It went up to it. It went up to a thousand in six weeks, but i had a long term thesis. I wrote the first kind of macro strategy paper about the valuation of bitcoin. I thought this could be worth a million dollars and lets assume im an idiot by 90, its all worth 100 grand. So this is the best bet ive ever seen so i held on and then it fell 82 and im like wow, but id taken. The bet – and i put money in was not levered and i could afford to take the bet. So i just thought: im just gon na forget about this and just see because this is a longer term thing and you dont normally make money that fast and doesnt normally fall. This far so lets just see, and then i kind of forgot about it 2014 and then 2015 starts going up again and then by 2017 im now mentally scarred from an 82 drop coulda woulda shoulda. I then see confusion in the market about either were gon na fork bitcoin since two different chains, the price is two thousand im now up tenfold im a genius. My macro bet has paid off sort of i sell out. It goes up to 20 000 in three months later, and i dont mind i dont mind because ive made 10 times my money. What i did was deviate from my thesis. My thesis was. This was a 10 year bet and i took the money off the table within five and then i went back and then obviously i bought back in may something like that 2020 and had a good run and put more money into it than i had originally.

In my original bet, okay, so my view – and it still remains – even though it seems pretty unfashionable right now – with inflation at eight and a half percent. My view remains exactly what you talked about is: as prices go up, the economy slows down with the exact mechanism and therefore it becomes self regulating, and it becomes that because people are quite in debt and its a very old population in the us and europe and Elsewhere, so if you raise prices on your retired parents, they cant earn more money because theyve got a pension and thats it. So what happens? Is they have end up buying less and theres a big cohort of people so thats? Why? I think it automatically over time? But the other mechanism is the bond market, which is a fancy name for saying interest rates, the price that you and i and companies and governments can borrow so if it becomes more expensive to borrow so think of your mortgage. If youve got a mortgage. Well then, if it comes more expensive to borrow, then you spend less so leverage works in crypto that you have some bitcoin and you want to borrow some or some us dollars or whatever it is you want to do so. You will pledge and your interest payment is collateral as collateral and your interest payments are whatever they are, but what happens is if the collateral falls and the exchange or whoever it is or the d5 protocol says? Oh it doesnt cover the amount you get liquidated immediately.

Theres no negotiation. No, oh, please! No! Nothing! Just like boom out and you take the loss, go into financial markets like the futures markets, which is mainly for accredited or sophisticated investors, its not an instant liquidation and thats terrifying, because suddenly something like the oil price lets say: youve youve bought some oil futures. What that is, is a is leverage on the future price of oil. Thats, like you, would do with bitcoin oil sometimes can go down 10 a day and before and because youve got leverage before you know it youre losing enormous amounts of money. They dont liquidate you. They call you up and tell you, you owe the margin and you can get yourself in a huge mess. So leverage is very scary. The nice way of playing leverage is options. Options are something definitely worth people learning about, youre, okay, still so its its just. A different way of doing risk. I think there is a narrative that says that its that the fed have to do this, but you and i dont – borrow at fed funds rates. The markets already changed our mortgage costs or whatever. So i think the market does its job but theres some belief that it has to be driven by the fed and their fed funds rate um. So that is, i think, more of a red herring. I think the free market does its job. However, they have one more other thing in their in their arsenal, and that is the balance sheet printing money or taking money out of the economy and when they print money, theyre buying the bonds of the government.

So the federal reserve are buying the bonds of the government, so it allows the government to borrow more without causing any problems um. So right now, theyre about to start tightening quantitative tightening people hear the terminology and what that basically is a fancy word for were going to take some money out of the economy and theyre going to take money out or theyre just not going to put as much In well, if they stop quantitative easing, which is the first step which theyve done thats, not putting any money in extra money in when they do quantitative tightening they take money out so theres a big pool of money sitting there and they say – listen were gon na. Take five percent of that out every year that less money around so the fed can engineer it by trying to raise interest rates and it filters through to our mortgages and other stuff or the market kind of clears of its own accord. Where prices get too much, people stop buying stuff prices fall back again, so either way tends to work and were in this weird mess where the federal reserve are doing it. The markets are doing it and were having to take all the pain. In the meantime, i generally think that the market is better at doing it. If you actually see it. You know, from my perspective, somebody closely follows interest rate markets and stuff like that they did all of the tightening anyway before well before the fed people.

Like you hear the expression the fed are behind the curve, what it means is the bond markets already priced it like interest rates, need to go up to slow down the economy because theres too much inflation and the federal reserve are trying to catch up. I actually think the markets do a pretty decent job in the way that you suggest prices rise. Eventually, it gets too expensive. We stop doing it now, theres different equations, that people fear is when it becomes super entrenched in the economy, and we all go to our bosses and go. I want to pay rise and everybody does that the same time that pushes up prices further, you get more wage rises and thats a lets, talk about it in financial term, financial market terms or macro terms. I think theres, three things you need to do here. One income, income rules – the world income pays your bills, income can pay your mortgage income does everything. Secondly, is you need to have optionality? You need to have things that can pay off a startup or a hobby business on the side can give you optionality, because you can build a business and a business has intrinsic value plus it can increase your income. That will never happen if you work for a corporation. Yes, you can have a great career and do fine, but youll never have that extra upside that you and i have had by building businesses. So that is another thing is: is focus on your income work hard! Look for other opportunities that can leverage that income and opportunity set that youve got for you and then thirdly, is if ive got this income look for investment opportunities that can change my life and that doesnt mean being a degenerate gambler.

Its like simply put if there is a thesis, for example in cryptocurrency that you and i share that this is a long term network adoption of this incredible technology that is exponential in nature and highly volatile. You should be looking at the moments of extreme weakness: the blood on the streets moment to be buying more not on leverage but just putting your money into it. So if youd have bought a house after the 2008 crisis, youd have done very well if youd aborted at the peak youll have done less well right. So timing matters – and i looked at this – to give you a specific example: just writing a whole article about this. Is i went back with a bit of honesty, thinking im looking at my eth price and im going? Why didnt i sell it at 3 000. I should have just you know. I could have bought it back cheaper, and i know that that is a siren song that goes in your head right. Mental torture and ive been in this space since 2013.