Hi.
Joining me today
is Jonas Benner.
Jonas Benner is a quant at
a MP, and he played a key
role in a and p investing.
I think they started with 27
million and then increased
that to 50 million worth of
Bitcoin futures last year.
I remember that was
circulated in the news
and I didn't know that.
This is the man behind it.
Um, then you did a talk
at Bitcoin Alive about
this, and I know that
some of your colleagues
also came to support you.
Since then, you've also
traveled to Prague to speak
at the 2025 conference there.
I listened to that as well.
I've done my due diligence.
And then finally, you were on
a podcast with Shane Oliver,
which I absolutely loved
because it was just such a
great conversation between
such a respectable economist
and someone who's, you know,
quite young in the company
and, uh, an expert in Bitcoin.
And the conversation was
just so good to listen
to from both sides.
So nus, welcome
to Honest Money.
Thanks for having me, Anya.
Yay.
And just be before we move
on, actually, uh, I'm not the
only one at a MP who's behind
the, the Bitcoin allocation.
I would say in the initial
allocation, I probably
actually played a minor role.
It's probably my boss,
Stuart Elliot, who came
to Bitcoin Alive as well.
He was heavily involved
and because he is the head
of portfolio management,
um, his word obviously
carries a lot more weight
than me just being a quant
within the investment team.
Um, so he, he, he is a
Bitcoin as well and he
was very involved in
making that decision.
And then our CIO Anna, she was
also super supportive of it.
So there was a whole
team at a and p that
was supportive of it.
Um, I just happened to be
the Bitcoin Maxie who's
been doing a lot of the
education and stuff and
pushing Bitcoin a fair bit.
But, um, just, just
wanted to make that clear.
I love it, and I'm glad you
said that because this is
also the discrepancy I picked
up on because during Bitcoin
alive, you did give a lot
of credit to your team, but
then it was actually Shane
that said that you played
the key role in his podcast.
So I'm like, which story is
true, but it doesn't matter.
I love your humility and um,
I, I'm so pleased to hear
that there is so many people
in such a. Large Australian
institution who's, you
know, very mainstream, um,
starting to be open-minded
to this, you know, up
and coming asset class.
It has been around
for 16, 17 years now.
And, uh, you know, we've
moved past this being,
you know, a speculative
or internet sort of magic
token to something that is
really gaining institutional
interest worldwide.
And I would love to hear,
maybe start with your
personal journey into Bitcoin.
How did you, what, what made
you, what, what made you
become a Bitcoin essentially?
Yeah.
That's a good question.
Um, I first really was
exposed to Bitcoin in 2016.
I was working at, I was doing
an internship at Deloitte
in Germany at the time.
I just got done with my
bachelor's, um, was doing
an internship and at the
time, Deloitte, I think it
was based in Berlin, they
had a blockchain center
and they came to Disor,
which is where I was doing
my internship to give a
presentation about Bitcoin.
And I, I had never heard of
Bitcoin at that time, but
a lot of the other recent
graduates who were working
with me were like, oh,
Jonas, you should come along.
They're gonna talk
about Bitcoin.
I was like, I don't even
know what that is, but
yeah, sure, I'll come along.
And then went along to the
presentation and it was
really, really interesting.
But because I'd never heard of
it, everything that they said
was completely foreign, but
they focused really heavily on
explaining what the blockchain
was and how it worked.
And that kind of
clicked to me, and it
seemed kind of cool.
But then the problem was
a lot of the partners at
Deloitte who I was working
with were throwing super
critical questions, uh, to, to
the team that was presenting
about Bitcoin and blockchain.
And because I didn't
really know much about it
at the time and I really
respected the opinions
of, you know, the partners
who I was working under.
'cause I thought they
were super smart and I
had it all figured out.
Um, I I, I started being
critical of it as well.
'cause I was like, oh
yeah, I kind of understand
why blockchain could
be revolutionary, but
this whole Bitcoin thing
I'm, I'm not sure about.
And just completely
dismissed it.
And then my brother started
getting really into it.
My younger brother actually
started getting really
into it in 2017 and like
kept telling me about it,
but I was always like,
eh, still a bit skeptical.
And then only in 2020 did I
really like during COVID start
really paying attention to it.
And listen to my first
Michael Sailor podcast.
On the, the What is Money
show with Robert Breed Love.
Listen, listen to the
wholesaler series in lockdown.
'cause I had
nothing else to do.
And, uh, it, it
clicked a bit more.
But at that time, um,
that's when I first started
investing in Bitcoin.
But at that time, all the
other outgoings seemed really
interesting to me as well.
And I was listening to
podcasts by Charles Hoskinson,
the founder of Ano, and
thought he sounded really
brilliant and what they
were doing was really cool.
I was also, 'cause I'm a
programmer, I started te
started teaching myself
Solidity, which is the
smart contract language
that you use to write smart
contracts on Ethereum.
So I was really into
that whole thing.
And then I think only late
2021, early 2022, when I
reread the Bitcoin standard
for the second time, um,
something clicked and I
was like, whoa, whoa, whoa.
Bitcoin is the only thing
that really makes sense.
Bitcoin is the only blockchain
that really tries to
solve a real problem that
we have and potentially
the biggest problem that
we have in the world.
Which is fixing the
broken monetary system
that we have and, and
introducing Honest Money.
I mean, that's the
whole name of your show.
You know, something that,
um, can't be manipulated.
Something where dishonest
actors can't take control
of it and abuse their
power over the population.
Something where we have a
more equitable, equitable,
more egalitarian money again.
Um, and, and really
understanding all of that.
And I was like, wow, okay.
Um, Bitcoin is a thing for me.
And since then it's
been Bitcoin only.
Yeah, I absolutely
love that story.
And you know, I've heard
you talk a lot about, um,
the, the monetary history.
Uh, you know, some people
find that particular subjects
so boring, but I feel like
for me that was one of the
big light bulb moments in
seeing in how Bitcoin fits
into that entire evolution.
So I would love to hear you.
Explain it.
Yeah.
How like you, you can pick
how ever many centuries
you wanna go back.
Well, you probably have
to go back pretty far.
And before I get started
on that journey, I think
you're completely right.
I think without understanding
the history of money and why
monetary goods have monetized
in the past and why maybe one
good replaced another form of
money that we previously used,
like why all of that happened.
If you don't have that
understanding, it's really
hard to understand how
Bitcoin fits into the whole
picture because Bitcoin has
superior properties to the
last freely chosen money
that we had, which was gold.
But if you don't understand
why we even ended up
with gold, it's really
hard to understand why
Bitcoin is so promising.
So that's the first thing
I wanna say is you don't
just need to understand
what the history looks like.
You need to understand
why it evolved the
way that it evolved.
It's really important.
So, I mean, if we
go back really far.
Humans basically
started off bartering.
We used to trade, uh, you
know, I don't know, chickens
for apples or, uh, bananas
for bread or, or whatever.
Um, but bartering is really
inefficient because of the
double coincidence of ones.
Basically you can, that trade
only works if the person
that you want something from,
uh, also wants something
that you can offer them.
So at exactly the same time
at, at exactly the same time.
Exactly.
And then if it's goods that
can perish, you know, then
it's really hard because
if you have bread now, but
somebody only wants bread in
a week, then maybe your bread
is moldy by the time that
you can buy the apples from
them with, with your bread.
So that's why, why it's
really inefficient.
Um, and then what humans
did over time is they always
converged on something that
was the most tradable good
within their small society.
Something that
everybody wanted.
And that wa was in the
highest demand from everybody
that was easily tradable.
And the interesting thing
here as well is that.
This money that evolved that
we're talking about now was
never centrally controlled
or issued by any government.
It was always, it always
came to be because people
naturally chose it through
free market competition
and by playing basically
game theory in the head.
Like trying to figure out
what's something that I could
trade my goods for that a
lot of other people will
want in the future as well.
And then through this game,
theoretical, um, thinking
converged on the most
tradable good, but nobody
centrally controlled that.
That's the amazing
thing about money.
Money itself doesn't have to
be issued by the government.
This is only something
that's been happening in the
last, let's say 100 years,
where governments basically
force us to use whatever
they issue because we have
to pay taxes in that money.
And because they've
built a whole system
around that money.
But money in and of itself
is not equal to currency.
Money is way broader
than just currency alone.
That's really important
to understand as well.
Um, but to go back
to the history.
We then were using things
like sea shells, glass beads.
Some societies were
using cattle or salt.
They were using
salt blocks as well.
Um, and then what happened
is, as humans spread out over
the world, and as we became
more technologically advanced
and you know, had ships
could sail over the world,
all of a sudden societies
that were using different
forms of money had to compete
with, you know, their form
of money with each other.
And what often happened
is that, especially when
Europeans arrived in, let's
say, uh, Northern Africa, or,
um, it probably happened in
other places, well, where,
um, the societies that
they encountered were less
technologically advanced
than they were, and they were
using, let's say seashells
or glass beets as money.
The Europeans then saw that
they were using this form of
money, which they could either
easily collect in the, uh, in
the case of seashells, they
just had to take their ships
to the beach, collect heaps
of seashells, then go down the
river inland again, and they
could basically appropriate
everything from the societies
to them because they had a
near infinite amount of money.
Same thing with glass beads.
There were North African
tribes that were using
glass beets as money.
And then Europeans discovered
that and went back to Venice
where they had perfected
like glass manufacturing
and creating glass beets
already just created millions
of them, then took their
ships back to Africa and
just bought everything of
them, leaving them with
worth worthless glass beads.
