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Why banks fear Bitcoin, how confidence is attacked, and what could finally force global adoption.
This episode unpacks why legacy banks publicly claim to support Bitcoin while privately working to suppress it, and how this contradiction reveals deep structural fear inside the traditional financial system. Drawing on decades of experience in TradFi, the guest explains how Bitcoin’s self-custody, instant settlement, and collateral efficiency directly threaten banks’ core business model: deposit capture and rehypothecation. The discussion walks through the MicroStrategy margin-requirement shock as a case study in how large institutions can weaponize risk controls to break confidence, force liquidations, and then retroactively justify the damage as “prudence.” Beyond market mechanics, the episode explores why Bitcoin is uniquely positioned as pristine collateral in a debt-saturated system, why rehypothecation is the hidden systemic risk most investors underestimate, and how properly structured custody and lending models (multi-sig, tri-party agreements) could allow Bitcoin to integrate with finance without recreating the same fragilities that led to 2008. The broader takeaway: Bitcoin’s volatility is less about fundamentals and more about a transitional power struggle between an old system trying to preserve control and a new one that removes it.
“Banks rely on deposits. If you can control your own wallet, that’s an existential threat.”
“They didn’t raise margin requirements to protect clients, they did it to protect their own balance sheets.”
“Bitcoin is the most elegant asset I’ve ever seen move. Sunday night, I can move $100 million.”
“Confidence is the currency. Break confidence, and you break the price.”
“Rehypothecation is where systems quietly go to die.”
The conversation makes clear that Bitcoin’s current growing pains are not signs of failure, but symptoms of adoption colliding with entrenched power. While near-term price action may feel disconnected from overwhelmingly positive tailwinds, the guest argues that the real inflection point will come when large sovereign entities move from passive tolerance to active accumulation. At that stage, Bitcoin transitions from a speculative asset into global monetary infrastructure, absorbing volatility and neutralizing manipulation. Until then, investors are navigating a contested battlefield where transparency, custody discipline, and skepticism of legacy incentives matter more than narratives or short-term price moves.
0:00 - Intro
0:33 - Ryan’s background
5:45 - AI boost
11:10 - Empery’s bitcoin transition
16:30 - Bitkey & Unchained
18:19 - Treasury strategy
24:35 - Apparent lack of price reflection
32:01 - Banks are scared?
34:55 - Margin requirements
41:25 - Obsura & SOTE
44:08 - Additional bank tactics
55:29 - Moving away from JP Morgan
58:11 - Pristine collateral
1:04:03 - No money printer
1:07:58 - 2026 predictions
(00:00) The banks are scared to death of this asset. I'm not a conspiracy theorist guy. I see it happening. They're out front saying they're supportive of it behind the scenes. They're trying to kill it and be like, "I told you so. Look what happened to Micro Strategy." They're not increasing the margin requirement to protect their clients.
(00:16) They're doing it to protect their own balance sheet. The catalyst that really gets it going and breaks all of the naysayers is a massive buyer. And there's no more massive buyer than US Treasury and treasuries around the world. Uh Ryan, thank you for joining us. I think uh I think this be an interesting discussion because I think you've been um heavily immersed in what many would deem to be the Tradfi world for years uh with Emperor Asset Management.
(00:51) Uh you founded it in 2008. So I think you've been through uh a couple of Trafi cycles. interesting founding an asset manager in 2008 when >> you know the world was a bit more chaotic. So I think to really set up this conversation is let's go back to 2008 starting Empire Asset Management um being very successful uh in that world and then coming to find Bitcoin and really lean into it full boore.
(01:24) Yeah, it's really through conversations like this that makes me think back to what that was then because 2008 was a fascinating time, right? It was a, you know, a true financial crisis, right? Driven by finance, you know, consequences to finance. It was just financial all all around, right? Money markets trading at discounts to to their uh, you know, par value or a dollar, right? That's, you know, hard to fathom that cash is trading below cash.
(01:55) So, but you know, we managed to get our uh funds together and we were supposed to launch with 50 million bucks uh and we ended up launching with five uh cuz everyone just panicked like literally like had signed subscription agreements and just panicked. So, you know, we've seen it.
(02:15) We didn't hold people to, you know, their subscriptions, uh, because everyone was just too nervous. And we just said, you know, hold your money and watch us perform and come in when you're comfortable. Uh, cuz everyone was scrambling for every dollar they could sort of secure at the time. Uh, so it was interesting. And then when we first started, the biggest risk was we held cash, right? And depending on where your cash was and what bank it was in, like your cash was at risk if that bank went under.
(02:48) So we had multiple bank accounts. We had Goldman, we had JP Morgan, we had Jeff, and we had like TD. Uh, and we I I every morning I had wire instructions with the balances in the accounts to be able to move them out based on, you know, the bank potentially collapsing so I could just quickly move. And that was, you know, you couldn't do electronic wires.
(03:13) So, it was sort of like you were faxing or scanning wires to the prime broker to get the funds out and trying to be ahead of everyone else because, you know, if you were a little bit slow, you were going down with the ship, right? And then you got to go unscramble the eggs and get your money back, which could take, you know, a decade and worst case scenario or maybe long case scenario.
(03:37) So, that's what we were dealing with. It was investing was like almost secondary. it was protecting our cash and then finding interesting things to do. So we we've seen I think the worst right out of the gate. Uh and then we performed well uh you know we stuck to our discipline and we made money.
(03:54) We effectively were doing and still are doing private equity style investments uh in the public markets right structuring transactions with public companies and funding whatever their mission to you know growth was. And we've been doing that for almost two decades now, generating good returns. >> What What's it like structuring these deals? Is it sort of white label go in depending on what the uh particular company is, what their goals are, really sitting down with them and getting it done or is there some formula to this? >> It's very much a bespoke market. every
(04:30) provision, every aspect, every term is negotiated with that issuer based on what the risks are there. What we're what we're we're seeking for, you know, upside, how much, you know, risk tolerance do we have, right? Are we structuring as equity or structuring is a convert, right? We'll go all the way up and down the capital structure from senior secured debt to just plain vanilla common uh with, you know, no rights whatsoever.
(04:58) So we'll we'll go depending on what the situation is, right? Because that's kind of what investing is. It's fitting your structure and the capital to their needs. Uh if you like the situation. So, you know, hundreds to sometimes thousands of pages of documents for each transaction. And we've done over 2,500 in the last 18 years.
(05:20) So we have we have a machine but it's it's a it's a very cumbersome machine and then it's also organizing all the investments you've made and all understanding all those provisions which you know the the current iteration of of AI and all that stuff is helpful with that but you've got a you know you've got a big file to manage uh as well so you have to have a good operational team for that.
(05:46) So doing this uh since 2008. So I'm just as you're describing that I'm thinking uh in my head like how how how much is the scale of these like of these individual deals changed as you've had QE1, QE2, COVID stimulus? How much more money is being demanded by these deals? I'm just curious specifically. >> I mean back in 2008 it's a good question.
(06:16) back in 2008, it was the only there was it was very spotty transactions like very little was getting funded. Uh, and it was only things that you know made a lot of sense that were like distressed like heckla mining was one where it was like the biggest silver producer in in the country. It was on the verge of bankruptcy.
