Bitcoin adoption in Asia, treasury companies and the four-year cycle

Transcript

Right now that average is at like 55,000. So I know this is an unpopular thing to say, but it would not surprise me to see Bitcoin go back into the 60s during a bare market and that bare market could start, you know, we could start moving back down towards that range as early as you just said maybe November or December of this year. GM, good morning. Welcome to the Milkro Show, the daily crypto show where we break down crypto without breaking your brain. I'm your host Jay Hamilton. It's Monday, September the 8th. Today we're joined by Frank Corva, White House and political correspondent at Bitcoin magazine. We're going to talk about according to the four-year cycle theory, Bitcoin price would top in October or November of this year. Is that going to happen again? Is history going to repeat

itself? Also, Frank just got back from Asia where he attended Bitcoin Asia as well as a MetaPlanet shareholder meeting and he's got some insight into a new retail and institutional on-ramp story that is taking shape in Japan. And then finally, we're going to talk about why Frank believes that the future of finance should be on Bitcoin. I'm talking about tokenized stocks on BTC L2s with fees paid in Bitcoin. What does that mean for the future of smart contract platforms versus Bitcoin? How will the future finance all shape out today's episode? We're going to jump into that and so much more. Before we dive in, I've got to tell you guys about an awesome report that the team put out

just this past Saturday. We put out our monthly report where at the beginning of every month, we show what we think could happen in the markets. And this is our September report. And September is a really important month, I think, in this cycle, a month that we're going to look back on and see as a bit of a tipping point. So, if you are a pro member, make sure you go check out that pro report. If you're not a pro member, hit the link in the show notes. You can read the first part for free. And if you want to go pro to get the rest, you can do that. Today's episode is brought to you by Figure Markets Grow Cash Like a Bank. No lockups, just real returns. It's also brought to you by Ken, the distribution protocol, changing the growth game. With that, Frank, welcome to the Milk Road

Show. >> How's it going, everybody? I've been been practicing this sign in Asia, so I'll just I'll just flash that one to get started here. Yeah, pleasure to have you on, man. Well, yeah, let's let's start. You just got back from Asia. Before we jump into where we are in the cycle and where we're going from here and some Bitcoin price action stuff, I want to talk about Asia. So, you were in Asia for uh Bitcoin Asia and also a MetPanet shareholder meeting. What were the vibes like? What was the What was the experience like in Asia? What do you What did you bring home with you? >> Yeah, I I'll start with Well, one, thank you. Thank you very much, Jay, for having me on. Super. It's an honor to be here. So, thank you. So, I went over to Hong Kong to uh to host a live desk with

Pete Rizzo, who I think has been on this show before. Um, which is always a blast. Uh, get to see some friends from around the world, all that kind of stuff. And it was a huge conference. We had about 17,000 people uh in Hong Kong. So, super super cool uh to see that many people coming out. I think we had 102 countries represented, which was fun. Yeah, vibe was vibe was cool. You know, vibes were high. I think it was very Bitcoin treasury focused. uh Bitcoin company, Bitcoin treasury company focused. Uh there was also, you know, there were some great talks with the likes of Shinobi, Evan Kotus from Zeus, um Giannis, people talking about Bitcoin layer 2s and what's coming and you know, basically financial infrastructure built on top of Bitcoin. I think some of that kind of stuff maybe, especially if there's a lot of non-native English

speakers in the audience, is a little bit harder to wrap your heads around. It seemed like a lot of people there were waiting to see the likes of Eric Trump and Adam Back and Mark Moss speak. all, you know, very cool to see them speak and to have them there. Uh, so that was super cool. I actually wasn't planning to go to the MetPlanet shareholder meeting. I was planning to go to Tokyo afterwards because I used to live there. I taught at a university in Tokyo in my previous life as a college lecturer and I was going back to visit some friends. Heard about the MetPanlanet shareholder meeting. You know, I've met Simon a handful of times. The president of MetaPlanet, obviously good friends with Dylan, work with him at Bitcoin magazine. Really pumped about what they've done. best performing stock in 2024. And I think MetaPlanet, um, if

you're an investor who's looking to have Bitcoin price exposure, I think a vehicle like MetaPlanet makes a lot of sense. Um, it's not exactly the reason I personally got into Bitcoin, but I understand why it exists and I was happy to see all the success that they had. The meeting was a ton of fun and I would say generally speaking in Asia, um, I think the meeting so there were 3,000 plus shareholders at the meeting. It was kind of surreal in that the main room was huge. But then I got there and I'm looking around. I'm like, why are these why are there these other rooms with chairs in them? There was overflow rooms. So people who came to the meeting didn't even get into the main room to to watch all the talks. They were watching it on a screen sort of in the room next

door. So shout out to Dylan. Simon uh you know the the success that they've had with MetaPlanet is incredible. And um you know Simon I think is a very very disciplined guy very much like Sailor um knows exa you know and Dylan they they know they know the game that they're they sort of know the playbook that they're running they they execute time and time again and uh yeah it was cool to see up close. Also as a quick shout out also I just published a piece for Forbes Crypto this morning uh on the Tokyo Bitcoin base which is more of like a grassroots let's learn about Bitcoin let's have some devs come and collaborate. Little bit of a different vibe from Metaplanet, but not entirely.

