What are the big problems that they're facing when it comes to building wealth.
A lot of people think that guiding wealth is you know, the hot pot and kp Itzazy. Personally, from my experience, it's the complaint.
Opposite when it comes to building wealth. I like to call it the game of money, and you might imagine that people that have been playing a game a lot longer than you probably have some tips and tricks and strategies that they could use to probably beat you pretty quickly. So in the game of building wealth, you might imagine that the wealthy, the billionaires have access to tips and tools and strategies that you don't know about. But there's ways we can change that. So today I'm going to
sit down with Peter Dunworth. He's the founder of the Bitcoin Advisor, So he works with high net worth individuals family offices to help them build generational wealth and incorporate bitcoin into that strategy. So, if you want to know the tips, tricks and strategies the high net worth individuals are using so you can win the game of money as well, pay attention in regards to preserving that wealth
and then thinking about that wealth generationally. Who outright think it's bad to leave wealth for your kids.
Now I completely disagree with Okay, you know, I look at my responsibility to my family, to my legacy. Sadly, there's no real out of the benchmarking society that we have that's universally accepted other than how wealth are you out? It's a school board that everyone understands what the school board is. There's no intangible around it. It's a number that you can look at. It's the only objective measure we have of success.
Peter, thanks for joining me today.
Pleasure to be here with you. Matt, thanks for having me.
Yeah, what a great opportunity.
Just happened to be in my neighborhood and so swinging by for an interview. So I'm excited about that. You know, there's a lot of overlap on what we do talking about wealth just overall, which is a pretty big topic. So I want to dig into problems that high net worth families individuals have, specifically around keeping wealth.
There's a lot of attacks on keeping wealth.
It's very hard to keep it. It drains away from us. Governments are trying to take it from us. So how do we keep it? We talked briefly about some potential taxes. I want to get into that how bigcoin can help fix all of this, keep build wealth, keep from losing wealth, build into the future. I want to think, since you're international from Australia, sort of what Trump's announcement means to
the rest of the world. And then I want to go through some different strategies that high net worth individuals have. So hopefully we have time for all that. So let's just frame it up here really quickly. So you work with high net worth individuals family offices. Family offices offices typically would be you can define it for me, but define what family offices are and define with me for us, what are the big problems that they're facing when it comes to building wealth.
Great question. Family offices in my definition of families who have generated substantial little significant amounts of wealth that want to be managing those assets themselves.
So what would that number be, Like, what's that threshold?
It can start at twenty five I would have thought, and twenty five millions to billions of dollars twenty five million or more. I think that's a starting point that you know, you can start looking at that. Under that you're probably working with a multi family office where you're leveraging off a number of other families to generate investment ideas and returns and then leverage that in two further ideas.
And from my experience, a lot of the families that we work with, the number one issue that they've got is keeping their wealth. The families that we work with are not interested on a return on capital. They're interested in a return of capital, meaning they're not focused on the percentage gains that they're making. They've made the pile, they've made their wealth. They want to make sure that
it's secure. So the first thing they look at when it comes to any investment, whether it's real estate, whether it's stocks, properties, bonds, or even bitcoin, is they want to make sure that the ownership the custody is locked down and they can't be subject to a number of
different attacks on that absolute base layer. So ensuring that you own what you think you own is probably the first port of call that you need to look at, and probably so something preliminary to that is what are the structures from a legal perspective that you have access to to maximize the outcomes that you want to get from the investments that you're putting that money into So I think it starts with the structures.
Then got it.
So that's an interesting way to think about it. And you know, I've often said, and this is unfortunately from a personal experience, that keeping money is a lot harder than making it, which sounds crazy for most people who haven't made money. But once you've made it, as I found out the hard way of losing it all, keeping it is much harder. So and then the more you have of it probably the bigger problem or challenge that becomes agreed.
And this is where a lot of people think, oh, it's so easy being wealthy, and to a certain extent, there are a lot of problems that go away when you're wealthy. But with great wealth comes great responsibility, and there's a responsibility that's put on you to not only maintain it, but to preserve it. And then the questions around legacy start entering your mind, around how do I preserve this for the people I love into the future. So a lot of people think that gaining wealth is,
you know, the hard part, and keeping it's easy. Personally, from my experience, it's the complete opposite. It's it's the keeping it that's the tough part.
I want to get into the generational wealth. That's something I think about a lot. That's kind of the stage that I'm in right now, so I want to come to that.
But before we get.
Into that, let's just talk through some of the major asset classes that people can invest into. You mentioned real estate, bonds, bitcoin, things like that, and Michael Saylor sort of laid out sort of some of the flaws in each one and how they cost you money. But one of the biggest problems is also taxes. So you were mentioning before we started recording that in Australia they wanted to launch I believe a tax on unrealized wealth at three percent I'm sorry, at three million correct.
In our pension system. There's legislation going through on the first of July that if nothing changes then that legislation will go through first of July and they go into tax at a right of thirty percent unrealized capital guiins tax on pension balance over three million dollars. So if you have a ten x return in bitcoin and you're all in bitcoin with a three million dollar fund, you're going to make twenty seven million dollars in a year. They're going to send you a bill for eight point
one million dollars of unrealized tax gains. And now in order to pay that bill, you're going to have to sell down some bitcoin, and you're going to incur a further eight hundred thousand realized capital gains tax to pay the bill. You pay nine million dollars on that gain, even though and it's an oxymoron to say an unrealized capital gain, because the very definition of capital gains means
that you've disposed of an asset. So they've just redefined the English language to suit an agenda that they want to take your assets before you've you've gone full circle on the investment.
Now.
The reason why I want to dig into this and talk about it a little bit is because I think both of you and I probably agree that whatever is probably happening in the G seven, if you want to call it the West Canada, Australia is probably a test bed for what may be coming for the rest of the world. So if it's happening in Australia, it's probably coming into Canada, it's probably come into Europe, and it's probably going to be come into the.
U at some level. So if we talk about this.
Now, you said it's in people's pension accounts, correct, So if I hold it in a personal account, if I own the stocks or whatever assets personally, that's not subject to that.
