Mark Yusko: Bitcoin, AI & the Next 14-Year Tech Boom
Summary
Bitcoin: Mark Yusco is strongly bullish on Bitcoin as the superior digital money for the next era, emphasizing blockchain as a truth-based monetary system beyond fiat debasement.
Smart Contracts: He sees a clear role for a “world computer,” owns Ethereum and Solana, and discusses trade-offs between proof-of-work and proof-of-stake, NFTs, and Bitcoin inscriptions/runes.
Chinese Solar: Contrarian opportunity in Chinese solar where oversupply should drive bankruptcies and consolidation, aligning with a buy-after-capacity-collapse strategy.
China Tech: Broadly positive on China’s leadership in AI and 5G and notes extreme investor aversion; highlights Alibaba as undervalued versus U.S. tech peers.
Oil & Gas: Bullish on traditional energy as essential and pervasive in modern life, arguing oil and gas demand persists despite decarbonization narratives.
AI: Sees long-term AI growth but questions brute-force GPU scaling and nuclear microreactors, favoring more efficient inference tech like photonics/optical computing.
Key Companies Mentioned: References to GOOGL, MSFT, COIN, ADBE, SNOW, NVDA, AMD, BABA, RGTI, and OKLO provide context, though emphasis is on themes rather than single-stock pitches.
Transcript
The greatest wealth comes from investing in innovation. To do that, you have to invest in something that you believe in before others even understand. You'll be mocked and ridiculed for your non-conensus action, but it's totally worth it. To me, Bitcoin has won as the money for the next 5,000 years. So, gold was money for the last 5,000. Bitcoin's money for the next 5,000. Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. >> Ladies and gentlemen, welcome back to Wealthon. This is Chris Perkins, president and managing partner at CoinFund. And today I am very lucky uh to have a guest by the name of Mark Yusco, founder of Morgan Creek Capital. Welcome aboard Mark. >> Hey, thanks Chris and uh excited to have this conversation and uh appreciate the invitation. >> Uh looking forward to it. Um uh as we begin, would love to just get a little bit of background on you and Morgan Creek. Um I think a lot of listeners are familiar with you, but for those who may not be, love to get an overview. I I'll give you a short version, although I don't do short well. My wife will confirm that. Um, but I'll give you a short version. So, uh, I'm a left coast guy. Grew up in in Seattle, ended up in the Midwest for college. Uh, came down here from my alma mater up at Notre Dame to North Carolina. Uh, we're in the Carolina blue today to run the endowment. 21 years ago started Morgan Creek Capital Management, which was basically one of the early firms to bring the endowment model of investing to other investors through an outsourced CIO model. Then seven years ago, oh jeez, it's a long time. Um, now almost eight years ago, formed Morgan Creek Digital and started my chapter three. So my chapter one I worked for not forprofits as an asset allocator. Uh, chapter two, I ran a asset management, wealth management business. And then chapter three, I'm a a late in life venture capitalist. I always say chapter four, I'll teach. >> Oh, that that that works out. Um, and I guess uh congratulations on landing Bill Bich down in North Carolina. >> Uh, you know what? Yeah. Um, I'm not a fan. I'm a Carolina fan. Huge Carolina fan. Not a Bellich fan. This has been the most disastrous year, >> but our basketball team is great. So, I'm I'm focused on basketball. >> I went to Navy and we're doing all right. So, anyway, >> no, Navy is I'm I'm I'm a huge Navy fan and I mean, it's a big place, but do you know a guy David Jones from down here in Chapel Hill? >> I don't. No, no, no. >> Okay. I mean, he might be a couple years older than you, but but he's a a Naval Academy grad, good buddy. Good. Um, and actually the guy I did an interview with earlier today was also a Navy grad, much older, but um, lots of lots of great Navy people. >> So, let's get after it then. Um, you know, really appreciate your background and history. I usually tend to, you know, I come from the digital uh, asset space. I really like to dive for for listeners on that vertical within within your career. Can you tell me about a lot of folks are now thinking about this asset class and they're just like something is going on here. You know, for me, I had my red pill moment as we call it. Can you walk us through your journey into the digital space? >> Oh, absolutely. And look, um I love the fact that you refer to as an asset class because because it is and there are a lot of people still fight that. >> It is. It is. And at the end of the day, what we're talking about is a technological innovation. And and that was the aha moment for me. And again, the shortest version of that is I was super lucky. I I joke my life was the technology cycle. Meaning, so 1954 before I was born, the mainframe computer was invented. And my dad happened to be one of those guys who installed mainframe computers into companies. Okay. 1963 I come along. Five years later an innovation happens out in Silicon Valley around the microchip and suddenly not just big companies can have computers but now smaller companies can have computers. And so I grew up in Seattle. 14 years later, innovation happens around the personal computer. The funny part of the story is I say most of my friends I grew up with don't work anymore because they were smart enough to go to work for for Microsoft. I wasn't. Um, now I defend myself saying if you ever seen the picture, the original Microsoft 11, you wouldn't have worked for them either. Now they're all multi-billionaires and I'm not, so I shouldn't make fun of them, but it's a funny picture. I mean, Bill Gates glasses were like this big and you know, the beards on the guys and >> but 14 years later now it's always 14 years. Why? Well, it has to do with innovation comes from young people. >> Because they don't know what they don't know. So, you know, Mark Andre was 19 when he had the browser and Larry and Sergey were 21. And so, it's 1996. Larry and Sergey are, you know, Stanford students. And uh we had a chance to invest in Sequoia and they put 10% of the fund into this company called Google. And I remember like it was yesterday our board saying, "Mark, that's a dumb name." Like, "Okay, yeah, fine. But now it's a verb, so it's pretty good thing." Um but more importantly, they said, "Why would you invest in the number 21 search engine?" Like, "Well, we're not. They don't actually do search." like, well, what are you talking about? Like, well, they don't actually when you type a question, they don't actually go search the internet to find your answer. They indexed the internet so they know where the information you want is. So, they can send you there faster. That was their innovation. And if you control the flow because it's easier and better than ask Jeieves or webcwler or whatever, you can charge more to advertisers. So turned out all right. Our 500k turned into 200 million. There should be a quad at Notre Dame called the Google quad. And the light bulb goes off. I mean literally the light bulb for my life went off that investing in infrastructure around technological innovation was a big deal. So 14 years later 2010 and I remember I was actually back in Seattle. I'm at Craig Macau's family office and I asked his family office guy, uh, you know, do you think the mobile net will be as big as the internet? And he's like, Mark, are you joking? Ask me if they want a computer, like whatever. Ask me if they want a phone. Like, I already have two. I don't need another one. Yeah, it'll be bigger than the internet. And and again, aha moment for me. I was at a traffic light here in Chapel Hill. Uh, 90 seconds, right? And I bought a plane ticket on Travel Velocity. like yeah this gonna be big and big. So e-commerce and the internet and the mobile net did to commerce and media 7 trillion dollar wealth transfer and we got in front of a bunch of that through investing in venture capital and technology and innovation. So I told you I don't do short well. So 2013 >> 2013 >> I have a buddy Dan Morehead Pantara I'm sure you know him and talked to him. >> So Dan and I go back 35 years. He was a Goldman. Then he went to Tiger where I had a close relationship with Julian Robertson. When he left Tiger to start Panta Macro we were first money in. He called me in 2013 said come to San Francisco buy you dinner. Like great have dinner. My friend says Mark big news. I'm shutting down the fund. Dan, why would you give back a billion dollars charging 2 and 20? He says, I'm gonna spend the rest of my career in Bitcoin blockchain. 2013, I was not running drugs on Silk Road. I was not a cryptography student. I had heard of Bitcoin, but I didn't know what it was. Blockchain I was in. I'd made two investments through Sequoia and August Capital. David Hornac. Blockchain I got right. It was the new operating system. So 2024, 14 years after 2010, is what I call the truth net, right? We're we're replacing trust with truth using blockchain technology. So aha moment and I actually wrote a long piece about this called the digital gold rush back in 2017 where I said, you know, the richest guy in California in the gold rush was not a gold miner. It was the guy who bought the pots and pans and picks and shovels and sold them to the gold miners. He was the first millionaire in California. It was called Yerba Buena back then. And he literally banged on a pan going down the street saying there's gold in the American River and come buy my stuff. $6 for an egg in, you know, 1849. So crazy stuff. Um, but the aha moment went off, but I wasn't smart enough to get it right away because I'm a finance guy. I'm a traditional finance guy. And no, Mark, you invest in stocks and bonds and currencies, commodities. >> And so I wrote a letter in 2014 to my clients saying, you know, I think this is a big deal. Maybe we should put a little bit in. I got hate. Like, don't talk about magic internet money. You're an idiot. We will fire you. >> Yeah. >> Wow. I mean, that is a violent reaction. It was a 41page letter, one paragraph about Bitcoin. And they're like, "You're an idiot." Like, "At least you read the letter." But I I I let that impact me. And from March of 14 to September, the price went from 500 bucks to 186. I was like, "Oh, they were right." And then eight weeks later, it was a thousand bucks. I'm like, "No, there there's something here." And that's when I did my like super deep dive. Yeah. >> And the little funny part of the story um is I you know a year later after I wrote the first letter uh May of 2015 my son was graduating