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Feb. 26, 2021 - Freedomain Radio - Stefan Molyneux
46:11
BITCOIN CRASHING?!?! WHAT'S GOING ON?
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Good afternoon. Everybody hope you doing well.
Yes, it's a straight-on fly-by, drop-by.
I just wanted to share a couple of thoughts with you guys, get a couple of questions from you, if you have them.
See if I can answer them to, I suppose, the best of my ability.
Good afternoon.
Just going to wait for a second for people to drop in, drop by.
So, nice to chat with you all this afternoon.
And, yeah, let's get ourselves sorted out.
With regards to crypto, because, you know, I'll just sort of tell you my particular perspective on this.
So, you know, I wake up in the morning, stretch, scratch myself, as men want to do, and I'm like, hey, I wonder what's going on in the world.
So this morning, of course, there was a lot of Bitcoin crashing, crashing, crashing, crashing, because what it went from like 73k Canadian down to 59 and change.
And yeah, okay, it's 25% or whatever.
It's a big swing, but not for the hodlers, not for the whole time for dear life people.
But see, I remember when it went from 20k to 3k.
So for me, 73, oh no, it lost a week's gains, and it's still vastly higher than it was at the beginning of the year.
And it's important to keep your perspective about that, because if you're panicking about...
Not making quite as much as the total peak of all time, you're probably on the wrong mountainside, right?
Nobody's going to buy low and sell high.
Maybe that'll happen to you once if you invest consistently in your life.
Maybe it'll happen to you once that you'll buy low and sell high at the perfect time, at the perfect moment.
It's like, never let that be.
Your standard. Never let that be your standard.
Your standard is good enough.
The perfect is the enemy of the good.
So, I want to tell you what I think is going on.
It's not investment advice.
Don't do anything based upon what I'm saying.
Do your own research. I'll just tell you my thoughts and perspectives on this.
And I'll give you some data as to why I think being bullish is probably a pretty good It's probably a pretty good idea.
As far as the future goes, it's, of course, unknowable as a whole.
Unknown, unknowable. But there's reasons to be hopeful, right?
Three months ago, Bitcoin was at $13,000.
Now it's at $49,000.
Again, the trillion market, trillion dollar market cap, I know it's floating around that kind of stuff, but you can actually do stuff with Bitcoin, right?
You can buy a Tesla, you can put a down payment on a house, you can maybe buy a new financial advisor.
And let's compare Bitcoin to the top financial institutions in the world.
Right? So, again, I know it's not, it's been floating around this, right?
So... Current market caps.
Bitcoin, about a trillion. JP Morgan, $431 billion.
Bank of America, $289 billion.
Wells Fargo, $139 billion.
Morgan Stanley, $135 billion.
Citigroup, $132 billion.
Goldman Sachs, $110 billion.
It's 11% of Bitcoin, Goldman Sachs.
UBS, $59 billion.
Barclays, $35 billion.
And what I'm surprised at, Deutsche Bank.
23 billion, right?
So you can pay a Bitcoin. It's a trillion.
Deutsche Bank is 2.3% of that.
Okay, so it's not bad, right?
Now, of course, the Fed...
Is printing a ridiculous amount of money, right?
Because the socialists who run central banking don't want the world to get mad at China, and so they're wallpapering over the financial crater left by COVID with money printing, and that's kind of inevitable, right?
And The other thing, too, I would say is you've got to look at who's selling, right?
If there's a sell-off, and, you know, arguably, yeah, there's a sell-off, but is it based upon sound financial reasons?
Is it large people?
Is it smart people?
Is it Tesla? Is it the bears?
No. No, I mean, Tesla bought a billion and a half.
They've made about a billion dollars as of yesterday off their Bitcoin purchase.
So here's the thing, right?
In business, in the business world, believe it or not, and I know this as an entrepreneur, you guys have known me as this podcast-y philosopher dude, but before that I spent many years in the business world.
I co-founded a software company, grew it to a pretty respectable size, was involved in the sell-off, was involved in going public.
And when you are sitting on a lot of cash as a business, and businesses are sitting on a ridiculous amount of cash at the moment for various reasons, but when you're sitting on a lot of cash, it's pretty hard to put that cash to work.
It's pretty hard to put that cash to work and actually have it make you money.
Really smart R&D people who understand the market and can build products that people really want.
It's hard to find those people.
It's hard to invest that money.
So, anybody want to take any stabs, any guesses?
How much cash is there on corporate balance sheets in the US? Anybody?
I know it's a little bit of a delay here, right?
But just if you had to guess, right, how much cash is sitting in corporate balance sheets in the U.S.? Just in the U.S.? Forget worldwide.
Just in the U.S., right? Lots.