And a last shout out to Metaplanet. They publish uh the Bitcoin magazine, the physical magazine we publish. They publish it, they help us publish it in Japanese, so I was able to pick up issue number two in Japanese while I was there, which was cool to see my work uh translated. I used to be a language teacher. So, it's always fun to see my work translated into different languages. So, yeah, all around great great trip and really fun times. >> It's so so much to unpack there. I mean, first of all, you know, wonderful to see the uh expansion and adoption of Bitcoin happening around the world. You know, we're uh based here in North America and a lot of our audience is based in North America, so we don't pay as much attention on a day-to-day basis on the Asia market. And just like hearing that

the for MetaPlanet is a Bitcoin treasury company out of Japan just to for the context of everybody there um hearing that it was had overflows at their shareholder meeting like let's be clear here most shareholder meetings do not have overflows unless you're talking about you know Warren Buffett and Burau Hathaway right like that that is more that is more of a vibe of a cultural movement and a belief in something bigger than necessarily like a typical shareholders meeting. That says a lot to me about Bitcoin adoption in in Asia and in Japan specifically. Is that something that you really feel is happening over there?

>> I think so for sure. So I I just I literally published this piece this morning and was and was talking with a lot of people in Japan about, you know, why Japan right now they're having a bit of a I guess like a Bitcoin resurgence. They're embracing it again. And I say again because for those who don't know the biggest Bitcoin exchange in the world in the earliest days of Bitcoin 2010 to 2014 basically right when Bitcoin had a price for those who don't know when Bitcoin was first kind of came out into the world it didn't trade for any price. People mined it you know it only got a price it was either later 2009 or early 2010. So Mount Gaus was the exchange that was based in Tokyo. A ton of Japanese flows went through that.

Uh Mount Gox for those who don't know went under. uh it was hacked. There was a theft of hundreds of thousands of Bitcoin. Uh they were either lost or stolen. Nobody or you know nobody knows the maybe the full true story there. Um but it did it left a bad taste in a lot of people's mouths. And so I think what both Simon and Metanet what they're doing as well as the Tokyo Bitcoin base um I'll quote the the CEO of Fulgar Ventures who's behind Tokyo Bitcoin base. They're trying to make Japan a great Bitcoin nation again. And I think it's uh it's it's high time that that happens because the yen, which used to be sort of a global reserve asset or a flight to safety asset, is no longer a flight to safety asset. The yen is getting absolutely hammered. Um Japanese

people, I think, are you know, things there like CPI inflation is not super high, but if you want to travel outside of Japan, your money doesn't go that far. Um, they're also seeing a lot of people coming into the country, a lot of Chinese because it's cheaper to buy a property, it's cheaper to buy products there, all this kind of stuff. So, they're starting to get a little taste of like what the real effects of what currency devaluation are. And I would love to see them, you know, not only adopt Bitcoin as an investable asset, but as an actual money that gets used more frequently. There's not a ton of that happening. Having lived there for a bit, I say this with pure love, but Japanese people are very much rule followers. So I think without some sort of regulatory uh change, some sort of shift where

they're maybe allowed to use it as money without a brutal capital gains rate. So the capital gains rate for those who don't know is something like 50 to 55% on Bitcoin and crypto sales. So it's kind of bananas. That's why I think MetPlanet capitalized on this idea of I think it's only 20% to sell securities there. So you're getting price exposure to Bitcoin if that's what you're looking for without the nasty capital gains. So I think that Metaplanet and also right now the borrow the rates to borrow in Japan are the lowest of any G7 country. So when Metlanet is borrowing yen, they're doing so at this basically a rate that can't even be compared to other G7 countries. So lots of interesting stuff happening taking advant taking advantage of what I would call a broken money and a broken

financial system. Um you know again that should be going on. I just hope that at the same time people do learn, you know, what Bitcoin, how a Bitcoin is money and maybe how that might benefit them moving forward if the end continues to sort of move on this trajectory that it's been on. Yeah, it's very interesting. We talk so much about micro strategy and strategy in North America, but not as much about Metanet, but really MetaPlanet deserves a lot of credit. And you can see an example here. You know, here we have a Bitcoin treasury company, a treasury company that it's it's essentially forcing policy makers hands. Yes. To make a change to the capital gains laws to the the the framing of an ETF and maybe

allow a Bitcoin ETF to come in. Like all these things as a result of MetaPlanet's success, they're saying, "Hey, we we've got to adjust." And it is amazing to see how how how the treasury company is impacting the adoption of Bitcoin there. I I want to touch on Eric Trump being at Bitcoin Asia and what sort of a signal that sends. I was just talking about this with someone. I don't know how that didn't get reported on more in that it's like it's kind of bananas. You're in China with the president's son and he's talking about basically the gauntlet that America is throwing down like look we're embracing this thing. It's it was provocative in a way, right? I mean it wasn't much different than some of the other talks that he's given. I've also interviewed him personally and it wasn't

like a radical departure from that but just the nature of him saying that in China it's such a impactful it was it was a moment that didn't sort of it didn't hit me while it was happening but it was kind of mind-blowing to think like you know we're a half hour from mainland China right now and the president of the United States son is talking about Bitcoin and how he's invested in it and his company American BTC and how America is going to embrace it. Um I can't imagine that you know he was just sort of hitting on talking points. I would imagine he knew that he was sending something of a signal. Um but again, this wasn't I don't know. Did you see reporting on this? Like I can maybe throw it back. Right. It's just not.

