What’s Next for Bitcoin: The Generational Run - TOKEN2049 Singapore 2025

Welcome everyone. Um, we're going to be chatting about Bitcoin. So, one of the most exciting topics. Not a lot happens in Bitcoin, but we're going to have a lot to talk about for sure. Why don't we just start with a very quick introduction and why you fell in love with Bitcoin.

Um, man, why did I That's like prehistoric timing. Um, so my name is Udi. I'm a Bitcoin dinosaur. I'm also CEO and customer support intern at Tapper Wizards. Um I think Bitcoin was just, you know, I used to be a software developer whatever it was 12 years ago and uh I heard about Bitcoin.

There was just at the time there was nothing like it. Today there's a lot of things like it but back then there was nothing like it. I was just uh I used to I used to play poker online before that and uh so I had good experience with having my funds confiscated and stuff like that. So when I heard about Bitcoin I was like oh this is a solution to all my problems. Um and never played poker again ever since.

So, uh, you know, OG's of a certain era were doing certain things in Bitcoin. Uh, 2013,

you know, people people were there to check out gambling and and other stuff. But,

um, no, I I I stumbled down the rabbit hole because I studied finance in undergrad during the 2008 financial crisis, which radicalized me. And so, when I heard about Bitcoin, I was like, cool, I don't understand. This is actually exactly what I felt when I first saw it. But once I went down the rabbit hole, I'm like, this is the solution to the trust problem we have with the monetary policy of the US dollar and banking. And so for me, this was the solution we've been looking for all along to solve the problems that had happened in the 2008 financial crisis.

All right. Uh I'm Manib, founder of STAX. For me, Bitcoin, same year, same era, 2013. I was uh finishing my PhD in distributed systems and came across Bitcoin and it actually solved the problem the people in my industry were trying to solve for more than 10 years and it was very surprising. uh and once it clicked like you know it's been a rabbit hole since before we kick off the discussion uh we were talking kind of backstage about one question which is if you the audience look at your total crypto holdings please raise your hand if more than 50% of your holdings is in Bitcoin and okay and what if keep your hand up if or raise your hand if more than 20% % is in Bitcoin.

More than 20%. That's definitely less than half, right? Like much less than half. If you and if your uh crypto holdings is more than 10% Bitcoin, more than 10%.

Yeah. Okay. So, so look around you. That's nothing. I think that's maybe like 10% of the audience.

And what I would ask, you know, this is the smartest people in crypto basically and the most involved people in the crypto industry basically and and maybe you know maybe 10% own any Bitcoin at all it seems like. So what I would ask you you know what I would ask myself is who do you think are the sellers of Bitcoin right now? Like who's going to sell Bitcoin? Because most of us seem to not own any. Um, there's like these corporations like Micro Strategy, the ETF, so they're buying up billions of dollars worth of Bitcoin every month and I don't see anyone who can sell.

So, you know, what's how how do you guys think it's going to play out is something I would ask myself.

Is that investment advice?

You know, no comment. I guess if I'm not in the US, I can make investment advice, right? I can offer people ideas. Udy, you you touch on this, but um over the last couple of years, we've seen bitcoins that have been uh bought by ETFs, by uh treasury companies, by all these like larger entities. We've seen the holdings go to millions of Bitcoin.

Um and it's keeps going up and up and up. Um how do you guys view that? Um in terms of is it a positive for the industry? Obviously price goes up so it's good. Um but is there some concern around centralization risk you know of the custodians?

Is that does that go against some of the early premise of Bitcoin which is everyone should hold their own and now we have a bunch of these like large entities that end up holding a lot. We can start with uh with money maybe. So I'm I'm actually extremely bullish on uh treasury companies and I think the the reason for that is uh I'm a believer in free markets and I think they are a lot more interesting than just vanilla ETFs because in ETF is just like a rapper Bitcoin is sitting there but these treasury companies are public companies where the managers have a fiduciary duty to now sort of like optimize their balance sheet and they're already seeing competition coming from uh Ethereum DATs, Solana DATs and other types of assets that are coming And I think it's actually going to force this conversation that the Bitcoin community was avoiding for a very very long time. And which is uh where is the Bitcoin onchain economy? You know, where can I get yield on my Bitcoin?

What types of methods are available? Are they in CFI? Are they in DeFi? So, it's a come to Jesus moment for the Bitcoin community because of market pressure that's going to come from from these treasury companies because it's the most efficient market that humans have ever seen, right? So, I think that's in a way a very very healthy thing.

