built it and you owned it and

you held it right there's there's

there are a lot of different ways to do

that i mean um you know your first

your ability to buy as much bitcoin coin

as you did was built on the same belief

right i'm gonna build something that

people don't quite believe yet or

understand and i'm going to hold it

look keith i think there's three ways to

make money in this world you can make

something

you can trade something you can own

okay so i started when i was 24 years

old making something and i've spent 30

years of my life

making business intelligence software

let me tell you it's really hard to make

things and you have to be the best in

the world at that

and if you are you know you are so you

can normally only do that in one place

after i made a a modicum of money then

this question do you trade it or do you

own it

people that know how to trade stuff i

respect them i just can't do it i mean

you have to be

dedicated and committed and understand

it and it's

it's very complicated so i'm not a good

trader

um i once tried to buy call options on

apple

and you know i knew apple was going to

eat the world

you know i thought you know this guy's

going to have a billion people doing

everything

i you know i bought apple stock and i

made

10x 20x my money and that was good

but on the other hand when i bought the

call option i bought 18 month leaps

and t keith i timed it exactly wrong and

can you believe you could lose money

buying call options in apple in like

2014

i was and the lesson i learned was

if you believe in something don't try to

time the market

just buy as much as you can and wait

because the market will disagree with

you maybe for a year maybe for two years

maybe for three years and they'll outrun

your options

but i didn't think i was going to be

wrong over a decade

i tell you one other funny story i

bought 500 000

shares of facebook at 12 a share

back i don't know 2012. okay and i

i think there's an employee that sold it

to me now

the biggest investment mistake i made of

my entire life

was selling that any amount of it at an

obscene

profit like obscene profit and

i look back and i'm like the stupidest

thing i did is i should have bought more

but i should have never sold it and

keith if you

look if you go back to 2012 we could

debate

you know should you buy facebook stock

at 12 bucks or 13 bucks a share

or 10 bucks a share or 15 share what

does it matter

like it doesn't matter and then truth of

the matter is if you would bought google

apple amazon or facebook at any point

between 2010 and 2020

for 10 years i think it's impossible to

have lost money at any point for the

decade

you'll be hard pressed to find that

point

and so your investment mistake would be

you know

trying to time the market on those

things because

i can't figure it out i mean i've been

wrong trying to time the market

on the other hand it was pretty clear

that facebook was going to

eat the world i mean they basically

created a software network to pull all

the social energy on the planet

and uh and that takes us to bitcoin

right why do i like bitcoin today

well we're 10 years late on facebook

apple amazon

and google at the point that like 20

something people look at me and they

tell me how great an investment

when my niece told me she was buying

apple stock in the year 2020

i was like okay ahead of the sport no

i'm not you know

they figured it out after the split

she's by and after warren buffett bought

it after the octogenarian bought it my

niece is buying it

after the lockdowns i'm like okay i

think i missed that

boat on the other here's the thing i

think about bitcoin

bitcoin is is the first software network

in the history of the world

that can that that can uh pull

monetary energy so the

these bitcoiners have figured out

something that is really a thing of

beauty and extraordinary

extraordinary value they're pulling pure

monetary energy

on a network and and once you

if i take a hundred million dollars and

i put it into bitcoin

it could sit there for a decade like in

a battery it won't bleed out you're not

losing two to four percent a year

and uh and i can put it in the palm of

my hand

and i can move it around the planet for

a few dollars in a few minutes

and we've never in the history of the

world figured that out

and uh and so it's very early on

my i like monetary i like software

networks that are worth more than 100

billion dollars

that are are 50x bigger than their

competitor that are going to eat the

world

that 99 of the world doesn't agree with

me on

so in fact i like the fact that people

don't understand it don't agree with it

or afraid of it

because i couldn't afford to buy it if

they all agreed with me

and we're i believe we're at that

inflection point for bitcoin where it's

like

it's big enough to be unstoppable but

it's still

new enough that there are 10 000

billionaires or billion dollar entities

and maybe five of them get it maybe ten

of them

out of ten thousand get it and so the

catalysts are all to the upside

and most of these risks they've been

worked out over the last decade

one you know i you could make make a

list of 100 things that might go wrong

we've watched them all happen they

haven't killed it and we're just sitting

right at the cusp of something really

fabulous here

yeah the the debate on um buy and hold

by the way i mean that's not something i

i

really have any care to get into i mean

that's that's an age-old debate you know

when somebody says they're a bad trader

or they can't trade around things i

believe them

you know i i built my whole career on

having the ability to say the opposite

to that i mean a lot of the things that

i've owned

uh including the company that i've built

i i don't know

i don't know what it's going to be as as

i'm sure you would uh agree

in three to five years it's not what

it's going to be today or tomorrow i

mean

what i don't know about what i actually

own and risk manage around whether it be

my company or any asset for that matter

that

that i care to traffic in uh or allocate

my hard-earned assets to

you know that's there's these things are

widely unknown

um so for me this discussion has a lot

to do with that like educate myself like

i've tried to on literally any asset

class that exists that trades with

a certain level of volatility or not and

that's that's what i want to do you know

for the rest of my life is just continue

to educate myself on what i don't know

um because uh i actually do think that

um

you know timing is doable it has been if

it wasn't that i wasn't able to buy a

bunch of bitcoin in april and may

from people who ostensibly didn't know

what they were doing so that's a

question i have for you uh on that

like is there like in any uh because

i'll cede your point it's a it's an

asset that you want

that you want to hold and people don't

understand it uh there's no need to

trade around it because that's how you

roll i i like core positions that i

trade around because that's how i roll

uh but if it is to be what you believe

it to be which is

a reserve asset you know what kind of

volatility characteristics you know are

you a observing and would you need to

continue to see for that to be true

well keith first of all i think that the

historic knock on bitcoin is it's highly

volatile and for the first 10 years

there are lots of volatilities uh that

took place

but i think if you look at the last 90

days and

and the last yeah three four five months

if you're looking at this

every single day i look at the 30 years

uh the 30 treasuries and swaps i look at

10-year treasuries i look at the nasdaq

the russell 2000 i look at gold i look

at silver

i look at apple amazon facebook and

google

and then i compare them all to bitcoin

and i got to tell you keith

like my unscientific view is

on every single day at least half of

those assets are more volatile than

bitcoin

and on a lot of volatile days i've seen

i've seen 80 to 90

of them be more volatile than bitcoin so

i think there's a historic

narrative slash belief people think they

know this is volatile

but in fact it's not looking that

volatile to me over the past

three months and uh i don't think

i don't think over the next decade it's

going to have the same characteristics

of volatility

that it had over the last decade um

on that by the way like that is

something that we can um if you don't

mind me interrupting like that's

something that we can

uh measure and map and do daily like

across durations guys throw up the

implied ball table if you want

which i include interestingly uh you

made the point on apple vault microsoft

vol

you know these things are wacky wacky to

back evolve i mean apple volatility is

at 50.

