Financial Planner Tells Clients to Put 5% of Portfolio in Bitcoin: Here's Why

David Oransky [00:00:00] The majority of our clients have invested in Bitcoin, but not all of them. So as we sent this out and said we were updating our kind of, you know, our investment policy statement to include Bitcoin when the ETFs come out, that we'd like to add it. So far no one's opted out. In fact, we've had a number of people say, Hey, isn't it reasonable to expect the price would go up? And if so, I don't wanna wait until that happens. Like shouldn't I be buying more now? So it's actually, you know, we have people buying more now, which I think is great. Howdy. I'm Hannah Newin Schwer a production lead at a soybean seed facility in central Illinois, and you're listening to the Vance Crow podcast.

Vance Crowe [00:00:38] Welcome back to the podcast. I'm glad you're here today. David Oransky returns. David is a CPA and a certified financial planner and a good friend of mine. And last week I got a letter from David that shocked me. He was writing it to all of his clients and he said, for the last year, we've been talking about holding at least 1% of your portfolio in Bitcoin. But now I want to tell you that I am confident enough that this is an important part of the economy, and you should move that from 1% to 5%. This is a bombshell. There are very few level-headed conservative financial planners that are saying something like this. And so I thought, David, if you're willing to put it in writing and send it out to all of your clients who trust you the most, then I wanna sit down and have a talk with you. So what you are about to watch is another great conversation about Bitcoin, but this time we go in totally different directions. You'll notice that David, after having a bunch of time communicating with so many of his clients, has a great way of explaining things to an audience that maybe is a little suspect of Bitcoin. Everybody knows that listens to this podcast that I have strong feelings about Bitcoin, but it's great to have somebody like David to explain it from a very different perspective. So I think you're going to enjoy this conversation. We're gonna get to that interview in just a moment. But first, a couple of announcements last week, a couple listeners poked me to say, where can we have a conversation about the podcast? There were some things that they wanted to discuss and they didn't know where they would find other people talking about the podcast.

Vance Crowe [00:02:10] So first you can of course go to YouTube and use the comment section. Also, Spotify is building out a really robust q and a system that allows me to interact with you. But if you really want to talk about the podcast in a place that I am spending my social media time, then go to X. That's where I'm at. I've started to pay for the blue check mark, and it's given me all these features that have made it way more valuable for me to spend time on there. So if you would like to engage with me about the podcast or other listeners, just make sure you tag me at Vance Crowe on February 8th and ninth. Legacy Interviews is heading to Monticello, Indiana, where we're going to be recording Legacy Interviews. If you've thought it might be a wonderful thing for your loved one to sit down with me to record their life stories so that future generations can know their family history, but you thought maybe the trip to St. Louis wasn't gonna work for you, then consider signing up for one of six slots that we have available on February 8th and ninth. We've got a bin Dominium set up that's a grain bin turned into a condo, and we've got a great space to be able to record these. And if you would like to learn more, go to Legacy Interviews dot com slash Indiana to sign up for one of those slots. Alright, without further ado, let's head to the interview with David Oransky. David Oransky, welcome back to the podcast.

David Oransky [00:03:32] Thank you. Good to be here,

Vance Crowe [00:03:34] Man. You wrote one of the most provocative letters I've ever received from a financial advisor, and you may be one of the only financial advisors in the country to be putting forward such a bold idea. You said in your letter just last week that you think people should be moving from a 1% allocation to a 5% allocation of Bitcoin. What made you decide to take that bold step?

David Oransky [00:03:58] Yeah, I probably am only one of a handful, and I probably know most of the others, and mine probably seem smaller allocations than what many other kind of advisors that are into Bitcoin would recommend. But it's been a journey. So I first started learning about Bitcoin in late 2019, spent a few months reading about it before I even took any action. So it was early 2020 when I first started exploring it and experimenting with myself. And then it took another year and a half, two years of researching it before I was bringing this to clients and saying, Hey, this is something you guys should consider. I think this is gonna be an important asset in the future, but I realized that the general consensus of this is that it's, you know, fringe or a scam or whatever. Let's start, you know, let's start with wherever you're comfortable. And kind of became a 1%, not because there was any magic of 1%, but because it was an amount that I, a lot of people could get off zero. It was a target that was small enough that's like, okay, I could lose 1% without, you know, it really affecting my financial plan. That's a reasonable target. The real goal was just to get people off zero and continue learning about it. And so in 2022, at some point, mid 2022, we actually like formally started recommending a Bitcoin allocation to our clients rather than just encouraging them to learn about it. And the majority of our clients have some Bitcoin exposure and not within the portfolio directly that we manage, but actually they own Bitcoin and self custody, which is great, especially considering most of them are baby boomers and retirees.

David Oransky [00:05:29] Like this is a demographic that most people thought would have zero interest in Bitcoin, or even if they did would not know how to handle it. And so we're pretty excited about that aspect. The 5% number has always, or long been a number that I've wanted people to get to. I just didn't feel like I could recommend that to them without them understanding it. Yeah,

Vance Crowe [00:05:53] Zero to one is a lot easier than zero to five.

David Oransky [00:05:55] Yeah. And so kind of the, the conversation was like, I'd love to be you at see you at 5%, but you need to get there on your own. You can borrow my conviction for the first 1%, let's get you there. Let's, you know, get that kind of, you know, lifeboat or that minimum amount there and then let's work through. And some did like some kind of fell down the Bitcoin rabbit hole, started learning, started sending me podcasts and what have you read this article or this book. And those, some of those people were, are at 5% and probably higher now. But what's changed now is the major thing holding us back from recommending it was kind of the regulatory uncertainty. This was something that, you know, within the industry, just broadly, people thought of as nothing. And the regulators were very wary, wary of it, which I think is legitimate. I mean, there's been tons of scams in the crypto or digital asset space and they don't really see the difference between Bitcoin and all those. I think over time that distinction will become very clear, but as of now, there's still a lot of murkiness around that. And so we wanted to do right by our clients by recommending it and helping them do it without getting ourselves into too much hot water with the regulators. And so now what's changed is the SEC lost a court case against one of the companies that have filed for an ETF and the courts basically decided that the SEC was acting arbitrary and capricious towards them. And so they have to go back and either they reevaluate the application, either come up with a new reason for why they have to deny it or they have to basically approve it. And so because of that, you've now had all these major asset managers, traditional ones, BlackRock, fidelity, Franklin Templeton, all sorts of'em, get in line trying to apply for this ETF and the SE C's been having conversations with them and it looks like this is probably gonna happen likely in 2024.

David Oransky [00:07:41] Some people think very early in 2024. And if that happens, it suddenly we have a vehicle that is SEC approved. Bitcoin suddenly becomes far more legitimate in the eyes of, you know, the general public, the regulators, the custodians, everything. And we've been waiting for kind of the green light of where we can just make this really easy and low friction for our clients. And we think we're close enough now where we feel comfortable saying, Hey, let's increase the allocation of 5%. The problem is we're still a little, we don't, those products aren't available yet.

Vance Crowe [00:08:14] You mean the ETFs?

David Oransky [00:08:15] The ETF, the SPOT etf.

Vance Crowe [00:08:16] So why don't, why don't we stop there for a second? Yeah. When, when people hear ETF, if you're not in the market, what, what is an ETF and why would somebody wanna hold Bitcoin that way?

David Oransky [00:08:25] Yeah, so an ETF is just an exchange traded fund. So think of a mutual fund, which is a pool of money where investors come together. There's a manager that takes care of all the actual buying and selling of the underlying securities. And you just get to hold this simple vehicle in your, in your brokerage account, in your IRA. Just makes it really easy. And the exchange traded part just means that rather than trading once a day like a mutual fund, you can trade it throughout the day. Much like a stock, it's a very efficient way to manage stuff. It's more tax efficient than a mutual fund. It's easier, you know, most new pooled investment vehicles are ETFs for a number of reasons. I think that part for this is probably less important, the distinction between a mutual fund and an ETF. But the idea is that you'll be able to buy it in your, you know, Schwab account, in your Fidelity account, and potentially even in some retirement, you know?

Vance Crowe [00:09:10] Yeah. Your 401k that you have with your business.

David Oransky [00:09:12] Yeah. Now, in terms of Bitcoin specifically, it actually strips away almost all the attributes that are what I think amazing about Bitcoin, what makes it magical. And so I'd actually, I have mixed feelings on the ETF. I'm really happy that it will, I think, bring a lot of new people into it and they'll start learning about it. I think it's good from my standpoint as an advisor where it makes it more legitimate and hopefully less concerns about compliance. But I also have this, you know, as someone that believes in the thesis of Bitcoin, that's like, ah, you're taking away all the kind of self sovereignty value of Bitcoin. You know, Bitcoin is the only form of portable wealth that can be transferred peer to peer and you know, taken across anywhere in the world in your head, or sent anywhere in the world in a matter of minutes. There is no other asset that can do that with those qualities.

Vance Crowe [00:10:02] Yeah. Everything else, somebody has to say, yes, I agree to allowing you to do that, or you have to carry huge volumes of it. Like if you're gonna bring cash, you know,

David Oransky [00:10:10] But you can't even do that. Right? Yeah. Gold and physical cash would be the next closest things. Bearer instruments, basically. The problem is if you, and I think this is, this is over time, more and more people wake up to this, you know, different people, it's different events that trigger people to pay attention to Bitcoin. You know, for some it was the Canadian trucker convoy during COVID. For others it was the war in Ukraine. For some it was, you know, what's going on in Gaza where people are imagining, wow, if, if I were in a situation like that, it would be very valuable to have some form of wealth I could take with me. If you have to leave your jurisdiction, you can't take anything. You're not taking your real estate with you, you're not taking your stocks with you, you're not taking your bonds with you, you're not gonna probably even be able to take very much cash or gold with you. I mean, those might be your best, but any considerable amount is gonna be taken from you. And

Vance Crowe [00:11:01] If you have a credit card, just like the truckers found out, they just turn it off or watch where you go. And so

David Oransky [00:11:06] Bitcoin is this kind of truly unique asset and as soon as you put it into an ETF, you strip all that away. 'cause now you're back into a permission to system where you need, it's, it's no different than a stock. The thing you retain is the price action, which admittedly for a lot of people is their initial attraction to Bitcoin. The reality is most people I think, enter Bitcoin because they see somebody else has made a lot of money off it, and they get in and then some of those people stick around to actually, or learn what it is and become kind of diehard Bitcoiners. And it's no longer about the price and dollars that could be worth it actually kind of what it enables in terms of society and and for their own personal life.

Vance Crowe [00:11:44] Yeah. And when you say die hard Bitcoin or I think like there's a a sense because when you meet somebody that's really into Bitcoin, they wanna talk about it all the time. Yeah.