One trillion? I got me a trillion.
Anybody else? Anybody else?
There's your gift, by the way. $1 trillion, anybody else want to guess?
$18 trillion? No.
Trillions, maybe $6?
$100 trillion? Okay, you guys got to get a little bit more sensible in your guesses.
$6 million, wrong channel.
$30 trillion, $69 trillion, you always say that, that's fine.
So the actual answer is that there's over $4 trillion of cash on corporate balance sheets just in the U.S., Four trillion dollars.
That's cash. Now, cash ain't making you a bunch of money.
So, yeah, in 15 minutes it will be 420.
So, they've got to find some place to do that, right?
They've got to, right?
So, when Tesla makes a billion dollars in a couple of weeks off a Bitcoin purchase...
Chief financial officers around the world are being asked by everyone else, wait a minute, the smartest and richest guy in the world just made a billion dollars.
Why didn't we make that billion dollars?
Because as I've said before, man, if you...
Going forward, the dollar is going to be devalued.
I think that's pretty inevitable, right?
It may lose its status as the reserve currency.
And... The world will be divided into two.
The world will be divided into people who have Bitcoin and people who don't have Bitcoin, which is why I want to spread the love with you guys as much as possible.
Now, in the business world, if you've got $4 trillion, not each individual company, but $4 trillion in aggregate, and that money starts evaporating due to inflation, well, what happens?
You're losing money. And then you need to invest in a hurry during a time of financial crisis, and that's never a good decision.
Almost never a good decision, right?
Now, the companies who have Bitcoin will be basically printing money.
Like, they have a license to print money relative to the fiat, which is being overprinted like crazy, right?
So, the companies are going to be divided into two.
The companies that have Bitcoin will basically be able to mint money relative to the US dollar because it'll be going up in value so much.
And the companies that don't will be doomed.
We'll be doomed.
We'll be doomed. Because companies, here's the thing too, you guys probably know this, but I mentioned it for those who don't.
So companies engage in multi-year contracts, right?
And inflation is horrible for those contracts, because there's an inflationary rate often built into those contracts.
Like you got a 10-year lease or a five-year, whatever it is, investment, and you have a certain amount of Profit built into that based upon inflation.
Now, if inflation goes up, of course, the dollars you get paid back in are worth much less than the dollars you expected, and so you're losing money.
And the only way to hedge against the losing of that money, in my opinion, is Bitcoin.
I mean, that's the way to do it.
So, yeah, Ethereum has tanked as well.
Yeah, a lot of the cryptos are down.
And I won't get into the Ethereum stuff, but just in general, this is really, I think it's important to understand.
So businesses are, you know, when you see Elon Musk make a billion dollars, people are like, hey, why aren't we doing that?
Seems pretty important.
Seems pretty important. And CFOs are going to need to answer that question, right?
Have you guys looked into the endowments issue?
Because the endowments issue is pretty big.
Is pretty big.
Is there any way financial institutions that haven't bought in can force the price, maybe promoting fear, uncertainty, and debt?
Oh, yeah, yeah, absolutely.
Absolutely. The moment that the big swinging dicks in the financial world are trash-talking Bitcoin, in my opinion, it's because they just intend to buy, and they're trying to drive the price down so they can buy the dip.
This isn't the 18th century where honesty rules the day.
The U.S. fake dollar will remain.
I don't know that honesty ruled today in the 18th century.
I can think of lots of exceptions to that.
But no, the US fake dollar will not remain.
It will not remain. Absolutely guaranteed it will not remain.
It can't. It can't possibly.
The only currency that's fiat that has ever remained, and it wasn't fiat in its origins, was the British pound sterling.
It's lasted 400 years, but it's lost 98% of its value.
So no, it can't.
Can't do it. Can't do it.
So the endowments issue, right?
So you've got Harvard, you've got Yale, and you've got Brown.
These endowments have been buying Bitcoin for over a year.
Now, these are schools that do a whole lot of due diligence, and, you know, they have some probably somewhat amoral, but fairly, I mean, very bright people, and they're not fooling around, right?
They've got a lot of capital to maintain, and they've been buying for about a year.
And you want higher education getting into Bitcoin because those guys have a lot of pull in the political world, right?
Visa and MasterCard, of course.
This is the two largest payment processing networks in the world for now, right?
And they've announced they're going to enable their merchants and their clients and everybody in their dark to transact with Bitcoin.
So this is trillions of dollars in transaction volumes.
So, Wall Street is short on Bitcoin.
They're short on Bitcoin.
Wall Street is short because most of the Bitcoin is held by retail.
And that's kind of important, right?
So BlackRock, you probably haven't heard of it.
I think Obsidian, which takes me to Dungeons and Dragons.