>> No, it did not. >> Yeah. Yeah. So, I thought it was interesting. I was talking about it. I do a a weekly recap with um a weekly news recap of uh Bitcoin and crypto policy with Julian Farre from Bitcoin Laws. and we were talking about just how it sort of kind of went under the radar, but also when he spoke at the MetPlanet shareholders meeting, I think it was within a day or two of that meeting that the White House released uh some information on I think it was tariffs with Japan. And I'm like that there had to be some coordination there. So, you have like Eric Trump kind of doing some form of I don't know if it's diplomacy or whatever it is in Asia and Hong Kong and in uh and in Japan and no real major media reporting on it, but was wild to

see up close. Um like much of what's happening these days, I don't think any of it's really I'm not processing any of it emotionally. I'm just sort of like is this real life? Is this really going on right now? And uh just sort of going with the flow. But it was kind of wild to see. Certainly the that to me what stands out is and and I think a there is so much attention on the the Trump family that you just don't even bother trying to keep up with it all and and and we all have to you know political views aside this is not a political show not trying to jump into that but to me there's an obvious signal of the president's son going to Bitcoin Asia and saying to the Asian market directly that we are embracing Bitcoin

like representing the president representing America like whether you agree with that representation or not that is exactly what he is doing and he's kind of saying >> your move China are you in or are you out like it is really game theory happening in front of our eyes and that that feels significant to me because China can't ignore that they they cannot ignore that hey >> America's moving in in the way that they are so we better I I think it's going to lead to a change you're going in China in the coming years, coming months that they're going to start increing their view on Bitcoin and their adoption as well.

>> It has to. I mean, we've seen the cycle with China though a number of times, the banning mining, the not banning mining, the this, but I think you're also seeing, you know, Hong Kong is this sort of hub that China uses to sort of allow money to come, I'll say to come into the country. I don't know how much of it maybe filters into the accounts or into the hands of people on the mainland, but I would imagine some of it does. So, Hong Kong just put out some legislation around stable coins that was pretty progressive. They issued spot bitcoin ETFs last year. I think things have been warming up there, but I would say that this will what just happened will only accelerate that process. Yeah, certainly. Okay, let's shift gears now to uh four-year cycle. Let's let's step back from the micro and go into the

macro of Bitcoin. So, Bitcoin's been in this four-year cycle for a few cycles now. Uh, and there's a lot of uh influencers and media who really attach to the four-year cycle, which is mostly a result, their belief will be that it's a result of the having. And we've talked a lot on the show about the general consensus that we're hearing on the show is that the four-year cycle is not a thing anymore, right? And that this might be the the end of it. uh and for various reasons. Would love to hear your thoughts. If you believe in the four-year cycle, that would mean that we would top in October, November.

>> Yeah. >> Is that going to happen again? Is history going to repeat itself? >> It's it's a good question. There's one thing I want to say before I dive into this, and it's that for all the people who are out there yelling like the bull market's about to begin, the bull market began in December of 2022 when FTX happened, and then everything has been basically up from there. Just keep that in mind if you're looking at this especially like through the eyes of an investor. Just something to think about that's all. Like so I see people saying like no no just watch what's gonna happen. It's like no like I have been watching since Bitcoin was $15,500 you know two and a half years ago maybe a little bit longer than that. Does it top? I think you know Dylan mentioned this at the Medit Planet shareholder

meeting. There's different buyers in the market now. You have countries, you have sovereign wealth funds, you have companies. Um a lot of these people are looking to hold longterm. I I I would just add a little caveat to that, something to maybe I would maybe counter it, but you know, you you also have Germany selling 50,000 Bitcoin. You have countries like Bhutan mining a ton of Bitcoin, but also selling a bunch of it as well. Um, for those who don't know, Ethiopia also mines a lot of Bitcoin through a a public p private partnership with a massive hydroelectric dam, but they're actually not necessarily doing it just to accumulate Bitcoin. They're selling a lot of the Bitcoin for dollars. So, there's a lot happening and that might affect the market dynamics. I think what we're seeing is not like these massive

massive moves up in Bitcoin's price. It's been a little bit more like stairs, like it's sort of okay, it gets to 96,000 and sort of finds a water level there for a bit, then it gets to 110, maybe goes a little above, comes back down. We might just do that. If you look at um so if you want to call Bitcoin digital gold, if you look at when the gold ETFs were issued, you had basically like a 16-year something like that bull market in gold where it just basically went up. I don't know if it'll be the same for Bitcoin. I still think it's a relatively young asset class. Sure, it's like it's over $2 trillion now, but $2 trillion is still not, you know, it's nowhere near what gold is at over 20 trillion. Um, and I think we still get

into these moments where people hear that message, okay, uh, the bull market is just starting. Then they look and they say, well, maybe I'm a little bit late to it. They dive in with leverage. That leverage once things unwind, that leverage makes the downturn even harder. Um, you know, to quote um, what's his name? George Soros. Markets are super reflexive. And I think that I don't think we're fully out of that phase of being reflexive. So if you just take a simple measuring stick like the 200 the standard 200 week uh moving average usually during bare markets Bitcoin comes back down to that rate. So last it actually went well under it last time. I think when it hit 15 15,500 after FTX I think the the 200 week SS whatever it is whatever the acronym is but whatever the