from Notre Dame and I said one word right not plastics like the graduate blockchain. We were early investors in Coinbase. I said go talk to Dan get a job at Coinbase and it'll be great. And he's wanted to live in San Francisco his whole life like since he was a little kid. And he's like all right. And he goes out and he comes back says, "I don't know, Dad. Maybe it's gonna be a big deal. I'm gonna go with KPMG. It's safe. Gets me to San Francisco. Like, you're gonna hate it." Which he did. Nine months later, he quit with no job, which is like a millennial thing. They just quit. Like, no, you get another job, then you quit. But love my son. Never asked me for money. Nine months took him to get a job. Got a job and only in San Francisco. I'm really proud of him. His company gets bought by Adobe. His boss gets fired. The new boss says, "I need you." So, they give him a raise. They give him some stock. Then the old boss goes to a company called Snowflake. Hires him away. More stock, more money. They go public to the moon. It's awesome. But when Coinbase went public, he calls me up. He says, "All right, Dad. You were right. I should have gone to Coinbase, but you're not as smart as you think you are." Like, "Oh, I told you work at Coinbase." So, yeah, but you didn't lever up the house and put all in Bitcoin. like little. That is true. I did not because I was afraid. And so I in 2017 I got approached by uh two young guys, Pomp and Jason. And uh they had seen me on the internet talking about, you know, Bitcoin's big, really big. Blockchain's big, really big. And they said, "Hey, let's start a fund." Like, we can't just start a fund. Like, yeah, we can. There's no competition. There's Panta and there's Blockchain Capital. We'll be the third one. Like, okay. And and so again, luck. Super luck. So, we send Pomp, 30 years old, to the first pitch to a pension fund up in DC, goes in 10, 15 minutes in. The CIO, this amazing woman, Kathern Molnar, says, "All right, I get it. I'm in, but it's gonna take me a while to get my board in, but I'll find a way. He calls me up. He's like, "We're gonna raise a billion dollars. It's going to be amazing." We didn't raise a billion dollars. The next 35 meetings, Chris, over University of Texas Endowment said, "Get out." Like, yeah, >> you're an idiot. Just get out. >> So, we didn't raise a billion dollars, but we raised 40 million bucks, 20 of it from Fairfax. And I'm super and I love the fact that last week we sent them back $3 for every dollar they put in and they still have $5 left. And and it makes me happy because they were the visionaries. They took the risk and their pensioners are the beneficiaries because they believed that it was an asset class. This goes so I said I don't do short but this is a long-winded way of saying you're right that this is an asset class. It's the asset class. It's innovation. Like most people think stocks, bonds, currencies, commodities. Those are the four basic asset classes. >> But innovation is what makes stocks, bonds, currencies, commodities happen. >> Yeah. >> And so if you can focus on innovation, and it's my pin tweet on Twitter, >> right? The greatest wealth comes from investing in innovation. >> To do that, you have to invest in something that you believe in before others even understand. >> Yeah. Yeah, >> you'll be mocked and ridiculed for your non-conensus action, but it's totally worth it. >> And if you need to be liked and you need to be right, investing is really hard. >> It's really hard >> because I say this all the time. When you make an investment and you feel good about it, you'll probably do fine. Maybe you make a little money, maybe you lose a little money. and you make an investment and you are super positive, you're going to lose a lot of money. When you make an investment and you're a little unsure, you're gonna make some money. When you make an investment and you just feel sick to your stomach, you make a lot of money. >> And it's really hard, right? We don't like >> it's so hard. >> It's so hard. >> No one likes that. And it's because >> if you feel really good about it, >> so does every So does everybody else. So does everybody else. >> There's comfort in the herd. There's warmth. EVERYBODY SAY, "OH, YOU'RE SO SMART. YOU'RE SO OH, THAT'S so great." >> No, I want you to tell me I'm an idiot because then I'm on to something. Now, it doesn't mean it will work every time. That's not my point. And it doesn't mean I'm a genius. I in fact, I don't have big ideas. I'm I'm not a biggie entrepreneur. I'm a lit entrepreneur. I like to build things, but I don't have big ideas. But what I'm actually pretty good at, I have a rule. Hear it once, remember it. Hear it twice, write it down. Hear it three times, do something about it. And it served me really well for a very long time. And my favorite example was when I first came down to North Carolina. I've only been here a couple weeks. And if you remember, the Economist magazine in 1998 had a cover story of these guys covered in oil. It said a world a wash in oil. And in the article it said oil was 11 bucks. They said we think it's going to five and someday it'll probably be free. Like that just doesn't sound right. But okay, I'll remember that. Two weeks later, cover of Business Week. Richard Rainwater, God rest his soul, one of the greatest investors of all time. I was on the cover naked long $900 million of oil. Ripped that baby out, put it on my desk. Two weeks after that, three guys trained by Richard had formed a company called Natural Gas Partners that did oil and gas. And so I'm like, ding, ding, ding, ding, ding. Got to do it. So I go to my board meeting and I say, "All right, I want to put 1% with these guys and I want to put 5% in commodities because we had zero." And my board chairman says, "Mark, that's the dumbest idea I have ever heard, but if you really want to do it, okay." I'm like, "Okay, great." So, he calls me in the president's office after the meeting. He says, 'Mark, when I say that's the dumbest idea I've ever heard, that's what I meant. The other stuff was just to be nice. And the chancellor says, "Well, well, Max, you know, he's only been here a couple weeks. If we're not going to take any of his ideas, we should just fire him right now. But maybe we should keep him around a little, try a couple ideas, then if they don't work, we can fire him." Like, guys, I'm sitting right here now. I wouldn't tell the story if it didn't have a good ending. And again, it wasn't me. It was Richard and John and and the guys, Ken Hirs, that 5% we put in energy generated 25% of the endowment's returns for the next decade. >> Wow. >> Because they thought it was the worst idea they've ever heard. >> Yep. >> Because if they would have said it's the best idea they've ever heard, we would have done fine, maybe. >> Yeah. But and so the more hate I got about about Bitcoin, I knew it was a good idea. But here's the problem. >> We're all human and we don't like hate and we don't like people telling us we're stupid and we don't like people who say, "No, I wouldn't do that." And you said it, you know, we got to convince our our better half, right? And you know, in my case, better 90%. And they're like, "Oh, I don't know. Oh, I don't I don't know anything about this and I haven't spent any time on it. And one of my favorite parts of this space in one talking to smart people and and people who who also have seen the the crypto light, but everyone I know that I respect started skeptical, which is very natural. It's new technology. >> I need to understand it. I'm I'm skeptical that there could be something, >> you know, what what what do you need new money for? I So, everyone I know then did the work. All but one. There's one hold out and I think he's just holding out. He's like doing a Peter >> That's definitely Pomp, right? It's certainly Pomp because he's a friend of mine. >> Yeah, certainly Pompe. It's one guy and I won't name names, but it's one guy and and he wrote a book on Fiat. So, maybe that's why. But but the point is every other person I know from Paul Tudtor Jones to Ducken Miller to I mean we're talking smart people like really smart people they all started like no don't talk to me about this >> and and yet they all have come around because once you do the work and once you understand what a blockchain really is and and what Bitcoin really is you can't unsee it. Yeah, it's true. It's true. What's your worst idea right now? I have to ask. Come on. >> Oh, my worst idea. Okay, I love that. Um, my worst idea right now, um, Chinese solar companies. >> Okay. Okay. >> Yeah. And and again, I'll give credit where credit is due. Um, so we have this great relationship. It's a firm called JB Investments and JB is just the initials of the guys and um they raise a fund like every three or four years and so they've only had like seven funds in the last you know 20 something years and their their strategy is super simple. They wait until a segment of an industry has massive bankruptcies and then when 90% of the capacity goes away, they buy. So they did it in auto parts, they did it in airlines, they did it in Met Coal, they did it in oil and gas and and now they're doing it in in Chinese solar. But look, we have a an an office in China that we've had since 2007. I've been investing in China since 1996. I love China. I love everything about it. I think they're so good at everything. They're leading in everything from AI to 5G to I mean, they're amazing. But man, people hate China. I mean, >> oh yeah, >> we can't we we have we have a China We've had China funds over the years. We can't even get people to like open our emails, let alone take our calls. So, China is is hated and then solar people are like, "Oh, there's too much capacity." And like, "Yeah, that's that's what's And so, there's going to be massive bankruptcies." And and so that's that's probably the one that the people would be the most violently opposed to. I mean, Chinese tech is right behind that. I mean, other than David Ter, no one believes that, you know, Alibaba is a better buy than than a US tech company. It is. Um, and then beyond, you know, the other one I I I I think I get a lot of hate on, I'm back on energy, >> you know, oil and gas is not going away. >> No. >> And you know, one of my favorite commercials, uh, maybe it was three years ago, four years ago, it was a couple getting ready for a date. And every time they used something that was made of petroleum, about halfway through it would disappear. So, the guy's taking a shower and suddenly the water turns cold and she's putting on her makeup and the lipstick disappears and she goes to put a fork in a salad and the