But anyway, so BlackRock is the world's largest asset manager.
I talked about this before. It has started to buy Bitcoin.
It's their CIO of fixed income who's leading this purchasing power and so all that, right?
So here's the other thing, Coinbase IPO, right?
So the second largest crypto exchange is going public.
You probably heard about this. And this, of course, has been closely monitored by the Securities and Exchange Commission.
So with the SEC approving Coinbase's IPO, and the IPO is like $100 billion plus...
You know, what are the odds that cryptocurrencies are going to be banned after somebody's gone public on crypto under the SEC's watch?
It would be pretty tough to get a hold of that, right?
So, North America's first Bitcoin ETF has launched with a record-breaking AUM, which is very good.
And so, a lot of institutions can't buy Bitcoin directly.
So, they complain that their only access is through closed-end funds that trade at big premiums and ETFs are the solution to this problem.
And wallets, right?
So investors are cranking open the wallets in amounts never seen before in the history of Bitcoin, right?
So January 2021 was the highest ever figure.
Anybody want to guess how many active wallets there were in the Bitcoin space in January?
How many more active wallets came along?
Anybody want to? I like the guessing games.
Some people do, some people don't.
But what do you guys, what do you guys think?
Anybody. So, there were...
You've got to get your mind out of the gutter, right?
So, there were 22mm plus active wallets.
That is crazy, right?
It's crazy. So, the SEC has green-lighted banks to custody stablecoins.
This legitimizes these crypto-assets as a whole, and that seems like a very good thing as well.
Now, Bitcoin volatility is going down.
So, we used to, boy, I mean, back in the day, right, like I was talking about Bitcoin going from 20k to 3k.
So, these, like, 85% corrections, they used to be the norm.
And because there's more investors, there's more sophisticated investors, and the legitimacy of the asset class is growing as a whole, so you are getting less Bitcoin volatility, right?
So... Yeah, there are some bearish stuff.
India is preparing a bill to ban crypto.
Why? Because they want their own digital currency.
FinCEN is trying to impose new reporting requirements.
It's going to be challenging and all of that.
But here's a little from CNBC, right?
So, February 22nd, 2021, Janet Yellen sounds warning about what?
Extremely inefficient, she says.
Extremely inefficient.
Bitcoin. Two days later, did you guys catch that?
Two days later, the Fed system that allows bank to send money back and forth is down.
So I just wanted to sort of point that out, that you can get, it's pretty good, you can get this from Genevieve Rochdector.
So yeah, I think this is an important thing to Do you understand?
That's pretty extreme. Well, here's the thing, right?
There are other places that have banned Bitcoin.
It doesn't matter. Bitcoin is actually of higher use in those places.
I don't think there'll be a ban, but even if there is, people just find a way.
It'll be a ban like there was a ban on alcohol under prohibition where things just get so badly that...
It's going to be rescinded, in my view, if there's a ban.
So I don't want to spend a long time today.
If you guys have questions, feel free to fire them in.
But I wanted to tell you what I think is going on at the market.
Yeah, Yellen wants to tax your Bitcoin.
After your taxed income pays for it.
Yeah, yeah, of course. Oh, I mean, if you can get free money at the point of a gun legally and with all the media in the world calling you a wise stateswoman, yeah, wouldn't you?
I mean, I wouldn't buy one any of that kind of power, but most people would, right?
Oh, yes, nice to see that the U.S. is back on airstriking militia facilities in Syria, right?
Everyone voted for $15 minimum wage, $2,000 stimmy checks.
And peace. And what do they get?
No stimmy checks. No minimum wage.
Hike. Which is good. And war.
And people don't understand. Why do they hate Assad so much?
Well, they hate Assad so much because he protects Christians.
Everything that is going on is virulently anti-Christian, as I've talked about before.
Everything that's going on is virulently anti-Christian.
And, yeah, he protects.
He protects Christians.
So he's got to go.
I'll never accept universal basic income.
How many years do you think the dollar has left as a reserve currency?
See, those kinds of questions...
By the way, this was given to me by a friend.
Anyway, don't ask those kinds of questions.
I'm really sorry, but don't ask those kinds of questions.
I know you're saying what I think.
Nobody can give you any kind of answer on that.
Nobody can predict the future as far as that goes.
You can predict general trends, but you can't predict specific times.
So, about 10 years ago, I said we had 10 to 15 years as a whole, and I'm not, you know, I'm not rejecting that out of hand, but nobody's going to have any particular answer.
What Obama and the Defense Department have done in Syria is disgusting.
Well, but, you know, Trump, there were a lot of drone strikes under Trump, too, man.
Don't blame it all on Obama.
And... Yeah, student loan forgiveness.