(06:34) So you go and you fund that and you kind of resurrect that asset and you take bankruptcy off the table and and then it really performed really well. It was very kind of, you know, niche things like that that made sense to finance in that environment. And then COVID was the exact opposite, right? Co was people were throwing money at everything cuz liquidity was crazy and performance was crazy and you could manage a ton of money and recycle that money with returns.
(07:02) I mean that I don't think you could get more of a despair at time uh than from financial crisis to like co and then it's you know it's the risk of capital's been off since the end of co really until the last 12 months and even that's been spotty right biotech's come back obviously the AI boom uh there's different sectors that are moving but we don't have a you know a broad market rally there's some interesting things going on within the market that has kind of kept it from broad, right? There's just a lot of change happening.
(07:34) >> You think it's this overindexing on the AI boom specifically or >> I think that's attracting a lot of capital, right? And then you have this whole like what's happening to the middle management world, right? Within all these corporations, AI is sort of replacing a lot of the mundane work, right? as a as a as a senior person, uh how many middle management and junior people do you need when you can just get your information from, you know, a chatbot, right? And when you have the smartest person within each sector
(08:08) available on an AI engine, uh at least to start your work and you know, initially educate you on that, how you know how much how much work do you need from your middle management? How much of that can you slice out? And I think we're seeing that across the board in a lot of you're going to see it in law firms, you're going to see it in accounting firms, right? You're going to see it in, you know, even companies like Amazon and, you know, all these, you know, cloud computing companies, right? You can eliminate a lot of that data analytics
(08:36) because that can just be automated. >> So, >> it's a the economy is kind of trying to figure its way through this. Employment is trying to figure its way through this, >> right? because >> it affects the different ends of the spectrum differently cuz I think about like here in media company of four or five people what it's allowed us to do to extend our productivity and efficiency it's been miraculous over the last two years really leaning into it but then you have these behemoths with tens of thousands of employees where
(09:08) they're start going to meet in the middle so I I've been very vocal about this if you're a small team starting up right now it's never been a better time to start a business but if you're >> Yeah. >> a large corporation with a bunch of >> headc counts and SGNA, there's going to be some tough conversations moving forward.
(09:26) >> Yep. Like my my son runs a 3D printing. He's like 15. He runs a 3D printing business out of our basement and I could have never even dreamed about doing that, right? Cuz everything is automated. He gets all his own. He can run a full business while in school, right? the just the ability to leverage that technology and leverage automation, leverage information, right? He's like, "Oh, I want to buy a new 3D printing.
(09:52) Hey, chat GBT, compare these two models. Tell me what's better for this and that and that." And it'll categorize all the, you know, areas where different, you know, 3D printers are better or different engraving machines are better, right? from the community it has to the how you repair it with, you know, uh, YouTube videos and who has more YouTube videos to be able to make a repair on something or replace a part or whatever.
(10:15) It's just it's a different world. And like you were saying, it's not just that you lay people off, it's that you never hire them in the first place because you can leverage your internal resources and grow. >> Yeah. >> So, it's fascinating. >> It's funny. We had um a 15-year-old on the show last week, Stella, and she's at the Alpha School in Austin where they're really leaning into AI, and she was she was showing um her masterpiece project, which is some uh game storyboarding app that'll eventually become like a gaming
(10:48) application all built with Claude Code. and speaking with her and made me very encouraged for uh the younger gen Z's and Gen Alpha cuz it seems like they're leaning into it and it's going to be massive for them, >> right? They can leverage it. We're we're we're we're not smart enough to be able to do that because we're not we didn't grow up with it.
(11:08) We're just trying to trying to survive. >> Speaking of speaking of survival and transitioning to bitcoins and I think um that's one thing I'm into Bitcoin for. Like I think we're in this transition into the digital age and uh we sort of got to shed the skin of the incumbent system. Big part of that incumbent system being the financial system which is riddled with debts and uh perverse incentives depending on where you look.
(11:35) And I I view Bitcoin as a solution to a lot of these problems particularly the debt issues that exist. I think we need to recapitalize the system with better collateral. And obviously what you're doing at Emperor Digital um it seems like you have come to a similar conclusion. So what led you from um what you had been doing to really I don't want to say drop everything but like look at Bitcoin and say oh I need to lean into this pretty heavily.
(12:02) >> So I I will say out of the gate you say shed the scheme. I think that's a a really good comparison because uh in this world that we live in today, let's just say Tradfi is the snake skin that doesn't want to come off, right? It's not it's not like the snake skin where they voluntarily shed. Like here, Bitcoin's trying to insert and the skin's like, I'm not letting go.
(12:27) I'm hanging on to this snake, right? Uh so it's the transition's tough um because there's a lot of fighting overtly and covertly, right? I I see that uh on a daily basis um especially coming from Tradfi and understanding how it works. Um but my our transition started um because for the longest time like we were a registered investment adviser with the SEC, right? And SEC was enforcement, enforcement, enforcement, right? They were going after anyone in the digital asset world, whether you're doing something right or whether you're doing
(13:06) something wrong. And like any industry, a lot of people are doing things wrong and some people are doing things right. But it didn't matter because they just they had a blanket approach to if you're in digital assets, if you're in Bitcoin, if you're doing things within crypto, you must be doing something wrong.
(13:24) That was kind of the approach. And for us as a registered investment adviser that could be audited by the SEC, you know, any given day, right? They come in every couple years or every few years and they could do it at any time. And you know, I didn't want to be in the position where I was even having to address that.
(13:41) Uh, right? I got enough problems, you know, you know, organizing our business as it was and, you know, presenting it to the SEC in a way that gets them comfortable. And then you go uh and you add this whole thing on, right? And then you just give them this avenue to just dig and explore and you know it they put their radar off.
(14:06) So under Gendler at the SEC, not something that we were willing to dabble into as much interest as we had in it. Uh and I did struggle with it to be to be fair. um I struggled with the purpose and the purpose is a lot easier to describe when you don't have all these bureaucratic uh hurdles right once the bureaucratic hurdles drop uh and you can actually see the thesis playing out which is the ultimate store of value right and you know fighting the debasement of of all these currencies right take away that bureaucratic you know ceiling and then have that thesis
(14:40) and it starts to look really interesting and and that's when we were like, "Okay, like administration is clearly behind this. Gendler's out. All the enforcement people at the SEC were eliminated, right? And everyone, even if you were involved in fraud related to crypto, you were still getting closing letters from the SEC saying, "We're no longer pursuing this matter. It's closed.
(15:03) " Right? You start seeing stuff like that and you're like, "Okay, this this is safe zone for someone like us who's trying to stay on the straight and narrow and we like it, but how can we actually get in it?" Uh, and the DAT was a very fast way to get a ton of exposure to Bitcoin, uh, you know, kind of overnight, right? as principles of a fund uh as a as you know investors for our fund we thought that they should have exposure to it we as individuals wanted exposure to it and then we're capital markets guys right like I
(15:39) started out describing we do transactions in the public markets investing in all these public companies that's what a digital asset treasury is right it's a capital market strategy to try and cheaply raise money or efficiently raise money in the public markets with all the relationships that we have to add Bitcoin per share.