David Oransky [00:11:52] But

Vance Crowe [00:11:52] There's something like truly beautiful, I talk with people about this all the time. Like when you go to actually understand like how does Bitcoin work? And then you come up with a problem in your mind and you're like, oh, well what about this? And then you go find out how they answered it. And every single time you're like, this is so elegant that it makes me feel like, you know, in a sense of awe. Yeah.

David Oransky [00:12:16] To,

Vance Crowe [00:12:16] To watch it. And I mean, I, I tell this all the time. I probably said it the first time we were on a podcast, like when I built a node

David Oransky [00:12:23] And

Vance Crowe [00:12:23] I downloaded the blockchain, and I have this computer, it's only dedicated, the only thing it is doing is downloading that blockchain. And I have that thing cranked up as far as it'll go, you know, and I have fiber, fiber internet at my house. It took five days for that thing to download. And that's when you realize like, oh, this isn't an Excel spreadsheet. Oh, this isn't like something you go pick up at the bank or whatever. Like this is truly, I have a record of every single transaction that has ever occurred on the blockchain, and I have the same one that all the other nodes and miners have.

David Oransky [00:12:54] Yep.

Vance Crowe [00:12:55] You feel a sense of like, connection to the world that that's like powerful.

David Oransky [00:13:01] And at first it seems too complicated, I don't understand it. I just wanna stay in the dollar system. And then after you learn about it, you're like, oh my goodness. This is actually, like you said, elegantly simple and robust and like anti-fragile in many ways that it has this. Yeah, I used to jokingly before I kind of was converted, call it magic internet money, I still think it's magic internet money. I just no longer mean that as an insult. It's like, it almost, it has this magical property, like what an amazing design. And that's been tested. Like, you know, it'll continue to be tested, but it's amazing that it's come this far and yeah, like I,

Vance Crowe [00:13:36] Well I think, like you mentioned all the, the stuff that people see, right? The, the exchanges go down, the fraudsters, the Sam Bankman frees the, like all these things. And it's funny because if you're a Bitcoin or if you're like a, they call 'em Bitcoin maxis, where you're like, I only care about Bitcoin. All the other ones are either shit coins or like, I just don't care about them, right? Yeah. Maybe they do something valuable, but compared to this, this is what I'm gonna, they focused on. When you really understand Bitcoin, it is not hard for you to spot the, the like exchanges that you shouldn't be on and the people that you shouldn't be near because you see like, oh, these are people that are trying to take the beauty and elegance of it and they're grafting off of it. They're parasites on it. So that's why like, yeah,

David Oransky [00:14:18] If you

Vance Crowe [00:14:19] Don't want to worry about your money getting stolen and used in exchanges for some crazy, you know, party kid, just take it off the exchanges. Own it yourself.

David Oransky [00:14:28] That's, and that's the beautiful thing about Bitcoin. You actually can self custody it. Like you don't have to worry about evaluating who to trust. And this is often why I tell like, where, where should I buy my Bitcoin? And I'm like, I actually don't really care where you buy it. I care how you store it.

Vance Crowe [00:14:40] Right?

David Oransky [00:14:40] Like as long, no ma you shouldn't store it anywhere. If you can, if you can get comfortable with self custodying, that puts all the power in your hands. You don't have to worry about trusting anybody.

Vance Crowe [00:14:50] And the, and the things like wallets at first it's like, oh, this is complicated, but it's not any more complicated than the first time you started to use email. And you're like, okay, like there's, people are gonna type into their computer, they're gonna go to a, a browser and then, and then go to a website and then do these things. Like all of those things now are intuitive. You don't even think about 'em. Yep.

David Oransky [00:15:12] But

Vance Crowe [00:15:12] When you're first setting that stuff up, that every single step Oh,

David Oransky [00:15:16] It's scary.

Vance Crowe [00:15:16] Feels like overwhelming. Yeah.

David Oransky [00:15:17] And the first time you send Bitcoin to a, you know, wallet that you created and you're like, I hope I did this right. 'cause otherwise it's gone. And you know, there's surprisingly few stories of people messing that up, like, because it actually is pretty simple. And the software solutions that help you do it today are, they're, they still have a ways to go, but they're pretty, anyone who's reasonably technically savvy, they're already there where they're, you know, a lay person can do it.

Vance Crowe [00:15:41] So going back to your letter, you hit the send button 20 seconds before the send button. Are you thinking about regulators or attention that this is going to bring to you outside of helping your clients?

David Oransky [00:15:54] No, I mean we've, we've been very cautious to kind of walk that line between telling our clients what we think is important for them to know without crossing into where we could get into confusion with regulators. Like we don't manage any Bitcoin for people. Like we don't take custody of it, we don't trade it for them. We're just advising. And you know, to me it's, we also, you know, help people evaluate, you know, whether they should buy real estate or a home or, you know, other things outside

Vance Crowe [00:16:27] Of insurance portfolio. Yeah.

David Oransky [00:16:29] And so it would, my life would be a lot easier if I could just go push all the buttons for them. And there's some days where I'm like, I should just do it. But it's, it hasn't been worth the risk of misunderstanding what the regulators, so no, we've, I don't worry about sending out advice. Like I think that is, that is our job and it actually disturbs me that a lot of advisors won't say what they think is right simply because they're worried about how the optics of that might look. I think moving to action, you know, actually doing it, that is where I do, I am a little bit more cautious and probably maybe more conservative, conservative than I need to be, but I don't really want to jeopardize, I won't be able to be in a position to give this advice if I am, you know, cross the line and do something that the regulators don't like. So I wasn't so concerned about that. I was interested to see, you know, like I said, the majority of our clients have invested in Bitcoin, but not all of them. And so as we sent this out and said we were updating our kind of, you know, our investment policy statement to include Bitcoin when the ETFs come out, that we'd like to add it, but giving people the ability to opt out. Like we're not forcing this upon them, at least yet we're not giving them the ultimatum. And so far no one's opted out. In fact, we've had a number of people say, Hey, if this ETF really comes out and you know, we're entering this next cycle of Bitcoin, isn't it reasonable to expect that the price would go up? And if so, I don't wanna wait until that happens. Like shouldn't I be buying more now? So it's actually, you know, we have people buying more now, which I think is great on their own.

David Oransky [00:18:02] Or there are some kind of proxies available, like within the public markets. Like there are futures ETFs, which I think are terrible long-term vehicles, but for a short-term thing they can work reasonably well. And then there's some other products that have bit indirect Bitcoin exposure or other stuff. So there's, there's some options, but at this point we are not using our discretion to go buy Bitcoin for people or any Bitcoin products. It's all client directed with our kind of, you know, guidance and assistance in, in figuring out what makes sense for them.

Vance Crowe [00:18:30] Yeah. It's funny to think about if the ETFs get approved, let's say the first or second week of January of 2024, if you're an advisor that hasn't been giving this guidance, now all of a sudden you have to go from zero. I don't think you should have Bitcoin to now let's open it up and potentially put it in your account.

David Oransky [00:18:48] It's gonna be interesting. 'cause I know a lot of advisors that are kind of interested, but they won't touch it until it's all greenlit from, you know, the powers that be. And it will be interesting to see and you know, what do they do? I mean, there's a, I've I've had the benefit of warning about this for the last four years, and like you said, yeah, they're gonna be kind of starting at 0.0. I'm really glad that we kind of have a headstart in kind of understanding this. I think also though, I, I think, I don't think everyone's gonna jump at it. I think a lot of them are too concerned about volatility. They're, I mean, I've had conversations with other advisors and, and given my, you know this David, like we agree on this other stuff. Tell me all this Bitcoin thing, it sounds crazy to me. And I explained, they're like, oh, I could never do that for my clients. It's like, why? Well, because it, you know, it is too volatile. It could lose a ton of its value and you know, in the course of a year. And I was like, yeah, but zoom out, like the time horizon here is 10 plus years. And they're like, oh, well that's too long of a time horizon for us. Like we have to manage the two to three year time horizons because otherwise our clients will be disappointed in performance. And it's like, oh, well that's a very different first principle we're operating on. I'm operating off the assumption that these are gonna be clients, you know, indefinitely, and that I'm trying to make sure that they have enough money to sustain the rest of their life, sustain their lifestyle. I'm not worried about measuring my performance over two to three years. Yeah. There will be a lot of volatility in Bitcoin, there'll be volatility in other stuff. I'm

Vance Crowe [00:20:09] Trying to, volatility in life, right? Yeah. Yeah.

David Oransky [00:20:11] And so that was like kind of like a, I can't believe people are that short term focused. And Bitcoin is one of those things that forces you, you can't really, I think it'd be really hard to own Bitcoin or understand Bitcoin and not have a, you know, what we call low time preference, where you're thinking long term, willing to sacrifice today to have a better future further out. And I think once you get into Bitcoin, everybody starts thinking more that way. You start seeing the world through a different lens and you are more patient. So like when I buy Bitcoin, I'm not worried about what its value is in a month from now or a year from now, or four years from now. I'm thinking 10 plus years out. And I don't mind volatility in between. I just care what the destination is.

Vance Crowe [00:20:50] And therein lies the beauty, right? Like the, the, the thing that has been taken from us in modern society is the ability to have a low time preference, right? Yeah. Like there's so much, like, I ask this all the time when people tell me that they're not into Bitcoin. I'm like, well, do you teach your children, your grandchildren, how to open a savings account? Do you walk 'em down there and say, here, put your money in here because what would a savings account have to be earning in terms of interest to beat inflation? And, and it's certainly, it'd have to be doing better than whatever the, the

David Oransky [00:21:21] Last couple years maybe the savings accounts work for teaching kids about money. But yeah, for the, until interest rates went back up and there was zero, I mean, my wife and I talked to this when we had kids like, are we going to go open a savings account that earns 0% or close to that? Like what lesson are you teaching them if you do that, that like, oh, you put your money in the, instead of buying something today, you put your money in the bank and you know, down the road you'll be able to buy even less stuff with it. No, I mean, so when you have that environment, it actually encourages people to consume sooner. And in the short term that may boost GDP and make things look good, but you're really just also destroying your future. Yeah. And

Vance Crowe [00:21:57] That's the same thing as the financial planner that's looking two to three years out. It's the, it's the person running the treasury or being able to determine how we spend money in the budget as a representative that says, I only care about getting elected in two years or in six years. So for me,

David Oransky [00:22:12] Spending

Vance Crowe [00:22:12] Money that we don't have is fine. And like inflation, I've always been like very, very wary of inflation. But as you start watching the way that it seeps into the world, I mean it is such a dark and terrible tax

David Oransky [00:22:26] Yeah.

Vance Crowe [00:22:27] That the leaders have done to us, right? Where they're like, we are going to pretend give you this money and pretend as though it's some kind of large s that we're offering you when the reality is like, we're stealing this from the future.

