Yeah, great questions, Brian. Thanks for calling in. Uh, let's just let's first take a step back. Bitcoin custody. Listen, uh, one of Bitcoin's long-standing slogans, at least when I was around almost 14 years ago, was be your own bank. And that's so cool. I mean, one of the best parts, best properties that Bitcoin has accomplished and achieved is you do not have to have counterparty risk with anyone. That's at the monetary policy level. I don't have to trust anyone not to print any more Bitcoin. And I don't have to listen to Fed rate hike meetings or understand what central bank balance sheets look like. None of that matters. There's zero counterparty risk. There's only 21 million. And that also goes for receiving it, storing it, and moving it. I don't need anyone's permission. I don't need to pay anyone a fee. I don't need to call any customer support or service. I don't need to trust anybody with my property. That is, I'm stating the obvious for many of you, but that is one of the most important properties that Bitcoin has accomplished that makes Bitcoin what it is, the best performing asset we've ever known, the best money we've ever conceived. However, with great power comes great responsibility. And I mean, I've talked to you guys on the show before. I think that we will have a tough time restoring harmony in society without a renewal of self-responsibility that goes into your health, what goes into your body, what you're eating, what you own, what you save in your the money that you're using, uh your family and the safety. You can't, we as a society can't be relying on government, can't be relying on big corporations. Nobody is here to save you. You have to save you. You have to be responsible for you. And Bitcoin actually makes that abundantly clear. It is a renewal of self-responsibility. Was be your own bank doesn't only mean yeah you have a fixed monetary policy that you're not trusting and that you don't have to trust. It's it's the big leagues. It's the big leagues. And anyways, I just want to acknowledge that you know custody is always a interesting topic. It's there's such variety. There's no right answer. Um, but definitely for folks coming from traditional assets, it's a bit of a culture shock because you're like, 'Oh my goodness, I can't call a customer support. I can't reverse this transaction.' When they said be your own bank, that's literally like you are responsible at the end of the day for the outcomes of your life, including money and your property and your bitcoins. Uh, with that being said, you're talking about uh Bitcoin and my recommendation. Listen, I'm not going to get into that tangent for a second. I just uh I'm trying to make I think a very important point in this modern-day AI era that Bitcoin Core is likely not only the most secure open-source library in Bitcoin, but maybe one of the most secure open-source libraries in the world because being source available and open-source, it does not imply security on its own. Just because it's public doesn't make it secure. People have to actually also care about its security. It has to have peer review. It has to have a diverse set of reviewers and researchers and contributors. A good example of a codebase that did not have this although it was public was Cold Card. Cold Card didn't let anyone else commercially use their software. So, it was hard for anyone to have an incentive to care about it. And it only had a few contributors and no one was truly peer-reviewing the software. And so you create an environment where the most incented person to fish around the codebase is actually an attacker. And so all I'm doing is I'm just to the Bitcoin community. I'm saying guys let's not forget that you know at the end of the day from a high level storing Bitcoin is generating a very very large and very very random number and then keeping that number safe and protected in a way that only you know it and who what how can we rely on doing that safely that number generation well Bitcoin core is in this world of AI where cyber security and hacks this is going to be this is going to proliferate this is not going away anytime soon. This is the new normal. I think the Bitcoin community needs to have an honest conversation about, you know, niche smaller, whether it's hardware projects or layer 2 lightning network projects that are open source and only have a few contributors without a large incentive for the community. I mean, Bitcoin Core, you've got uh university professors, Sailor needs Bitcoin core to be successful. Jack Dorsey needs Bitcoin core to be successful. Now that the US government is strategically holding Bitcoin, investing in Bitcoin, thinking positively about Bitcoin, the US government has an incentive for Bitcoin core to be successful. That is that is another league, another stratosphere of security and accomplishment for a open-source critical open-source software library than some of the other things people have used in the past. And I'm only trying to make that point. But should you use Bitcoin Core or and and not this isn't specifically to you Brian to