So, and as you can see,
then what always happens is
that if one form of money
is inferior to another form
of money, because it can
be more easily inflated
by a more technologically
advanced society, then
that form of money will go
away because it will become
hyperinflated and worthless.
We see the same thing
nowadays with high inflating
currencies in especially
developing countries.
Um, and then what happens
over time is the whole world
converges on the one good.
That is the hardest, basically
the hardest form of money
because that's a really
important property of money,
is that it is hard to inflate.
That's what we call
hard money, that it's
resistant to inflation.
And gold was just the
thing that, um, fulfilled
that property the best.
It also fulfilled a few other
properties the best, like
it was fairly divisible.
Um, it was super durable
because gold doesn't
rust or perish at all.
Um, and it was widely
recognized and had
network effects because
Europeans were using it.
So at some point we
converged on gold.
But mainly because it
was the, the hardest to
inflate because it's really
hard to find more gold.
It's hard to dig it
out of the ground.
You, you know, you have to
find it, dig it out of the
ground, and actually convert
it into pure real gold, um,
which no one can easily do.
No, we still to this day,
haven't figured out alchemy.
I know that there technically
is a way to make gold as a
byproduct of mercury, but that
gold is highly radioactive.
So to this day, we, we still
can't make gold in a lab.
Maybe that will change one day
and that will then be an even
stronger case for Bitcoin,
but at the moment we can't.
Um, so that's, that's
why we ended up with gold
at some point because
it best fulfilled the
key properties of money.
It was di visible portable
scars, um, fungible.
So one, you know, durable
unit of gold is equal
to another, um, uh, unit
of gold and durable.
So those are like the
five key properties.
There's probably a few
more, but those are
really the five key one.
But then the problem with
gold was that when we get
it, when we started getting
even more technologically
advanced and trade was
starting to happen globally,
and we started getting
communications networks where
we could send information
at the speed of light.
There was a disconnect between
how fast trade could happen
and how fast the monetary
good that was facilitating
that trade could happen.
So gold could only travel
as fast as humans could
travel, but information
could travel faster.
So all of a sudden there was
a big disconnect between,
um, the, the money that we
were using and its speed.
Its, um, saleability
across space.
So the saleability across time
and saleability across space.
Two really important
things as well.
The saleability across
time is really about how
well your money keeps
its value over time.
So you can basically
convert your time and energy
now into money and then.
Carry that value into
the future without
it losing any value.
That's the saleability
across time.
But the saleability across
space is how, how easy it is
to send that value over the
entire world, you know, in,
in a couple seconds to, to
match the, the speed of trade.
And gold wasn't fit for that.
Um, and the other problem
with gold is that it
carried a lot of value in
relatively small units.
So it was actually pretty
dangerous to try to transport
larger amounts of gold over
the country to, you know,
make big purchases or, uh, do
big trade because you could
get attacked by a group of
robbers, like armed robbers.
And if they stole your
gold because it's a
bearer instrument, they
would confiscate all of
your wealth from you.
So there were a few reasons
why we then decided to go off
using just pure gold as money.
And initially we had a
pretty good solution to
that, which was that banks
and eventually central banks
said, let's like everybody
just give us the gold.
We will hold it for you in
a really secure vault and
we will issue issue paper
certificates against that
gold, which you can use
as money, but you can also
always redeem it for your gold
that's sitting in our vault.
And that was a really good
solution because it overcame
the the visibility issue
of gold and the usability
issue of gold because
paper certificates were
a lot easier to trade.
And you never had
to walk around with,
with all of your gold.
Um, and then the problem
was that once you centralize
something and have somebody
hold that and custody it
for you and issue paper
certificates against that
for you, you run into
a trust issue where you
have to trust that the,
the issue actually honor
redemptions when everybody
wants to redeem their paper
certificates for gold, that
they actually have the gold
and give it back to you.
But also that they don't just
print more paper certificates
than they actually have gold.
And that was the first problem
because they started doing
that because banks realized
that not everybody was coming
to convert their paper money
back into gold all the time.
So they were like, oh, what
if we just create a little
bit more paper money than
we actually have gold?
Nobody's gonna notice,
nobody's gonna, you know,
do a bank run on us.
Um, and then at some point,
you know, that started getting
really blown up where all
of a sudden there was so
much paper certificates.
Trading relative to, to gold.
Um, and especially the US
was doing that during the
Vietnam War where, oh, okay.
Actually I have to circle back
a little bit to explain what,
what happened there, which is
the Bretton Woods agreement.
So, so we had all of that
where paper certificates
were backed by gold.
Um, then second World War
happens, and at the end of
the Second World War, um,
the leaders of, I think
it was like 150 countries
met in this town in the US
called Brett Woods, where
they decided that the new
host, world War II monetary
order would be the following.
The US would back their US
dollar with gold and every
other major currency would
back their currency with
the US dollar, knowing that
they could always redeem
those US dollars for gold.
So basically we, we had this
paper certificates, uh, backed
by gold with the US dollar,
and then every other currency
was backed by the US dollar,
which was backed by gold.
So it was like backed by gold
with an intermediate step
of the US dollar in a way.
Um, and then what happened
during the Vietnam War in
the sixties was that the US
was spending way more money
than they actually had gold.
And in order to keep the war
going and to keep financing
it, they were just printing
more and more dollars without
actually having more gold.
And a lot of European
countries were
catching up to that.
And I think the, the French
government was the first
one to try to call them
out on what was going on.
And they actually took a
warship and send it over
to the US like full of
US dollars and demanded
to get their gold back.
And, uh, president
Nixon realized that a
lot of countries had
already been doing that.
And the US I think went
from 20,000 tons of gold
that they were holding
down to like 8,000 tons
or something like that.
And he realized that if
they would keep redeeming
the US dollars, that f that
foreign nations held against
gold, the US would soon be
out of gold, and therefore
the trust in the US dollar
would probably be lost.
So he told the
French government to.
Go back to France, um, because
they're not gonna get the
gold and that he's ending
the convertibility of US
souls to gold temporarily.
But that temporary, um, pause
has lasted until today and
since that day, um, money has
been backed by any commodity,
it's been backed by trust
in the issue of that money.
And we now have what's
called fiat money.
Um, so that's how
we got to today.
I know that, that there was
a long history lesson there.
Um, but the important thing
to understand there is I think
that money doesn't have to
be something that's issued
by the government is usually
something that's chosen by
the people freely and it's
chosen because it has the
best monetary properties.
And one of the key ones is
how hard it is to inflate.
And then the, the second
thing to understand is
that the money that we use
nowadays, the government
forces us to use and we're
not choosing it freely.
And this is where Bitcoin
comes in because, um, Bitcoin
is kind of like gold, but
in the digital realm, it
has all of the properties
that gold has, but better.
It's gold that you can send
over the internet in a way
that nobody controls, that
nobody can inflate, that
you can store your time and
energy in without anybody
arbitrarily de basing it.
And in a way, it combines
the best properties of gold
with the best properties of
fiat because just like fiat
money, you can send it all
over the world at seconds,
but you don't have the
problem that central banks
can just print more money
and inflate your currency
or your holdings away.
And you have the best
properties of gold, especially
the hardness of gold.
But, um, you can send
it over the internet.
That's basically, um, why
Bitcoin is such a brilliant
solution, because Satoshi kind
of realized that Fiat overcame
a lot of the shortcomings of
gold by being more fit for
this global hyperconnected
economy, but sacrificed
the key properties of gold.
And gold had a lot of key
properties that fiat money
didn't have, but wasn't
fit for this new world.
So he, he was like, let's
just create something
that fuses the best
properties of both and
isn't controlled by anybody.
So nobody can ever
mess with this money.
Hence why It's,
uh, honest money.
I I love that you keep saying
honest money throughout.
Thank you.
Um, but yeah, I remember
reading, um, somewhere like
the history of central banking
as well, how even before the
Fed was established and going
back many, many centuries
ago, it was essentially
initially implemented to try
and standardize the gold.
So to ensure that the gold
that was being traded between
people was genuine gold.
They didn't have some
other metal in the middle,
and it was gold coated.
And so that sort of
centralization happened over
many, many, many years to
get it to what it is today.
And I think I also read, I
wanna say Lynn Oden's book
where she wrote that, um,
the first time in human
history where a softer
money one was with fiat.
And
do you wanna explain
fiat just in case?
I don't think I have explained
it in previous episodes,
but I do mention it a lot.
What is Fiat?
Fiat.
I think the word itself
just means by decree.
Yeah.
So basically it's,
um, money because the
government says so.
Um, it's not money because
people choose it to be money.
That's what fiat money is.
But fiat money is for
everybody listening, who,
who doesn't know This
term is just the money
that we use every day.
So Australian dollars,
that's fiat money.
US dollars, that's fiat money.
Euros, that's fiat money.
The money of today
is fiat money.
Um, whereas money
itself, the concept is
much broader than that.
And actually, I think making
the distinction between
maybe the, maybe the best
distinction to make is between
money and currency because we,
we nowadays use currency and
money interchangeably as if
they're synonyms, which is why
a lot of people think that.
Currency that they use
nowadays is also money.
But when you think about
the concept of money
itself, and there's
actually a really good book.
I read it in German, I've
read it three times now
'cause it's that good.
And do you know Gigi?
Yes, by the way.