(15:59) And if you if you're right in that sweet spot, then and you like the Bitcoin asset, it just seemed to make a lot of sense to just kind of take our team. Don't take the risk of building a new team, right? We had our hedge fund team, plop the four people in that were had the skill set to be able to execute that capital market strategy within the public markets and boom, you're off to the races.
(16:25) uh then the trade blew up but that's that's a separate discussion and you know probably a longer discussion. >> So for this rip was brought to you by our good friends at BitKey. Bit key is the hardware wallet that makes Bitcoin easy to use hard to lose the two or three multisig. You download the mobile app.
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(17:45) Is Bitcoin risky or is ignoring it the greater risk? On January 7th at 10 a.m. Central, join Unchained and Parker Lewis for Bitcoin is the greatest asymmetry, an exclusive online video premiere exploring the forces behind Bitcoin's riskreward profile. Originally presented at the Old Parkland Debate Chamber in Dallas, Parker breaks down why the probability of its success matters more than short-term price movements, how monetary design shapes outcomes, and what today's market and policy environment may mean for the years ahead. If you want a clear
(18:09) framework for thinking about Bitcoin's opportunity, don't miss this video premiere. Register now at unchained.com/tc. That's unchained.comTFTC. Let's dive into it because I think it it ties in. I think there's a lot of broad skepticism of the digital asset treasury play obviously since um really going back to beginning of the year when strategy started coming off uh its highs.
(18:38) And then obviously in the summer when things really accelerated and now um probably 28 to 30% off Bitcoin's all-time highs, people are asking the question, was this just a fad or is there something here? And so I think starting with the debt strategy at a high level like does it actually make sense? Obviously I think you do like why does it make sense um to to deploy a strategy like this? And then we can get into the sort of incentives that have been introduced with individuals and companies like um Emperor Digital um leaning into this like is it
(19:17) is it viewed as a threat to Trafi and are there moves being made to quell the the threat? >> Yep. Yep. Uh does does the that thesis make sense? Um it does under very specific circumstances, right? Like I understood that this was a big fat trade when we started on the journey. Like from from I literally from when I came up with the idea to when we closed on the $500 million, it was six weeks.
(19:57) Like I we banged it out, right? We had the thesis. We identified the bankers. We identified the public company that we would that we would go into. Uh and then we put our road show together, our presentation materials together. You know, refined the strategy, figured out where we wanted to live within the DAP world, right? Because a lot of the stuff we were looking at from the hedge fund side was, you know, everyone seemed to have a lot of expenses associated with their debt.
(20:25) Whether it's these asset manager agreements that were like between like 1% and 3% for doing what? Like the public company was outsourcing the management of that asset to a third party for ex some exorbitant amount of fees. That didn't make sense for us because they're like as the public company that's your job, right? You're the fiduciary over that asset, manage that asset to the best of your ability.
(20:49) And if you don't have those capabilities, probably shouldn't be in the strategy, right? And you got to keep all those expenses down. You can't have big corporate overhead. You can't have big salaries, right? So, we came in really cheap, right? Low salaries. And we're put $25 million from our hedge fund in.
(21:04) So, we're like, okay, now we are all aligned with the investors and we got to run this thing really efficiently, right? keep the corporate overhead down, the salaries down, keep the option packages, so you're not issuing more options. You're not milking this. This is not like a lifestyle public company like a lot of these smaller public companies are.
(21:18) We're like, so when does this make sense? And I think it makes sense and we did it because we we felt that we could make it make sense. And a lot of them are just too bloated. And when the trade collapses, right, when you come near NAV or below NAV, um, how are you servicing all those expenses? Because are you selling Bitcoin, right? Because you can't sell your stock anymore because that's, you know, you're diluting Bitcoin per share.
(21:45) And are you selling Bitcoin? Uh, you know, you're slowly going to bleed out Bitcoin to to service the public company. That's not a good scenario, right? Do you have the internal capabilities to be able to trade derivatives and get some yield on that stack, right? Can you sell calls? Can you sell puts? Collect that premium? Can you do put spreads and call spreads? And can you, you know, play that game without risking your stack and actually generating value for your investors? And I think if you can't do all those things, then it's a stupid trade. It
(22:17) doesn't it doesn't make sense. And even if you can do all those things, who knows if the market even cares? Maybe they just rather own Bitcoin directly, right? So we remain with the thesis that I can protect your Bitcoin, right? Because I can have multicustodial relationships. I can have it in cold storage.
(22:39) I can have insurance at each custodian. I can have an overlaying insurance product that protects the Bitcoin generally, right? Uh I can trade derivatives around it to generate cash flow to offset corporate expenses. I can do capital markets transactions like buy my stock back to add Bitcoin per share, right? And modestly leverage against that stack.
(22:59) So you can you can there's a lot of tools that you can pull from. Uh, and I think if the public debts are set up like that where you have the flexibility to use your stack to borrow against it, where it's not leaned up, you know, right out of the gate where you have a senior secured convert against it and it's sitting in some account control agreement where you can't touch it, you can't post it for collateral because as you probably know, if you're going to trade on Derbit, right, you're going to trade with these market makers like a
(23:25) Falcon X or a Gemini, uh, you got to post your BTC. And if your BTC is stuck in an account control agreement, you can't post it. So you can't trade derivatives around it. So you're kind of like stuck. So if you've got the right setup, I think it can make sense. I think a lot of people get nervous about holding their Bitcoin.
(23:42) So I can hold it in protected form. I could trade derivatives around and then I can do capital markets transactions to, you know, add Bitcoin per share. If I can do all that, then I think you've got something. Uh but you also want the asset to work, right? underlying the whole thesis is assets got to work right and so you got to believe in Bitcoin and you got to start there and that's we started there and then we built it behind it and you know it has been a difficult asset for the last call it 3 months right it started to break a lot of people's confidence in
(24:24) the asset and I think that's a you know that's a topic worth explor exploring is is we got all these tailwinds but something's not right. >> Yeah, a lot of tailwinds. It was interesting because we posted um it doesn't make sense to a lot of people what's happening. Obviously the administration, you mentioned the SEC, the the bureaucratic morass that the industry has been subjected to for for many years seems to be behind us.
(24:53) We want to be the Bitcoin crypto capital of the world. Executive order around a Bitcoin strategic reserve. you have banks announcing it seems like daily at this point some sort of integration um with Bitcoin focused products uh allowing their customers to buy trade um and ultimately use Bitcoin as collateral uh the ETF despite the fact that Bitcoin was down however many% uh in November and for much of this month like it still has net inflows uh outside the US you're seeing a bunch of positive headlines in relation to the mining industry and
(25:32) um UAE and other other countries buying exposure to Bitcoin and to your point just a lot of people are sitting here scratching their heads like why why isn't the price reacting appropriately and obviously you have um this confluence of events too where the price did run up to 125,000 we saw looking at the onchain data looks like a lot of people have been holding Bitcoin for over a decade said okay market's liquid.