Um, I'm I'm personally not that concerned about the centralization risk because there are so many of these companies out there and for an individual holder like myself, I can always keep my Bitcoin in cold storage, right? It's it doesn't make a difference to me who else holds Bitcoin.

Yeah, I'll chime in a little bit too. So, yeah, I mean on the centralization risk like Bitcoin doesn't solve the problem of uh asset distribution. So a lot of people kind of confuse Bitcoin as this like socialist experiment of of wealth redistribution. It's not that like it's going to have concentration. There's going to be institutions that hold a significant portion of it.

There's going to be wealthier people who bought earlier and have a bunch of it. And so it doesn't solve that problem and that's not really a solvable problem. This is a distribution problem. And so I'm not too worried about centralization of custodial arrangements because per Moon's point, anyone with, you know, a mobile phone can download an app and have a a non-custodial wallet. So it's it means that Bitcoin using Bitcoin as a Swiss bank account, you know, in your pocket is accessible to pretty much anyone in the world.

So it doesn't change that. So I I'm not too bearish about that.

I have a much bigger concern. Um I think I think Micro Strategy owns now 2% 2.5% of Bitcoin. Um and you might think you might your your response might be well this is a lot. I'm concerned because they're owning so much of Bitcoin this might hurt the value proposition.

My concern is the opposite. They're buying a lot of Bitcoin. There's not going to be any left for me to buy. There's they they own two to 2.5%.

they're they keep buying more and and people's reaction is like, "Oh, I'm concerned that they're going to buy more." That's that's that's your concern. If they if you're convinced that they're going to buy more, and I am, then what are you waiting for? Is is what I would say you I I mean, I'm I'm much less concerned about the centralization uh risk at Coinbase than I am about the price just running away from me. for you guys as early holders.

Um, are you still buying more with like everything that you get or is that a lot like a lot of your early holdings are kind of what you're keeping or is is still, you know, a big part of money?

I don't I don't own enough Bitcoin.

Okay. So, constantly you buy more and more all of you guys.

I mean, for me, I've been in the space for 13 years and I've never sold any Bitcoin. So, uh, you know, that's and it was 99% of my net worth until 2022, which is kind of ridiculous. Um, so I'm no I'm not buying more just because my concentration was ridiculous. I mean it you got to remember too I've seen my net worth go up exponentially and drop 85% three times. It's not it's not good for your mental health.

It's it's crazy.

I've given up on my mental health. So

we know.

Yeah.

Um Manip uh obviously you're quite active in Bitcoin D fire building uh a bitcoin layer 2. Uh can you talk about kind of like where this space is overall? We've seen over the last two years probably like hundreds of millions of dollars being raised for different sort of Bitcoin layer 2. All of them seem relatively similar to someone that's not close to it. Can you tell the audience a little bit about you know how is stacks different but how how do layer 2 in Bitcoin differentiate themselves because it's a little bit more difficult than for example on Ethereum.

Yeah. So I think the high level thing for people who are not familiar is Bitcoin is very simple. It's very durable uh but you can't program it uh unlike things like Ethereum or Solana that developers are sort of like more used to but I think there's still a lot of potential in making Bitcoin productive uh deploying it on chain using it in DeFi doing decentralized lending of it decentralized trading of it all the applications that people are really excited about for Ethereum or Salana uh that can happen with BTC as well and I think that part of the the industry has traditionally been lagging a little bit and I think there are two big reasons for it. One is actually technical. Uh there's technically a very hard challenge which is fully trustless way of moving your Bitcoin from L1 to L2 and recently there has been a lot of progress that that has been made on it.

The other is I think actually just awareness and and building a a developer community around it because you know this Ethereum and Solana in some ways are much more straightforward. uh you can you can start programming it. Bitcoin is much harder to program and you have to bridge it first to L2 and then sort of like get into it. So there's this market awareness problem which is what you're referring to in the last 2 years. I think we we at STAX helped contribute towards this as well that we we're raising a lot of market awareness around how large of an opportunity the Bitcoin DeFi ecosystem is.

It's literally trillions of dollar dollars that are mostly sitting passively and they could be deployed on chain. And that's that's I'll link that to the point about the digital asset treasuries because they are going to face market pressure to now go and get yield on the bitcoin and we are already seeing that people are coming to stacks and asking us about how to get yield on their BDC. Uh so that's kind of like the historical point of view. Recently you know 2 years ago or so a lot of bitcoin L2s got funded. Uh they differ a little bit in the technical approaches what they're trying to do.

