Hi, Peter.
I feel like you're a man
who needs no introduction.
Welcome to honest Money.
Pleasure.
Thanks for having me.
Yeah.
I wanted to start with,
a little bit
about your clients.
So you, A partner
at the Bitcoin advisor.
You co-founded that with
Andy, I believe.
And,
I've also read somewhere
that you manage over $1
billion worth of clients
assets.
That's
a lot of money.
Yeah, a lot of trust
placed in you guys.
And one of the things
that I love about,
what you've explained in
the podcast is the concept
of a triple point asset.
And, even just yesterday,
I saw someone comment on
Brian's post on LinkedIn
that Bitcoin is
not a store of value.
It is not a medium
of exchange,
and it's not a
unit of account.
So how would you explain that
to to your clients?
That's a beautiful
framing for that.
And I think
the beauty of that,
the world we live in
is that
everything is subjective
to that person
making that comment.
Bitcoin is none
of those things.
But to you and I, Bitcoin
represents a store of value
medium exchange
and unit of account.
And I think
the very unique thing
that Bitcoin
represents to us
that takes a lot of work
to understand
Bitcoin in this fashion.
But once you see it
you can't unsee it.
Is that
Bitcoin is what I call
the first triple point asset,
meaning
it is
the best store of value.
It's the best medium exchange
and it's
the best unit of account.
Now
these things typically
take time
to evolve and develop,
and for the world
to reach consensus
on each of
those three things.
But objectively,
Bitcoin is a
better store of value
than gold, and gold's
been used for 5000 years
or more
to determine
a store of value.
Maybe exchange
is the world's run
by the US dollar, but,
you can suffer sanctions.
You can have your cash
it removed from you.
If you're Russia,
you can have $500 billion
worth of farmers
have stolen from you.
And now,
I'm not saying this
to be political.
I'm just telling you
that these are the
objective
facts of the matter.
But none of that can happen
when you own and control
your own Bitcoin.
And that is a very unique,
7.2 Bitcoin versus
app traditional maybe
exchange in
the US dollar.
And the final boss
of all of this is
the unit of account.
And there are Bitcoiners
who have reached
what I call
terminal bitcoin meaning
they can't get any
more bitcoin.
They've sold their house,
they've sold their business,
they've sold their
all their other assets.
They're literally sitting on
a pile of bitcoin.
It's all in Bitcoin.
And there's nothing further
they can do.
And one
and those people
are basically running
on a Bitcoin standard
or Bitcoin
represents a unit of account.
So they
they reconcile the Bitcoin
with every transaction.
And if the bitcoin stacks
not increasing
it's decreasing.
And they're
probably wondering
how do I slow the bleed
on that.
And this is where
what is very unique
about Bitcoin
with being a triple point
asset is for the first time
in history,
we've got one asset
that can rule
the three functions of money.
And therein lies
the absolute special thing
that is Bitcoin.
And because
it's the first
time in history
that we've had
one asset to rule them all
when it comes
to the functions of money,
a lot of people will
dismiss it.
So there's
an instant dismissal
of store value
because it's highly volatile.
Well, that's in their view
and their world
that it's highly volatile.
But if you've
been in Bitcoin
5 or 10 years then
the volatility Bitcoin is
is something to be
glamorized, not shunned.
Because that's
how you get the huge returns
you do
when it comes to
medium exchange.
I think a lot of people
are wanting to push
the medium exchange narrative
with Bitcoin immediately,
but I can tell you
from someone
whose job is to preserve
wealth,
the last thing
you want to be spending
is your best
performing asset.
So I look at that
and think the the exchange
function of money
right now is
somewhat of,
it's a dichotomy for me,
because at the one time
I want it
to be globally universal
in acceptance
as a medium exchange,
but at the same time, I.
It's hard
to sell your best asset
to buy a cup of coffee.
I look at that and think,
that's the
internal
problems that you have.
Until you reach
terminal bitcoin,
where you don't have anything
to sell to buy Bitcoin,
then you don't really have
that problem.
You always have
cash available to buy.
But in a bitcoin as well
then people will suffer that
that problem.
And then
the final one
is this unit of account.
You know
how you accounting for your
yeah wins
and losses
in the financial year.
Do you look at it
in terms of say it all said
it's going up X amount
or do you
denominate in Bitcoin
where you know
you either have more bitcoin
or less bitcoin
than they had a year ago.
And this is where I think
everyone will move to that.
The latter option
where financial success
is determined
by how much bitcoin
you either gained or lost
in that financial year.
Yeah.
Yeah. Absolutely.
And I completely
can relate to that.
Friction between using it
as a, as a store of value
and medium of exchange.
Because I do like to spend
my bitcoins symbolically here
and there to support
other bitcoiners.
And recently I lost a bet
and I calculated that
that t which,
which was like $50
now is going to cost
like just under
$2,000 in 20 years.
Yeah.
It's like the most
expensive shit
I have ever, ever
spent money on.
But yeah,
I would love to know,
what strategies
you use
to to speak to your clients
about the volatility,
how do you
manage their emotions
and the,
the perceptions
that they have of Bitcoin?
Because obviously
you're fighting against
mainstream media
and all the FUD
that's out there.
So how do you deal
with that?
I think I come
from a
very privileged position
that because we, you know,
we deal with
all types of assets.
A lot of clients
give me a lot,
a lot of grace when it comes
to introducing
new concepts to them.
And this was never more
so than nearly ten years ago
when we talked about Bitcoin.
The initial framing of that
was framed around,
the weighting
to the portfolio
and then the expected return
and the expected
catastrophic losses,
and triangulating
that into an argument
that clients understood,
which went very simply.
The recommendation
is to put 1 or 2%
of your net assets
into this investment.
There is a 25 to 50% chance
that it is
a catastrophic loss,
and you're going
to lose everything.
In portfolio terms, that
represents a bad day
in the stock market.
It wouldn't even represent
a bad day these days
because the volatility
has gotten bad
much higher
in the stock market.
It's really a bad morning.
But the potential gain
on this is, you know, you
you're going to
sit on a potential 100
X in the next ten years.