all of you guys what should you do it depends on what you want for example Brian's talking about inheritance you know what you can use for inheritance Brian Strike you can log in your Strike account and set up inheritance on Strike that's one of the awesome parts about being a customer of a platform that you trust and you like and that serves you well is I hopefully make your life better. We make your life better with Strike, but it's not your keys, not your coins. And that's counterparty risk, right? Uh, and so is multi-sig, collaborative custody, is multisig are these things better? I'm careful with this wording here. Is it better? It it's be it depends on what you want. Now, I know something like Bitkey. Bitkey, think of it all like a spectrum. Trusting a custodian is maybe on one end of the spectrum where the whole I'm my own bank. I'm self-sovereign. I own and hold and protect my really really large really really random number, you know, and that would be you could do a Bitcoin core on an offline laptop um and generate keys that way and then you can trust a business. And now there's ways in maybe towards the middle of that spectrum which is maybe like a Bitkey like one of Dorsey's products where it's collaborative custody in a way and there's an inheritance feature on there. Um, now it's multi-sig and technically they have some form of master key to my understanding. Um, but anyways, I think it's a spectrum. There's no right answer. I don't want to get on the show and say this is what's better or this is what's right. There's no such thing. And that's kind of the culture shock where what do you mean? What's the right answer? What what's the Chase Bank? There's no such thing. That's that's this new cultural I think trend that we're all in of self-responsibility. Well, I it's not for me to determine what's best for you, right? Uh so yes, could and and by the way, Strike is investing. We're we're building a lot of these products. Custody is something I mean, at the end of the day, we're here to be helpful and people need help with custody. And so it's something as a company we're trying to build potentially potentially products that sit along this spectrum. you want to fully trust us, you want to kind of trust us, you don't want to trust us at all, but we can maybe help you set things up all the way across the spectrum. So, yes, collaborative custody and there's some vendors out there that do have inheritance uh as well. Um, it's totally an option. I, you know, there's always going to be a plethora of different options. The other cool thing about Bitcoin is we can still build on top of it. I can't submit a feature request to gold. Gold is gold. Gold is this rock that mother nature invented and it is what it is. And I've watched the Bitcoin custody space truly evolve in remarkable ways and it will continue to do so. And every single year that goes on and goes by and Bitcoin continues to survive and Tik Tok next block, there's going to be more and more services, more and more features, more and more options along the spectrum. None of them are necessarily better. It depends on what you want and it depends on what you're looking to achieve. But to answer your question, Brian, it sounds like this stuff is might potentially be a little overwhelming for you, you need to set up inheritance away that your wife can be in a position to successfully take over the bitcoins. If, god forbid, something bad happened to you, it doesn't sound like I personally would recommend Bitcoin Core to to you to start. Maybe. Yeah, maybe some collaborative custody or some vendor relationship or even a Strike account for some of the coins would be a better option. But it's all dependent on what you're looking to do. I don't know. Hopefully that was helpful. Let let me know, Brian. I'll be in the comments. Let us know if that was helpful. But just broadly for all you guys, I think custody is becoming more and more because the other thing is as Bitcoin goes from a trillion dollar asset to 5 trillion to 10 trillion to 20 trillion. I mean, we're all accumulating more and more wealth and custody is going to become increasingly important and the amount of serviceable details that we're all going to need as we're part of the largest wealth transfer I believe that will happen in human history. Um, it's it's going to always be a top of of the line topic of conversation. Uh, and I do think people need to acknowledge this responsibility that is embedded in this asset class. I actually think it's a healthy societal trend. I think it's good that there's a renewal of self-responsibility across all things, including your property and your money. And I'm glad that you guys are asking the right questions and taking this stuff seriously. Okay, next question. Let's see here. What about Renee? Renee from the Netherlands. I love how global this movement is and I love that all of you guys call in from all over the world. Renee from the Netherlands. Let's hear what you have to say, my friend.
