The Print That Ends This Cycle

Added: 2026-06-02

[00:00:00]John, we missed a week. Well, Memorial Day really threw a wrench in our our scheduling and we couldn't we couldn't make it up Tuesday, so we're back.

[00:00:07]>> Yeah. It's a It's It's a real shame.

[00:00:09]It's a We brought shame on our households relative to your unbroken streak with with Odell on RHR. Maybe maybe we'll we'll we'll start our streak today going forward.

[00:00:19]>> Yeah. We had a We had a Friday RHR last week. Bass feels a little bearish. I feel I feel like he's a little bearish right now, which is usually a good sign for for the near-term prospects of the Bitcoin price. Though, we have drifted a bit lower since we recorded on Friday, currently below 72,000, but I think Bitcoin's in an interesting spot. We're going to I think end this conversation on the fundamental value prop of Bitcoin and some developments that have happened in recent weeks, but first, I think jumping right into it, just talking about the memetic power of this administration, and you wanted to start off this week's presentation with the juxtaposition of President Trump and Jerome Powell from last year's audit of the the building of the new Federal Reserve building and Secretary of the Senate presenting the $250 bill with with President Trump on it.

[00:01:12]>> Yeah. Look, I mean, this this guy, you know, much much can be said about him positive and negative.

[00:01:19]And we know we don't have time to get into all that, but I think the one thing that we all have to agree on is that Trump across his two administrations is responsible for some of the the most iconic images of our our the story history of of this great country.

[00:01:32]And you know, the the one on the right, the the Besson image is is what I led off the the week with uh just cuz I think it's so it so perfectly captures the moment and also the contrast uh between what happened last year with this iconic image of Trump and Powell, which I think is probably the number one image that Trump will ever produce. I mean, I just I don't think you can get better than than this. But a strong number two is is this one of Besson holding up his $250 bill. Um you know, you've got uh, larger currency denominations, right?

[00:01:59]With people struggling with price inflation, that's always a good sign.

[00:02:02]You've got the uh, Treasury Secretary taking, you know, the diametric opposite stance relative to to his former counterpart at the Fed as it relates to Trump. You know, clearly uh, with this this this wonderful grin show showing uh, Trump's Trump's image on on the currency. Um, you know, I think tells you a lot where we're going, tells you a lot about where the different camps sit.

[00:02:25]And uh, yeah, I just think this Yeah, when I >> I get to I mean, we just did some pre-show prep, more more pre-show prep than we than we typically do. And I think what I'm picking up is that the underlying theme of this discussion is going to be the acceleration of the K-shaped economy and how how we navigate that moving forward cuz it seems very clear that there is some dislocation between AI, the plays within AI, and everything else. And um, it's just really interesting times that we live in, but sticking on geopolitics and the Trump administration, I think one thing that's become clear over the last week that a lot of the the price action that we've seen in oil markets, especially going below 100 and staying in the mid-80s for the last few weeks has been manufactured price due to the fact that that many nations are draining their strategic petroleum reserves as an attempt to route around the supply disruptions because of the closure of the Strait of Hormuz.

[00:03:22]>> Yeah, you know, and I think this relates to the K-shaped economy as well, right?

[00:03:26]Where we're all uh, you know, those of us who are have the need to actually be aware of what, you know, gas prices are, you know, certainly have felt in the last 6 months uh, the impact of all the disruptions in a in a way that perhaps the those at the top of the pyramid haven't quite as much. But it hasn't been, you know, completely unbearable yet and I think there's a like decent amount of confusion as to, you know, why we haven't blown out further. There's There's speculation about this and we've talked about it a little bit on the show, but Rory Johnston, um who's great oil analyst everyone should follow, um had some good data out highlighting that there's some incongruity in uh Chinese data that they follow uh suggesting that you've had imports come oil imports come way down, but also mobility indicators that they follow are are still strong.

[00:04:09]So, like you're not really seeing demand destruction.

