Episode Transcript
[00:00:00] In our view, this is a stage of quiet strength, rising conviction, healthy fundamentals and a backdrop of fast growing institutional participation.
[00:00:11] We think this is mid cycle in what could become one of the most significant bull runs in Bitcoin's history.
[00:00:19] From its current range, we believe there is still a path toward a 4 to 10x value appreciation which would imply Bitcoin price targets north of $500,000.
[00:00:32] The best in Bitcoin made Audible I am Guy Swan and this is Bitcoin Audible what is up guys? Welcome back to Bitcoin Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else. You know, don't forget to check out our sponsors Leden IO for Bitcoin backed loans.
[00:01:09] The HRF are an awesome and I'm honored that they support my work. They put on the Oslo Freedom Forum which is a phenomenal conference and then also they do the Financial Freedom Report which is one of my most valued and information dense newsletters and then synonym who have made Pub key app P u B k Y dot app. They have an entire tool for building decentralized and censorship resistant applications. Also as well as their wallet, they have a fantastic bitcoin wallet called Bitkit. Links to both of those will be down in the show notes. And lastly Git Chroma they are all about redesigning light for humans rather than machines. Getting hormones right, getting your circadian rhythm right, getting your energy levels right matter Light matters way more than I think most people give it credit for and they are based bitcoiners and I use a number of their products. I'm a big fan and it never hurts to get a 10% discount with code Bitcoin Audible all right, so today we have a read and this one is Tordem Easter with Adamant Research and partnering with Unchained have their new Adamant Research report of where we are in the market, how they think about, you know, kind of the hodl waves and you know, how many people in profit where they see that. It basically is a breakdown of all of the fundamentals of where we are in the market and how to think about where we are in the cycle. And they've been phenomenal. I believe I've done audio for every report up to now. If I haven't, I probably intended to and then just forgot to get to it or finish it or I guess I probably didn't do their first report because that was before I did the show. But still I've always been. I know I have a PDF of all of them because I extremely value what they put together. They always have fantastic research and it always ends up being all of the things that I kind of value and pay attention to, but just put into the best, most cohesive package that I never really have. You know, I just kind of build it up in the back of my mind over a long period of time and then to get to see it laid out kind of piece by piece and the entire thesis and the thinking on where we are, it just, they just did do a fantastic job. And this is a, this is a really good one for anybody who's just thinking about this of you know, timing and long term positioning is how do you set yourself up so that you can deal with the expected volatility and get the most out of our heading into a bitcoin future.
[00:03:45] So with that let's no longer delay because this is a bit of a long one, but it's good as hell. So let's get into today's read and it's titled how to Position for the Bitcoin Boom by Turdmeester, August 2025 Introduction at Adamant Research we like to publish our reports at times when the crowd is despondent and disinterested.
[00:04:13] Today that is not the case. Market participants are clearly emotionally invested. However, the crowd is still by and large dismissive about the medium term potential of Bitcoin versus stocks, commodities and other investor favorites. In our view, this is a stage of quiet strength, rising conviction, healthy fundamentals and a backdrop of fast growing institutional participation.
[00:04:40] We think this is the mid cycle in what could become one of the most significant bull runs in Bitcoin's history.
[00:04:47] From its current range, we believe there is still a path toward a 4 to 10x value appreciation, which would imply Bitcoin price targets north of $500,000.
[00:04:59] This report aims to help investors understand the drivers of Bitcoin's value, identify the signs of possible headwinds, and grasp a few strategic and impractical notions about how to invest in this space.
[00:05:14] Some of the conclusions suggested by this report Blockchain analysis indicates that most Bitcoin is still held by strong hands Bitcoin to continue decoupling from other cryptos, stocks and bonds.
[00:05:28] Global macro predicament is a powerful tailwind for Bitcoin. Bitcoin startup investing is complicated yet attractive.
[00:05:37] Bitcoin nation state adoption is just getting started.
[00:05:41] Institutional adoption is a huge driver of this bull market.
[00:05:46] Collaborative custody is a good option for novice investors.
[00:05:51] A common phrase among Bitcoin enthusiasts is fix the money, fix the world. In this report we focus on Understand the Money, Understand the World, Enjoy Turda Meester Editor in Chief we maintain that the risk reward ratio for Bitcoin, the currency, is currently the most favorable of any investment in the world.
[00:06:17] Adamant research report November 2015 Bitcoin at $300 we assert that the long term risk reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world. We expect for it to trade in a range of 3,000 to 6,500, after which we foresee the emergence of a new bull market.
[00:06:39] Adamant research report April 2019 Bitcoin at $5200 this report is solely educational and has not been catered to your individual circumstances and as such, any action or inaction which you may contemplate based on the contents herein should be made in consternation with your personal, legal, tax and financial advisors. The authors and publishers of this report may hold some of the assets mentioned or equity in the companies mentioned. Nothing in this report or its associated services constitutes professional or financial advice of any kind, including business, employment, investment, advisory, accounting, tax and or legal advice. Nothing in this report or its associated services constitute or forms any part of an offer or sale, a subscription of, or any invitation to offer or buy or subscribe for any securities, nor should it or any part of it form the basis of or be relied upon in connection with any contract or commitment whatsoever. Risk Disclosure Crypto assets are a highly volatile asset class. The value of crypto assets can go down as well as up and you can lose your entire investment when held by custodians. Crypto assets are often uninsured and are usually not covered by national compensation schemes.
[00:07:34] Part 1 as an investor, why do I care about Bitcoin?
[00:07:40] Bitcoin is wasteful. Bitcoin isn't backed by anything. Bitcoin is too volatile. Bitcoin is the slowest, most expensive database on the planet. Bitcoin is too private. Bitcoin is not private enough.
[00:07:52] Any of all of these criticisms could convince us to discard it if Satoshi Nakamoto's invention didn't have any redeeming features.
[00:08:00] What this elaborate network makes possible, though, for the first time in history, is true scarcity for the digital world, fully autonomous ownership and a permissionless global network for financial transactions. Because of its ingenious proof of work mechanism, Bitcoin has been able to become a digital gold with an unprecedented robustness and openness. 14 years of operation with an uptime of 99.989% and anyone with access to an off the shelf phone and an Internet connection can gain permissionless access to the network in minutes.
[00:08:39] This is why we call it the most disruptive technology since the invention of the Internet.
[00:08:45] To illustrate, these are some of the areas in which Bitcoin, with a current market cap of $2 trillion, directly competes with existing infrastructure. Fixed income, for example bonds, cash, gold, central bank reserves, currency, deposits, payments and remittances, and real estate as a store of value.
[00:09:07] But all of the above might still make the investor shrug. Quote, so you've built a better mousetrap. Why should I care?
[00:09:14] Well, we respond Consider that our existing monetary system is running on fumes. With accelerating debt and inflation increasingly destabilizing the global economy, most people today are aware of some fundamental issues with the financial system.
[00:09:30] The U.S. money supply increased by 42%, or about $7 trillion since the pandemic.
[00:09:39] Since 2020, the minimum reserve requirement for U.S. banks is 0%.
[00:09:45] FDIC reserves only cover 1.26% of U.S. bank deposits.
[00:09:52] Government budget deficits in the U.S. 6.4% of GDP and the EU 3.2% of GDP are now higher than those during the Great Depression.
[00:10:03] Additionally, 1.4 billion people still don't have bank accounts. Remittance fees are about 6%.
[00:10:12] Banks don't settle transactions on Sundays.
[00:10:16] The solution is a paradigm shift, a new technology for the digital age that can grow into a universally accepted store of value.
[00:10:26] That's what Bitcoin a full reserve bank for saving in cyberspace with the promise of evolving into a reliable and politically neutral money.