David Oransky [00:22:40] And I think people are feeling the symptoms of that. They just don't know the cause. Like you talk to people and there's this sense that like, I'm working harder and harder and yet I'm not getting ahead. And I think a lot of that is, you know, and also the term inflation is a very nebulous term that I think is intentionally made murky so that it's, you know, it's a shifting thing. Inflation used to mean like the expansion of the money supply, like the dilution of the value of your dollar. Usually when people are talking about inflation these days, they're talking about the consumer price index, like how much does this basket of goods cost and how does that change over time? And most of the things that are in that basket are things that technology and innovation help you produce more with less. And so that basket of goods is actually getting cheaper and cheaper in real terms over time. But because they're printing money for simplified terms, it actually, those goods are actually getting more expensive in nominal terms. And so it's this weird thing where people just assume that everything gets more expensive over time, but in reality it doesn't. It's just mostly that the value of your dollar is becoming less and less in buying.

Vance Crowe [00:23:49] Oh, and I'm, I'm with you on this and we made different, but like I cannot believe how many people for years and years and years were like, Vance. It's not inflation that we have to worry about. It's deflation. It's deflation. You'll be like, show me a situation like where the entire society is worse off if you can wait and make those purchases. Because you are saying the value of saving is higher. I mean, China had this problem for a while now they don't have that problem anymore.

David Oransky [00:24:16] Well there's, I, I agree with you, but I think it's important to point out the distinction when we're talking about deflation. The thing that central bankers are worried about with deflation is like a rapid deflation. 'cause our, so our whole system, monetary system is built on credit, basically a bunch of IOUs that if they can't be, you know, one person's asset, you know, if you own a bond, you own an IOU for someone else to pay you money, that asset is someone else's liability. If that person can't pay off that bond, then your asset also disappears and the whole system starts to implode. And when you have deflation, that's what can happen. So they worry about the whole system imploding on itself. That's only an issue because of our monetary credit based system and

Vance Crowe [00:24:56] The time length that you're looking at it, right? Yeah. Like if you say, well, those things crash, but on the long term then you get rid of that giant bubble

David Oransky [00:25:03] That's there. It's, but I think there's a valid argument that we've come so far. I mean we've been operating the system since, you know, 1913, that, you know, it's kinda like the forest fire analogy. Like yes, if you had let the little fires burn on these little deflationary bursts, that would be healthy. That would be a normal system. But at this point, we've not let those little fires burn. And now when we eventually have a fire, it's gonna be big. And so I don't blame, it would be a miserable experience for everybody if they allowed a, you know, deflationary collapse. Ultimately something like that is probably gonna happen.

Vance Crowe [00:25:36] Didn't you think it was gonna happen in 23? Like I thought it was. I I was very like, here it comes there, here it is,

David Oransky [00:25:42] There was, we got close to some banking issues. But they're able to plug, I mean it's always a risk, but the thing is they have the ability to effectively print money. And so anytime we get deflation, they have a lot of tools to kind of counteract that, which makes the risk. The other guardrail is, you know, inflation, which too much inflation is a bad thing too. So anyway, I think where you were going though with where deflation could actually be good is in a world where, you know, we were on a Bitcoin standard, you had, you know, money wasn't credit, but money was actually bearer assets, something like Bitcoin and you have society innovating and new technologies come in that allow us to make more things and, and everything with less inputs, then that would be a healthy deflation. Where over time things get cheaper and cheaper. And so you can save a certain, you know, amount of money and that money may not grow in nominal terms, but what it buys does increase. So it's purchasing power increases. And it's a mind shift, right? Right. Now people wanna put their money to to work, they wanna see their money earning interest. They only need that because the things they're trying to buy are also going up. If everything was actually allowed to get cheaper, like it should be most things at least then you wouldn't need the value of your money to go up because it's buying more and more over time. That would be a very healthy deflation scenario. Getting there is gonna require a completely different monetary system. And so, you know, as it relates to Bitcoin, I do think that Bitcoin has out of, is the best potential solution to this unsustainable track run.

David Oransky [00:27:16] And when I say it's unsustainable, I really mean it's unsustainable. But I don't know when that ends. I don't know at what point it actually breaks. I mean we've been on a fully fiat meaning non, you know, just government decree, not gold backed, not gold linked in any way system for 50 years, you know, since the seventies, nothing's broken yet. You go all the way back to 1913 when we got Federal reserve. Nothing's broken yet. It's been over a hundred years. Like how many more chapters are left in this book? I don't know. But I still don't see how it can go on to infinity.

Vance Crowe [00:27:43] Well and to your point, you've said this many times before, like the gold bugs have been predicting this sort of thing for a very, very long time and they're, you know, they're stashing away of gold didn't actually pay off. Well it's done better in the last few months. Yeah. But like not really.

David Oransky [00:28:01] Right? I think and, and I think, I think that can, yeah, I think that's a great lesson to think like they've, they may eventually be right, but they haven't been right yet. And if you go all in on something and you're too early, you're almost not much better than being wrong. And the ironic thing about the gold story is I think they will eventually be right, but because Bitcoin has now come along, Bitcoin is better than gold in almost every single way other than it hasn't been around thousands of years. And so the gold bugs may ultimately be right with their thesis and still not actually profit off it in the long run if they don't also own Bitcoin. But this goes back to like, although I'm a big advocate of Bitcoin, I don't advocate for anybody to be a hundred percent Bitcoin. In fact, I think that'd be insane. I also don't advocate for anyone being 0% Bitcoin. I think that's, you know, potentially equally insane. And for our clients, you know, we mostly work with people in their sixties and seventies who have retired or closer to higher. They're already financially independent, they live below their means and they have the ability to, we have the ability to allocate their portfolios such that if Bitcoin goes to zero, they'll be fine. We also have the ability to have enough Bitcoin that if Bitcoin goes where we think it will go and it happens in a shorter timeframe, they'll and other stuff in their portfolio gets hit hard, that they'll also be fine. And to me, that's really our job as advisors is more the risk management. You know, getting rich and staying rich are different philosophies. Our clients are mostly already financially independent. We're just trying to play more defense, which is avoiding mistakes or avoiding things that could go wrong. And always asking like, what if we're wrong? And so what if we're wrong about Bitcoin and Bitcoin goes to zero, they'll be okay.

David Oransky [00:29:35] I don't think you could say the same thing for a portfolio these days that has no exposure to things like gold and Bitcoin. Like things could go wrong and you might not be okay. And so within the realm of people that advocate for Bitcoin, we're probably more measured and a little bit more reserved than the average person. But it's because we're trying to make sure they're okay. We're not, we're not trying to hit grand slams for people that don't need it. We're trying to view it as a risk management.

Vance Crowe [00:30:02] So when you say the Bitcoin price goes where we're thinking it may go like what, how, how should somebody understand that? Like it'd be ridiculous for you to be like, I think it'll be at this amount by this

David Oransky [00:30:12] Time. Yeah. But

Vance Crowe [00:30:13] Like I'm

David Oransky [00:30:13] Very hesitant to put a number on it. I think it's going up in dollar terms for sure. For two reasons. One, I think adoption will increase, demand will increase over time. This happens in cycles. People keep seeing world events that make them curious or interested. Maybe I want a little bit of that. But even if you didn't have that and demand just stayed static, there's going to be endless money creation just for our system to continue functioning. And so when you have a ever expanding amount of dollars divided by a fixed number of Bitcoin, like the value of that Bitcoin in dollars goes up, not even because it's becoming more valuable in terms of its purchasing power,

Vance Crowe [00:30:49] It's

David Oransky [00:30:50] Because the dollars becoming less valuable. So you have both effects. I don't, I don't know which one has a bigger impact over what time period. I think they're both going to impact the price of Bitcoin. But at some point the price of Bitcoin in dollars almost becomes irrelevant. And like I don't get that excited or depressed when the price changes. I mean, you know, I, I got into Bitcoin in early 2020, it, you know, when it was around $10,000 it dropped to 5,000. I was like, well, and like literally right after I bought it and I was like, well I wanted to buy a little bit more, now it's half off. That's a good deal. And then wrote it up to what, close to 70,000,

Vance Crowe [00:31:27] 60

David Oransky [00:31:28] Something thousand dollars and backed down. And like I'm like numb to the price because I'm not buying it for gains in dollar terms. I'm buying this as a, you know, 10, 20, 30 year plus time horizon and position size important. I can afford to lose it all. Like I haven't gone all in on Bitcoin, but I think I've hedged my bets enough that I will be okay no matter what. And that's exactly what we're trying to do for our clients. That's really the name of the game. We wanna make sure that you're gonna be okay no matter what happens. At least for all the things we can foresee

Vance Crowe [00:31:59] In the world of Bitcoin. There's a popular podcast called The Rabbit Hole Recap. And one of the guys on there, his name is, he goes by odell, Matt Odell. And he has a great phrase for people that are not in Bitcoin. You hear this phrase and you're like, ah, I don't what does that even mean? But it's just stay humble stack stats.

David Oransky [00:32:16] Yeah.

Vance Crowe [00:32:17] And what that means is like, don't worry about whether the price is up or down, whether people agree with you about Bitcoin or not, but you're supposed to be stacking, they call 'em SATs. So SATs is, is short for Satoshi. Satoshi is the smallest unit of a Bitcoin. So 0.070 and then one

David Oransky [00:32:34] 100 million. Yeah.

Vance Crowe [00:32:35] Yeah. And I think that that is like one of the, if you become a Bitcoin person, that's the like mantra that you want to take into your heart. Because the initial feeling, and I have a good buddy that just, we both have a good friend that just bought it and he was like riding high as the bulls were, were running these last few weeks and just loving it. And you're like, ah, you know, I've seen this before 'cause it's gonna come back down. But the reality is if you can just continue to sock away, just convert your dollars in tiny amounts to Satoshi's, eventually that pays off. And it may not be a year from now or even 10 years from now, but like the fundamentals indicate to people like you and me, that is going to be a very beneficial thing to do.

David Oransky [00:33:17] I would want to own Bitcoin, even if I knew for sure the price would never go up.

Vance Crowe [00:33:22] Oh, interesting. Same one.

David Oransky [00:33:23] Because it provides portable wealth that you can take with you. It is the only thing that does that. And that is true utility value that I would want. Even to me, the, the fact that it has a lottery ticket attached to it, that the, the potential price appreciation in dollars for Bitcoin is so significant is just that a lottery like, great, I got a free lottery ticket with this. That's actually not my main interest in buying it. I'd wanna own it. Even if it, even if expectations for future returns were really low.