lettuce disappears and they go out to the car and the back tire is gone. Everything in our world is petroleum. >> So, this idea that somehow we're going to live without it makes no sense to me. So, I I I like that one, too. If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance at hardassetsalliance.com. That's hardassallalliance.com. >> What about the crypto space? What what's exciting in the crypto space currently? Are the trends that you're following? Where are we in this development? >> I'm a I'm a long-term wildly bullish believer in in Bitcoin. To me, Bitcoin has won >> as the money for the next 5,000 years. So, gold was money for the last 5,000. Bitcoin is money for the next 5,000. It's the transition from analog to digital. >> Look, money is an asset that exists in the absence of a liability. Gold has been that. I mean, we had puka shells and stone wheels, but but gold has been that for 5,000 years. Now we have a digital version which is more divisible and more portable. Yeah. >> Same scarcity. So >> I think it it does that. And so therefore, >> what does that mean? Well, that means that a single ounce of gold has been a single ounce of gold for 5,000 years. But the value of that gold has changed from >> single pennies to, you know, 40 something hundred dollars. The gold didn't change. the monetary unit changed. And the problem with currencies, there have been 775 paper currencies in the history of the world. Threearters of them no longer exist. The oldest today that's still surviving is the pound sterling. And for a pound note, you used to get a pound of sterling silver. Today, it would take you 174 pounds to get a a pound note. So, it's it's just not it's not the same. And the pound note didn't change. >> Yeah. >> You know, it's just a piece of paper, piece of linen. Um, someone posted a picture the other day like $50 bill and $100 bill. What is the difference between these two? >> Belief and custom, >> right? You believe one is worth 50 units of effort and one is worth a hundred units of effort. That's just a belief in custom. >> And so the problem with fiat is all fiat eventually goes to its intrinsic value which is zero. All currencies have intrinsic value. Zero. Money has intrinsic value. Gold has intrinsic value. Bitcoin has intrinsic value. >> But it's belief in custom. >> So So that's one thing that I'm I'm I'm >> internally optimistic. But that's it's not going to go up as fast, right? Because we're not going to devalue the currency as fast as we did the last five years. The last five years, we printed more currency in the United States than the previous 245 years. that's just not going to happen again. I mean, we'll print more, but we're not going to wy it, I don't think. So, so that's one. Um, I I want to like the whole smart contract >> universe because I do believe that >> that there's a role for >> a world computer, right? I do believe there is is a role. Now, a couple things on this. So, one, it's funny. I love to go on, you know, spaces and podcasts and stuff. And it's funny if I go on a Bitcoin maxi show, they're like, "Oh, you're a shitcoiner." Like, what are you talking about? I own a lot of >> And they're like, "No, but you own Ethereum. You own Salana." I'm like, "Yeah, and your point is what?" Um, and if I go on a Salana show, they're like, "Oh, you're a Bitcoin maxi." I'm like, "I own a lot of Salana." Like I made more on Salana than any investment in my whole life. >> Wow. >> Not credit to me. Not credit to me. Credit to Kyle Smani and his >> Kyle, >> but you know, still I I get to spend the money now. Um best investment ever in my career. I mean, >> wow. >> So, grateful, but and that's just the law of small numbers. You put a small amount in that turn into a big number. Um, but but the point is that I I'm I'm torn because there are those that don't want to believe in one or the other. I'm like, but they're not mutually exclusive. They're different. Now, I also I also struggle >> like I'm a believer in runes and like, you know, the guys will love me. I'll say dog, you know, I like dog go to the moon and like how could you like such a meme coin? I'm like, yeah, but it's a memecoin on the right chain. And what do I mean by that? I'm a big proof of work guy. Proof of stake >> has it. It to me it's too close to the old system. He who has the gold makes the rules. >> I like proof of work, right? You have to do the work. And so I own a couple NFTts and you know dubious value. What is value? It's an eye of the beholder. But they're worth something. You know, thousands of dollars, whatever. I don't want them on a chain that points to an AWS server. >> That's not onchain. That's kind of on chain. >> Totally. >> I want it on chain. Like, >> yeah, >> like my PFP is on the Bitcoin blockchain. Now, there are those say, "Well, that's that's polluting the chain." I'm like, "Why?" >> I mean, it's there. It's not causing any stress. >> I was not expecting for you to come on here and talk about ruins of all things. And those are essentially those are for the people who don't know those are inscriptions on Bitcoin itself canonical. Um and there's a debate. Do you debase beautiful Bitcoin? >> Absolutely a debate. >> I I think it's fine. Like I I have a couple myself. Um I don't know if they're worth anything, but that was the last thing I was thinking that you're going to talk about. >> And and and the thing about it is the idea of it >> is so logical, right? If you think about it, if everything's going to be digital, >> Yeah. every stock, every bond, every currency, every commodity, every piece of fine art, every building, every private business. If ownership, not the physical thing, but if the ownership and the digital identity, like my driver's license, my marriage license, my passport, if all of that's going to be digital, I kind of like the idea that it's on a chain that can't be seized, can't be corrupted, can't be hacked, can't be turned off. Like I got in this debate with the Salana guys and look Salana's been very >> You're definitely a Bitcoin maxi by the way. >> Just kidding. >> It's funny because I I got in a thing because I said my problem right now with Salana is transactions get vaporized AND OH MY GOD HOW CAN YOU SAY THAT? THAT IS NOT WHAT HAPPENS. We've never rolled back the chain. I didn't say you roll back the chain. I said more often than I like I put a transaction out there. the network's down and unless I see it and rescend it, it vaporizes. That's it's not like the end of the world, but it's less than good. And so until you fix that, I I struggle >> and and then you know, you got all the other things about what about the wash trading and the real volume like >> whatever. But but we know that it's faster and cheaper. >> And you know what am I and again I make the Ethereum people really pissed on this. >> I asked the question, well if Ethereum was invented today instead of first, would anybody use it? It's a legitimate question, right? >> Yeah. >> Slower and more expensive. So if you had the choice now, could you say, "Well, it's more secure, so I'm willing to give up speed." Yes. Right. Good, fast, cheap. Pick two. Like when you're building a house, you know, you can get it good and fast and it won't be cheap. Good and cheap and it won't be fast. So, um the there are trade-offs in all of this, but it's because the technology is evolving. >> Yeah. >> And at the end of the day, I am a technology maximalist. >> Yeah. >> I love technology. I love working with innovators. I mean, I was on the phone yesterday with this guy in Hong Kong. He's working on uh a project with with Anamoka, and I'm trying to keep up. I mean, I really am, but I'm not an engineer. I'm an old finance guy trying to, you know, keep up. But, man, he was going deep into the tech. And I say it all the time, like, I don't understand how you and I can be talking in real time in HD and I'm staring into a metal and glass box. That just doesn't make any sense to me. And I don't really understand the difference between CDMMA and TDMA, but I don't really care. And so I just know that there are people like this guy I was talking to yesterday >> who do know all the differences between sharding and this and that. >> And that makes me comfortable. And so I just want to I want to partner with those people. We talked to this guy the other day. He basically invented everything that you do on your iPhone related to the app store. He coded by hand like him personally. And then he invented a the chip that Nvidia that AMD is now competing with Nvidia. You know, the current CEO is taking all the credit, but he's like, I built that. You can you can look you can pull up the the notes and I built it and he's got this new company and >> and like I could talk to this guy all damn day. I mean he's so now part of it he's he's been around a long time. He's done a lot of things and he speaks my language. Old guys old guy talk. But but then on the flip side we talked to this kid and my wife says you can't call him a kid. That's disrespectful. Like he's 30 years old. I mean he's younger than my kids. And so I love this. So he said, you know, he worked, he went to Duke, you know, that other school down the road. I call it University of New Jersey at Dur. >> Never heard of it. >> I know. Never heard of it. UNJ as I like to refer to it. Um and because 80% of the class from New York, New Jersey, but >> it's not 80, but it's pretty high. So he was in the lab and he's like, you know, why does my phone always get hot? Huh? It's because the memory's over here and the processor over here and the electrons go back and forth and the wires get hot. Says, "What if we use photons?" The guy says, "You can't do that. Photons won't go in in silicon." It's like, "Well, it go through liquid crystal, right?" We said, "What if we put the liquid crystal on the silicon?" Like, can't do that. So, he goes to the lab and he does it. And I'm like, "Okay." And then even better, I love telling the story. One of best investments that we ever did was the result of what I call the the the triple play. So to get the best returns in venture, you need three things. You need a technology cycle. So that 54, 68, >> yeah, >> 82, 96, 20110, 2024. >> You need low levels of money chasing deals. So if there's too much money chasing deals, they'll pay too much. So your returns go down. >> Yeah. Yeah. >> And you need a bunch of laidoff workers from a recession. And the last time we had all three up until this year was 96. So in 96 we had this guy, he just got laid off by Bell Labs. And he says to the guys, "Hey, can I take my project with me?" And they're like, "Dude, we don't know what dense wave multiplexing is. Knock yourself