200 standard weekly standard moving average was at like 20,000 at the time and it dropped all the way to 15. Right now that average is at like 55,000. So I know this is an unpopular thing to say but it would not surprise me to see Bitcoin go back into the 60s during a bare market. and that bare market could start, you know, we could start moving back down towards that range as early as you just said, maybe November or December of this year. Will that definitely happen? I don't know. I do think there are genuinely different buyers in um there's people there's states in the United States establishing SPRs. There's countries establishing SPRs. Um but at the same time, we also have countries like the new like the United States talking about establishing SPRs, but they haven't necessarily done

so yet. In the back of my mind, I have to think that maybe some of these countries are aware of the four-year cycle and maybe they're waiting for a better entry price. So, you know, it's sort of how do you separate what people are talking about from what's actually happening? Signal from the noise. Uh who's actually buying, who's saying they're going to buy. Um all this stuff I think makes a difference. Um but I just think it's still too young of an asset class to say that we're not going to see any significant draw downs. Will it be 90%? No, I don't think so. Could it be 60%? easily, I think. Yeah. >> Do you think that it comes Do you think the peak is this this year? Do you think it's in Q4? Do you do you buy more into the consensus that we're hearing is more

the peak is going to be in 2026 and this is more of an extended cycle, not necessarily a super cycle like still still going to be drawd downs, >> but when's when do you think the peak will be? >> It's a very it's a really good question. Um, yeah. I mean, that's my that's my if I were to look at this through an investment lens, I don't really ever I sell some Bitcoin once in a while if I need to pay down some debt or something like that, but I don't really think about it from a speculative standpoint. I mostly just buy and hold it. Um, that being said, I'm not making I I'll put it this way. I don't plan to sell any because I think I'll get a better buying opportunity 10 months from now or something, but I'm not making any large

purchases at these levels. I'll put it that if I came into a windfall of money at this point, I wouldn't be throwing tons of money into it. Some people say to me, I'm not a good Bitcoiner because of that or whatever. I'm It's like, yo, dude, you don't have my student loan debt. You don't have my financial situ. I have to deal with all that kind of stuff. So, I'll I'll buy Bitcoin at the prices that I feel are most appropriate. That being said, every day I use, you know, I use Fold. I use my Gemini credit card. I accumulate Bitcoin. I kind of DCA into it. So, I never stop stacking. But, you know, I think the bigger thing too is I think what we need to pay attention to is if we see what looks more like a parabolic phase that we've seen at the end of previous bull runs,

maybe not so much last time it was a little bit muted. I think the previous one when we went to 68,500 in 2021. Um, but if we do see Bitcoin go to like 150 170 in the next few months, yeah, I wouldn't surprise me if we saw a significant downturn from there. Why do people invest in real estate? Because it spits on cash flow. But I'm not here to manage rental properties. That's why I'm looking at Figure Markets. Their new democratized prime product backs your money with real cash flowing assets and returns up to 9% APY. It's the first real world asset for lend pool built for everyone, not just institutions. Ready to lend like a bank and get more than the 5% A is offering you? Download the

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>> Okay. Okay. Great take. Uh let's go from Bitcoin to the treasury companies back to the treasury companies talking about MetaPlanet. Um, one thing that is uh a theme that keeps getting discussed is uh will there be an when will there be an altcoin season and will there be an altcoin season? And one uh one point is is have we already had an altcoin season and it's been in treasury companies and just hasn't been on chain. It's been in public markets through these treasury companies. What's your thoughts on that?

So to rewind a little bit, I think we also beyond the treasury company discussion which I think is worth talking about. I remember like about a year ago, wasn't everybody like pumped about Dog with Hat and like Solano was ripping? So maybe if that's if that's sort of the world you're in like maybe that stuff comes in different phases because from my understanding that was very much that season was sort of inspired by what was it like the Jetto airdrop or something like that. there was a Salana airdrop that sort of everybody had their bags got pumped and then they start those bags started overflowing into different things. Um but to to the latter to the point that you're making I think on some level people are always looking for what's the higher beta asset what's the alpha above the Bitcoin return human

nature to speculate. So I think the reason that treasury companies became maybe a more attractive option is because we've seen alt seasons and previous cycles and oftent times a lot of altcoins don't necessarily come back the next time around. You know, that's different with maybe ETH, Soul, even meme coins like Doge or something like that. But there's been plenty of altcoins of your that are no longer a thing that at one point had their pump and did well and blah blah blah. So, I think when people look at a Bitcoin treasury company, they're looking at it, it's a little bit more of a binary game.

They could blow up, but if they don't, they believe that the underlying asset is going to come back in the next cycle. So even if they maybe buy the top here, similar to the philosophy with Bitcoin of like, okay, maybe I am, but I'll just hold it for four or five years and it'll come back around. At the same time, I don't think all these Treasury companies are going to make it by a long shot. I don't think like I think we're going to see a lot of these kind of blow up spectacularly. Not not all of them. And I actually don't think the financial instrument in and of itself is a bad idea. I think we've seen Michael Sailor execute it, you know, pristinely with Micro Strategy. And again, if this is your thing, it's it's a it's an amazing, you know, it's proven to be an amazing

investment. So, yeah, I think it definitely sucks some of the the oxygen out of alt season. I would say also, as I'm thinking about it, as I'm talking, I think Trumpcoin did that as well. I remember everybody getting pumprol. Yeah, that being a thing that sort of sucked things out. I I I would imagine that there if we do go into a parabolic phase with Bitcoin from here, like I said, 150 170. I I don't imagine there's no world in my brain where alts don't follow that for a period of time. Again, it's not the way that I invest or do this stuff, but it's just again if we're just looking at through like a human nature standpoint. If people feel like their Bitcoin gains have gone up from some level, I you know, a lot of those people are doing stuff on chain, they're