And what's
transpired over those
just over nine years
that we've been giving
that advice
is we've seen clients
have nearly a 200 x return
on that
2% of their
initial investment.
So obviously it's grown into
an outsized portion
of the portfolio.
And then the
next conversation
that we have with
clients is who
who say that huge gain
now represents more than
50% of the net assets.
Is the conversation
around clients
wanting to sell some of that?
And it's like, hang on a so
we're now at a
different stage
of this investment
cycle for Bitcoin.
And my expectation is
there's a 100
x return
in the next ten years.
Do we really want to be
selling this asset
when property
looks very soft
commodities.
Well take your pick.
There is probably going
to be some
some form of inflation there.
But you look at stock markets
it looks way overpriced,
probably looks overpriced.
Bonds are on investable.
Do we really want to be
selling down
our best performing asset
to jump into these other,
other options and.
I'm more successful
than not in talking clients
out of
selling their Bitcoin to
to pursue those other things,
because the other options
at the moment just aren't,
aren't really
that palatable or offer
a good outlook for
for the next ten years.
Yeah.
And yeah, that makes sense.
And I'm glad that
they are taking your advice
because yeah, I just
it sounds really scary
to hear that someone's,
you know, has this asset
that's outperforming.
And then they
want to trade it
for something else.
Yeah.
But what do you
believe, Peter?
Like what do you think
is the, the,
the market
size for bitcoin.
Are you thinking
like 500 trillion
that it could
potentially reach or what.
What are your
personal opinions on.
Substantially more than that
really.
I think we're going to be 10
to $20 quadrillion
worth of market cap.
And so everyone
I talk to
looks at that and says,
but there's
only $1 quadrillion
worth of value in the world.
How could it be
bigger than all
that's there now?
And it's like, well,
it's going to grow
the pot dramatically.
All of the asset
values are going
to get inflated
to infinity,
and Bitcoin
is going to take up
a larger and larger
market share of that
to the point
where it's over 50%.
I actually think
it'll end up being
probably more like 90% of
total assets.
Will be held in Bitcoin.
Because Bitcoin offers
the greatest functionality,
the greatest return,
the greatest security
and peace of mind
in holding that asset.
It also gives you
the greatest optionality.
And once people understand
all those points
around Bitcoin
being the greatest asset
ever invented,
more and more people
will migrate more
and more of their assets
to it.
And I look at,
you know,
you look
through most of the Bitcoin
and who've
been around a long time.
This sitting on 90%
plus in bitcoin.
And I look at that
and I think well
that effectively means
in that client's world
basically it's Bitcoin
is ten x
all the other assets.
And given
that we're ten years
ahead of most advisors,
why wouldn't
the rest of the world
catch up to that point where
90% of their assets
are held in Bitcoin
and only 10% is held
in real world assets?
That makes perfect
sense to me.
So that that puts the market
cap of Bitcoin potentiality
at $10
quadrillion.
And we're currently at two.
What's that?
Might be a
5000 return,
frankly.
But like zeros
I'm not I'm not going to have
to visualize this after that.
Basically there's
a lot of return
left in front of me.
So if you're selling that
because you think
the party's over,
or most importantly,
if you say, I'm
not going to buy bitcoin
because I'm too late,
you're thinking about it
the wrong way.
There's
more gains in front of us
and behind us.
So jump on board.
Yeah, absolutely.
And I'm always interested in
so what I'm hearing you, it's
not a matter of
if I am curious to know
when and how you think
this might happen.
Globally
and in Australia.
Like, what are you
what are some of
the trends
that you're seeing this cycle
from your clients of people?
Like getting it all.
Like the biggest thing
I'm saying, which I didn't
think we'd have it.
Well, I'm
surprised it's
taken this long,
but now that it's here,
I'm surprised
it's actually happening
where we're
having conversations
with clients.
A lot of our clients
are baby boomers.
They're sitting on
considerable assets,
and we're
having conversations
going through
their balance sheet
to determine
what are the best assets
to be selling to
trade into Bitcoin.
And these are
multi-million
dollar properties,
multi-million dollar
ship or folios.
And they look
at this thinking
now we think this is wrong.
Run its course.
We need exposure
in this new asset class.
And we think
this is the future.
And if you ask me, would
baby boomers be
seeking out our services
to have those conversations
without me
having to explain to them
what what benefits are I,
I didn't see that coming.
So that I think is
a growing line of capital
that is going to force
a huge amount of capital
into the Bitcoin sector.
And this is where these
these clients
are typically buy
and hold clients.
They don't make huge changes
to their portfolio.
They make huge
investment decisions
very carefully,
very methodically over
very small.
Well,
maybe over decades.
Do they do changes like this.
And, and this is
a significant trend
change what we're seeing.
Yeah.
Absolutely.
And do you believe
that Bitcoin will be
an S-curve of adoption,
or do you think it's
going to be more linear?
I think we're definitely
in an S-curve.
I don't think it's linear.
You know, I think
and this is the
the madness of Crowds,
I think is is probably
a great book to read on this.
And nothing creates
a mania better than money.
And people getting rich.
People do
stupid things to get rich
and they take risks
that they shouldn't.
And this is
the ironic thing
of that Bitcoin is that you,
you can actually do
risk your life dramatically,
have huge exposure
to Bitcoin.
And what most people
look at as wildly
risky is actually very,
very safe and secure.
And that's that's
the one thing
that most normies
have trouble
wrapping their head around.
I think Bitcoin's
wildly risky,
and I
just want to caveat that by
saying Bitcoin's
wildly volatile,
but the solution
to volatility
is just holding it
for a long period of time.
And if you do that,
you get rewarded
with the best returns on it
out of any asset.
Yeah.
Yeah, absolutely.
I definitely
I keep saying this
in almost every episode.
To me
Bitcoin is the safest asset.
There's nothing out there
that I feel more secure
holding.
And yeah
I but yeah,
do you see it making inroads
as like
the preferred collateral for
banks
and money
market players?
I've got no doubt.
I've got absolutely no doubt
whether I think
Wall Street's
starting to understand it.