out." And he goes all over Silicon Valley. No one will fund him. And the best part of the story, the only person that would give him money is his retired third grade school teacher who gave him her life savings of $300,000, which was not a good decision. I'm not saying that was a good decision, but she trusted him. And so finally, one venture fund gives him some money. Well, they said, "What is it?" Well, you know, fiber optic cable, white light, x data. If I shine it through a prism, I get eight colors. I get eight times as much data. 16 colors. Six time. And they're like, "No way. Does it works perfectly comes um now I'm forgetting the name of the company. Uh but it worked and became a multi-billionaire." And her 300k turned into 300 million. I love that part. >> Love it. >> So, love it. But um I can't believe I can't remember the name of the company, but it doesn't matter. So uh but he was laid off, right? Nobody was doing the deals. All the venture guys were out of money and we had the technology cycle around the internet. So we needed to expand the capacity of fiber optic cables. So if you look at today, you know, what do we need? we need to expand the uh the capacity of doing analysis, >> you know, AI inference. >> So this guy says, well, I could take the laser >> and shine it through a prism and you know, CPUs work in two dimensions. They read words. GPUs process images and read words, but they can go faster, right? pictures worth a thousand words, but they're still linear and sequential and they're two-dimensional. But he's like, matrix math, which is what inference is about, the way the brain works. Brain doesn't work in two dimensions. It works in three dimensions. >> He's like, I'm going to paint the matrix on the crystal and paint it on this side and then I'll have a three-dimensional inference tool. And they're like, no way. It works. just got funding from Bill Gates and Microsoft and you know we're following on and >> that's great. >> I mean now maybe it doesn't work and maybe it's a but if it does what we think it's going to do it changes everything because >> not having heat in your machines means no more cooling no more you know restrictions on space you can have all your models locally on your laptop >> be awesome. >> Yeah. So, so 24 next 14 years is is 2038. >> What what do we think's going to be out on that horizon? I mean, my son's getting into quantum now. You have you're we're in this period now of AI and crypto. I think those two technologies are absolutely intertwined. >> Intertwined. We call it blockchain intelligence, >> right? It's the same thing. I mean, you need each other. Like, we can go through X42 like all these different things that are coming together. >> We keep hearing this quantum thing like what's 2038 going to bring us? I think I think Quantum is is the most likely. >> Yeah. >> And that's about the right time, right? I mean, you know, all the the guys Long Regetti going against Martin Skrey, which is never a good idea. I mean, whether you love him or hate him, the guy is super smart. >> I would not be on the other side of Martin on this trade. Um, and and look, I I think the Oaklo crowd, the Regetti, I think they're all scammers. I mean, but but whatever. So, but 15 years, 14 years from now, 13 years from now, I think that's the right. So, I think quantum is the next the problem with quantum and we've got some small investments. The problem for quantum is computing is really about precision faster. >> Yeah. >> Right. That's what because we can do all the things that computers do faster. Yeah. They're more efficient. We can read, we can do math, we the the thing that that that is crazy a little bit like if if it's binary one or zero, then we can accurately get combinations of ones and zeros to make the, you know, the color of your eyes be blue or brown or whatever. >> Okay. But if I'm two states at once, which again boggles my mind a little bit. >> Yeah, it's insane. What happens if you you catch it at the wrong phase transition? Well, you get an error rate. >> Yes. >> Well, the error rate now is unacceptable. Like if I ask it two plus two, I better get four five six% of the time, right? 96% not going to do it. Yeah. >> So I I until they can overcome that piece of it, I don't I don't see the practical applications. Like yes, it can factor prime numbers way faster than a CPU, but who cares about factoring prime numbers? What we need? Can you can you model this, you know, protein or can you, you know, secure this this asset using Shaw 256. Now, oh, it's going to break Shaw 256. Maybe. But as I understand it right now, given the number of cubits we have, we basically have about as much compute power as my Pentium 486 from 19 whatever that was 87. So I'm not I'm not I'm not afraid of a Pentium 486. >> Yeah. So So as an investor, how do you play these cycles? Is it too early? As you know, 2038 is pretty far away. Are you still focusing on the here and now? So, it's too early in the public markets. And so, I will argue that the quantum companies in the public markets are like the.com companies in the.com bust, right? You change your name to do and your stock went up. I'll give you example. So we invested in venture, not in the public markets, in venture in this company called Art Technology Group in 1999 and they went public in 2000 and our cost was 50 cents. Goes public goes all the way to a hundred bucks. Lock up comes off. I call the VC say what do you think? He says I can't talk. I'm an insider but I can tell you two numbers. Revenue 6 million market cap 6 billion. I gotta go. I gotta go. And we sold. >> Now, the stock went down to four, which think about it from 50 cents to four eight times. I would have been pretty happy, but I'm way happier at 200 times. And so, I think that's what's going to happen with all of these stocks. Like, everyone's all excited about nuclear. >> I take the other side of this. The problem with GPUs and AI right now is this belief that well all we need to do is get more power and have more chips because the chip maker wants to sell chips. Shocking. Ask the barber, do I need a haircut? Yes, you need a haircut. >> So, we want to sell more chips. >> But again, that's not how the brain works. The brain is not a brute force. This is the most amazing thing. Our brains function on 20 watts. 20 watts. 247 365 90 plus years. 20 watts. 20 watts. >> How? And where are the watts created? Mitochondria, all that kind of stuff. But 20 watts. >> So, but how does it do that? Well, like right now all around you there's all this stuff, but you're ignoring and I'm ignoring 90 plus% Right? We're only focused on the conversation we're having, maybe a couple things in the frame, but everything else in the room around me, my brain doesn't process. That's not how computers work. They have to process everything all the time. And worse, >> they process it once, then they process it again and again. And so the idea that we linearly extrapolate that power demand >> makes no sense to me. So, I don't think we're going to build a bunch of nuclear reactors. I actually don't believe they're going to build nuclear reactors the size of, you know, my backyard. I don't think that's going to happen. And I think it's novel to try. And people say, "Well, but there's nuclear reactors on submarines." Yeah. Encased in a giant amount of lead underwater under pressure where if something bad happens, it's okay. I mean, not okay, but >> not good for the sailors, but Yeah. Here. looking for the sailors. No. And look, I I I got recruited to be in the new when I was in college. >> Of course you did. >> And I got on the sub out in San Diego and they closed the hatch. I'm like, >> hell no. >> Claustrophobic. It was >> I always had dreams of being Maverick, right? I I wanted to be a naval fighter, a naval aviator. >> Oh, they're I didn't have the right stuff, so to >> speak. Yeah. Yeah. So, Mark, uh, as we come to the end, got to wrap up. Um, any final thoughts of this conversation has been just absolutely fascinating from my perspective. >> No, look, I I appreciate uh one, I appreciate the conversation. Two, I appreciate your uh allowing me to go off on on different tangents. What what I love about conversations, you know, um I have a buddy who's he's a podcaster and and he tweeted one time. He says, "You know what makes a great podcast is you you ask good questions and then you shut up." Like, no, Scott, that's not what makes a great podcast is people who prepare before. So, they have good questions to ask, which you did, obviously. But then they listen to when you answer and they ask a better follow-up question, which is why we have a conversation. That's what a conversation is. And so I I I've really enjoyed the conversation and you know I talk too much but but I I love when people give good questions and good ideas because I I am a huge believer that dialogue and debate in search of truth is what it's all about. And what I really like, like I say, you'd expect we talk about runes because most people would think if he likes Bitcoin, he can't like runes. Or if he likes, you know, EVMs, he couldn't possibly like inscriptions. Like, why why wouldn't I? I mean, I think um now God, I'm blinking on his name. um the guy that uh wrote all the rune code um he's got a single name on Twitter, but um >> oh my gosh. Anyway, but I mean I love the guy. I think he's super Leonitus. He is so smart and he didn't write the code, but he's he's the the dog promoter, but um there's another guy who wrote the code. But anyway, I love these guys because they're so smart and they're pushing the envelope and and yeah, I'm I'm I'm open to the other side that oh, it's just junk clogging the network. >> Well, show me show me why. Show me why. >> Yeah, got it. >> And if you can't show me why, then I'm not gonna just believe you because you're standing on principle. It's like it's like the argument of >> peer-to-peer electronic cash system. Yeah, got it. That's what I said. >> Awesome. Well, thank you so much for coming on. I have one favor to ask. Next time you talk to Pomp, ask him what Army stands for. And the answer is aren't real Marines yet. And so just make sure you do that for me. >> I will. I will. And then I will also say that that you and he have now made a bet for two weeks from now or a week and a half from now. >> Oh yeah. >> For the big game and uh aren't aren't aren't really Marines yet. I love it. >> Good. Step for five. Take care. B. Thank you so much. >> Yep. See you. >> Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.com/free. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. Thank you all for watching. We'll see you again next time.