Yeah.
Yes.
No, not personally, but often.
No, yeah, no.
Yeah.
I don't know him
personally, unfortunately.
You know, he stays
very anonymous.
But, uh, to anybody who,
who, who doesn't know this
guy, he is an Austrian
Bitcoin and he's done some
of the most amazing writing
in the Bitcoin space.
He has a website called
Dare gigi, like D-E-R-G-I-G
i.com with some of the
best articles on Bitcoin.
Like reading those for
me was mind blowing.
Like there's one
where he talks about.
Proof of life, I think is
what it's called, where he
talks about Bitcoin, you
know, potentially being
like a living organism.
Anyway, he, he recommended
this book called, um, in
German from gda, which in
English translates to on money
or the Essence of Money, I
think is what it's called
in, in English, um, by LIOs.
And this was written in 1921,
so like during the Weymar
Republic time in Germany.
And this book is by far
the best explanation of
money that I've ever read.
And what the essence
of money really is.
And basically the distinction
that he makes there is that
money essentially is just a
claim on value that you get.
But if you have provided
value, but you haven't
received anything in
return yet, another way
to say it is that money,
money, the money is just.
Value, but currency is the
representation of that value.
It's, it's the units that
that value is divided over.
But when you think about the
concept of money that way, you
can probably also think about
it as the aggregate purchasing
power in an economy.
That then means that if
you think about money, just
as the value that has been
created and as currency,
as the units over which
that money is divided, then
it's all of a sudden really
easy to understand how the
government can't actually
create any more money.
They can create more currency.
But all that that does is
it takes the money that
already exists because they
haven't provided any value.
When they, when they print
money, they just take the
value that already exists and
divide it over more units.
So while they print more,
you know, money units.
They don't create more money.
It's kind of like
thinking about a clock.
Like if you think about like
an analog clock, I could
add another line to that
clock and say, okay, now
my clock has 13 hours of,
um, you know, going around.
So 26 in the whole day, but
I haven't created more time.
I've just created
more hours, which is
a measurement of time.
It's kind of the same
thing for, for, for money.
And once you start thinking
about money in that way,
it becomes really clear
why, you know, fiat money
is such a bad thing because
it's not directly linked
to value that we created.
It's like the, because
a good money should
only come into existence
through work as well.
You shouldn't just be
able to create money out
of nothing because we all
have to exchange our time
and energy for money.
That's the only way
that we can get money.
So wouldn't it be fair if
everybody could only get money
if they provide value as well?
And there's not one
central party that can
just print money out of
thin air for nothing.
And then again, I said
printing money, but
they're just printing
currency, not money.
And that's making that
distinction for me when that
clicked was was brilliant.
I really like the
clock analogy.
I'm gonna use that.
Yeah, yeah, yeah.
That just clicked,
clicked in for me.
Uh, um, yeah.
But I also wanted to ask
you, you mentioned gold is
a bear instrument and or a
bear asset, and I wanted to
obviously go, um, Bitcoin
is as well, but how would
you define Aberra asset
for those who heard that
word, but don't necessarily
know what it means?
Aberra asset is just
something that you can
truly own yourself.
And this again.
Is such a groundbreaking thing
to have in the digital space.
Um, even in the
physical space.
Like we don't actually
own a lot of things
that we think we own.
Hmm.
Like the money in your bank
account, I mean, there's that
thing in the Bitcoin space
that it's favorite not money.
It's not money, it's not news
and it's not in the bank.
Um, it's a bunch of IUs.
Yeah, exactly.
Exactly.
It's just, it's just
numbers on a screen.
But the money, unless you hold
money, cash you, it's not a
bearer instrument, um, either.
Um, but then when you think
about shares that you own, you
don't actually own the shares.
You, you know, you have access
to the, the price movement
or you get exposure to the
price movement of that through
a brokerage account that
you have, but it's not like
you actually have ownership
of those shares yourself
truly, even with a property.
What, even if you paid
off your house, you
know, you might have the
property and you might
be able to live in it.
Um, but if you don't
pay, I don't know, land
taxes or whatever, uh,
needs to be paid on, on
houses here in Australia,
um, the, the government
could seize your house.
So that's not true.
Ownership either.
True ownership and a true
bearer asset is something
that unconditionally you
can hold yourself and nobody
can take that away from you.
Not the government,
not anybody.
And with gold you can
do that because you can
just put gold in your
pocket and walk around.
Obviously that's the
risk of somebody trying
to rob you and then they
can take that from you.
But that's the risk with,
with any bearer assets
apart from Bitcoin if
you custody it properly.
Um, but that's why having
something that you can truly
own is so, is so amazing
because we, we don't have
that nowadays anymore.
All of the things that we
think we own, we're just
allowed to, I don't even know
if own is the right word.
It's probably.
Mm. What's a better
word for that?
Uh, it's like we're, we're
allowed access to it in a way.
Like, while, while we behave
the way that the government
wants us to, they allow us
to have access to it, which
feels like ownership, but
it's not true ownership.
And then in the digital space,
true ownership seems even more
foreign because how do you own
something that is dig digital?
How do you, how is
that a bearer asset?
If it's sitting in cyberspace?
How does that make any sense?
And Bitcoin solves that with
really clever cryptography
where a. You get your,
you know, your private key
and your public key, and
explaining that for, for
anybody who's listening,
who doesn't understand that,
uh, in, in simple terms, um,
basically in, in cryptography,
especially public, private
key cryptography, which is
what Bitcoin uses, how it
works is you can get a pair
of private keys, which is
kind of like a password, like
a really long, complicated
password that you have.
And that is then
mathematically linked to a
public key, which becomes
your Bitcoin address.
That's where you, where,
that's where your Bitcoin
is technically sitting.
Um, and the private
key is what gives you
access to that Bitcoin.
But they're mathematically
linked in a way where
if you know the public
key or the address of
somebody, you can't back
solve for the private key.
Um, and that way, as long as
you know, the private key,
which nowadays is easy to
convert into 12 or 24 words.
Um, like English words that
you can just write down or
engrave in a steel plate
and carry all over the world
with you, that is what allows
you access to your Bitcoin.
And in Bitcoin having access
to the Bitcoin is equivalent
of owning that Bitcoin because
everybody who can move the
Bitcoin owns the Bitcoin.
Um, so that's how Bitcoin is
a bearer asset in cyberspace
because the, the bearer
asset in a way is almost
the private keys that give
you access to the Bitcoin.
And that's, that's how Bitcoin
solves for that, for that.
And it's amazing because
now you have something where
if you are worried that
your government is going
to put in capital controls
or potentially become
tyrannical and the here in
Australia, you know, at the
moment we're fine, we ne,
but we never know what's
gonna happen in the future.
I mean, you see a lot of
stuff happening in Europe
with like digital ID being
introduced and them really
cracking down on free speech.
And the uk, I mean, this,
uh, is probably leading
the way, but Germany
isn't, isn't far behind.
Um, but there's a lot of
countries all over the world
where things are a lot worse
already, where governments
have capital controls, where
you've got hyper inflating
currencies where you can't
actually own anything.
And even if you own something,
you can't take it with you,
like your house that you
have, you know, in Nigeria or
Turkey or something like that.
If you want to flee the
country for whatever reason,
you can't take that with you.
But with Bitcoin, you now
have a bearer acid sitting in
cyberspace where all you need
is a bunch of words that you
can write down, or worst case
even remember in your head.
And you can take millions,
even billions, all over the
world without anybody knowing.
So it's, it's the purest
form of bearer asset because
it's pure information only.
And everything that can
be represented as pure
information, um, is, is
the purest form of itself
if it is represented
in information only.
Yeah, a lot of people struggle
with Bitcoin not being
tangible, but one kind of
example I like to use is you
can have a filing cabinet at
home that's physical and you
can touch it, or you can have
a filing, you know, a folder
on on your computer, and you
don't necessarily think you
don't own those documents,
or that those documents
are not there just because
it is in a digital format.
So Bitcoin is
kind of the same.
Like you can always come back
and verify your holdings.
You can move them, you
can test them around.
You can come back five years,
10 years, 30 years later,
they're still gonna be there.
And I think a lot of people
just, yeah, need time to
make, make that switch.
Um, yeah, no, that's a, I
think that's a brilliant
analogy, actually.
Um, no, that's a
really good one.
But even then, when you
think about the, the whole.
Moving from physical things
to digital things is something
that we're not seeing for
the first time with Bitcoin.
As you mentioned, files we
used to have like, especially
big offices or you know, if
you think about like a law
firm or something like that.
Like they used to have
rooms filled with old
files that they would
then have to look through.
Now they have everything
digital where if you wanna
find something, you just
hit control F and then you
can, you can look for it
and you know, you can go
through a whole database
of stuff really easily.
So we saw that move from, uh,
with files from physical to
digital, but we've seen it
with other things as well.
If you think about, you
know, bookstores initially
what became Amazon.
They used to be physical,
then they became online
shopping in general.
Used to be purely physical.
Now you can do it
digitally as well.
Friendships, even like
if you think about
Facebook, Instagram, no.
Like obviously there's
a big physical part of
that, but part of it has
also become, uh, digital.
Same with dating, same
with movies or music.
You used to have it, uh, on
like a cassette or like a cd.
I do.
Miss blog stream.
Exactly.
No.
Well, is it blog stream?
Is that what it was called?
No.
Well, um, no, the bias for
when you used to, when you
used to go and rent movies
from a physical location.