Unbelievable how electric is that voice from the heavens. I question if that's your real voice. Unbelievable. This is just the coolest life experience. Thanks for calling in, man. And a and a phenomenal question. So, I am correct on record saying that the Fed can hike rates or the Fed can lower rates, it's all inflationary is my point. And if inflation is really baked in the cake here, then I think it's all bullish for Bitcoin. Now, that is counterintuitive and that flies in the face. You've got all these, oh, Harvard University economic professors and all these former Goldman Sachs guys that have uh the Fed hike is riskoff and risk off Bitcoin trades like a tech stock. And um here's my point. Let's take a look at the Fed hiking rates. Um right now the US government is operating a over $2 trillion deficit. That's a huge problem when you're sitting on top of $40 trillion of debt. That's the other thing is people say, 'Well, in the 1960s or in the 1970s or in the 1980s before you were born, yeah, but guess what? That's not an apples to apples comparison.' None of that matters because we didn't have debt to GDP at 120% and $40 trillion worth of debt. That's the that's the most important part of what we're living through right now. Don't tell me what happened 50 years ago because 50 years ago, debt to GDP wasn't 120%. and there wasn't $40 trillion worth of debt. So, let me explain to you why that's so relevant and why this is unique and why I don't think a Fed rate hike or a Fed cut matters at the end of the day because inflation's already baked in and we're already in a sovereign debt crisis. So, the Fed hikes rates, what does the Fed do when they're hiking rates? They're further blowing out the deficit. The third largest expense that the US government has is the treasury expense is the expense to carry this much debt. It is incredibly expensive to have $40 trillion worth of debt. I mean the interest on that debt is hugely expensive. The other expenses that the US government has things like Medicare, things like social security. So unless the US government is willing to default on its interest payments and its debt or it's willing to cancel in default on things like Medicare and Social Security, this is only making the deficit bigger. How do we go from a $2 trillion deficit to a $3 trillion deficit? Well, if Powell keeps hiking rates, that's how. Now ask yourself this. What should yields do? So, these uh Treasury yields, right, we're seeing the 10-year go blow through 5%, the 30-year higher and higher and higher. Ask yourself, what do you expect yields to do if the go the government, the person that you're lending money to, is becoming increasingly insolvent? They're becoming increasingly less creditworthy. Do you think yields are going to go up or down? They're going to go up. Of course, they're going to go up. If I'm lending someone money and their deficit is getting blown out further and further, they're becoming less and less creditworthy, they're they're they're get becoming more and more indebted, more and more insolvent. Am I going to give them better terms lending money or are they going to get worse terms? Worse yields are going to go up. And then you have this sovereign debt crisis where Powell raises rates. The deficit then further blows out because you're adding a ton to the expense of the government. Now, how does the government pay for that? They need to issue more debt. They need to borrow more money to cover that expense. They issue more debt. Yields go up because there's there's a just a supply demand imbalance. There's not enough people buying the debt that they need to issue. And so they're issuing more debt. That further blows out the deficit. Yields go up. That's inflationary. By the way, all of this is inflationary because who owns the debt? The United States used to export the currency, export the debt, export inflation. the way that the system worked and the intended setup which is now changing. Scott Bessent, Donald Trump, uh Jameson Greer, all of these guys part of this administration have been very vocal in saying we want a new monetary order. The current monetary order and the old monetary order is the United States is going to run structural deficits with countries like China. China's going to run a trade surplus. For every deficit, there's a surplus. So the United States is running a $2 trillion deficit. There's $2 trillion worth of surplus out there. China is one trillion of it. Now these trade partners would take their surplus and recycle that trillion dollars. So the two trillion dollars net across the world, they would recycle that into US debt. So United States would run these deficits. Their counter partners, the folks that they're trading with called China would run a trillion dollar trade surplus. They'd take the trillion dollars and they'd buy government debt. the government would be able to issue more debt because who they're trading with on the other side of of their deficit the whoever's running the surplus is buying the debt. International foreigners have stopped buying US debt for a long time especially after 2008. No international you there's no we talk on the show that the Cayman