Correct. So you can hold it in trust, company or personal and it won't be subject to an unrealized capital gains tax. I think for the moment, the way it was proposed, it was ill thought out legislation that was proposed. No one really picked it up, no one really cared about it. The feedback I've had from the industry is that no one really cares about rich people getting tax more. But what they don't understand is the downstream consequences of that.
And anyone who's holding bitcoin in that pension system will very quickly reach that three million dollar threshold and then we'll all be subject to the tag. So it's a slow creep that has no indexation as well. So you're going to be suffering that regardless. And if we think probably long lines similarly, from a hyperinflationary type event, or at least an inflationary event, three million is not a lot of money. Yeah, we're going to be there in the next dickide.
Yeah.
I mean the crazy thing with that to your point, it's not a lot of money, and because of the inflation when you think about I mean, here we are in this beach town in southern California, and I know my neighbor across the street from me house is probably worth I'm guessing four million, four and a half million dollars, and he bought the house for three hundred and thirty thousand dollars I believe in like around the early nineties,
so that's twenty five years ago. So they bought the house for four hundred grand twenty years ago, and now it's worth four and a half million. So basically, through the money printing, through the inflation, they've artificially pushed the asset price up and then they do want to take money, so you're actually worse off.
Right, This is the problem that that creditory event, which is sort of pushes inflation, makes everyone feel like they're wealthy and they're richer than they are. But the problem is Yo Naiba, if he wants to monitize that in any white hypo form other than debt, needs to sell that asset. Pibwaeva taxes are revivable on it. Whatever's left, he still has to find a home yeah, and guess what, everything else has gone up around him, so he'll probably
be buying an inferior asset. And this is where to me, bitcoin plays a huge part, particularly for those real estate investors, of diversifying a portfolio and adding in an asset that they can understand or easily understand that is very similar and acts very similarly to real estate. But to me, it has a significant upside over and above what real estate does, even with the leverage that you can get there.
Yeah, before we get into that though, we're just kind of sticking on this for a minute. I mean, why would anybody keep money in a pension account. If that's the case, would everybody just close their pension accounts out and move them into other assets.
Well, the problem is this is captive for anyone under sixty two or sixty.
Five years of age.
They're allowed to sell, they're not allowed to sell, well, they're allowed to sell their assets, but they're not allowed to take the assets out of the pension system until they reach what's called preservation age, which is around between sixty and sixty five. Time we get there, they'll push that to sixty five to seventy and it's kind of a hotel California for capital that can go in, but unless you're retired, you can't take that money out.
Now, is this only for government workers the captured pension system or is it like private businesses?
Also peed into that this is for everyone in Australia. But just the absolute duplicitous event that happens on this is that most government pensions are not subject to this tax because they have something different different called a defined benefits scheme. So fortunately for the politicians who are making decisions for the rest of us, their superannuation scheme or pension scheme is not affected, so they will not suffer the tax consequences that everyone else will.
Sure, it's what it always is.
Recently, I saw Larry Fink from Blackrock was over I believe in India, and he was talking about how Blackrock wants to help these other countries build up capital markets. So the US sort of has it unfair advantage because we have these capital markets that attracts all his capital. But he wants these other countries like India that are rapidly growing to us of capital markets and maybe try
to kind of bring them up. And he talked about the problem that India has because most people down their own gold, so they keep it as jewelry and they keep their wealth in that gold. And he talked about in a roundabout way where basically India should sort of make that illegal because they need all that wealth in the system, right, So that's kind of the point that
you're making. They want that money in the pension and then they want to probably continue to raise that pension age because they need that money to stay in there. And that's exactly what Fink was saying. He's like, no, no, we need all that gold to go into the system
so we can have it. And he even did talk about the age at which you could withdraw it, but even more specifically what he talked about was the way, meaning the schedule, the time, how much you could withdraw at a certain time, because again, they want the money, and you know, with governments going broke, I mean, they're just going to be coming for everything.
We just have to sort of expect that.
And sadly, this is why I bring it up, and it's a cautionary tale because Australia is a test net for the rest of the world when it comes to this. If there's very little pushback in Australia, then other governments will look at that and think, well, the Australians did knock up about it, why don't we test it, And so it will just proliferate amongst those G seven countries that you talk of.
You know, I just went to Australia for the first time. I was down there just a couple months ago, and I grew up, you know whatever, watching Crocodile than the and you know Stever, when I just had this vision of these these Australians being these rugged and burly kind of kind of people, like that's not a knife, this is a knife, right, or the Foster's like this is a beer or whatever it.
Is, right.
But yeah, sure seems like the Australians are pushovers these days.
Sadly, I hate to say that, right.
It all started when he gave up your guns.
Yep, and I think there was it was an opportunity time for the government to have that gun buy back and seizure of the guns, and Australia hasn't really pushed back on that whatsoever. Gun liscense is very different to what it is in the US. The US it is a right. In Australia it's a privilege that the government bestows on you if you meet the certain hurdles. You need to go through all sorts of licensing and training
in order to get that. There are some exemptions for farmers and the like who need that for maintenance of property.
But it's been a it's a very different culture in Australia to America, and I think there has been a whittling away of that oka Australian who pushes back on authority to say, hey, we don't want to deal with that, leave us alone, and probably highlighted by the reaction the behavior around the vaccine mandates and lockdowns that we went through, which I think we're probably globally the most raconian out
of anywhere. And I live in New South Wales or Sydney, south of US as Victoria which had arguably the world's long well it did have the world's longest lockdown, and so I had a lot of friends down there who know, just walking in the street, they were stopped the police decide what are you doing? Where are you going? You're not allowed to be out and you've got to go home.
It's like I'm walking the adult like. There was some I think some serious concerns rised, and I think we're very quick to memory haul that and not not for attention to it, Forget it never happened, and move on until the next one.
Run sidetracked into this little conversation. But just for a minute, we'll get back to the generational wealth question I want to get to. But what's going on in Venezuela right now? I mean, is a perfect example of where things eventually devolve too, right, and so in Venezuela, Now, did Maduro win the election? Is was there some sort of a coup that's going on? Like what's going on down there?