(25:59) It's valuable enough. I'm going to take some chips off the table. Famously, we had Galaxy facilitate the sale of 80,000 Bitcoin for some estate sale that was uh demanded by um the estate owner who had passed away, I'm pretty sure. Um and so I think we're we're at this point where it seems like it's all systems go, but the price is not is not uh reflecting it's not reflected in the price going up.
(26:25) >> Yeah. If I were to, you know, do what you just did, articulate, if we didn't have the benefit of being able to see the price, right, and I were to articulate all those reasons that you just articulated, Genius Sack, stable coins on top of all of that, right? And I said to you, okay, so start the year, Bitcoin was at 100,000, right? Or Trump administration comes in, Bitcoin moves 90, 100,000.
(26:50) and I were to tell you all these things that happened over the last 12 months, you would say, "Oh my god, it had to have doubled, right? Something like it had all those those tailwinds." But don't forget the efficient market theory, right? As a trady guy, the efficient market theory basically says that all that stuff is priced in in advance, right? So that $100,000 price that you saw back at the beginning of the year, right? that was pricing in all this great stuff that was likely going to happen because of the position the Trump administration had taken. So you
(27:23) could have easily predicted that all these things were going to happen and some of them were delayed like the legislation you know uh you know through uh the Senate has been slowed down. It's not going to get done before the end of the year and the SEC coming out and saying that it was you know going to get done before the end of the year.
(27:39) That was it's just not how the congressional process works. It's not that fast, right? But I think people were hoping for that. But so there was some stuff that was slowed, but a lot of stuff happened. Uh, and you could say that that was predicted back then. So we're sort of where you would have expected from a a tailwinds perspective to be, right? But then you have this whole thing happening under the surface, right? Which is the banks are scared to death of this asset.
(28:12) And I know, right? And I I truly believe that because if you just play it out, right, banks rely on deposits, right? Deposits, that's their fuel for everything they do, right? They got to get spreads. They got to collect that money and then they got to lend that money through all these different mechanisms, right? Whether it's financing someone's jet or financing someone's home, right? Or financing someone's apartment complex that they're developing, right? that spread is that that's their bread and butter. Uh then they have the prop
(28:44) trading desk and all other stuff they're allowed to take from a risk perspective that's a little higher on the risk spectrum, but the bread and butter is that lending business. And that lending business needs those assets. And if you can control your own wallet, right? And we've been now transacting in Bitcoin for a few months actively, right? because we got the big stack and we can move it around between wallets and custodians and and places where we're posting as collateral for derivatives trading. It is so elegant and beautiful
(29:13) to move around, right? You get your wallet address, you do your little test of, you know, 0.001, you send it over, it's received. Uh you can see all the history in that wallet that's ever happened. All right, all open ledger stuff. And boom, Sunday night at 8:00 p.m. I can move $100 million from one wallet to the next.
(29:33) I can move it from Galaxy over to Falcon X. Like, that's amazing. I've been operating with within the confines of the banking system and the Fed system for since I started my career where we're doing wires, right? and I gota got to get my wire set up and I got to get it released before the Fed cut off and the bank's internal cut off policies of 4 p.m.
(29:54) even though the Fed's closed at 6 p.m. and then I'm stuck from Friday at you know 6 till Monday morning when I can't really do anything. So, and you know you're financing transactions where it's really difficult for me to send a wire over 5 million bucks, right? It's getting a ton of scrutiny from the bank. Uh, and it's going through this whole process and I just don't even know when my wire is going to get out, if it's going to be able to get there for the closing of the transaction.
(30:19) And so internally, we have all these procedures in place to make sure we're set up for closing, that we're wiring a day early so we don't mess it up, right? All that stuff is out the window with Bitcoin, right? It's just such an elegant asset to move around. uh it puts all the control within the owner of that asset and that's a that's a real threat to the banks, right? And then as soon as the insurance starts to make more sense, right? And then you get the charters issued so all these custodians can exist without filing, you know, individual
(30:53) applications on the state level. So you can get the federal charter and then those federal charters, although now you can't borrow at the Fed window and you can't lend on those five charters that were issued to the crypto custodians. eventually you'll probably be able to and then then it starts to look much more like a traditional banking system, right? And Fidelity, you know, they're they're Trady, right? They're within crypto, they're trady, and now they have a bank charter.
(31:18) Uh so they're in a really good spot. Seems to me that they could be they've already done a really good job at gathering assets within their brokerage accounts. So they'll be able to g gather assets within their within their cryptocustodian accounts and do it on more of a traditional system that people are accustomed to. So it's a threat. It's real.
(31:39) >> And I think I checked last week. I think Fidelia has something like 7.2 trillion in assets under management. So to your point, they can definitely bring it in. >> And so >> and they span both Trady and crypto. Like they're in they're in a sweet spot. And they've been in Bitcoin for 11 years now.
(31:58) 2014 is when Abby had them getting in. So >> they know what they're doing. And so you say the banks are scared. And I say part of the list of headlines that I I listed off earlier was that banks are implementing it. Do you think they are in an oh [ __ ] like this is happening. uh Bitcoin's not going anywhere and so we need to basically stave off the the sort of native Bitcoin and crypto companies long enough while we implement everything so that we can capture some of this market or do you think they still want it to go away? I think it's it's the latter. Uh but
(32:37) they're pretending it's the former and I'm I'm not a conspiracy theorist guy. I just I see it happening, right? They're they're out front saying they're supportive of it just like they said they were supportive of the new charters, but behind the scenes they're trying to kill it in every way they can, right? Lobbying against it, fighting, you know, anyone who is in support of it and trying to, you know, convince them that it's it's risky, right? the things they're saying publicly, right, versus the things they're saying privately.
(33:11) Like, they're literally telling people that are fans of it that it's too risky of an asset, that it's not appropriate for, you know, the masses to own and that there shouldn't be charters that help facilitate this because you're really, you know, you're allowing people to take risks that they don't understand.
(33:28) But publicly, they're saying, "Oh, we're building blockchain. We're going to allow our FAS to to buy it." Right? So the disparity between those statements that are happening in the public versus the private, I think that tells you everything you need to know, right? They they they don't want to be the idiots who publicly were bashing it when the train has left the station and it's probably happening, but they also want to slow it down and kill it as you know and be like, I told you so. Like we originally told you so.
(33:56) We tried to get on board, but we told you this was risky and look what happened to Micro Strategy, right? that thing got crushed. Everyone was a believer and that thing got crushed and you know you shouldn't have been owning that, right? So in hindsight and they're really powerful institutions with tons of capital to be able to move stuff.
(34:16) So they can make these Monday morning calls when they were actually the ones on the field affecting the place, right? They can say, "Oh, I told you you know MSTR was risky. You know, we brought the margin requirement up to 95%. that's why we did that because it was risky. It's like no, no, no. The margin requirement going to 95% is what caused the asset to go down and why you can now say that it was risky and you made the right move. I told you so.
(34:46) It's like, okay, you were pulling the puppet strings that made the puppet collapse and you said the puppet was >> going to collapse. >> So, it's it's a lot of that. Let's dive into this specifically because we've we've been talking offline um for the last few weeks and I think that's one thing that made me really excited to have you on the shows because you've seen this.