[00:04:12]And he thinks that the delta there is getting backfilled by the Chinese effectively just uh making massive withdrawals from their petroleum reserve. He's kind of interpolating that. He doesn't have great data to that point. Um but it you know stands to reason. And of course, you know, they're they're certainly not alone. All all the cool kids are doing it, and we're seeing it in, you know, the US last week. We just had our second highest SPR draw on record um surpassing the ones from 2022. Highest was the prior week. And then uh you know, Japan also is is is running the same playbook here. Um And so, this is keeping us, you know, keep keeping a a relative lid on oil prices. You know, it hurts, but it's not it's not destructive yet for um many sectors of the economy. It's it's not probably uh it's getting to be a voting issue in in the US, but it's not necessarily a rioting issue yet. But, you know, the question is uh the When you think about stocks and flows, like the these are all stocks, right?

[00:05:04]And you you deplete them without uh re-upping them, you can only do that so many times. And uh you know, you can't even get them down to actually zero. You need to keep some level of stock in for the SPR to actually work um you know, chemically and function the way that it should. So, question is you know, how many how many more times can we run that playbook before you start actually getting uh more more meaningful uh getting in the street type uh type impacts on the oil price.

[00:05:27]>> Yeah, and I I think last week was rather interesting as it pertains to this particular theme because you had the CEOs of Chevron and Exxon come out and basically call BS saying, "Hey, these these prices are artificially manufactured. What we're looking at looks like the prices should increase throughout the summer, maybe getting back to the $150 to $160 per barrel range. And I mean I was following WTI this morning. It looks like it popped above 91 from from 85 over the weekend. I wouldn't be surprised if that's the market digesting two CEOs at two of the largest major oil producers in the world calling BS on this.

[00:06:05]>> Yeah. The DJ in me looks at this chart and wants to call a lower high there.

[00:06:10]>> [laughter] >> But I won't I won't make any bets to that effect. But yeah.

[00:06:15]>> Look, this is obviously you know we talked about it for the last like three or four months. Like this is kind of the the the crux of the whole thing, right?

[00:06:21]Is is who who blinks first? Who can you know maintain enough stability in core input prices to their economies to to not have to to back off and and to maintain leverage in this whole US and China you know via Iran type of standoff that we're looking at.

[00:06:37]And it's TBD, right? This this the Achilles heel over in the US is that this has when when this price gets out of hand, you know that has direct impacts not just for voters who can ultimately in November potentially constrain Trump's agenda, but also more significantly and more immediately for your bond yields, which flows to everything else. So in a hyper hyper financialized over financialized economy, we've seen a couple times that it seems like four five four six on the 10 year is maybe the place where you need it where Treasury or somebody needs to step in and maybe Trump needs to fire off a positive tweet to keep the move volatility index at bay. We'll see if if we need another one of those in a little while, but yeah, this is without being able to make any clear calls, this is obviously the the crux that the rise got to focus on here in the next couple months.

[00:07:23]>> Yeah. I think what is what is more clear at least to me and be interested to get your perspective on this is where it's easier to tell the signals in in the AI play right now. The the numbers coming out of this sector are absolutely mind-boggling and you have it highlighted here that Micron hit a trillion dollar a cap for the first time as stock surges 19% and then Dell stock skyrocketed 32% for its best day ever as AI server revenue source and then I think on top of that Dell released their first hydro-cooled GPU rack in in conjunction with CoreWeave and that was announced at the end of last week as well. So it seems like the infrastructure buildout is happening, it's real. I know we've been talking behind the scenes of using the tools, they're real, they're an incredible productivity gain for for teams that know how to utilize them and I think that's the most important thing to highlight here that know how to utilize them um particularly in a cost-efficient way and uh again going back to what we said earlier, we're in this very interesting time where you have this geopolitical strife, you have this K-shaped economy and then you have this behemoth of an emerging market theme and what will be a part of human society moving forward which is this AI buildout on the infrastructure side and then the utilization on the software side that is happening at an insane pace.