Vance Crowe [00:33:48] That is fantastic. I, so a couple of weeks ago I was at a farm credit system. So the farm credit system's like one of the largest banks in the US Yeah. They, they do 45% of the lending to agriculture. And they invited me to come in and talk about the edge of chaos. So they were like, Hey, come tell us about where you get new ideas, how these things get into popular culture. And I talked about Bitcoin and for the first time ever went on stage, 'cause I've been invited to talk about it a few times, but for the first time ever, I didn't talk about the price, I didn't talk, I only talked about, I brought it up and I said, here is riot mining in Texas. And what they did was they built up a bunch of of miners and they went to the electrical grid in Texas and said, Hey, we're here to buy, you know, huge amount gigawatts of power and we're gonna run it through our miners. And then in last August when they were rolling blackouts look like they were eminent for Texas. The government came to riot mining and said, Hey, we would like to use that energy. Right? Said that's fine. And the government paid them $37 million now people were super up in arms, $37 million for a month of electricity. That's highway robbery. But if you think about what it would've cost the citizens of Texas for an hour of a blackout, let alone five days, right? 37 million is a, is a steal. And that's where you're looking at Bitcoin and you're saying this can create resilience in our electrical grid that could be truly profound and really make it so the, the value of, of generating more energy than we've ever created before is getting paid for.

Vance Crowe [00:35:31] You don't have to wait for some kind of government subsidy

David Oransky [00:35:33] Exactly. It, it will encourage the use of kind of these alternative energies. It is location independent. You now have the ability to basically move energy from anywhere in the world because there's, there's all sorts of straight up energy. You have these,

Vance Crowe [00:35:47] The Bhutan is a great one. They have all these hydroelectric dams.

David Oransky [00:35:50] Okay? They

Vance Crowe [00:35:51] Have all this water coming down in Bhutan. They can't do anything with it. So they built all these hydroelectric dams and just plugged Bitcoin mines right into

David Oransky [00:35:58] 'em. Yeah. You have that, you have these, you know, natural gas wells that aren't Commercially viable to capture and transport, but you're just releasing methane into the atmosphere, which is way worse than CO2 in terms of its warming effect. But if you instead put a Bitcoin miner on top of it, you can use that gas, turn it into CO2, which is less harmful and make it profitable. You're no longer having to force, you know, companies to do this with, you know, worrying about regulations or subsidizing with the government. You actually make it a profitable business endeavor to also do things that, you know, other people would find to be very valuable in terms of the environment. And so like yeah, the externalities of Bitcoin are actually really positive. Like my interest in it is predominantly like its monetary aspects, but you look at the other impacts it has on society in terms of, you know, stabilization of the grids, allowing for more diversification of energy sources, changing people's time preference to less consumption now just society wide. Like I think all those are really positive things. And so it's funny, like I've never really been into ESG investing. My approach has always been, no, you buy the best investments and you figure out how to spend your money and your time in ways to help bring about the world you want. Because simply investing in certain companies over there doesn't really change much. But in a way Bitcoin is like the ultimate ESG investment. It's, you know, agnostic to to, you know, politics and all that. It's open to anybody. It's free open source. It's good for the environment. I would say I, that's a big misunderstanding, kind of what we just talked, a lot of people think it's bad for the environment because it uses energy. It actually has a net positive impact I think on the environment.

David Oransky [00:37:31] It's like, it's the ultimate ESG investment and I think it has great prospects as a financial investment also.

Vance Crowe [00:37:37] Well, and I, in working for Monsanto for all those years, I had the experience of having people be convicted about something and not know very much about it.

David Oransky [00:37:47] Yeah.

Vance Crowe [00:37:48] And I see that going on the exact same thing occurring with Bitcoin, right? So people will come up to me after that talk.

David Oransky [00:37:54] Yep. And

Vance Crowe [00:37:54] They'll be like, yeah, but, and then they have something like, yeah, but we're wasting all this energy. Right? If we weren't doing that, then that energy could be used for something else. Or it might not drive the price up, but like you have to open it up and just like I was saying before, like every single time you're like, ah, I found its Achilles heel. Yeah. You open it up and all of a sudden you realize like, oh wait, this is a way to make it so the trapped natural gas in Alberta no longer has to be flared. Yeah. Oh this, this makes it so you, so Arizona can build out a more resilient electrical grid so that that way we don't have to worry about blackouts.

David Oransky [00:38:30] And people are slowly figuring that out. There's a few people within the kind of more ESG financial space that have really been converted and become huge advocates of Bitcoin in terms of their mission isn't the monetary aspects of it, it's the environmental. They just see it as one of the best tools to do that. And so I'm overall very bullish. Not even just in terms of price, but in terms of just adoption, what Bitcoin could do. I think there are still a lot of hurdles. You know, there's many people, you know, powers that be, that really would not like Bitcoin to be successful 'cause it threatens them. But the direction of the overall sentiment and understanding is only increasing,

Vance Crowe [00:39:10] Increasing. I mean, it seems like we've moved from it being a radical idea in the Overton window. First an unthinkable idea to radical to now being like acceptable. Right? Like some people would accept it. And so, and eventually as these spot ETF comes up, like there'll be some amount of policy so it'll move right into the center of it. My concern with the ETF is that this is a backdoor way to control it. It'll be like, yeah, mine too. Well the only safe way to own it is with a registered financial advisor who can make sure you're getting what you paid for. Yeah. And like, I don't want any

David Oransky [00:39:43] Of that. I I worry about that too. That's my biggest fear of the ETF is that it, that yeah, they'll basically say, Hey, we've now provided you a safe way to get this Bitcoin exposure that you say you wanted. And so to protect you from yourself, we're now not gonna let you get it any other ways and hold it yourself. I won't be shocked if that's the direction it goes. I ultimately don't think that will be successful, but it may take a while to work through.

Vance Crowe [00:40:09] Well, it's a weird thing to see people like Jamie Diamond and Elizabeth Warren, you know, teaming

David Oransky [00:40:16] Up Yeah.

Vance Crowe [00:40:16] Sitting in a Yeah. Sitting in a, in a hearing teaming up to be like, oh, this is the

David Oransky [00:40:20] Yeah, this

Vance Crowe [00:40:20] Is the refuge of scoundrels and and thieves.

David Oransky [00:40:25] Yeah. And this is where I like to separate Bitcoin from everything else. 'cause almost all the other digital assets in crypto, I think are, I, I don't think they should necessarily be regulated that they can't exist, but I don't think they're worth looking at. And I think there are a lot of scams there, but it is very odd to see, see who's teaming up with the banks here. Yeah.

Vance Crowe [00:40:48] And then to watch a group like BlackRock do their about face and say, actually we think there's a lot of utility here. Yeah.

David Oransky [00:40:54] The incentives for a company like BlackRock and JP Morgan are very different though. JP Morgan's a bank, you know, Bitcoin is a direct threat to their system. BlackRock is an asset manager. They earn, they earn money based on managing assets. And so if there is demand for people that wanna hold Bitcoin, it's in their best interest to create a fund, charge a, you know, whatever percent a UM fee on that and collect that. So they're, they're far, it's not an existential threat to BlackRock. They're just trying to make sure that they move to maintain their position. It's much more of a threat to a bank.

Vance Crowe [00:41:28] Well that actually gives me some hope because if people have disaligned interests here, then that means the people in the BlackRock position are much more, I, I mean they may ultimately be, you know, they're regulated and want the

David Oransky [00:41:42] SCC

Vance Crowe [00:41:42] Involved in it, but at least they're not saying, well, we may switch over and and ban it. But it makes more sense.

David Oransky [00:41:47] The other hope I have is that, you know, Bitcoin is not just a US thing. And so the US has long reach in terms of their jurisdiction, but you'll start to get some game theory. You know, the more the US cracks down and tries to make Bitcoin, the more opportunity it creates for some other country to have a more open society, a more free market. And you'll see more innovation go there. And with that you'll see more wealth move there. And so I, I mean, one of my concerns is that you, you know, as the US we try to hold on too much to like the things that are currently working for us in terms of domination, like the dollar and that ultimately that will in the long run be bad for us. Like if we cling to it too much rather than kind of adopting and rolling with the times.

Vance Crowe [00:42:31] Well, and like Bitcoin will roll over even a big country like the US I if you look

David Oransky [00:42:35] At the, that why I'm not that concerned.

Vance Crowe [00:42:37] If you look at the hash rate, so the hash rate is like the way that miners make sure that the blockchain is secure. So anytime you add more hash rate, you get a computer that is faster than other people, you get electricity to it, you plug it in, that adds to the overall hash rate. Yeah. And the more hash rate you have, the more likely you are to get little bits of Bitcoin back.

David Oransky [00:42:57] Exactly.

Vance Crowe [00:42:58] Well, what's brilliant was that China shut down their, their hashing, right? Yeah. So like all of a sudden all these miners, it became illegal. So if you go look at the chart, it was

David Oransky [00:43:07] A huge percentage of the hash rate.

Vance Crowe [00:43:08] Yeah. And so you're, if you look at the chart back when that happened, and it was like two years ago, it goes down and you're like, oh no, it's all over. And now you look at the hash rate since then, it, it's a blip.

David Oransky [00:43:21] It's like,

Vance Crowe [00:43:21] But a

David Oransky [00:43:21] Lot of people thought that might have killed Bitcoin and it didn't. It didn't. And so every time, every time there's a, you know, some sort of attack on Bitcoin, which at this point the attacks are mostly on the social political layer, not the technical side of it. And it doesn't die, it comes out stronger. You know, it's kind of like that hydro you cut off one head and you know, two more grow. And so in a way, like, although I'm not eager to see kind of what regulation comes and what try, what they try to do to stop, I think we are, it's becoming clear. We're getting to the then they fight you stage, we're probably in it now. But unless they can be a hundred percent successful, which I don't think they can be, I think ultimately Bitcoin emerges stronger and proves even further proves the thesis. It's like,

Vance Crowe [00:44:03] Yeah. And for people that are like trying to get their arms around this even more than the price, like put that aside for a second. If you wanna see a chart that is beautiful, go look at the hash rate chart.

David Oransky [00:44:14] Because

Vance Crowe [00:44:15] What that means is anytime you're watching that, that part of the graph go up, that means more people

David Oransky [00:44:21] Are

Vance Crowe [00:44:21] Saying, I'm gonna take money from right now and not just go buy Bitcoin. Yeah. I'm gonna go buy the machines and plug them in to try and get whatever Bitcoin is being allocated through the subsidy, which is that 6.25 and the fees.

David Oransky [00:44:34] Exactly.

Vance Crowe [00:44:35] And like it's, it is. So there's absolutely, so

David Oransky [00:44:37] There's two ways to acquire Bitcoin, right? You can go mine it or you can buy it from someone else that mine it. Or, and so there you have these, these built-in arbitrage mechanisms that keeps the whole thing very efficient. And that's what's so beautiful about Bitcoin. It is a self-contained system. It is completely outside of the traditional financial system. Yes, there's on-ramps and off-ramps that touch the traditional system, but it doesn't need any of those to function.

