Listen, Bitcoin had a horrible year. Why do I think it happened? We had a $9 billion seller and I had a friend that wanted to buy a sports team. So, we sold some Bitcoin to buy a sports team or to buy a boat or everyone took a few chips off the table. And I think we put a low in at 60. I'm not 100% convinced, but I'm pretty convinced. And so, yes, I've been buying some Bitcoin recently. And I think one of the reasons why crypto's not going away is it's all right. I like this desk.
It's nice, right? You know why? Our team got mad at me the other day because they were like, "You're on stage and I was still texting them to get stuff done." And I said, "Yeah, it's easy." You know, I just do that. People are very confused in this room. They feel like the last 10 years of investing, I don't want to say it was easy, but it was definitely like everything was up and to the right. You could just make money, you could buy S&P, you could buy Bitcoin, whatever. It now feels like we are in a much more complicated, kind of macro-oriented world. You've been in the macro world for I don't know 30 years, 40 years...
Long time. 60 years. A long time.
I had hair like you when I started.
Listen, it's complicated. I was sitting with two of my mentors who are 72 and we were talking about their kids. I don't know if they did it right or wrong. Their kids are roughly the same age as mine. And I said, "Would you ever think about, you know, giving your kids some money to manage so they can make their own decisions with it? Like how do you empower them?" And they looked at me like, "Are you insane?" They were like, "We are entering the hardest 10 years of our careers and how to preserve and grow value and we're at least pretty good at this. We have no idea if those kids are going to even be, you know, an iota as good." And so, no. And I thought about that because, you know, they're right. There's so much changing right now that it makes value and understanding where to have your capital just to stay level. If you measured yourself in gold, you didn't have a good year last year unless you owned a lot of gold, right? And so does it mean run into gold now? I don't think so. I think gold and silver, certainly silver, put in the cycle high. If you look at the silver chart and you lay it over any other bubble in history, the NASDAQ bubble, the MicroStrategy bubble that we had, you name the bubble, the Nikkei bubble in '89, take the silver chart, put it right over it, and tell me you want to buy silver. You might buy it tactically because it gets oversold and it bounces, but I will bet my clothes. I'll show up on this stage naked next year if silver puts in a new high. But it was an amazing story last year. And so what I think is happening is the United States is losing its position as the reserve currency of the world. And you can see that by the amount of treasuries held by foreign central banks, foreign countries, they're going straight down. Partly this is by design. This is an administration that has told neighbors, allies, "We think you cheated us. You got a better deal." We're very belligerent in our negotiating tactics. It can be called the art of the deal or it can be called being belligerent in your negotiating tactics. But what you saw from Mark Carney in Davos and Keir Starmer, they're like, "Okay, we get it. You don't want to be our partner. We don't trust you anymore. We will partner with China. We'll diversify our assets." And so the good news for the US is China is nowhere close to being the reserve currency because it's a closed current account. I was actually just in Asia and I asked four different Chinese billionaires, guys living in Hong Kong but mainlanders, how soon will China open up and have a convertible currency? The most optimistic prediction was 20 years. They're like, "No chance. There'll be so much capital flight." What are currencies about? Trust. I trust the people in charge to be fair with my money. And so, China doesn't have it. So, you go to Europe. When I graduated from college in 1987, European and US GDP was roughly the same. And today, the US is almost double. And so, you're like, "Oh, yeah. Europe's not this great growth story." Listen, they have a lot of good stuff happening in Europe, but it's not going to be the reserve currency. And so we're going to be in a world where we're in between where there is no reserve currency. And so last year it was gold and silver. The year before it was Bitcoin. Got to be in Bitcoin. Bitcoin went from, you know, 16, 18,000 in 2022 to 130,000. Pretty damn good way to increase wealth. But then it had its movement and it crashed for a lot of reasons we can talk about. And so you got to constantly be on the move to figure out what's working. The trades this year that, you know, I said made sense about a month ago and I didn't put enough on, short mega cap in the US and long the rest of the world. Look at what happened just in the last week in Korea and in Japan. European and Asian stock markets are way outperforming the US. That makes sense, flow of funds and they've been undervalued for so long. And so I think sitting in your seats is a much harder job than it's been in the past 15 years.
When you think about the US as a global reserve currency, you mentioned to me that you go around the world, you talk to these people, you ask them how wealthy they are, they always quote their wealth in dollars. What happens if the US isn't considered that global reserve currency or at least people start to weaken their dependency on it which seems to be happening? Like what do they use?