Oh, man. Maybe student loans can get somebody that they...
Or they can forgive all of the people who trained them in communism.
I would refuse to go to the dentist if it went out for Stefan's warnings.
Oh, good.
I suppose. I'm glad you go to the dentist.
Syria actually has a very nice coastal beach region.
Yeah. Two very dangerous things to do in this world.
If you are a political leader, particularly in the Middle East, two very dangerous, or North Africa for that matter, two very dangerous things to do in this world.
Number one, protect Christians.
Number two, try and bypass the central banking system.
Ooh, they will F you up with Chinese anal swabs.
Biden on track for more deportations than Drumpf?
I don't know about that. Is that right?
I don't think that's true. He's dumping tens of thousands of illegals into Texas, right?
Oh, and ISIS is back.
Yay. Oh, well.
I have no patience for this.
Like, I saw this Asian woman was complaining that, you know, there was a huge amount of crime.
Her parents got beaten up and had their stuff taken.
And it's like, well, you know, the East Asians, right?
The Chinese, Japanese, and Koreans and all.
I mean, they just vote for Democrats.
So, you know, I'm completely sick and tired of trying to stand between people and the consequences of their actions.
I don't give... A flying frack anymore, anymore, not a tiny bit of my atomic nature, leans in sympathy towards those who are complaining about the direct and completely predictable result of their own choices and actions.
So the people who don't get their stimmy checks, you're not getting your stimmy checks.
Trump was willing to go to the wall to get you your stimmy checks.
You're not getting them. Why?
Because they're bombing Syria.
You're not getting them. You're not getting them.
And people are like, hey man, we didn't flip this state just to not get our stimmy checks.
It's like, I don't care. Democrats lie.
I mean, Republicans lie too, but a little less.
Democrats lie. So this woman who's like, okay, you voted for a bunch of Democrats who defunded the police and opened borders and legalized whoever they can get their hands on who are going to vote Democrat, and then you complain that their parents are affected by crime?
You get what you deserve!
And if you choose to be a low-information voter, I have no sympathy for you anymore.
And now that the Internet's out, I have no sympathy for the low-information voters.
Oh, wait! Hunter Biden was a bad guy?
I wouldn't... Come on, it was everywhere.
Everywhere! The guy who raises drug addicts and abusers, the dad who raises drug addicts, cheaters and abusers.
Oh, but he's going to be great in charge of the country.
I'm sorry, I didn't mean to laugh.
It's just kind of funny. The majority of Biden executive orders is to help immigrants.
Well, the majority of Biden executive orders is to make sure that the Republicans never get elected again by legalizing immigrants.
Illegals. Okay. So, let's not get dragged off into the land of politics because I don't do politics anymore.
So, let's talk a little bit about, at least in my opinion, what the hell's going on.
What the hell's going on. Okay.
So, I did a nice...
I've had a homeschooling session with my daughter this morning for quite some time about buying on margin, otherwise known as crack cocaine, greedy excavation of the neofrontal cortex, impulse control problem, stimulus, reflex, retard crap that goes on in the market, right?
I suppose I can think of some situations where buying on margin or buying with leverage would be some great idea, but generally I think it's terrible.
I think it's absolutely terrible to buy a margin.
Now, if you're some sophisticated investor, blah, blah, blah, okay, fine.
But for most people, you know how it works, right?
Some of those who don't know, this is buying a margin one-on-one.
So, if you buy $100 worth of Bitcoin and Bitcoin goes up 10 bucks, You've made $10, right?
But did you know that there's a way to buy $100 worth of Bitcoin or to spend $100 on Bitcoin and make $50 if it goes up?
Sure. So what you do is you buy on a 5 to 1 margin, right?
So you put $100 down, people give you $500 worth of Bitcoin, it goes up You know, 10 bucks per chunk and you get 50 bucks back, right?
Big upside and it's a multiple and it's greedy AF, right?
So, that's how you can do it, right?
Now, of course, with every upside comes a downside.
So, what happens is if you, you know, look at a 20% crash, like a drop that happened, right?
You buy your $100 worth of Bitcoin, 5 to 1 leverage, you only give them $20, right?
Now, if it goes down $20, often in the contract, it's just a forced sell.
It's called liquidating the position, right?
Whoever lends you the $80 to buy 5 times the Bitcoin you can afford or are willing to spend, what they do is when you might not be able to cover the loss, They'll just liquidate your position.
Because let's say it goes down 25%, you know, and you go from $100 to $75, but you owe them $80.
They've got to try and run after you for the $5.
They don't want to do that. So when it gets close to $80, they'll just liquidate your position and sell it, right?
This happened to a bunch of people with GameStop as well, right?
And tell me if I'm adrift on any of this stuff.