Vance Crowe [00:45:01] Right. Because ultimately you could trade a horse for Bitcoin if the person has Bitcoin and you have horse,

David Oransky [00:45:06] Right? Yeah. And that's its main difference between gold. Like gold doesn't have a system built around it, it's just an asset. In order to actually transact with it, you have to have all this other distribution and you know, infrastructure around it. That is our banking system. And that's like, it's because gold didn't have that inherently that that dollar, you know, had to be, become kind of the, the medium of exchange version of gold. And then eventually they just cut the link and then you end up with what we have now with Bitcoin. That's it. It doesn't have to happen. So,

Vance Crowe [00:45:36] So let's go a little bit deeper for which one of the things that's happened in the last few weeks, although it's gone up and then down, was that fees went

David Oransky [00:45:46] Yeah.

Vance Crowe [00:45:46] Pretty wild on Bitcoin. So you do have to, if I'm gonna send money to you Yep. I have to put that into a node and then that node puts it in. Do you wanna go high priority, then you're gonna pay this amount. If you wanna go low priority then this amount, and it just depends how much space there is right. On that block.

David Oransky [00:46:03] One's settings, the price, it's a free market where people are bidding and,

Vance Crowe [00:46:07] And so there are

David Oransky [00:46:07] A lot of people willing

Vance Crowe [00:46:08] To do the high, high

David Oransky [00:46:09] Priority. It's like uber surge pricing.

Vance Crowe [00:46:11] Exactly. And the the pricing got high, right? Yeah. It became expensive. I, I read about a guy trying to move one whole Bitcoin, but from several UT XOs. So you had a bunch of wallets that collectively had won. Yeah.

David Oransky [00:46:24] And

Vance Crowe [00:46:25] They wanted to charge him something like $17,000 to be able to move it.

David Oransky [00:46:28] Wow.

Vance Crowe [00:46:29] And you look at it and you're like, well that's because, or $1,700. Sorry 1700. And he's like, well that, that's because it's so expensive right now, you may have to wait. And that's something that's an interesting thing about Bitcoin is like, it is not immediate. Right. And there, there are things undergirding this whole system that are gonna be more complicated that up until now haven't been a

David Oransky [00:46:54] Big deal. Yeah. Yeah. You're competing for block space. But the only other option is to ration it and give someone the power to decide who gets to go first. Right. And so, like, in order to be a system that functions in kind of like a consensus anarchy system and not have a ruler in charge, you have to have a true free market like that. And you know, if you, if it's really important for you to transact right at that moment in time, it's gonna be worth it to pay it or you wouldn't pay it, you would wait. And so it allows you have flexibility or if you don't have flexibility, you'll pay up up. But there are also gonna be, you know, people aren't gonna be buying coffee with Bitcoin on the base layer in a few years. I don't know that anyone's really doing it now other than for a novelty. And so like the base layer is gonna be used for those big settlement transactions and that's final settlement when you do it. But you don't get final settlement in our existing monetary system for, you know, if you pay on something on a credit card, it takes months before that's actually fully

Vance Crowe [00:47:51] Sold. Let, let me slow this down.

David Oransky [00:47:52] Yeah.

Vance Crowe [00:47:52] If I wanna send money to you, then I submit this to the, the blockchain and then if I've paid enough money, it will go through in about 10 minutes. Yeah. But we don't really know because of the way mining works. Exactly.

David Oransky [00:48:03] And what

Vance Crowe [00:48:04] You're saying is there's two layers. There's that layer, which is the hardcore Yep. You are transacting Bitcoin. But then there's another layer on top of that that you could do where you're saying, we're gonna use Bitcoin but we're not gonna make the transaction final. So a system like lightning where you and I put in money almost like a, like a pocket change, right?

David Oransky [00:48:25] Yep. It's like a tab we have with each other that either of us can close at any time we want. So you don't have to still rely on, you don't have to trust the person that they're good for. 'cause it's built into the smart contract. If I can say, I want you to set up on your tab and you've had to kind of post collateral in a way and that can immediately close. I mean, think of it similar to like, you know, in our current system, if you have, if you're buying a house and you're closing on the house, you know they're not typically gonna accept a check, at least for the big amount. You're gonna have to send a wire because a wire is basically final settlement. Like could it technically be reversed yet? But for the most part it's considered final settlement. You don't use a wire when you go buy a cup of coffee, you put on your credit card because it's an insignificant amount of money. The the vendor's not worried about it either because it's an insignificant amount of money. So for really important, serious transactions, you'll wanna transact on the base layer and you'll be willing to pay those fees for things that are more inconsequential. There's other options that aren't necessarily immediate final settlement, but they're more secure than, than our current systems. And I think this stuff's gonna get built out. Like I think we're still in the very, very early days of this user experience in terms of spending, like Bitcoin is not really a medium exchange for everyday goods yet. And it probably won't be for a while. And it's gonna be, that's gonna be done on other layers. And we don't know what that looks like. And I'm okay with that. Like the primary utility of Bitcoin today is protection against devaluing of the currency. It is a store of value. And that is utility in and of itself. That is a reason to hold Bitcoin. It doesn't need to be used as a medium exchange now for it to have value. In fact, when it becomes used as medium exchange, that's probably when the dollar system has, you know, kind of crumbled.

David Oransky [00:49:59] And that may be decades away. Like I don't, I don't know. So those are kind of like, yeah, I'm interested to see what that stuff turns out to be in the future. But for now I'm more interested in the store value.

Vance Crowe [00:50:10] What do you think happens? An ETF comes out or there's maybe, let's say 12 different ETFs. Yeah. And then people say, Hey, I want to put, let's say 0.1% or 1% of my net wealth Yeah. Into, into this. Does that mean that they're going to be transacting all of those Bitcoin transactions? Like do they or, or will BlackRock buy a bunch and be like, okay, this one's for you and this one's for you. Like, 'cause that will be an insane amount

David Oransky [00:50:36] Transac. Yeah. No amount. They'll be bigger

Vance Crowe [00:50:37] Transactions

David Oransky [00:50:38] When they're buying into the E tf. They're gonna be, so what? They'll be buying shares of this ETF. And so as the demand for that ETF increases, you'll start to see the value, the cost of that ETF goes slightly above what the underlying Bitcoin is worth, which now creates an opportunity for a market participant, like a, a bank, a big asset manager, a hedge fund to come in and say, Hey, we could deliver Bitcoin to BlackRock. Let's go buy X number of Bitcoin, deliver those to BlackRock and in ex and exchange those for shares of their ETF. And then we'll sell those shares of the ETF at a premium to all the people that want this ETF. 'cause it's now got above. And which then brings the price back down to not, you know, to par with the underlying assets. So there's all these builtin arbitrage mechanisms with the way ETFs work that incentivize everyone to keep those prices at parity. But no, it's not like if someone's like, I wanna go buy $10 the etf, there's gonna be a $10 transaction on the blockchain. It's, this is almost like its own layered technology on top of it.

Vance Crowe [00:51:37] But it still will create, you know, it'll

David Oransky [00:51:40] Create demand, it

Vance Crowe [00:51:40] Create a transaction in

David Oransky [00:51:41] Place, right? Yeah. Oh absolutely. And so, yeah, I wouldn't be surprised if fees on the base layer go up. I, I don't know. I don't have any guess of like what they go to. But yeah, there will be more activity, there'll be a lot more demand for Bitcoin is my guess. I mean, maybe this ends up being nothing. Maybe everyone that wants Bitcoin already owns it. I don't know. But I know anecdotally from talking to people, there's a lot of people that would like more exposure to Bitcoin. It's either too much friction or too scary for them to hold their own keys and they just want to buy an ETF that's easy. Or

Vance Crowe [00:52:13] Maybe don't have cash. Right? Maybe they, they're at their, maybe it's all like you if you're in a, in a corporate job and you're like, Hey, we're gonna spend the money that we get as our paycheck and everything that gets matched we're gonna put into our 401k. Yeah. And now we've got this money that's been sitting there and it's never been able to go after Bitcoin this directly.

David Oransky [00:52:31] Yeah. 401k plans. There may be more restrictions on because the employer would have to, they kind of decide what the menu of options are. Oh. And some of them have a self-directed brokerage account where you can then go out and buy whatever you want. But even sometimes there's restrictions of those. So I'm not within an IRA, which is that individual retirement account like where you kind of can pretty much buy anything you want. You'll be able to, but within company 4 0 1 Ks, it'll probably be hit or miss.

Vance Crowe [00:52:54] Oh, I did not realize that.

David Oransky [00:52:57] Yeah. It depends on the rules of the plan. 'cause the employer has a responsibility to provide you with good options and not everyone believes Bitcoin is a good option yet. And we don't know how long it's gonna change to change those minds.

Vance Crowe [00:53:11] So the havening is coming, it's looking like it might be somewhere in the middle of April.

David Oransky [00:53:16] Yep.

Vance Crowe [00:53:17] What is the happening?

David Oransky [00:53:19] So the way all Bitcoin has been created is through the mining process. And the mining process is basically writing all the trends. When you, if we wanted to send Bitcoin back and forth, that that has to get added to the ledger and that's done through the process of what we call mining. And miners make money in two ways. They get fees from the transaction. So you can bid on and say here's how much fee I'm attaching to my transaction. And they start at the top of the list with who's paying the highest fees and that's how they decide the order at which they included. There's also this block subsidy or the Coinbase transaction, which I think started at 50 bitcoins per block and then went to 25. So it keeps getting cut in half approximately every four years. So then it was 25, then it was 12.5 and now it's 6.25. And in estimated to be April it's gonna drop to what? 3.125. My math is right there. And so what you have, the reason that that is Bitcoiners get excited about that is right now, in order for the price of Bitcoin to stay even all that new Bitcoin created that 6.25 Bitcoin that are created approximately every 10 minutes has to find a buyer. Somebody has to buy that at the prevailing price. Otherwise the price will fall until it brings in new buyers. And so if theoretically, if the price will remain exactly static, that means that 6.25 Bitcoin is finding a home at the current price. And so there's, you know, somewhere between 30 and $40 million a day of Bitcoin being soaked up

Vance Crowe [00:54:43] To buy about 900 Bitcoin right now, about 900 Bitcoin a day. I

David Oransky [00:54:47] Can't do the mental of my head. I think that's about, yeah, at some point I did. That sounds, that sounds right. Yeah. And if it didn't, the price would go down. Well now what happens? So let's say you have, you know, 30, $40 million buying Bitcoin every day and suddenly the amount of Bitcoin that it's chasing gets cut in half. You suddenly now have new price discovery because there's not enough Bitcoin to go around. So the price has to go up until some people fall out of the market. And so how much does it go up? Does it go up double? Like some people, that's an overly simplistic model. Probably doesn't go up double just because of the habiting, but it does cause upward price pressure until a new equilibrium price is determined. And I was gonna say theoretically this should be an efficient market and people should front run this and it gets priced out ahead of time. I think if you look around at the, the people with big amounts of money, the large asset managers in the world, they don't get Bitcoin or they're not really allowed to buy it. So those are the people that normally would be keeping the markets reasonably efficient by, you know, voting with their money. I'm not sure that's happening. So like, although I tend to be a believer in efficient markets or at least that you should act as though they're efficient. I don't actually believe they're purely efficient, but that, you know, just like the, the tires on my car perfectly round, they're close enough that I assume they're round and everything's fine. And that's generally how I think about public markets. I'm not sure that's true with Bitcoin at least yet. I think there's a lot of asymmetry and information. People don't get it and I think even the people that get it don't necessarily have enough money to purely arbitrage that away. So I think the having is probably a positive catalyst that causes the price to go up. All else being equal.