Because one thing
Wall Street loves
is volatility.
And Bitcoin's
the most volatile
asset out there.
Obviously
there's more volatile assets
in the treasury companies,
but that's really
a leveraged play
on the volatile asset.
So the
the one thing
that I love about Bitcoin
and this is whether or not
Wall Street likes it or not,
the government
will mandate it.
I'm absolutely certain
that it's
the problem
that we've had
with Wall Street
up until this, up
until Bitcoin's arrival,
and an institutional level
anyways, that
you could not divorce
Wall Street speculation
from Main Street consequence.
So Wall
Street was taking a huge hit
with other people's money,
and Main Street
was picking up
the bill for it
when it all fucked up
and went to shit pun Palace.
Those words
Main Street had to pay for it
and the government oversaw it
and they
there was nothing
they could do about it.
They just had to pass
the bill on and say, sorry,
you guys are good for it.
Now, technically,
Little Man didn't pay for it,
but the collective did
because it got kicked up
to the sovereign level
and all of a sudden
the government is now
basically paying the bill
for these Wall Street
execs speculating
the beauty of Bitcoin is,
is that there's
no Main Street consequence
for Wall Street
speculation.
And what does that mean?
Well, if the Wall
Street
buyers, sellers,
traders, whatever it is,
if they blow themselves up
using bitcoin,
there's no main
street consequence.
There's no housing bubble
that's going to burst.
There's no
cost of living crisis
that's going to
get exacerbated.
There's no,
commodities
that are going to blow up
and all of a sudden, like
bananas, $10
a kilo,
we don't have
the main street consequence.
And this to me is
the really exciting thing, is
that it allows Wall Street
to speculate in a bubble
without
affecting real world assets.
And
I've got a lot of,
my father's, my true love,
telling me that
you can't live in a bitcoin.
And for that reason,
precisely, is the reason
why Wall Street
is going to speculate on it
for the very reason
Wall Street can't, you know,
we can't live in it
is the very reason
that they're going
to gamble their lots on it,
because there's
no Main Street
consequence for it.
And if you sort of
follow this back
to to the original,
the genesis point of this
was really in the 1980s
when Larry Fink,
ironically, who created
the Bitcoin ETF
back in the 1990s,
he wanted to monetize
basically American
property market.
And how did he do that?
He created residential,
and commercial
backed, mortgage securities.
And
and that was a way
to monetize and gamble
on the American
housing market
or real estate market.
Property was nowhere.
Wasn't financial loss
in any way, shape or form?
It took him nearly
25, 30 years
to get to the point
that created the GFC.
Ironically,
the genesis point of the GFC
started with Larry Larry
Fink creating those options.
Now he no way, in
no way, shape or form wanted
to create the housing market
that went
and caused
the GFC back in 2008,
but that were the unintended
consequences
of Wall Street speculation
with Main Street consequence.
Now fast forward
to where we are now.
Larry Fink,
who knows a thing or two
about tokenizing things,
has created the world's
first, largest
and biggest ETF,
and the Blackrock eighth.
And he is going to find
a way to monetize
that and allow
Wall Street speculation.
And the beauty of this is,
is that it removes
the main street consequence
where housing prices
go up, interest rates
get smashed around,
housing becomes unaffordable.
All of a sudden
people are using, you know,
housing as a store of value.
All of those things
get demonetized
and sucked out of that.
That whole ecosphere of that,
that financial
asset class
and gets put into Bitcoin.
And that's a net
benefit for all of us.
Yeah.
Jim.
Yeah, I
hadn't I
hadn't thought of about it
like no consequences
other than maybe someone on,
you know, LinkedIn saying
I told you
it was a scam once.
Once the bubble
like you
once we have a drawback.
But yeah, I've loved,
Larry's journey with Bitcoin.
Obviously he was
he was very against that.
And now he's seems to be
very, very for it.
And you know
seeing those results
of the Bitcoin ETF launch.
It's just it's just wild.
And I'm surprised
that this isn't
talked about
more in mainstream media.
Like how is something like
this still
you know
kind of you need to be
in the know to
to to notice these things.
It's even in his,
letter, 2025
letter to shareholders
and investors.
He's talking bitcoin,
you know, potentially
replacing the USD
as the global reserve asset.
And the media is crickets
about it.
It's just it's wild.
Like what what do you think
will be some of the
things that might slow
down adoption for Bitcoin.
Very good question.
I think
if we continue to have
the operation
checkpoint 2.0,
the difficulty
in actually sending money
to the exchanges,
I think that's going
to slow down adoption.
I think it's
we have
a major blow up
in one of the major exchanges
that will obviously
rock the confidence
in that
it will slow adoption, but
it won't actually undermine
the protocol.
There's a whole
host of things
that I think we can see,
obviously, probably
one of the biggest things
if this
if the government starts
ramping up
interest rates
to where
they probably should be.
Yeah.
If we had a major increase
in interest rates,
we had government
cut spending
and actually lived
within their means,
we reverted to a gold
standard or equivalent.
These things,
basically
describing a unicorn
that will never exist, but
the taxing is happening.
You know,
it's not going to happen
anytime soon.
And contrary to that,
we'll probably
say governments really stop
ripping into the printer
and exercising
that ability to print money
in the very near term.
So a lot of
people are calling for it.
This the expectation
that that will happen
and that will have
a positive effect
on on the price of Bitcoin
when we have
the confluence
of rates dropping
and the prices,
the money printing go to,
that will obviously
be very beneficial
for Bitcoin.
So price appreciation
they will be extraordinary
I'd expect.
Yeah I'm very glad to see
what's going to happen
now in September.
Do you have an opinion
as to
whether the fed
will hold or lower rates,
or what do you think
they're going to do?
Question.
There's huge
pressure on power
to drop them, but
it's I think he's fine.
He's doing a dance with Trump
at the moment, and I wouldn't
be surprised
if he didn't
drop rates at all in the sit.
Now we're going to sit on it
for another little bit and
just sort of
build
that pressure in the market.
So I'm a bit ambivalent
and it's above my pay
grade
to really comment on that.