going to go down out on the risk curve to Ethereum to Salana or whatever. With that kind of stuff, I don't I don't look at that with any sort of uh I don't I I compared to maybe some other Bitcoiners, I don't moralize. If that's your thing and that's what you're into, go for it. I would imagine we're going to see that again. But it might be maybe a bit more muted. Um because not only do we have the treasury companies, but we have people investing in Coinbase, Circle, Micro, like Tradfi has started had started to take some of that oxygen as well. I think there's just more options for people. Plus, >> back in the day when we had old seasons, there were just less altcoins. So, it's like now you have a quadrillion altcoins, just a cadillion meme coins alone. So, I think there's just a lot of

like the tension has sort of been dispersed and where people are placing their bets has been dispersed. So, I think that some of that will play some of a role in maybe muting it, but but I would imagine it will come back around. >> Yeah, there's certainly more supply. There's there's way more supply and way more supply across variant various markets where there is different types of investors in each of those markets. But that but you can't deny that there's also more demand. And that's why this is such an interesting question right now and one question that I find myself asking pretty much every guest and you get very different answers because truly nobody knows how far demand is going to go in this cycle. And it's been a bit of

a weird cycle where we have not seen the thing that is very clear in this cycle is okay it's easy to say that the cycle the four-year cycle is result is a result of the of the having okay yeah agree with that you can I think everyone can agree as well that the impact of the having is diminishing as the amount of supply that's impacted by the having is significantly less than it was you know two three cycles ago. So that is clear as well. But it's also very clear that the four-ear cycle also happens to line up with the business cycle, right? And the business cycle has not taken off in this in this you you were you nailed it when you said this bull cycle started in

2022. That is a great take that everybody should remember because it's so easy to come in now and be like, "Oh, I'm here at the beginning of the bull cycle." And it's like, no, no, no. The bull cycle started then. It hasn't been up only and no bull cycle is up only, but we're up since then and we're we have not gone into a bare market. Maybe you could argue that the tariffs caused say like minor bare market depending on like your your take of what a bare market is. Technically it wasn't a bare market. I guess technically it was a bare market because we did see a 20% draw down in the NASDAQ, right? And and S&P 500, which I think is like one of the definitions of bare market. So anyways, but point being, yeah, we're in this bare cycle or sorry, in this bull

cycle, we've been in this bull cycle for a while and it's just very difficult to know where does demand go from here because if we see rate cuts and I want to ch touch on this in a second is getting a bit more US policy, but there is there is still this I'm still a believer that we see this blowoff top typical finish till the bull cycle and that that is going to push and I think that there's enough investors from both the retail and the institutional side that we didn't have in past cycles that I do think that like treasury companies can rip. I think public companies such as Coinbase and those circle can rip and I also think that tokens and onchain assets can rip as well. Like I just think it can happen across the board.

But I don't because there is like 40 million tokens now when you include every meme coin and 40 million is a random number I'm throwing out. It's probably more. It's in the tens of millions at this point. Um, not every not every token can go, not everything can go. Um, let's let's talk about US policy for a second. What's your thoughts on uh what's happening at the Fed and uh, you know, Trump firing Lisa Cook and the board of governors split that's happening. give us a breakdown of where you see the Fed right now and what the impact could be on their rate cut decision coming up in uh what just over a week now.

>> Yeah. Um I mean I'm a big I think Lyn Alden, you know, the nothing stops to strain thesis is that's it. You know, I I there's it's funny. It's like I I feel really bad. Well, I feel like I'm a bad Bitcoiner saying this. There's like a little part of me that almost feels bad for Jerome Powell because I think in his own weird way he did try to sort of maybe stop inflation. At the same time, he's the dude that let it get to like 9 10% under Biden. So, you know, didn't do that good of a job. Um, but, you know, it's like I guess he's trying. Um, with what the tre the pressure that Trump is putting on him, I would say with all this, the only thing that makes me a little bit nervous. I'm not a big power consolidation guy. I'm I'm a big

decentralization guy. So this idea of like it was floated I think a few weeks ago of like Bessent being not only the secretary of the treasury but also the chair of the Federal Reserve. Stuff like that becomes really really worrisome to me but at the same time not really. I I actually am a believer that Bitcoin does become the money of the world that it eventually replaces the dollar. I've been vocal about this. Um and so you know I look at all this stuff I take it with a grain of salt. I mean it's very okay what happens with the Fed and what goes on next? like I don't know eventually they just keep Treasury keeps issuing debt, the Fed keeps printing money and we just go into this cycle until people completely lose faith in it. That's a little bit of a longer term

view, but in the short term I think he tried to do the best he could. I I wouldn't want to trade places with Jerome Powell. Um yeah, >> hardest job in the world. >> Totally. Yeah, I I think he did the best he could. Um, at the same time, you know, I kind of believe the Fed is sort of inherently evil. So, there's a little bit of karma when I see Trump, you know, doing these sort of TV moments with Powell and sort of it's just like, well, maybe that's just like karma coming back around to get you a little bit. So, I don't I don't lose sleep over what happens to Jerome Powell, but I do, if I were to look at it through the lens of uh, you know, someone who still believed a lot in the traditional system, what what else can he do? I mean, like, what

what other situation is he in? And I think he will eventually he will cut rates, but I think it's it's partially it's not going to be in reaction to Trump. It's because he knows that if he keeps them high, it's it's it's also hurting the debt. The debt is inflating at a ridiculous rate because the rates are so high. So, it's something that he just has to do. It's it's a it's a it's a it's a balancing act that is just absolutely miserable. Has to be super super difficult to do. And then when you factor in human egos and him not wanting to look subservient to Trump. Real quick side note there. I'm a big I think uh we were talking a little bit earlier where you're based Pacific Northwest. I'm a big sort of believer in the Jeff Booth philosophy that like we don't actually

live in a democracy. If the president can't get rid of the Federal Reserve like then those people are the ones that are kind of actually in charge. So you know again like did Lisa Cook deserve what happened to her? I don't I don't know. I I I just don't even think about this stuff that much to be honest. But it's uh yeah, it's a it's an awkward time where I think on a certain level everybody's trying to do the best they can in these traditional systems. They don't want people to panic. But again, to quote Lyn Alden, nothing stops this train and like eventually the the wheels are going to come off. Um for in the meantime, they're just doing the best they can to keep them on. That's, you know, my humble take on it.

