The Bitcoin Boom

Old Men New Money, please subscribe on YouTube, Spotify and iTunes. Thank you. Welcome to another episode of Old Men New Money. I'm Douglas Borthwick. I'm Ali Davoudi. And we've got a lot to discuss today. First of all, if you haven't already, please subscribe to us on iTunes, Spotify and YouTube. Also, if you want our weekly newsletter, subscribe to it on LinkedIn. There's a link on oldmennewmoney.com, but also go to our site on LinkedIn for Old Men New Money. You can subscribe there and we'll give you all the details on a weekly basis of sort of what we see happening in the market.

And we're going to add something this week and that's M&A activity. So mergers and acquisitions activity in the space. I think it's going to be pretty exciting. Today in this episode, we're going to discuss a whole bunch of things. We've got obviously MicroStrategies, Bitcoin Empire, what they're doing. We've got Metoplanets, what they're up to. We've got 21.co. That's the new Cantor, Tether and Jack Mallor's Bitcoin play. We got M&A news with Coinbase, securitize and jump trading. We've got the Bitcoin reserve legislation on the state level. We've got the Genius Act. It's been blocked in Congress and we'll talk about why.

And hopefully we've got a couple more things to throw in there, but a jam packed day. So anyway, Ali, MicroStrategy, what's Saylor up to? Saylor's leading the way. Anytime anybody else adopts his strategy, he's first mover. So they're going to move his stack more to make it more valuable every time. The guy's got a winning strategy. Every single person that adopts it, every state. So when Arizona comes up, we're sitting at $103,000. Yeah. But it's not just strategy anymore, right? I mean, we started off with strategy. It moved on to Metoplanet out of Japan. And now you've got pretty much everyone and their mother trying to get involved.

21.co, obviously getting involved now. That's Jack Mollers who's joined up with Cantor's and Tether. And they've started off with a whole bunch of Bitcoin as well. So it seems like, you know, there's obviously a race between really two big boys, but the biggest boy still in the world that the US is said to have around 200,000 Bitcoin, who knows if they do or not. We have to really get to the details of that because we haven't seen an audit. He's doing a very good job in going out there and in talking to other corporations. And today he was talking to obviously the Saudis, talking to them about why they should be much more invested in Bitcoin.

So, you know, in the last couple of weeks, he's talked to Microsoft today. Talked to the Saudis. He's certainly getting around and he's become one of the biggest evangelists for it. Now, his biggest push, he really does believe that Bitcoin is going to become capital singularity. And what does that mean? It means that there's no competitor, absolutely no competitor. Whether you're in equities, there's a lot of risks. If you're in debt, there's a lot of risks. If you're in anything other than Bitcoin, there are tremendous risks.

And so, you know, interestingly, I just released a book called Bitcoin Capital Singularity that can be found on Amazon. The net of it is, the net of it is, and I believe this as well. It's very hard to find another investment. And this is something that came up in a conversation we had with Samson Mow a couple of months ago on this show, where people come to you and they say, look, will you invest in this? Will you invest in that? And it's always hard when you compare the investment in something to making an investment in Bitcoin. Absolutely.

Now, Samson's view was, well, you wouldn't invest in anything other than Bitcoin or something that is using or building the environment for Bitcoin. Look, if you had a big hit at your company and you walked out with 10 million cash and you want to park it in something safe, you go and buy a house, $5 million, $6 million, and you put it there, you're going to end up spending five, 10% of the value of that asset annually, just for the upkeep. The beauty of Bitcoin is it has zero carrying costs, so you can afford to ride it up and down and not have to constantly get it chipped away every year.

The nice thing about Bitcoin is there is no carrying cost involved. But let's say you bought that $6 million house and then something happened, you lost your money in the stock market. Well, that asset is no longer safe. Not only that, it's a perpetual liability because every year you're going to have to pay five to 10% of the value of that asset for its upkeep, whereas you never have that situation with Bitcoin. So it really is the ideal store of value created for a digital age. Well, there's also people look at equities and they say, look, my equities are good.