But speculating on it,
looking at the posturing
on both sides,
reading the paper and say,
we're going to have
a Mexican standoff, you know,
rates will go nowhere.
Yeah,
it definitely feels like
it's very political,
more than anything.
So, yeah, no matter what
the outcome is,
I'm probably won't
be surprised.
But, yeah.
So do you have a timeline?
Like, how do you see bitcoin
regulator realizing
the financial system?
Oh yes.
I think it will
absolutely re collateralized
or refinance last
an underfunded system.
I think it's going to take
10 to 15 years to do that.
And I think the fastest way
to do that is with
principal protected markets
where you staple government
treasuries to Bitcoin
and you guarantee
the capital
of those investments.
But you take a portion
of that
principal protected note
and you buy direct
Bitcoin with it
and you stay put together.
Now, on a five year note
on the numbers
that I've looked at,
if you were to.
Put inside $1 billion
into a principal protected
note, 800 million of
that went into a government
treasury paying 5%.
So that
the interest accumulated
to the original capital
that you put in, that's
where you get
the capital protection from.
And that allows you to
then put 20% of that
capital into Bitcoin.
By my calculations,
you will get a 200%
return on Bitcoin
and 100% return
of your initial capital.
So you've effectively
tripled the equity
of your initial investment.
And all of a sudden
that gets capitalized
into Bitcoin.
So I look at that
and think
that is the fastest,
easiest way to do that
with the least consequences.
And this is the problem
that really I don't think
a lot of the economists
have really looked
at the way to solve
these problems is to inflate
our way out of it,
way out
of it with
the lowest consequences,
the greatest bang
for your buck,
and most importantly,
the best outcomes
from a society.
Well,
I look at this and think
the best bang
for your buck,
the best return on that,
the best multiply
that you're going to get
is putting that that cash
into the
smallest market possible
and the most tightly held on
that happens to be Bitcoin.
The beauty of that
is, is that there's
no downstream consequences
for increased
cost of housing.
You know, pumping money
into the housing market
or lowering
interest rates
is going to force up
the cost of housing.
It's going to force up
cost of living.
Everything's
going to get more expensive.
And the inflation rate, it's
going to go through the roof.
But if you
pump it into Bitcoin,
there are none of
those downstream
negative consequences.
And you actually solve
what you really need
to solve for,
which is the recapitalizing
of the financial markets.
And yeah, I'm very curious.
I'm going a little bit down
a speculative route here,
but I'm curious to know
what types of jurisdictions
do you think will lead
the way with global adoption?
I think the strongest,
the strongest.
At the moment
we've had
the weakest
governments around the world,
or economies
around the world
have adopted it like El
Salvador is now
a beacon of light
in the Bitcoin community.
But when they first started
that it was
hell on earth,
quite literally
one of the highest murder
rates on earth.
The president of El Salvador
now has done the killings,
just done an incredible job
turning that
that country around to now
being a beacon of hope symbol
for the world.
I think
we now have
in the current U.S.
administration,
yet
the most
powerful administration
or government on Earth
and acceptance.
And I wouldn't
say dependance yet,
but they will become
a dependance on Bitcoin.
And we're starting
to see the regulatory
frameworks
build out around that.
And one of the things
that I think
is absolutely huge, it's
sort of gone by the wayside
and I've just a house
full of good news,
is this repeal of 721,
which now allows the banks
to Cassidy Bitcoin
on their balance
sheet without it being.
Economically unviable.
So there's no reserve capital
that needs to be held
when you hold Bitcoin
on the balance sheet.
The repeal of said
121 remove
that need
for additional
capital to be held
so now they can
economically hold clients
bitcoin
on their balance sheet.
And that is the first step
of mainstreaming
this into clients
globally.
The US is basically
at the top of the
tip of the spear.
Everything is now
downstream of that.
The US has given a go ahead
to make that happen.
We're going to see savings
and loan products
now build out on the back
of it,
and you're going to have
every bank in the world
clamoring
to Cassidy you Bitcoin.
Which yeah,
which makes me curious
as well
as to how
that's going to trickle down
into Australia because
I always wonder,
like what's
going to be that catalyst
to start setting things off.
It's still very, very much
a niche thing here.
And I wonder
if is going to be
the institutions
that are
going to lead
the adoption in Australia,
or whether the retail sector
is going to wake up.
Like what?
What do you think,
is going to happen
with Australia?
The question I think the
superannuation industry
is going to have to start
allocating more heavily
to Bitcoin
and everyone who works in
Australia has
a superannuation account
or pension account,
and that will probably be
the Trojan horse
for the Australians,
because this will
not only help to re.
Well, our banks don't need
recapitalizing
to be very strong
on a global scale
relative to everyone else.
But,
our banks are heavily
will they act wide
relative
to residential property.
So all our banks do now
is basically lend
to residential property.
There's no business
lending of any note
in Australia.
It's a very difficult market
to get that done in.
And I think
the repeal of said
121 in the US
is actually going
to have downstream
consequences to US fear that
hopefully removes
the operation.
Chokepoint 2.0
shows the banks
how to monetizes
and most importantly
gets every,
you know, gets Bitcoin
in the hands of
every Australian.
Yeah.
And the whole operation 2.0
I always wonder
if there is something similar
in Australia
like that
that we don't know of.
It would certainly make sense
because it feels
like there is,
but it's not.
It hasn't
really come to light yet.
It just seems
that it is driven
largely
by consumer protection.
But I do wonder
if there is something
bigger at play.
And why there is.
Yeah, so much stalling of
of allowing people
to transfer their funds
into bitcoin.
I'm not sure.
But let me tell you
a comical story,
which literally happened
just in the past two weeks.
We had a client of ours,
he had sold down
seven figures
in Bitcoin
to do something.
And so there was a sale on
an exchange
that was passed
through to a business
banking account
that business banking
account then went to
go and buy
something else.
And then there was
a flow of money back
the other way of,
just on five figures.
So less than $30,000
millions went one way
from the exchange
to the bank and out.
And then there was about 30
or $40,000 flowing
from the bank
back to the exchange to do
whatever needed doing that.
