So we as a digital currency group
my company we've invested in a hundred and forty five companies now and
So we're the most active investor in the space. And so we have pretty good visibility
And insight into kind of what's what's working. What's not working? And I continue to believe that the number one use case is
Speculation right now and and and that is not a bad thing in that
one look I think Bitcoin is going to
Controversial opinion here is going to displace goals over the next couple decades in terms of the role of gold plays in a portfolio
We will combine stuff. Yes. I
But but separate from kind of the story value kind of gold
play I think that in order for Bitcoin and digital currency to provide the utility that people are excited about from a
cross-border payment perspective remittance perspectives, you know if all of the all the other
Friction that could be eliminated by the
free movement of money around the world
It's not
Possible unless the asset class the size of SMS is larger
Unless there's more volume in velocity in the on rooms the off ramps
So initially the know born use case is speculation as a market cap grows. You have more more liquidity
going in and out of different fiat currencies, and eventually you'll have the ability to
Operate you know as an individual or as an or as a business
exclusively in Bitcoin a digital currency and completely
Eliminate or bypass the middleman and all the friction all the cost
But none of that becomes possible, you know
You can't you can't create a better financial system that eliminates all the friction and Milliman
When you only have a hundred twenty five billion dollar asset class that trades five billion dollars a day. It's just not big enough
So that's an interesting point. So you think that
that
Speculation is one of the good ways to build the cult. It's the only way it's the enabler
It's the you it's the flywheel effect you it has to grow in value
and as it grows in value
Becomes more interesting as a tradable asset and as it becomes more like a tradable asset you get the derivatives and you get the futures
And you get there first sure and then you have the liquidity that the argument is is what are you trading then?
I guess the answer is you're trading a future operability or
Something, you know, you're training the future use case
it was really kind of it's two things one is if you if you buy into my
Hypothesis that bitcoin is gonna displace gold. So you're trading into an opportunity
So if there's a trillion of gold and then there's 125 billion of Bitcoin
so that's one play and the other is is you're you're betting on the
Innovation you're betting on the technology betting on the community. You're betting on this new financial system
That is gonna get built over than a couple decades and that that investment. Thesis is a little it's a it's a different analysis
The gold analysis is okay. What is the probability that a cash or sum of a trillion?
You know and then you you discount that back and you say okay?
It's you know
It's gonna the five percentage is gonna happen that it's gonna capture twenty five percent so you could do the math still big number
whereas if Bitcoin
Becomes the new finit the underpinnings of the new financial system
All of the value that gets tied up in Bitcoin as it's moving around the pipes
It's kind of like oh, it's like a working capital analysis
And so if there's five or ten or a hundred billion dollars tied up in the Bitcoin system
Assets being used for all these use cases you can make some assumption as to what the value of the asset class would would be
At that point and that's not even in, you know valuing the the blockchain use cases
You know using the database for you know recording ownership around, you know
digital rights and identity and all the crazy ideas that we've invested in and you've heard about so you can you think of therefore a
Bitcoin
Thinking through you all your idea with gold and other areas is you need to think of it in terms of option value?
What is the probability of it ending up replacing gold and then trying to impede that?
My guess is you could probably apply some sort of option pricing model and come up with some fair value
Whatever that means right and you know
These small changes in your assumptions have a pretty meaningful impact on the outcome and look and that's why you know
That's why Bitcoin will move up or down five percent in a week because the very small changes in money flows
very small changes in perception
changes, you know kind of the probability of the ultimate ultimate outcome and again with gold as the as
The in my opinion kind of the number one
Use case
our digital gold eight trillion relative 225 billion
I mean for you to you know, double your money in gold over the next couple decades
It's essentially it's a it's a bet against the dollar. I mean it's a bet against kind of fiat currency
Certainly, my belief that Bitcoin would perform well in that environment
But but really more importantly if the world doesn't fall apart and if the value of fiat and the US dollar doesn't collapse
Bitcoin could and should still perform really really well because you're investing in this new financial system this technology this
community this this this
Restructuring of rebuilding of the way that value moves around the world and gold is gold is never gonna have more utility
it's never gonna it's it's just going to
or not be perceived as this store of value that you put in your portfolio that would perform well in periods of financial
dislocation, you know
There's these who used to be people
You should trade the gold silver ratio for a long time
and one of the reasons why silver often outperformed in certain times is because it has to
Two values one is the precious metal value and the others the industrial value because people use silver a lot of stuff
I mean you kind of think of Bitcoin in the same way. It should hyper outperform in that kind of magic scenario of
devaluation of fiat currency
Which probably at the end of the next recession we're going to see some format of but also
It has the price in the optionality of the future financial system
Which as you go into a recession and you get some more extreme monetary policy
The probability explodes of having to choose a different outcome. That's a super smart way to look at it. That's absolutely right
You