I'm always going to get that coupon from Microsoft because, you know, software as a service is important. But when you look at it, then you see something like tariffs news hitting the tapes, and then you see a breakdown in pretty much all equities. You kind of forget about all the different factors that an equity makes up. You know, the equity is priced on the net present value of future cash flows, which can be affected by absolutely anything and everything under the sun. Yes. You've got us fixed income, but let's say your US fixed income pays 4%, but inflation is 5%, 6%, but you're actually losing money in an annual basis.

And so I think that you're going to start, and this is, I think why sailor has this view that Bitcoin is going to be worth $12 million at some point. It's really because people are looking at it and saying, why am I invested in X, Y and Z when I should be just in Bitcoin? Well, and I think the problem with it is that everybody loves to catch a falling knife, whether it's in equities, whether it's in Bitcoin, you know, I had so many people calling me up, you know, worried when it had dropped to eight or three, or maybe they had bought it at 90,000. And now they're worried that they're underwater.

And I just keep telling him, you're not buying it at 93,000 to sell at 150. You were buying it at 93,000 to hold until 11 million when each Satoshi is worth 11 cents. And then you'll feel better about this investment, but you have to just buy and then forget about it because in the next five years, this thing is going to go somewhere. Oh, it's going to happen here. It's going to happen there, but it's going to help. Yeah. That might be a problem for Bitcoin in that it's a long-term investment, but it has liquidity. And if you think of other long-term investments, right?

Like fine art, let's say, or real estate, people are forced to hold them for a long time. So you buy it, you got to close your eyes and in 10, 15, 20 years, you know, it's going to be worth a lot more because of inflation. Whereas Bitcoin has that temptation where immediately you can go out there and sell it when it's up three or 4%. And that's actually, it's a positive, but it's also a negative. You can also take the loss and then buy right back in. You don't have to wait 30 days like it and have it be a wash sale because it's classified as property. You can take a loss today. Let's say you bought it at 94,000.

You can sell it at 83, take the 11,000 per token loss, and then buy it back one hour later, and that's your new basis. And that loss still counts. We're not accountants on this show. So please don't take our financial advice. Check with your CPA, but that's what it is. Yeah. I don't know. I mean, I was very impressed with sailors, Microsoft's presentation. And I encourage everyone to really look it up online on YouTube and take a look at it. But obviously, you know, micro strategies continued by. And since our last call, they went out there and they bought it. Hey, let's talk about that year. Keep calling it micro strategy.

And let's just talk about how brilliant sailor is, but it's moved to the name strategy. I hate, I mean, it's almost like the Prince, you know, changing his name to assemble and stuff like that. Yeah. For sure. We call it strategy used to be called micro strategies. Like X used to be called Twitter. Yeah. But, you know, maybe we could call him sailor about this and have him change it. But in the meantime, we just have to deal with it. Maybe we can ask him when we have them on. Yeah. But these guys know they've got around what, 553,555 Bitcoin. That's around 2.6% of all Bitcoin outstanding. It's pretty astounding.

They bought another 15,355 Bitcoin for $1.42 billion at 92,737. And when that was announced and your Bitcoin was a little bit lower and everyone's like, Oh, I don't know. Sailor says he's going to buy the top every time. And now we're trading at what 103,103,000. Yeah. I mean, he obviously, there are a few traders that I can point to. And I can say this is someone that has a view, an idea, and just doesn't back down from it whatsoever. If you're a good trader and nothing has changed about your trade. Prediction and your theory and your thesis about the trade, except for the prices moved against you, you should love it.

He's not a trader though. He's an accumulator. But my point is, this is he's still, he's trading, he is trading paper dollars and his company stock for what he finds to be the most valuable finite asset made for the digital age. And so you as a person, that's an individual that can go out and buy it. When you buy a share of micro strategy, you get the only levered way to purchase Bitcoin, you get it done for you by an expert. And on top of that, you get free custodian services for it. Whereas, you know, when you go to I bet and the others, you're always going to be paying a fee. I mean, Lord knows what you're paying over at GBTC.

I think it's still like over 1%. So I mean, that just eats your way. Yeah, but strategy stock is still trading significantly above the Bitcoin that it has underlying it. Now, a lot of guys are saying, yeah, that's crazy. It's nuts. If there was a block trade and you wanted to buy 2.6% of a company, you're going to pay a little bit higher than where the market is in order for a sovereign nation these days to buy 2.6% of the outstanding Bitcoin in one fall swoop. I don't know how they would do it, but the nice thing with micro strategy is you could just buy it in the open market.