STAX still remains the higher highest market cap like circulating supply market cap project out there and I think the way we sort of differentiate is I think we have a very very organic developer community people who've been at it for years they are actually seeing all of the ups and downs of like what are the challenges and I think we have a very very active R&D division as well right so uh there are still sort of like fundamental technical challenges that need to be solved before we can get to a place where it's fully self-custodial u you can just take your bitcoin and you know without trusting anybody can deploy it in an L2 and I think that so we recently got around $600 million of BDC deposited this year um on our current version of the technology and I think once we get the self-custodial one live we expect that number to go into billions of dollars then obviously you've been in the industry for a super long time you know a bunch of the Bitcoin OGs um in my experience at least talking to some of them they tend to obvious they tend to want to store a lot of their Bitcoin without really touching it, right? They tend to just want to keep it somewhere for years and years and years and any anytime they touch it, they get a little bit scared, a little bit anxious. Um, is that something that um, you know, you experience as well with people that you know and do you think some of those people will eventually want to go on Bitcoin DeFi and use maybe lending services to borrow against Bitcoin?

Yeah, that's a great question and and one, you know, so my fund focuses on Bitcoin DeFi specifically. Um, we invest in alternative L2s similar to STAX in in terms of being a Bitcoin L2. Um, and I've known MI for a super long time in the space. You know, I think uh this is a question that both I feel like STAX these other L2s even at Tapper Wizards, you know, we we've wondered, well, who's the user base?

Y

um and I think there's this thought that there's like Bitcoin maxis who own Bitcoin and then there's like altcoiners, but actually the overlap is pretty significant. You know, in Asia, I think altcoins are much more popular than Bitcoin, as evidenced by the hands raised in the audience. But in the United States and like Europe, Bitcoin is held predominantly held like as a percentage of people's portfolio. So these there's not that divide. So these people who own Bitcoin were also yield farming with their Ethereum.

They were doing DGEN stuff over on Salana and Ethereum. So these are the same people. And if they have the opportunity to earn yield with their Bitcoin, you know, I think they would take it uh because they look at their Bitcoin as this digital gold, but for the right riskreward ratio, I think that these opportunities would be interesting to them. So, you know, this was a conversation that exported with quite a few folks in the space. But as a marketer, I think the it's the same customer that would be using uh Salana or Ethereum because there's not a lot of like Ethereum and Salana Maxis.

Most of those people own Bitcoin. Yeah, I might I might add like two points to this. One is one thing that we've seen is um the tax treatment is actually very important to some of the large holders. uh because let's say you got into Bitcoin in like 2012 2013, you're sitting on these unrealized uh like tax triggers and and that's why when we were designing our um way of depositing from L1 to L2, we had to like really double check the technology and tweak it to make sure that it doesn't trigger a tax event. And that was that was something that was very important to a lot of Bitcoiners.

The second thing is I'll come back to the self-custodial part and I'll share one data point which is uh Babylon which is another bitcoin L2 uh they offered a mechanism where people can just like keep their bitcoin locked up on the L1 to participate in the economy on the L2 and they got around 55,000 BDC uh when they were launched which is right

yeah I think it is it has gone down a little bit now but I think it is still billions of dollars worth of bitcoin um and I think that that is a very good indicator that if you get the the right sort of environment where the trust level is very very minimal like people just don't have to trust any other software and the and the tax treatment is is favorable to them that's when you you get the bitcoin bitcoin moving on chain

would you have been one of the central figures of ordinal when when they exploded on on bitcoin I think it's almost you know sort of like foreshadowing of what can happen in the future with some of these bitcoin layer twos can you tell the audience kind of some of the learnings that maybe you got away from that experience ordinal kind of exploding and then falling off a little bit. Who were those people that were using um they were playing with ordinals and and buying these assets?

So at Tupperware Wizards, the the the main thing we are trying to do with everything that we do is to get people who are currently underexposed to Bitcoin and get them into Bitcoin. People who are crypto native or active in crypto and get them over to Bitcoin. that was the main audience kind of the main user base that we had with ordinals. Um even then what we found is you know we we issued a couple of collections on ordinals they you know commercially they did pretty well uh but it was a real challenge to convince people to spend bitcoin. People preferred to spend other things

right? So we had um in in our mints we had people prefer to use to pay with soul and get a bitcoin ordinal. Uh people just don't want to spend the bitcoin they have or they don't have a bitcoin. So there, you know, I actually think people are severely severely underexposed to Bitcoin in crypto and that's that's what we found and we were a little surprised. Um, but I actually think that there aren't as many people who are in Bitcoin and you know there's um we we were talking about the the the kind of DeFi capabilities of Bitcoin and it's it's really interesting.