Blockbuster.
Blockbuster, blockbuster,
not block string.
Oh my gosh.
I'm such a big pointer.
Block Blockstream is
because Yeah, yeah.
Blockbuster.
No, but like, exactly.
When, when, when we were
younger, like when I was a
kid, you used to have to go
to like a physical store and
then, you know, choose a movie
like a DVD that you wanted to
rent, and then you'd have to
take the physical DVD home.
Same with music.
Like I, when I was really
young, like I, for my
10th birthday, my dad gave
me like a CD of like an
album of a German band
that I really liked.
You know, like all of those
things were physical as well.
Like they had to be stored
on physical devices.
And now we have Spotify,
Netflix, and other platforms
where everything is digital.
So this whole move from
physical to digital is
something we've seen
many times before.
And with money, it's
just now the next
iteration of money where.
We mo we're moving from
physical gold to digital
gold, but something that
can actually become a
medium of exchange as well.
So with gold, we now only
think about as a store
of value because it's, it
can't be used as a medium
of exchange anymore.
But with Bitcoin, while it
will start as a store of
value, and that's the, the
thesis that a lot of people
have for Bitcoin right now.
It actually has the potential
to move to becoming a
medium of exchange as well.
And just on, on that move from
physical to digital, I think
one key thing to understand
there as well is the reason
why that works for the things
that are just described is
that when you think about what
files are or what, uh, movie
or music or even knowledge
like Wikipedia and you know,
Google and, and all those
things, what all those things
are is just information.
That can be represented
as ones and zeros.
Like knowledge is
just information.
Music at the end of the day
is also just information.
A movie can be broken down
into pure information.
So when you think about
that, wouldn't then the
like, if we live in a world
where we constantly want
to advance as humanity,
that means that we need
efficiency and scalability.
But physical things are
really bad for scaling and
for being efficient because
you have to create copies of
them, like physical copies
that need to be on, stored
on something for information.
That used to be a book for
movies that used to be DVDs.
It's really unscalable
and really inefficient
as to, you know, get out
there to a billion people.
But something that is
just information, if you
represent it as ones and
zeros, becomes really
efficient and really scalable.
So as we advance as
humans, it completely makes
sense to move away from
physical to digital space
if it's just information.
Because why not represent
it in its purest, most
efficient, most scalable form.
But money is also
just information.
It's like a ledger of who owns
what and who owes what to who.
That's all that
money really is.
So it's also just
pure information.
So why, why keep that in
a physical form when we
now have a digital form
for it that allows for
scalability and efficiency?
So when you think about
that, that whole dynamic
of information going from
physical to digital and
money just being information,
it's the same thing.
It's basically logical
that it will happen.
Yeah, I love the chart.
I think Anil said so,
or created it where he
talks about that density.
So you're starting with like,
you know, books all the way
down to two terabyte chips
and the same with money.
You have gold and then
you have fiat and then you
have Bitcoin, which is,
yeah, the most dense form
of information there is.
I really, I really
like that chart.
Um, uh, I'm a visual person,
so, so like anything that
kind of paints, paints a
picture of the key concepts.
Um, I wanted to also ask you,
'cause what you said in, um,
I think your Prague talk, you
were talking about the way
that money is adoption and
it follows four key steps.
I knew of the three, I
didn't know of the first
one and I'm like, that
makes so much sense.
Um.
So do you wanna talk
about how it all starts
as a collectible?
Good.
Yes.
Yeah, I will talk about that.
And this, this also comes
back to what I just said about
Bitcoin and how currently it
might be seen as a store of
value by more and more people
and how it has the potential
to move to minimum exchange.
That's how, how
that all fits in.
So another thing that you
learn from studying human
history, but also the history
of money, is that those goods
that are freely chosen by
people as money is through
free market competition.
They tend to monetize in four
stages, and the first stage
is that they start off as
a collectible where people
start collecting it for some
reason back in the day, like
for seashells for example,
they thought seashells were
beautiful and, and look good.
But they were also kind
of rare because if you
live, if you don't live
by the beach, it's hard
to come by seashells.
So they humans had this
thing of like valuing
beautiful scarce things.
Um, so they started collecting
them, but then once enough
people collect something, it's
um, it's value rises, it's
purchasing power also rises.
Um, you know, as more
and more people do that
because everybody starts
seeing that as valuable.
And then once enough people
collect something, it will
actually be a commonly used
store of value, which means
that almost everybody starts
using that to store value.
So they, when they provide
value to other people, ask for
that thing or wanna have that
thing because they wanna store
their value in that thing.
And then at some point that
purchasing power rises enough
and plateaus where it reaches
some kind of equilibrium,
where it's pretty stable in
terms of what you can exchange
that store of value for.
And at that point, it
moves from store of value
to becoming a medium of
exchange where it's the
thing that is the most
tradable good and that
everybody uses to exchange
value with one another.
And then once it's a medium
exchange, it usually.
Simultaneously becomes a unit
of account where people start
pricing goods and services
in that money that they use.
So nowadays, if you go to
Woolies, everything's priced
in Australian dollars.
But back in the day,
everything would
be priced in gold.
So if you went to the pub,
um, you know, and you wanted
10 beers for you and your
mates, um, then you, you,
you would know how much
gold that would cost because
there would be a gold price
attached to those beers.
Yeah.
And I'd learned
something yesterday.
I was yesterday years old
when I learned about the
history of like the gold
coins and why they have
like, not gold coins anymore,
but why coins used to have
and still do ridges mm-hmm.
To prevent them, you know,
I think it would make it
easier if someone was shaving
off clippings to, you know,
try preserve more gold.
But the funny thing is those
ridges are still there today.
Yeah, yeah.
True.
That is funny.
It's a bit ironic.
Yeah.
Uh, do you know where
the, where the term
sound money comes from?
Like why it's called
Sound Austrian Econ?
I don't know.
I mean, yes, they, they are
the ones who termed that,
but, um, I've, I've heard
many times people talk about.
How back in the day when we
were using gold as money and
we would have gold coins,
it would actually be pretty
difficult to know whether
what you were getting was pure
gold or another form of metal
that was just laced with gold.
Something that you,
you just explained.
And one thing that people
used to do is they would
train themselves to recognize
the sound that a gold coin
would make if you dropped
it on a hard surface.
And that was a very quick
and easy way to verify
whether what you just
got was actually gold.
Because it makes a
distinct sound when you
drop it on a hard surface
compared to other metals.
And that's part of the reason
why it's called sound money.
I love it.
I love hearing these
like random little
pieces in history.
Um, yeah, just to go on
a little tangent as well,
something that I learned,
um, I'm reading, uh, Robert.
Uh, Robert p Murphy's book
Choice at the moment, and
this is where I learned
that, um, Austrian economics
came as a derogatory term.
It was really, yeah.
So, so it was used in
Germany to kind of, um, to,
to, yeah, I think it was
against Menger, potentially.
Um, yeah, it was used as
a derogatory term because
Austria was kind of considered
for whatever reason, inferior
and because it just sort
of stuck around it, it,
it, it, that's how, what
it became later on and also
reminds me again of how.
The term Maxism or Bitcoin.
Maxism again, came as
a derogatory term from
Ethereum, folks like, you
know, and it stuck around.
We're like, we'll take it.
Thank you Bitcoiners and,
and maybe hard money, um,
fans or maybe, um, I guess
every Bitcoin is an Austrian
economist in a way, at at
least partly, uh, maybe
there's something about us
where if people try to make
fun of us or make us seem,
you know, extreme or inferior,
um, we just have a way of
like finding that funny and
just, just running with it.
Like, that's how a
lot of stuff happens.
Like even.
I think it was Brett Galling
house, the XRP founder, who
together with Greenpeace, um,
created this skull, um, with
like smoke coming out of it.
Like, you know, really ugly
looking that was supposed
to represent how bad Bitcoin
is for the environment
and Bitcoin, Bitcoin
has saw that and we're
like, wow, this actually
a really cool sculpture.
And I think it cost a
lot of money to create.
And now at the Bitcoin
conference, um, in Las
Vegas, I think this
year they were actually
displaying Thecal because
they thought it was so cool.
But it was like initially made
to attack Bitcoin and, you
know, portray in an artistic
way how bad Bitcoin is for
the environment supposedly.
Um, and Bitcoin has
just ran with it.
Same with the term like holo
and like, like other stuff.
Um, yeah, we, we just
like those things.
Oh.
When people started calling
us psychopaths and every
Bitcoin just went with that,
but like for each other
Good morning psychopaths.
Yeah.
Yeah, it, it, it's weird
because, um, you know, since
I came out of the closet as
a Bitcoin on LinkedIn, it's
been really interesting.
It, it is a very divisive
topic and I've met so many
great friends from all over
the world that you just
click with instantaneously
because you all have
like, shared core values.
You'll wanna see a
better world essentially.
Um, we're not
apologetic about that.
We really think that, you
know, fixing the money can
fix everyone's lifestyle and
a lot of the problems that
the world is facing today,
not everything, but a lot.
Um, but it's interesting how
it seems to trigger a lot
of people, like, if I was
to recommend a movie to you
and I'm gushing about it,
I'm like, oh, you have to
see this movie or read this
book ly love it, da da da.
You'd be like, oh my God,
I wanna know more about it.
But you do the same thing
with Bitcoin and, and
for some people it just
triggers discomfort and.