[00:10:40] Part 2 Blockchain analysis indicates Mid Bull Sentiment Further, in this report, we'll talk more about the fundamental reasons why Bitcoin is here to stay for the long term. But as we all know, it is an incredibly volatile asset. So let's first look at some data to determine if it is worth our time today.
[00:11:02] The special thing about Bitcoin having an objective ledger which records every transaction settlement, is that it allows for analysis that is usually impossible for other asset classes.
[00:11:14] Let's mine some of that data here below to answer the question. Is Bitcoin still undervalued?
[00:11:22] One blockchain suggests whales active, not capitulating.
[00:11:28] Knowing what insiders are doing is always considered to be useful. As potential investors in a certain asset class, we want to know what the most experienced and wealthiest people in that market are doing with their portfolio.
[00:11:42] As it happens, the information on the Bitcoin blockchain allows us to approximate exactly that. The holdernet position change is a metric that shows us whether whales the People controlling the oldest coins in the highest quantities are moving their bitcoins around, which correlates with selling behavior or whether they are stoically holding onto their positions because they think bitcoin is still undervalued.
[00:12:09] As you can see below, whales have been moving some coins in the last two years when bitcoin retested previous all time highs during a tumultuous US election.
[00:12:19] However, nowhere in 2025 have holders been net movers of over 100,000 coins in a day, which historically has been indicative of selling activity during late stage exuberance.
[00:12:33] 2. Current sentiment Another measure which we also used in our 2019 report, Bitcoin in heavy accumulation is called Net Unrealized profit and loss.
[00:12:46] Here's how it Using the blockchain, we can determine the dollar value of each bitcoin at the time it last moved.
[00:12:54] That way one can calculate for the aggregate of all bitcoins in existence whether the market is experiencing unrealized losses or or unrealized gains. As we all know, when we look at a certain investment that we've made in the past, it usually makes a strong psychological difference whether that investment is in the green or in the red. This is the reason we use this on chain metric as a sentiment indicator. With 50 to 70% of total coins currently looking at unrealized gains, the sentiment among holders is solidly hopeful optimistic as expected Mid bull Market Once this measure reaches 85 to 95% levels, in absence of dollar devaluation or hyperinflation, it would be fair to caution euphoria and look for other indicators of a top in this bull cycle lower Bitcoin price. Credible Catalysts now that we've established that Bitcoin is likely undervalued by, the question arises what if the Trump pump is coming to an end and the price will only dwindle from here?
[00:14:02] We'll get into some specific investment strategies later on in this report, but let's first address some of the headwinds that Bitcoin could still face now that we're three years into this bull market.
[00:14:14] 1. A large scale Bitcoin Hack an obvious and far from insignificant risk for market prices today is is for a large amount of Bitcoin to be stolen, market confidence could take a hit and possibly the hacker could further sell into weakness. A negligible amount of large bitcoin balances worldwide are insured against risk, so large scale losses won't be compensated for by buybacks from insurance companies.
[00:14:42] Additionally, with over 10% of all Bitcoin in circulation reportedly being stored by Coinbase, the market currently faces significant concentration risk. Some ETFs have now started diversifying their custody providers, which is a positive trend. That being said, we think only in extreme cases could a hack actually arrest or end the Bitcoin bull market. When 120,000 Bitcoin was stolen from Bitfinex in 2016, it barely registered in the price.
[00:15:11] Two unlikely Headwinds liquidations of known coin hoards as the very first bitcoin exchange founded back in 2010, Japan based Mt. Gox vacuumed up as much as 7% of all Bitcoin in circulation. That is, until it collapsed in early 2014 due to a series of hacks its management had desperately kept hidden from the public.
[00:15:36] At the time of its bankruptcy, Mt. Gox owed a staggering 850,000 bitcoin to its customers, but after a long recovery process and expensive legal proceedings, only 141,000 bitcoin were available to distribute back to its claimants.
[00:15:54] When distributions finally started in the summer of 2024, many investors feared this would put downward pressure on bitcoin prices. The worried sentiment was further amplified by the ongoing bankruptcy procedures of a host of crypto companies who had collapsed at the beginning of the 2022 bear market.
[00:16:11] First and foremost the infamous FTX Exchange, but also lesser known names such as blockfi, Voyager Digital, Celsius Network, Three Arrows Capital and Genesis Global rattled investors. Investors feared that all this could lead to a languishing bitcoin price. Unable to produce the familiar bull market rallies it is so famous for reporting in mid-2025, we have to acknowledge very little of these fears have come true.
[00:16:39] With no more than 35,000 Bitcoin left to distribute, the Mt. Gox Estate is now close to being depleted. Also, other bankrupt entities have very little to no Bitcoin left to distribute. Additionally, the appetite of this bull market has been thus that newly available coins get absorbed quickly with little negative effect on price.
[00:17:00] One striking example of this occurred recently in late July of 25 when Galaxy Digital reported on facilitating the liquidation of a massive 80,000 Bitcoin coming from a single person or entity. This $9 billion sale caused the bitcoin price to move down by a mere 4%. 3 Is confiscation a risk to custodied Bitcoin?
[00:17:28] Historically, assets held in custody, especially bearer instruments like gold and cash, have always been vulnerable to state encroachment, especially during periods of economic turmoil or political upheaval. The Federal Reserve act of 1913, on the eve of World War I enabled the introduction of inflation and subsequent erosion in value of dollar promissory notes In 1933, during the Great Depression, President Roosevelt issued Executive Order 6102, which compelled citizens to surrender privately held gold to the government.
[00:18:04] And in 1971, during the US Trade and Deficit crisis, President Nixon definitively decoupled the dollar from gold, making it impossible for savers to convert their dollars back to physical assets, a power which up to that point they had had for 177 years.
[00:18:23] Because of these historic precedents, and with awareness of the enormous fiscal problems in the western world the US EU, Japan, etc. It is unsurprising that Bitcoin investors have long viewed third party custody with suspicion. When assets are not held directly, they can be frozen, redirected, or seized.
[00:18:45] That said, in recent times the regulatory winds in the United States have been shifting.
[00:18:50] Rather than pursuing a posture of suppression, policymakers are beginning to integrate Bitcoin into the broader financial order.
[00:18:58] The approval of spot Bitcoin ETFs in early 2024 marked a significant turning point. These SEC sanctioned vehicles gave institutional and retail investors a secure legal channel for exposure. More importantly, the regulatory endorsement signaled that bitcoin is no longer being treated as an adversarial financial instrument, but instead is being absorbed into the established investment framework.
[00:19:25] Further evidence of this shift came with Trump's unveiling of the National Strategic Bitcoin Reserve Initiative. While still in its early stages, the creation of such a reserve reflects an emerging awareness in Washington that Bitcoin does function as a strategic asset.
[00:19:42] US States Texas, Arizona, and New Hampshire were quick to approve their own official Bitcoin reserves, and nine additional states have pending proposals on this matter.
[00:19:53] This shows how, among certain policymakers, Bitcoin is being considered not merely as an investment but as a monetary hedge and a tool of national relevance. A government generally does not seek to confiscate what it may one day rely upon.
[00:20:08] That said, the historic risk to custodied bitcoin remains at the moment, it is probably a very low risk, given the current administration's posture and the broader institutional trend. But that could change and will depend on which jurisdiction investors reside in. History shows that measures once thought extreme can quickly become popular under the right pressures. A future administration, especially in the context of out of control budgetary deficits and escalating domestic or military conflicts, might take a more adversarial stance. In such a scenario, large stashes of Bitcoin that are held in heavily regulated onshore entities would be considered low hanging fruit and thus the most vulnerable to confiscation or forced rehypothecation in order to borrow cash.
[00:20:57] 4. What if Bitcoin is seen as a threat to the dollar or other fiat currencies?