[00:08:46]>> Yeah.

[00:08:47]The the funny thing the funny thing here about all this is like um you know we had Intel, we had Cisco both you know up on a stick, blowed earnings, making new all-time highs. Now you got Micron, you got Dell. Like we're running it back with like the the the late '90s stalwarts that really defined the the original tech boom and tech bubble. The interesting thing though is like for for anybody out there who wants to just make kind of the lazy comparison and say well this is obviously just kind of running back you know that exact same trend and that exact same set of themes. You know go look at a go look at a Cisco PE chart and in into into 2000, right? From late '90s to 2000. Like we're talking like 70, 80, ultimately up to I believe like 150x earnings forward forward earnings so not even established earnings like looking forward Wall Street consensus earnings. You know Nvidia right now is trading at like 21 times forward and that's on numbers that are definitely like way too low. Now you can can like yeah maybe everyone knows that they're way too low, and that's that's priced in. The buy side consensus already.

[00:09:39]Okay, fine. But like, we are My point is like, we are in a very different environment, and it can get It can get a lot sillier, right? Based on historical historical trends and precedents. And but I think what you're seeing right now is you you see this this chart on the bottom, like, you are actually seeing like meaningful acceleration in reported earnings. Now, that's definitely a function of running it hot. It's like, you know, on an inflation-adjusted basis, is it as good as it looks? Like, no, probably not. But that's the game right now. So, to keep the to keep the the wheel spinning and then to keep this working, um you know, the administration really needs uh S&P earnings to to rip. And thus far, like, you are seeing that. So, you could argue like, you know, there's been a a popular meme on FinTwit in the last few weeks, you know, it's not a bubble in the P, it's a bubble in the E.

[00:10:23]People are overestimating the long-term, you know, earnings potential of these companies for various different reasons.

[00:10:28]But for now, right? It's not been primarily other than Intel. Intel's definitely had, you know, it's trading like 120 x earnings. Like, a lot of these stalwarts right now are trading at, you know, justifiable like, theoretically like, squint and you can kind of see it multiples at least on earnings that are like clearly accelerating, right? So, this is a real story thus far. I I think it's probably way too lazy to write it off as just circular financing entirely. You know, as you said, like, we're using the tools like we see it, the utility's there in a way that it definitely like The utility's there, the infrastructure's there in a way that it was not in 1999.

[00:11:00]So, for now, that analog doesn't really hold, and you know, the question is like, can can this continue and persist while oil sits where it is and while in energy and copper prices sit where they are, and can the US leverage its relative, you know, strength on like the LNG side to uh to continue this power buildout that's necessary to to maintain all this, or is this all going to get short-circuited by, you know, an an ongoing uh ongoing strife in the Middle East? And unclear, but um this is clearly a very strong force pulling in in one direction on the US side. And you're on mute, Marty.

[00:11:32]Marty, you're on mute.

[00:11:33]>> Sorry. I was saying even if the the energy markets do perturb the the infrastructure build out, I think it'll be temporary. Again, like you said, like I said, the utility of these tools is there. It's very clear, and we're only the warm-up stage of this. I mean, the genetic economy just became a thing at the beginning of this year. I mean, I think you have some charts that we'll that we'll reference, but if you look at token usage growth, it's it's going hockey stick, and that will only continue to go parabolic, especially if robotics actually come to market and become a thing, which I think I mean, you can make the argument that the robo-taxis and Teslas and Waymos are already a form of that robotics. And if you if you think about humanoid robots and robots that will be used in manufacturing capacity, like we're at the very early stages of of token utilization and consumption. They're going to they're going to hit numbers that that we can't even fathom right now. And then on top of that, I think to your point about valuation, I think a lot of people were throwing water on the SpaceX sort of valuation of 1.5 trillion looking at their their S-1.