But more importantly, without getting into the facts, because we don't know the facts, but we do know that's facts.
Is like you have the.
Military opening fire on innocent civilians. We do know that that's a fact. Now we don't know the circumstances behind that. And I saw I think I retweeted. I think it was Spike Cohen said that socialism is one of the things that you can vote your way into, but you got to shoot your way out.
Of strying's done. How many guns left? That's a problem for ye try Yeah, in America, not so much.
Yeah, although Kamala Harris is already talking about trying to change that as soon as you can, so we'll see.
How that goes.
Anyway, let's get back to the top of a hand here. So high net worth individuals they think more about preserving wealth than acquiring because they've already made it, so how do we keep it? They think about what types of assets they could buy that they could keep that, taxes being one thing that they have to navigate, but in regards to preserving that wealth, and then thinking about that
wealth generationally. And as I said, this is something I've been thinking a lot about because at the stage I'm at with my kids, I just went through setting up trust structures. We went new trust structures and building like family constitutions so that there's like a set of rules like a US Constitution around that wealth as it goes down generationally. So that's sort of where my head's been.
And I've been sort of battling some people on Twitter because there's this whole seemingly movement or maybe it's just caught my attention of people. A lot of prominent bitcoinners, even who outright think it's bad to leave wealth for your kids.
They're entitled to their own opinions.
What do you think about it?
I have, and I completely disagree with it. You know, I look at my responsibility to my family, to my legacy, not only to my children, but to know my lineage. I need to honor their lineage and the sacrifices that they've made to be as successful as I can be, and then to ensure that not only AREM a success, but my children are success. And sadly, there's no real other benchmark in society that we have that's universally accepted other than how wealthy you are. It's a school board
that everyone understands what the school board is. There's no intangible around it. It's a number that you can look at. It's the only objective measure we have of success.
Now.
It's not the only way to define success, but it's the universally accepted way of that.
Now.
I look at that and think, why would you want to rob your children of the ability to leverage that and further the legacy of everyone who's come before you, And you think about all of the sacrifices that you make as a bitcoiner. I personally look at my children, I think I want them to go on and be productive parts of society. And I think if they've got capital, and I think it will be an indictment on myself and my skills as a parent if they don't make
a contribution to society. I want them to go on and do great things. And having access and access to resources enables them to further the family legacy into the future and become meaningful contributors to society.
I think of it.
I think there's two different ways. I think, you know, because we went into you know, from an equity based system to a debt based monetary system sort of officially in nineteen seventy one, severing the tays to God. In a debt based minetary system, we're basically stealing value from the future, yes, And so we're literally stealing value from our you know, for our kids and grandkids, et cetera. I just think that's like the direction of the world.
But as a bitcoiner, I think about flipping that and like, our money should buy us more goods and services in the future, and we should be building value into the future,
not stealing from it. And I've been sort of using this analogy and this way to look at it as like a blockchain where it's like, my life is proof of work, and I'm building a block and I want my kids to be able to attach their block onto my block, and my grandkids to attach the block onto a block, and to continue to build this like blockchain of life, and like why wouldn't we push value into the future as opposed to stealing it from the future. Now I could see how people would say it's bad
for kids. I suppose if you raise bad kids. But that's more of you, not a symptom of the money, right, I.
Agree, And this is where money. You know, people say money changes you. I don't think it does.
It just.
Exemplifies and expands on what your true nature is. If you're a bad person, if you've got resources, you're going to do really bad things. If you're a good person and want to make contributions and build out and help society, having more resources allows you to do that. I think it's an internal struggle that's projected on to other people. It's always an internal struggle. And this is where for me, you want to provide optionality, whether it's to your children,
to your clients, to anyone around you. Providing options and then giving others the choice to make I want to be in a position that they've got all the resources that they could ever possibly want, and then if they decide that they want to make a contribution, their best way to contribute to societies to make donations and give
the money away, then so be it. And to me, and I was just talking about this with a group of tax attorneys across the country yesterday, that to me, bitcoin represents the best generational asset to pass on because not only is it going to be the lastest longing, sorry, the longest lasting, it's going to be the best performing. But there's a very curious thing that you can do with bitcoin that you can do with no other asset, and that is to your point about being able to
put assets into the future. You can timelock assets for different generations, and so you can timelock bitcoin for different generations. And that's something I spend a lot of time thinking about.
That. You might not.
Want your children to benefit from your bitcoin or all of your bitcoin, and you want to leave bitcoin in for further generations, out for your grandchildren or great grandchildren, great great great great grandchildren. All of a sudden, you can timelock a portion of this asset today that's going to continually grow into the future. That can only be accessed to a future point in time, which is to your point about the debt robbing from the future to
take now, that is the complete inverse to that. And this is where I think Dave Bailey came up with an innovative solution to pay off the US national debt by buying a trillion dollars worth of bitcoin, timelocking it for thirty or fifty years, and then have that as a way to pay off what's currently currently here.
Now, imagine the dump on the market in twenty or fifty years what that would look like though, So you just made a couple of big claims. So you said that big onin is the longest lasting, it's the best performing, and then the ability to time lock it.
Let's just go through that.
So you said it's the longest lasting. So you talk about high neworth individuals thinking about saving their money in bonds or real estate or businesses or whatever. You said, bitcoin is the longest lasting. Break that down for us.
It's ironic given it's only fifteen years old, right, and that comes from years of studying this and you're probably of the same mind that you know, the more time you spend looking at an asset or an investment, the worse it gets. You find holes in it. Oh, this could go wrong, that could go wrong. What have you. I've spent close to twenty thousand hours now staring at bitcoin trying to poke holes in it, understand what I don't understand, and I'm still an amateur even after that time.