David Oransky [00:56:18] But all else is never equal. Who knows? There could on the same day, you know, there could be a new bill that comes through Congress that's gonna ban Bitcoin and that takes the wind outta the sails. I don't know,

Vance Crowe [00:56:27] One of the fascinating things, I heard this just, just the other day, a guy talking about when the happening happens, if you look at the stock to flow ratio, yeah it'll actually be a more, or

David Oransky [00:56:38] It'll

Vance Crowe [00:56:38] Be more scarce than gold. Yeah, yeah.

David Oransky [00:56:40] So

Vance Crowe [00:56:40] Explain stock to flow.

David Oransky [00:56:42] So stock to flow is the stock is the, the existing stock. How much, in this case Bitcoin is out there in the market, which is currently 19 point something million, there will only ever be 21 million. And the flow is the amount of new Bitcoin getting added. We typically measure that over the year. So how much new Bitcoin is produced every year divided by, well actually we're gonna do it the other way. So the stock, how much of Bitcoin exists divided by how much new amount is coming on every year. And the higher the stock to flow ratio, the more scarce the asset is considered. 'cause the new, the new coins coming in aren't really diluting the existing supply that much. And so goal out of all the precious metals has been had the highest stock to flow ratio. It's been the most scarce asset in terms of that definition. Which is one of the reasons it became money over thousands of years. The best form of money. Silver was the second highest, which is why it be. And but it was a lot more abundant in terms of absolute terms, which is why silver kind of was the day-to-day transactions, smaller transaction gold was the, you know, for bigger transactions. So now that Bitcoin is already on par with gold and will become more scarce in terms of stock to flow than gold here in a few months, you know, if that's a major factor for you considering like what is hard money then Bitcoin looks even more attractive then. But I think it's also crazy to think about, there will only ever be 21 million Bitcoin, over 19 million of them have already been mined and are owned. And I think it's something like 80% of those haven't moved and over a year they're held by, you know, people by Bitcoiners that are like, I'm holding onto this because this is what I believe.

David Oransky [00:58:18] I'm not selling this unless the price goes up a lot. And even then I'm not selling it to convert back to dollars. I'm selling it to make my life better. Maybe I

Vance Crowe [00:58:24] Massive, massive

David Oransky [00:58:25] Buying a house. Massive. Yeah. Maybe I'm buying something else.

Vance Crowe [00:58:27] So let's walk through that more slowly. Yeah. 'cause if somebody's like hearing that for the first time, so out of all the Bitcoin that are gonna be out there, there's only 21 million that will ever be there. Correct. 19 some odd million are out there. So 93% of all the Bitcoin that are ever gonna be in the system Yep. Are already somebody owns them. That's

David Oransky [00:58:44] Another a hundred years before the remaining, you know, 2 million are produced, most of 'em in the next 10 years. But, and

Vance Crowe [00:58:51] Then out of all those 93% that's already owned by somebody, would you say 80%?

David Oransky [00:58:57] I think it's somewhere around 80% haven't moved in over a year.

Vance Crowe [00:59:00] Meaning people are getting, we call 'em LERs, right? Where they, they get 'em and they say, I don't care that the price jumped up to 40. It's not like I was waiting for, you know, some sell point and then I'm gonna do it. They're like, Hey, I'm gonna, yeah,

David Oransky [00:59:13] I'm

Vance Crowe [00:59:13] Gonna hold onto this. And right now the thought is that most of the Bitcoin that are being sold into the system are from miners who are saying, Hey, we got bills to pay, we gotta pay electricity, we gotta pay staff, we gotta buy more equipment. So we're getting these Bitcoin in, maybe we're saving some out for ourselves. But if the price is is where, where it means that we can cover all this stuff, we're selling everything that we can in order to be able to cover that. Yeah.

David Oransky [00:59:38] So if we get a demand shock, let's say the ETF actually does unlock audit demand and there are a lot of people that are waiting on the sidelines and they're saying, if the ETF gets approved, I'm gonna allocate 1% to Bitcoin or something. If there's a lot of those, that's a huge demand, you know, demand inflow there and it's all gonna be chasing a relatively small number of Bitcoin. And so that could cause the price of Bitcoin to go up pretty significantly. And yeah.

Vance Crowe [01:00:03] What is one, if, if, if people did your initial letter, not your 5% Yeah. But if people did your initial letter and said, I'm gonna take 1% of my portfolio and put it into Bitcoin. I mean that would be billions of dollars. Hundreds of billions of dollars.

David Oransky [01:00:18] Yeah. And I don't think everybody will, but over time, like if they keep doing 1%, like it's as, as the value of Bitcoin goes up, 1% of that of their, of their own wealth is a smaller and smaller portion of the overall Bitcoin market cap. I mean that's what has to happen. And this is why you can't get like a large company like Apple to add Bitcoin to their balance sheet. There's just not enough liquidity there. The price has to go up more before they can trade in it. 'cause they, if they just put their, you know, buy a tiny little bit of their balance sheet, the market would move huge. And they don't want to do that. They need to have sufficient liquidity there. So as the price goes up and the market cap of Bitcoin increases, it actually makes it a more attractive asset for large asset, you know, large, large companies, large pension funds. It needs to be a bigger, more liquid asset before it can attract them.

Vance Crowe [01:01:03] Yeah, right. I was just listening to Lynn Alden who's like, she wrote a great book of favorites book called Broken Money. It's wonderful podcast if you, all you have to do is search her name and it's worthwhile. But she was talking about how at $40,000 a piece, there's a lot more institutions that can engage in it. Yeah.

David Oransky [01:01:20] But

Vance Crowe [01:01:20] Until it hits a hundred thousand dollars or even well beyond that, there's in pension funds and insurance groups that they can't touch it. They'd knock the boat over they're giants. But to imagine a world in which Bitcoin's market cap does get up to the, yeah. To that size. 'cause right now the market cap, if you took all the Bitcoin in the world multiplied by what is the current price? Yep.

David Oransky [01:01:43] That's

Vance Crowe [01:01:43] The market cap and it's around 800 million I think right now. Yeah.

David Oransky [01:01:46] Somewhere in that ballpark. Yep.

Vance Crowe [01:01:47] Gold is 1 trillion. So it's, it's about

David Oransky [01:01:50] Gold's higher than that. It depends on how you measure gold. Like do you include all the jewelry? Do you just include what's on central bank? Ba but I think gold's closer to like 10 trillion.

Vance Crowe [01:02:00] Okay.

David Oransky [01:02:00] I think, I think Bitcoin has about 10 x from here to, to be gold roughly. And then again, it depends on what measurement you want to use for gold. But Well

Vance Crowe [01:02:07] Then I, I was gonna say, because what I had heard, and I think maybe what I'm talking about is just like gold bullion or gold that you were

David Oransky [01:02:12] Able to buy might you look at just the subset of that you might be right. I don't know that.

Vance Crowe [01:02:15] And so that's about 1 trillion on that side. And then apple, its market cap is 2 trillion. But you imagine that Bitcoin right now isn't as large market cap as apple, but it seems entirely conceivable that it could be.

David Oransky [01:02:30] Yeah. I mean I think bitcoin's gonna continue to grow and mature and so like the trajectory of it, it's not a hundred percent, but it's, I have a lot of competence to go there. I don't know over what timeframe, but you see all these catalysts on the horizon and like when there's gonna be new demand, like if it gets to this step then like that unlocks a whole other, you know, layer of demand. It's one of these assets that you look at. It's like this is a very asymmetric bet. And so people are, you know, some people are worried to buy Bitcoin rather they, oh it's, you know, 40 whatever thousand, you know, that's more than double what it was last year. It's like, yeah. And they're like, so I'm gonna wait for it to come back down. It's like, yeah, it might look, it absolutely could lose, you know, 20, 30% in a very short period of time. But you zoom out and look at like a 10 year time horizon and it's like, it's very asymmetrical. Like unless Bitcoin fails, which it seems very unlikely it's gonna fail, then it, it's just a matter of time before it continues to grow.

Vance Crowe [01:03:26] Yeah. And that's like most large investments like the there, if you're not in it on, like if you remove the top three biggest days where the stock made a move or Bitcoin made a move, if you take those three days out, you maybe wouldn't have made money or you'd made way, way, way less. And so it makes sense, like things move quickly. It's like that gradually then suddenly. Yeah.

David Oransky [01:03:47] I think you still have to manage your own psychology. So this is where I do think, like for most people, dollar cost averaging and meaning adding a little bit every day, every week, every month, however you wanna like spreading out your purchases for many people is gonna be the right thing to do because it manages your own psychology. You know, when the price goes up, you're excited that you bought someone, it's cheaper when the price goes down, you're excited that you didn't buy it all before and you get to buy someone, it's lower and so you, you're less, you're more likely to stick with the plan. And that's important. Like discipline and investing is extremely important. If you, you know, if you can't stick with the plan through the rollercoaster ride, you're gonna get crushed. And Bitcoin is a wild rollercoaster ride, you know, every four years or so it loses like 60 to 80% of its value and then goes on to make new highs. But you have to be able to withstand that. And so you have to size your position such that you can handle that. And the, in fact, the only people I know that have, most people, when they learn about Bitcoin and start investing in Bitcoin, they only go in one direction. They get more and more conviction about it. They get more and more comfortable with it, they wanna buy more and they only increase, you know, the number of SATs they own. The only people that I've seen go backwards are the people that kind of ape in, they go huge lump sum before they really understood it. They didn't know why they were buying it. They kind of got fomo. They saw someone else, you know, making money and they go all in and then they realize they were way overextended. When the price goes down, they freak out and sell because they don't wanna lose everything. I mean, to me that means you put too much in initially. Like I like when we're advising our clients, we are, you know, the five percent's a generic.