[00:21:05] At first glance, Bitcoin is an obvious challenger to fiat currencies. Its origin as a peer to peer monetary network outside government control invites comparisons to gold as a competing monetary tool. But that framing no longer reflects current U.S. policy direction. Recent legislative and institutional developments suggest Bitcoin is being treated not as a threat but as a strategic complement to the existing monetary system. However, over time we still see some potential threats emerge to corporations holding Bitcoin.
[00:21:37] Senator Cynthia Lummis Bitcoin act, which aims to define and protect the legal status of Bitcoin, has progressed with little resistance. At the same time, laws like the Genius act and other emerging stablecoin regulations point to a bipartisan recognition that digital assets may serve national interests rather than weaken the dollar. Crypto infrastructure may help extend its influence globally.
[00:22:03] Stablecoins are central to this thesis.
[00:22:06] U.S. secretary of the Treasury Scott Besant recently said stablecoins are probably the greatest advertisement for the dollar globally. His comment reflects a growing understanding that dollar denominated stablecoins are pushing demand for US Government paper into markets where traditional banking is limited, inefficient or politically constrained.
[00:22:29] These instruments polish the dollar's reputation by allowing it to function as a high speed, low friction monetary layer in a globalized digital economy, as well as boosting demand for the short dated government bonds that the stablecoin's management used to back the value of its token.
[00:22:48] Tether is the clearest working model of this dynamic. With more than $150 billion worth of circulating tokens, it serves as a critical source of dollar liquidity and in markets where official access to US financial infrastructure is limited or unavailable. And more Importantly, from the US government's point of view, worth $100 billion or 70% of its reserves invested in T bills, it provides a reliable source of demand for short dated government debt. Tether Closely related to one of the oldest bitcoin exchanges, Bitfinex reinvests 15% of all of its profits into Bitcoin, with which it has so far purchased 100,000. Bitcoin Tether's long term strategy is simply to keep acquiring more Bitcoin, which incentivizes the US Government to retain a friendly posture towards this emerging asset class. This structure, pairing stable fiat instruments with non sovereign reserve and profit diversification is likely a template for how stablecoins will evolve in the future.
[00:23:55] At the same time, we are seeing the emergence of publicly traded Bitcoin treasury companies, most of whom are using high stock valuations and low interest rates of fiat borrowing to their advantage by issuing additional shares and issuing debt to willing buyers in order to acquire more Bitcoin on their balance sheet. In creating this structural short fiat long Bitcoin trade, they are in effect using Bitcoin to execute a speculative attack on fiat currencies such as the dollar, the yen and the euro. If the popularity of this strategy keeps increasing, and that is likely given how even US Banks are now allowed to hold Bitcoin on their balance sheets, it's not unlikely that governments will eventually crack down on the highly profitable Bitcoin treasury strategy. But for the moment, the regulatory climate remains very friendly.
[00:24:49] 5. Would a market crash cause Bitcoin to Tailspin?
[00:24:55] Before delving into short term correlations, let's look at the overall picture. For any given five year time span since its inception, Bitcoin has outperformed every other asset class in the world, including all US Stock market indices.
[00:25:11] The one major asset class that it correlates with in the long run is is the global M2 money supply. In short, when central banks print more money, the Bitcoin price tends to rise faster than normal. And given how nearly all governments in the west are facing record debt and deficit levels, the world is bound to soon see another big round of money printing. In this context, the major threat the investment public continues to face is so called stagflation languishing stock markets combined with high inflation. The way to survive such a period is to outperform inflation. And given how the Official Consumer Price Index or CPI is a measure that's been vulnerable to manipulation, we recommend tracking long term inflation trends by using a basket of raw commodities such as the CRB index. Sure, the CRB could come down as it did during crashes of 2008 and 2020, but a recovery is all but secured given a the structural overallocation of capital to the consumption sector crowding out investment in primary commodity producing industries, and b the stimulus program that inevitably follows every crash in order to prop up governments and banks. In short, if your investment portfolio outperforms the CRB over the long run, your family and or business owners are likely protected from inflation. And so when we look at Bitcoin expressed in units of the CRB index, we see that after bouncing against the 300 level in 2021, 2022 and 2024 over the last six months, Bitcoin has decisively broken above this resistance is now trading north of 350units of the CRB index.
[00:27:00] This setup makes us confident that Bitcoin will outperform commodities by a significant margin and with that overall inflation over the next few years.
[00:27:11] Part 4 what to buy Beginning in 2012, some two years after Bitcoin's inception, alternative crypto coins began to be created. This trend reached mainstream audiences in 2017, and after another cryptomania in 2021, over 20,000 different tokens have been pushed onto investors.
[00:27:34] Additionally, hundreds of startups have been launched, several of which are now publicly traded companies, and we've also seen the issuance of tradable mining contracts and other securities. So amidst all this chaos, how do we choose what to invest in?
[00:27:50] We suggest that a well rounded portfolio in the cryptocurrency space should follow two guidelines. One of the available cryptocurrencies focus exclusively on Bitcoin and two Invest in Bitcoin first and Bitcoin companies later.
[00:28:07] Let's dig in.1 of all cryptocurrencies focus exclusively on Bitcoin this guide deviates from our November 2015 report in which we suggested to focus on Bitcoin, but also to round off your investments with a small basket of altcoins.
[00:28:27] Our argument to justify owning altcoins now known as crypto went as follows.
[00:28:33] Quote in networked environments like the world of cryptocurrencies, new developments tend to follow a power law distribution. There are a few clear long lasting technologies followed by a long tail of ever smaller and less used ones. This long tail pattern can be found in areas such as languages, e commerce stores, blogs and social networks.
[00:28:56] End quote the reason we changed our mind over the last seven years is that we have come to see Bitcoin more as a foundational protocol than a communications language. Bitcoin is more like the base layer engineering protocol of alternating current which allows electric machines to operate, than it is like the German language which from an engineering point of view is a more surface level communications protocol.
[00:29:21] Just like the TCP IP protocol is the foundational layer for all of the Internet, we believe Bitcoin is becoming the foundational layer for the Internet of Money.
[00:29:32] So why might Bitcoin become the singular foundational protocol for E money instead of one out of many?
[00:29:39] The short of it is that at the very heart of digital money is reliability, which is very expensive to achieve and of which the per user cost becomes cheaper as the monetary protocol grows in size.
[00:29:54] First, Bitcoin's reliability is rooted in redundancy. Its transaction history is reliably accessible only because thousands of copies of the ledger are stored all over the world.
[00:30:06] Second, bitcoin has, as any robust digital money would require safety guards to prevent political factions from changing the system with a manipulative strategy. This is where proof of work comes in. The only way to make a cryptocurrency incorruptible is to design it as an energy intensive system.
[00:30:26] Those who perform work get to vote on the validity of transactions with the words of satoshi one cpu, one vote.
[00:30:37] The requirement of using electricity and redundancy to all who get involved acts as a firewall around the network, an immune system that protects it from attacks.
[00:30:50] Because energy intensity is a condition sine qua non for any truly decentralized and reliable cryptocurrency, we end up with a winner take all dynamic. Once a functioning mechanism is figured out, the network effects and economies of scale of this system make everything else's security model seem hopelessly inefficient by comparison.
[00:31:15] To illustrate with an analogy, consider the natural world already features a base layer technology focused on storing extraordinarily important information, which it does with redundancy and sophisticated energy management systems. We're talking about the Nucleic Acids Protocol, the two main classes of which are RNA and DNA, which embeds and proliferates the molecular instructions for all life on the planet. The fact that all organisms operate on the same standard is a testament to the fact that nucleic acids are the most effective solution to life and procreation to come out of the known universe.
[00:31:56] Additionally, this protocol has created a huge competitive moat around it because it is such a vastly rich ecosystem within which Darwinian competition and evolution can take place.