Mark Yusko: Bitcoin, AI & the Next 14-Year Tech Boom
Summary
Transcript
The greatest wealth comes from investing in innovation. To do that, you have to invest in something that you believe in before others even understand. You'll be mocked and ridiculed for your non-conensus action, but it's totally worth it. To me, Bitcoin has won as the money for the next 5,000 years. So, gold was money for the last 5,000. Bitcoin's money for the next 5,000. Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. >> Ladies and gentlemen, welcome back to Wealthon. This is Chris Perkins, president and managing partner at CoinFund. And today I am very lucky uh to have a guest by the name of Mark Yusco, founder of Morgan Creek Capital. Welcome aboard Mark. >> Hey, thanks Chris and uh excited to have this conversation and uh appreciate the invitation. >> Uh looking forward to it. Um uh as we begin, would love to just get a little bit of background on you and Morgan Creek. Um I think a lot of listeners are familiar with you, but for those who may not be, love to get an overview. I I'll give you a short version, although I don't do short well. My wife will confirm that. Um, but I'll give you a short version. So, uh, I'm a left coast guy. Grew up in in Seattle, ended up in the Midwest for college. Uh, came down here from my alma mater up at Notre Dame to North Carolina. Uh, we're in the Carolina blue today to run the endowment. 21 years ago started Morgan Creek Capital Management, which was basically one of the early firms to bring the endowment model of investing to other investors through an outsourced CIO model. Then seven years ago, oh jeez, it's a long time. Um, now almost eight years ago, formed Morgan Creek Digital and started my chapter three. So my chapter one I worked for not forprofits as an asset allocator. Uh, chapter two, I ran a asset management, wealth management business. And then chapter three, I'm a a late in life venture capitalist. I always say chapter four, I'll teach. >> Oh, that that that works out. Um, and I guess uh congratulations on landing Bill Bich down in North Carolina. >> Uh, you know what? Yeah. Um, I'm not a fan. I'm a Carolina fan. Huge Carolina fan. Not a Bellich fan. This has been the most disastrous year, >> but our basketball team is great. So, I'm I'm focused on basketball. >> I went to Navy and we're doing all right. So, anyway, >> no, Navy is I'm I'm I'm a huge Navy fan and I mean, it's a big place, but do you know a guy David Jones from down here in Chapel Hill? >> I don't. No, no, no. >> Okay. I mean, he might be a couple years older than you, but but he's a a Naval Academy grad, good buddy. Good. Um, and actually the guy I did an interview with earlier today was also a Navy grad, much older, but um, lots of lots of great Navy people. >> So, let's get after it then. Um, you know, really appreciate your background and history. I usually tend to, you know, I come from the digital uh, asset space. I really like to dive for for listeners on that vertical within within your career. Can you tell me about a lot of folks are now thinking about this asset class and they're just like something is going on here. You know, for me, I had my red pill moment as we call it. Can you walk us through your journey into the digital space? >> Oh, absolutely. And look, um I love the fact that you refer to as an asset class because because it is and there are a lot of people still fight that. >> It is. It is. And at the end of the day, what we're talking about is a technological innovation. And and that was the aha moment for me. And again, the shortest version of that is I was super lucky. I I joke my life was the technology cycle. Meaning, so 1954 before I was born, the mainframe computer was invented. And my dad happened to be one of those guys who installed mainframe computers into companies. Okay. 1963 I come along. Five years later an innovation happens out in Silicon Valley around the microchip and suddenly not just big companies can have computers but now smaller companies can have computers. And so I grew up in Seattle. 14 years later, innovation happens around the personal computer. The funny part of the story is I say most of my friends I grew up with don't work anymore because they were smart enough to go to work for for Microsoft. I wasn't. Um, now I defend myself saying if you ever seen the picture, the original Microsoft 11, you wouldn't have worked for them either. Now they're all multi-billionaires and I'm not, so I shouldn't make fun of them, but it's a funny picture. I mean, Bill Gates glasses were like this big and you know, the beards on the guys and >> but 14 years later now it's always 14 years. Why? Well, it has to do with innovation comes from young people. >> Because they don't know what they don't know. So, you know, Mark Andre was 19 when he had the browser and Larry and Sergey were 21. And so, it's 1996. Larry and Sergey are, you know, Stanford students. And uh we had a chance to invest in Sequoia and they put 10% of the fund into this company called Google. And I remember like it was yesterday our board saying, "Mark, that's a dumb name." Like, "Okay, yeah, fine. But now it's a verb, so it's pretty good thing." Um but more importantly, they said, "Why would you invest in the number 21 search engine?" Like, "Well, we're not. They don't actually do search." like, well, what are you talking about? Like, well, they don't actually when you type a question, they don't actually go search the internet to find your answer. They indexed the internet so they know where the information you want is. So, they can send you there faster. That was their innovation. And if you control the flow because it's easier and better than ask Jeieves or webcwler or whatever, you can charge more to advertisers. So turned out all right. Our 500k turned into 200 million. There should be a quad at Notre Dame called the Google quad. And the light bulb goes off. I mean literally the light bulb for my life went off that investing in infrastructure around technological innovation was a big deal. So 14 years later 2010 and I remember I was actually back in Seattle. I'm at Craig Macau's family office and I asked his family office guy, uh, you know, do you think the mobile net will be as big as the internet? And he's like, Mark, are you joking? Ask me if they want a computer, like whatever. Ask me if they want a phone. Like, I already have two. I don't need another one. Yeah, it'll be bigger than the internet. And and again, aha moment for me. I was at a traffic light here in Chapel Hill. Uh, 90 seconds, right? And I bought a plane ticket on Travel Velocity. like yeah this gonna be big and big. So e-commerce and the internet and the mobile net did to commerce and media 7 trillion dollar wealth transfer and we got in front of a bunch of that through investing in venture capital and technology and innovation. So I told you I don't do short well. So 2013 >> 2013 >> I have a buddy Dan Morehead Pantara I'm sure you know him and talked to him. >> So Dan and I go back 35 years. He was a Goldman. Then he went to Tiger where I had a close relationship with Julian Robertson. When he left Tiger to start Panta Macro we were first money in. He called me in 2013 said come to San Francisco buy you dinner. Like great have dinner. My friend says Mark big news. I'm shutting down the fund. Dan, why would you give back a billion dollars charging 2 and 20? He says, I'm gonna spend the rest of my career in Bitcoin blockchain. 2013, I was not running drugs on Silk Road. I was not a cryptography student. I had heard of Bitcoin, but I didn't know what it was. Blockchain I was in. I'd made two investments through Sequoia and August Capital. David Hornac. Blockchain I got right. It was the new operating system. So 2024, 14 years after 2010, is what I call the truth net, right? We're we're replacing trust with truth using blockchain technology. So aha moment and I actually wrote a long piece about this called the digital gold rush back in 2017 where I said, you know, the richest guy in California in the gold rush was not a gold miner. It was the guy who bought the pots and pans and picks and shovels and sold them to the gold miners. He was the first millionaire in California. It was called Yerba Buena back then. And he literally banged on a pan going down the street saying there's gold in the American River and come buy my stuff. $6 for an egg in, you know, 1849. So crazy stuff. Um, but the aha moment went off, but I wasn't smart enough to get it right away because I'm a finance guy. I'm a traditional finance guy. And no, Mark, you invest in stocks and bonds and currencies, commodities. >> And so I wrote a letter in 2014 to my clients saying, you know, I think this is a big deal. Maybe we should put a little bit in. I got hate. Like, don't talk about magic internet money. You're an idiot. We will fire you. >> Yeah. >> Wow. I mean, that is a violent reaction. It was a 41page letter, one paragraph about Bitcoin. And they're like, "You're an idiot." Like, "At least you read the letter." But I I I let that impact me. And from March of 14 to September, the price went from 500 bucks to 186. I was like, "Oh, they were right." And then eight weeks later, it was a thousand bucks. I'm like, "No, there there's something here." And that's when I did my like super deep dive. Yeah. >> And the little funny part of the story um is I you know a year later after I wrote the first letter uh May of 2015 my son was graduating from Notre Dame and I said one word right not plastics like the graduate blockchain. We were early investors in Coinbase. I said go talk to Dan get a job at Coinbase and it'll be great. And he's wanted to live in San Francisco his whole life like since he was a little kid. And he's like all right. And he goes out and he comes back says, "I don't know, Dad. Maybe it's gonna be a big deal. I'm gonna go with KPMG. It's safe. Gets me to San Francisco. Like, you're gonna hate it." Which he did. Nine months later, he quit with no job, which is like a millennial thing. They just quit. Like, no, you get another job, then you quit. But love my son. Never asked me for money. Nine months took him to get a job. Got a job and only in San Francisco. I'm really proud of him. His company gets bought by Adobe. His boss gets fired. The new boss says, "I need you." So, they give him a raise. They give him some