(35:13) You know how these large capital allocators can use their large amounts of capital to influence things. And I think everybody is looking at Micro Strategy this year and going, "Oh gosh, this is this is terrible." But to your point about the margin requirements, I think that was a a clear sign to me at least like, hey, they don't like this.
(35:32) Why would they just ninja launch a massive increase of margin requirements overnight? And so, what effect does that increase have on people that not only own uh MSTR, but are had at that point been using it as collateral um for for a loan? >> Yeah. So, if you were a longtime Bitcoiner, uh, and MSTR came along, you said, "Oh, wow.
(35:59) Now I can instead of just owning Bitcoin, I can sort of be a little bit levered to Bitcoin. So, I can own MSTR. I can still love my Bitcoin and own Bitcoin, but I can also own MSTR and I can borrow against it, right? Because you can post it uh in your brokerage account in a margin account uh and you can borrow cash against it and you can buy more MSTR, right? So you can effectively use the bank's money to get more exposure to MSTR, right? On top of the fact that they have the preferreds and the converts out there where they're, you know, effectively levering
(36:28) their own equity to it by using the preferred capital to, you know, juice the equity returns that you can get on the Bitcoin, right? So it was a great thesis for the Bitcoiners because just modestly increases in value. It's a it's a it's a flywheel, right? And so I I totally get why all the Bitcoiners were really into that debt, right? Um and it also made them vulnerable because inside these big institutions, you can see how much money you're lending against MSTR in the aggregate, right? You can say, you know, there's 10 million shares held
(37:10) of MSTR with inside JP Morgan. And you can say okay we've lent five billion against it. If we increase the margin requirement from 50 to 95 you got to basically people got to post you know $4.9 billion $4.8 billion. So you you know the effect that things like that will have on the asset. And they you know they called it you know a a risk department call right.
(37:42) the risk department decided that they had to bump up that margin requirement. But that doesn't it doesn't make any sense. It doesn't reconcile with with anything that MSTR was doing at the time or Bitcoin was doing, right? But then because you have so many Bitcoiners that own MSTR and people associate Michael Sailor with Bitcoin, when that thing starts to come down, right, when it goes from over 400 to under 200, you're sort of breaking people's confidence in Bitcoin.
(38:18) And I think that was part of uh the overall strategy was to hurt MSTR, hurt Bitcoin, hurt the confidence and thesis in the asset, bring the V back up, right? And then put this narrative out there that that seller could potentially have to sell Bitcoin and they own a large percentage of the Bitcoin that's that's issued. So then start to panic people, right? And then it's selling beget selling beget selling.
(38:47) And that's that's how history always plays out. >> No one wants to catch the falling knife. >> No. But let's dive into this too. The risk department too. It's like okay we we've our risk team has determined that we need to increase the margin requirement just playing through the thought experiment. Okay. What are they protecting their clients from? Right? Is it the case micro strategy goes down and they don't want them to have to sell their positions.
(39:13) But like conversely, if that's like your whole goal of of managing risk for for your clients is to make it so they don't lose their assets in the form of this this security the shares in this company like isn't increasing the margin requirement. Doesn't that end up with the same goal? Because you're just going to have to force people to sell or post collateral and if they don't have collateral to post, they're going have to sell down their positions.
(39:39) >> That's the irony. >> Yeah. >> Yeah. That's the irony of the whole thing. And and let's let's be clear, they're not increasing the margin CL requirement to protect their clients. When a risk department increases the margin requirement, they're doing it to protect their own balance sheet because they say, "Okay, if we go from 50 to to 95, that means the stock can basically go down 90% before we 95% before we start to get in problems with the loans that we have out against it.
(40:11) " Right? So, if they move it to 95%, they're effectively expecting a 90% move in the stock, right? Which that only happens if the asset collapses, too. And were they predicting a 90% move in in Bitcoin down? They predicting it goes back to 10,000, right? That just didn't seem to be on the table.
(40:36) Um, none of it seemed to be on the table, right? The stock was pretty stable. Bitcoin, the underlying asset, was at the lowest of all it had ever been at, right, on a on a trailing period. MSTR's volatility was declining, not increasing, right? You you would increase margin requirement when the VSS go up because the higher probability of a big move, underlying asset falls down, MSTR stocks down.
(41:04) Didn't make sense. Yeah. Didn't make any sense. There's no risk. There's no risk model where unless they have some AI bot that, you know, is predicting things that no one's ever seen in their life, which AI doesn't do that. AI can only work off data that exists. That's why it's not a good predictive model, right? >> Mhm.
(41:24) >> And you know, that's where you need humans. >> Sup freaks, have you noticed that governments have become more despotic? They want to surveil more. They want to take more of your data. They don't want to follow you around the internet as much as possible so they can control your speed, control what you do.
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(44:01) Use the code TFTC and you'll get 15% off anything in the store. That's drinksotay.com. Code TFTC. So, I guess my other question is like how long is is that just one shot? Is that like one arrow in the quiver that they have? because I imagine you bump up margin requirements uh to 95%. And then anybody who was engaged in sort of using MSTR as margin to get leverage um you'd have sort of the books clear and you'd find ultimately find another equilibrium and then go from there.
(44:40) People who were overextended get wiped out. People who were were not overextended are fine. you just sort of find an equilibrium and things can reset from there or is is that how you view this playing out or is this like a sustained u quote unquote attack for for lack of a better term? I think it was their first not their first I think it was one of them their more public attacks on the asset uh where they thought they could really have a you know financial impact and a you know emotional impact and the emotional impact you cannot discount how
(45:15) powerful that is right people you know big Bitcoin believers start to question everything right is this asset subject to manipulation and you know am I exposed goes to that and you know just starting to conspiracy theories swirling right has it been hacked is there more asset out there than we than we understand like all these crazy things were happening because they tapped into people's confidence in it when once the confidence breaks right because that's what all these things are right at the end of the day any currency right what's
(45:53) what's the USD worth it's worth what people are willing to you know believe it's worth right because you got a huge leveraged balance sheet that you know if that was any corporation it would be bankrupt right but USD is the best currency in the world so it's just confidence and people say well you know Bitcoin is you can't articulate what it's worth it's just you know digital a digital asset has no actual value no currency has actual value like people who say that are just missing the mark and it's all confidence So JP Morgan
(46:28) adopting that theory I think was like okay so if we break confidence in it like any currency whether it's you know Japan or Argentina right uh if you break that confidence in that currency then you damage the value of that currency and that's doesn't go away overnight. So, I think that they took a big shot across the bow, right? They probably got a leak in the boat.
(46:58) Uh, and then they kind of were in there trying to make that hole a little bigger by saying, you know, going off the NASDAQ 100, going to get kicked out of the MSCI, like pulling back, you know, pulling old, you know, articles and data and statements and kind of making them in the headlines. Like that's part of that coordinated attack.