[00:12:40]And actually just recorded an episode with John Tinsman, which should drop 20 minutes from now, but I think one thing that he highlighted that a lot of people are overlooking with the SpaceX numbers that were that were disclosed is that deal with Anthropic that they did for leasing out Colossus, which I think took them anywhere from 7 to 10 billion dollars to to build. And I think that's a uh that's sort of a it might have been even cheaper than that. And they're leasing out that compute for 1.6 or 1.9 billion a month to Anthropic for the next 3 years. The multiple on that Colossus build out alone is going to be massive. And they're building Colossus 2, which is going to be a gigawatt. Obviously, again, going back to robotics thing, hasn't really materialized in a way that makes it obvious to people, but you can easily squint and see that becoming a real thing. and and to the point that you're making justifying some of these valuations. Um Not SpaceX specifically, but you we have it here next. I mean, staying on this theme Anthropic just raised 65 bill series H at a 965 billion post money valuation. Open AI is beginning to and their models are beginning to solve and disprove central conjecture in discrete geometry. Again, the utilization the the sort of productivity of these models is being proven out. And then on top of this, I believe Anthropic had its first profitable quarter earlier this year, too. So, the sort of meme of they're spending money to to win the race and they're not going to make any money on the back end is beginning to dissipate as well.

[00:14:09]>> Yeah, look, I I I forgot to include that headline here, but I think that's a huge one, too, for you know, just starting to see data points for proving out the the economics, but I I totally agree with you and I think, you know, even if there's a lot of talk about scaling laws and you know, how far can they go and you know, if you throw X amount of compute on a log log basis at at the problem like do you get the commensurate increase on on the curve that has been established um in capabilities and all these different metrics and like I I think, you know, that's that's an important conversation and definitely like if if suddenly scaling laws broke like a lot of these stocks would have a problem for a while, but the reality is like if everything stopped tomorrow in terms of uh improvements in capabilities, like I think we're we're at like 0.01% of the actual utility that can be unlocked from what we have today.

[00:14:55]Like I look at my workflows and you know, everyone and anyone who follows you knows that you've been kind of on the cutting edge of of remaking your business in TFTC with a lot of these tools and I think you would probably say like you can think of like, you know, a hundred things you'd like to do still better with them. I'm like even farther behind you, you know, I've really started in the last like couple months to to ramp up more and rethink my workflows, um but I can, you know, sitting here today like I can imagine like another hundred things that I need to build and that I could automate better.

[00:15:23]And, you know, we don't even have like a a massive business at 10:31. Like, think think through like apply that to all of the corporations that are out there that have a ton of inefficiency, but also a ton of creativity in in a lot of their workforce. Like, if everything stopped today in terms of advancement, we still have yet to we have like multiple decades of unlocking actual utility and productivity, you know, beyond what we have today out of the tools that we have that just today. So, I you know, fully cosign. Like, there's a big element of this that is like currently being proven out right now, and that is definitely not fake.

[00:15:52]And if at all like if the curve stopped tomorrow, like we've got a long way to go before we fully kind of harvest what what's available today.

[00:15:58]>> Yeah, which brings us to the other side of the coin, which is you have all this incredible growth, productivity, efficiency being brought to market, but then that is not being felt by everybody. Again, leaning into the K-shape economy meme for looking at the delinquency rates, 90-plus day delinquency rates on credit cards, student loan debt, auto loans, mortgages all beginning to creep up, credit cards getting to 2008 levels. Uh if you look at savings rates, collapsing right now, lowest since April 2008. And so, you have this again this juxtaposition of this incredible wave of productivity sort of in infrastructure investment now beginning to be profitability in the AI sector, and then the common man doesn't seem to be able to to capture that value and put it put it to work for for themselves, and and they're obviously struggling as inflation begins to rear its head again, and the prospect of of the jobs market becomes a bit more tumultuous for for your average person.

[00:17:03]>> Yeah, I mean, here here's your here's your K-shape. And I could have picked a bunch of other charts that would, you know, kind of show the same thing.