And the bank
put a
kibosh on the transaction
and stopped it and said, no,
you're not allowed
to do a swap.
What are we worried about?
You know,
fraudulent behavior
and the rest of it,
he said, just have a look
at the transaction history
on this account.
There's millions one way.
And now I'm sending
$40,000 back.
This way, please.
And so anyway,
I was on the phone
with the bank.
Luckily they had a banker
that they could
actually speak to
and problem solved.
But there is a
very real problem
with sending money
from your bank
account to the exchange
that,
that's probably
one of the biggest hurdles
that we have to overcome in
trying to get clients,
Bitcoin.
Yeah.
Yeah, it's really frustrating
because yeah, family
and friends
that, that,
you know,
want to move their money in.
They're obviously law abiding
citizens
have had bank accounts
for decades
with no suspicious behavior.
And then all of a sudden
they want to put some money
into Bitcoin.
And these just seems
to be
like the biggest problem.
And yeah, it's it's
very frustrating for sure.
I hope it changes sooner
rather than later.
Yeah.
But I want to go back
to the Bitcoin advisor
a little bit
and more about your clients.
So you guys
recently have launched
a specialized product called
Loan My Coins.
And maybe
you can walk us through
how that product works.
And who is it for.
It's it's
a very unique product.
And I've just
put this candidate in
in front, up front
that it's probably not
for 99%
of the people listening.
So it's a very unique product
that works
by basically,
it's a bitcoin to
bitcoin loan
rather than a bitcoin
to see it launched.
And the beauty of this is,
is that enables us to achieve
some very unique things
in the Bitcoin mining space.
And I'll just briefly rattle
those off.
The first is
there's no counterparty risk.
So when
borrowing on your bitcoin
probably one of
the biggest concerns
is having counterparty risk.
Whether or not
you'll actually
get the return
of your Bitcoin.
With this, there's
no need to worry about it.
The second
point is that it's
there's no
margin call
on this product.
So because it's bitcoin
the bitcoin if
Bitcoin drops 50%
with every other
loan out there,
you would face a margin call.
And you'd either have to pay
the loan out or alternatively
top up the cap of the bitcoin
to avoid that margin
call with this product.
There's no magical.
So you're not subject
to the whims
and the
volatility of Bitcoin,
which is a huge bonus because
because of
Bitcoin's volatility,
it can with people out of
and lose the the collateral
they put up as a security.
And this is one thing
that I was acutely aware
that I didn't want to do.
The third point is
because it's bitcoin,
a bitcoin,
we can borrow effectively 95%
on our bitcoin stack.
So if you put in
two bitcoin you can
borrow 1.9 bitcoin
relative to any other lender.
That's borrowing
bitcoin to say it,
the maximum length
you can get there
is maybe somewhere
between 50 to
maybe if you like
me, 60%.
But with this
you can actually
borrow up to 95%
on your bitcoin,
which represents
a huge difference.
Most importantly,
if you're
putting in Bitcoin
as collateral for a loan,
what this means
is that you can either
get double the amount back
in a loan,
or alternatively,
you can have half the amount
of collateral
put up at risk.
And that to me represents
a huge de-risking
of borrowing on your Bitcoin,
because ultimately
you want to put up
as little capital as possible
to get the maximum
loan amount.
And this is the problem
with the Bitcoin defeat loans
is that you
have wildly volatile
collateral
that you can
get a margin call on
and that you have
counterparty risk.
And so outside
of the first 48 hours
of the the loan contract,
where you've got your Bitcoin
sitting in escrow,
there is no counterparty risk
because you've effectively
got back what you put in.
And we spent a lot of time
and money
on legal,
to ensure
that the contract
is structured
in a way
that there's no counterclaim
from a third party creditor
down the line.
And that's really important
because so the problem
that happened
with your block phone Celsius
in years gone by is,
is that
Bitcoin has put up there
bitcoin as collateral.
So you had $1 million loan,
you'd had to put up
$2 million of bitcoin.
And that got
your million dollar loan.
And what most people did
is they went
and bought Bitcoin.
And then to avoid
the fear of a margin call,
they took that
million dollars in Bitcoin
that they had just bought.
And they added that
to the collateral
of the security
that the lender was holding.
Now the lender
then Celsius or
BlockFi went bust.
Their
their debt
obligations or their assets
got sold off to third party
creditors.
You as the Bitcoin owner
who put your bitcoin
up as collateral,
they lost your bitcoin
and then they sold off
the obligation
that you had to them
to a third party credit.
And so now you've got to deal
with a third party creditor
who wants their million
dollars back, despite
the fact that they've lost
$3 million of your Bitcoin.
To me.
Yeah.
One of the first rules
of any advice
that we deliver to,
whether it's wealthy families
or bitcoiners is
it's not about
return on capital,
it's return of capital.
And so these legal structures
that we put in place
protect you in the event
that the,
the lender goes broke.
And that's really important.
There's going to be
no counterclaim
for the bitcoins
that you received.
And that is really,
really important.
So what I think is
really unique
is we've
created a loan product
that is very unique.
And when you first hear
about it, you're like, oh,
that doesn't make any sense.
And then you start
thinking about it
from a Bitcoin perspective
denominated in bitcoin.
And you think, oh,
okay, I understand this.
I think this makes sense.
And where I will say,
what I think
the ideal use case for this
loan product is
if you can find a,
an investment
that outperforms Bitcoin
plus 5%
is the hurdle rate
for whether or not
you'd want
to use this product.
Having said that,
it's also a very
dangerous product.
If you say, oh great, 5%,
interest
rate with a 95% loan,
I'm going to go and buy a car
or a sauna or whatever
you want to do
with your money.
That's going to be
the most expensive loan
you're ever going
to take out,
and you're going to lose it
on your Bitcoin.
And so this is where I think
and you know,
I do a really good job
of understanding
what the clients
are wanting to do with that
in order to determine
whether or not
it's a great fit for them.
Because I can tell you, we've
probably told more than half
of the people
inquiring, probably
more like 80%
that what
they're inquiring for.
It's not a good use case.