Islands is the largest market for US government debt and that's just US hedge funds domiciled there. That's not actual foreign demand. There is no foreign demand. So all of the de the debt is now domestically owned. It's on our It's on us, America. It's on American banks balance sheets, Renee. So it's on American banks balance sheets. It's owned by the boomer class. It's owned by these endowments. It's owned by these pensions. So the United States has gone from here's a way to think about it. We've gone from exporting the currency, exporting the debt, and therefore exporting inflation. That was the hack. That was how America acquired a high quality of life is we were able to export inflation. But now that the debt is owned domestically and locally because internationally there are no no one is that dumb to have real rates negative to be lending the United States money and get real return negative in purchasing power. So we've gone from exporting inflation to now importing inflation. Think of it that way because people will say, 'Oh, America are bullies to the third world, to these emerging markets, because they're exporting inflation onto these countries.' But now America's doing it to itself. It's because they're issuing the debt locally to the banking system, to its populace and its people. Then we're now importing inflation. So when you are paying out like think of $40 trillion worth of debt, there's a trillion plus dollars of interest expense on this debt alone. Who's getting that money? Americans are getting that money. So, it's inflationary. When you hike rates with this much debt, it's inflationary because you're stimulating. You're paying people out in you're not paying out China. You're not paying out India. You're not paying out Russia. You're paying out boomers. You're paying out people like Tether. You're paying out and that's so here here's another way to think about it. If I raised the social security payouts by 25 basis points, would that be inflationary? You say, 'Yeah, that's stimulative because you're giving out more money to people, the boomers, that are active consumers.' This is one of the highest consumption age classes in the history of humanity. And so hiking rates blows out the deficit which then forces the United States to issue more debt which blows yields higher. So rates go up, deficits gets blown out, yields go up, debt goes up. You get into this cycle and then this is all inflationary. So then Powell hikes rates again which further blows out the deficit which further pushes yields higher which further causes more stimulus and inflation which causes him to hike again which blows out the deficit which pushes you get into this cycle of sovereign debt crisis. And so I don't care what happened in 1970 or 1960 or 1980. None of that matters. Debt to GDP was not 120%. there wasn't $40 trillion worth of debt. That's so when you raise the expense that the government has to pay out, you're blowing out the deficit and you're stimulating the economy because now all that debt is owned locally. The United States has gone from exporting inflation and its debt to importing it. So the inflation is baked in the cake. Now obviously if they cut rates, well I don't necessarily need to explain that one to you guys. That makes it much easier and cheaper to create credit. creating credit is just creating more units of fiat currency. So there's more paper claims of fiat floating around competing for a relatively fixed amount of stuff and that's obviously very inflationary as well. So I, you know, I've been very consistent in my opinion. Inflation is baked in the cake. And by the way, if you look at the US's fixed expenses, things like Medicare, Social Security, and the interest uh obligations that it holds, it's already at 105% of its receipts. What that means is the United States tax receipts, the money, the revenue that the United States is bringing in, it's fixed expenses, fixed expenses, things that like theoretically like really can't change or it's some form of default. They're defaulting on social security. They're defaulting on the Medicare that they've promised people or they're defaulting on the interest obligations they have on this debt. Assuming they're not going to have some form of default, the revenue they're generating alone doesn't even cover the fixed fixed expenses. And that doesn't get into, oh well, now they're in another war and the military expense has to go up. So, we're already in Ponzi-nomics. We're already in you have to print just to start making your fixed expenses. And if the Fed keeps hiking rates, then that 105% is just going to go higher. Debt to GDP is just going to go higher. And as long as I'm on this very long rant, let me tell you guys, you're you're probably sitting there, well then what do they do, Jack? How do they solve the problem? I'll tell you guys how they have to solve it mathematically. And this is not a political thing. This is not a bit Oh, well, Jack's just talking his own book cuz he's he's a Bitcoin guy. No, this is what's I call this a mathematical thing. This is a 2 plus 2 