But from what I can see, I can't find any holes with it. It gets better every time I look at it. And this is where it's going to be the longest lasting asset that we've got on many different layers. Firstly, I think it'll outlast just about everything else in the world, whether it's stocks, bonds, properties, governments, society as a whole. That is the substrate of our structure moving forward. It's just that that information isn't evenly distributed, so not too
many people understand that. If they did, we'd have bitcoin in the millions or billions of dollars per value. When I talk about bitcoin being the longest lasting, all you have to do is buy it and hold it, and if you self custody it, that can last essentially for ten hundred thousand years into the future, however long society is going to last. However, I'm very doubtful that you can achieve that same outcome with property or bonds or shares.
You look at the average length of a company across our countries, and if you include startups, the average length of the company would be about five years. No, most businesses fail within five years. Now, if you're fortunate enough to own a big company like one of the big banks or insurance companies, they may be going now for one hundred hundred and fifty years, but they are you know, the pointy point zero zero one of a percent of
companies that have ever been established. So do I have the skills to figure out what companies are going to be around at that point in time in the future. Absolutely not. And this is where the whole idea of index investing, which I disagree with, but it's been a very palatable format for people to invest in. This is why people invest in passive index funds because they don't have to pick the winners. They just have to pick the exposure to whatever the market is going to be
at that point in time. Now, that's a great way for preserving wealth, but you're not going to outperform anything, You're just going to keep it stagnant, and over time your wealth is going to deteriorate relative to the winners who pick the best assets. So I look at that and think that's not going to make your wealth last long. And this is where to me, bitcoin is a complete anomaly because I believe bitcoin is our first risk free asset. It's not our volatility free asset. And there's a key
distinction between that. But if you're thinking in generational terms, you can buy bitcoin and know that, Okay, you can deal with a bad two or three years because you know we're planning for thirty fifty eighty, one hundred, two hundred years. In fact, we've got one client who's planning for trying to have a two hundred year plan for his legacy, and it revolves around his business and bitcoin
backing it and funding his vision for the future. Now, no other asset would I have confidence in to fund a two hundred year plan With bitcoin, I certainly believe it.
Let's dig into that a little bit.
So it's the longest lasting Like obviously a house is probably not going to last that long. I mean, there are some that are a few several hundre years old, that they have to be rebuilt and whatnot rate. So obviously a car, you know, businesses most likely are not that long.
So I get that.
However, does that assume and that means that it's an asset that you could just buy it and never touch it again for twnity years Because I could just sell one property for another, I could rehab the property, I could sell this business buy a different business, So I could manage that well through real estate and businesses. But bitcoin is more like a hands.
Off approach completely.
And what I mean is that a big deal?
No? I think it's a huge deal because every time you transact, you're subjecting yourself to a number of different things. Firstly, your personal judgment to outperform the market, that you're going to improve the capital allocation. Secondly, and a big one is typically there's a tax consequence for every transaction that you make, and if you're making multiple transactions in that two hundred year period, you're going to be taxed multiple times.
So if you look at say, typical tax regime in the US on capital gains would be circa thirty percent. Now if you do that four times in one hundred years. That's only one transaction every fifty years, you're going to end up with less than forty percent of the original capital that you had.
That's well, I mean, assuming the capital doesn't grow, yes, but let's look.
At it in bitcoin terms. If you bought and solid bitcoin four times and incurred that thirty percent fight four times, you'd have less than forty percent of the original bitcoin that you started with.
You can think of that tax almost as volatility, right, So when when an asset draws down by thirty percent, it has to make a sixty percent just to get back to even So if you make that transaction, thirty percent goes to taxes, Now that next transaction has to go up by at least sixty percent just to get
you back to where you were. Right. So that's sort of how that that volatility, if you want to call it that of the tax taxation will really draw down on your long term gains correct plus to your point, I did like that, I mean, then that draws on your own judgment. And so when you're thinking about two hundred years now, you're depending on the judgment of all those errors down the line that they're going to make good judgment, which is probably probably pretty hard to view. Okay,
so that's the longest lasting meaning. I can set it and forget it. I'm not subject to all the different transactions, the subjection of people's interpretation of markets at that time and whatever. Then you said it's the best performing asset. Now we certainly know factually it has been the best performing asset in the world. Some people still think it's a magic Internet money. You said that pretty matter of factly.
So why do you think it's going to be continue to be the best performing asset in the world.
On the most basic of premises, I believe in humanity, and I think we will evolve, not to evolve. If you believe that we are going to improve and our lives are going to get better, then Bitcoin is going to fundamentally accrue more value and grow into the future. If I look at all of the avenues of capital and the places of capital where they are stored, and how they move, how they are used, Bitcoin is an insignificant market in relative terms to the bond market, stock market,
property market. Look at with a deep understanding across all of those asset classes and how that compares to bitcoin, and it will be a one way valve, there'll be a drain of capital from each of those large assets into bitcoin. And so what does that do at a time when Bitcoin is becoming more and more scarce, so there's less and less coins on exchange. Bitcoin will as the market cap grows, we'll be able to access bigger and bigger capital pools. So you have larger capital pools
trying to find less bitcoin. And I look at this and think, this capital appreciation in bitcoin hasn't yet started. A lot of people think, oh, well, it's been the best over the last fifteen years, it can't go any further, but they fail to understand that there's a host of reasons why this little asset cooled bitcoin that is inconsequential in global terms, can take on an infinite infinite amount of capital. And to me, I look at the future and think, there's no other asset that I want to
be holding other than bitcoin. If you want to capture that upside and bring this full circle to one of the points you made earlier, this is really one of the It's a real dichotomy because you have what people think is a volatile asset, which is actually a risk free asset when you understand it and it's the best performing asset that you want to put in a portfolio that is going to preserve your wealth. So a lot of those things just do not marry up to what
you would think is a sensible investment decision. And this is where when people look at it without studying, I think they suffer cognitive dissonance because a lot of those things can't be true at the same time, and bitcoin is the first time that those things are true.
I want to take a second, just real quick, to just give you a reminder. The reminder is take control of your bitcoin. Look, for the first time in history, we have a way to preserve our property, take custody of our property and protect it with no cost. You can't do that with gold, you can't do it with your stocks, and so we can do with bitcoin.