[00:32:08] A new organism whose molecular instructions are coded using a different protocol wouldn't just be competing with just one other RNA or DNA based organism. It would in effect have to compete with the extremely adaptable and widespread network of all existing organisms.
[00:32:28] Similarly, we see Bitcoin's dominance only continuing and strengthening going forward because it is by far the most known robust and reliable protocol stack in the world of cryptocurrencies.
[00:32:41] We can also look closer to home to get an illustration of how foundational protocols that compete with each other tend to result in a winner take all outcome. A world where basically just one protocol survives and dominates.
[00:32:55] In the early 1990s, for example, a fierce battle took place between two protocols, each of which had a different way of organizing online information.
[00:33:05] Most of us are not aware, but the outcome of this competition was a win or lose outcome and it influenced to this day our experience of browsing the Internet.
[00:33:16] One of the two protocols was called Gopher, the other the World Wide Web.
[00:33:22] Gopher had a head start, but slowly lost ground because it was less censorship resistant, required more top down oversight, and because it fell apart in many different forks. After several years of competing, the World Wide Web started to dominate and Gopher completely fell by the wayside. Similarly, we expect less reliable crypto coins such as Ethereum, Ripple and Cardano to ultimately lose the war and dwindle against Victor Bitcoin in closing, let us respond to the most prevalent criticism lobbed at Bitcoin, which is also the dominant justification for the creation of alternative cryptocurrencies.
[00:34:02] Bitcoin can't do X.
[00:34:04] For several years we heard that about transaction speed. Bitcoin was too slow and supposedly would never scale. And then the Lightning network came about, which is a protocol layer on top of Bitcoin, which gave it its current potential to facilitate millions of transactions per second.
[00:34:20] Later we heard that Bitcoin had no privacy features, which led to the creation of a host of altcoins, and that in 2021 a soft fork upgrade to Bitcoin called Taproot has enabled a range of powerful privacy solutions for Bitcoin, making the Lightning network more private and allowing for new forms of collaborative custody and smart spending contracts such as Coinjoin, Roast, Frost and Fediment.
[00:34:44] The pattern that we see here is that there is no limit to the features that can be incorporated in Bitcoin because its blockchain offers a robust foundation on top of which a whole suite of other protocols can be built.
[00:34:59] Think of Bitcoin as the raw land on and around Ile de la Cite in France, that easily protected island in the Seine River. At first this land was used to build a little village, which then later evolved into the medieval city of Paris. As more capital was invested in the land core protocol, additional roads, ports and skyscrapers would be equivalent to additional protocol layers. A virtuous cycle develops the existing infrastructure, draws in more people and resources, which then further expand the city.
[00:35:32] Similarly, Bitcoin is a protocol stack, which we can expect to be expanding for many decades, and its foundation is that lean, simple database defended by the world's strongest firewall, the Bitcoin blockchain.
[00:35:48] In sum, we recommend to not worry about diversification in cryptocurrencies and to focus exclusively on Bitcoin. It's the right tool for the job, so pick it up and add it to your toolbox.
[00:36:03] True, after having spent 14 years in this space, we may suffer from survivor's bias, or we might have become jaded seeing thousands of people lose their savings investing in failed crypto ventures.
[00:36:15] So by all means do your own research. But if you're asking our opinion, it is we sincerely urge investors to not waste their money on other cryptocurrencies, most of which are vastly inferior from an engineering point of view, most of which are nothing more than unregistered securities designed to line the pockets of their founders, and most importantly, all of which lack the elegant design of the overwhelming network effect, the robust track record, the possibilities for autonomous ownership, and the strong cypherpunk ethos that the Bitcoin protocol stack has to offer.
[00:36:53] Investing in Bitcoin, we believe, is like having the ability to buy shares of a general Internet ETF back in the early 1990s, or like being able to buy undeveloped land on Manhattan island and at the start of the Industrial Revolution. It's the opportunity of a lifetime.
[00:37:14] 2. Invest in Bitcoin first in Bitcoin companies later if one wanted to invest in the Internet in the early 1990s, the only option was to invest in startups building on top of the TCP IP stack, of which there were hundreds. By contrast with Bitcoin, we have the luxury of being able to invest in the actual protocol, not just in the businesses built on top of it. We believe that buying into the operational backbone itself, buying Bitcoins or fractions of bitcoins especially during this infrastructure phase, should be the main focus of a cryptocurrency investor. Unless you have special skills that set you apart, our general recommendation is to first focus on buying Bitcoin and only later to focus on the ecosystem companies.
[00:38:06] That said, here are some brief thoughts on how to invest in the space of companies that have non trivial exposure to bitcoin.
[00:38:14] Thorough due diligence is indispensable. Each company in the Bitcoin space has by necessity a very limited track record. This means an in depth survey investigating its people, plans and operations is of crucial importance. If you don't have the time, consider outsourcing this work to a VC fund or analyst, but then make sure to do your due diligence on these professionals or at least have your financial exposure be in proportion to the time you were able to do due diligence.
[00:38:45] First mover advantage is overrated.
[00:38:48] Go instead for a company that has know how integrity and perseverance even if they arrived later to the party. We've seen strategic advantages evaporate very quickly in this space. Even owning intellectual property doesn't seem to have much sway in Bitcoin's global marketplace, where open source projects tend to drive the price of software down to nearly zero.
[00:39:11] Because the ecosystem is clearly still in its infrastructure phase, look out especially for the presence of highly skilled engineers.
[00:39:19] Lean into geographically diversified strategies.
[00:39:23] Bitcoin is already controversial in today's world and polarization is only expected to grow.
[00:39:30] Companies who have operations in multiple countries or who serve them with an agile and international team should generally be preferred. Also, consider how companies who require deep ties with regulated entities like banks can be more vulnerable to political shocks.
[00:39:47] Think about timing.
[00:39:50] Had you invested in video streaming in the 1990s, you'd have lost your money no matter how gifted the founder was. Aside from bitcoin mining and probably payments over the lightning network, there is a lot of uncertainty about which Bitcoin use cases will take off at any given time.
[00:40:08] So try not to confuse exciting technological designs for their ability to be monetized in any given year.
[00:40:16] It's a great plus if the company has growing revenues, in which case you want to ask yourself whether the growth is sustainable and can turn into profits.
[00:40:26] Think about leverage and third party risk Bitcoin treasury strategies are experiencing a huge boom now capitalizing on the crisis in the fixed income markets. Companies like Strategy aggressively buy Bitcoin with freshly issued debt in effect cornering the market.
[00:40:45] They have so far acquired over 700,000 bitcoin, which is over 4% of bitcoin's available supply. As market sentiment gets increasingly heated and with growing involvement of retail investors, we expect this trend to continue and eventually result in an unsustainable bubble. We advise caution and awareness that Bitcoin treasury strategies, while often remarkably sustainable if executed prudently, absolutely do expose investors to additional layers of risk compared to a simple investment in Bitcoin, the asset one fundamental driver of Bitcoin's price.
[00:41:27] Rather than giving you a dry list of all the niche areas where we expect Bitcoin appetite to come from, let's exclusively focus on one particular source of demand, a source which we believe will form the driver for adoption for many years to come.
[00:41:44] Long Term Store of Value the reason why the use case of store of value, that is Using Bitcoin as digital gold as a savings mechanism, has such importance is because it is a crucial step in the evolution of Bitcoin towards becoming a money, which is what it was designed for By Satoshi Nakamoto initially back in 2010. Bitcoin started as a collectible, a mere curiosity which people enjoyed gathering over the years. It has become much more frequently used as a store of value for the short term by speculators and for the long term by investors.
[00:42:21] Next, we can expect it to take the role of a medium of exchange, which means that it gets frequently used as a way to buy and sell goods and services.