stock. Then the old boss goes to a company called Snowflake. Hires him away. More stock, more money. They go public to the moon. It's awesome. But when Coinbase went public, he calls me up. He says, "All right, Dad. You were right. I should have gone to Coinbase, but you're not as smart as you think you are." Like, "Oh, I told you work at Coinbase." So, yeah, but you didn't lever up the house and put all in Bitcoin. like little. That is true. I did not because I was afraid. And so I in 2017 I got approached by uh two young guys, Pomp and Jason. And uh they had seen me on the internet talking about, you know, Bitcoin's big, really big. Blockchain's big, really big. And they said, "Hey, let's start a fund." Like, we can't just start a fund. Like, yeah, we can. There's no competition. There's Panta and there's Blockchain Capital. We'll be the third one. Like, okay. And and so again, luck. Super luck. So, we send Pomp, 30 years old, to the first pitch to a pension fund up in DC, goes in 10, 15 minutes in. The CIO, this amazing woman, Kathern Molnar, says, "All right, I get it. I'm in, but it's gonna take me a while to get my board in, but I'll find a way. He calls me up. He's like, "We're gonna raise a billion dollars. It's going to be amazing." We didn't raise a billion dollars. The next 35 meetings, Chris, over University of Texas Endowment said, "Get out." Like, yeah, >> you're an idiot. Just get out. >> So, we didn't raise a billion dollars, but we raised 40 million bucks, 20 of it from Fairfax. And I'm super and I love the fact that last week we sent them back $3 for every dollar they put in and they still have $5 left. And and it makes me happy because they were the visionaries. They took the risk and their pensioners are the beneficiaries because they believed that it was an asset class. This goes so I said I don't do short but this is a long-winded way of saying you're right that this is an asset class. It's the asset class. It's innovation. Like most people think stocks, bonds, currencies, commodities. Those are the four basic asset classes. >> But innovation is what makes stocks, bonds, currencies, commodities happen. >> Yeah. >> And so if you can focus on innovation, and it's my pin tweet on Twitter, >> right? The greatest wealth comes from investing in innovation. >> To do that, you have to invest in something that you believe in before others even understand. >> Yeah. Yeah, >> you'll be mocked and ridiculed for your non-conensus action, but it's totally worth it. >> And if you need to be liked and you need to be right, investing is really hard. >> It's really hard >> because I say this all the time. When you make an investment and you feel good about it, you'll probably do fine. Maybe you make a little money, maybe you lose a little money. and you make an investment and you are super positive, you're going to lose a lot of money. When you make an investment and you're a little unsure, you're gonna make some money. When you make an investment and you just feel sick to your stomach, you make a lot of money. >> And it's really hard, right? We don't like >> it's so hard. >> It's so hard. >> No one likes that. And it's because >> if you feel really good about it, >> so does every So does everybody else. So does everybody else. >> There's comfort in the herd. There's warmth. EVERYBODY SAY, "OH, YOU'RE SO SMART. YOU'RE SO OH, THAT'S so great." >> No, I want you to tell me I'm an idiot because then I'm on to something. Now, it doesn't mean it will work every time. That's not my point. And it doesn't mean I'm a genius. I in fact, I don't have big ideas. I'm I'm not a biggie entrepreneur. I'm a lit entrepreneur. I like to build things, but I don't have big ideas. But what I'm actually pretty good at, I have a rule. Hear it once, remember it. Hear it twice, write it down. Hear it three times, do something about it. And it served me really well for a very long time. And my favorite example was when I first came down to North Carolina. I've only been here a couple weeks. And if you remember, the Economist magazine in 1998 had a cover story of these guys covered in oil. It said a world a wash in oil. And in the article it said oil was 11 bucks. They said we think it's going to five and someday it'll probably be free. Like that just doesn't sound right. But okay, I'll remember that. Two weeks later, cover of Business Week. Richard Rainwater, God rest his soul, one of the greatest investors of all time. I was on the cover naked long $900 million of oil. Ripped that baby out, put it on my desk. Two weeks after that, three guys trained by Richard had formed a company called Natural Gas Partners that did oil and gas. And so I'm like, ding, ding, ding, ding, ding. Got to do it. So I go to my board meeting and I say, "All right, I want to put 1% with these guys and I want to put 5% in commodities because we had zero." And my board chairman says, "Mark, that's the dumbest idea I have ever heard, but if you really want to do it, okay." I'm like, "Okay, great." So, he calls me in the president's office after the meeting. He says, 'Mark, when I say that's the dumbest idea I've ever heard, that's what I meant. The other stuff was just to be nice. And the chancellor says, "Well, well, Max, you know, he's only been here a couple weeks. If we're not going to take any of his ideas, we should just fire him right now. But maybe we should keep him around a little, try a couple ideas, then if they don't work, we can fire him." Like, guys, I'm sitting right here now. I wouldn't tell the story if it didn't have a good ending. And again, it wasn't me. It was Richard and John and and the guys, Ken Hirs, that 5% we put in energy generated 25% of the endowment's returns for the next decade. >> Wow. >> Because they thought it was the worst idea they've ever heard. >> Yep. >> Because if they would have said it's the best idea they've ever heard, we would have done fine, maybe. >> Yeah. But and so the more hate I got about about Bitcoin, I knew it was a good idea. But here's the problem. >> We're all human and we don't like hate and we don't like people telling us we're stupid and we don't like people who say, "No, I wouldn't do that." And you said it, you know, we got to convince our our better half, right? And you know, in my case, better 90%. And they're like, "Oh, I don't know. Oh, I don't I don't know anything about this and I haven't spent any time on it. And one of my favorite parts of this space in one talking to smart people and and people who who also have seen the the crypto light, but everyone I know that I respect started skeptical, which is very natural. It's new technology. >> I need to understand it. I'm I'm skeptical that there could be something, >> you know, what what what do you need new money for? I So, everyone I know then did the work. All but one. There's one hold out and I think he's just holding out. He's like doing a Peter >> That's definitely Pomp, right? It's certainly Pomp because he's a friend of mine. >> Yeah, certainly Pompe. It's one guy and I won't name names, but it's one guy and and he wrote a book on Fiat. So, maybe that's why. But but the point is every other person I know from Paul Tudtor Jones to Ducken Miller to I mean we're talking smart people like really smart people they all started like no don't talk to me about this >> and and yet they all have come around because once you do the work and once you understand what a blockchain really is and and what Bitcoin really is you can't unsee it. Yeah, it's true. It's true. What's your worst idea right now? I have to ask. Come on. >> Oh, my worst idea. Okay, I love that. Um, my worst idea right now, um, Chinese solar companies. >> Okay. Okay. >> Yeah. And and again, I'll give credit where credit is due. Um, so we have this great relationship. It's a firm called JB Investments and JB is just the initials of the guys and um they raise a fund like every three or four years and so they've only had like seven funds in the last you know 20 something years and their their strategy is super simple. They wait until a segment of an industry has massive bankruptcies and then when 90% of the capacity goes away, they buy. So they did it in auto parts, they did it in airlines, they did it in Met Coal, they did it in oil and gas and and now they're doing it in in Chinese solar. But look, we have a an an office in China that we've had since 2007. I've been investing in China since 1996. I love China. I love everything about it. I think they're so good at everything. They're leading in everything from AI to 5G to I mean, they're amazing. But man, people hate China. I mean, >> oh yeah, >> we can't we we have we have a China We've had China funds over the years. We can't even get people to like open our emails, let alone take our calls. So, China is is hated and then solar people are like, "Oh, there's too much capacity." And like, "Yeah, that's that's what's And so, there's going to be massive bankruptcies." And and so that's that's probably the one that the people would be the most violently opposed to. I mean, Chinese tech is right behind that. I mean, other than David Ter, no one believes that, you know, Alibaba is a better buy than than a US tech company. It is. Um, and then beyond, you know, the other one I I I I think I get a lot of hate on, I'm back on energy, >> you know, oil and gas is not going away. >> No. >> And you know, one of my favorite commercials, uh, maybe it was three years ago, four years ago, it was a couple getting ready for a date. And every time they used something that was made of petroleum, about halfway through it would disappear. So, the guy's taking a shower and suddenly the water turns cold and she's putting on her makeup and the lipstick disappears and she goes to put a fork in a salad and the lettuce disappears and they go out to the car and the back tire is gone. Everything in our world is petroleum. >> So, this idea that somehow we're going to live without it makes no sense to me. So, I I I like that one, too. If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance at hardassetsalliance.com. That's hardassallalliance.com. >> What about the crypto space? What what's exciting in the crypto space currently? Are the trends that you're following? Where are we in this development? >> I'm a I'm a long-term wildly bullish believer in in Bitcoin. To me, Bitcoin has won >> as the money for