equals 4. Okay, you have to delever the balance sheet. Debt to GDP is at 120 plus percent. That has to get down to 20%. That's just the that's just the facts. That's that's the thing. Okay, how do you do that? Well, you need the growth that you're producing to be higher than how much it costs you to borrow money. You have to you have to be producing some productivity. So, right now, let's say the economy is growing at 10%. No wonder yields are pushing higher. yields want to be six, seven, eight, nine, 10 because I'd have to be a fool to lend the US government and only get three, four% when I can invest it in the economy and the S&P 500 and Bitcoin and anything else and get a better return. So naturally, yields are going to find if if they're truly allowed to test a free market, they're going to find the true cost of capital. They're going to they're going to find some equilibrium naturally. Now, the US government can't allow that. one they can't afford it but it doesn't matter if the economy is growing at 10% but they're but the 10 years at 10% then they're not aiding towards the problem they need to solve that's where I think there has to be some form of yield curve control which I I'm sure there won't be outright yield curve control but what yield curve control is is when the Federal Reserve the central bank is printing money to buy government debt which is another way of saying they're just printing money to lend to the US government that is the most stimulative the post-inflationary Bitcoin to a million dollars. I'd be shocked if they ever outright say that that's what they're going to do. But some variation of that has to happen because they have to cap yields. They cannot let the yields go to the actual growth of the economy because then you won't get the debt to GDP from 120% to 20%. The way that you do it is you cap the 10-year at call it 5% and then you run everything else hot. And so everything else, the the economy is growing at 10%. The S&P 500 is all-time highs, Bitcoin's all-time highs, your your gas bill all-time highs, your grocery bill all-time highs, but they cap the yield on the long duration or or or whatever or it doesn't really matter. And then that's how you delever the balance sheet because you're grow you're growing faster than the debt. That's how you do it and that's what they have to do. And so Powell, it doesn't really matter what Powell does. Now, here's one last thing. thing I'll say, Renee, and then I've been ranting too long on this one, but I'm not I just want to be clear with you guys. I'm not saying that we can't have like some riskoff event and Bitcoin has a flash crash lower. Like, if what I'm So, right now, I'm recording this on a Sunday night. Okay? If I wake up tomorrow morning and the 10-year pushes to 6% and this whole Ponzi fiat system is imploding before our eyes and Bessent and Trump don't step in and start issuing bailouts and fiat liquidity in the meantime, everything could sell off. You could see a stock market crash. You can see a Bitcoin dip. All of that is totally reasonable. But I don't necessarily count that. Like I'm not a day trader. I'm not speculating on the near-term. I'm saying over the medium to long term, this is all incredibly bullish for Bitcoin. It doesn't really matter what Kevin Warsh does because we're not in a normal circumstance and scenario at debt to GDP of 120% and $40 trillion worth of debt. Hiking blows out the deficits and is very stimulative and yields will go higher. Same with cutting. Cutting is further inflation expectations which will push yields higher. More fiat credit will be created. Hard assets will go to the moon. So either way you slice it, they need fiat liquidity. They need some form of yield curve control. They need a severely weaker dollar. They need to delever themselves from this 120% debt to GDP. And Bitcoin's going to the moon and I don't really care what happened in 1970 because it's not apples to apples. So that's my answer. In the meantime, if there are dips, they're dips to be buying. So, no one should ever be too levered on Bitcoin or thinking that they can price predict day day trading. That's not what being, at least for me, that's not staying humble and stacking sats. But over the medium
To long term, I have no idea if there's going to be some liberation day risk-off where everything drops by 20% and then they step in and they provide the fiat liquidity and they issue the new yield curve control type program and then off to the moon, off to the races. But this is all just math. This is all just 2 plus 2 has to equal 4. I don't care about your beliefs. I don't care what happened in 1970. None of that matters to me. 2 plus 2 is 4. It is what it is. Like the math is the math. And the United States is just way too indebted and way too levered that, you know, the interest rate that the Fed sets is irrelevant. And raising it is actually stimulative and further blows out the deficit. Okay, I'll cut myself off there. Renee, voice from the heavens. Thank you for calling in, man. All right. Let's hear from Jake. How about Jake? Here we go.