[00:42:30] And finally, under a Bitcoin standard, it could turn into a unit of account whereby people start expressing all economic value in terms of how much BTC it may be worth.
[00:42:43] Now, the motivation for many people to start investing in an asset that is useful as a long term store of value in 2025, often for the first time in their lifetime, is manifold.
[00:42:56] Inflation is back after massive stimulus in response to liquidity tightness in 2019 and the pandemic in 2020, inflation soared, peaking at 9.1% in 2022. This was the highest dollar inflation print in almost 40 years, and the numbers keep adding up. Between 2010 and 2025, US consumer prices have risen by over 40% according to Ayer's Everyday Price Index. Given how public debt and budget deficits in the west are at multigenerational highs, we expect for the inflationary quantitative easing programs to continue for years to come. The alternative is blanket government defaults, which money issuing countries almost never do.
[00:43:41] All of a sudden, millions of investors in the Western world, as well as its largest funds, are keen to find new vehicles for storing value.
[00:43:51] Bitcoin, being highly liquid and provably scarce, now makes for an attractive proposition.
[00:43:58] The bond cycle has turned bearish.
[00:44:01] After 40 years of generally positive returns in treasury and corporate bonds, valuations are now slipping. And until global debt levels are a lot lower, inflation adjusted returns will probably not return for many years.
[00:44:16] That means the 6040 portfolio is dead. Bonds are no longer a hedge for recessions, which is a shock for risk averse investors around the world. And also it means that traditional large holders of fixed income securities such as banks, insurance companies, central banks and other economic giants are now worriedly reviewing and revising their long term investment strategies.
[00:44:43] The real estate market is turning a corner.
[00:44:47] One greatly underappreciated driver for real estate values over the last century is the low quality of money in the world.
[00:44:56] After the boring but reliable gold standard was gradually abandoned, savers around the world identified real estate as a new store of value. Combined with the bank's hunger for yield on deposits and and decades long artificially low interest rates, the real estate market became one of the most debt levered markets in the world.
[00:45:17] As a result, real estate recently peaked at 46% of all global wealth representing a staggering 68% of real wealth owned by investors.
[00:45:29] Since the Fed turned the corner and started to raise rates in 2018, significant real estate headwinds have taken shape. Baby boomers are aging out of their properties, home insurance costs are soaring and repairs are now more expensive due to the increased cost of labor and raw materials. Perhaps central bank buying of mortgage backed securities will continue to stave off a traditional bear market. The Fed currently owns over 2.1 trillion of all 11 trillion US mortgage backed securities.
[00:46:01] But it seems increasingly unlikely that real estate will continue to be a suitable hedge against inflation.
[00:46:09] In short, the global economy is over indebted and the economic machine needs to be restructured so that it can begin living within its actual means again.
[00:46:21] This process is bound to be painful. A wave of bankruptcies for one, so that business activity can focus on those areas that still can be supported and by the deleveraged economy.
[00:46:34] Generally speaking, we can expect for economic activity to switch from emphasizing the production of consumer goods and services towards goods at the very beginning of the value chain. Crude oil, grains, cattle, metals, minerals. Think of what an individual family would do if the interest rates on its debt suddenly multiplied. It would only spend money on the most basic economic goods until the debt is paid off or incomes rise.
[00:47:04] This is what now begins to happen in the world at large. And during that period of transition, that period of restructuring, investors will flee into liquid assets with low counterparty risk, real stores of value, of course, as happened in the stagflation of the 1970s. Given these shifting tides, investors will continue to reach for gold, that historic store of value.
[00:47:31] However, it is our belief that in a digital, intensely globalized world, Bitcoin will be even more desirable and in demand because of its superior ability to be stored safely, its vastly higher divisibility, its lack of a need for third party storage, its resistance to confiscation, its supreme auditability and its provable scarcity.
[00:47:55] Part 6 Bitcoin adoption by Nation States after tiny El Salvador blazed the trail in 2021 by officially declaring Bitcoin legal tender, now economic juggernaut USA has entered the fray. We expect other countries to follow suit in the next few years, though the process may be bumpier than most expect, let's begin by covering the United States, where Trump's supportive stance wasn't so much the quiet beginning of an adoption trend, but rather the official endorsement of a fast developing reality that wasn't always so. In the early years of bitcoin, China actually dominated its marketplace. So much so that traders looked at price charts in yuan to gauge where the price was going next.
[00:48:44] That changed in the period of 2017 to 2021, during which the CCP aggressively cracked down on bitcoin exchanges and bitcoin mining.
[00:48:54] Ever since, the bitcoin universe's undisputed center of gravity has been the United States. At the moment, US based corporations hold some 2.5 million bitcoins, 1.4 million of which are held in the recently approved ETFs. Additionally, some 36% of global bitcoin mining activity is taking place in the United States.
[00:49:16] Markets have responded strongly to the Trump pump, a series of strong bitcoin endorsements by the new administration, which include a strategic Bitcoin reserve, the adoption of the Stablecoin Friendly Genius act, and a 166 page White House report proposing the Digital Asset Market Clarity Act. Additionally, the Trump administration boasts with Howard Lutnick, a Secretary of Commerce whose behemoth firm, Cantor Fitzgerald, has close ties with bitcoin native companies, and with Scott Besant, a Secretary of the treasury who's been equally positive, for example, commenting there's a very good chance that crypto is actually one of the things that locks in dollar supremacy.
[00:49:59] These strong endorsements are beginning to cause a global ripple effect.
[00:50:03] Russia, for example, will be issuing Bitcoin bonds via Spare bank, the largest bank in the country.
[00:50:11] In Pakistan, recent announcements outlined plans for a strategic bitcoin reserve and and allocating 2,000 megawatts of surplus electricity for mining and AI.
[00:50:22] Progress has been made in a host of other countries in the sense that significant numbers of state officials are now in talks with bitcoin companies.
[00:50:31] However, governments worldwide are often so entangled in their own political dramas and crises that bitcoin adoption remains a low priority item on their agendas. For instance, in Israel, Prime Minister Netanyahu's involvement in ongoing conflicts has sidelined any meaningful engagement with bitcoin, despite showing interest behind closed doors.
[00:50:53] Also, Canada's opposition candidate Pierre Poilievre showed interest in bitcoin, yet the topic was sidelined after losing the election, the new Canuck president, Mark Carney, has put any efforts for bitcoin adoption there on ice.
[00:51:08] Similarly, talks about bitcoin in Australia have stranded and after the country made a shift further left on the spectrum in Thailand, progress toward a regulatory sandbox for bitcoin adoption was agreed upon, yet military efforts to oust the prime minister introduced fresh instability.
[00:51:26] These examples illustrate how internal and geopolitical dramas perpetually relegate bitcoin to the bottom of priority lists even as it inches upward in importance.
[00:51:38] An additional hurdle is the conflation of Bitcoin with other cryptocurrencies, AKA crypto or altcoins, which taints perceptions.
[00:51:48] Many government officials lump Bitcoin in with centralized projects like Ripple and Ethereum, fostering negative understandings that require education to help them understand the value of Satoshi's decentralized, politically neutral money.
[00:52:03] To counter these misconceptions, continued engagement of opposition leaders and potential future prime ministers investors will be key.
[00:52:12] In the end, with the American example in mind, it may be corporate adoption that becomes the most powerful catalyst for nation state involvement. When corporations grow big and powerful thanks to their bitcoin holdings, money talks and begins to influence policy directly. On Wall Street, BlackRock draws much attention with its Bitcoin ETF becoming the most successful in history, ranking as the third biggest driver of profit and revenue, surpassing even its S&P 500 ETF in impact.
[00:52:49] In Japan, where earlier efforts stalled, Bitcoin treasury company Metaplanet has recently ignited a craze propelling bitcoin into mainstream financial news daily and making it too big to ignore.