I look forward to the collective brain if there's anything.
And this is... I hate to say this is kind of dumbed down.
It's kind of not. When the 0708 stock market crashed, what happened was some companies were leveraged like 30 times, which means basically something loses value 3% and you're wiped out.
You're wiped out.
Leverage ETFs are the same thing.
Buying on margin with volatility is fine if It's just throwaway money.
It's just money you found in your jeans while you were doing the laundry and it's just throwaway money.
But, again, I'm not trying to give anybody any financial advice and telling you, for me, you couldn't pay me enough to buy this stuff on margin.
You could not pay me enough to buy this stuff on margin.
It's no fun. It's no fun.
Because it is so volatile that anytime people are doing leveraged stuff...
And do you guys know, what are the leverages that are out there, right?
What are the leverages that are out there?
I mean, is it 2 to 1, 5 to 1, 10 to 1?
I mean, what can you get in the crypto space?
I mean, to me, it wouldn't be anything, sane wouldn't be more than 2 to 3 to 1, but the ETF is just someone else buying a margin for you, less risk to you, but the result is the same.
Well, the difference being, of course, what was it?
Maxine Waters said, well, why?
If you lose money on stocks, why can't you get a refund?
This woman is in charge of a trillion-dollar, multi-trillion-dollar economy.
She doesn't even understand the first thing about it.
Oh, what do you say?
What do you say? Oh, come on.
No, you can't get 1 to 100 in crypto, can you?
You can't. You can't possibly get 101 leverage in crypto.
No, that's mad. I don't believe you, Ron Burgundy style.
Sorry, I don't. I'm sure the one in 69 guy is going to come by because apparently he hasn't got all his porn for the day.
Doesn't sound like he ever will either.
So that's...
That's what happens. So, this is my view, right?
This is my view, just my particular perspective and opinion.
But this is my view about what's been going on over the last 24, 48 hours, right?
So, yeah, the price goes down.
Price is just going to go down.
People are like, eh, I need the money, or I'm tired of waiting, or whatever it is, right?
There's some legend who had a video who was celebrating when Bitcoin...
Just sold 100 Bitcoins that he'd had since 2010, when they were basically free, right?
And he just sold it for $5 million, right?
Or whatever. I mean, I don't know where exactly he sold it.
But, yeah, there was another guy.
There's an old video of him celebrating Bitcoin crossing $100, and he did hold on.
Do you speak Francais?
Stéphane, are you French-Canadien?
I am not French-Canadien.
My Molyneux, the last name, goes back to 1066 Battle of Normandy all the way back, so...
Will you come to Europe after COVID? We need you here.
Maybe Poland, where you felt safe before.
I would love to come back to Europe.
I would love to come back to Europe.
And I love Poland with a burning biblical passion that should never be broadcast on the internet.
So I love it long time.
So here's what I think is happening.
So a bunch of people bought Bitcoin on leverage, and the price went down, and their positions got liquidated.
Now, this is a cascading effect, right?
So If you bought more leveraged, when the price goes down, your position will be liquidated first.
Now, of course, when a bunch of positions get liquidated, there's a whole bunch of bitcoins for sale and the price is going to go down.
And what that does is it then affects everybody who was less leveraged.
So, I don't know, let's say you leverage 20 out of 100 and somebody else has leveraged 30 out of 100.
Well, if the price goes down from 20 to the point where the 30 gets liquidated, then you've got a cascading effect where it kind of wipes out the people who were leveraged.
And now, who's buying?
Who's buying? Well, I don't know, obviously, it's Bitcoin, but my guess would be who's buying other people who, well, aren't leveraged, right?
People who aren't leveraged, the people who aren't buying, right?
So, what's happening to me is a positive thing as a whole.
I just don't have sympathy for people who buy on margin.
I have no sympathy.
Oh, I'm wiped out. It's like, I'm sorry you had to learn that lesson.
But you're greedy. You're greedy.
And if you're greedy, it's going to get you.
It's going to get you. You've got to moderate.
This is a whole philosophical position, right?
Stoicism as opposed to Epicureanism.
You've got to moderate your desires, right?
You've got to not just give in to greed.
And... Just say, I want it all and I want it now.
That's a way to destroy yourself in very many different ways in life.
Many different ways to destroy yourself and most of them are based upon greed and moderation in desire.
You've got to have desire to live, right?
There's no point getting out of bed if you don't have any desires.
You've got to have desires in order to live, but you don't want your desires to take you over to the point where you run off a cliff, right?
So, all right. So what's happening at the moment, in my opinion, is you have people who are getting their positions liquidated because margin calls are coming in, and it means that the people who are buying are the people who aren't under margin call restrictions, and therefore you're taking money from unstable, greedy people to more stable, long-term investors.