David Oransky [01:05:18] Like we will customize it for clients based on that. But in general, like that's an amount that they can withstand to do that. Even if that went to zero, they would be okay, I'm not someone that advocates for putting like 80% of your wealth in Bitcoin. Like if you're in your twenties and you want to do that and you're willing to lose it all because you have the ability to work, like that's fine. I'm not gonna tell you not to do that, but I'm als I'm probably not gonna advise you to do that either. And that's not most of my clientele.

Vance Crowe [01:05:42] So you've been around people that have like walked the path, right? Yeah. They've, they've like, you know, gone from, I'm not interested to, okay, tell me more. Yep.

David Oransky [01:05:51] Walk

Vance Crowe [01:05:51] Me through the, the like average person's experience.

David Oransky [01:05:56] Initially they're skeptical. Like I heard this thing was a scam, what about this? And we kind of, I, for me, I walk up through the monetary history 'cause that's what it clicked for me. And in my kind of role as financial advisor, that's, that's I think the most relevant. Like we don't, that's don what

Vance Crowe [01:06:10] We talked about in the first podcast, right? Yeah.

David Oransky [01:06:11] All that stuff. I will say that, you know, probably initially most of our clients bought Bitcoin for exactly what I told them. Like, you can borrow my conviction up to 1%, let's get you there. And then they pay start paying attention, they start watching it. And the timing, this was just somewhat how it worked out. Like most of my clients got into Bitcoin in summer to fall of 2022. So they've more than doubled. So they're feeling pretty good right now. Like, which is good, but I'm also like, I think

Vance Crowe [01:06:42] And also a freak accident by you. It's not like you were like, ah, I'm getting 'em in the right. No,

David Oransky [01:06:46] It was when I, I felt comfortable enough, you know, like I, I was not gonna bring it to them until I felt very, very comfortable that this was the right long-term thing. And that took, that took two years of studying and having conversations. Now before that, if clients would bring it up, we'd have conversations, but I was not proactively going and say, Hey, this is something you should consider. I really think you should have some of this on your balance sheet. I am a re I mean it's funny because you know, people here that I recommend Bitcoin, they're like, wow, you're crazy. I'm actually a really conservative investor

Vance Crowe [01:07:17] And crazy conservative investor. I not, not irrationally such, but like

David Oransky [01:07:22] Yeah, most

Vance Crowe [01:07:23] Of our portfolio

David Oransky [01:07:24] Is like passive, you know, passive equities, US government, treasury bonds. Like it's very clean, very conservative, tried and true. We own a little bit of gold, we own some commodity exposure and we own Bitcoin. And those are the things that I think actually strengthen the plant. Like those are diversifiers, those are things that you're not getting that exposure anywhere else. And especially for people who are retired having, you know, a lot of retirees have 50% of their portfolio in US government bonds. That is the safest thing in the current system. But it's very susceptible to inflation, which is why we use inflation protected bonds for a lot. But again, you're just tying it to CPI, which we talked about may not be the best measure of inflation, but it's still better than nothing. But if we were to end up in a world where treasuries get deep severely devalued, which we saw over the last two years, I mean if you held the long-term nominal treasuries, you lost 50% of their, they lost 50 plus percent of their value, you know, recently. So yeah, Bitcoin has lost 80% of its value at times. Like,

Vance Crowe [01:08:27] But then it came back. Yeah, but

David Oransky [01:08:28] Then it came back. The government bonds, you know, like, and the

Vance Crowe [01:08:31] Bonds in the treasuries, it's not like you're sitting there waiting for a ton of upside. You're just trying to mitigate

David Oransky [01:08:36] Downside. Yeah. So in some ways, like buying the Bitcoin is the insurance policy on the other stuff. And if it never pays off, because then that's fine. You had everything, you know, it's like buying insurance for us. You know, Bitcoin's not technically insurance, insurance are contracts, but I think you can somewhat think of it as a hedge on it's outside of the system. The only two things that are really outside the system are gold and Bitcoin. Because you could argue real estate to some degree, but you've gotta pay property taxes and other stuff. It's a little bit more complicated and it's not portable. Well

Vance Crowe [01:09:06] Let's, let's go and talk about some of the things that happened in the economy in 2023. Okay? So we're at the end of December. And you know, the, the thing that my nightmare that came true but then was not as big of a deal was that the, the banks were many of them insolvent. What happened there? What, what, why, why did they,

David Oransky [01:09:28] So one of the biggest buyer of treasuries is banks due to regulations and just less lending going on. So

Vance Crowe [01:09:36] Meaning that like they would take in all these deposits 'cause there's all this cash going around. Yeah. And the government would come to the banks and say, you gotta put this somewhere safe. You can't just let it sit in cash. Here are these bonds, buy these bonds.

David Oransky [01:09:48] Yeah. They didn't really have to come sell them, but yeah, the, the banks bought them. They were on the list of, you know, things that were considered safe assets. And then when in, when the fed raised interest rates, the value of the bonds goes down. So suddenly their, you know, kind of equity, the, the amount of assets they have on their balance sheet to offset the liabilities, which are all their deposits, they are increasingly looking insolvent. And so that SVB, Silicon Valley bank was kind of the first one to go. And there was concerns that this would be widespread because the entire banking system is built on this kind of fractional reserve system. Like when you go deposit your money in the bank, they don't have it in a vault. They lend it out. In this case they, a lot of it they lent to the government and that whole system can come crashing down as soon as people lose confidence in the banking system. And so they had to kind of plug it, they, they rolled out programs that allowed the banks to basically borrow on those treasuries at face value. So, you know, a bond you bought for a thousand dollars may only be worth 70 do you know, bought it for a thousand may only be worth $700. Now they could go take a loan out for a thousand dollars even though their asset wasn't worth a thousand dollars because it's, hey, when it matures it be worth a thousand. So they've, they've the, the Fed and the treasury has a lot of surgical tools to help people or institutions they wanna help and the banking system is gonna be one of those. But yeah, it was scary and I'm, you know, going back to being conservative, like I'm the person that for years has always been extremely diligent about checking our clients like FDIC, their balances that don't go over the FDIC limits, don't do this because, and people are like, oh you're crazy.

David Oransky [01:11:22] When was the last time there was a bank failure and this one was mitigated? They ended up making all the depositors hold hold, but like it's just not worth losing sleepover.

Vance Crowe [01:11:32] And what changed as a result in the economy? I mean one thing I know is that the government came out and said if you are a bank owner, you know, we're, you are liable for all of these problems. So all the people that we're owning banks are now much more aware that the government will let them sink if it has to.

David Oransky [01:11:53] Yeah, the government is probably less concerned about the shareholders of the bank than they are the depositors, which I don't know, I think is rightfully so. I I I don't necessarily agree with the idea of having unlimited FDIC insurance 'cause I think that creates too much moral hazard. But I mean this is one of the, like we talked about this system, like we should have let the little fires burn decades ago and we haven't, like, I don't know what you do if you're in this situation of the FDIC chair and con like, are you gonna let you know all these people lose their deposits that you told them were safe, they were in government insured banks. Like I just don't see any politicians do it. I I think the reality is their banks are almost always gonna get bailed out of the depositors because we do have the ability to effectively just print money. So I think that's always gonna be the easier course of action, which is why like I'm not someone that believes we're gonna have the deflationary collapse. I think that is always a chance. But there's enough tools that far more concerning is the idea of like high inflation because that's where they don't really have the tools to, to stop that. And so we're gonna be kind of bouncing back and forth between, you know, getting close to deflation and then if we get too close they start printing money and we are then gonna have an inflationary problem. But all these things, I mean, woke me up to like, again Bitcoin like having money outside of the system. Like wouldn't it be nice if you could go to a bank and put your dollars in and not have them be fractionally reserved because especially when your bank's not paying you any interest on that checking account anyway. But there are no banks that are fully reserved.

Vance Crowe [01:13:23] Yeah, we found out out this winter they won't even allow 'em, they won't allow. So there was, what was the name of that one? It was out in

David Oransky [01:13:28] Wyoming. Narrow bank and custodial bank.

Vance Crowe [01:13:30] Yeah. They came out and said, Hey we want to, you can do it, you can set up your own private bank. But they wanted to become a part of the the the overnight system. System. Right. Federal

David Oransky [01:13:40] Reserve. Yeah.

Vance Crowe [01:13:40] And so they went to the government and applied and the government said, and what they said was, we are not going to take any of our depositors money and loan it out and instead we're gonna have depositors pay us. Yeah, you pay us and what we'll do is hold your money for you securely and not lend it out. They

David Oransky [01:13:56] Created too much of a systemic risk. Why

Vance Crowe [01:13:58] Is it a systemic risk? It's not

David Oransky [01:13:59] A risk because the bank's doing anything risk. It's a risk to all the other banks because if you're earning 0% interest at, you know, at a big bank, I'm not gonna name any and you can go, but it's fractionally reserved and you can earn 0% at this other bank in order even even pay a nominal fee. And you never have to worry about a bank and you never have to worry about that. You're gonna move your deposits over. So as deposits flee from one bank, that bank goes in solid and you create the whole system. I mean it's, it's a house of cards and so they have to keep the charade going. Bitcoin provides that off ramp where you say, I just am not gonna deal with the system and I don't think it makes sense to fully take that off ramp. 'cause for the time being, we live in a dollar world. Like I own all, I own dollars, I own government bonds. Like I think in the, that's the bridge that we need to get there. But long term I wanna have at least some of my wealth that's outside of that system that can't be touched by that. Like, you know, there is so much more uncertainty with the stuff in the traditional financial system than there is with Bitcoin. Yes. Bitcoin is the only thing Bitcoin doesn't have going for it is the general consensus that it's good. Which is why it's so cheap. If everybody understood Bitcoin, the price would be crazy high. I

Vance Crowe [01:15:08] I remember when I last winter trying to explain last spring, trying to explain to people what is a full reserve bank

David Oransky [01:15:15] People

Vance Crowe [01:15:15] In banking and them like not understanding it because it is so fundamental to our American dollar system because banks actually, we talked about fractional reserve, they make most of the money that exists in the economy. Absolutely. Yeah. By by saying well we're gonna take your deposits and we're gonna loan 90% of it out to this guy and then we're gonna take that back as deposits and we're gonna loan 90% of that out. So they're like creating money. It's a of

David Oransky [01:15:39] Musical chairs. Yeah.

Vance Crowe [01:15:40] So

David Oransky [01:15:40] There is base money what the Federal Reserve creates and that's like your, you know, federal reserve notes. So your dollar bills in your wallet. And then there are reserves which are just on the fed's balance sheet. That's what banks hold. That's, you know, money for banking institutions when you go put money into a, you know, commercial bank that money gets, you know, lent out or sent somewhere. They're, and whenever they make a loan, they're creating money outta thin air. But it's the game of musical chairs. The chairs are the real base money created by the Federal Reserve. The players in the game are all those dollars in deposits at commercial banks. And when the music stops there's not nearly enough chairs. And so they have to keep, you know, they have to keep the music playing or when it gets really bad, like what happened in 2008, they add more chairs to the system so that, you know, not too many people fall down.