you know for people that don't know what

volatility is and they they just need a

mouse trap to kind of

you know compartmentalize the thought

the vix today is trading in the high 20s

apple volatility is is double that right

so again

you're right i mean you've seen out

you've seen volatility what happens with

volatility as you know

is that when something goes down it it

starts to realize

volatility the the the bitcoin

volatility actually looks a lot like

gold vol

like gold gold volatility in the last 90

days so your observations are an

empirical fact

so so keith i think you and i both agree

that the monetary

supply is expanding and it's probably

going to expand it double the rate it

used to be expanding for the past decade

and that's stampeding a lot of investors

into a store of value

so i i think the fed crowded everybody

out of

treasuries and sovereign debt because

you're looking at effectively

zero yield and uh and if you ex if you

expect the monetary supply to expand by

15 percent a year 10 to 15

over the next three to five years then

that means that a five

percent yielding bond is negative ten

percent

asset return and it means that you know

it means that i gotta go somewhere so am

i gonna go to

big tech or i'm gonna go to gold ten uh

now nasdaq is ten trillion dollars and

it's big tech

and gold is 10 trillion dollars and i

look at

you know apple apple is like emblematic

of big tech

but between you and me we both know

apple is more volatile than bitcoin for

the past three months

and there's two trillion dollars looking

for a store of value

people are literally using apple stock

as a store of value because

it's a deflationary apple's buying it

back and they think apple's not going

anywhere

and they're desperate to flee currency

and so i get it i know apple i can buy a

million dollars of apple

i buy it it seems to work but it's

really volatile so if people are buying

apple and it's volatile and then they're

not buying bitcoin

when it looks less volatile again it you

know you would do all of your readers a

big service

keith and i would love if you did this

because the bitcoin analysts don't do

this the crypto analysts don't do this

they calculate volatility a bitcoin

against

tron chain link ethereum and

tether and eos but but there's 250

trillion dollars of assets that own gold

technology and bonds what we need keith

is a one two one page that shows the

volatility of bitcoin versus gold

silver apple stock nasdaq russell 2000

dow bonds 30s tens

etc versus bitcoin 90 day and a 30-day

and maybe a six-month trailing average

yep

and then when you get up you get to

decide do you put your is apple your

store

value is nasdaq your store of value is

gold your store value is bitcoin in your

store value

everybody can have their own opinion

right i just happen to be of the opinion

that bitcoin is going to exp bitcoin is

the facebook

of monetary systems and the different

and everybody thought facebook what is

this thing it's worth 10 billion dollars

in 2012.