[00:17:08]And it's it's it's a really interesting time because you we've highlighted this on prior episodes and in prior newsletters, but there's like a there's kind of a damned if you do, damned if you don't impact here or a dynamic here where it's like, you know, what if what if we're wrong about what if what if the US is wrong and you know, the AGI pill people are wrong about where this is all going and there's all this, you know, massive capital expenditure and increasingly, you know, debt being taken out. Not a massive amount yet, but you can see that increasing. And, you know, resources being pumped into the data center build out and the AI build out on on the assumption that this is going to be this is the future of the economy.

[00:17:42]And if for some reason that that, you know, we're we're off by an order of magnitude and a lot of that goes goes belly up or goes upside down, you're going to have a major problem like immediately, right? In tax receipts from, you know, bottoming bottoming out equity valuations, you'll have public markets collapsing, you'll have issues in the credit complex. Like that's that's a really bad scenario already and it's going to get worse if more and more resources get pumped into this thing over the next few years, which is going to happen, right? So, if you're wrong, that's not good as the US. What if you're right? Right? Like what if the AGI pill people the Darios and the Sams of the world, which by the way, some free advice, guys, if you're listening, you're definitely not. If you're listening, please stop going on podcasts like or get a PR person who can help you in some way massage this narrative better. But in any case, like what if that narrative is right and, you know, work is work is going away, we're going to like 30% unemployment before we finally get to, you know, AI utopia where everything's abundant and we have the Star Trek future. And you've already got a huge amount of the economy looking like this, right? You've got people with delinquent student loans and increasingly auto loans and man, big credit card debt, you know, highest in the whole way.

[00:18:46]Mortgages are okay now, but like what happens when like 20% of the white collar workforce, you know, in in middle management like it's laid off? Like are mortgages going to look great in that case? Like, you know, probably not. So, if you're right, where where does that leave us in terms of the the the social reaction function to to all of this? And this is increasingly getting discussed on, you know, various sides that we can talk about, but you know, this is this is a big cognitive dissonance and and tension that is going to bear monitoring, I think, over over the coming year.

[00:19:14]>> Yeah.

[00:19:14]>> Yeah. To your point about the narrative side of things, they really need to figure this out and it is uh I mean, we'll just keep going down the chart here because I think uh what uh I mean, I'll skip this for now unless you want to talk about it because I think um the Mondani >> Yeah.

[00:19:33]>> stuff is probably more pertinent to this particular point of the >> can >> conversation.

[00:19:36]But I mean, you you highlighted this juxtaposition and I think to your point, I think Brad Gerstner recognizes this narrative problem and he was on TBPN last week beginning to sort of try to to to to counteract the negative PR winds that are coming AI's way due to the energy usage, the the spectre of of mass job losses because of the technology and he's thinking about ways to to work with the Trump administration to create an initiative that would quote-unquote deliver a very tangible, profound dividend to communities where they're building data centers and then that's juxtaposed to news from last week of of Mayor Mondani from New York City pledging an aggressive crackdown on bad landlords saying that New York City will work to transfer ownership of tenants.

[00:20:23]They're talking about overt private property seizure in New York um coming after the bad landlords um and and you can see if that's becoming popular in the largest city in the United States, the financial hub of the world, it's very easy to project that forward and have people begin to demand similar actions against uh AI hyperscalers and anybody building out that infrastructure.

[00:20:51]>> Yeah, for sure. Look, like you know, the Mondani thing, it's not obviously about directly about AI, but you know, people people hate landlords, right? In general and like that feeling can can be and often is like weaponized by leftists and communists to to get certain outcomes.