Now, isn't that a good thing?
Wouldn't you say that's a... That seems like a final good thing to me because we do kind of want more.
I mean, I know.
I mean, leverage, it has its place and blah, blah, blah, blah, blah.
And there are people who, I don't know, like the people that like frying bacon in the nude also like doing this kind of stuff.
But in general, the maturity of the market tends to...
Manifests itself when people who aren't crazy leveraged are the ones who are holding stuff, right?
Oh, you're asking somebody else there.
Okay. The three ways most people go broke.
Ladies, liquor, and leverage. Ha, ha, ha, ha.
I love bacon anytime.
Well, I'm not going to debate you on that.
I'm not a big bacon fan myself.
I don't mind it, but...
See, the problem is, for me, to be tasty, it has to be so crispy, I'm giving myself charcoal poisoning.
If I can either draw with it or eat it, it probably is going to be tasty, but won't do it.
So here's another thing, too, I think, to understand, that another thing that's going on is that Interest rates are very low, and so when interest rates are very low, you can borrow pretty cheaply in order to invest.
Now, interest rates at some point are going to go up, and then what happens is it will be a repeat of the 07-08 to a small degree, right?
I mean, in the crypto space, because people won't be able to borrow as cheaply to buy crypto, and there'll be a bunch of sell-offs and all that as well, right?
The other thing to remember, too, is, you know, the tax cycles.
Like, when is it that people are going to need to declare their losses?
And if people have lost money in the stock market, they may be short there as well, they may be leveraged there as well, and they might have to sell Bitcoin in order to cover losses in the stock market.
There's a whole bunch of stuff that's going on.
And this is not a crash.
This is a correction. And, you know, to me...
You don't want to react. Have you ever been on a plane?
I mean, I used to fly insanely a lot because I'm a very technical person.
I wrote all the software on most of the software that we sold.
So I'm very good at technical stuff, but I'm also, as you know, a very good communicator, right?
Doesn't mean I'm always right. It just means I can communicate my errors very well.
So... Because I was one of these rare people who understood the technology very deeply and could also explain it to people as a whole, I was just flown all over the place.
I flew to China, I flew to Europe, I flew all over North and Central America explaining my software.
It was an environmental management information system that helped people reduce pollution.
So all of the environmentalists out there nagging the government is like, nope, I was out there doing this for 15 years and really helped the planet a lot and all of that.
I flew a huge amount.
I remember one time.
I've never been much of a nervous flyer.
Because to be a flyer, you basically have to forget that you're on an exploding metal tube 30,000 feet above the ground.
I'm in the subway. It's a very comfortable subway.
And I've also seen the degradation in the quality of flying that occurred pre and post 9-11.
It's brutal. Anyway. So I do remember one flight where the turbulence was so bad that the stewardesses, they had to crawl up the aisle.
They couldn't walk, right?
You know, you always see these movie scenes, right?
You know, the camera shakes and then the overhead bins open.
It wasn't that bad, but it was pretty bad.
You couldn't walk. And I think that was one of the times where I was like, yeah, I could get nervous about this.
Wait, I am in an exploding metal tube 30,000 feet above the ground.
It's really bad. And so there's turbulence and then there's a mountainside, right?
There's turbulence and then there's buildings, right?
So you don't want to mistake turbulence for a mountainside.
So a crash to me is if, you know, Bitcoin completely evaporates, somebody finds a way to hack it and the whole value evaporates.
And it's not going to happen, right? But...
That's a crash. That's a mountainside, right?
And you don't want to mistake turbulence for a mountainside.
And my general rule, for me, I'm sharing it with you if it's helpful to you.
I've got to tell you, I look at the price and it's like, oh, that's a drag.
And then literally five minutes later or three minutes later, I've just forgotten about it.
Because it's all paper.
It's not real until you sell.
So if it's like white-knuckle time, Then one or two things is happening.
You've invested too much or you don't have the correct perspective, right?
I mean, paper losses aren't even paper cuts, man.
You can survive paper cuts, right?
So, all right.
So, yeah, I think that's what's going on.
I think there's a general shift of Bitcoins from the more speculative people to the people who understand things a little bit more, who are less greedy.
And we kind of need that to occur.
We kind of need that to occur.
All right. Let's see here.
Let's see if you guys have any more questions.
Would crypto still be worth something if the USD hit hyperinflation?
Oh, yeah.
Yes, see, what is currency?
Well, it's 101, right?
What is currency? So, currency is a way of measuring the relationship between disparate goods, right?
So, currency is a way of measuring the relationship between disparate goods.
So, I may want someone to clean my teeth, and my philosopher may—sorry, my dentist may not be interested in philosophy, right?