And the fundamental
premise of the Bitcoin
advisor is to help
get bitcoins off exchange
and help clients
get more Bitcoin.
And so we want to
use that loan product
in a way to get more bitcoin,
not to help clients lose it.
And so we've been very,
I think we've
been really good
at explaining
to clients the downside
of using such a product,
because it
with any financial position
there is risk and helping
explain to clients
what are the,
you know, the pros and cons
of pursuing
a product like this.
Yeah, absolutely.
And this timing
this timing,
the the Bitcoin price
also play into that.
Like for example, if you were
if a client
was to take this loan
at the top of the market
and then Bitcoin's
going down in price,
would that be
potentially the ideal timing?
Yes I would
if you want to short Bitcoin.
So if you think
if we went to
$1 billion tomorrow
you think
this is not sustainable,
we think it's going to be
coming back down to 200,000.
That might be an ideal time
to actually take a loan
out on your Bitcoin
and basically convert it
cash.
What's the price
know absolutely plummet.
And then you can buy
in back at 200,000
and you've effectively bought
for more Bitcoin
or four times more bitcoin
than you originally had.
So that would be
the ideal outcome.
Having said that,
you'd have to be very brave,
very clever.
And that's not something
that's in my wheelhouse.
I would never attempt that.
I'm I'm not smart enough
to do that.
So I love it.
I just when I was trying
to research this product,
I was also kind of asking
all sorts of weird questions.
I was grok
and,
I'm very curious
to know, Peter,
is this product available
only in Australia or is it
available worldwide?
Can anyone globally?
So this I'm glad
you said that,
because I've wondered
if one of your clients
might potentially
be Michael Saylor,
and then one of
the rabbit holes
that I went down,
I was like,
would this
be insider trading?
And turns out he wouldn't.
But he would
have to obviously prove
and demonstrate that.
But yeah, he didn't use
any insider knowledge
to potentially leverage
this product.
But yeah,
this is what I do
in my spare time.
That's a great question.
I'm glad you brought that up,
because I think
this loan product has got
a lot of use cases for me.
There are probably
two major use cases.
The first is, I think people
who think that they can
outperform Bitcoin
by investing
in the treasury companies.
I think there is
an opportunity,
a small window of opportunity
with a huge amount of risk.
But there is an
opportunity there.
And then the other is
if we have a really strong
bull market and it's clear
that there's
just a whole host of,
I guess, air
in the market,
that really needs a big drop,
then it's
probably an
ideal product to do that
because
you get to go to cash.
It's very little
to go to cash from
an expense perspective.
And then you get to,
you know, if it drops 80%,
you can buy back four times
the amount of Bitcoin
that you initially sold.
So I'll look
at that and think,
if you can do
that, fantastic.
And if you if you can then
stay humble
and stack sets
and just get as much Bitcoin
as you can.
And that's
the ultimate strategy.
Yeah.
Yeah absolutely.
And I'm still in that camp
where I'm like I'm
in a accumulation zone
right now.
I'm very interested
in bitcoin
collateralized loans.
But I want to spend
a good amount of time
learning about it
before I do anything.
Yeah.
But I think
I also saw,
in one of your posts as well,
that this is the
ideal product for
someone who's got Bitcoin
with a low cost base as well.
Can you explain that
a little bit more?
Yeah.
I think,
clients with a low cost base.
And let me explain.
So the use case of that is,
we come across
a whole host of clients who,
and maybe og
bitcoiners
have been around
for a long time.
They've got
really low
cost base.
But the catch with that
is having a low cost base.
Bitcoin is not only
to have a low cost base,
but they also have,
the bitcoin
in the wrong entity.
So in Australia
you can have family trust
companies
or superannuation funds.
In America
you can have irrevocable
trust or offshore trusts.
In the UK there's
something similar again.
So each different
jurisdiction has its
equivalent
or equivalency of that.
And early
Bitcoin has got Bitcoin
at a very early price.
But they weren't thinking
that this was going to go
to $1 million a coin.
And they were
going to sit there with tens,
if not hundreds
or millions
of billions of dollars.
And it's sitting in
a structure that is both tax,
well,
ineffective
from a tax perspective.
And it doesn't provide
the asset protection
that's needed.
All of a sudden,
this loan product
allows people to shift
that asset
into another entity,
into another top structure.
And this is where,
my background
in estate planning
and structuring, trusts
and the like for clients
is really valuable
because we can
effectively shift
the value of these assets
to another entity.
We without a
major tax consequence
and most importantly, though,
about the tax consequence,
you're not avoiding it.
You're deferring the tax
payable on it.
It's all once payable.
And to do anything
other than that is illegal.
We're not trying to do that
in any way, shape or form.
But coupled with
the opportunity
inside the bitcoin, treasury
company
or companies,
you can take a very small
portion of your stack.
And if you time it right,
you can actually double
the size of your stack.
So you have a,
a stack
that's sitting
in the structures
that give you the best,
and most tax effective
use of your Bitcoin
as well as an asset
protected bitcoin.
And then you've got your
original stack as well.
So I look at this and think,
this is a very unique product
that has the ability to help
a lot of bitcoiners
shift those assets
into the right structures.
Without a
major consequence.
Yeah.
Interesting.
That's very interesting.
But you also
mentioned estate planning,
and I wanted to touch on this
as well.
It's one of
the key things that you do
with your clients.
I'm keen to know
a little bit like high level.
What are some of
these strategies
and how do
those conversations
typically go?
Because I, I feel that
a lot of people
don't think about some of
those more morbid topics,
but they're so important.
Yeah, I agree, look,
no one likes
talking about death
and there's nothing,
nothing fun about it
whatsoever.
It's usually a very awkward
conversation.
And,
and the difficulty is
with Bitcoin anyway, is
that Bitcoin is
a digital instrument,
and there's no
in the event
that something goes wrong
or you don't
securely transfer your
Bitcoin on your death,
there's no appeal
to authority.
There's no legal
decree, there's no government
mandate that you can
wangle your way back
to get those bitcoins.
Once they are lost,
they are lost for good.
There's no way
to recover them.