And you should.
Now don't store it on an app on your phone that can get half. What you want to do is use a hardware device something like this treasure right here. So basically your private key sits here. When you want to do a transaction, you plug it into your computer, sign the transaction. When you're done, you unplug it and put it back into your safe. I've used Treasure for now, I don't know six seven years, because I think it's the easiest one to use. I've tried, I think pretty
much all of them. And it's also open source so you can trust the code. And again it's easy. Why easy, Because if it's too complex, it makes me think of how many potential holes and risk there could be, not just in the device itself, but even in my own ability to secure it. So I want something fast, I want something easy. I don't want something safe. That's why I use Treasure. And if you don't use Treasure, use something.
Please get your bitcoin off the exchange, use a hardware device to secure your private key, and if you like Treasure, check out the link down below. What do you think about somebody like Larry Fink who went on TV a couple of weeks ago and said, hey, I I think that bitcoin's a legit asset. Everyone should take another look at it for example, right, and we've seen many examples
of that. Trump was just speaking about bitcoin and the importance of bitcoin after a couple of years ago, seeing that he thought it was a scam and whatever rate are those people just changing their mind to jump on the bandwagon providing a lip service. Does Larry Fink, you know, just want to pump up his own book or do you think it's possible that people can actually do research and change their owner.
I think Larry has found something. I think Larry is sincere in the interviews that you're referring to. I think he has done an enormous amount of work that as bitcoiners were not privy to, and I think he's got a huge amount like a huge team around him with really smart people who are giving him arguably the best information.
Now Wall Street are full of really smart guys. But if you look at Larry Fink's genesis story, you realize that he wanted to token ask the world back in nineteen eighty and it started with residential mortgage backed securities. Now I look at the work that he's doing with the ETF and there's an opportunity for Larry to, I believe, create the world's greatest investment product, which he tried to do with the residential mortgage backed securities. That was an
attempt to tokenize real estate or real estate globally. That led to a catastrophic failure in the GFC because, as you and the prelude to that was you had the investment banks wanting to monetize that product upfront and then export the risk to main street and pension funds globally. Sadly, this led to a credit boom, This led to the GFC.
But what happened with that credit boom and GFC was there was an insatiable demand from Wall Street to create more products of that mortgage back security then on sell it, however, and that meant that the main street lenders had to go out the risk curve to find poorer and poorer quality borrowers to fulfill that need. And this is what led to the ninja lines and no income, no job
applicant line fabulous. We loved it until we didn't. And this is the problem is that Wall Street monetized it and took all the profits and no risk, and they exported all the risk. And then when the poor retail borrower who couldn't afford a million dollar mortgage on the salary of someone stacking shells led to the underpinning of
and the cascading of values across the world. Now I look at that and I think what happens if we get a principal protected note and Larry starts issuing that where he marries up a five year US treasury with bitcoin, and so you get a capital guaranteed note where they issue a ten billion dollar note. Eight billion goes into a five year treasury. That five year treasury grows from eight billion to ten billion in the five years, and then they get to then invest two billion dollars into bitcoin.
And that way, if you put in a million dollars, the worst result you can achieve in five years is five is your million dollars back. But this gives an opportunity for Larry to effectively tokenize the world, and this is ultimately what he wants, and he can achieve that with US backed US government BACKDT and coupling that to Bitcoin,
both of which are risk free. And then that takes all of the risk away from retail, retail investors, retail moms and dads, and it puts it firmly and squarely on the shoulders of the two risk free assets in the world that we've got, which is US government treasuries and bitcoin.
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I agree.
I mean when I listened to Larry Fink, he doesn't just say, oh I like it, you should buy it. He gives the reasons, like the mechanisms, the supply demand mechanisms, of why it makes sense, of what it protects you from, of why it goes up. And so to me, that gives me like a level I think he shows demonstrates that he has a level of understanding about it, not just lip service. I think it's crazy for people to
think that you just can't change your mind. I mean, the smartest people in the world change their mind, probably the most right. I think a sign of intelligence is how quickly you can change your mind based off of new information that you've received.
So it.
It never ceases to amaze me. And I suppose this is an example of how closed minded some people are. It's like, oh, but he said that five years ago.
Well, I think credit to Larry. He has done a great job in changing tackle that. I think it's very difficult. One of the touring points he most recently made where I genuinely feel like he understands the problem. I haven't heard him talking about debasement of the dollar now. He talked about the devisement of the dollar in America. He talked about the de basement of dollars around the world. He clearly understands the problem of the money printing and
how bitcoin solves it. So hats off to Larry, like one of the smartest people in the world and arguably the greatest salesman.
Now getting back to the question that kind of that led into this, which was I was just asking sort of you had made a statement that it's the best performing asset, and so again I said it's the best. It has been the best performing. Let's think about the forward projection of this. Michael Saylor laid out some math which we're going to link to Michael Sailor's interview down the presentation down below at the Bitcoin Conference in twenty
twenty four. It's certainly worth a watch. And Michael Saylor sort of laid out this twenty one year projection and he gave sort of three price models bear, bear, medium, and bowl or whatever it was.
I thought it was pretty good.
Certainly might be conservative on the barecase over aggressive on the ballcase. I don't know, you think maybe the math might be a little bit off. Maybe where do you think the math is when you're looking at the projection?
Right?
So this is where a lot of people get things wrong. Right, So, when you're investing your money, like I always tell people, like, you need to know what you're expecting when you get in right, Where do.
I think it can go over what time frame? What are my risks? You have a plan for that.
So if you're advising your high net worth individuals on buying bitcoin, where do you lay that out? How do you project that out?
I think it comes down to a whiting to start with. So you need to understand what the risk profile is, to understand what they can and can't sleep with. So I urge any client to invest however much they can invest without losing any sleep. Now, I typically start that conversation at ten percent. For families, that's an inconsequential amount of wealth. It's embarrassing if they lose it, but it
doesn't change anything in their life. It doesn't change where the holiday, where the kids go to school, where they live. Nothing changes now.
Just real quick.