>> Yeah. Uh, okay. I want to I want to talk a bit about um Bitcoin as money which you brought up there. But before we do, I just want to touch on two other like US policy things. Sure. One is um >> debanking and SBA guidance. Um, can you quickly frame what happened uh in the past uh what time period the past like during Biden Biden's administration of around debanking? Uh because this was a something that wasn't reported on a ton or talked about a ton but was really impacting crypto founders and then tell us what just happened. Was it last week or the week before the house executive order? Yeah.

>> Yeah. Uh, so yeah, I mean there there was some reporting on it's like Nick Carter, I'll shout him out for, you know, he classified it as operation chokepoint 2.0 and that included debanking. It wasn't just debanking, but a lot of other founders that I know have come out and said yes, they shut down our bank accounts, too. And these are people that didn't come out and say it while it was going on. So, it was basically uh it was probably I can't think of his name off the top of my head, but someone that Elizabeth Warren put onto Biden's team and he's I can't uh it's a heritage wise it's an Indian last name, but anyway, he he was >> they were basically just saying like you're out of favor with us. And this was also Marty Groomberg from the FDIC.

Essentially people saying, you know, members of government, this is like the most anti-democratic thing in the world, saying you're out of favor. Your industry is out of favor with us. As at one point, maybe back in the day, maybe like gun shops were out of favor or like uh payday lenders were out of favor. Crypto industry fell into that sort of bucket of of company and they were just saying, "Yeah, we're just going to cut off your your bank access. we're not going to, you know, we're not going to allow this bank to ser to service you. >> This is America. This is not like, you know, >> and that's them like that's them like going to your bank, right? Like they're going to, you know, to to JP Morgan Chase or, you know, whichever Charles Schwab and they're just saying, "Hey, you you can no longer bank, whether it

be their their personal bank or their their business bank, you can no longer bank this person." And so, you lose your bank bank access. like you no longer have a bank account which is like super debilitating that really impacts >> beyond the only the only other place we see this I do a lot of work with activists in this space and the only other people that I see this happen with is literally activists who are living under totalitarian regimes or authoritarian regimes most dictators their playbook is debank people and this is what was going on in the United States so when people you know and it's I'm not I I never sort of make my political beliefs known but when people talk about Trump being author authoritarian. Like I I get I get some of the tendencies. Don't get me wrong.

I'm not I'm not defending him or or not defending him, but how can you argue that what was going under Biden wasn't how how can you argue that it was just okay to take away someone's bank account? I think debilitating is an understatement. Imagine not being able to pay you what are you going to call your mortgage company and be like, "Hey, do you accept Bitcoin?" Like, it's not happening. We're not, you know, the Overton window has not shifted that far yet. So, we're you're you're you're hurting people. You're really hurting people who they've not done anything illegal. you just they've just done something that the government doesn't necessarily like quote unquote or maybe even forget about like understand they don't understand the industry. So it was it was really really wild to see that. Um and I think you know I I say this a lot. So I I went

out on the Stand with Crypto tour that Coinbase is sort of works with Stand with Crypto. It's like an advocacy arm. I don't know if it's that's exactly what it is, but I was out um on that tour around the United States and just speaking with people covering some of the events that they did. And when you take sort of the eyeire of all those who were debanked and then other people, younger people in the United States who can't afford to buy a home, who are struggling with student debt, who are doing all this stuff, who feel that on some level Bitcoin/crypto is going to be a way out for them. It's an investment.

it's going to be maybe a sea change or like a there's going to be a shift. When you're doing that to people, they're going to push back and and and what we have now is sort of what happened. So, I think that's, you know, enter Trump and Trump knew that this was an issue. So, he's issuing through the Small Business Association through executive orders. There's a there's a concerted effort not just to provide lip service to say we're not going to debank people anymore, but to put this into writing to say like no, no, no, we're not doing this. But he also knows what it feels like. You know, while he was being prosecuted, I forget under what the charges were, but his family was debanked. I know Eric Trump talks about this a lot. So, it's a personal thing for him as well. If someone has done

something illegal, if they're laundering money and we know that, like, okay, freeze their bank account. But when we don't like somebody or we don't like the industry they work in, we don't do that. Like, that has to be the thing that sets America apart from authoritarian regimes. So, um, really, really frustrating scenario. It's good to see the Trump administration and the small business administration um making it a point, you know, not only, you know, this is a what are we at almost a year after Trump won the election still following up and saying, "No, we're not going to allow these practices to exist in the United States." It's a good thing. I'm I'm happy to see it happening.

>> Yeah. And and to me the the the outcome of this is this this won't get a lot of press coverage and it won't be a big topic but it is these are the the little things that compound into the larger adoption that we keep all talking about because when you think about it if you what do we need in order for crypto to be successful to the level that we all want it to be? We need more adoption. What do we need to do in order to achieve more adoption? We need more products that people can adopt, right?

