Jeff Booth, Investor ego death capital: Stable Coins & Institutional Bitcoin

Welcome, Jeff. Thank you so much again for agreeing to another interview. I really appreciate it. You're always so knowledgeable about the Bitcoin space, and it's one of my great passions and love.

So I wondered if you could talk a little bit about stablecoins. I don't fully get it, and I know that it would really help my listeners as well as myself. Sure. I think first of all, you have to think about what a stablecoin is, right?

And where does it gain its stability? A stablecoin is just a peg to the US dollar if it's a US dollar derivative, and it gains its stability by losing money against Bitcoin, right? So you could actually call it a guaranteed loss coin because it's losing value at the exact same rate as the US dollar to Bitcoin. So it's still an inflationary system.

It's pegged to the US dollar. And they'll buy treasuries or other instruments to keep it stable against the US dollar. so it does i i guess i don't get the point of it really um because if um you know with bitcoin you don't really need um to have it related to a fiat um why why is that it just makes it safer is it no it's actually it's more dangerous like i say it's a guaranteed loss coin right the but the perception. So you know my thesis that Bitcoin, as long as it stays decentralized and secure, you have an open decentralized secure protocol bounded by energy.

And that protocol that we call Bitcoin is repricing the entire world And from it all prices will fall forever So you don use a currency to measure another currency You use a currency to measure things But what I just described essentially, the first global free market that has ever existed and Bitcoin being outside the system that we know imposing new constraints which force the free market. It means all prices fall. But most people aren't measuring Bitcoin like that. Most people are measuring Bitcoin from the system they've always known.

So from that system, it would appear that the US dollar was a better fiat currency than other currencies. And around the world, people would think, oh, I want the US dollars rather than my Nigerian ones. So it would make sense that people would be almost lulled into a false sense of security on a stable coin, especially if you called it that, that would mirror the US dollar because they were measuring the system change from the system that was being changed. But the reality now is that the US dollar actually is falling, and has been falling for quite a few weeks.

Yeah, the short-term noise of all of this, It's a U.S. dollar in fiat currencies. The U.

S. dollar is still the best currency and a whole bunch of weak ones. But they're all losing value. The U.

S. dollar over the last 100 years has lost 99% of its value. So it's just others have lost more value. So everybody's playing this relative to the U.

S. game while all currency, all fiat currencies are losing value. And that's why. Because it feels safer.

It feels safer. And it a relative value that people are confused about whereas Bitcoin is repricing that entire system Yeah But under those circumstances it would be really easy to see people get fooled or believe a stable coin was safer than Bitcoin because it's a confusing topic. Well, thank you for giving me a bit more clarity on that. I really appreciate it, and I'm sure my listeners will too.

And the other issue that I just keep reading about is, of course, Michael Saylor's Bitcoin purchases, which is just he's putting himself or the strategy into incredible risk apparently because he's taking loans to buy the coins, to buy Bitcoin. Now, I love Bitcoin. I've been a follower since 2008 and supported other startups. But why would you put yourself in the red light like that?

And I know one investor who I don't have much respect for, but said that, you know, it's people that don't have business models that have to do this. What is your overview on this? So with Saylor specifically and what he's done is essentially he's doing a fiat attack using leverage in a system that must debase the currency. He's taking those loans and he's converting it to the heart of asset.

And so he's engineering, he's financial engineering as a way to get more Bitcoin on the balance sheet, which is actually incredibly brilliant. In fact, all of the different securities that he offers allows different players who believe that bonds are safe because they haven't done the work on Bitcoin to buy his stock. So he offered a whole bunch of different instruments up and down the capital stock to be able to drive money into his company and buy Bitcoin I suspect that strategy over the long term will play out exceptionally well Oh, okay.

Well, that's a positive viewpoint. And what about all the countries that are starting to now have a reserve of Bitcoin? I mean, I think that's sort of fabulous compared to 2008 when it was first discovered. Is that, am I correct?

Is that a great thing for countries to have a base of Bitcoin? So my personal view in this, and I think you know this, is this is an open monetary network that any single person on the planet can move to. And most people are stuck in a jail cell yelling at the jailers, well, they can move their time and energy into Bitcoin. They don't have to wait for their country to say yes.

They can just move. But it would make the same sense as it does personally. Essentially, my purchasing power goes up forever rather than go down forever. It would make the same calculus personally as it would for a corporation, as it would for a country.

So countries that do this earlier, their citizens will be wealthier because they'll have more to be able to spend on citizens than the countries that go later. But this is, like I said, this is imposing, this discipline across everyone and everything. And some nations are going faster than others, some are going slower, and that means their citizens will likely suffer or do well to any degree that it looks like that. Well, that's so positive.

Thank you so much. It relieves some of my anxieties and misunderstandings and really appreciate your time today. And I know that my listeners will really appreciate hearing your feedback about these issues. Thank you so much, Jeff.

Anytime, my friend.