the next 5,000 years. So, gold was money for the last 5,000. Bitcoin is money for the next 5,000. It's the transition from analog to digital. >> Look, money is an asset that exists in the absence of a liability. Gold has been that. I mean, we had puka shells and stone wheels, but but gold has been that for 5,000 years. Now we have a digital version which is more divisible and more portable. Yeah. >> Same scarcity. So >> I think it it does that. And so therefore, >> what does that mean? Well, that means that a single ounce of gold has been a single ounce of gold for 5,000 years. But the value of that gold has changed from >> single pennies to, you know, 40 something hundred dollars. The gold didn't change. the monetary unit changed. And the problem with currencies, there have been 775 paper currencies in the history of the world. Threearters of them no longer exist. The oldest today that's still surviving is the pound sterling. And for a pound note, you used to get a pound of sterling silver. Today, it would take you 174 pounds to get a a pound note. So, it's it's just not it's not the same. And the pound note didn't change. >> Yeah. >> You know, it's just a piece of paper, piece of linen. Um, someone posted a picture the other day like $50 bill and $100 bill. What is the difference between these two? >> Belief and custom, >> right? You believe one is worth 50 units of effort and one is worth a hundred units of effort. That's just a belief in custom. >> And so the problem with fiat is all fiat eventually goes to its intrinsic value which is zero. All currencies have intrinsic value. Zero. Money has intrinsic value. Gold has intrinsic value. Bitcoin has intrinsic value. >> But it's belief in custom. >> So So that's one thing that I'm I'm I'm >> internally optimistic. But that's it's not going to go up as fast, right? Because we're not going to devalue the currency as fast as we did the last five years. The last five years, we printed more currency in the United States than the previous 245 years. that's just not going to happen again. I mean, we'll print more, but we're not going to wy it, I don't think. So, so that's one. Um, I I want to like the whole smart contract >> universe because I do believe that >> that there's a role for >> a world computer, right? I do believe there is is a role. Now, a couple things on this. So, one, it's funny. I love to go on, you know, spaces and podcasts and stuff. And it's funny if I go on a Bitcoin maxi show, they're like, "Oh, you're a shitcoiner." Like, what are you talking about? I own a lot of >> And they're like, "No, but you own Ethereum. You own Salana." I'm like, "Yeah, and your point is what?" Um, and if I go on a Salana show, they're like, "Oh, you're a Bitcoin maxi." I'm like, "I own a lot of Salana." Like I made more on Salana than any investment in my whole life. >> Wow. >> Not credit to me. Not credit to me. Credit to Kyle Smani and his >> Kyle, >> but you know, still I I get to spend the money now. Um best investment ever in my career. I mean, >> wow. >> So, grateful, but and that's just the law of small numbers. You put a small amount in that turn into a big number. Um, but but the point is that I I'm I'm torn because there are those that don't want to believe in one or the other. I'm like, but they're not mutually exclusive. They're different. Now, I also I also struggle >> like I'm a believer in runes and like, you know, the guys will love me. I'll say dog, you know, I like dog go to the moon and like how could you like such a meme coin? I'm like, yeah, but it's a memecoin on the right chain. And what do I mean by that? I'm a big proof of work guy. Proof of stake >> has it. It to me it's too close to the old system. He who has the gold makes the rules. >> I like proof of work, right? You have to do the work. And so I own a couple NFTts and you know dubious value. What is value? It's an eye of the beholder. But they're worth something. You know, thousands of dollars, whatever. I don't want them on a chain that points to an AWS server. >> That's not onchain. That's kind of on chain. >> Totally. >> I want it on chain. Like, >> yeah, >> like my PFP is on the Bitcoin blockchain. Now, there are those say, "Well, that's that's polluting the chain." I'm like, "Why?" >> I mean, it's there. It's not causing any stress. >> I was not expecting for you to come on here and talk about ruins of all things. And those are essentially those are for the people who don't know those are inscriptions on Bitcoin itself canonical. Um and there's a debate. Do you debase beautiful Bitcoin? >> Absolutely a debate. >> I I think it's fine. Like I I have a couple myself. Um I don't know if they're worth anything, but that was the last thing I was thinking that you're going to talk about. >> And and and the thing about it is the idea of it >> is so logical, right? If you think about it, if everything's going to be digital, >> Yeah. every stock, every bond, every currency, every commodity, every piece of fine art, every building, every private business. If ownership, not the physical thing, but if the ownership and the digital identity, like my driver's license, my marriage license, my passport, if all of that's going to be digital, I kind of like the idea that it's on a chain that can't be seized, can't be corrupted, can't be hacked, can't be turned off. Like I got in this debate with the Salana guys and look Salana's been very >> You're definitely a Bitcoin maxi by the way. >> Just kidding. >> It's funny because I I got in a thing because I said my problem right now with Salana is transactions get vaporized AND OH MY GOD HOW CAN YOU SAY THAT? THAT IS NOT WHAT HAPPENS. We've never rolled back the chain. I didn't say you roll back the chain. I said more often than I like I put a transaction out there. the network's down and unless I see it and rescend it, it vaporizes. That's it's not like the end of the world, but it's less than good. And so until you fix that, I I struggle >> and and then you know, you got all the other things about what about the wash trading and the real volume like >> whatever. But but we know that it's faster and cheaper. >> And you know what am I and again I make the Ethereum people really pissed on this. >> I asked the question, well if Ethereum was invented today instead of first, would anybody use it? It's a legitimate question, right? >> Yeah. >> Slower and more expensive. So if you had the choice now, could you say, "Well, it's more secure, so I'm willing to give up speed." Yes. Right. Good, fast, cheap. Pick two. Like when you're building a house, you know, you can get it good and fast and it won't be cheap. Good and cheap and it won't be fast. So, um the there are trade-offs in all of this, but it's because the technology is evolving. >> Yeah. >> And at the end of the day, I am a technology maximalist. >> Yeah. >> I love technology. I love working with innovators. I mean, I was on the phone yesterday with this guy in Hong Kong. He's working on uh a project with with Anamoka, and I'm trying to keep up. I mean, I really am, but I'm not an engineer. I'm an old finance guy trying to, you know, keep up. But, man, he was going deep into the tech. And I say it all the time, like, I don't understand how you and I can be talking in real time in HD and I'm staring into a metal and glass box. That just doesn't make any sense to me. And I don't really understand the difference between CDMMA and TDMA, but I don't really care. And so I just know that there are people like this guy I was talking to yesterday >> who do know all the differences between sharding and this and that. >> And that makes me comfortable. And so I just want to I want to partner with those people. We talked to this guy the other day. He basically invented everything that you do on your iPhone related to the app store. He coded by hand like him personally. And then he invented a the chip that Nvidia that AMD is now competing with Nvidia. You know, the current CEO is taking all the credit, but he's like, I built that. You can you can look you can pull up the the notes and I built it and he's got this new company and >> and like I could talk to this guy all damn day. I mean he's so now part of it he's he's been around a long time. He's done a lot of things and he speaks my language. Old guys old guy talk. But but then on the flip side we talked to this kid and my wife says you can't call him a kid. That's disrespectful. Like he's 30 years old. I mean he's younger than my kids. And so I love this. So he said, you know, he worked, he went to Duke, you know, that other school down the road. I call it University of New Jersey at Dur. >> Never heard of it. >> I know. Never heard of it. UNJ as I like to refer to it. Um and because 80% of the class from New York, New Jersey, but >> it's not 80, but it's pretty high. So he was in the lab and he's like, you know, why does my phone always get hot? Huh? It's because the memory's over here and the processor over here and the electrons go back and forth and the wires get hot. Says, "What if we use photons?" The guy says, "You can't do that. Photons won't go in in silicon." It's like, "Well, it go through liquid crystal, right?" We said, "What if we put the liquid crystal on the silicon?" Like, can't do that. So, he goes to the lab and he does it. And I'm like, "Okay." And then even better, I love telling the story. One of best investments that we ever did was the result of what I call the the the triple play. So to get the best returns in venture, you need three things. You need a technology cycle. So that 54, 68, >> yeah, >> 82, 96, 20110, 2024. >> You need low levels of money chasing deals. So if there's too much money chasing deals, they'll pay too much. So your returns go down. >> Yeah. Yeah. >> And you need a bunch of laidoff workers from a recession. And the last time we had all three up until this year was 96. So in 96 we had this guy, he just got laid off by Bell Labs. And he says to the guys, "Hey, can I take my project with me?" And they're like, "Dude, we don't know what dense wave multiplexing is. Knock yourself out." And he goes all over Silicon Valley. No one will fund him. And the best part of the story, the only person that would give him money is his retired third grade school teacher who gave him her life savings of $300,000, which was not a good decision. I'm not saying that was a good decision, but