And this is where,
as as an investment advisor
who has a fiduciary duty
to their client.
The number one thing
that we do
is obviously protect
the the bitcoin,
but make sure that that
Bitcoin is recoverable
in the event of death
or any other mishap.
And that's
how we've developed that
collaborative security model
to ensure that there's
no single point of failure.
Because the last thing
I want to do
is be on the hook for,
on the hook
for a client
who's self-custody
their Bitcoin
and they turn around
and say, oh, will you,
you tell me how to do it?
But you didn't tell me X, Y,
or Z. I'm going to sue you.
And that's an
unacceptable on two parts.
Firstly, the client
losing Bitcoin and secondly
being held responsible for it
wasn't an acceptable
Wasn't acceptable
business model
that we want to do.
Hence the reason why we did
the collaborative security
to ensure
no single point of failure.
And I'm really proud
to say
that we'd never lost
a Bitcoin.
Sadly, we lost,
our fourth client
sadly
passed away who's
going through this process?
And hopefully I'll catch up
with their family next week
and just the most
do lots of semis
you can imagine.
But,
you know,
we're going
through the process
of transferring
that to the executor
of the estate
and then distributing
that to all the
beneficiaries, the, you know,
all the family
members involved.
We've done that three times
previously.
We haven't
lost a single Satoshi,
and we're about to do that
for the fourth time.
And this is where
when constructing
those models for Bitcoin is
where all of that
not your keys,
not your coins.
And a lot of this file
to think about us actually
being the single point
of fire
in our self-custody set up.
And that's
a very difficult thing
to look in the mirror
and think, have
I solved that problem?
That if I'm no longer here
and my family recover, that
when you've got
tens of thousands or hundreds
of thousands of dollars
in Bitcoin,
no biggie, you've lost it.
Too bad. Move on.
But when your entire family's
net wealth is in Bitcoin,
or alternatively,
makes up more than 50%
of your net assets,
making sure that you've
got a proven system
and you can
demonstrably prove
you don't have to trust.
You can actually verify
that the system
you've got works.
And this is what
we show clients
when we go through it,
then that is a
for the clients
who are not
native bitcoiners,
that is a huge unlock
for them because once
they see that
their partners
not gonna lose their bitcoin
and the person receiving
it doesn't have to
learn about bitcoin,
which is usually
the big prohibition
on getting more bitcoin,
then that's a
huge mental unlock
to help the family
get more bitcoin,
because the non bitcoin in
the family
is no longer responsible
for the recovery of it,
the bitcoin in the family
has outsourced
their responsibility
to us.
We show the family that how
this is
how you're going
to recover it.
And then once they know
they can recover it,
they can't lose it.
Then there's the
implicit endorsement
from the rest of the family
for the Bitcoin
to go and buy more Bitcoin.
And at the end of the day,
that job is just to help
clients get more Bitcoin.
And this is a service
that helps them do that.
Yeah yeah I I'm
I fully agree
that the biggest risk in
Bitcoin is the self-custody
aspect.
Most people
think it's volatility.
But you know
if you're a Bitcoin
and you think self-custody
is the one thing
you need to get right,
and even though like I'm
a bitcoin and I self-custody
does stress me out
so much,
it stresses me out
more than anything.
Every time the price like
there's a ten K candle
going up,
I was like,
why is it still there?
And I'm checking
it's still there.
So yeah,
I think collaborative custody
is a really
interesting model.
And do you think this is
kind of where the future is
going to be
in Bitcoin,
like more businesses
doing this sort of stuff?
I think
without a shadow of a doubt,
because it's a technology
that it's
the only asset class
that lends itself
to thinking able to do this.
And I can tell you
from a whole range
of different reasons,
this multi-sig
collaborative security model
is an absolute
game changer.
From an asset
protection perspective,
I think it's
wildly beneficial.
One of, you know,
Bitcoin's huge concerns
is another 6102 style attack
where the government comes in
and just takes a Bitcoin.
One of the beautiful things
about what
what we do at the Bitcoin
Advisor is we've got clients
all over the globe.
We've got,
when clients work with us,
we typically have a key
set up with
where our keys are in three
different jurisdictions.
And so to actually suffer
a 6102 style attack
where the government comes
and takes your bitcoin,
the client's
not capable of
moving the Bitcoin.
If the government came
and said that
because there's keys
in different jurisdictions
that protect the client from
being able to move it.
So I look
at these.
Yeah, this is this is
this is one of the
very strong selling point.
Well this is yeah.
It is it's a it's often
overlooked
and people
don't comprehend it.
But where I get to have
some really great sort
of intellectual conversations
is sit on,
I often get asked to sit
and present
to, tax or legal
communities,
tax professionals and legal
professionals on bitcoin.
And this is one of the points
I love bringing up,
because no other asset
can you hold a key
in three
different jurisdictions.
So if you think about it,
commercial property is held
in the jurisdiction
that the property resides in.
The stocks are held
in, you know, on a
on a national level
at the National Stock
Exchange.
Commodities,
the same thing
is actually
a physical commodity
that's held there.
Or there's a not
according to that
certificate,
bonds,
same thing
held in the national Bank
or the central bank.
However, Bitcoin
is the only asset on earth
that can be held in five
different places at once.
That is what I love about
it comes to asset protection.
Yeah,
this is what I love about
learning about Bitcoin.
It's it's it's the hottest.
Well it's
not the hardest thing
to explain
but it does
really take time to
to get your head around it.
And that no matter
how much time you're spending
and all these
different aspects of it
that you learn to admire,
there's still something else
that just makes
you think like
even that alone
is such a strong point,
like such,
such a strong argument
for Bitcoin.
But then there's like
100 other things
that I just amazing about it.
This is yeah,
this is what I really love.
I'm.
Yeah obsessed.
Yeah I am
I can't wait to see
Australians really start
to understand
this product more.
I've seen
especially this, this cycle.
It seems like the retail
isn't quite there fully,
from what I've heard of,
haven't been through
many cycles
like some other bitcoin
is have.
But it's what I hear
from them
that you know retail hasn't
really woken up.