I think the previous panel or maybe the one before that was about DATs or partially about DATs and crypto. Um, and there's this really interesting difference between the ones on Bitcoin and the ones in the rest of crypto. So, one big difference is the the the the kind of altcoin DATs tend to buy at least some of the coins from the foundations and the labs and so on like it's it's actually coins that aren't circulating and they're just kind of changing hands and that we saw the Ethereum Foundation doing that and obviously on on the much smaller chains too. Um, with Bitcoin there's no foundation to buy. You have to buy it on the market.

The other thing is on Solana, on Ethereum and on other on those other guys, you can be, you know, like when we talked about, you can go and be productive with those assets on chain. With Bitcoin, I think it'll happen, but it's still not there. So, what tends to happen, those coins just go completely off the market.

And what we're seeing in Bitcoin is there's more and more coins are just going forever off the market basically. Um, which is a dynamic that never happened in Bitcoin before. I think that's something that people just don't comprehend. there's this new sync which is huge this black hole of Bitcoin that bitcoins go into it and they cannot go out.

Um well I mean they could but I think it's very very unlikely that Micro Strategy sells any Bitcoin anytime soon. You know things can go wrong sometime in the future. I don't think it happens anytime soon.

Um and that's just a completely new dynamic we had um in many time periods in the past we had so-called forced sellers of Bitcoin. people who have to sell because they're leverage and whatever. This is the first time in Bitcoin's history that we have forced buyers. Um, Michael Sailor and his company have to buy Bitcoin all the time or the company does not have a right to exist. They have to keep finding new ways to raise capital and that's what they do.

They keep finding new innovative ways to raise capital to buy Bitcoin. They are forced buyers. That's something we never had in Bitcoin before. So that to me that's like I I've been in Bitcoin for 12 years and I have never been more bullish than I am today. It's just I think the the market structure changed completely in Bitcoin.

I've got a good addition to this which is actually the aha moment that I had uh as to why DeFi and Bitcoin was important. A lot of people ask why DeFi and Bitcoin? Like who cares? Like Bitcoin is this digital gold and you can do the DeFi stuff elsewhere. I was at NFT NYC in 2022 and I was talking to an artist and they're like, "Yeah, so I bought this NFT for 0.

1 ETH and I flipped it flipped it for.3 and I was like, "Cool. What do you like about Ethereum?" You know, proof of stake versus proof of work. Like you like Vitalic.

And they're like, "I don't know what they said. I don't know what any of those words mean." And I was like, "Holy shit." Like this person doesn't know anything about Ethereum, but they were already thinking in the Ethereum standard. they're quoting me asset prices in it ETH.

So that was kind of an aha moment where you know Bitcoin's primary user acquisition loop is number go up price goes up we all become aware of it that's why we're in this room and then more people buy in anticipation of it going higher so with NFTTS or other DeFi things are more casino games or speculative game mechanics that appeal to different people some people like to buy Bitcoin spot some people are artists and they like to buy a collectible um you know for example I'm into watches so I like collectibles it attracts a certain type of person. And so when we think about the Ethereum DeFi summer, it was the explosion of speculative games that brought all those new users into ETH and now think about ETH as their money. And so does it really matter that Bitcoin is objectively a better money than ETH? No. If everyone just buys ETH because they're getting into it because these speculative games.

So that's where I felt it was important that we bring these games back to Bitcoin and and have that as an extra viral loop mechanic to bring more and more users into Bitcoin. And of course, a lot of DeFi is is is functional in a way that's good for people. Like you borrow dollars using your Bitcoin as collateral or earn yield on your Bitcoin. So that that's an aside to kind of Udy's point of like he views ordinals as a way to pull people into Bitcoin. I saw that at NFT NYC.

Part of uh Bitcoin's magic has always been that it doesn't change much, right? It always stays the same. There's certain certainty that it will stay roughly the same. Whereas like Ethereum, Salana, they change quickly and that can introduce some risk. But also in Bitcoin, especially when it comes to layer 2 and utilization of DeFi, it's sort of an obstacle, right, that it doesn't change because sometimes you need maybe a small change that would enable something to work a little bit better.

An example would be some Bitcoin covenants. Um, Manip, how have you kind of dealt with that given that Bitcoin has basically been the same for the last four years or so? Um, probably will be the same for next 2 years with no changes or at least for a few years. Um, is that a problem for you guys when building on top of Bitcoin?