So just as a block trade, it should be trading as a premium because there's no other place you can go to buy that much Bitcoin with that much liquidity at any moment in time today. And with their $3 billion spec, 40% of their holdings is micro strategy because it's essentially the purest synthetic way to purchase Bitcoin. Well, I would argue that maybe the purest way would be IBIT rather than strategy. But I think that what they did is maybe that's just why that's more pure because it's not trading at a premium right now.

I think that what they're doing is they're parking money right now until they can do their own strategy, but they don't want to miss out in terms of where will Bitcoin be in three months time by the time they get their strategy going. So they buy into strategy right now while they put their own strategy on without having to pay the premium. So that's that's them. But I think for the individual retail investor, what you earlier, you said the price of a stock is discounted future cash flows. So when you're buying it, you know, I'm buying strategy and OK, they have $55 billion worth of Bitcoin. And let's say their market cap is $100 billion.

And so everybody points out to the fact that, well, it's trading at a premium, but you're also getting one of the brightest, most committed minds in this nation market who has never wavered executing the game plan for you. And that to me is very, very valuable because I think in the future he's going to turn it into basically a Bitcoin bank. Oh, for sure. He's going to turn this into a bank. He's going to turn into a lot more. But also what people don't understand is that Bitcoin today, they may see it as just being it's a dead rock that you're holding in your portfolio.

But as we know, over time, you're going to be able to take that Bitcoin and earn considerable amounts just by owning it. What you can lend it out in? Oh, for sure. At some point, he's going to end up doing that, you know, he's going to end up lending it out at significant rates when it's worth a heck of a lot more than it is today. I think that sailor is probably the best financial engineer of our generation in that what he's figured out is obviously that there's different pockets around the world that can invest in things, but they can't invest in Bitcoin directly. Maybe they can invest in equities. Maybe they can invest in fixed income.

Maybe they can invest in equities, but not over a certain volatility. Maybe they can invest in fixed income that has very little volatility. And he's managed to find a way to carve out volatility from Bitcoin and offer it in different slices and different types of plates for different types of investors. And in doing that, he's really changed the game. If indeed, strategy's price is overpriced relative to where Bitcoin is. And I can sell stock at the money. I can sell equity into the market and then use that to buy Bitcoin. Well, heck, I've just made more.

And the other thing I think that the market is very concerned about is always the downside. At which point would sailor have to start selling Bitcoin? And I think that his view is never near the interest rate payments that he has to make on the debt on his balance sheet are so small relative to the amount of Bitcoin that he has on his balance sheet, that it largely becomes irrelevant, especially because the interest rate payments versus the debt are largely very, very small. Remember, he's managed to borrow it around zero percent. Not his preferred trade. Right. His last one was at 10 percent. That's right. That was the 10 percent forever.

Yeah. 10 percent annual yield forever. That's not bad. What's crazy is, you know, now I remember he was in Bitcoin, but you're going to get in dollars. Well, we're getting a lot of calls these days from shops that I'd say about six months ago, if you wanted to borrow dollars against your Bitcoin, you'd be paying around 14 percent with maybe a 70 percent LTV loan to value rate. And I'd say lately that's moved down to around eight percent. And with a 60 percent LTV.

So there's competition coming in the lending against your Bitcoin space where what that means is if you have Bitcoin, you would essentially move it into a cold wallet and then you would get cash dollars in return. Now, if the price of Bitcoin went down to a certain level, you then get a margin call and have to pay up, but otherwise you'd have cash that you could spend or invest. If you can be borrowing at eight percent, then put it at 10 percent into this new product that Saylor has paying you 10 percent, you could essentially just take out the R plus also have the upside on Bitcoin.

I think that these types of financially engineered trades are going to be coming more and more popular over time. And, you know, obviously, microstrategy is the first guy involved in this. But twenty one, that's the Cantor's Tether with Jack Mallers. They're convinced that they're going to do an even better job in financial engineering than microstrategy and a better job than Metoplanet. Now, Metoplanet is really following microstrategy slash strategy. And they provided details on what that better job is so far.