[00:53:04] This corporate momentum transforms bitcoin from an abstract concept into a big box on your doorstep, concretizing its role as an economic engine.
[00:53:17] As corporations like Strategy and Metaplanet monetize bitcoin bonds, they reduce career risks for politicians, shifting perceptions and eliminating barriers that once made adoption politically hazardous.
[00:53:32] In closing, it's important to remember bitcoin's grassroots origins. As of this writing, over 50% of all Bitcoin is still owned by individuals. It is these millions of people who are ultimately driving global adoption. Private businesses are situated downstream from this source of primal energy, and we'll find most governments even further downstream from them.
[00:53:56] And so, while political hurdles and misconceptions will likely keep stalling widespread nation state bitcoin adoption, America's bold lead and the massive global corporate involvement promise to only accelerate Bitcoin's adoption rate, dragging new governments aboard whether they're ready or not.
[00:54:16] Part 7 How to build a Position in Bitcoin now that we've covered why Satoshi's invention is valuable to us as investors, let's talk about how to allocate a portion of bitcoin to a portfolio.
[00:54:34] 1. The importance of a Long Term Strategy in the Bitcoin ecosystem, volatility is a given.
[00:54:44] It's a phenomenon investors must learn to stomach.
[00:54:47] A successful bitcoin investor will have to weather significant downturns to achieve results.
[00:54:53] As the saying goes, it's not about timing the market it's about time in the market, holding is often the hardest and most important aspect of investing.
[00:55:05] Embrace a long term perspective and prepare psychologically for potential downturns which can help maintain a healthy outlook and and prevent impulsive selling Lump Sum Investing versus Dollar Cost Averaging Bitcoin's notorious volatility has sparked a debate among investors on whether to enter the market with a lump sum investment or to invest fixed amounts regularly. Dollar Cost Averaging Generally speaking, people who have irregular income or are managing a mature portfolio often lean towards buying a lump sum one and done. Keep in mind that this may require extra psychological resilience as the price can drop after you purchase and being fully allocated, you won't be able to buy any more dips.
[00:55:55] On the other hand, people who have relatively steady employment and who are still building a savings portfolio may want to consider investing in Bitcoin via a dollar cost averaging strategy.
[00:56:06] This has the benefit of accumulating a growing position over the long run while possibly experiencing less stress when the price dips as you know that more buys are coming in anyway.
[00:56:18] Ultimately, the choice is about personal preference and aligning with your financial, family and life situation.
[00:56:26] We suggest choosing the method or combination of methods that best allows you to stay invested for the long term.
[00:56:34] 2. Allocation strategy suggestions in the current landscape, we recommend considering your Bitcoin investment as a potential part of three distinct strategies as an insurance policy against systemic risks, as a hedge in a broad speculative portfolio, and as a calculated bet on an early retirement.
[00:56:58] Let's break each one down.
[00:57:01] Bitcoin as Insurance against systemic risks 5% of wealth making an allocation to Bitcoin can serve as an insurance policy against various systemic risks inherent in even the most conservative looking investment portfolios. Bitcoin's decentralized nature, low counterparty risk and global accessibility make it a robust hedge against potential crises.
[00:57:28] Think of it like you think of having homeowners insurance which costs about 0.25% of the home value per year.
[00:57:36] Similarly, Bitcoin is a way to insure your investment portfolio.
[00:57:40] Given how in most portfolios the proverbial kitchen is already filling with smoke, we think it's warranted to pay a higher one time premium 5% of wealth for an insurance which can pay out in the case of an inflationary depression or other systemic crises of the financial system.
[00:57:59] In sum, by investing a modest percentage of your portfolio in bitcoin, you can protect yourself from catastrophic losses in traditional assets by benefiting from the cryptocurrency's resilience and continued adoption during times of economic uncertainty.
[00:58:17] Bitcoin as a speculative asset 10% allocation a speculative portfolio traditionally involves betting on assets that are not yet inflated by the hot mine money of the boom phase of the business cycle. Historically, these have been assets with relatively low counterparty risk, such as precious metals, cash, deflated real estate and agricultural commodities.
[00:58:43] However, despite the efforts of portfolio managers, assets in such a portfolio can still move in tandem during anomalous and or crisis situations.
[00:58:53] In comes Bitcoin, a scarce and largely uncorrelated speculative asset which has permanent liquidity. You can always find a buyer for it which, if stored properly, has extremely low counterparty risk and which is currently historically undervalued. By including a Bitcoin investment in your portfolio, you can benefit from its potential for substantial resilience during periods of deflation or stagflation in the economy.
[00:59:22] In conclusion, if you have a need for speculative safeguards in your portfolio, consider integrating a 10% Bitcoin allocation into it in order to help offset both losses during the bust phase of the business cycle and value erosion during aggressive spikes of inflation.
[00:59:41] Early retirement 20 to 50% of assets investing 20 to 50% of your assets in Bitcoin as an early retirement bet is a more aggressive strategy that aims to capitalize on the potential for massive wealth creation in the coming years.
[01:00:01] As a disruptive technology, Bitcoin could radically transform how value is exchanged around the world.
[01:00:09] If Bitcoin achieves widespread adoption and captures a significant portion of the global market for value exchange, the potential returns can be astronomical.
[01:00:19] Keep in mind, however, that this strategy can be stressful and comes with substantial uncertainty given the volatile nature of the market.
[01:00:28] Part 8 I've decided to buy Bitcoin. How do I hodl Bitcoin is not a company with a CEO and a physical building somewhere. It's an open source protocol. That means, on one hand, enormous freedom for entrepreneurs to create a wide variety of products and services, and on the other hand, a vast and confusing landscape for aspiring Bitcoiners to get lost in.
[01:00:56] In this section we provide you with some general pointers on how to approach Bitcoin storage, as well as with some concrete options for safekeeping your bitcoins.
[01:01:07] 1. Storing bitcoins yourself using a single private Key the simplest method for securing Bitcoin in self custody is is single signature self custody on a hardware wallet. A hardware wallet is a physical device that helps the user manage his private keys and enables access to the funds. Practically speaking, the device will generate a string of 24 random words which you then write down and store in a secret place.
[01:01:36] While this is a quick method for storing bitcoins securely offline, this single signature wallet can fail due to a single event, for example if you lose your backup or if someone steals your hardware wallet, which can become problematic as your bitcoin position increases in value.
[01:01:55] Brands such as Coldcard and Blockstream Jade are examples of trusted hardware wallets. As a general rule, always order your hardware wallet directly from the company's website or their trusted vendors. Using third parties like eBay or Amazon exposes you to a not insignificant risk of pre installed malware.
[01:02:17] 2. Storing bitcoins yourself using multiple Private Keys Another method of securing your bitcoins is called multi signature self custody. This security technique requires multiple private keys to spend funds, ensuring the safety of the assets even if one key is lost or compromised.
[01:02:39] This method can be operationally challenging as it requires securing multiple physical keys and hardware wallets plus additional information about how the multisignature wallet was created. This is a great option for securing large sums of Bitcoin for the long term, but we recommend for the novice to do significant research or to connect with a reputable expert before setting this up on one's own.
[01:03:04] Some trusted options in the space are Nunchuk Bluewallet, Liana Wallet and Blockstream Green.
[01:03:12] 3.
[01:03:13] Storing bitcoins with a third party custodian Third party custody is a convenient alternative to self custody where savers entrust their bitcoin to a corporation such as an exchange or wallet provider. While it feels like the easiest solution, custodians have many layers of risk that should be considered.