Yeah. So, I think the the STAX project started in like 2017 around the same time with Lightning started and we had one sort of like a design principle that we're not going to rely on any changes coming from Bitcoin, right? because they are unpredictable, they take a very very long time. So we will always like tweak our L2 technology uh and that's something in our control that we can work with and it might have trade-offs right like for example our current version of the uh of the bridge between L1 and L2. It has a decentralized group of signers but people have to put some trust in in those signers and that's how we are moving things.

if Bitcoin changes and has you know some more improvements that we can we can work with um that would help our lives but we we can't really rely on it right so that's that's sort of like been um the the design principle and like I I feel like when Dan was uh talking about people thinking of ETH as money like there's a very interesting dynamic that always plays out in every cycle which is um whenever you know Ethereum is getting a lot of traction Ethereum has nowhere else to go but become number one, right? It's already number two. It has been number two for a very long time. So, if you go to the Ethereum community, you know, at one point they had these um this flipping charts, right? Like, hey, Ethereum is going to flip Bitcoin in all these different ways.

Uh it's like, you know, uh transaction count or uh gas fees and all all these different like number of users. And it was very interesting that if you would dust it up and look look at the chart um like even a year ago, Bitcoin was actually beating beating Ethereum on all of those things. But recently because of these treasury companies, Ethereum is having a comeback at least in price, right? And as soon as it's having a comeback over there, you see the same arguments come back up. Now, now in the treasury companies market that ETH is a better asset because it has yield.

ETH is a better asset because all the stable coins are on on on Ethereum like it is where all the next generation financial rails are going to be built. And then the same argument like it just trickles down and now you have Solana. It's better, cheaper, faster and the things you can do on Ethereum, you can actually do it better on Solana. And I think this thing continues and the market is not going to stabilize until like clear winners start to emerge in different categories. And when when things are unstable like this, if Bitcoin I don't I don't personally believe that Bitcoin would ever lose the number one spot.

If it ever does, that's actually a more unstable uh market dynamic because if if somebody else can take over Bitcoin, then what else is there that's going to take over that thing, right? and and large institutions and and and big players, they don't like to enter unstable markets. They they they sort of like stay away for a while until the markets have stabilized and then they come in and and build long-lasting things. In in my view, it's actually very important for Bitcoin to uh to stand out and give something that is stable to the rest of the industry so that people can specialize in their own different areas, but no one no one is trying to come for for the the use case that actually Bitcoin is providing.

Woody, you've been a big proponent of OPCAT, one of the covenants that would make Bitcoin much more usable for layer 2. How has the process been trying to get that, you know, into Bitcoin? Um has it been challenging? Um how does it work even to propose something like that and to get it in the code?

It's been very hard. The there's um um for people who are not familiar with how kind of Bitcoin governance quote unquote works. Uh it doesn't and there isn't right. So like there's um there's no one you can really kind of lobby and pitch. there's no one that you ask for permission that makes things difficult, right?

Because there's no one who can make the call. Um and um it is yeah it is it is challenging and and and if you you know if you're the type of kind of uh person who's a builder and you want to build a bunch of like cool innovative stuff, it can be seen as frustrating. Um but there are benefits to it too. I mean, the fact that that the the fact that Bitcoin is that predictable is, I think, what allows it to be the hyper financialized instrument that it's becoming now. Um, so, you know, there's there's benefits and there's drawbacks.

Uh, I think that what we're going to see, we're already seeing it, I think we're going to see more and more of it, is is, you know, builders going to route around that, right? So like you there's going to there's a whole spectrum that can be completely centralized which by the way now with more reg regulatory clarity that might be fine for a lot of use cases and there's going to be like a lot of more decentralized solutions and even you know even if it doesn't happen with like changes to Bitcoin itself the market finds a way so I'm not I'm not worried about that the at the end of the day you can't argue with you know with the market the market seems to like where this is going, you know,

and does that mean the higher the price goes, the less likely it is that new things actually happen on Bitcoin?

I think so. Yeah, because it's it's hard to convince people to make a change when everything is going great, right? So, you you might, you know, we might have to wait until things stabilize price-wise before uh there there are big technical changes and uh that might take a while. I don't know that Bitcoin price stabilizes anytime soon. though.

Yeah. I mean, my my two cents on this, it's a blessing and a curse, right? It's a it's a it's a blessing because Bitcoin is trustworthy because changes are hard to make, which is great because things like the monetary policy, 21 million hard cap, we don't have to worry about that changing versus Ethereum, they're constantly changing the monetary policy, which by the way is is hilarious when they talk about deflation. You know, when the Ethereum community talks about, oh, it's a better sound money, they completely don't grock or understand what sound money is about. It's about having a predictable monetary policy.