why would anybody want to buy this thing

and i thought well maybe because a

billion people will use it

and i think with bitcoin well what

happens keith

when a billionaire shows up with a

billion dollars and wants to drop it on

the bitcoin network

how many billionaires can drop a billion

dollars on the bitcoin network

before this thing becomes substantially

more interesting and more valuable than

facebook

because as i said nobody ever brought a

billion friends to facebook

yeah they could bring a lot more than a

billion dollars if if it's going to be

what people believe it to be and by the

way

i love a great story i mean i the gold

story's been around for five thousand

years it's a great old story but

it doesn't mean i own it in size at

every single price i i don't want to go

back into the like i'll own it core i'll

trade around

you know the risk of it the thing is if

it if it is to develop the attributes of

something that and that's how i

that's why i wanted to have this

conversation to begin with it had

nothing to do with kind of the

the background you know trolling of the

discussion on twitter

it actually has to do with just that

it's is it a core asset allocation

and how big is it going to be and what

is it going to replace

these things you know again you have to

have a volatility assumption

because you made this this a very good

point that you made here um and you're

using the tron point

and and i don't know about tron i

mean and if people think that that's

uh he doesn't know anything that's fine

i already i already see to the point i

don't know what the that is

um but again you you're talking about

the flow into the pond as opposed to

you know the ocean that is asset

allocation

like the ocean forget a billion you

could if you had the pension fund

of any major state allocate you know 100

100 billion you know the system wouldn't

be so what we have to do is make that

case i think

like can it be that and and and what

would be the things that you would look

for to establish that

that flow let me tell you why

big tech is not a good store of value

over the long term and why

gold is not a good store of value over

the long term

let's start with big tech it apple's

fine but when apple's pde

goes to a hundred and then 500

and then a thousand at some point the

ceo of apple is going to print more

stock or he's going to buy something

with it

and the way that you destroy companies

is you do dilutive acquisitions

so the truth is apple stock is not

scarce

the the the executive team can and will

eventually print more and if that

doesn't dilute you

then they've got regulatory risk

competitive risk execution risk

a lot of moving parts right and maybe

the chinese government takes a different

view toward apple just like the american

government takes a certain view toward

huawei

right so that's why they're not good

over the long term

are they good stores of value over one

two three five years

yeah over a decade not so sure over 100

years

absolutely not now why isn't gold a good

store of value but by the way people

make fun of me for about 100 years but

there's nothing in western civilization

that we really cherish that isn't

a hundred years old you know mozart

beethoven cathedrals the country

our cities right there's a lot if you

really care about something

you look out a hundred years it

clarifies all the noise

now you back up and you can see why you

don't want to store

all of your money in an equity now let's

go to gold

if you put a hundred million dollars

into gold and the gold miners print two

to three percent more a year let's say

two percent more

well over a hundred years you lose 88

percent of your purchasing power

now why did that work in the past few

hundred years because gold dilutes two

percent a year and the economy grows by

two percent a year

so roughly the power of what you can buy

with gold as you mine two percent more a

year and a two percent expanding economy

is the same that's one reason it worked

the other reason it worked is

we had no other option there's no choice

welcome to the land of no choice so in

the year

2020 you have a choice you have a

digital gold

they can't make any more bitcoin miners

are

the friends of bitcoin owners they're

not the enemies of bitcoin owners

so bottom line is you want to store 100

million dollars for 100 years you put it

in gold

under the best case you'll lose 85

percent of it under the likely case

you'll lose it all

because the bank will fail the country

will fail somebody will seize it or some

will

enjoy it the reason that the bitcoin

maximalist the cyber hornets if you will

the reason they're passionate and

religious about this

is because for the first time in human

history

you can take all of your wealth and your

life force

you can put it into an asset you can

keep the keys

you can take custody of your million

dollars your hundred thousand dollars