So, if my dentist was really interested in philosophy, then we'd talk philosophy for 45 minutes, and they'd clean my teeth for 45 minutes, or whatever, right?
But human needs are always mismatched.
So, how do we—how do we— Measure the value of philosophy versus the value of teeth cleaning and individual activities.
How do we value 45 minutes worth of philosophy to 45 minutes of cleaning your teeth?
So money is the way of doing that.
Money is the way of comparing goods and services that people aren't trading directly.
Because if you're trading directly, right?
You know, you used to do this as a kid, right?
In your lunchroom, you'd swap out your food or...
After Halloween, you'd all sit around the table and it was great fun and you'd just trade all your candy until you got what you wanted.
So, you all want different candies and so on, so you don't need money for that because you're trading directly.
But goods which can't be traded directly need to have a way of measuring their relative value, right?
How much is half an hour of philosophy versus half an hour of teeth cleaning?
Nobody knows. Now, again, if you can trade it directly, that's one thing, but...
If you can't trade it directly, you need to have a way of measuring the value of things which aren't being traded directly.
And that's all currency is. That's all currency is.
And people think that Bitcoin is somehow magically entirely different from the US dollar.
Okay, I get them. But they're both still stores of value.
They're just ways of comparing value, right?
So if you make $100 an hour, let's just make no tax, nothing.
You make $100 an hour, and you want to buy an iPad for $400, right?
So the market says that four hours of your time is worth the iPad or your iPad is worth four hours of your time when you're working.
That's all it's doing.
That's all it's doing.
If you make $100 an hour and you go to get a haircut and it takes 15 minutes, or in my case five minutes, it takes 15 minutes And you pay $20, right?
You make $100 an hour.
So basically, what, $100 an hour divided by 5?
Whatever it is, right? Let's say you make $30 an hour.
You go and get a haircut for $15, right?
So it's saying that a half an hour of your time is worth 15 minutes of the hairdresser's time.
It's just a way of calculating the value of things which aren't being bartered directly.
The relative value. Relative value.
That's all it is, right? So people say, well, Bitcoin doesn't have any value.
It's like, of course!
Of course it doesn't.
Because it's a relationship.
Right? So let me give you another example, right?
Mercury is poisonous, right?
And you don't want mercury in your environment if you can avoid it.
Unless it's Freddie Mercury, in which case you're having a blissful listening to him sing, particularly alive.
So, mercury is pretty bad, right?
So, mercury is in your thermometer, though, right?
So, your thermometer is hanging outside the window, and this was more important if you had cell phones, right?
A thermometer is hanging outside the window, and it's telling you the temperature.
You say, oh, but mercury doesn't have any particular value in and of itself.
In fact, it's a poison. It's like, well, yeah, but it tells you the temperature, which helps you figure out what to wear.
It helps you figure out whether you need to shovel your car later in the day or whatever.
It's really cold, and the clouds are gathering.
So, there's just...
Mercury is just a way of helping you make decisions about your environment, right?
So, oh, it doesn't have any value in and of itself.
Well, it does because you value it to measure things.
You value Mercury to measure the temperature, and you value Bitcoin to measure goods and services.
Now, right now, Bitcoin is being valued usually in terms of US dollars, and my strong suggestion is to start thinking of it in terms of goods and services, right?
So, when people say Bitcoin doesn't have any value...
It doesn't make any sense to me.
It doesn't make any sense to me because Bitcoin is measuring a relationship.
Right? Bitcoin is measuring a relationship.
Saying Bitcoin doesn't have any value is like saying a marriage doesn't exist.
It's like, well, yeah, a marriage is a commitment.
A marriage is living together. A marriage, you know, you can say it's a legal arrangement or whatever, right?
But the marriage doesn't exist.
In a tangible sense, a marriage is a relationship, or lust, or love.
Oh, love doesn't exist because it doesn't manifest out there in the real world.
You can't sell it as an object in and of itself.
It's like, no, love is a relationship.
Respect. Does disrespect exist?
Not really. It's a relationship, right?
So confusing relationships for entities is like saying that mass and gravity are the same thing, right?
So mass is the thing itself.
Gravity is the attraction between objects that have mass, right?
Does gravity exist?
Well, it exists as a relationship.
You see it manifested in two objects coming closer together because of gravity, right?
So saying that relationships don't exist Yeah, I get that.
You know, I have friends.
Does friendship exist outside of our individual bodies and choices?
No, it doesn't. It's a relationship.
You are friends with someone.
And Bitcoin is a measure of a relationship between goods and services that aren't being bought directly, as I said, right?
So, you've got to get out of the concrete thinking if you want to understand.