Vance Crowe [01:16:29] Well and it's funny to think about how quickly a bank run can happen nowadays, right? Oh yeah. 'cause you can can, and

David Oransky [01:16:35] That's what, that was the deal with SVB, right?

Vance Crowe [01:16:37] Like people are like, oh they're having trouble. Well then why don't I just transfer from this bank to that bank? Right. But at the end of the day, you're not actually able to get it out. Right. Like if you went to one of those banks and said, I'll just take $120,000 in cash, they'd be like, no. Oh,

David Oransky [01:16:52] Get cash. Yeah. All

Vance Crowe [01:16:52] You can

David Oransky [01:16:53] Do is move it to another bank. Yeah.

Vance Crowe [01:16:54] And, and hope that that one's more solvent. And

David Oransky [01:16:57] As the banks consolidate and there's fewer and fewer banks, there's less and less even chance of bank runs between them. Because if, you know, if if there was only one bank, it can't really be insolvent 'cause and if they don't let you take your money out, it's just journal entries moving between people. Like it's a more stable system. So it's not surprising that over time the banking system consolidates into a fewer number of bigger and bigger banks that actually makes it easier for them to keep the music playing.

Vance Crowe [01:17:22] Well what are you looking at for 2024? What do you think something to look forward to,

David Oransky [01:17:28] Something to look forward to? I mean, I'm actually pretty optimistic about it. I mean, although I sound very cynical on the economy and the banks like, you know, there's, I, I'm optimistic and part of the reason I'm optimistic is I think Bitcoin will bring a lot of good, I'm excited. I mean, outside of what I do for work, I try to focus on things with my family and kids and that stuff's all exciting. I love my work and what I do and I love learning about Bitcoin and teaching people about it. I hope, I hope more people will start learning themselves. 'cause I think you really need to have a good understanding of it to make sure you can withstand the rollercoaster. But I think more and more people are waking up. I've had a lot of people reach out to me this fall, friends, other advisors, curious about it. So I think the tide's turning here and we'll have to see kind of what happens with the economy here. I don't know, I thought 2023 was gonna be a rough year than it was. But this is why we don't go all in in one area. We own stuff. We own everything so that no matter what we'll be okay. And I think 2023 was yet another year that showed that to be true.

Vance Crowe [01:18:30] Yeah, I'm, I think I'm bullish on life more than I've maybe ever been. I think the economy, I'm like a little bit like, well that's kind of nerve wracking, but you just try and diversify and I've healthy kids. I

David Oransky [01:18:40] Worry about it less because I own Bitcoin, honestly.

Vance Crowe [01:18:43] That's totally true. That's, I mean that's definitely true. Any recommendations on Bitcoin wallets?

David Oransky [01:18:55] I mean there's ones that we typically are steering people towards now, but that stuff changes over time. I, I don't know, I don't want to have to make sure I update it. I,

Vance Crowe [01:19:03] I personally, I'll say what I think and you can agree or disagree on these, to me the most user friendly when you're just like getting started, that is secure enough for, for my taste is treasure. Yeah,

David Oransky [01:19:15] I agree.

Vance Crowe [01:19:16] And like the, the upside is like, it's a very simple thing to plug into your computer. You can like figure out how to use it. It'll take you just a little bit of time to learn how does the security thing work. But then once you become more advanced and you're like, Hey, I wanna have something that's never touched the internet, that, that I am really pretty certain is, is gonna be separate from being able to be hacked would be coin kite. So the the cold card.

David Oransky [01:19:42] Yeah, I think both of those are good. I think you described, I'm right, the cold card is generally seen as being a little bit more robust, but it's also not nearly as user friendly for someone that's just starting, whereas the treasure is a pretty good balance. Yeah,

Vance Crowe [01:19:53] I think treasure is like, it's, it's almost like having an iPhone that you plug into it. It's like very simple. Yeah. Straightforward.

David Oransky [01:20:00] More than anything though, I'm a big advocate of multisig. I don't know if you guys have ever,

Vance Crowe [01:20:04] You and I are on the different pages

David Oransky [01:20:06] On this one. Yeah, I know. So Multisig is like, rather than having one key to open your vault to Bitcoin, there's most cases three keys and you need any two of the three to open it. And so by having three, it means that if one of your keys gets compromised, it's no big issue. You have to have two compromised. It means that you could, you know, not have to worry about whether you trust treasure or cold card or any of the other wallets. 'cause you can get different wallets. So if there is a bug in the software or backdoor or anything, you haven't put all your eggs into one basket. It provides more resiliency in terms of like estate planning. And there's just,

Vance Crowe [01:20:39] I see there's

David Oransky [01:20:40] A lot of reasons that I prefer multisig. It adds more friction to moving your Bitcoin.

Vance Crowe [01:20:44] Have you moved stuff using Multisig?

David Oransky [01:20:47] Yeah, so we use, we often will use a company that helps coordinate it to make it really easy. I, I don't think if you're gonna do it purely by yourself, I think Multisig is too complicated for someone that's doing it for the first time. I don't think it's too complicated. I think once you get comfortable doing single sig and all that, you can move to Multisig. I prefer to use, i i I have some of each, I have wallets that are single signature and if the idea is, you know, portable wealth that you can take, whether you get out single signature is, is arguably better. If you're looking for something that is really resilient and unlikely to be compromised, I think multisig is better. But

Vance Crowe [01:21:24] Yeah, I think there's definitely like ups and downs and I, I see it and I also am like, ah, I don't want to include somebody else in on this. You don't have to, you could

David Oransky [01:21:31] Do your own multisig where you hold all three keys and

Vance Crowe [01:21:33] Bury 'em in the backyard or do well. Right? There's all sorts.

David Oransky [01:21:36] I mean people, it depends on kind of which threats you're most worried about. I mean, some people will, will have 'em in, in other countries and other jurisdictions, like I don't think, you know, most people know they keep one at their house, one somewhere else. And that way also, they don't have to worry about their house burning down and losing, you know, their keys. They don't have to worry about getting robbed and someone taking it. Like, it just, it removes all the single points of failure because I think most people tend to worry about the threats of like someone stealing their Bitcoin, which maybe that is a threat that's pretty unusual. More likely you're gonna lose something and if you lose your, you know, your hardware wallet signing device or your list of words, the Bitcoin's gone. So with Multisig, by having a different geographic locations, you minimize,

Vance Crowe [01:22:21] That's not entirely true. As long as you have the list of words you can re, re. But

David Oransky [01:22:24] The problem with having multiple lists of words, if you want to have more redundancy for your backups, if anybody finds that list of words, that's unencrypted. They've got your Bitcoin. Whereas with Multisig, if somebody finds your list of words, they've only got one piece of the puzzle, they can't take it. So I don't know. I'm a big fan of multisig. We could probably debate whole

Vance Crowe [01:22:40] Podcast debate on this. I think this is, this is exactly Bitcoin, right? Yeah. It's like we've reached a certain point where you and I are arguing about the minutiae about, you know, multisig and how do you store it. This is way

David Oransky [01:22:50] Down the rabbit hole, way

Vance Crowe [01:22:51] Down the rabbit hole. More

David Oransky [01:22:52] Important is take self custody of it if you can so you don't have to trust anybody. And then you can decide based on your level of comfort and technical expertise and what threats you're worried about, whether single sig or Multisig. And if, if you do multisig, whether you wanna use like a collaborator to help, you know, coordinate that and they hold one of the keys or you just wanna have all three of 'em. But I think those are better discussions to have kind of on a one-off basis depending on what the threat model is.

Vance Crowe [01:23:17] So final two questions. First one, if somebody's like, Hey, what do I need to read or what should I watch that will help get me on the path? What would you recommend?

David Oransky [01:23:28] My favorite is that new book that you broken money, Alden's Broken Money, I think if you want a comprehensive but still readable book.

Vance Crowe [01:23:35] It's a very intense book though. It's,

David Oransky [01:23:36] It's very intense. Someone that really wants to learn. I think that's, that's becoming my go-to. If you're looking for a much shorter version, there's a both a book and a long form essay called The Bullish Case for Bitcoin by VJ Boy Potty. I think that's not a bad intro. It'll give you a high level over the history of money and why, you know, Bitcoin, it looks attractive, it's very readable. You can get the, the essay online for free, just type in the bullish case for Bitcoin. He then turned it into a book and expanded on things more. I think that's good. I mean there's,

Vance Crowe [01:24:05] It's also surprisingly easy to read the Bitcoin white paper.

David Oransky [01:24:10] Yeah, there's

Vance Crowe [01:24:10] A lot you won't understand, but like it's,

David Oransky [01:24:13] Everyone

Vance Crowe [01:24:13] Should

David Oransky [01:24:13] Read it at some point. I think finding, like finding your first way into Bitcoin is hard. I think it's different for, for me it was absolutely the monetary side of it. I was interested in the economics of it. Once I got through that, I immediately wanted to learn about the technical stuff. Okay, this is cool. If it works, how do I know it works? And so if you're interested in the technical, there's a really good book called Inventing Bitcoin by Jan Pritzker that's written all with analogies. You don't have to be a computer science person to understand it. That for me was another key piece of being like, okay, I can trust this. There's, and there's other books that take it more from like the social and environmental. There's, there's all different, what I find is that people enter Bitcoin from all these different directions and then once they're there they start to see, like you were talking about earlier, how it just like touches all these other areas and it's so like, elegant in, in what it does. And so I'd say whatever aspect interests you start there and then just follow your curiosities and, and go from there. Like I said, I don't know anyone that's gone down the Bitcoin path and turned around and said like,

Vance Crowe [01:25:15] Yeah, not for me.

David Oransky [01:25:15] Yeah.

Vance Crowe [01:25:16] So final question 'cause I know 'cause last time we did a podcast, I got a bunch of these questions is if somebody wanted to get ahold of you

David Oransky [01:25:23] Yeah. Or

Vance Crowe [01:25:24] Learn about,

David Oransky [01:25:25] I am on Twitter at David Oransky, but I'm not that active on Twitter. Every now and then I post something the best. Like our website is lamber wealth.com. We mostly work with retirees, people in their sixties and seventies. But how

Vance Crowe [01:25:39] About I put a link to your, to your letter on your, on the show notes.

David Oransky [01:25:44] That's fine. Yeah,

Vance Crowe [01:25:45] That'd be a great way to do it. Okay.

David Oransky [01:25:46] I can make sure you get that. Well,

Vance Crowe [01:25:48] Man, I knew from the moment I read the first paragraph that I was like, all right, we're having David back on the podcast. So thanks for coming by man.

David Oransky [01:25:54] Thanks for having me. It's great to be here.