I'm really curious to
know psychologically
where that comes from.
Um, it could be aversion
to change, it could be fear
of the unknown, it could
be, you know, shame that
people hold around money.
And I guess this is
leading into the question.
You obviously, you know,
you work in, in a corporate
fiat world and you are a
Bitcoin and, and I wanna know
about how that transition
for you happened, do you
feel, you know, at home?
I mean, now at the moment,
to be honest, um, it,
it feels pretty good
to, to be a Bitcoin now.
Um, at, at least within a
MP I'm not sure how people
at other superannuation
funds or in the finance
world in, in general feel.
Um, but I think that's
because a MP, you know, was
courageous enough, um, to, to
make that move into Bitcoin,
even though it's a really,
really small allocation.
But we've now, we've seen
really good returns on that.
I mean, we, we put Bitcoin
into our portfolios at a
small allocation in May last
year, you know, somewhere
in the mid 60 thousands US
dollar, and now we're at
122,000 as of this morning.
So up like a hundred
percent almost.
Um, so of course that has
been good, but also the
Bitcoin space has evolved
so positively with, I
mean, Larry Fink, the CEO
of BlackRock is like on
CNBC basically every week.
Shilling Bitcoin like,
like, uh, hardcore Bitcoin.
I would, uh, but you have
other people like Ray Dalio,
Paul Tudor Jones, you know,
like really well respected
hedge fund managers talking
positively about Bitcoin.
JP Morgan just came out with
a report where they compared
Bitcoin to gold and how on
a volatility and correlation
adjusted basis, they think
Bitcoin should be at 165,000,
um, using gold as the anchor.
Um, Deutsche Bank put out
a research report a week
and a half ago where they
evaluate whether they think
there's a place for Bitcoin
in Central Bank reserves by
2030, and their conclusion
was that there was a place
for both gold and Bitcoin in
Central Bank reserves by 2030.
And this is Deutsche Bank
putting out this paper.
So the, the, the whole finance
world is starting to wake up
to the fact that, you know,
Bitcoin is a legitimate asset.
Bitcoin is potentially
this, you know, new reserve
asset in a digital world.
Mm. Um, and, and a lot
of people in the finance
space are seeing that.
So our investment team,
um, they, they hear
about that stuff as well.
It's oftentimes because I,
I share articles with them
or like show them, you know,
oh, look at this, look at
this paper that came out.
Um, yeah.
And, and, and all
of that stuff.
So they probably hear
more about it than people
at other firms would.
Um, but it wasn't
always this way.
So I started with a
and P in 2022 and.
I would try to talk to people
about Bitcoin here and there.
The problem was that
there would always be one
or two people who would
be super skeptical and
critical of it and would
shut it down straight away.
Like even in, in like a
bigger team conversation,
it would get shut down
very, very easily.
The only thing that I
found was that at the time
there were a few grads
working with us that, that
had just come out of uni.
They were really receptive to
what I was saying because I
guess they, they were young.
They, you know, had interacted
with crypto before and they
thought it was fascinating
to, to learn about the
history of money and, and
those sorts of things.
But it was more a lot of
the people who had been in
traditional finance for a
long time, who had, you know,
been in the industry for ages
where I, I noticed that it
is actually, it's probably
one of the biggest hurdles
you can have to understand
Bitcoin is being in the
finance industry for a very
long time, or in economics for
a really long time because.
Bitcoin questions
or understanding for
understanding Bitcoin, you
have to question all of the
assumptions of everything that
you've known up until this
point, and you have to put
everything that you know up
until now aside and start from
scratch With Bitcoin, there's
no prior knowledge that you
can really use that's really
helpful, unless you were an
Austrian economist or maybe if
you are, um, like a computer
scientist, it helps because
you understand networks and
cryptography and those things.
But other than that,
everybody starts from
sketch with Bitcoin.
And I find that that's a
big hurdle for a lot of
people in, in tra file.
Um, but yeah, coming back to
my experience, it, it really
changed at the beginning
of last year when the ETFs
launched in the us um, where
we now have, I think it's 11
spot Bitcoin ETFs in the us.
We have ETFs here in
Australia now they're thinking
about like ETPs in Europe.
Um, and when, when that
happened, like when BlackRock
and Fidelity came out and
started offering this to
institutional clients and
retail investors, that was
a big signal to the whole
world of finance that, hey,
Bitcoin is institutional
grade and this is something
that BlackRock is putting
their full weight behind.
So maybe let's start having
another look at that.
And that, that was also
what triggered us at a
p to seriously consider.
Investing in Bitcoin.
Like Stuart, the, the guy
that I mentioned earlier,
my, my boss, um, he, he
was pushing hard for that.
Um, and then we, yeah, we
started looking at investment
models that we could apply
to Bitcoin, um, and how it
would make sense within the a
MP um, superannuation space.
Um, because obviously there's
still a lot of risk involved.
There's still a
lot of volatility.
Um, and people were very
skeptical, so we had to
do it in the dynamic way
using futures and at a small
allocation that we did.
Um, but yeah, that, that,
that's how it started.
And since then I've been
running educational sessions
within a MP, like started
with the investment team.
Then the leadership team, then
executive team, and even gave
a presentation to the board of
directors in May of this year.
And everybody loves hearing
about the history of money.
Mm, stores of value
from first principles.
Like these are all things that
nobody thinks about anymore.
Like even people who are
on the board of directors
of a company like a and
p didn't, haven't really
stopped in their life and
actually asked themselves
what actually is money?
How did we get to, you know,
this form of money that
we're using now and what
was before that and why did
we use gold at some point?
But also what makes a
good store of value?
What properties should a
good store of value have?
And how do some of the
stores of value that I use.
Compared to Bitcoin on the
key properties of a store of
value, and like that, that's
that whole first principle
unpacking of things that we
take for granted in everyday
life is something that we've
just been, we just haven't
really been taught to do.
And it's something that
we don't learn because,
I don't know, it's just,
you know, currency is
just something that we use
every day to pay for stuff.
So why should I even think
about what money actually
is and where it comes from?
It's, yeah, it's,
it's hard to forget.
Yeah.
And, and it's fair, like, I
mean, I can understand why
obviously a lot of these
people went to university,
uh, long, long ago before
Bitcoin even came out.
So we didn't have
a different system.
We didn't have anything
to compare it to.
And now in order to understand
this new phenomenon, we
really have to zoom out
very, very, very far
historically to try and
make sense, sense of things.
Um, I, I just, what I
love about Bitcoin, just
the, the layers that
it requires to just.
Understand it, you know,
first you learn about
Austrian Econ a little bit.
Then you learn about hard
money or sound money.
Then you learn about
the monetary history.
Then you learn about
cryptography, and the more
you kind of like layer your
knowledge, the more you just
start to be in complete all.
Because like you said
earlier on, all of those
like attributes that.
Good money, good.
Like the visibility,
fungibility, portability,
da dah, dah, dah, dah.
Bitcoin is now introducing
new attributes to, to that.
So like the, it's expanding
the list and like you said,
things like censorship
resistance, which might
not be necessary in stable
economies or, or, or, you
know, countries that have
good governments, but many
countries in the, in the world
don't have that experience.
So having sensory
resistance is really,
really important in money.
Like you wouldn't wanna be
in a relationship that's
financially abusive.
You also don't wanna be
in a relationship with
the government that is
financially abusive.
I think that's fair.
Right?
That's not controversial
thing to say.
Um, va value density, it's,
I guess it's related to
bitcoin's di visibility in a
way where another beautiful
thing about Bitcoin is
that you can divide one
Bitcoin into a hundred
million Satoshis, which are
the subunits of bitcoin.
May.
And the thing is technically
with like the lightning
network, you can even divide
it one Satoshi even further.
So Bitcoin in theory has
infinite DI visibility, which
is perfect because if Bitcoin
becomes more valuable, at
some point we could run into
an issue where maybe if one
Satoshi becomes equal to 1
cent in Australian dollar
terms, it still works.
But if it becomes more
valuable than that, then we
gotta start dividing Satoshis.
But that's the beautiful
thing with Bitcoin.
You can infinitely divide it.
And this is also where
one common question or
criticism of Bitcoin comes
in, and I've heard this from
really, really smart people.
They then say, oh, but
if infinitely divisible,
how can it be scarce?
And initially like when like
on first thought, it's like
I kind of understand where
they're coming from because.
They think scarcity just
means that there's a limited
number of units of it, but
what matters isn't the, the
number of subunits, but the
number of the, like the whole
basically, um, which again,
like come coming back to,
I guess you could use the
clock example, but a lot,
an example that a lot of
people here use is the pizza
example where if you have one
pizza and right now it's, uh,
split up into four pieces.
If you cut every piece
in half again, then
you have eight pieces.
But you didn't just create
more pizza, uh, you still,
you created more slices.
Exactly.
You still have one pizza.
And that's the same with whi.
Just because you can divide
it into more subunits
doesn't mean you create more.
It's uh, yeah, that if
you have to do that,
you actually make what
is there more valuable?
Because, you know, if,
if you have to subdivide
it, it means that the
hole went up in value.
Um, so Bitcoin is gas.
Bitcoin is the most scarce
verifiably scars thing
that we've, we've ever seen
that can be used as money.
Um, which yeah, is is truly
mind blowing when you think
about it as well, because
scarcity is the thing
that we arguably value
the most in money, and
we've just perfected that.
Like Satoshi literally
perfected the thing
that is the most
important about money.