she trusted him. And so finally, one venture fund gives him some money. Well, they said, "What is it?" Well, you know, fiber optic cable, white light, x data. If I shine it through a prism, I get eight colors. I get eight times as much data. 16 colors. Six time. And they're like, "No way. Does it works perfectly comes um now I'm forgetting the name of the company. Uh but it worked and became a multi-billionaire." And her 300k turned into 300 million. I love that part. >> Love it. >> So, love it. But um I can't believe I can't remember the name of the company, but it doesn't matter. So uh but he was laid off, right? Nobody was doing the deals. All the venture guys were out of money and we had the technology cycle around the internet. So we needed to expand the capacity of fiber optic cables. So if you look at today, you know, what do we need? we need to expand the uh the capacity of doing analysis, >> you know, AI inference. >> So this guy says, well, I could take the laser >> and shine it through a prism and you know, CPUs work in two dimensions. They read words. GPUs process images and read words, but they can go faster, right? pictures worth a thousand words, but they're still linear and sequential and they're two-dimensional. But he's like, matrix math, which is what inference is about, the way the brain works. Brain doesn't work in two dimensions. It works in three dimensions. >> He's like, I'm going to paint the matrix on the crystal and paint it on this side and then I'll have a three-dimensional inference tool. And they're like, no way. It works. just got funding from Bill Gates and Microsoft and you know we're following on and >> that's great. >> I mean now maybe it doesn't work and maybe it's a but if it does what we think it's going to do it changes everything because >> not having heat in your machines means no more cooling no more you know restrictions on space you can have all your models locally on your laptop >> be awesome. >> Yeah. So, so 24 next 14 years is is 2038. >> What what do we think's going to be out on that horizon? I mean, my son's getting into quantum now. You have you're we're in this period now of AI and crypto. I think those two technologies are absolutely intertwined. >> Intertwined. We call it blockchain intelligence, >> right? It's the same thing. I mean, you need each other. Like, we can go through X42 like all these different things that are coming together. >> We keep hearing this quantum thing like what's 2038 going to bring us? I think I think Quantum is is the most likely. >> Yeah. >> And that's about the right time, right? I mean, you know, all the the guys Long Regetti going against Martin Skrey, which is never a good idea. I mean, whether you love him or hate him, the guy is super smart. >> I would not be on the other side of Martin on this trade. Um, and and look, I I think the Oaklo crowd, the Regetti, I think they're all scammers. I mean, but but whatever. So, but 15 years, 14 years from now, 13 years from now, I think that's the right. So, I think quantum is the next the problem with quantum and we've got some small investments. The problem for quantum is computing is really about precision faster. >> Yeah. >> Right. That's what because we can do all the things that computers do faster. Yeah. They're more efficient. We can read, we can do math, we the the thing that that that is crazy a little bit like if if it's binary one or zero, then we can accurately get combinations of ones and zeros to make the, you know, the color of your eyes be blue or brown or whatever. >> Okay. But if I'm two states at once, which again boggles my mind a little bit. >> Yeah, it's insane. What happens if you you catch it at the wrong phase transition? Well, you get an error rate. >> Yes. >> Well, the error rate now is unacceptable. Like if I ask it two plus two, I better get four five six% of the time, right? 96% not going to do it. Yeah. >> So I I until they can overcome that piece of it, I don't I don't see the practical applications. Like yes, it can factor prime numbers way faster than a CPU, but who cares about factoring prime numbers? What we need? Can you can you model this, you know, protein or can you, you know, secure this this asset using Shaw 256. Now, oh, it's going to break Shaw 256. Maybe. But as I understand it right now, given the number of cubits we have, we basically have about as much compute power as my Pentium 486 from 19 whatever that was 87. So I'm not I'm not I'm not afraid of a Pentium 486. >> Yeah. So So as an investor, how do you play these cycles? Is it too early? As you know, 2038 is pretty far away. Are you still focusing on the here and now? So, it's too early in the public markets. And so, I will argue that the quantum companies in the public markets are like the.com companies in the.com bust, right? You change your name to do and your stock went up. I'll give you example. So we invested in venture, not in the public markets, in venture in this company called Art Technology Group in 1999 and they went public in 2000 and our cost was 50 cents. Goes public goes all the way to a hundred bucks. Lock up comes off. I call the VC say what do you think? He says I can't talk. I'm an insider but I can tell you two numbers. Revenue 6 million market cap 6 billion. I gotta go. I gotta go. And we sold. >> Now, the stock went down to four, which think about it from 50 cents to four eight times. I would have been pretty happy, but I'm way happier at 200 times. And so, I think that's what's going to happen with all of these stocks. Like, everyone's all excited about nuclear. >> I take the other side of this. The problem with GPUs and AI right now is this belief that well all we need to do is get more power and have more chips because the chip maker wants to sell chips. Shocking. Ask the barber, do I need a haircut? Yes, you need a haircut. >> So, we want to sell more chips. >> But again, that's not how the brain works. The brain is not a brute force. This is the most amazing thing. Our brains function on 20 watts. 20 watts. 247 365 90 plus years. 20 watts. 20 watts. >> How? And where are the watts created? Mitochondria, all that kind of stuff. But 20 watts. >> So, but how does it do that? Well, like right now all around you there's all this stuff, but you're ignoring and I'm ignoring 90 plus% Right? We're only focused on the conversation we're having, maybe a couple things in the frame, but everything else in the room around me, my brain doesn't process. That's not how computers work. They have to process everything all the time. And worse, >> they process it once, then they process it again and again. And so the idea that we linearly extrapolate that power demand >> makes no sense to me. So, I don't think we're going to build a bunch of nuclear reactors. I actually don't believe they're going to build nuclear reactors the size of, you know, my backyard. I don't think that's going to happen. And I think it's novel to try. And people say, "Well, but there's nuclear reactors on submarines." Yeah. Encased in a giant amount of lead underwater under pressure where if something bad happens, it's okay. I mean, not okay, but >> not good for the sailors, but Yeah. Here. looking for the sailors. No. And look, I I I got recruited to be in the new when I was in college. >> Of course you did. >> And I got on the sub out in San Diego and they closed the hatch. I'm like, >> hell no. >> Claustrophobic. It was >> I always had dreams of being Maverick, right? I I wanted to be a naval fighter, a naval aviator. >> Oh, they're I didn't have the right stuff, so to >> speak. Yeah. Yeah. So, Mark, uh, as we come to the end, got to wrap up. Um, any final thoughts of this conversation has been just absolutely fascinating from my perspective. >> No, look, I I appreciate uh one, I appreciate the conversation. Two, I appreciate your uh allowing me to go off on on different tangents. What what I love about conversations, you know, um I have a buddy who's he's a podcaster and and he tweeted one time. He says, "You know what makes a great podcast is you you ask good questions and then you shut up." Like, no, Scott, that's not what makes a great podcast is people who prepare before. So, they have good questions to ask, which you did, obviously. But then they listen to when you answer and they ask a better follow-up question, which is why we have a conversation. That's what a conversation is. And so I I I've really enjoyed the conversation and you know I talk too much but but I I love when people give good questions and good ideas because I I am a huge believer that dialogue and debate in search of truth is what it's all about. And what I really like, like I say, you'd expect we talk about runes because most people would think if he likes Bitcoin, he can't like runes. Or if he likes, you know, EVMs, he couldn't possibly like inscriptions. Like, why why wouldn't I? I mean, I think um now God, I'm blinking on his name. um the guy that uh wrote all the rune code um he's got a single name on Twitter, but um >> oh my gosh. Anyway, but I mean I love the guy. I think he's super Leonitus. He is so smart and he didn't write the code, but he's he's the the dog promoter, but um there's another guy who wrote the code. But anyway, I love these guys because they're so smart and they're pushing the envelope and and yeah, I'm I'm I'm open to the other side that oh, it's just junk clogging the network. >> Well, show me show me why. Show me why. >> Yeah, got it. >> And if you can't show me why, then I'm not gonna just believe you because you're standing on principle. It's like it's like the argument of >> peer-to-peer electronic cash system. Yeah, got it. That's what I said. >> Awesome. Well, thank you so much for coming on. I have one favor to ask. Next time you talk to Pomp, ask him what Army stands for. And the answer is aren't real Marines yet. And so just make sure you do that for me. >> I will. I will. And then I will also say that that you and he have now made a bet for two weeks from now or a week and a half from now. >> Oh yeah. >> For the big game and uh aren't aren't aren't really Marines yet. I love it. >> Good. Step for five. Take care. B. Thank you so much. >> Yep. See you. >> Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.com/free. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. Thank you all for watching. We'll see you again next time.