But there is the odd person
that's like a
know me and they
come to the
point where I
understand bitcoin
and then they're
selling their property for it
because that's like
the moment has clicked
or they're moving in
a significant amount
of their net worth into it.
And I just I can't
wait to see, you know,
more Australians do that.
And yeah,
preserve their wealth.
I think it's going to be
it's not just Australians,
it's everyone
in the globe.
Yeah.
I think all of a sudden
we're going to see a deep
monetizing
of all those other assets.
Like some of those stocks
are just insane.
We've got stocks trading.
There's a whole host
of stocks trading at us.
You. Yeah.
At a greater than 20 times
piece price earnings ratio.
That means
you're going to take 20 years
to get the cash flow from
that company to pay you back.
That is a
huge risk,
huge risk.
And if you look at
a comparative
PE ratio to Bitcoin,
you get paid back
in less than two years
on average.
I look at this and think
in these terms, Bitcoin
just represents
such great value
from an economic perspective,
from a financial perspective,
from an estate
planning perspective,
from an asset protection
perspective.
I love this and think
once the world understands
one of the values
and benefits of
of this asset,
and yet
to have 9,095% of your net
assets in Bitcoin
makes perfect sense to me.
Yeah.
Yeah, absolutely.
And the other year on you
mentioned irrevocable trust
which reminded me
of Mark Morse.
And that was one
of the events last year
when I was a complete newb
that I, that I saw you at.
And I remember
you asking him
a question about the trusts.
But yeah,
he he's really interesting.
I learned a lot from him.
He mentioned something
recently on on LinkedIn
that, you know,
S&P 500
is just a proxy
for inflation.
And I used to
love the S&P 500.
That was like my favorite,
you know, investment vehicle.
And now it's just like it's
just following inflation.
It's not really
outperforming it.
And then you look at gold
sensitivity
and bitcoin
sensitivity to inflation.
And you're like
this is clearly
clearly the
fastest horse in the race.
Yeah definitely a
long term asset.
I'm also curious to know
like what is your
average client
who who's who.
Would it be a boomer.
Would it be female?
Very good question
on that.
Depends
how you break that down.
I think most of our clients,
probably our ideal
client, would be someone
who wants
to allocate in a big way,
but doesn't have
the necessary skills
or confidence to do that.
Now, that might be
male or female.
Typically
that does break down
into an older demographic
because they're not
technologically savvy.
Like youngsters.
But it typically comes down
to someone
who wants to be handheld
through a process to ensure
that they're not
going to make it up.
And this is where
the casing
with Bitcoin and this is,
say, on a
on a metal level,
this is a return to
consequences for actions
when it comes
to Bitcoin
being a digital
parent instrument.
If you mark it out
there's nothing
you can do to fix it.
Absolutely nothing.
And this is where
I think
our service
is really valuable,
because when you're working
with a team
of professionals
who haven't lost
a single Bitcoin,
that helped
give clients the
the confidence to know
that they can apply
as much capital
as they want to this asset,
and they know
they're not going to lose it.
Yes, there's a fee for it,
but it allows them
to get allocated
in the volume that I want.
Whereas if they went
and did it themselves,
they might only invest
10 or 20% of what they would
if they actually employed us
to help them with it.
And that to me
is a huge benefit
because it gets them
allocated in size
immediately
rather than having to go
through a 3 or 4
or 5 or 6 year
learning curve
to feel comfortable to fully
self-custody their Bitcoin.
Yeah,
I've been through a
yearlong learning curve
and I'm no, I'm still not
fully comfortable.
Yeah.
And, I can
completely,
see it and understand that
there's obviously
a lot of high
net worth clients that have,
you know, entire teams
managing their trad profile
portfolio.
And because they're
very time poor and they don't
exactly, you know, if
even if they are
smart and savvy, they
they simply don't
have the time.
So it makes sense
to have attained
supporting you
through this process,
especially with something
as new as and crazy.
It's bitcoin.
Yeah.
I just want to check
if I've missed any questions.
Peter.
I think we have
really covered a lot
of ground.
I've covered
all the questions that I had.
This is it
is there anything
that you would like to share?
I think
probably the the most
important messages
Bitcoin is now gaining,
I guess, mainstream
notoriety.
A lot of people
feel like they have missed it
and so they don't
want to touch it.
And a message to reiterate
that I think is
really important is
when not even
in the second innings.
Yeah.
Of of Bitcoin
the party has not
even started yet.
There's so much capital
coming to this space.
Maybe 10 million
people globally actually
deeply understand Bitcoin.
There's
another 8 billion people
who need bitcoin not want it.
They need it.
And so we're still so really
there's so much
upside in front of us.
My I guess passing
message would be take action
if you haven't already.
So your bits learn
as much as you can and
your life will be better off.
For it.
Yeah, absolutely.
Which is another quote
that I was just
reminded of that
you said in another podcast,
is that Bitcoin rewards.
I'm going to
mess this up now.
It rewards the.
So sorry it's
not the big versus the small.
It's the fast versus
the slow or something
like that.
You said it much better.
It used to be
it used to be the big eight,
the small.
Now it's the fast
eight the slow.
So yes, that's it, that's it.
It's like
I got there in the end.
Yeah.
Well, thank you
so much for your time, Peter.
If someone wants to
reach out to you
or Andy, how
what would be the best way
to get in contact
this way to reach out to us
is probably Onyx.
It's Peter, BTC
advisor with an R.
It's the fastest way
to get in contact with me.
Or alternatively,
go to the website.
The Bitcoin advisor.com
and that's advisor with an R.
You'll see
both Andy and
our faces there,
along with a whole host
of some of bitcoin as best.
I think we've got the best
bitcoin team in bitcoin.
Literally just a wealth
of knowledge there
who can help you
with just about any bitcoin
question that you've got.
And I know we're all mission
driven to help you safely
consider your Bitcoin
and help
you get more Bitcoin.
So if there are any questions
around that
really welcome
the opportunity to help in
any way, shape or form.
Awesome.
Thank you so much.
Thank you for your time.
And yeah, thank you so much.
Appreciate all you do.
Thanks.