pysh-booth-mallers-saylor-hodl-vortex-odell-BTCsessions-bullish-bitcoin

Why are We Bullish? with Pysh, Booth, Mallers, Saylor, HODL, Vortex, ODELL | BTC Sessions

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Key Takeaways

  • Plebs are front-running institutions. Bitcoiners view Bitcoin as the way to a prosperous future and their goal is to hold Satoshis, not accumulate Dollars
  • Bitcoin is an open system with superior network effects and economies of scale
    • Competition is necessarily subtractive in closed networks, whereas innovations are additive in open networks, and with exponential gains
    • The chain is as strong as its strongest link. Users benefit when an entrepreneur succeeds but aren’t hurt when an entity fails
    • Bitcoin has no jurisdiction, nation-states will compete to attract entrepreneurs and capture value
  • Investors looking to arbitrage the spreads between futures and spot have to over-collateralize to borrow coins, this collateral is taken off the market and locked in escrow.
    • This is a self-enforcing positive feedback loop: more coins taken off exchanges drive the price and volatility higher, which increases spreads and causes more people to take the trade
  • There are $130Tr bonds yielding negative interest, with no way out of the existing system – Bitcoin is the exit
  • Two forces going are head to head: the existing system pushing prices up against technology driving prices down. To bet against technology is to bet against humanity.
    • Moreover, technology exponentially deflates prices, and thus requires exponential monetary inflation.
    • “Bitcoin will go up against every other asset class, forever.” – Jeff Booth

Guest Line-up

Plebs Have the Advantage

  • Bitcoiners view Bitcoin as the way to a prosperous future. Thus, their goal is to hold Satoshis, not to accumulate Dollars
    • By contrast, investors didn’t study bitcoin enough to appreciate it and will sell for USD gains.
    • That said, such investors reduce volatility and provide an opportunity for newcomers to buy
  • It’s a mistake to evaluate an entirely new system through the lens of an old system. Ego and mindset prevent The Yuppie Elite from exploring the new system.
    • Keep in mind, Bitcoin is outperforming all other assets and doesn’t wait for laggard entrants

Bitcoin is an Open System

  • Bitcoin is natively digital money with clear standards built on mathematics and the ability to build more features on top
  • Open networks with superior network effects and economies of scale, here is why:
    • Competition is necessarily subtractive in closed networks, whereas innovations is additive in open networks, and with exponential gains
      • For instance, using Venmo means not using CashApp. However, Strike and other solutions utilize the same Lighting network.
      • Keep in mind, innovation is permissionless and 8 billion humans can freely utilize and innovate on Bitcoin.
  • In an open network, the chain is as strong as its strongest link. For instance, users benefit when an entrepreneur succeeds but aren’t hurt when one fails.
    • By contrast, one overleveraged bank can threaten the global traditional financial system
    • Immediate settlements mean individual traders can blow up with leverage, not the system.
  • Regulators can regulate in their jurisdiction, but Bitcoin has no jurisdiction and allows a free flow of capital with no counterparty risk.
    • In an open system, winners provide the best experience and brand. Similarly, nation-states will compete to attract entrepreneurs and capture value. (e.g. No tax gains or banking license requirements)
    • Put simply, people will go where they are treated best

A Maturing Derivatives Market

  • Bitcoin infrastructure is quickly ramping up, with expected ETF and major bank offerings by end of the year
  • Investors looking to arbitrage the spreads between futures and spot have to over-collateralize to borrow coins, this collateral is taken off the market and locked in escrow.
    • This is a self-enforcing positive feedback loop: more coins taken off exchanges drive the price and volatility higher, which increases spreads and causes more people to take the trade
  • There are $130Tr bonds yielding negative interest, with no way out of the existing system – Bitcoin is the exit
    • “This [negative rate] is considered the risk free rate, and people call bitcoin a risk!” – Preston Pysh
  • Contrary to conventional macro-economic wisdom, monetary inflation trumps consumer inflation.
    • Despite the Consumer Price Index (CPI), the narrative is acknowledging inflation worries, and investors will look for inflation hedges
    • The US won’t pay back its debt, nor will it default. The cheat code is currency debasement

Technology is Deflationary

  • Two forces going are head to head: the existing system pushing prices up against technology driving prices down. To bet against technology is to bet against humanity.
    • Moreover, technology exponentially deflates prices, and thus requires exponential monetary inflation.
  • $185Tr of monetary easing in the last decade is the driver behind “housing always goes up”. The question is will there be another $185Tr over the next 10 years?
    • As technology continues to lower prices, “Bitcoin will go up against every other asset class, forever.” – Jeff Booth
  • Printed currency flows into harder assets, and Bitcoin is the hardest of them all. Put it this way: the housing supply doesn’t halve every four years
    • Keep in mind, currency debasement transfers wealth from the poor to the rich, with severe social implications

“It Goes Up Forever”

  • Bitcoin is engineered money that appreciates against inferior assets and currencies, and anything is plastic beads when compared to digital gold
    • “Bitcoin is the most valuable digital real estate in the planet, and it will be for the next thousand years” – Vortex
  • “We are going to do austerity” – no politician ever
    • Economies will keep inflating till they can’t, they are paying their bills with inflation, not taxation.
    • Hopefully, the western world will embrace bitcoin as superior technology and understand that this monetary expansion is not sustainable
  • Bitcoin lends itself to peaceful, rational resolution. Physical assets lend themselves to seizing with force.
  • Entrepreneurs are asymmetric bet-takers, not risk-takers. They understand there is more risk in an existing system and reward in a new system.

MicroStrategy and Bitcoin

  • “We are not really into blockchain analytics, […] our strategy is to buy and hold bitcoin” – Michael Saylor
    • That said, to combat analytics, bitcoiners should avoid KYC services, and utilize Conjoin, Tor network, as well as the Lighting and Liquid networks
  • MicroStrategy bought the naked asset in order to have control over the custodian, rather than having to invest in a fund
    • Publicly traded companies have to follow various regulations. With that in mind, if self-custody is not an option then use an agent that provides you the option in the future.
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Notes By Mostafa Khaled

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