no government no bank can take it away

from you there's nobody to tell you

you can't own your life force and if you

have hopes and aspirations for your

family

for your religion for your for for your

life

then you have the power to achieve those

hopes and aspirations

without asking the permission of a bank

or a government

or a politician and and if

if money if money is uh

energy right and and this energy

is going to last a long long time

energy is essential to life bitcoin is

about

immortal life it's about achieving your

hopes and aspirations for as long as you

can conceive of them

now tell me you think you're going to

love apple stock or gold or silver bars

or bonds or municipals the same way

as that i don't love anything i mean

when it comes to assets i mean other

than my own

company and my family i mean it's like i

guess that's the one difference that we

have here i don't

that's that's a beautiful story by the

way and it's it sounds like you're a

traitor

no that's i could be we can call

you can call me whatever we want the

reality is that um

you know that that beautiful story does

get interrupted

uh through the other side of the trade

and that's actually we can't just at the

same and i do appreciate that you said

what you said which is

wouldn't it be powerful and really

empowering to give people the actual

data that which we do by the way we also

include

inverse correlation data which

absolutely matters to bitcoin so when

we're talking about the volatility of

bitcoin across durations we're talking

about the

implied and inverse correlations that

are currently existing

you know even though that story is a

beautiful one this other one

won't cease to exist immediately and we

do have to deal with

what we call uh you know dollar up or

quad four

and those are days where people that do

believe that like look look

dude i'm not sure if you know what quad

four is i think it's pretty

straightforward but the reality is that

we back tested that economic

circumstance

because again no matter what your your

your life is the one that you love or

you don't love

you know quad four is when both growth

and inflation are slowing at the same

time the only time you're going to lose

money in bitcoin

is in quad 4. that's a back-tested fact

it might change

it might not be a fact that everybody

likes because it stirs up hornets or

whatever

but there's i don't love or hate that

right there are three different economic

scenarios out of four

where i know i'm going to make money

being long bitcoin and that's awesome

you know what the only other thing that

has that attribute the major one that

you've mentioned

it's tech big cap tech big cap tech the

only time you could lose a considerable

amount of your assets

a drawdown which i think most humans

should be aware of uh

is when you have those quad-four

deflationary conditions

so that's one thing that i just wanted

to submit here today like is that

something that

people that are you know romanticizing

about the story

like are aware of fundamental i think it

would be good for them to be aware of

that because at least that would

they'd buy a lot more of it at the time

when they could get a lot more of it at

a lower price

well keith you know i'm i'm glad there

are traders in the world

and i'm not a trader but if there were

no traders in the world there would be

nobody to sell to me

when i want to buy so i want people to

do that and i appreciate it

but having said it all let's go back to

the year 2012

and let's talk about trading google

apple amazon and facebook

and at the end of the day the only

mistake you could make is be

short any of them at the end of the day

amazon crushed 15 000 retailers

and google crushed 10 000 different

entertainment companies

and apple destroyed 10 000 different

device companies

and so there is one asset in each of

those markets that destroyed everybody

else

if you picked the one asset and you

bought it at any point

in the decade you were a winner and if

you sold it

at any point in the decade you were a

loser

so you know the difference is i mean

when you talk about trading soybeans or

corn futures or wheat or

oil or whatever these are commodities

and people make them and the price goes

up and the price goes down and if you

time it right you make some money

but when we're talking about a software

network that's going to change the life

of a billion people

and dematerialize a trillion dollars of

energy

the only question is is that one the

winner

and bitcoin is the winner of of the

crypto wars

it defeated 6 500 different

crypto competitors and it has risen

out of those wars to be the dominant

crypto asset network just like amazon

defeated every retailer in

in cyberspace just like apple defeated

everybody in mobile space just like

facebook defeated everybody in social

space

you have a chance to buy and own the

winner and just wait

for the rest of the world to recognize