So we might now have
perfect money and real
life while it happened.
How incredible is that?
Yeah.
And, and the other story
that I like to tell as well
is about the Cipher Punk
movement and how we're all
today reaping the benefits
of the, that movement,
you know, through having.
The ability to send
emails privately to one
another through work.
We can keep corporate secrets,
you know, corporate, we
can exchange love letters
without the whole world
knowing, you know, and,
and that is all thanks to
the cipher bunks and the
arguably the most important
invention is Bitcoin.
So, yeah, I do, I do love, um,
telling that story as well.
Um, but going back to what
we were talking about just
now, um, in terms of what
do, do you have any, I always
hesitate to ask like, uh,
speculative questions, but
do you see Bitcoin becoming
a medium of exchange in
the next 10 to 20 years?
Like, is that a possibility?
10 to 20 years.
I mean, it's a possibility.
You don't know.
Um, I, I don't think it
will, to be honest when I
think about it sometimes,
I'm not sure whether it will
even happen in my lifetime.
Um, because these things can
take a really long time and
we see how slow adoption,
like while it is picking
up a lot, when you zoom
out and think about, okay,
institutions are now coming
into the Bitcoin space.
A MP has like now a 0.1%
allocation roughly to Bitcoin.
But we're the only
super fund in Australia.
We manage.
I think it's somewhere
between 60 and 70 billion
Australian dollars.
But then there's like
Australian super that
is around 400 billion.
And there's other really
big super funds, you know,
that, that collectively
manage trillions of
Australian dollars.
Um, and within that, we're
the only one with a tiny
allocation to Bitcoin.
So zooming out and looking
just where all of the big
money sits and how much of
that money is invested in
Bitcoin, we are so, so early.
But another way to think
about that is if, if anybody
listening here thinks about
their own family, their
relatives, and their friends,
and how many people have
actually invested in Bitcoin,
substantial amounts, but
also are able to articulate
what Bitcoin actually is.
'cause that's the
more important thing.
Like a lot of people buy
Bitcoin out of fomo, but
how many of those people
actually understand Bitcoin?
It's, you know, maybe
one out of a hundred,
probably less than that.
Maybe one out of a thousand
if we're being honest.
Um, so we're still super
early with Bitcoin,
but unless people.
All adopted, or almost
everybody adopted as a store
of value, it won't be able
to move to becoming a medium
of exchange, at least in
developed countries with
somewhat stable currencies
in developing countries.
That might happen
a lot faster.
Their adoption might
happen a lot faster.
But then again, they also
have stable coins like USDT,
which they probably prefer
because it doesn't have the
volatility and they, they're
not trying to store well
for a long period of time.
They probably need a medium
term store of value and
something they can use
as a medium exchange.
Um, so just thinking about
it from that perspective,
um, I think it'll take a
long time until can actually
is a medium exchange.
And especially if the US is
smart, which it looks like
they currently are with
adopting and pushing the
adoption of stable coins, they
might be able to keep the US
dollar alive for a lot longer
than it otherwise would.
Um, so I think there.
They're understanding
this whole field
really, really well.
And I'm pretty amazed by
the Trump administration and
how, how much they're able
to embrace this and how much
the tone has shifted from the
last administration to this
one in terms of crypto in
general, but also Bitcoin and
like, they're all politicians.
So like we, we never know
what the true motivation
behind their, the actions
are, but it's, it sounds
like some of those people,
like properly get it.
Like if you listen to like RFK
Junior or the vec, um, even
JD Vance, um, it, it seems
like they, they do understand
the value behind Bitcoin
and why it's inevitable even
for a country like the us.
But then again, um, I think
they're able to stretch
out, um, the, the US dollar
staying alive for a lot longer
than it otherwise would by
adopting and pushing the
adoption of stable coins.
Um, so we're, I, I
think we're still.
Long time away from that.
But that's okay.
That's, that's how money
monetizes and people have to
figure out that Bitcoin is
the best store value and the
more money they print, the,
the faster it will happen.
And the more tyrannical
governments all over
the world become, the
faster it will happen.
It's like the more
governments do what they
eventually always do, the
faster people adopt Bitcoin.
So the longer they behave,
the slower it will be.
We'll see.
Yeah.
Um, I do also wanna ask
you, 'cause we spoke just
before about some of the
common questions that people
have about Bitcoin, you
know, that raise eyebrows.
I've never heard the one
about, you know, divisibility
like have being an issue
with the supply cap.
That was, that was
an interesting one.
Um, but the most common
one that I hear that,
um, I think is, is, um.
More reasonable question
to ask compared to some
of the ones that are just
like, it's a Ponzi scheme.
I'm like, that has
been debunked so much.
I don't even wanna, I
don't even wanna, you know,
entertain that anymore.
Like, we're done with that.
That should have died,
you know, years ago.
The one that I think
deserves an explanation is
the intrinsic value one.
So
yes, let's go.
And, no, you're right.
And, and this one is a
really tricky one, and I
think it's also the one
that holds back people in
traditional finance the most.
And it's one that I get at
work a lot, but not, not
just at work, but even, um,
people who work in other
industries, like friends that
I have from uni, for example.
The intrinsic value part
is something that a lot of
people get caught up on.
And I actually used to
get caught up on that a
little bit as well, um,
because it's, it's hard to
understand because bitcoin.
And the, the thinking
around intrinsic value
really challenges how we
value all other things
basically, apart from gold.
Um, so what we usually do
in finance is that in order
to value assets, um, we look
to some kind of cash flow,
whether that's bonds that
pay coupons, um, equities
or shares, pay dividends,
or you know, at least you
have a claim on the future
cash flows of a company.
So you can do like
discounted cash flow models
and things like that.
With real estate, you
have rental income.
So with a lot of financial
assets, we usually look at
cashflow and then build some
kind of cashflow valuation
model around that to try to
figure out what the, you know,
what the true value of an
asset is and what it should be
and how it should be valued.
And then obviously with
shares, um, you, you've
got growth expectations
for like tech companies.
So they, they are valued
far beyond their cash flows,
um, be because of that.
But it, it usually anchors
around some kind of cash flow.
And then people look
at Bitcoin and they
say, well, Bitcoin's
an unproductive asset.
You know, it
doesn't do anything.
It's, it's just,
it's just there.
Like what the hell is the
intrinsic value of Bitcoin?
But what I, I usually say
to people, and I said this
to Shane on the podcast
as well, is that trying to
value Bitcoin based on cash
flows or through this typical
lens that we use is trying
to value a painting, um,
based on a dividend yield.
Like it makes no sense,
it's the completely
wrong tool for the job.
Um, but there, there is
this misconception that you
need some kind of anchor
value to value something.
And even with gold,
because gold is also an
unproductive asset, it doesn't
generate any cash flows.
So economists and
traditional finance people
struggle with gold as well.
And the way that they
mentally overcome that
with gold is they say,
ah, but at least gold has
some industrial demand in
electronics, in dentistry.
And people use it
for jewelry as well.
But then when you really
think about that, I think
that's just a convenient
argument that, you know,
helps them make sense
of why gold has value.
But first of all, the
industrial demand for gold
maybe accounts for 10 to
15% of the value of gold.
85 to 90% is just
pure monetary premium.
So if all of the industrial
demand for gold went away
tomorrow, gold would arguably
retain most of its value.
Then the second thing is
the industrial demand, like
electronics and dentistry
for gold only came around,
I don't know, like a
hundred years ago, maybe
a bit longer than that.
Like electronics and dentistry
are fairly recent phenomenons.
But gold was highly
valued for thousands
of years before then.
So when you really think
about, you know, the
history of money again,
like that whole argument
basically goes away.
So it's not the industrial
demand that gives gold value,
but that's where people then
really start to struggle
because then they're like,
what the hell is giving
this thing value if I can't
even explain it with them?
Some industrial demand.
And I think it's just a common
misconception that a monetary
good needs some baseline
non-monetary utility to anchor
it's worth when in reality.
It's probably something else.
It's probably just the
monetary properties of it that
we value and we can attach
value to the properties of
something and the utility
that we derive from that.
Not any cash flows or any
industrial demand, but this,
this really challenges the
traditional view of value
because this is, um, like, um,
uh, how like it's kind of like
intellectual property, you
know, at at companies where,
um, or like data or something
like that where like companies
like Facebook, they, a lot
of their values derived from
IP and data, those are also
intangible things like how can
they be valuable, but they,
they have a lot of value.
But the same thing for
a form of money where
monetary properties are what
people value for money and
especially a store of value.
And what matters there is
how superior those properties
are to other monetary goods.
And then we, we can
derive value for that.
So.
I think intrinsic value in the
traditional sense is probably
the wrong way to think about
it, because, um, with, with
Bitcoin, maybe there's a
new form of intrinsic value
and it's just the intrinsic
properties that it has.
And maybe verifiable
digital scarcity is a new
form of intrinsic value or
utility, just not something
that's physical, um, in
the traditional sense.
Um, and, and that's where,
where people struggle a lot.
So that's probably my, my
answer to that is that,
um, cash flows or other
intrinsic, um, industrial
demand don't apply to Bitcoin.
But that doesn't mean
that it can't have value.
It doesn't mean that
Bitcoin is just the
greater fool's theory.
Like a lot of people say
where, oh, Bitcoin only has
value because people think
somebody else will buy it at
a higher price in the future.
It's like.