Jack's been on the tapes and all he said is, look, we're just going to do a really good job because we've been in the business for a long time. That seems to be the net of it. So that's not it's not very encouraging. But I think that, you know, they've gotten a big slug of money, obviously, from Tether Cantor's who already had a relationship with Tether. They managed Tether's fixed income. So I think it's going to be very interesting to see what they come up with. That sailor has not already come up with.

And I will tell you one thing that I don't love about the whole borrowing against your Bitcoin is because that's how traditional finance ends up you and taking you out of your self custody and self-reliance position. I mean, the whole promise of Bitcoin was always about not your keys, not your coin, not having to trust institution, others that continuously fail us. Right. And one of the things that, you know, made it easy for small retail individuals to buy it and hold it and not get thrown out of their holdings was they weren't given the crack that is margin.

And so when you buy something outright and you don't owe any money on it, you're not paying interest on it, you can ride those curves. Because like I said, one of the best attributes of it is that it has no carrying costs and it was unleveraged when you purchased it. Then they come out with all these future contracts for an unlimited number of underlying Bitcoin that don't exist because we know it's a finite supply. And these weapons of mass destruction, similar to the ones before with the mortgage market and stuff, are going to have a bad effect on this nation market now, I don't know what that is.

But one of the things that scares me is traditional finance, which is essentially largely what is being attacked by the promise of Bitcoin is now coming and doing a backdoor to kind of get into the Bitcoin ecosphere. And I'm not sure that I love that. It's almost like big tobacco when it came back after our kids with vapes as opposed to cigarettes. So I get the lending against your Bitcoin and how attractive that is to a lot of people, but it'll be interesting to see what sailor does with his cash trove of Bitcoin there. He leverages it and how he lends out against it. There's two ways to buy a company, right?

One is to buy the equity and the other one is to lend the money. Because when you lend the money and someone can't pay you, you own that company. You own them. And so it would be, it's very interesting to see this. I mean, this could just be essentially a trap to hold and own other people's Bitcoin at a discount. What do you do? You lend to them, you make it sound very attractive. And then what happens when they can't pay? Thank you very much. Now I own your Bitcoin, but I own it at a discount. If the LTV is 70% and the price goes down 30%, okay. Now I own your Bitcoin. You paid me interest the whole time you thought it was your Bitcoin.

That's right. And it's a beautiful scam. Well, it's not a scam. It's business and it's the business that not just banks are in, but there's also vulture funds that are involved in this business as well. A lot of people make good money by lending to folks or companies that they feel are in trouble so they can end up owning that company or owning that. Look, it's the same sample bitches that got us in trouble in 2008, 2010. Still made their bonuses. People's parents got divorced because of all the scam. I'm going to still call it a scam because that's what I think modern day banking is modern day banking is a scam.

And so all those people that got hurt last time, and that was the reason when Satoshi came out with his white paper. Now we're just talking about going and trying to skin this cat a different way. And so at the end of the day, I'm very suspect of traditional finance coming back into this Bitcoin ecosphere. Same way as Jamie Dimon working on projects related to it in the background. So I don't understand, you know, that's the same thing with Trump right now. We haven't found that we don't have the audit of the 200,000 that we purportedly have in US treasury.

But I don't think Trump's going to tell us when he starts accumulating or if he's already started accumulating or how he's going about accumulating it in things. Because I mean, if he makes that announcement, I think today, tomorrow you and I see $150,000 Bitcoin price and that would be against himself. Yeah. Bo Hines has made it very clear. And this is the guy that's really in charge of, you know, building up this strategic Bitcoin reserve that he wants to buy or he's been told to buy as much as possible, as fast as possible. And within that, it's very unlikely that he's going to come out and tell the world.

I don't think he has to tell the world that they've been buying. Remember, all he has to do based on the executive order. Is he's not to use new money. Now, if tariff money's coming in, could he spend it? Sure. If there was a revaluation of gold, could he use that? Sure. If he saves money from Doge coming in and saving money in different organizations. Yeah, it doesn't require appropriation, you got it there. Doesn't need Congress for that. And so it wouldn't surprise me if we're going to see a percentage of all of this has been going into Bitcoin and the Bitcoin reserve. Yeah.

And then with the Tada moment where they let you know after, let's go back to one question that you asked earlier, which was how do you go about accumulating a lot of Bitcoin and then talking about strategies value? Well, let's think about it. Companies pay premiums all the time to take out other companies at a premium to their current value. So technically you could argue that you could pay basically one and a half time what micro strategies current market cap is and call that a two and a half X premium to its underlying Bitcoin.