(47:23) Like why why is an analyst at JP Morgan talking about it being removed out of the index and talking about MSTR as a as a you know risky bet when he doesn't even cover the company. like pretty sure the analysts are pretty busy writing research and publishing on companies and doing update notes on the you know universe of companies they cover and but yet he's going off on some MSTR attack for a company that has no research coverage at JP Morgan, right? So it's just and it's at the end of the day that move was detrimental to their own clients. They wiped out billions of
(47:59) dollars of value in their own clients portfolios, right? That was the ultimate result of it. They basically attacked the stock by attacking their own clients because they knew that they couldn't post the billion dollars of collateral. So, I I think it's just confidence, confidence, confidence, and they that that was what they were that's what they were firing at.
(48:24) >> How do you counterattack this? um you call them out. It's the only way to do it. You got to go to the mat with them. I think that's the it's the only And a lot of people are afraid to do that, right? Because it's a big massive institution. >> Mhm. >> And people have exposure like we as a fund, we have accounts with JP Morgan, right? We have accounts all over the street, but we were prepared to get the phone call saying, "We're going to shut your account down." Right. Okay.
(48:56) Shut my account down. I'll post about that, too. Right? So, I think that's the only way you beat them is you have to have a voice. Uh you have to know what you're talking about, right? Because if you're wrong, they'll destroy you. But if you're right, how do they really deal with you? Like, as a Tradfy guy, I'm like, "Okay, I know enough to be dangerous about how all of this works.
(49:18) I've seen this in different asset classes for my entire career, right? These big banks attack based on the knowledge they have under their umbrella, right? There there's there's so many examples of when banks have attacked hedge funds, right? Hedge funds used to, you know, generally custody all their assets at one institution until in the late 90s, early 2000s.
(49:50) the prime brokers or the the banks were figuring out that we see exactly what this fund's exposure is, right? And they're my custodian, but they can use that information against me. And there are so many examples where they did, right? There's there's a case out there where basically a fund got taken down uh by a top five institution because they did a similar thing.
(50:14) They basically were shorting all the stocks that were in that fund's portfolio and they were, you know, smaller names so they could move, they could just lay on them and short them and short them and short them and then they went and increase the margin requirement on those securities because they said, you know, they're under a lot of pressure.
(50:33) Uh the VA is up on these things and you know, we got to increase the margin requirement. The fund was like, well, we don't have the capital to post for that. you are our prime broker, you know that because we keep all of our assets with you. And the response from the bank was, "Okay, we'll come back to you with a solution.
(50:55) " Their solution was, "We will bid you for your entire portfolio below market." Right? Now, you have that bank that's short, and this is a public case. You have that bank that's short. You have the hedge fund that is long all that stuff. And the bank to cover their shorts, if they can buy it down here, right? they can pay below what they shorted it.
(51:14) That's a great trade for them. And so they can basically go to that fund and say, "You can't meet your margin requirement. We'll bid you. We'll bid you for your whole portfolio. Just take you out of it." Uh, and you know, fix your problems, right? And so that's what happened. They ended up taking them out, right? They shorted it up here.
(51:32) They bought it down here from the fund. The funds wiped out. And this bank had a great trade, right? Shorted it. took the positions from the fund, wiped the fund out, bought it all really cheap, wrote it back up, right? That I mean that that happens all over the place. And that is why all these funds now have multiple custodians, right? We keep your shorts in one place, you keep your longs, you trade your derivatives in another place.
(52:01) No one can see, no one has transparency into what your overall positions are, so no one could take advantage of them. And that was sort of what people started learning uh through you know instance like that and you know they're really manipulative but if you read your prime brokerage agreements most of it's allowed because you ultimately give them control when you take on margin right so that's the prime well that was another detail that emerged from JP Morgan's posturing towards MSTR the margin margin requirements too is that there was a bunch of people stuck
(52:38) in that trade who said, "Well, if you're going to raise the margin requirement to 95%, I can go over to Fidelity or someone else who has not raised the margin requirement and I would like to do that. can you please send my shares over to this broker? And um they were not able to do so in a timely manner, which I'll let you explain, but this would um signal that um they didn't have the shares because they were locked up in in short positions.
(53:06) >> Yeah. Yeah. And we'll we'll never know exactly, you know, the nature of those shorts, but there there are multiple incidents that I know of where that happened and one very specifically uh where I got all the details. I think you're familiar with a similar one where this guy who had a pretty decent position of MSTR at JP Morgan when they increased the margin requirement, he's like, "I can't meet that, but I'll move my stock out to a place that doesn't have margin requirements that are that ridiculous.
(53:40) " So, at that point, it's in JP Morgan's interest to not let those shares leave, uh, right? Because that kind of hurts their thesis. And two, maybe they can't let them leave because they don't even have them because either they put a short on themselves or they're short it uh or they lent it out to some hedge fund on the street that's willing to pay for it uh and they can't get it back.
(54:04) They don't want to recall it. You know, these prime brokers never want to recall. They never want to have a track record of recalling shares that they lent out because then whoever put that trade on, it blows up that trade at the time when they want it to work. So they basically just, you know, try to hold out as long as they can and try to find stock from other places to be able to deliver out on behalf of clients that are requesting to do transfers.
(54:30) So you there's a lot of information to be to be gleaned like them not being able to deliver the stock out >> irregardless of the reason the exact reason why it tells you they were either they were directly short or indirectly short, right? they're short the stock. They don't have the stock to deliver. So, it's curious increase the margin requirement, don't have the stock to deliver.
(54:55) That's those two things pair together plus, you know, making statements, you know, down the line after the after you already wounded the animal, right? After the ship has a leak and it's starting to sink and then you start to hit it with, you know, MSCI stuff and NASDAQ stuff, it's just it it's just too much, right? just too much to to be a coincidence.
(55:16) >> Yeah. >> Like where was that statement a month ago when the MSCI report came out? It didn't do them any good then? >> No. >> Right. And do you think um like how do again how do we get out of like do you think people just need to move their their money off of JP Morgan if they think this is a believable thesis that they're attacking this and sort of just take their control um of the margin specifically away from them. Yeah, I do.
(55:50) I think people should move their stock out of MSTR out of JP Morgan, move their MSTR stock out. Um I think you know places like Fidelity are you know I think they although they are a trady institution uh at the core and at their founding I think they are one of the more uh you know crypto intelligent uh firms and I think they could benefit from the you know the big guys taking a hit.
(56:19) So it seems like a good safe place to go because they seem to be on the right side of things uh as opposed to the you know more just deposit collectors like Fideli is less less of a deposit collector. It's a brokerage firm right? So the deposit collectors are the ones that are most vulnerable. So I think those are the places where you move the asset out uh if you want to fight this this trend, right? Because although like we spoke about the banks are publicly saying that they like blockchain, they like Bitcoin, the systems that they're building,
(56:55) that's not really blockchain, right? That's not a, you know, decentralized network. It's a it's a centralized network. It's a centralized blockchain that they control. They're calling a blockchain to be on trend, but it's just a ledger system that JP Morgan will control and it has some blockchain technology, right? Uh right, whereas the Bitcoin network is a true decentralized network.