We need more apps and more tools that people can actually use. And how do you create that? Well, you need more founders. And this debanking removed a lot of great founders and a lot of great innovation. And this just is one small step to bring that back and to encourage people, no, you can start a crypto business. You can build here. you can do that in America which is obviously a big important step in order for us to achieve the adoption. Okay, let's talk about uh Bitcoin as money before we wrap here. Give me give me your take on um Okay so >> we did an episode last week with uh Ryan Rasmusen from Bitwise who just put out a

report uh yeah, incredible um guy. He just put out a report about a long-term projection for Bitcoin, a long-term capital markets projection for Bitcoin. And in this report, his his the prediction is that Bitcoin will be 1.3 million uh price by 2035. I don't need you to speculate or comment on that that price prediction. Uh but one of the big things the way they broke that down was they looked at what how much Bitcoin will take of certain markets and one of them is the biggest market that everyone knows that Bitcoin is taking is store of value and gold right it is going to slowly take more of the store of value

in the gold market because it's just an easier way to store value than gold is you would I rather have a digital thing that I can carry across borders and send seamlessly in two seconds or would I rather try to figure out how to store gold in a vault and deal with transferring gold? Like obviously Bitcoin is a better use case for that. But the bigger question is beyond that, what role does Bitcoin play, right? Does Bitcoin become money? Does it play a role beyond just store value? What's your thought on the long-term role that Bitcoin will play in the future of finance?

>> Yeah. So, I I appreciate this question and I and I want to preface it by saying I came to Bitcoin. And I know your audience is more maybe like an investor focused. They're not necessarily talking about Bitcoin as money all the time. And I just want to say that I came to it with the same sort of uh view. Someone told me that Bitcoin over time was going to be worth a lot more and I didn't want to have student loans anymore. So just to preface it, that's how I came to this. Um where my mind has changed. One, I use Bitcoin as money frequently, but two, before doing this political beat at Bitcoin magazine and what I'm doing, I used to cover a lot of what gets called Bitcoin circular economies around the world. Um, a lot of these exist in different parts of Latin America,

Africa, Southeast Asia, places where maybe people are cut off from the traditional financial system. Um, and I'll give an example of that. So, I was recently, at the end of last year, I was in Kenya and I was in the largest informal settlement aka slum in Africa. It's about 600,000 people living in an informal settlement within the city of Nairobi in Kenya. It's a very intense place. I wrote a piece on this for Forbes that actually got picked up by the BBC and they told the story um of basically what you get what you hap what happens in a lot of these sorts of areas. You had a lot of refugees uh from all over Africa who cannot get a national ID within Kenya. So what they're doing is basically they're just using Bitcoin as money because they need

to. Um if they're going to accept any sort of digital payment, they're accepting Bitcoin. Yes, they could still use the fiat currency, the Kenyan shilling, but that's been devalued at such an extent. Everybody knows that you don't have to be an economist to understand that your purchasing power is getting grossly eroded. Um, so in this in this area where they just use Bitcoin as money, using it over lightning predominantly, the the Bitcoin layer 2. Um, you know, I've seen a massive change where people are like single mothers or people in the community are planning for their children. They've never had that experience before because they even if they did have uh their documentation, they haven't made enough money where they'd be able to pay the banking fees to sort of have some money in the bank.

So, they're using Bitcoin now as store of value and as a medium of exchange. And I think I'm going to I'll cite uh Roy from Roy Shinfeld from Breeze, the Breeze SDK. Um you know, he actually calls it a false dichotomy. Bitcoin for for it to be a long-term store of value, for it to succeed long term, it has to become a medium of exchange. Um, and what I'm seeing in a lot of these places around the world, so I was in Bitcoin Accazi in South Africa, Bitcoin Beach in El Salvador, uh, Afriit Kiraa, which is the place I was just talking about, uh, Bitcoin Dua in Ghana, is that the communities are just using it day-to-day for purchases, and it's sort of like a rising tide lifts all boats. Uh, the whole community is doing better as a result. Um, it's a little bit different

here. I think it's going to take a a little bit longer for people to want to use it as money because the dollar is relatively it's fine to use as a currency. Like, yeah, it's losing value. So, in the United States, people using Bitcoin as a store of value. Great. I personally use Bitcoin pretty frequently. I make purchases online with it. I'm on Noster Zapping people. >> How do you do that? How do you like how >> uh which which of the two? On Nost or on >> No, no, no. Like making purchases online with Bitcoin? Like where are you doing that? like you you're not buying your Netflix subscription with Bitcoin coin, you know, >> you could I mean you could use Bit Refill. So Bit Refill, but that's not even just Bitcoin. That's different cryptos as well. Um so you could essentially go and buy a gift card with

it if you wanted to, >> right? >> So I uh trying to think of the last thing I bought online was something did I just pay for with Bitcoin? It was Oh, it might have been Bitcoin hardware. I was buying some cold card stuff, but I've also bought my node, you know, with Bitcoin online. So, I've used it for different things, probably mostly using it on Nostra, but also when I travel, but also I'm going to give a shout out to one group real quick. So, there's another thing that's happening all over Africa and Latin America as well. So, I'm going to I love this app so much. So, when I was in Kenya, another thing that's super cool. So, in Kenya, they have a mobile money system called EMPA.