[00:21:06]But like people really Not not not just like, you know, your like tie-dye hair like liberal arts grad who came out of like Barnard or something, you know, the the Not to Not to over stereotype, but your your your Mom Daddy base, right? That you would expect. Like, obviously, a lot of emotions can be weaponized in that base. But, like, everyone hates data centers basically right now. And you can argue like I think there's interesting evidence that that's largely like an astroturf campaign that's being encouraged by certain foreign actors. We don't have to get into that. But, you know, it's it's pretty clear like there's an increasing tide of everyone from your Barnard grad to like your you know, blue-collar mechanic to like your random white-collar worker in, you know, random second-tier city, right? Like, everyone hates data centers increasingly. And so, I think it's interesting that you see Gershner kind of floating this idea that he's going to work with tech leaders in the White House to make sure everyone gets taken care of based on the growth of these data centers and and and pay a dividend, you know, the the I love the capitalist framing of the the equity-based framing of this what is basically just like, you know, a welfare payment based on this.

[00:22:13]You can see him trying to get out in front of it, right? With his own with his his own spin. And, you know, the question to me is like if you're doing that, like, what's going to be more popular? Like, well, here's like a a well-structured, you know, dividend plan based on the the growth of data centers or is it going to be more popular to have a demagogue who says like, "You know what? We'll just take your stuff." Right? Like, and I think [laughter] that's like that's increasingly in the Overton window now. That's a conversation a lot more people are going to have and going to want to have. And that has real implications for, as I said, like, the social fabric and also the monetary and fiscal reaction function to potentially, you know, if you have discontinuous and sudden like non-linear jumps in unemployment. Again, with the K-shape backdrop we already have, like, what's the response to that ultimately going to be? Like, there's a knee-jerk response whether regardless of like whether it's, you know, Trump in in office or AOC, whether it you know, wears a MAGA hat or a Che Guevara t-shirt, right? Like there's one kind of common reaction function, which is in one way or another to print the money, to to write the checks, to write the stimmies. Maybe you do that by monetizing excess excess surpluses that have been saved overseas by trade surplus countries that we're friendly with, you know, as it seems like we're trying to do right now, whatever. But they this kind of lead this kind of rhetoric like leads ultimately in in one direction if it gets really popular.

[00:23:27]>> Yeah, and this is it's funny.

[00:23:29]I've been talking to Tom Marzello from Cathedral about this cuz we actually did some research on this as it pertains to Bitcoin mining back in the day when we were having problems.

[00:23:39]But I I think Bitcoin miners have done a good job of sort of figuring out the narrative and how to position things and AI data center builders could learn a lot from the hard work that we put in over the decade. But it was funny to see uh Kusner float this idea cuz Tom's actually been publicly talking about uh Alaska and uh oil permanent fund like structure for these AI companies and local communities. If you have a data center come in and to your point it would be very similar to a dividend, but if they are as profitable like if you think of like Colossus in Memphis and how profitable that's going to be alone if you were to set up like a permanent fund for the local county, maybe the state, the city, whatever it may be and just throw throw some some dividend into that and you do that over time. I think that could be a good way to to curb the the blowback, the narrative blowback that you get. And then on top of that I think it's a lot of education because I I do think that all of this is massively beneficial for those who know how to utilize the tools on the back end, but on the front end I think the energy infrastructure build out is completely necessary. Take AI out of the equation.

[00:24:47]Like our grid systems need a revamp and a and a bolstering whether or not AI was a thing. Like and so I think reinvestment in this energy infrastructure and hopefully investment uh a point where we we just have abundant rather cheap energy because the case for investing in generation assets and interconnection assets and transmission assets is much easier to make because the the revenue is much more reliable. This is this is going to be overall good for for humanity. And this is again going back to Dario and Sam, like stop going on podcasts. Like let people who can actually pitch a good vision of the world do do the narrative crafting for you cuz there is an actual legitimate good narrative to be spun here from the energy generation side.

[00:25:33]It's just the the market and the average person has no idea how these energy markets work in the first place.

[00:25:38]>> Yeah, for sure. I mean it was to your point, it was a narrative that worked a narrative pivot that I think worked well for Bitcoin mining several years ago.