You know, it's interesting. I had this idea that we should create like the global wealth currency which is really the S&P 500 but for the biggest 500 companies in the world. And it's that as all these currencies debate, as these countries debase their own currency because of the debt problem, asset prices go up. And what we learned and what quite frankly Kevin Warsh believes and I think Scott Bessent believes is that roughly you can grow money supply pretty quick. Not stupidly quick, but pretty quick. You can keep rates pretty low and inflation comes down, CPI, consumer inflation, because there's so much productivity gains. There's so many businessmen saying, "I can set this thing up in Mexico and be cheaper than in New York." Or now we've got AI. AI will literally be the thing. Everyone read that article that came around the last two days that should have scared us all. AI is going to crush inflation. And so what happens is you have consumer price inflation go relatively low. That drives asset prices up because you can keep rates low. And what's going to stop it at one point and Ray Dalio has been aggressive talking about this is a political revolution. It's MMT squared. It's wealth taxes but not at a state level that don't make any sense. But at a national level, it's people just say enough because the criticism of the Trump economy, interesting enough, is the exact same as the criticism of the Biden economy, right? It's not working for 60% of the people. He said, "Wait, but my stock market's on the high, 50,000 Dow yesterday. Come on, you guys should forgive everything else. 50,000 Dow." Well, Biden had the same thought. His stock market was at the all-time high, right? He had inflation coming down. He had inherited from a high level coming down because of COVID, right? Jobs, he had the most job gains in the history. No president in our country ever had more job gains than Joe Biden, right? So, if you're Biden, you're arguing I was a great steward the same way Trump is. Well, just go walk into Queens and not Manhattan or into Des Moines or all over the country. And most people say it's harder this year to do what I did last year. You can call that inflation, whatever you want to call it. It's harder this year to have the same life I had last year. And so that's the real risk. And I don't know when that shows up.
It's not lost on me that the private sector crushed inflation, not the Fed, right? What you're talking about here, the Fed was able to get it from 9 to 3, but really it is the private sector and artificial intelligence and all this stuff that seems to be really putting inflation to bed. How does that change monetary policy? Especially, you know, if you're Warsh, you're coming in and you've got deregulation, you've got tax cuts, you've got deportations, you've got tariffs, you've got AI. I mean, this is a very complex thing to navigate. The one thing I would say all of us as Americans should have a huge sigh of relief and a little bit of a cheer, like raise a glass and cheer. That Warsh is in the seat. Let me tell you a little bit about it. I don't know him that well, but I know him pretty well and I understand Jamie Dimon really well. And Kevin sat for the last 12 years as close as me and Pomp to Jamie Dimon.
Is he in the league?
Is he in your league in the fantasy football league?
He's not in our league. There's a billionaire fantasy football league. Mike's in it with a bunch of these guys. So he'll tell us about that in a second. But so what about Kevin? What Kevin Warsh did and why the market reacted the way it did is he took the tail risk away from idiot policy. He's dovish. He is going to probably cut rates at least the first time, but he thinks rates should be a lot lower because of the AI piece. But if the facts change, Kevin will change. And he's a man of integrity. Like, he's tough. And he's one of the most convincing conversationalists you'll ever sit with. The last time I was in his office, he looked good. I looked fat. I was like, "Hey, what do you do to stay healthy?" Intermittent fasting. And I got a one-hour lecture on intermittent fasting. This guy knew more about intermittent fasting than anyone I've ever met. And he'd been on it for six years. I lasted two days, too. Guys like him who have discipline end up having integrity. And so I think we're happy that Kevin's there because he took the tail risk that you're going to do something really stupid, that you're going to cut rates when you should be raising rates. He's got at least some period of time where he gets to keep Trump happy because he's going to cut rates. And I would probably argue if he has to hike rates he will have convinced Trump it's the right thing to do. Like the one thing about Trump which is well documented is if you're close to him, you have a lot of influence. You can help change his mind and he's not as stubborn as he looks sometimes. And so I think Kevin will help the dollar stay important a lot longer and will be a good steward of the economy.
We're at the Bitcoin conference. Bitcoin is not quote-unquote working. Are you selling Bitcoin? Are you buying Bitcoin? Are you worried about Bitcoin? I put on my green pants today because I'm trying to give good energy to Bitcoin. I almost wore an orange jacket.