I have no affiliation with Tando. I just wrote an article on them. That's it for the app. There's no KYC. There's nothing like that. But if I wanted to basically, so while I was in Kenya, I I I don't have a national ID, so I can't pay via their mobile money system. With this app, I type in somebody's number and I can set so I connect my Bitcoin Lightning wallet to this on the back end. I type in someone's number, their bill gets settled in Kenyon shillings, my Bitcoin Lightning account gets deducted, and Tando takes care of that on the back end. So I call these lightning to fiat interfaces. I think you're going to see a lot more of that as well for people who want to live on a Bitcoin standard. So you're able to spend your Bitcoin even if the merchant doesn't accept it. I think what you're

seeing though is like so I lived in Venezuela under Chavez, the beginning of hyperinflation. I've seen that with my own two eyes. So again, you and I living in Canada, living in the United States, different vibe, you know, yes, we could complain all day about how much value our money has lost. Our Canadian money, American money, still two of like the prettiest pigs in the pen, right? Not going great, but not as bad as Lebanon, not as bad as Venezuela. So, I think that eventually people I think it'll also be a um over time when younger people maybe they're playing video games and just earning Bitcoin and using Bitcoin as native money or some other crypto asset. It'll be a digital native thing. Like I've taught older people how to use Lightning, how to do they're just like I don't want to do this. Just give

me my Venmo. Just give me my PayPal and leave me alone. I just think it's going to be a matter of time. But another piece to that is going to be regulation. We need dimminimous exemptions on on Bitcoin and crypto spending. So it when I was in the White House, I was in the press room and the first thing that came to mind was like, hey, President Trump has talked about the minimus exemptions on this, some of us want to spend our Bitcoin, whether it's buying a beer, buying a coffee, whatever it is. I think people should have that option and and to go back to the Fed, like, you know, if the Fed is going to devalue our currency and everything else, we should have the option to use other currencies that we feel, how can I say it, just that are holding our value over time. So

I think all of this kind of stuff, it's just going to take a little bit more time. There's still I mean the majority of people still think Bitcoin is a scam. So we we're still not even like past the point of like convincing most people that it is a store of value. It's just going to take a long time and I think more of like a digital native user base. I think my nieces and nephews will probably use Bitcoin as money without even thinking about it by the time they're in their 20s or 30s or whatever. So maybe sooner. Who knows? It really depends on how much value the dollar loses in the next five ten years. Yeah. to to me this just makes me I don't know how this all shakes out, right? And I don't think and nobody knows, right?

What the will will will Bitcoin will we move to the bit will the whole world move to the Bitcoin standard? I don't know, right? I could I can I can see it like I think you can you can make a great case for it. you can show the path that that would require and you can also one of the biggest parts of that case is you can show that a lot of the world as you said in developing countries already is doing this right so so yeah I I can see that that case I don't know if it happens or not but I think that we all do know that the current system is broken and the current system is not going to is not going to persist and that there is a shift coming and I think we also all understand that Bitcoin as a

store of value alone alone has a lot of even if it only only is a store of value and not the and the whole world doesn't move to Bitcoin standard it still has a tremendous upside as an investor. So I think it just makes me so bullish and so excited about the future of of Bitcoin but also the future of crypto to solve massive issues that we have in our financial system and in our money system. So, you know, stick around because as you said, Frank, we're so so early still >> and it's easy in the day-to-day to get caught up in price and oh, you know, Bitcoin it's hovering around 110 and it's not at alltime highs and it's not enough and then you make, you know,

silly investment decisions. It's just be patient like we got a long ways to go, folks. >> And and to that point, I just think it is important. So, I I think people say like after a while like price isn't important, blah blah. It is important because most people are coming to this from the fiat world. Well, there we're all coming to it from the fiat world. So, in the fiat world, if your investment drops by 15, 20%, whatever it is, and especially if you're coming to Bitcoin or whatever you're looking at just as a as an investment, what we don't want to see happen is people buying a top and then panic selling the bottom. So, I think it's for anyone telling you price doesn't matter this and that. Yes, it does. It after a while when you're in it, you get more comfortable with the volatility, it

doesn't matter as much. But if you are somebody who's helping new people get into this, yes, you very much want to explain to them that this is volatile and maybe when we're approaching all-time highs, you shouldn't be dumping your life savings into it. I think it's fine to have those discussions. Some hardcore Bitcoiners, some Puritans will tell you it doesn't matter. One Bitcoin equals one Bitcoin. That is not how most people view the world. Ideally, if people are buying Bitcoin, we want them to buy and hold it for the long term. Statistically, that's when you see the best rewards. So, it is perfectly okay to talk about price. And I think with what you're doing with this podcast, talking about it as an investment, I think it's a great place to meet, especially newer people, if they're just coming to this, where they're at. It's

it's it's a it's a big part of the equation or it's maybe like a an understated part of the equation, especially amongst those who have been in the space for for a long time. >> Yeah, I couldn't agree more. Frank, absolute pleasure to get you on the show today. >> Thank you, man. Jay, an honor, an honor to be here. Thank you guys for listening and yeah, we'll talk soon. I got to remind you all before we let you go that none of today's episode is financial advice. I'm not your financial adviser. Frank's not your financial adviser. If you're looking to make any investments, you should do your own research and you should speak to a professional because investing is risky and difficult. As I said at the beginning, if you want to get our September market outlook for crypto, hit the link in the show notes.

We just put out our full report on what we expect to see over the month of September. Have a wicked awesome day, everybody. We'll see you back again tomorrow. If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a DEX that we built in partnership with Cow Protocol. Why did we build it? Not to make money, just honestly so we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15% fees. Uh this is a huge difference from uh other centralized exchanges that charge half a percent or even up to 1.2% fees on their swaps. Also, you can swap on Salana all at swap.mmillgrow.com.

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