[01:03:35] Always online access to the account is a weak point in this setup. If a user's email is compromised, an attacker may be able to socially engineer their way into the custodial account even if there is physical two factor authentication. Since an employee at the custodian can reset the two factor counterparty risk. It's important to know how a custodian is using client funds. Are they rehypothecating how they are securing keys or if they outsource key security to another company which compounds the risk.
[01:04:11] Exchange Hacks Many thousands of bitcoin have been irrecoverably stolen through custodial security breaches. When a custodian centralizes large sums of bitcoin, it becomes a bigger target for an attacker.
[01:04:27] It must be noted that while less vulnerable to direct user hacks, the recently launched Bitcoin ETFs have limited insurance and also expose the investor to counterparty risk and exchange hacks. Some third party custodians which in our view are worthy of Kraken Cash app, River NYDIG, BL3P, Bitfinex and Fidelity.
[01:04:52] 4. Collaborative custody Collaborative custody uses multisignature, which we discussed above as option two to create a balanced solution between self custody and third party custody. It allows users to store their Bitcoin with a trusted selection of people who collectively hold the private keys necessary to access the funds. Another option for using assisted multisig is to hold a majority of the private keys yourself and to use a third party as holder of a backup key. Collaborative custody eliminates the risk of a single point of failure, preventing users from losing Bitcoin if they make a simple mistake and protecting their funds from hackers by keeping the private keys geographically separated, making it challenging for hackers to gain access to the funds. It also helps to reduce the complexity of doing multi signature by oneself.
[01:05:47] At Adamant Research we feel that collaborative custody usually offers the best risk and reward mix for new bitcoin savers.
[01:05:56] That is why this report was published in partnership with a provider of this service that we use and trust Unchained, based in Austin, Texas. Other such providers are AnchorWatch, CASA and BitGo.
[01:06:11] Also worthy of note are forms of collaborative custody that use MPC models instead of multisig and and have a lot of the same value proposition. Examples in that category are Anchorage and Fireblocks.
[01:06:25] Conclusion Securing private keys is a crucial aspect of being a Bitcoin investor. Each method has its own advantages and disadvantages.
[01:06:36] Take your time to consider your personal circumstances and risk tolerance in choosing a storage method that suits your needs.
[01:06:45] And good luck.
[01:06:47] The final page has an artwork with this subtitle.
[01:06:52] This work is titled the Power of the Peace.
[01:06:56] It was created in 1577 to convey the hope of a young, beleaguered nation to achieve peace in its territories, which was eventually achieved in 1648 with the formal recognition of the Independent Dutch Republic.
[01:07:14] The Etch by Virix van Cleve is full of symbolism. It shows how prudence, reason, force and time can work together to control violence in society.
[01:07:26] The swords and lances from the war are transformed into sickles and plowshares, retooling society for peace.
[01:07:35] In the grand furnace displayed center stage, we see a display of technology as a force for good.
[01:07:43] This is also our hope for and expectation of the Cypherpunk project and its current apex, Bitcoin.
[01:07:52] Channeling human effort in a way that encourages society to grow more orderly and peaceful, Bitcoin contributes to a harmonious world by serving as a scarce and robust money which protects families wealth through space and time and by acting as an incorruptible tool for builders, supporting them in creating honest and enduring institutions.
[01:08:20] All right, that wraps up Adamant Researches and Tours Toward a Meesters how to Position for the Bitcoin boom 2025 edition and I was actually just on why are we Bullish with Tour and Pete Evans actually, and we had a really really good time on that show. In fact I might, I might post it in the feed, but I'll retweet it out or post it on Noster, whatever, wherever regardless from sessions from his YouTube channel. But you might find it in this feed here in the next week or two. I usually try to give them like a week to have like the bulk of their listeners, so I don't feel like I'm stealing their audience by going on their show as a guest. I'm sure Ben wouldn't even care, but I don't know, I just feel better about doing it anyway. But regardless this piece I always am a big fan of the Adamant Research reports, also a huge fan of Tor and his writing and think it's it's always been super valuable. In fact I get a lot of just kind of like sentiments and little pieces of data without actually putting it together. I see it one day and I kind of like trying to store it away as like this is kind of a framing I have and this report specifically just kind of confirmed and concretized a lot of things that I've been thinking and the perspective that I have had on where we are in this cycle and what the likely drivers of this cycle were.
[01:09:52] And probably the biggest takeaway that I think is really valuable to understand for this particular cycle in the next like two to three years is the fact that governments are being interested, but that the nation state adoption is to is likely to be very messy, very back and forth, not super committal and basically outnoised or deprioritized by all of the political strife and the various crises and financial situation that it's just not going to be high on the priority list even though Bitcoin will continually inch up in importance. And that really the thing to watch is the next step up the ladder is the small businesses, the large and institutional players at a global level recognizing Bitcoin as an extremely desirable store of value, that savings, retirements, long term portfolio plans, that the 6040 portfolio system is going to start breaking down and Bitcoin is likely to start being added as a as a significant player or as a significant Part of that portfolio, maybe, as I love also the breakdown, which are all things that we've talked about at various times and things that Adamant research and Tour have talked about before. But I love the.
[01:11:20] The really kind of like hard framing on systemic insurance is that stability of the financial system.
[01:11:27] And you want an insurance plan of something that's highly liquid, that's global, that's not locked to some counterparty or specific jurisdictional risk, and that's at a 5% allocation to think about. Like we're in pretty volatile times, we're in pretty uncertain times. So it makes more sense to put more toward an insurance policy which Bitcoin has provided very well in the.
[01:11:51] I mean, during its short history then as a speculative asset, as essentially an emergent protocol. And the incredible potential value of an emergent open source protocol that's global and can truly change the nature of the financial system and the global monetary friction. The global monetary consensus is that just from that perspective, that might be worthy of a 10% allocation.
[01:12:21] Looking at trends and looking at the environment that it is coming up in and what it actually serves in that environment as the very dominant features, the very core benefits of Bitcoin are being served in an environment where the demand for exactly those core benefits is continually growing because the stability of the political and financial environment is actually being degraded. So it's not just that in this environment, Bitcoin is a better asset and a better technology, but the old trusted technology that we've been using for a very long time is actually breaking down. We are in a period of transition where we have to move away from old practices and traditional thinking about debt. Traditional in the context of, you know, since the fiat world since 1970 and the true complete end of the gold standard, or the very nature that money ought to be scarce or locked to something that is difficult to create.
[01:13:26] That that era has essentially run its course. And there is a fundamental shift in how we think about the bonds are not going to do their job anymore. Real estate is likely not going to keep up with it anymore. And inflation is not only back, but likely to accelerate because there's no stopping this train. The debt situation is horrible and there is only one apparent trend. And governments who can print their own money just don't default. They print. And all of those realities together mean that the people who do not change their financial strategy and their thinking about monetary security are simply going to die. They're going to go extinct. So it's either adapt or die. Go down with the ship. So it is critical that there is some sort of a speculative play on what the adaptation will move to.
[01:14:16] What is the new portfolio since the old portfolio isn't safe anymore? That is by definition speculation on the future. Because all traditional assets don't look very traditionally safe anymore. They are all suffering some sort of degradation or loss of trust for some reason or another. I mean real estate specifically $2.1 trillion of $11 trillion is held by the Fed.
[01:14:45] That is a market that is entirely propped up by the central bank on top of a market that's entirely propped up by the central bank. The government bonds are propped up by the central bank. The real estate market is propped up by the central bank. And without the central bank, both markets would experience a historic collapse. Those are not safe places to be. Real estate cannot handle $2 trillion worth of real estate being dumped on the market. Now I'm not saying that the Fed would just up and dump $2 trillion in destroying the market, unless obviously they wanted to destroy the country or the financial situation because they have some political motive which is not totally out of the question. Central banks have been known to start wars and destroy regime, destroy the economic conditions to end a regime on purpose. But I also don't find that likely. I find the opposite. More likely is that they end up with 3, 4 or 5 trillion dollars worth of mortgage backed securities on their balance sheet because it's still not propping up the market successfully. But consider that's almost 20% of the market.