Listen, Bitcoin had a horrible year. And why do I think it happened? I think we crossed 100,000. We were the best performing asset over the last 5 years, 10 years, six years, eight months. And it felt like we won the goddamn marathon. And we hugged. I even sent a celebratory Twitter to our entire client base. Guys, you did it. This community, I'm so proud of the community. And it's the first global brand that's ever been built by a community. It was a miraculous accomplishment. And I think that sigh of relief allowed this religious zealotry. We got to do it. We got to build. We got to relax a little bit. And you started seeing we had a $9 billion seller. You started seeing some whales sell not in a mass wave. I had a friend that wanted to buy a sports team. So, he sold some Bitcoin to buy a sports team or to buy a boat or everyone took a few chips off the table. Listen, markets are about supply and demand and flow of funds. And as you had the ETFs and then the DATs coming in to buy Bitcoin, they were met with sellers. And once the buying stopped, you know, it doesn't take a lot of buying to push it back the other direction, right? Markets find price based on the marginal buyer. And I think we put a low in at 60. I'm not 100% convinced, but I'm pretty convinced. And so, yes, I've been buying some Bitcoin recently. I'm talking to a lot of people. They're all dabbling a little bit, but a lot of the old guys don't have a lot of dry powder. And so, what we need is new narrative. And it usually takes a while. Like, I can come up with some, Warsh is going to cut rates. That'll be good. Market structure I think is going to pass, believe it or not. Not positive, but I think so. I literally got a call from Chuck Schumer three nights ago. He's like, "Damn it, we're going to get this thing passed." I was like, "Okay, boss, keep on it." I'm talking to both left and the right. What's crazy about market structure, and this says a lot about politics in the country right now. Both the left and the right want to pass it for different reasons. The right needs it because this is kind of Trump's signature thing. I'm the crypto president. How can I own the House and the Senate and not get a goddamn crypto bill passed? And so there's a real urgency for the right to pass this bill. The left realized, yeah, we should have listened to the few people who kept telling us there are more crypto owners than dog owners in America and crypto is pretty popular, especially among young voters. And so why are we making what should be a bipartisan technology political? And so the core centrist of the Democratic party was like, let's pass this thing and get it off the stage as a political issue. So the $190 million Fairshake has raised doesn't go attack them in all their elections again. Like every Democrat believes that Bernie Moreno won his election over a pretty popular senator in Ohio because of Fairshake. Right or wrong, that's what they believe. And so both the Democrats and Republicans want to pass. The bills are this close at this point. There's one big outstanding issue. Should stablecoins be able to give rewards? They can't even give interest but give rewards that kind of mimic interest or not. And the banks are like absolutely not. And Brian Armstrong is like absolutely yes. So intellectually Brian's 100% right. The real innovation is stablecoins that pay interest. That's an innovative product. It's great for the consumer. It hurts banks. What is driving me crazy, and I've been privately loud about this, but not publicly, is the senators are like, "You guys have to figure it out." So, they keep putting the banks and the crypto execs in an office saying, "You guys come up with the compromise." I was like, "Guys, isn't your job to figure out what's best for the country and set the rules and you're going to piss somebody off?" Okay? Like that's how progress happens. Because of so much money in politics. Both Republican senators and Democratic senators are scared to piss anyone off. And so we're in this weird standoff between Brian and listen to be fair, the other, Jeremy and Chad Cascarilla, the guys they're backing Brian. And Brian's right intellectually, period. There's no, you know, I hope he wins. I don't think he will. And so we'll see where the compromise is. So that's the one thing that could hold this thing up. I don't think it will be held up. I think it'll pass. And maybe if that passes that gets us a little more narrative, right? Wall Street wants to participate, not because of Bitcoin. They understand we're going to move from a world of accounts to wallets. Paul Atkins said, "I want everything onchain." And you look at how fast some of these onchain ecosystems grow. And so the idea of tokenizing Galaxy stock or SpaceX shares, you're not going to sell them to the same people that are buying them already in the US. You're going to sell them all around the world to the 5 billion people that don't have great financial services in Cambodia, in Benin, in Paraguay, and Uruguay. Like that's where crypto really matters. The same people who use stablecoins. You're not going to use stablecoins. You got your little phone, it works perfectly. We have amazing payment systems in America and we have amazing financial services offered. And so the crypto revolution has always been about serving the underserved. And why it's so important for America is it is an amazing platform for us to tell our stories for our champion brands who everyone wants around the world to raise capital to have investors in. And it's an amazing chance for those people to invest in Google. Like forget Bitcoin, forget anything. Like Google's been a pretty goddamn good investment since everyone wrote off the new CEO. And so most people in the world don't have a chance to invest in those things. And so why market structure is important is it brings Wall Street in. Wall Street is here to sell. Wall Street is one of the great selling machines ever built. They sell mortgages. They sell equities. They sell private equity. They sell stories. People on Wall Street get paid to sell, not to buy. Wall Street's going to sell crypto. And that crypto is going to run on the Ethereum blockchain or the Solana blockchain. That story. Once you have a wallet, you got to have some Bitcoin, right? And so my hope is the bill goes down, there's an acceleration of trade into our space that legitimizes it more, right? I always said nobody did more for Bitcoin to legitimize it than Larry Fink. So now we need a Larry Fink at each of these organizations and all of a sudden the 2% allocation to Bitcoin just becomes of course.