it and

you know you tell me is there any

winning trade of facebook or apple or

google or amazon stock in the year 2012

that's better than the trade of buying

it well

you know i mean it's not like um

you know what there's making money

because you have none uh

and there's that you know that that i

get that you know you can't afford to

miss this

uh because if you miss facebook you're

an idiot you know um but then there's

once you have money there's risk

managing

the money that you have like i would say

that a low volatility asset class that i

own a shitload of and consume it it's

very liquid is wine

i mean it's standard the test of time i

mean if you choose the right vintage and

hold it you can hold it and

and drink it and enjoy it thoroughly you

know there's there are a lot of

different ways to do this this isn't

just like

there's one idea that can change the

world therefore i mean

if you took my wine away from me i'd

hate my life that would suck i mean

that's that's my life right

it's so so from a libertarians

perspective you know i think there are a

lot

for me what i'm really trying to find is

the place

for which i have found by the way i've

found a bitcoin is an asset allocation

in my portfolio it's not all of it and i

don't i don't know why it has to be all

or none

and and i wonder what your thoughts are

on that because in addition to my

company's equity my wine my yeah i do

there are times throwing a lot of gold

and there are times not to that's

actually the lesson that i'm trying to

to to at least engage people in with

with bitcoin specifically

so keith all the guys that have more

money than

god in this world right they have it

because they bought or

owned or created a technology

that changed the life of a billion

people and so i don't think you're gonna

get a thousand extra return on buying a

nice chateaubriand or

or whatever absolutely not if if you

could show me

if you showed me a sugar cube that you

could produce a billion of and give it

to people and for the rest of their life

they would be perennially happy with no

health

issues i would say you should invest in

that wine network

but what we're talking about here is a

monetary network

never before in the history of the wall

created at the beginning of the

s curve if you buy at the beginning of

the s curve

and you're right then you're going to

have an extraordinary

return as an investor if you buy at the

end of the s

curve maybe you'll hold some value

look look let me ask you one more

question say you actually wanted to take

a million dollars and you wanted to put

it

in an investment and give it to your

daughter or your granddaughter in 30

years

how would you do that like how do you

pass down

a material amount of money to your

granddaughter or your daughter in 30

years

because i can't do it with real estate

in florida they tax it away from you in

30 years

i can't do it with any stock because i

don't know the stock won't get destroyed

in 30 years

i can't do it with gold because it's

going to be cut in half

and maybe seized by someone in 30 years

i can't do with a bond because and i

can't do with currency

with bitcoin because you can't make any

more

of it it's you've got this pure

piece of financial energy you could buy

it you could hold it

for no carry cost and you would be able

to hand it to someone in 30 years so

the magic of this is for the first time

in human history

we figured out how to send money forward

in time

ten thousand days without losing it

it's a it's a magical thing but if i

give you a battery if you put all your

if you put a million dollars of

electricity and battery it bleeds two

percent a month

you lose 24 of your energy in a year you

can't deal with the battery

the gold battery bleeds two to three

percent a year

we've got a battery that doesn't bleed

energy

it's a magical achievement nobody in the

history of economics

ever created a closed a closed

monetary system that respects the laws

of thermodynamics

and it doesn't bleed off monetary energy

into the atmosphere

i mean how is that not something that

you would want to put

some amount of monetary energy into to

protect for the future

no it sounds like exactly what you

should buy when you're in quad 4 when

it's for sale i mean that's um

because the energy and again that's

actually the way we think about gold as

well i mean it's labor plus

energy equals gold price i mean that

absolutely is the way to think about it

i mean

okay so when we look at um when we think

about you know these things

and and we try to like just say there's

just one thing like i don't think that

the market is actually

giving you that message guys can you

throw up the inverse correlations just

because

again i think it's an important lesson

like why is it that bitcoin got crushed

in q4 of 2018

and again in you know in q2 of this year

it's because it has an extremely high

correlation to the to the currency it is