So ten percent, Now, I could put one hundred percent of my wealth in and have a ten percent stop loss. It's only risking ten percent. Or I could put ten percent of my wealth in and have a zero percent stop loss. So I'm just curious on that because the chance of Big one going to zero is highly unlikely. I mean it's not even probable, right, It could draw down fifty or seventy five percent. So if they put ten percent in lost half of that, that's.
Kind of inconsequential.
I agree, And this is where it's a long game and people take a long time to understand it. Because as simple as it is, twenty one million and that's all I really need to understand. There are so many other factors that they need to understand in order to get comfortable with putting in additional capital. We like clients to hold the underlying because we think that's going to create the greatest optionality moving forward. And we try and veer away from ETFs and the rest of it, because
if you want maximum optionality, you want to hold the underlying. Now, a ten percent allocation drops fifty percent. I always tell my clients, now, whatever you put in and you make that initial purchase, just be sure to understand that this could drop fifty percent tomorrow, and then I'm going to come back and ask you for another ten percent to put in the next day when it's dropped fifty percent, so we can dollar cost average into it now on
a new investment. I haven't met a client yet who says, you know what, that's a great idea, here's my money, let's do it. It takes a long time. It's takes a lot of education to get a client comfortable with a serious allocation. By serious, I mean anything over five percent.
And that's a really good point that I'll just hit on for a second. I want to get back to the price predictions. But just hit on that for a second, which is for these high net worth individuals, family offices and institutions to make a move, it doesn't happen quickly. Yeah, there's big numbers, there's a lot of information they have to take in, there's a lot of education they have to overcome, and a lot of times there's a lot of decision makers that have to be involved in this, right,
And I just want to hit that point. Wait, because you know, with what's happened in the ETFs and black Rock, and you know now President's talking about it, a lot of questions might be we'll WHI aren't more people buying then, and I would say they are, or more specifically, they're getting ready to correct. Just as an antidotal piece of information. In twenty twenty one, I went and spent the year
in Puerto Rico. In Puerto Rico sort of this Galt's gulch, where like all the rich people are moving over there, right, and my friends over there were some of the some very very I'm not going to name drop them, but very very influential, like hedge fund managers and like very very established investors, you know, billion dollar funds, et cetera. One of my probably best friends over there at the time. He he doesn't believe in bitcoin.
He's a trader.
He's a very well known name, super brilliant, like amazingly brilliant. And he bought bitcoin at like eighteen thousand in the fund, sold it at like forty five thousand, like crushed it for his fund, right, But he just is like, no, I just whatever, Like I kind of like Monaro makes sense because it's private, but like not Bitcoin whatever. He's like to me, it's just a trading toy. That's always
been his approach to it. That being said, about a month ago I talked to him and he's been out since it was there in the forty five forty eight thousand range or whatever. About a month ago he said, Bitcoin is now the single largest position my fund has.
Amazing And I said why.
And it's not because all of a sudden he believes in it. He's a trader, he said. If you knew the amount of billionaires that have called me and asked me how they can get into this and secure it for a long period of time because of the craziness of what's going on in the world, you would understand why I'm so bullish, and so I just say that story just to say, like, we do have all these people that are trying to get in to the point that you're making. Right, there's a lot of education have
to overcome. It's coming. Would you say that's fair? Is that kind of what you've seen in your own experience?
Absolutely, And this is the only asset that is ex legal, So it's outside of the purview all the US government. It's beyond they touch. It's about the only thing that can be other than physical gold and physical goal. We all now has its on constraints.
Okay, so let's get back to the price prediction. So Michael Saylor sort of laid out this twenty one year plan by twenty forty five, and it would have a base case of thirteen million or sorry, let's start with a barecase of three million dollars per bitcoin, a base case of thirteen million dollars per bitcoin, and a bowl case of forty nine million dollars per bitcoin. I thought,
you know, it was thoughtful. He said that right now currently bitcoins had a compoundent and a growth rate of about one fifty but right now we're having about a fifty five percent ar and he says, you know this, this decelerates fifty to forty five, thirty whatever and finally stabilizes around twenty, which is about double what the S and P five hundred is. Now, you've mentioned the scarcity many times. Double the S and P five hundred like
that seems super ultra conservative to me. But you think maybe some of those numbers are off just a little.
And I think we all love Michael Saylor. I think he's Bitcoin's greatest proponent.
We're all lane, none of us know the future. We don't know.
That's true, But just if you look at his work in there, one of his final comments in that speech was, we have a thousand X from here now. The price at sixty five thousand dollars on the day, give or take, would mean where we've got a sixty five million dollar bitcoin coming, not a forty nine. So I think Michael would prefer to surprise to the upside as opposed to put a big number out there. Not that forty nine is not a big number. But I think there's a
host of things that I disagree with fundamentally there. And if I look at this, and I think probably the lynch pin for something going substantially higher than what he lays out is the fact that we haven't had someone with a money printer being able to buy bitcoin yet, no one has done that. When we have someone do that, then that can dramatically shift that playing field for to
the significant upside. When the US Federal Reserve decides to buy some and can have the ability to hold their finger down on the money printer, they can buy a limitless amount and set the floor at ten million, one hundred million, whatever they want, and now all of a sudden, we're in a completely new paradigm. So for me, it's very difficult to argue with what Michael says, and I think all of it's consistent and congruent thinking that I
agree with. The only X factor that changes it to the upside, not the downside, is a government with a money printer that gets involved and says we're going to set the floor.
Yeah. I mean, I think that is maybe a little bit baked into the cake in a sense, because you're saying that it's projected to capture seven percent of the world's assets, and so if you think about it, I mean, really, we have this amount of assets, so I like to think I laid out a case that there's like three ways I would think about valueing bitcoin in the future.