[00:25:44]And I think that that one of the most powerful charts people can see is like China's construction of new megawatts of uh grid production relative to the US.

[00:25:52]You know, ours has like effectively flatlined for I don't even know how long, like 20 years. Um and China's just up into the right constantly. And I think people can just see that intuitively grok like that's not sustainable. And people people can understand like there is no such thing as a rich energy poor society. And so, you know, moving more and more the narrative to exactly that point I think would be very helpful. And it and it's not even just a narrative win, like it is legitimately true.

[00:26:15]But, you know, we'll we'll see if if that kind of framing can can win out over you know, [clears throat] hey, data center's bad. We're we're going to move to seize the the means of digital production.

[00:26:25]>> Uh New York will find out the hard way.

[00:26:27]Hopefully we can avoid it. I think I think the I don't know, the branding of communism and socialism is is not very good right now. I mean, you had uh Hasan whatever get get like chased away from like I think he was chased away by ice riders or like get out of here last night. But, I digress. We're going to end it on this. Again, I told you we would talk about Bitcoin fundamentals and from a narrative or not not a narrative, excuse me, Um from a sort of value fundamental value prop side and then on the technical side. And again, I think we missed last week, so we weren't able to talk about Hormuz Safe. And then on top of that, we've got incredible developments happening on the privacy and medium of exchange payments aspect of Bitcoin from Calle and the Cashu protocol project.

[00:27:14]>> Yeah. I mean, I think this is, you know, we like to end on Bitcoin, but I thought it was a really poetic juxtaposition of of headlines. I think we hit Hormuz Safe a little bit on the last episode when it like just dropped that that morning when we talked about it, but we won't have to belabor it again. I'm sure people have heard of it at this point, but you've got Iran, you know, floating this idea of a, you know, an insurance operation for maritime cargo going through the Strait of Hormuz administered by Iran with fees paid in Bitcoin settled on Bitcoin blockchain. You know, this is a This is one potential validation of the long-running Bitcoin thesis that, you know, it's money for enemies and you've got a heavily sanctioned country trying to launch What what is really, frankly, like kind of a protection racket. Like I don't really expect it to get off the ground, but trying to launch this with with direct integration to Bitcoin because that's the only thing that that's appropriate for this very adversarial payment situation for, you know, a sanctioned country. Kind of you know, it's it's a perfect validation that sovereigns care, sovereigns are paying attention. You know, the biggest players in in the world understand some of the key properties we've been talking about with related to Bitcoin for a long time. This is not an encouragement from TFTC or 1031 for anyone to go and use Bitcoin to avoid US sanctions, just an observation of what that might what that might mean.

[00:28:26]And again, I don't expect it to actually like get off the ground in any meaningful way because like just just using Bitcoin is not going to, you know, stop someone from from being sanctioned and from feeling the pain of US sanctions for participating with Iran.

[00:28:38]But interesting data point on the sovereign side. On the the technical privacy kind of, you know, hundred sat scale. Like the the Hormuz Safe is relevant for the, you know thousand plus Bitcoin scale. This is relevant for like the 100 sat scale the average daily user. You know Cali's been if you're not familiar with him you should follow him on Twitter and Nostr everywhere a real a real monster in in Bitcoin and Bitcoin oriented development and you know has been working for a while on using a secure enclaves to facilitate cashews. We probably don't have time to get deeply into cashew on on the show right now but basically an implementation of Chummy cash that has potential promise to make Bitcoin much more tractable as a you know a medium of exchange for for small payments or even increasingly large payments as well.

[00:29:25]Very simple very you know dumb easy to easy to play with easy to develop on you know make certain trade-offs relative to using Bitcoin itself on the blockchain but for potentially significant gains in speed ease of integration and and you know various other other benefits. I'll hand it off to you to to talk about this particular development but the the high-level like theme that I think this highlights is if Cali's right and this is moving in a certain direction you would have the potential here to solve one of the major trade-offs of using Chummy cash which is the the operator of a mint can potentially inflate supply and effectively rug participants in the mint without much pushback from from the users or way to govern that. This could potentially be a solve for that and it just pushes you one step closer to maybe making this very viable at scale and so I just think it's interesting that like as price you know as price flattens flat lines it's it's crappy environment out there we everyone's bored everyone's going away and and buying AI volume next stocks.