But I would still think from a strategy standpoint, if your goal is to acquire that much, that's a very attractive buyout, Ken. Yeah. And then, you know, we wrote a paper on that and I'll put that out again. The question essentially is what if micro strategy or strategy was nationalized by the United States? Now that would be quite something in that they'd have to pay some sort of premium. You'd think that the board would have to approve that somewhat, but would sale or sell it for one and a half times the price for two and a half times the price for three times the price doubtful. I don't think so. I've been against that with everything.

I don't think so. Unless, you know, I think it's certainly very, it's certainly dangling there. Look, there's a number of ways you can accumulate Bitcoin. You could accumulate it through IBIT. You buy IBIT because IBIT obviously is going to move towards this where you can sell your IBIT and get Bitcoin. So they're going to move towards that. That's sort of going to going through the motions right now with the SEC.

You could buy a strategy or you could buy Bitcoin or you could do all three of these different strategies, or you could just start taking it from other people, you know, forfeiting it in some way and finding criminals or saying people are criminals and taking it. But it's yet to be seen how it wouldn't surprise me if there's not a V-WAP on right now from the US government that's just sitting there and buying Bitcoin constantly as a constant drip.

But you'd think as well, though, that there's enough analysis of wallets that someone would be seeing this and talking about it on X and we're not seeing that yet, you know, and there are so many hawks on X that are looking and noticing every single time someone buys. So, but it's be interesting if someone does know and they do hear it and they do know the wallet address, then certainly leave it in our comments. We'd love to take a look at it. But moving on from that, if the US is buying, they're going to at least have to start buying soon because obviously this week we had New Hampshire.

They're the first US state to pass strategic Bitcoin reserve all the way through it signed by the governor. Arizona came also this week, second state to sign. First piece of thing Katie Hobbs has done ever as governor. Well, you know, we weren't sure that she was going to sign it because about a week ago, she was sort of unsure and pushing away, but she has signed it. Texas has passed a number of things back in March. On May 8, their House committee advanced it to the final floor vote. And if Governor Abbott signs, Texas would be the third and they'd plan a $500 million annual Bitcoin purchase.

So, you know, we're not talking in the billions there, but $500 million annually. That's not bad. That's better than a punch in the face. And it's one state in one country. I mean, imagine if the world starts to do this. Look, the entire argument for the store of value is essentially there are, let's say 8 billion constituents of planet earth. Okay. Not, not including animals and stuff. Let's just call us humans and stuff. There's only 17 million Bitcoin because 4 million are irrecoverably lost. And the last million is going to basically trickle out this next five years, and then you'll leave the last hundred thousand from 2040 to 2140.

But if you look at what is going on right now, there's not enough Bitcoin for every millionaire household to have half of a Bitcoin. And so whenever I tell anybody that is late to the game, and they're like, should I really buy it at a hundred? Should I really buy it at 90,000? I always tell them, listen, yes, because you are one out of 8 billion people on the planet and you're going to own a piece of something that there's only 17 million. And even though, you know, people make the argument, yeah, but each Bitcoin is divisible into a hundred million satoshis, right? It is, but that's actually a good sign for us.

You can't break the U S dollar up lower than a penny. But that's why I think that Bitcoin is going to go up to 11 million. So a number like that, because at that point satoshis are worth 11 cents, something that average person can understand. And, you know, I never really thought that Bitcoin is going to be used for transactions. You're not going to go buy a pizza with your Bitcoin. No offense to our friend who bought two of them for 10,000. I never thought that it would be used for that. I always thought it would be a store of value for you.

And then you would basically, when you need it to kind of either convert into possibly another crypto, let's say like a Litecoin or something that goes in shorter blocks, or you would go into your Fiat currency, be at the pound, be at the Euro, be at the dollar, and then transact in that currency. But I just look at it. I think of every single Bitcoin as an NFT unto itself. It's one of 17 million. And that's all there is for planet earth. And there's no exceptions to that.