No, Bitcoin has value because
nobody can create more of
it, and I can exchange my
time and energy for it.
Now, having analyzed this
thing and understanding
that it has by far the
best monetary properties
of anything that
humanity has ever seen.
Mm-hmm.
And I'm able to stomach the
volatility, but I'm pretty
sure that it will maintain
my value into the future
and probably even go up
in purchasing power terms.
That's why I value this
thing and that's why I'm able
to, or I'm willing to pay
a lot of money for Bitcoin
at the moment, or exchange
a lot of fied money for
real money at the moment.
Um, because I value the
properties that nobody can
base it and that I don't
have any massive costs and
headaches associated with it.
Like a property, like a
property might be able to
store your wealth as well, but
you've gotta manage penance.
You have to worry about
maintenance costs and you
can't take it with you.
If I wanted to move back
to Europe, uh, next year.
I couldn't take my
property with me.
And then there'd be massive
costs and headaches involved
with, you know, trying
to sell that and then
finding something else
in Germany with bitcoin.
I, I just take my private
keys with me and that's it.
Yeah.
And you know, again,
intrinsic value is such
an interesting one.
And without even trying to
go into the debate, which
is what I used to do, is
like, you know, talking
about sub subjective value
versus intrinsic value.
Mm-hmm.
I think it, it is
more important to meet
people where they're at.
So I wonder if there is a way
as well to introduce intrinsic
value because obviously they
need something to anchor
to and a real good world.
Real world tangible.
Think that you can point to,
I guess, the intrinsic value
in the, in the sense that
they need to understand it.
I wonder if that comes to
like on chain data, things
like hash rate, how, you
know, how many miners are
investing in infrastructure
to, to maintain this network.
What are the nodes doing?
How much are they increasing
by the adoption rates?
The, the way how many people
are holding Bitcoin like
for longer periods of time,
like longer than 12 months?
You can, you can get all
of this information from,
so is would this be a
better way maybe to Yeah.
Intrinsic them away?
I, no, I actually
hadn't considered
that, but I, I agree.
Those are like the, um, the
key metrics of Bitcoin, I
guess, that, that you've
just listed, especially
looking at hash rate minus.
Nodes all over the world and
unique Bitcoin addresses.
Obviously one person can
have a hundred different
Bitcoin addresses.
Um, so it doesn't map
to, to people one-to-one.
Um, but as long as those
numbers are growing, um, and
there's a good trend in them,
um, obviously Bitcoin, the
network itself is growing.
Um, and I guess the, the
energy input is probably
another thing that you could
look at where obviously
Bitcoin mining is highly
energy intensive, but if more
and more energy is going into
the network and securing it,
then maybe that is some, some
real world anchor that it has,
um, not just from Bitcoin back
into the physical world, but
also from the physical world
into Bitcoin in terms of the
value that's flowing into it.
Yep.
Noise.
Um, I wanted to now pivot
a little bit and ask you
just broadly, what are
some of the pros and cons
of investing into Bitcoin
directly versus investing
into Bitcoin futures?
I'm not like a high
finance person.
Yeah.
You mentioned like
anything derivatives.
I'm like, woo, la la.
So these the, I would just
love to know from a quant.
So.
There For an institutional
investor like us, there
are a lot of advantages to
using futures rather than
underlying um, assets, but
especially for Bitcoin.
Um, part of the reason why
we did it with futures is
that in the framework that
we use to invest in Bitcoin,
which is our dynamic asset
allocation, it's like this
basket of trading strategies
that we have for, for shares,
bonds, commodities, um,
foreign exchange currencies.
Um, we basically trade
everything through
futures anyway because
they're highly liquid.
And the good thing with
futures is you, you
usually don't have to put
up the whole capital, um,
of the, the underlying
thing that you wanna hold.
So oftentimes if you have, if
you want to invest, let's say.
10 million into, um, the s
and p 500 through futures.
You don't have to actually put
up 10 million, but you might
only have to put up 1 million
to get exposure to 10 million.
So it's almost like you're
getting a leveraged exposure,
um, that, that you have to
manage through the margins
that you have to maintain.
So that, that's one of
the benefits is lost.
It's less capital
intensive, but also futures
are highly regulated,
um, instruments, so.
ETFs obviously
now are as well.
But the, uh, bitcoin
futures have been around
for a lot longer and like,
especially the CME Bitcoin
futures from, from the
US are highly regulated.
So for us, rather than
trying to do some kind of
self custody, um, or, I
mean Bitcoin, ETFs, uh, in
Australia didn't exist at
the time when we started
investing into Bitcoin through
mp, um, futures was really
the only institutional grade
exposure that we could get.
And with futures, it's easy
to dynamically manage them the
way that we do, where we can
dial our exposure up and down
because they're super liquid.
Um, and, and trade, um, yeah,
almost around the clock.
Yep.
Nice, nice.
Okay.
That makes sense.
I'm just a simple
woman and I like to buy
my Bitcoin directly.
And I mean, to be honest,
like not financial advice
obviously, but I think on a
personal level, um, the, the,
the best thing to do is to buy
Bitcoin directly and to try to
self custody at least a part
of that because unless you do
that, you don't actually get
a lot of the benefits that,
um, you know, Bitcoin offers.
Like, you don't get the
sovereignty, you don't
get the ability to take
it anywhere with you
as long as you're still
holding it on an exchange.
Or even worse if you're
holding it through futures.
Personally, all you're getting
is price exposure to Bitcoin,
but you're not getting any of
the monetary properties of it.
You only get the
monetary properties if
you self custody it.
Yep.
Yeah.
Yep.
I like it.
Yeah.
And this leads in very
nicely to the next question.
In your personal life,
do you wear your quant
hat or do you wear your
Bitcoin Maximus hat when
it comes to buying Bitcoin?
Let's just say the, the
orange hat, it's the one
that I'm wearing more.
It's, uh, the, the hat
is based on conviction.
Um, yeah.
Yep.
I love it.
It's just, yeah, conviction
is so important and the only
way to maintain it is to
continually keep reading,
continue, keep studying.
And I've, you know, I've
had moments as well, 'cause
I'm very new to Bitcoin.
I've had moments where I'm
like, am I right about this?
Have I, are there any risks
that I, that I missed out on?
And I'm like.
You know, trying to find
my friendliest og and
I'd be like, this is
what I'm worried about.
They're like, oh,
a 30% drawback.
Oh, welcome to Bitcoin.
Like, yeah, yeah.
Wait till you hit 80.
You're like, I don't
think we will anymore.
But yeah, hopefully we won't.
But you know, still your
first, your first experience
can be quite emotional,
but I think the best way
to manage the emotion is
just to, to keep studying.
Um, and a hundred
percent like, and this
is what I say to people.
That asks me about
Bitcoin all the time.
It's like the best thing for
me about Bitcoin hasn't even
been investing in Bitcoin.
Yeah, that's been good.
But the best thing about
Bitcoin has been everything
that I learned along the way
in order to try to understand
Bitcoin as well as I can.
And nobody will ever fully
understand Bitcoin like
this is the other crazy
thing, is like no matter
how much you study it, there
will always be something
that you don't understand.
Nobody has a full
understanding.
Nobody ever will,
I don't think.
Um, but what you learn along
the way makes you grow so much
in terms of understanding how
the world works, understanding
how the financial system that
we operate in work works.
How fractional reserve
banking works, what the
role of central banks is.
As we talked about, like the
history of money and how we
got here, you, you can also
go down rabbit holes about
cryptography, information
systems, energy use, energy
grids, how Bitcoin mining
can be plugged in to help,
uh, finance sustainable
renewable projects.
How Bitcoin mining can
help stabilize energy grids
all over the world and
can really push us towards
this renewable, um, energy
that we want to move to.
And like all of
these other things.
And like all of a sudden
you're going down rabbit
holes about thermodynamics
and like all these crazy
things and you just, you
just start to see the world
through a different lens.
And that's why Bitcoin
has called it taking
the orange pill as well.
Just like in the Matrix
where Morpheus offers neo the
choice of the, the red pill
or the blue pill where, you
know, one is he goes back
in the matrix and doesn't
know that, you know, he's
in the matrix and he is,
uh, blissfully ignorant.
And the other one is that
he stays awake to it.
And outside of the matrix.
And knows what's going on.
And as a Bitcoin, once you've
studied it enough, you, you,
you've taken the orange pill
and you never see the world
the same way, which is a bit
frightening, but it's also
really empowering because
all of a sudden you like
everything that happens,
like you read something in
the news and you're, you're
as a Bitcoin, you're like,
ah, yeah, no, I know what
the agenda behind that is.
And like you, you see
everything a bit differently.
Um, so that's the best thing
about Bitcoin is it's free
the money, but it can also
free your mind, um, to escape
this fiat matrix that the
world has constructed for us.
Yeah, yeah, absolutely
agree with you.
It is very empowering
in that sense.
It has completely renewed
my thirst for knowledge,
unlike anything ever before.
And I just like, I
genuinely enjoy learning.
I genuinely enjoy, I
genuinely enjoy reading
and consuming content.
And it feels empowering
because I remember.
Um, I always used to be
quite intimidated by older
people, by more educated
people, by, you know, people
who are in higher positions.
And that is really no
longer the case when it
comes to Bitcoin at least.
And, and, you know, any,
anyone with a position title
or, you know, in some sort
of position of authority,
what, no matter what they
say, I don't feel like
intimidated by it or, you
know, they can say whatever
they want and I'm like, it
doesn't waver my conviction.