Who cares if the dollar is deflationary at at times? It doesn't make it sound money. And so, instead of a bunch of guys in suits in a room, you've got a bunch of developers making changes to the monetary policy. That's fiat. Fiat is where a group of people can arbitrarily change the monetary policy at a whim.

So, you know, that that's that's kind of the difference there. Um, but uh you know, a curse though is that Bitcoin can't move as quickly as all these other chains where if they adopt new code or or or really cool technologies, we can't do that very rapidly. And I think the, you know, I'm on the I'm on the side of of pushing these changes forward because there's a social contract that was made during the block size wars. We weren't going to have Bitcoin scale on the base layer. We weren't going to increase the block size and keep increasing it over and over and over.

We were going to have Bitcoin scale in layers. So, Bitcoin L2s though have an uncomfortable game theoretic connection to the Bitcoin base layer in a way that we wish was stronger and things like OPCAT or other software proposals could I think fulfill that social uh that kind of social promise that was made that we would scale Bitcoin in layers to where people using a Bitcoin layer 2 wouldn't have to use a Bitcoin layer 2 that is inherently more risky. they'd be able to use Bitcoin in a layer two in a almost trust minimized manner, almost like trustless manner. So yeah, for me this is u these changes basically fulfill that social contract that was made many years ago. We were talking about this before, but we've seen over the last like eight years or something, Bitcoin has accomplished basically everything that you could kind of hope for eight years ago, right?

like we're now it's countries that are thinking about u getting exposure to Bitcoin central banks we have tens of companies buying Bitcoin. Um I will put you guys on the spot and ask you as huge Bitcoin bulls obviously. What is one thing in Bitcoin that concerns you today? What's one thing where like if you could think of like I'm scared of this happening in the future whether it's like the quantum threat or the security budget or something. What is one thing that keeps you a little bit uncertain still despite all the success over the last 10 years?

We can start with whoever is ready.

I u I'm ready because it actually keeps me up at night. Right. So I think there there there two basic things with Bitcoin um which are a real threat in my view. One is the quantum thread which um I'm actually less scared about that one the and I'll explain why. So the reason for that is whoever cracks quantum computing first is likely going to be a very very sophisticated actor.

It's not that there's someone sitting in a basement and suddenly invents a quantum computer, right? Like it's likely going to be a very large research lab like a Google or a Microsoft and I think they have done significant R&D in it and if they're able to, you know, get access to a to a million or more Bitcoin that's a almost like a prize. It's like a big bounty and they're not just going to dump it on the market. You know, Google is sitting on, you know, hundreds of billions of cash in in their bank account. They don't they don't need they don't need to sell Bitcoin on spot like, you know, they're sophisticated players and they would know what to what what to do with it.

Um but it is a challenge just because of logistical issues like even if you know people start migrating from the addresses that are um that where quantum computers can be able to steal it will take something like 2.5 years. at current bandwidth to be able to do that, right? So people people need to start looking into this now. So I think I think it's a it's a it's a it's a reasonable thing to worry about today.

The second problem I'm actually much more worried about and which is the block rewards. Right now Bitcoin mostly runs on on block rewards and we have anywhere between like 3 to 8 to 7 years runway. It's not a lot of time actually. Right. So, we're going to have another h havinging in 2028 and then 2032.

And after 2032, the the new amount of Bitcoin, even if you project Bitcoin in millions, it's not not going to be a lot of of new supply that's actually coming in uh to be able to sustain the network. And when I have this discussion with a lot of Bitcoiners, I've even seen arguments like, you know, large entities like Micro Strategy or a Coinbase, they might start doing mining at mining at a cost.

Yeah. Right. It it may happen, but that's that's not something I'm willing to bank on that a bunch of centralized entities who just hold a lot of Bitcoin, they are now mining at a cost just to keep the network going. Right? So I would much rather see a onchain Bitcoin economy, which is what Ordinals was was pushing forward, which is what a lot of L2s are trying to do, where there is um if you look at the numbers, I think there's around 1.

8% 8% of Solana's um uh yields like are coming from real economic activity and for Ethereum it's around around 04.5%. Those numbers are significant. I think if if we can have something like that happening on Bitcoin in the next 4 to 8 years that would be amazing for the long-term incentives for miners.

Yeah, I mean these are the classic problems. I mean quantum I'll just give a quick TLDDR on both of these. uh quantum low likelihood within a decade but we should plan for the possibility that it can occur. So we have, you know, could for example like postquantum cryp cryptography I believe is much more intensive from a data perspective. So we'd have to make changes.