And people don't get that, you know, people like if you talk to neophytes, you know, my parents, friends, others, you know, in their sixties, seventies, et cetera, that still have their retirement funds, pension funds, things like that. And they're watching their stocks go down and they're watching Bitcoin go up. And they asked me and they're like, well, I thought this was supposed to be a risk asset. I thought it was supposed to be this. And I keep telling them, you know, like the stock market's kind of rigged. Like nobody's ever really addressed what happened with GameStop. Nobody's really addressed all the Phantom stock that was short.

Nobody's really addressed that. They changed the rules and screwed the retail investor. Again, the retail investor had Robin Hood and Ken Griffin and Citadel up against their backs up against the walls. His ass should be broke because they had them broken in order for them to cover what they would have had to. He would have been bankrupt with the beauty of Bitcoin is those rules can't be modified unless everybody agrees. You know, one of the things I think that confuses a lot of people. I get a lot of calls from guys and say, look, I can't afford to buy big. It's at 90,000. It's at a hundred thousand dollars. I can't afford it.

But what they need to understand is this is why we're so early. I think still people don't understand you can buy a hundred dollars worth of Bitcoin, $10 worth of Bitcoin, $50 worth of Bitcoin. You can buy very small amounts. In fact, you can go on the coin basis of the world, the crack and just buy a little bit and set it up automatically, where you're just buying essentially dollar cost averaging every week, every month, every day, whatever you're comfortable with. Whatever you're comfortable with. And you can do that and just let it sit there quietly in the background. And then over time you accumulate.

And you may find if you'd held it over the last 10 years, you'd find that over time, this starts to appreciate in value. Now it does not always going to, I mean, this is not financial advice, but I'd say that if you'd done this over the last 10 years, over the last five years, over the last three years, over the last two years, you'd be sitting in the money. You know, you used to run the Forex desk over there at Morgan Stanley. So tell me, what was the number one performing currency the last 14 years? Oh, I could, I don't think there was one. I will tell you this at Morgan Stanley. It's called Bitcoin.

Maybe you don't want to call it currency because it's out there in poverty, but when they compare it to everything else, it is the only one that appreciates. Whereas your purchasing power on every other, I mean, sailor always says, if you were running a publicly traded company on January one of every year, you have to figure out how to make 20% because that's how much you're losing in purchasing power. Well, this is why it's capital singularity. But when I was at Morgan Stanley, I guess what I like to do is look at countries I thought would devalue and we did that successfully in Latin America. We did it successfully in Southeast Asia.

We did it successfully in Iceland, where we took positions, long dollars and short those other currencies. We did it through non-deliverable forwards through derivatives. But a lot of the times we talked about dollar being the cleanest of the dirty shirts, in other words, every currency is always going down, but the dollar would go down less. And that's really one of the reasons why I found Bitcoin, is that I wanted to find a way to short the dollar, at least not be long it with assets. And you can't do that. You can't switch to the euro because Europe's printing. You can't switch to the yen because yen is printing.

You can't switch it to the pound because the pound is printing. Everyone's printing. And if everyone's printing their currencies, you've got to find something to invest in. Now, what do rich people do? Well, they go out there and they buy some fine art or they buy real estate all around the world. They don't live in it. They buy it because they know in 10 years time it'll be worth more. It'll go up with inflation. So they buy gold and then Bitcoin came into being and the little guy realized they could buy into something that would have a similar appreciation. But it was better, better. Why?

Well, you buy gold, you've got to store it, you've got to pay for the security, you've got to have somewhere to hide it. It gets pretty heavy. You buy fine arts. The insurance cost is going to crush you. The nice thing with Bitcoin, though, is everyone now knows about it. Everyone knows where they can go to buy it. Everyone can sell it without having that much of a transaction fee. It's got liquidity. It's got sort of all portability. What else has come out that you've seen occupy the most expensive real estate in the world, which is the bottom right hand corner of your TV screen? I mean, it was always NYSE, NASDAQ, S&P 500.

And then it would be natural gas, you know, oil, natural gas, your 10 year treasury. And now you've got Bitcoin rotating in there, too. This is just like email. Sure, you know, we had email come out in the late 90s, but nobody ever threw their hands up and was like, you know what, screw this email thing. Let's go back to regular snail. It's going to have a couple of hiccups and mountains and things like that.