So like the venture capital method. So like uber told took money from taxis and limos and vans, So if I got five percent from each of those, it's worth this, right, And so then we can look at the total value bitcoin could be pulling from. So Michael Sailor laid out with nine hundred trillion dollars in assets effectively, so we get seven percent of that for example, Right, I think if if a sovereign were to buy it, it would
just get to that percentage of global assets faster. Right, So I want to get back to that because of what Trump's announcement was. But I also think about it in the sense of not just if a government were to buy it, but the rate of debasement that we're facing in the future. So Michael Howell, in my opinion, probably the best in mapping out global liquidity flows. And so it's not just looking at what the FED balance sheet is, but the major central banks of the world.
And you can see that the S and P five hundred is basically moving in lockstep with the global liquidity. Yes, so about twelve percent so it looks on paper you're going up with your purchasing powers and growing. But bitcoin, so gold has a one point four to nine sensitivity ratio. So for every ten percent in liquidity, gold goes up by four teen percent a little bit better. But bitcoin has an eight point nine times since to be so for every ten percent in liquidy, biccong goes up by
ninety percent. So you could just look at to the point, you know, I guess if the central banks use debt, but that expansion of the monetary base, and all we have to do is look at the projections by the government In the US, the Congressional Budget Office CBO tells us what it's going to be by twenty fifty, right, and so that's one way to look at it. So not only could it capture seven percent of the world's assets,
but today they're at nine hundred trillion. Those assets could be one point four quadrillion by the time it gets set seven percent, and that's where it's probably undershot to the downside.
That's it. And this is where I look at things a little differently, in that if we look at the ultrawealthy, we look at Alon, we look at Jeff Bezos. They store their wealth in the companies that they own because they've got the most control over it. I believe that that has the most significant upside. They're not ninety nine percent of their wealth would be stored in these assets
that they've built from the ground up. They're not spending one hundred percent of their wealth perannum they would be spending I would have thought zero point one of a percent of the wealth parannum. That seems like a pretty fair assessment what I look at. And this is where I think bitcoin completely redefines this is this gives everyone on Earth. It democratizes assets, and it gives everyone the ability to be a Jeff Bezos or Elon Musk and
owned Tesla and Amazon themselves. It gives them a monetary premium into the future that has no comparison in relative terms from an investment perspective. And when you look at that and understand that price is determined at the margin, we can have so much more capital stored in bitcoin. That's going to be in percentage terms, we could see ninety nine percent of the world's wealth stored in bitcoin
and only one percent is for real world assets. Because people are going to want to have that premium of being able to move their value forward into the future for future person. So I'm probably the most bullish person when it comes to that because I understand the value of optionality into the future. And this is where bitcoin is the only asset that has that fight chuck.
Yeah, Now, what's interesting with bitcoin is it started in the shadowy shadow supercoder world or whatever and sort of kind of spread to the people, right, a decentralized, bottom up approach, and so it was people, people people, and eventually it got to a government in l Salvador. But that's like probably still the bottom of the government level. Right. They're one of the poorest countries in the world. We're the most dangerous county in the world. Now one of
the safest. They're turning around. But to that perspective, kind of a bottom up phenomenon.
Yes, and Bukeley, President Bukeley.
From L Salvador, has been around talking to a bunch of other government leaders, but other small government leaders about doing something like this, and so again a bottom up approach. I always thought the US would be sort of the last move advantage out of any country because of they have the dollar, they have the most to lose. So to see two two of three presidential candidates come out and announced that they would have a strategic reserve, trying to bring it kind of on par with gold as
well as even if neither of them win. We also have Senator Loomis who put together a bill to do that. It seems that that switches from a bottom approach to a top down approach. I mean, back to game theory. If the US announces this, then I think all the other nations are sort of forced to react to that. Currently in the betting markets, Trump is favored to win by fifty six percent, and if he wins, I think he would probably do it, Like why wouldn't he?
So that's basically.
Giving us, at this point, per the betting markets, at fifty six percent, odds that the US will adopt this and other nations will be forced to I guess that's the way I read it, And I'm curious what your take is on that specifically, because we haven't really seen the price of bitcoin pump based off of that news.
I think there is famal indecision in the USA voters mind than what the betting markets predict. I think Kamala Kamala Harris is a much bigger threat than people are making out. I think people are very dismissive of her, and I think the Republicans have got a huge amount of work to do if they want to win this.
It's not a lay down like they know well, they'll have you believe that said, this puts an enormous amount of pressure on the rest of the world that they need to act really, really quickly, and we could be much closer to the suddenly part of the gradually then suddenly than we realize because you have two of the three presidential candidates making promises. I thought Robert F. Kennedy
was absolutely brilliant. He showed a deep command and understanding of bitcoin on a very deep level, and had some great policies.
He really had a good script writer for.
Sure, phenomenal yes, and he delivered it well. Trump, on the other hand, he made a promise that that's all he needed to make. He said, Hey, I'm going to make sure we don't sell the bitcoin, and what's ironic, three days later US government sells thirty thousand bitcoin or whatever they've sold they've put to market. I want to see a competition between the Dems and the Republicans, who are the only two feasible candidates, and I want to see them fight for bitcoin. I want to see who
can put together the most outrageous policy. But to me, what we saw in Nashville was enough to say, Okay, now, anyone dismissing bitcoin as that magic Internet money sort of really needs to have a look, go away, reassess, and realize that where at this we're standing at the forefront of global adoption on a government level.
And you know, one thing about these types of things, when they tease a new tax thing and then it kind of goes away. They sort of are like seeding the future almost, if you will rate decensitazos to the future. And so even if this doesn't go through right now, it's the direction in which we're going. And so if you're a long term thinker, you should certainly be paying attention to these these signals right there. They're they're there,
we're going in this direction. And I would imagine that even if Kamala wins, and even if the US doesn't go this direction now, other nations are probably paying attention to go, well, maybe we should try to front run that, would you say?
So, it's the only logical thing to do. Yeah, there's only one way to Like, you can't win by not playing. You have to ender the field and you have to stop playing otherwise you completely lose. So I look at this and I think, effectively you've been gifted by the US government or their proxies in RFK, Junior and Trump an intent of what they are going to do. Yeah, if I was any other country with a money printer, the finger would be on the button now and I would be sating whatever.