So I think it's something we should talk about and start planning over years and just have it kind of ready on off the shelf versus like I don't think it's a huge concern. I mean remember that quantum crypto cryptography breaking any crypto you know cryp cryptography at all is theoretical like this is the theoretical based on physics this isn't a uh just it's inevitable it's going to happen it's it may not ever be able to happen um on the block subsidy you know the declining block subsidy will that be offset by an increase in transaction fees so basically the newly minted Bitcoin are on this curve that eventually hits 21 million by the year like 2,100 and something. And so every four years the number of newly issued bitcoins drops in half called the having. We all know that. Um now when Satoshi created Bitcoin he hypothesized that transaction fees would replace the subsidy to some degree over time.

Therefore giving an an amount of value to miners to keep them game theoretically aligned and behaving properly. That's how Bitcoin's proof of work works. Um, I think it's too soon to see if this is going to be an issue or not. But of course, I like to see more transaction fees occur. The Bitcoin block space is quite empty right now.

So, Bitcoin DeFi stimulates that. A lot of people are lending and borrowing and staking, and so that activity would make me feel more comfortable with the long-term security budget issue. My premise though with the security budget problem though is that what's an appropriate level of security spend? No one knows. No one no one has any idea of like should the Bitcoin blockchain should you know the miner's annualized fee revenue should that be 100 billion should it be 10 billion is it a percentage of the total value of Bitcoin is there some magical percent is it a percentage of flows or is it a static number is it a game theoretic number that like okay if it's half a trillion dollars a year that's too much for any one government to spend to want to try to attack Bitcoin because at at that level only nation states would be able to attack it So I think that's the important question.

What's an appropriate level of security spend? And we haven't really seen Well, no one really knows, you know, and so I think it's kind of subjective as to if there is a problem there or not. Yeah. Um my biggest concern about Bitcoin is that I will not own enough Bitcoin. I I I I I think really I think you know if we're talking about things like um quantum threat um block subsidy those are things that if they become a problem maybe then that will be you know 10 20 years from now um the real problem for the next 3 months is 3 months is that I think Bitcoin price is going to run away from all of us in this room and that's the main thing that I think everyone should focus on in the immediate term 20 years from now we can you know we'll figure it out.

Um there's uh I I I was sitting in this chair less than 24 hours at this exact chair. The panel was a lot more diverse. Now we're all like Bitcoin bulls, but it was a you know there was an Ethereum guy and a Salona guy and an AI guy and I was like I was just sitting there and I'm like I think like Bitcoin is going to go like hyperbolic like immediately and we're now like I mean I don't know six 7% higher than the price was at that panel. I think we're going to have in the next three months multiple, you know, $10,000 green candles on Bitcoin. Uh I think it's going to become like a normal thing because basically I think that people sold all their Bitcoin.

If you want to be afraid about something of a Bitcoin is you don't own enough. And I think this is correct for everyone in this room and on this stage probably. That's that's my main concern.

People forget too that there's only 21 million. That's less than every single every millionaire in the United States could not own one Bitcoin if they wanted to. So for if for any reason at all this speculator forever kicks in, which it's happened three other times in 2013, 2017, and 2021, if indeed this is another cycle, which I think it's the beginning of one, then yeah, I mean this is the the right time. You know, Bitcoin moves in ways where it might be boring for a long time and then it moves in a second. Remember that there is no supply response.

When Bitcoin goes up in value, no more printed Bitcoin enter the system. This is a very unlike any other asset out there. It's unlike gold because the more valuable gold gets, they dig deeper and deeper into the earth to extract more. Um the same with other commodities and same with fiat currency. This inelasticity is what makes Bitcoin, I think, really unique and causes it to be highly volatile.

So, and I think to Udy's point, I think that volatility is going to be to the upside.

To play devil's advocate, Udy like um that's over the last three months, the the amount of money that they raise has gone down. The multiples have gone down. Micro strategy or strategy is having issues raising a lot more capital, right? Their buys have been smaller than they have been previously. Um and other companies have similar issues where there's just less money to put into them.

you know, insurance companies are buying less. Where do you think the next buy pressure is coming from? Like is it is it people here? Is it is it central banks? Um or do you think there's a lot more capital that just hasn't been deployed last couple of months?