I mean, currency as a whole, Bitcoin, In particular, in this circumstance, Bitcoin has no value in and of itself, but that's a useless thing to say.
Because if I said to my best friend, I'm going to take our friendship and I'm going to sell it on eBay, I'm going to sell our friendship, right?
What would he say? The question makes no sense, although my statement would make no sense.
It wouldn't make any sense at all.
Well, you can't sell your friendship.
Therefore, your friendship has no value.
Therefore, it doesn't exist. Therefore, the whole concept of friendship is meaningless.
You understand? That would not make any sense.
It would make no sense at all. It would make no sense at all.
If you go to your girlfriend, right, and you're short on money, and you say, no, it's okay, because what I'm going to do is I'm going to go and I'm going to sell our love on Kijiji.
And she's like, wait, what, we have to have sex with other people?
No, no, no, no. Nothing to do with that.
I'm going to sell our love.
On Kijiji or eBay or whatever, right?
It wouldn't make any sense.
And try making that listing.
People won't understand what you're talking about because love is a relationship.
It is a way of understanding the attraction and commitment between two individuals.
That doesn't exist in the same way that a tree or a rock or a cloud does, right?
It's a description of a relationship.
Does gravity exist?
It's a description of a relationship between objects that have mass.
Does love exist? It's a description of a relationship between two people who have love and commitment to each other.
Does friendship exist? No!
It's just a way of measuring relationships.
Mass, romantic love, platonic love.
It's just, we have so many words.
I mean, people think the government exists.
The government doesn't exist. I mean, people with guns and buildings and books, they exist, but the government doesn't exist, and yet people swear allegiance to governments all the time.
So you've got to remember, this is a metaphysical and epistemological question.
What is real?
What exists? And people put, what they do is they put Bitcoin into the category of it doesn't exist, it's not real, it has no value in and of itself, and they forget that they're describing a relationship.
Between goods and services that aren't bought directly.
You have to have a way to measure how much your time is worth versus a gallon of oil or gasoline.
You have to have a way, otherwise you can't buy it.
You can't buy it. You can't trade.
So when people look at Bitcoin and say, it doesn't have any value, it doesn't exist, it's not real, it'll go down.
You look at your life, the value in your life comes out of relationships, usually not objects.
I mean, how much money would you take if you're married and you love your wife or your husband?
How much money would you take to break up with them and never see them again?
Well, probably the answer should be, I would assume there's no amount of money that would have me break up with my wife and never see them.
There's no amount of money that I would do that for at all.
Or if you have children, you love your kids, you know, how much money would people have to give me for me to never see my daughter again?
The answer is there's no amount of money in the world that would ever have that come to be.
So, parent and child is a relationship.
And it's worth more than all the money in the world.
Bitcoin is a relationship.
And thinking of it as an entity or thing that has value in and of itself, without looking at the two things it's measuring against, it's like saying that gravity exists independent of mass.
So, alright. What have we got here?
I never knew what it was like to retain $100,000 in liquid assets until Bitcoin.
I remember as a teenager retaining 100k in liquid assets, but probably quite different, right?
Tooth cleaning is a service. Philosophy is a discussion.
No! Why? Why is philosophy not a service?
Why is philosophy not a service?
Tooth cleaning is there to make you happier, or at least prevent you from being unhappy from tooth decay, and philosophy is a service that is there to help you be happier, right?
If you look at therapy, which is not exactly the opposite of philosophy, that's just a discussion, but you pay for that, right?
Oh, I guess you haven't ever donated to the show.
The link is right below. You know, it's fair, right?
It's fair. Ah, let's see.
Steph should cut his own hair.
Way cheaper and impossible to botch, as it would be such a simple job.
I do most times, just I have a little bzzz, bzzz, right?
I do for the most part, but it's kind of tough to do the back, and if I ever turn around, I don't want to look like I'm ill.
That was a good explainer. Thanks.
Well, I'm glad that you... I'm glad that you found it enjoyable or useful.
All right, let's just do one or two more questions.
Oh, it got to the bottom. Oh, good.
Well, you know, I guess I just kind of dropped in and wanted to say hi, so we'll keep this one, I guess, relatively short.
So, yeah, thanks. I hope this was helpful.
Thanks, everyone, so much for dropping by.
FreedomAid.com slash donate if you find these things helpful and useful.
This is a hard one and sometimes bitterly acquired knowledge, so I hope that you find it valuable and will support the show if you can.
And yeah, it's a great pleasure to chat with you guys tonight.
You can drop by my show this evening on Podbean.
I'm going to do live calling shows now.
It's a little bit easier and faster.
Thanks everyone so much for your questions, comments, issues.
I love you guys so much.
Have a wonderful, wonderful afternoon slash evening.
And take care. I'll talk to you soon.
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