debasing

you can't unlock these two things and

say that you're going to be blissfully

unaware

of these realities or you're just buying

at a high price all the time

you're chasing it and a lot of people

will chase bitcoin you could buy it a

lot maybe a lot smarter buying

i'm not refuting what you're buying i

bought a shitload of it right i mean

i you know i'm equating it to how i

think about wine which is

yeah i bought a lot of it but i'm not

going to sit there and just like

romanticize and not understand that the

dollar the other side of the trade which

it's it's replacing

doesn't have a huge immediate and

intermediate term impact on the price of

the thing you're buying

okay so keith i have a comment on on

quad four

first of all there's a group of people

in the world that you trade with

that believe that in inflation is equal

to cpi

and therefore you can define a quad 4.

there's a group of people

that i that i align with the bitcoiners

that believe that the true inflation

rate is not cpi but rather it's the

asset inflation rate it's the rate at

which the

long bond or the t bill or equities have

been moving up for the past decade or

the expansion of the monetary supply so

if you focus on inflation the cpi

it's one percent or less if you would

focus on inflation as the monetary

supply expansion it's 15 percent

and i actually think that the inflation

rate for the past decade is 20 percent

if you look at the cost of a of a

10-year bond

that yields 50 000 a year in interest

it went from a million to 10 million in

10 years that's 22

inflation so there are different you

know over the near term if you're

trading with people that

that buy into your cpi definition as

inflation

then that works but if you're looking

over the long term and you're trading

with people that actually

buy into the asset inflation rate as the

inflation rate

you come to a different conclusion well

yeah my last point is

in the near term keith in the near term

these things work

but over the long term adoption makes

sense like

all of your arguments about why you

should short facebook in 2013

they're all wrong facebook's trading at

280 bucks a share

they're all wrong you should have never

sold it ever ever ever

now what happens to all these wonderful

models

if ten billionaires decide to buy one

billion dollars of bitcoin each and

announce we bought it

we're not ashamed of it we're gonna buy

more

all your models are destroyed completely

devastated

bitcoin goes to the moon because what

really matters is

with facebook does it work do a billion

people use it

with apple do they buy it with google do

they use it with bitcoin

will they use it all the all the

near-term trading models they'll work

for 90 days 30

days whatever as long as everybody else

in your trading universe

sees the world you see it but over a

decade

over 20 years over 30 years the laws of

thermodynamics are going to kick into

place

and it's pretty obvious bitcoin is a

better long-term asset than gold

or corn futures or soybeans or any

company run by a ceo

no matter how august and intelligent

they are they're all

just merely mortal and bitcoin is

something better than that

that sounds like it i have no quibbles

about that the more you talk the more i

i like that story i mean it's not and

again it's not we can't

if you want you can reduce uh me to just

being a trader i don't think you're

trying to do that but the reality is

that

it's not about the level of inflation

never has been michael

it's about the rate of change of a price

basket of things that are inflating

and that's absolutely what quad 4 is

sometimes it's deflating

sometimes it's inflating you'd have to

be a certified idiot

to say that oil at a negative oil price

which it was in q2

which impacted again the price of

bitcoin was hostage to quad 4.

that this is obeying the laws of

thermodynamics it is the secret to the

universe

it is calculus its rate of change so

again i i think and it would be great

that if bitcoin bulls who have this

the long term story nailed down would

just seed that point

the rates have changed it's not unlike

the weather the rates of change of

growth and inflation

absolutely impact the price of bitcoin

and if if people knew that you'd have

more people

you know less concerned or worried about

buying bitcoin because they'd have the

confidence

to buy it during a hurricane a hurricane

or quad 4 conditions

is when you have disinflation so i i

don't know how somebody would refute

that you know can you

well keith like once i understood

bitcoin

i would go to bed with anxiety at night

feeling short because i worried that

somebody else

would figure out what i'd figured out

and they would buy it all and i wouldn't

be able to buy anymore

and so what once you get something and

you look out decade or decades

the only issue is how do i buy more of

it yeah so

that's all we're thinking so you should