[00:30:26]You're seeing meaningful validation at both the sovereign level and the technical level for what we've been talking about in Bitcoin and the reasons that we're here in the first place right like even as the bear market drags on like you're seeing ongoing validation of everything that you know that we care about here.

[00:30:42]>> Yeah, completely agree. And Matt and I talked about it on Friday, not this specifically, but the the fact that sentiment I I think I've been in Bitcoin since 2013. I think this sentiment is the worst since 2015. And historically, that is the the best time to be allocating to Bitcoin, not financial advice, just um highlighting some pattern recognition from my days in the trenches over the years.

[00:31:03]But as it pertains to what Cali is referencing here for the Cashu protocol, I think the trusted execution environments are slept on. Uh we have a a company in the portfolio, Maple AI, that we backed because of their utilization of trusted execution environments. And essentially, for those who are unaware, these environments allow you to run code in secure enclaves. And so your phone, your iPhone, you're doing Face ID, basically people think that a lot of people just assume that you're sending your biometric data to to an iCloud server, but no, like it it the your face is the private key that's held in a secure enclave in your phone. You can run software on that. Not only that, but you can interact with secure enclaves in the cloud as well. And then what these secure enclaves allow you to do is to run compute in a way that the person actually running the computer has no idea what's what's going on. It It is a trusted execution environment. And what Cali is referencing here, I'm not going to pretend to know exactly what he's built. And I think that's he's he's he's been a bit um sort of opaque about what what's actually happening and just um sort of alluding to what they're doing. But what I assume is that you're able to set up a a mint within a secure enclave using one of these trusted execution environments.

[00:32:20]And you can sign blinded messages for the the mint users or blinded signatures, excuse me, to to facilitate payments and to John's point, if you can do like a reproducible build to prove that the operator of the mint can't actually control it at the end of the day, can't inflate supply, can't prevent people from from spending, that is going to be massive.

[00:32:46]And I think the progress progress that we've seen with TEEs specifically is again slept on, but something that I would highlight for anybody listening to pay attention to moving forward.

[00:32:59]Particularly I mean we backed Maple originally and we were their Mutiny wallet pivoted to the Maple. We're very comfortable with the pivot to Maple and the focus on AI over non-custodial Bitcoin lightning wallets using these trusted execution environments because I think as many people become more aware of how much data you're going to be sharing with the the hyperscalers, the demand for the ability to do AI compute and then execute trusted execution environment that a hyperscaler doesn't have access to the information, the prompts or the outputs they're putting to they're putting in and getting out. The demand for products like that is going to increase significantly and I I think actually it will be mandated for certain applications like legal, health, whatever it may be. And so it's really cool to see this reintroduced to Bitcoin. Mutiny really led the way there many years ago with the non-custodial lightning wallets using these secure enclaves and it looks like Cashew is is leaning into it as well. And so this is going to create very secure and private Bitcoin infrastructure, which is great to see.

[00:34:07]>> Yep, absolutely. It's a it's a good time to be paying attention to what really matters in Bitcoin and it's exactly what you'd want to see if when the price isn't going isn't going your way, the question is what's happening under the hood with fundamentals and I think we're we're only getting positive fundamentals you know, year on year here.

[00:34:24]>> Yeah.

[00:34:25]That's great.

[00:34:26]Hey, wild times out there going into the summer. I don't think there's going to be summer doldrums this year. I have a hard time to believe that it's going to be a very doldrum filled summer. I think things are just heating up proverbially, pun intended. John, great rip.

[00:34:40]>> As always.

[00:34:41]>> We'll be back next week.