(57:28) Uh and so that they they want they they want to say they're in favor, but the things they're doing are just just like everything else they've ever done. control the asset, control the knowledge, right? Be the be the center of the system so you can control the system and so you can, you know, be aware of what's on the system because it's part of your network, right? It's not it's it's totally disingenuous to to suggest that that they're adopting, you know, a a true true blockchain philosophy of a decentralized network.
(58:04) That's not what's happening at all. smart contracts and loans. >> Yeah, >> it's [ __ ] >> It is. And it's funny. It's so old as new again in this space. Digital digital uh ledger technology is back in back in the news, back in vogue. Um but this it's too interesting topic too, which is like it seems clear to me.
(58:28) I go back to like the system needs to be recolateralized with better collateral. Bitcoin is the best collateral, most pristine collateral that's ever existed. scarce uh divisible as you mentioned earlier trade 24/7 365. It um is not collateral like real estate or even shares in an individual company which come with their own um which come with their own hair.
(58:52) Uh it's it's very hard to move a house. The value of a share in an individual company is dictated on how well that business is being run and how profitable they are at any given point in time. where Bitcoin is just it's just this neutral reserve asset that is relatively simple and dumb which is a good thing and many people myself included think like there is um room for Bitcoin to intersect with traditional finance I think particularly in structured credit um where you use Bitcoin as collateral to help you buy a house or get a loan to to invest in a
(59:30) business or something like that And um I I think that's sort of the period we're in right now is we're sort of feeling out where this intersection makes sense and who are actually the good actors within this intersection that are going to build products the right way that actually um give individual Bitcoin holders um value and increase utility of their Bitcoin to actually be able to do things in the real world.
(1:00:03) And that's where I think the the JP Morgan positioning towards MSTR and and Bitcoin by extension is is really unfortunate because there's massive opportunity here if done the right way. And it will come down to um I think everybody's got to be hyper cautious of rehypothecation. Um and how these products are structured is going to be very important and should determine whether or not you interact with them in the first place.
(1:00:28) But there is a way to do it right. uh particularly with like multi-IG escrow uh and being able to validate that that your Bitcoin is where you think it is at any given point in time like there is a way to do this and it's >> 100% >> will it happen and who's actually going to drive that? >> Yeah.
(1:00:45) Yeah. We we've we've seen that because we borrow against our Bitcoin a little bit to buy our stock back and if you you know you can enter into all these different uh structures of these loan agreements and like you say multi-IG account control agreement where you have a wallet right and you have the capital provider and you have the you know lender right because it's an alternative market the capital provider is not necessarily the lender right you have the lender who's getting their capital from you some bank or some foreign institution or
(1:01:16) whatever and then they're lending it to the borrower and but you should have an account control agreement that's a triparty between the capital provider the lender and the borrower and that bitcoin should be locked in that account uh in that wallet and not move and as you said you can monitor the activity in any wallet address right so there are very good ways to do it without letting that bitcoin get down to that capital provider and then him you reypothecating it to, you know, 10 different parties cuz he reypotheates it
(1:01:49) and then they reap and then they reypothecate it and as the person whose Bitcoin that actually is, you sort of start to lose control over that, right? You could have a bankruptcy, you know, 10 steps down the road and your Bitcoin could fall into that bankrupt entity and then you say, "Okay, yeah, but I could get it back from the person who bought lent it to them, but then they file bankruptcy or I get back from the person who lent it to them and then they file bankruptcy, right?" So, it's, you know, once the cascade of liquidations or
(1:02:22) bankruptcies start to happen, it's very tough. I mean they were unscrambling the Bear Sterns, you know, situation and the Lehman Brothers situation, right? Lehman for 10 years, right? Bear Sterns, that is why they saved it, right? Cuz they knew that unscrambling those eggs when you have all those different swaps and collateral agreements and all that mess out there in a in an operating institution could take 10 years, right? So, same thing is for Bitcoin.
(1:02:52) Once you have that network out there, if you're just allowing that Bitcoin to move around and allowing those assets to move around, you could right, you got to do it the right way. You got to do it smart. You got to learn from the, you know, mistakes that Tri Spy has made over the last hundred years. So, account control agreements, but you got to have a sophisticated party who understands, right, what they're negotiating.
(1:03:17) And so maybe it's like legislation where you have smart contracts that just dictate how it works and you literally prevent rehypothecation stuff like that where you could protect the system a bit cuz like when you lend stock out when you lend Bitcoin out you lend one Bitcoin it gets reaposcated reaped reap that that that Bitcoin can be sold 10 times short short right so although there's only one Bitcoin it it cycled through the system and created the selling of 10, right? That happens in equities.
(1:03:53) Um, so reaptheocation is is dangerous and posting as collateral when people can do that is is dangerous, right? They're not aligned with the with the lend with the borrower. >> No. And there's no lender of last resort in Bitcoin, too. Somebody lose. I mean, we learned this in 2122 with three arrows, right? Gemini and their yield products with Genesis lending it out to people.
(1:04:18) Obviously, BlockFi, Celsius, FPX go down the list. Like there is >> you got it >> a very high potential. I mean, the counterparty risk isn't worth it at the end of the day. That's like >> I'm not even sure how you get your hands around what the counterparty risk is when you can reap because you don't even know who ultimately has it. >> No.
(1:04:38) And that's what like these triparty agreements I think they need to be table stakes for anybody. >> Yeah. >> Doing they should be industry standard. >> They should be and that's what like companies like Unchained, Debbify, that's what they're working to bring uh to the market in the private sector. But that's my biggest worry as the banking sector is at least feigning interest in in getting in is are they just going to port their rehypothecation engine in equities onto Bitcoin and their end clients are are none the wiser and I think we should demand the transparency
(1:05:11) and the sort of products that that are possible with these multi-IG trilateral agreements like if you're not using this like I'm not going to use product. Right. Right. Right. And I I'm not I'm not sure how you would draft it into legislation other than preventing it, but do you do you really want to, you know, have bureaucracy, you know, dictate the terms of these agreements? I I don't know the answer to that, but I I think people have to be wiser to the different mechanisms and why hypothecation rehypothecation is
(1:05:47) dangerous. Uh and all these like when we started negotiating our agreements, the the most clear uh like tell about the value of reapthecation to the people who are lending us money against our bitcoin is that if you allow if you do it in ACA uh it's uh 10 and a half% interest. If you do it such that we can uh hypothecate and rehypothecate it, we'll do 8 and a half% interest.
(1:06:24) Right? So as the consumer, you're like, "Oh, I don't care what they do with it. I don't want to pay the other 2%." Right? I don't want to pay like 40% more or 20% more that I don't really care because I'm saving the 2% on a on a big asset. I'll I'll I'll save the money, right? But in that 2% is a is a message, right? Which is what are they doing with it that they want it so bad that they'll give it to you for 2% less, right? And that's that's where you got to be wary.
(1:07:01) If they're if they're if they're making more money than that, which they are, otherwise they wouldn't give you that discount, then how are they doing that? And how is that going to hurt me? >> Yeah. >> Right. as as the borrower. And so that that's the message. >> Yeah, it's a very strong message that people don't pick up on either.