[01:15:49] In 2008 it was about 10% of the market that was underwater on their mortgages.
[01:15:57] And that 10% led to a cascading effect that caused a roughly 30% drop in housing prices over the period of the next few years. And when that happened, it actually doubled the amount of people who were underwater on their mortgages.
[01:16:15] So this kept going. This, this continued to snowball into 2010 and 2011.
[01:16:22] So if the Fed owns $2.1 trillion shy of 20% of the entire market worth of mortgage backed securities, that's not a real market.
[01:16:35] That's not a real market. None of these prices are real. None of this is sustainable. None of this has anything to do with the market at all.
[01:16:44] They have twice the amount of non market purchasing as the amount that caused the global financial crisis in 2008. In other words, without the Fed, we'd very likely be in a twice the global financial crisis. This is not a real market. It's fake.
[01:17:06] Which essentially means the only way to keep the appearance of the real estate market and the bond market not Being total disasters, not being the end of the eras which they are in. Essentially the central bank has to print, which means that the trade off from not having bonds completely collapse and not having real estate completely collapse is inflation.
[01:17:31] But that only even works so far and it still comes home to roost. It's not going to work in the bond market for very long. And it seems to already kind of be breaking down because price controls don't really work. They appear to work for a period of time until reality slowly squeezes its way back through the door.
[01:17:51] So increasing instability and volatility in all three of those areas will have people demanding something else as a safe store of value. And so there will likely be a divide and or many people. It will likely be a combination of both. A return to the oldest of tradition gold and a push, a speculation on what the superior more future oriented tool for this job is, which will be Bitcoin. Again, in that sense, I don't even see a competitor. So I don't even feel granted my show is called Bitcoin audible but I don't even feel even slightly uncomfortable about making that claim because I don't even see anything else in that role. It's not even there's just not a competitor. It would literally require Bitcoin failing for it to not be true in my thinking at least. And Bitcoin doesn't even have to get quote unquote technologically better in order for it to fulfill that role.
[01:18:54] Again, I think multisig, collaborative multisig like this concept itself is actually enough to make it match for it to match the real estate market to. We're talking hundreds of trillions of dollars in value for simply that purpose. And it also means that the security budget will not be an issue at all because you know what people are willing to pay in order to close on a house, in order order to get financial stability, in order to get this sense of hedging and having a basically hedging against the dollar, buying a put on the dollar in real estate, where the real estate value itself goes or the nominal price itself goes up faster than the obligation on the debt that you can just sit on it for a couple of years and you quote unquote have equity. This is one of the most desirable things. This is why it's freaking half of the world economy.
[01:19:47] I actually use it as my metric for where I think we should suspect prices like fees, transaction fees will eventually go. And I think it puts us in the thousands of dollars for a transaction fee on the bitcoin based layer. Now maybe that's never the case just because of how technology goes and the various protocols we will build on top of it. But the thing is is I think it's sustainable to suspect that transaction fees could be that big and that if they do end up there, we shouldn't be surprised because that's exactly the amount of capital people are willing to invest just to get ownership of real estate. And this is a better store of value alternative. But the really big one for this cycle is that the government adoption, the nation state adoption will be messy and unreliable and we'll get probably positives and negatives and you know, probably back and forths. Especially since this has somehow become associated specifically with the politically right because the left has just completely thrown any idea of actual liberal philosophy or morals out the window. Like freedom of speech is basically, it's now like a bad word for the political left, which is freaking crazy. But because of that, I expect there to be a, a significant wishy washiness. And I think the political instability will just kind of be a norm where one regime kind of has one total like completely different approach and then the other one just goes completely in the other direction. And it causes enormous amounts of uncertainty about building serious infrastructure and also volatility in the business environment itself. But it will also just get slowly more embedded and more entrenched. And specifically when businesses get large and successful and institutions who have Bitcoin become more influential, it will slow down that volatility in the political environment because they will have all of those institutions will have more political power to defend their positions, to defend their capital investment.
[01:22:05] So bitcoiners, bitcoin businesses, institutions that adopt Bitcoin globally will continue to get more and more powerful and influential and increasingly nation states won't be able to ignore it. So I think it's probably going to be that the next cycle is more likely to be the true nation state adoption cycle because so many institutions became so powerful that they don't to want really have a choice. They need to figure out how to crack down on it and they need to figure out how to get their foot in the door. And so nation states at large will start to play the game. Whereas this cycle I think it's reasonable to expect a lot of activity, but no solid consistency in what that activity is. Just that it's become relevant and statements have to be made, positions have to be kind of laid and it increasingly gets harder and harder to ignore. But just because of the general volatility and instability and the Other increasing obligations and difficulties of the political strife and competition, the political competition around the world. It will continue to get deprioritized until it can't be deprioritized anymore.
[01:23:21] So in my mind, this is the corporate and institutional era of adoption for Bitcoin. This, that's what this cycle is. And it also kind of makes sense that we're stepping up the ladder of the various markets that are interacting with this is that we've had significant retail adoption. We've had the individuals drive the overwhelming majority of this market for a really long time. And now we're moving into the institutionalized era. We're stepping up the ladder to those who respond to the demand and the movement of the individuals and the cultural layer and then politics and the nation state is downstream from that of it has to respond to what the institutions do, who have to respond to what the people do. And at each stage the, the individual, the retail market continues to expand more and more because having it go higher up the ladder just continues to add legitimacy and kind of break away all of the psychological barriers that people have to this thing being new and unfamiliar and odd and untrusted and all of these things because people keep building solutions as the demand at the individual level continues to increase and as the old systems or the old thinking around portfolios and investment and safety going into the future completely change.
[01:24:46] And so I really, really appreciate this report.
[01:24:49] I think this was a fantastic framing and it's probably a really good one to share out with those friends who are interested but don't quite know how to think about it and want a really big like step back, big picture view of where we are.
[01:25:07] So with that we'll close this one out. Thank you guys so much for listening. If you don't want to sell your bitcoin and you don't want to pay capital gains, but you need access to the fiat leaden let in I'm a customer and I got to say that my choice to do this in the last two years to work on, to finish this house has been unbelievably successful and it doesn't make sense for every situation or for every need for, you know, spending fiat. But this is such a powerful tool to have in your kit and finding a company with a track record and that is trustworthy is difficult. Check them out. I got a special link for you down in the show notes. It's LEDN IO also check out to get your light health right. I use my, I use my sky portal every night. I just have red light going on in here while I'm working on stuff as well as my glasses so that none of the blue light on my screen getting energy levels and hormones and circadian rhythm right has has made a big difference in kind of my general stability throughout the day. 10% discount with code Bitcoin Audible It's Getchroma Co Shout out to the HRF and their amazing work. Go to the Oslo Freedom Forum if you haven't. It is the center of the conversation for freedom around the world and then their Financial Freedom Report is a one stop shop for everything going around going on around money and finance and freedom around the world. And lastly, build stuff that can't be shut down with tools that are tested and work pub key P U B K Y if you are a developer and you haven't checked out their stack of tools, luckily there's a link for you right in the show notes because wouldn't it be great to have an unstoppable DNS huh? Maybe you should check them out. Alright guys, thanks for listening, thanks for subscribing and thanks for sharing. Seriously, you don't know how much that helps and I will catch you on the next episode of Bitcoin Audible. Until then everybody, that's my two sats.
[01:27:20] Investing in bitcoin, we believe, is like having the ability to buy shares of of a general Internet ETF back in the early 1990s or like being able to buy undeveloped land on Manhattan island at the start of the Industrial Revolution. It's the opportunity of a lifetime.