But continuously, this thing has outperformed any other of its peers in terms of currency, its performance, its holding back in all of it is because it is based on mathematics, encryption, cryptography and Satoshi's methodology of basically cutting everything in half every four years. And that being the anti inflation mechanism is brilliant. It's really in the whole concept of constantly trying to go back into traditional finance. Actually, I'm not a fan of that. But, you know, it's been 2000 years since we've changed the way we store and transact value.

You know, the last time we did this, somebody was going to your ancestors and my ancestors and saying, hey, give me those coins. They're heavy. They rattle. They make a lot of noise. The bandits are going to hear you, you know, take this paper, put it under your shadow when you get there, take it to a bank. They're going to give you the coins, et cetera, at that point. So it's hard when it's very hard to understand, you know, people start to lose their mind because they're like, what do you mean, 64 character walk? What do you mean? I if I lose my password, it's never going to come back and things like that.

But that's the same type of reaction that people had way back then when someone said, hey, give me those tokens. You can't buy anymore. Take this piece of paper was talking to my uncle the other. And he told me when he got his first Diners Club international card and he was in London for a dinner in the early 60s, he said he thought he almost felt like he was stealing because he went to this club. He ordered dinner, gave him a piece of plastic. And then they said you could go. And for him, it was just so strange. He was an early adopter, but I think that's the stage where we are now. We're in that stage of credit card.

Because if you look at us for 65 years later in your kids, my kids, everybody understands credit cards, debit cards, all that stuff, but we're at this early stage and I hate the fact that we keep trying to go backwards and make Bitcoin fit into that traditional finance social construct we had from before. That one makes no sense. Giving us banks a dollar so they can lend 10 out makes no sense. I agree with you here. I think that the reason why we've got to take the circle and fit it into a square hole is for regulatory purposes because regulations and the SEC has been stifled.

But so CFTC, I mean, pretty much every agency has been stifled the last couple of years, thanks to Biden's administration. So everything's sort of been on hold and crypto and Bitcoin have moved in one direction, whereas regulation hasn't moved at all. So right now, everyone's trying to cram it back into whatever regulations exist, while Hester Pierce is essentially sitting there saying, no, no, no, let's move it forward. Let's change regulation so it can catch up. And I think that you will see some catch up. And I think that we're seeing that sort of now in that we're seeing established companies now start to buy into the crypto space.

And now we're doing the segue here into M&A news. Right. Because jump training. Are they really buying into the crypto space or are they buying into Bitcoin? Because so Coinbase acquired Derbit for two point nine billion dollars. That's as of I think yesterday. Two days ago. Right. Now, that's a crypto play, really. You know, Derbit obviously offers options and derivatives on Bitcoin, pretty much the gamut, but it's a huge derivatives play. And now Coinbase will have to take that and give it to all of their retail clients. So that's really a big deal. Also, though, Derbit's got a Dubai license pending approval.

So that would also go to Coinbase as well. So open up Coinbase in the Middle East. But the other interesting one is their securitize is a registered broker dealer, very much like INX and T zero. But what they did is they kind of moved into the institutional space. They're hosting right now the BUIDL product, which is BlackRock's product. BlackRock obviously was part of an investor in a 47 million dollar raise that they did back in 2024, valuing securitize in the couple of hundred million dollar range and now jumped crypto.

So jump trading's crypto area has now made an investment in securitize, just announced yesterday as a strategic investment in securitize. So you've got jump trading moving into it. You get BlackRock moving into it. And this is all in tokenized treasuries, tokenized funds, tokenized anything. Things always said every asset in the world is going to be tokenized. Right. And so securitize right now is really getting the investments. I think, you know, about a month ago, you saw INX finally being acquired by Republic I think is expected to be completed in something like what, eight months and also sounds like it's in chunky different parts.

Some of it's going to be in dollars now and some dollars in the future. It seems like there's now a lot of movement within the space where early players are now getting acquired by larger players. And I think that that's very, very good. We're going to just go back to 1999, 2000 and see who came out of that crash and what happened and anybody that had good technology was bought up by the Googles of the world. Yeah. So we're seeing that now, you know, jump investment aligns with I think real world assets are expected to see around 19 trillion dollars market cap by 2033. So this is going to be an absolutely huge type of event.