(1:07:21) And to your point about legislation, um I don't think it needs to go that path either. I think it's going to be dictated by the market. Like you need something like a fidelity, the brand cache as a fidelity um to step out and say, "Hey, no, like this is how we're doing it. >> This is the way to do it. If you're pledging Bitcoin as collateral, here's where it's going to stay and here's how it's going to work and you can validate that it's not being rehypothecated.
(1:07:46) Um, that is I I think the ideal path for forcing the market to to adopt this what I would deem to be I mean I should objectively safer market structure. >> Yeah. >> What uh we're ending the year here. It's December uh 22nd. This will be released on 29th. So, leading up to um New Year's Eve, uh obviously it's been a year of uh of scratches, bruises, punches to the face for the Bitcoin market.
(1:08:19) What are you looking forward to in 2026? Do you think we're going to continue on this trend or you think the tailwinds are simply too strong that um the punches have been eaten? We're we're getting back on our feet and 2026 is looking like a good year. How how are you viewing uh Bitcoin in 2026? So I there are still more tailwinds, right? Also because of the efficient market theory, a lot of them are understood and probably probably priced in, right? But I think the one that's not priced in uh is you get legislation through Senate, right? And you have a
(1:08:58) true framework where digital assets, you know, hopefully specifically large dig digital assets like Bitcoin, you know, maybe Ethereum will fall in it, maybe Salana will fall in it. Uh where there is just a very defined framework for them to exist within the system. Uh and once that happens, uh I think there will be more broad adoption, right? Because at the end of the day, there's still a very very small percentage of the world consumer that owns Bitcoin. Very small.
(1:09:29) You know, outside the US, you know, there's I don't think there's any country that's above 5%. Uh right. And the US is is still, you know, arguably between 15 and 20 for any ownership of any digital asset whatsoever. Uh, so there's still a long way to go, but I think the catalyst that really gets it going and breaks all of the naysayers is a massive buyer.
(1:09:56) And there's no more massive buyer than US Treasury and treasuries around the world. If if the legislation goes through, I think that'll happen. I think there will be, you know, right now, US can own it. If they seize it, they don't have to sell it, right? New Hampshire's same. So, but if they actually acquire it, right, as part of a reserve, uh, where they're saying 5 10% of the treasury value should be in digital assets or Bitcoin or whatever, then that's massive buying, right? And then other jurisdictions around the
(1:10:35) world will follow, right? That's just the nature of the beast. and then you should really start to see the asset stabilize. Um, if if the legislation happens in Q1 or Q2, I could see that happening in Q3 or Q4. Uh, I think that's in the administration's interest. It's in their interest financially personally.
(1:10:59) Uh, right and that's a large part of the way this administration works. uh and then I actually think it's in the interest of the country and many countries around the world because it will stabilize their economy right I mean you you can you can get rid of this whole inflation uh disaster all this currency debasement right if you if you owned one USD in 1920 right by 2020 lost 96.
(1:11:27) 6% 6% of its value. Like that that's shocking, right? That's when you look at inflation that way, you really understand what's happening. And if you have a fixed asset, uh then you can really stabilize everything. And I think if we can get there, that's when we go to the next level. Like that's when this asset can really move.
(1:11:54) Uh, and I don't think that's priced in >> strategic reserve market structure. It see I mean it seems like the uh the tailwinds of that the light tailwinds are beginning to bubble I mean the UAE stepping in I think don't have any hard information on this but just perceptively looking at some of the headlines and having been at conferences around the world where some government officials attend it seems like everybody on the geopolitical stage at least is sort of looking uh behind their shoulder at others and saying okay who's going to be first to
(1:12:30) do this and that's another black swan positive tailwind is if you have some country it's like okay I'm not going to for the US. I'm going to I'm going to go first and the um environment is such where like the the pressure to do that is rising. I don't think it's going away. I mean the thesis is there.
(1:12:53) I mean, Argentina, they they've right, they've been chasing their currency for the benefit of their citiz citizens for decades, and this could be a really quick fix for them to just stabilize it, right? Instead of making your currency based off of gold, like peg it to Bitcoin, it'll work. >> You can just peg it to Bitcoin.
(1:13:18) Well, they're starting can't be more volatile than their currency. >> You can see like they're starting with Bitcoin mining. I know there's government initiatives to um survey how mining can can be incorporated into their electricity system down there. Who knows what happens with Venezuela? Um obviously tensions arising there, but it's a very oil and gas-rich nation.
(1:13:40) if you have the Madura regime fall um whether it's naturally the will or some regime change uh >> who's going to replace him and are they going to be looking at the state of the country and saying hey we can use these energy assets and Bitcoin to sort of get ourselves back on our feet quicker that would not surprise me >> um yeah I think all these these factors and these variables are just um are pointing to somebody's somebody's going to at some point because the incentive is too strong.
(1:14:12) >> Yeah, the thesis the thesis is 100% there. Someone's just got to make that jump. And I agree with you that someone should make that jump before the US because the thesis is stronger for other countries like potentially a Venezuela if the regime falls or when the regime falls. Uh and then countries like Argentina like it's it's a no-brainer.
(1:14:36) But if the US does it first, it makes it so much easier for them because then it's stabilized, right? If they're the first to jump in, it's a little more dicey, >> right? But if the US does it and then it starts to be a real trend and then if every treasury around the world owns some of it, I mean, then you have a a commodity that's parked, right? Are treasuries going to sell it? No.
(1:15:06) Right? Then you just bring the you essentially like suck up the float and that starts to look really interesting and then you can't manipulate it as much. Right? So, you know, now you can swing it around. I don't know if you call it manipulation or whatever you want to call it, but for an asset that's 1.8 8 trillion.
(1:15:27) You can move it around with a few billion, which that that's that's probably going to change uh once you have treasuries uh start to suck it up. >> Yeah. Yeah. We need to uh move into the decad trillions, centa trillion market cap. Yeah. >> To make it so you can't move >> move the market with billions. >> Yep.
(1:15:50) >> Ryan, this has been incredible. Where can anybody who's so curious learn more about what you're up to? Um, learn about MRI. >> Yep. You can follow us on X. Um, Empre Digital, uh, and then, uh, we're on Instagram and we're on all the other socials as well, but, uh, I think our majority of our presence is on X.
(1:16:09) And, you know, I post a lot about this TRFI stuff and the the way the two worlds are starting to integrate together and the the good and the bad that comes with that. And this is going to be interesting to watch it play out uh over the next 12 and 24 months. Uh whether this works or doesn't work, it's going to be really interesting.
(1:16:28) There's going to be a lot happening uh overtly and covertly. So, >> well, that's the uh that's the beauty of Bitcoin. At the very least, no matter what the price is doing, it's always very interesting. So, >> yeah, >> we'll be uh >> I really appreciate you having me. >> Well, thank you for coming on. I was going to say I was just going to say we should do this again at some point next year.
(1:16:51) Do a little update, see how things are progressing. >> Agreed. There's going to be a lot to talk about. >> There is. All right. Well, you uh you enjoy your week the end of the year and uh we'll see you in 2026. >> Sounds great. Happy holidays. >> All right. Peace of love, freaks. >> Thank you for listening to this episode of TFTC.
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