It is just a money printer though, right so right now we have like the rise of the bricks, and the bricks are deciding to recycle their profits their reserves not in back into US treasuries, but instead of gold. Yeah, you got to save it something. And so like, well, we don't trust US treasury Moore, after you've took in Russia's or whatever, like you're debasing, We're not going to do that.
What is by gold?
And so it's not to say a money printer, but like where do they say, and so they could certainly do that into bitcoin. Let's sort of transition this and as somebody who advises hang that worth individuals and families on how to get into this, just how can we generally advise the arden. So Michael Sailor lead out sort of what do you call it? A normy strategy, a ten percent, a bitcoin maximalist strategy, and a double and
triple maxi strategy. So what would your normy, maximalist and triple maxi strategies be that you would advise somebody on.
It really comes down to a personal preference. But I think you've got to start with an allocation that someone is comfortable or willing to lose. Now, this is counterintuitive, but people need to learn, and Bitcoin's made around for fifteen years. The belief that people will voluntarily learn about this new asset class and spend one hundred hours going down the rabbit hole and figuring things out, I think is a complete furfee that is not going to happen.
What I would prefer to do as an advisor is walk clients to the deep end, tell them to buy ten percent, and literally push them in the deep end, and then ensure that there's a life raft, a stick, something to pull them out and make sure that they're not going to hurt themselves. Because once they're in the deep end and they're finding for their lives and trying to learn as much about it. They're incentivized now they have skin in the game to actually go down that
rabbit hole and start learning about it. And once they learn about it, they're going to apply more capital to it. So I think the more capital you can get someone to allocate at the beginning, the bigger they're incentive to learn. The faster they learn, the more bitcoin they'll end up having. And so I think the saying from GG is the
more you know, the more you buy. Yeah, And so in order to get them to that stage, though, you just need to effectively create a safe sandbox or a safe place for them to invest as much capital as they can where they're not going to get wrecked. They're not going to pay tuition fees, they're not going to get scammed out of bitcoin, they're not going to have someone Robert or altatively send it to the wrong address. That is something that you can't do with more than
one or two percent of someone's capital. You can't have an a tuition fee payable of more than two percent. To me, is even one percent is unacceptable. But it's a great lesson for the rest of your capital and
investment decisions moving forward. So I think and what we try to do is create a safe framework for owning the underlying asset so that clients can put in fifty eighty percent of their capital if they was so wish to, in a safe way that they're never going to lose their bitcoin, and to me, the preservation of their bitcoin, and back to that thing that we talked about at the start, that the return of capital, not the return
on capital, is the most critical component. Having that custody self custody down is arguably the most important thing you can do when it comes to bitcoin.
So what are the steps to that preservation of bitcoin the custody self custody that they need to be aware of.
I think you want to make sure that you have got that in a way that removes every single point of failure, So you can't have a single point of failure in your custody setup. To me, having a single SEK.
A lot of people talk about, hey, let's buy a hardware wallet, put all your bitcoin on that, and it's not your keys, not your cheese, so to speak to me, that represents a single point of failure because what happens if something happens to that device, or alternatively, what happens if something happens to you, who is going to access that? So how we think about preserving that bitcoin is ensuring that we remove every single point of failure from everything
in that client's bitcoin life. So that means ensuring there's no single point of failure from themselves, no single point of failure from us, no single point of failure from their multi seak provider. We want to have multiple options for everything in place. And one thing that I've had, I guess a very unique experience of is going through three probates now with clients. We've been doing this for the family office side of things for the last eight years.
We've sadly had three of our clients pass away. But I can tell you and something I'm very proud of that with the collaborative security protocol that we implemented for them, they were self custing, they had full control, full autonomy. But when that day came that they were no longer here, there was a seamless transition to their beneficiaries. And this is where when you start storing significant amounts of wealth in bitcoin, this becomes a significant issue that needs solving.
And so the way we get round. That is to have a collaborative security protocol. We hold one off the three keys for the client. The client holds a key and the multi sea provider holds a key, and then couple that with advice, training and education around how to
actually move and use that bitcoin. And one of the key pieces that I think is really important for anyone with a bitcoin setup is to have an estate planned protocol dedicated to the physical recovery if your bitcoin, because if you don't have that in place, there's no legal recourse, there's no mandate, no legal decree that the government can mandate the transfer of your bitcoin from the protocol to your as So unless you have the pragmatic recovery of
your bitcoin lockdown, the legal framework for the recovery is a bit point.
So collaborative custody. So instead of having one single key, I have three keys. Two of the three have to be present to sign the transaction to move the bitcoin. But in a collaborative custody I don't keep all three keys. I only keep one of them, and I use other people, for example your company and another company to hold those keys. So then if I were to die or lose my key, hopefully the other two people have their keys correct, or if something happens to one of them, hopefully the other
two parties have the keys correct. That's kind of the way it works. And then if I were to die, then my trust or whatever my will could then say, hey, these two people need to sign the transaction to move the bitcoin.
Correct. And when you're dealing with large amounts of wealth, the beautiful thing about that setup is is that you can create some very strong asset protection strategies. I know, we're in the US and your legal system is out
of control when it comes to litigation. Having keys in different jurisdictions gives you the strongest form of asset protection that you could ever have, because all of a sudden, now there are multiple different legal jurisdictions that if someone was to ever litigate you, they need to go to
different jurisdictions in order to access that coin. Are that key and ask that to sign a transaction to move the bitcoin to where it needs to be so for me moving forward, And this is just one of the other reasons why bitcoin is the ultimate asset when it comes to intergenerational wealth. This is something that can't be done with any other asset.
Yeah, yeah, amazing.
All right, Peter, I think we've gone over a lot. That's some good information. I want to link down to your services down below. If anybody wants to talk to you about that, Lintha, anything else that you should want to point attention to, or that you want to kind of close it out with.
I think it's just an important time if you're not in bitcoin, to get into bitcoin as quickly as possible. We've got some exciting things that are to fruition, much of which we talked about today, And if you need help getting getting started, reach out to the team. We'd love to help great.
Thanks so much for appreciate it.
Thanks Mat