But what has to happen in order for tokenized anything to be exciting, retail has to be able to buy it without any sorts of friction. And right now, it's all about friction. If you sign on to securitize or T zero or INX, it is friction, friction, friction, compared to if you sign on to, let's say, Coinbase for the first time. Yeah, which is the easiest GUI. Or but think of the friction just to sign on with Morgan Stanley or E trade in order to trade equities 100 percent. So it's got to go through compliance, got to go look at this, got to go look at that. Now, crypto, those always kind of come from it in a different direction.

It was sort of like KYC. What's that? Now, that's not going to last forever, I think. I think that we're going to have to. KYC, I think, is something that's going to stick with us for a long, long time. We wanted to. You need to have KYC and AML. Otherwise, no government was going to allow you. Well, you don't need it. Yeah. I think we'd all be happy if there was no KYC AML, but the governments won't allow it. You know, identity theft is a 38 billion dollar problem in America annually.

And so when I send a payment to Amazon with crypto, you would know where it came from and where it went and what the purpose was ostensibly for what you did for it. The only thing you wouldn't have is my identifying information. You wouldn't know it's Ali Davoudi. You wouldn't know my Visa MasterCard number, et cetera. It would just go and it would be anonymous. And that in and of itself is worth 40 billion bucks a year just to our country alone. I don't know what the cost is overall to the globe, but I imagine it's a lot. Well, think of anonymity today. So I make a deposit at Bank of America.

Bank of America then lends that money out to someone in the form of a mortgage. Really, I'm lending it to that person. The Bank of America. Douglas, when you give them a dollar, they can lend to 10 guys a dollar. But the Bank of America is the one that's picking up the VIG. I'm getting 0.5 percent and they're lending it out at 6 percent. Just like the prime lenders with your stocks. Now we get by with DeFi, though. I'm lending directly to that person. I'm getting the 6 percent. And then do you also get basically a lien on their property? Well, the smart contract gives me the lien on whatever it is that I'm essentially lending against.

I got you. So I'll lend you USDC against your Bitcoin using DeFi. I get the money. Yeah. No, no, no, no. The middleman would be a uni swap or air swap. But it's for pennies on the dollar as opposed to large percentages. And I think that the market will move to that. What do you know about the Genius Act? Because it was blocked in Congress this week and a lot of guys are pointing fingers at Coinbase, actually. And they're saying that this is Coinbase is the one that was pulling it back because Coinbase wants this to be part of a bill regarding market structure. And so I think that there's a lot of folks that are a little bit upset.

They feel that Coinbase is sort of putting the pressure on Republican and Democratic folks to to to push back their way right there. And so I think there was a lot of surprise that Genius Act didn't go through. Genius Act obviously is that a stable coin act that's been trying to get through Congress for a while. It was blocked by Democrats yesterday and it's stalling in Congress. No formal vote occurred, though, and no revotes scheduled, but it could actually get pushed into past the midterms. Part of the problem I have with trying to fit that round ball in the square. It's, you know, the fact like, look, here's Coinbase. They first came out.

They were big champions of democratization and individualism and finance and things. And now they've got billions of market cap and they are the stodgy old white dudes up the market again. Typical. Well, maybe they'll vote for it once they've bought some stock in something. Yeah, I mean, that's Nancy Pelosi. Yeah, I mean, that seems to be the way things go these days in Congress. So, you know, who knows? Anyway, this has been a great wrap up, I think, for our listeners next week when we come down and actually start talking about really states getting involved. We've actually got one of the champions of this.

We've got Dennis Porter coming on our next interview and he runs a Satoshi action and so he's been out there talking to all of the states and he's actually behind obviously the New Hampshire and the Arizona. So we're going straight to the horse's mouth to really get a good discussion there. And so very, very exciting. And again, if you get the opportunity, please subscribe to us on YouTube, Spotify, iTunes. If you want to get a weekly newsletter, which now includes M&A before it was just including things like what's the news this week, which corporations have been buying Bitcoin. Now we're going to start talking about the M&A news.

What's happening there comes out every Sunday at EST. Sign up for it on our website, oldmennewmoney.com or click on, go into LinkedIn and check there, but I'll put a link anyway below this on YouTube. And otherwise have a great day and take a look at my books sitting there at Amazon. Anyway, this is Douglas forthwick. I'm Ali. And this was Old Men, New Money.