And that, that is a very
empowering place to be in.
Um, so I couldn't, I
couldn't agree with you more.
Yeah.
Um, it's also like the
beautiful thing about it is
all these like side benefits
that you get, like very
organically, it has lowered
my time preference and the
longer I'm in Bitcoin, the
longer that, that, that.
Time preference
kind of extends.
I can't wait to start painting
and you know, just going back
to you, you know, studying
just for the sake of it.
Like, just because I
can, like, just random
things like that.
Um, and it's, it, it's
almost like Bitcoin is like
a mind virus that's positive.
You know, like usually if,
if we think about viruses,
it's a, a negative thing
because they make us sick.
Um, but Bitcoin is like a
type of virus that you catch
that makes you healthier and
healthier over time mentally
and potentially physically
for a lot of people as well.
Because you, you, you start to
get this low time preference
thinking, and if you really
think about like everything.
Beautiful and worthwhile
in life requires this
type of thinking.
Like if you want to have a
fit, strong, healthy body,
that requires you eating
healthy on a daily basis,
moving a lot, sleeping enough,
stretching your body, you
know, doing all the right
things, but not just for a
week or month or one year, but
like a whole life basically.
If you wanna start a family,
if you wanna be mentally
well, if you know, you'd
want to be in a good head
space like that, those are
all things that you have
to take care of, that have
to be day-to-day things.
Um, and that require you
to think for the long
term and not just live in
the here and now and live
hedonistic, um, you know,
short term thinking lifestyle.
So Bitcoin is like perfectly
aligned with what all the
philosophers have always told
us about wanting to live a
happy and fulfilled life.
And Bitcoin just is like a
money that fits in perfectly
into that whole idea.
It's beautiful.
Yeah, absolutely.
I mean, I wanna eat
healthy and exercise so
I can see Bitcoin become
a medium of exchange.
Is that quite bad?
Exactly.
I just wanna be around to see
how everything's going unfold.
Um, last question or
second, last question.
Um, I, is there a person in
your life or at work that
you orange peel that you're
super proud of that you, you
know, saw go from like really
skeptical to like, oh my
God, this is the best thing.
Thank you so much
for introducing me.
Wow.
I don't know if there's
someone, I mean, my fiance,
um, I think I, I managed to
orange peel her a, a fair bit.
Um, but at work I, like,
I don't think that I've
necessarily completely
orange peeled anybody.
Stuart is quite orange peeled,
but he, he was a gold bug
before discovering Bitcoin.
He understood all of
the underlying issues
that need to be fixed
with hard money already.
But what I'm actually quite
proud of is Shane Oliver, who
I was on the podcast with.
He.
He used to be really
outspoken, um,
negatively about Bitcoin.
He, he used to be a big
Bitcoin critic and he's still
skeptical, but as you would've
heard on the podcast Yep.
He's, he's now very open
to it potentially being
this new form of digital
gold and for, to have a
place, at least as a reserve
asset and as a store value.
Like he's really coming
around to that idea.
And I think part of it is that
we are having open dialogues
within a and p around this.
I talk about it all the time,
and I guess through practicing
that so many times, I've found
a good narrative and a good
way of communicating it to
traditional finance people.
So I think it resonates with
him, but also to his credit,
he's keeping an open mind.
And like Shane has been
with a MP for over 40 years
and he's been a Keynesian
economist his whole life.
And usually those
types of people.
Uh, unfortunately quite close
minded about Bitcoin because
it challenges their whole
worldview and everything that
they've been preaching for 40
years in, in, in Shane's case.
But he somehow is able to
keep a really open mind and to
be open to innovation and to
actually consider this thing.
And he understands
Bitcoin really well.
You would've heard in the
podcast, like he, he actually
understands a lot of the
dynamics behind it quite
well, um, for, for someone
who's an economist and a
a, a bit older as well.
Um, so yeah, I'm really
impressed by his ability
to do, to do that, but also
proud of myself for pushing
him a bit in that direction.
Yeah, me too.
Me too.
It's such an admirable quality
to see someone, especially
the longer they've been in
a certain profession and the
longer they've subscribed
to a certain type of, you
know, economic school of
thought, then the harder they
might be to like undo that.
So yeah, like I think it's
a, it's a great quality, um,
for anyone to be able to sort
of change their mind in light
of some new information,
even if it is happening,
you know, bit by bit.
But I, last question I wanted
to ask you is, I have a lot
of wonderful Bitcoin Maximus
friends all over Australia
who are in, you know,
pretty powerful positions
within their companies and
a lot of them are banks and
superannuations and whatnot,
and, and they really wanna
start having that conversation
and kicking it off at work
with, with their colleagues
and, and people who, you
know, might potentially
be able to influence,
you know, some sort of.
Adoption within their company.
Um, what advice might be
for you to those people?
Like how to, I guess, come
out of the shell and, and
navigate, uh, potential
criticism and potential?
Yeah.
Like, no one wants
to be ostracized.
No one wants to be treated
like they're weird, but Yeah.
How, how, what would you say?
Yeah.
Um, it's tri, it's tricky and
I think everybody needs to
be aware of their particular
firm and their particular
environment and what the
people around them are like.
I think one thing people
could do is, and they're
probably doing this already,
is have, you know, one-on-one
conversations with colleagues
and people in their team
just to gauge where people
are at with Bitcoin.
But I think one thing that
wouldn't hurt anybody, and
especially at a bank or
within a superannuation fund.
If you are either in
the investment team at a
superannuation fund or at
a team that's, you know,
thinking about, you know,
future, the future and
innovation within a bank.
Um, trying to set up
something like a workshop
around Bitcoin, um, could be
a good idea and super easy.
'cause like, who's
gonna say no to you?
Suggesting you running a
workshop and dedicating your
time and energy to doing that.
Like, there's nothing to
lose for, uh, you know,
someone who's, who's
your boss or in a, in a
position of power there.
Um, and then the way that
you could sell it, I guess
in the superannuation fund,
and this is kind of how I
sold the first workshop that
we did to, to our CIO, was
that Bitcoin obviously is
becoming this thing that
is institutional grade and.
I've studied this thing for
thousands of hours, I would
say I understand it quite
well, and I understand the
investment case quite well
and what I think more and
more people are waking up to.
But what I saw within
the team at a MP was that
there was still a lot of
skeptics, but I thought
that their skepticism was
coming from not understanding
Bitcoin well enough.
So I went to the CIO and and
told her basically exactly
this, and was like, Hey,
like I think this could be a
massive opportunity for a MP.
I've studied this
for a long time.
Whenever I tried to talk to
people about it, I, I find
that, um, the stuff that they
say seems like they haven't
studied it deeply enough,
or they're still, you know,
stuck on the fad from 2017.
How about we just set up.
A small internal workshop,
just the investment team.
I pitch my whole investment
case for Bitcoin and I
answer all of the questions
and criticisms that people
have, and if they walk
away from that workshop,
we'll do a second one.
If they still have questions,
let's, let's just get to
a point where everybody's
informed enough about Bitcoin
and then we can all make
an informed decision about
whether we wanna embrace
this together or not.
Like if you just approach
it in a way like that,
where you frame it as all
that you're doing is you're
trying to provide something
for everybody else, but
you're not asking for
anything specific in return.
It's like, you know, it is
not like, oh, we have to
invest a bit Bitcoin, so I
have to run this workshop so
everybody gets it, and then
we, we can go forward with it.
It's like, no, let, let me
provide something to all
of you because I think I,
I have a lot of knowledge
that I can share so that
you don't also have to spend
thousands of hours and then
come to me with all of your
criticisms and questions.
You obviously, you have
to prepare for the typical
questions and criticisms, but.
They're all the same ones.
Like there's nothing new
under the sun when it
comes to Bitcoin criticism.
So be prepared for those and
have a really good answer
to all of them, because what
I found is that once you're
able to answer the criticisms
in a good way, it takes away
that fear from people and
people are more open to it.
And then you can
take it from there.
And if you're in a bank,
um, maybe you don't have
that investment narrative
that you can use, but even
within the bank you can say,
look, Bitcoin is obviously
becoming this big thing.
They are now, I don't know,
companies that are providing
things like Bitcoin backed
loans or offering their
their customers to, to
custody Bitcoin directly.
Like, and, and maybe for
a bank even like another
thing to get ready for as,
as much as we as Bitcoiners
might not necessarily like
the ideas, like stable coins
becoming more of a thing and
you know, getting your bank.
Ready for a blockchain
in crypto environment
and then having Bitcoin
be a big part of that.
Like maybe there's an
angle that you can use
there where you frame it
as something that could be
really important for the
bank to be future ready and,
you know, to be innovative
and, and forward thinking
rather than just stuck on
in the present or the past.
So I think if you, if you just
find ways of communicating
Bitcoin and why people should
at least listen to you talk
about Bitcoin as something
that can only benefit people
and worst case, you just
don't do anything with it.
And that's it.
If you can frame it in that
way, um, I don't see why
people would say no to it.
And then start small.
If people like it, you can
expand out and, um, who
knows what's gonna happen.
Yeah.
Thank you so much for that.
And the only thing I would
add to that is, um, bring
some snacks because people
are a lot more open-minded
when you're feeding them.
That's a good idea.
All right, NUS, thank you
so much for your time.
Thanks, Anya.
Really enjoyed it.
Great, thanks.
Bye bye.