So, you know, eventually I think that stuff like central banks, nation states is finally getting close to being a reality. I think, you know, people talked about it for over a decade and it was mostly science fiction. And I think we're getting to a point where not today but you know in a year or two three from now I think it becomes a very real you know uh option but in the immediate term I think that people are vastly underestimating uh Michael Sailor's capital raising uh ability. Um, the guy acquired an insane amount of Bitcoin, raised tens of billions of dollars already. Every time that, you know, they kind of pumped the brakes a little bit for for a month or two, everyone is like, "Oh, it's over.

That the it's not over." Uh, they keep coming up with new schemes. They have a brand new scheme right now that's doing really well with Stretch. Um, and and and if that doesn't work, they'll have many more. I think that the thing that people don't fully understand unlike you know the other DATs comparing the other DATs to to Micro Strategy is in my opinion a complete misunderstanding because Micro Strategy has to like absolutely has to keep coming up with ways or the company dies.

Now do you really think that Michael Sailor is going to give up now? I don't think so. There's one day Michael S will be like I'm tapped out. That day will come but it is not this day. So, um I'm I I just think, you know, whatever like oh there's a few weeks when they raise le capital like I'm not worried about that at all.

I think I think the treasury companies I I actually think they're just getting started right like it really before it was one player which was micro micro strategy and

Bitcoin once or you mean everything?

Everything all the entire market is basically think of this as um the crypto markets are still relatively very small compared to NASDAQ and NIC. So this is for the first time these new types of assets are actually finding they find the the tooling right they're finding the rapper on how to now enter uh the Wall Street and one example I would give is Tom Lee I think he was here yesterday Tom Lee's B&MR um has gone to $10 billion in holdings in like 5 months right the graph goes like this so I think I don't think there's only one sailor I think there are a bunch of like mini salers uh coming up and and that's the free markets at play because what's going to happen is uh sailor pioneered the concept and deserves a lot of credit for it but now people are going to iterate on every single thing that they can iterate on right so uh they have yielding strategies they have different ways of like figuring out different revenue sources and how I can go and purchase more of these assets so people are going to try all of those things and some of some of those are not going to perform right so there are already some Bitcoin and treasury companies that are trading below NAV which are actually great acquisition targets. Like you can if somebody purchases that company that's 20% discounted Bitcoin and there's no way to get discounted Bitcoin anywhere. So if if your company is successful in its strategy and you can just go and buy this $500 million DAT that is trading at 20% discount, you can suddenly increase your holder value for yourself. And I think all of that is going to play out rapidly.

And I think Wall Street has a very deep appetite for these new types of financial products u out there. Um I would say part of the reason why Bitcoin has done so well over the last year or so is also the administration, right? The administration has been very friendly. We have Trump here at the conference, his son. Um are you guys well how much of that do you think has contributed to Bitcoin price going up and do you think there is some sort of a small risk that if the administration changes in 3 years you know it's going to have an adverse effect because this administration has been so friendly on regulations on just pushing crypto forward in some not so good ways as well.

Um, is that a concern that in 3 years we have to think about that like like if Democrats win, you know, we're in a bit of a hole?

Yeah, I actually, you know, going back to what our concerns for Bitcoin would be, it's a I would say a minor concern. Like I wish it was more bipartisan. Um, I don't know if anyone knows the Reserve One folks, but like Jamie and Sebastian over there have been kind of hitting that bell of of you know, it should be Bitcoin should be a neutral nonpartisan issue. Y

and um I agree with them on that where I'm like I prefer it not to be a political thing. However, we can't really plan this out how we like. It just kind of happens. I think, you know, I wish Trump and his sons would be a little have a little more finesse with value extraction from the space. I feel like they've kind of gone really explicitly for it and I think that's going to reflect very negatively and Democrats could use that against the space.

However, I mean, I remember, you know, when people were considering voting, you know, Trump or Biden, um, well, sorry. Yeah, I mean, Camala, but, uh, the Democrats basically said, "We are going to destroy your community and we do not care about crypto at all and we're going to do everything we can to make your lives miserable." So, the Democrats somewhat forced the community to go Republican. Um, long story short, I do I do think it's a material issue.

I think I think that um a a change and and assuming that Democrats remain like they were in the in the in the last administration, I think that change would adversely affect a lot of the other projects like for example, Tether is now thinking of coming to the US. That wouldn't happen, right? a lot of the other um custodians and exchanges and other types of businesses in the industry, I think they would probably suffer a lot more relative to Bitcoin where Bitcoin is already global enough and neutral enough. If anything, you know, when when when things look like very sort of like shaky in the world, some people do go to Bitcoin as this neutral asset uh that they need to hold if if if there's a collapse.

Cool. Well, we've run towards the end of the talk. Thank you so much for listening. Thank you so much for the panelists. We'll see you next time.