The Debt Trap: Why Gold Pumps First and Bitcoin Follows | Michael Terpin
Summary
Bitcoin Cycles: The guest outlines a four-season Bitcoin framework, expecting further fall-phase pain and a potential capitulation before the next multi-year uptrend.
Bitcoin ETFs: Spot ETFs broaden retail access and add structural demand, though flows behave pro-cyclically with inflows on strength and outflows on weakness.
Stablecoins: Rapid growth in stablecoins underpins remittances and corporate payments, with firms like PayPal and Stripe building offerings and third-world users treating stablecoins as checking accounts.
Decentralized AI & AI Payments: He sees decentralized AI plus crypto as the biggest near-term opportunity, with AI agents using stablecoins and emerging protocols (e.g., X42) enabling machine-to-machine payments.
Gold & Debasement: In monetary debasement cycles, gold typically rallies first followed by Bitcoin, echoing prior commodity supercycles and recent central bank gold accumulation.
Risk Factors: Near-term volatility stems from cycle-driven deleveraging; quantum computing threats are distant and likely addressable via protocol/wallet upgrades.
Institutional Behavior: ETFs and corporate treasuries broaden ownership, though some new entrants bought tops; disciplined accumulation and permanent-capital approaches are emphasized.
Transcript
In focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. Global markets are navigating a high stakes tugof-war today following an address to the nation where President Trump signal harder strikes against Iran. We're now seeing reports that Iran and Oman are drafting a protocol to monitor traffic through the straight of Hormuse. Now, this news has caused oil prices to to retreat from their session highs, and it's also helped stocks par some of their earlier losses. But in the crypto sector, the stress seems to remain here. According to onchain data, the largest Bitcoin holders have kind of turned into net sellers right now, and public companies like Riot platforms continue to reduce their holdings. But at the same time, legacy firms like Franklin Templant are pushing deeper into the space. So, who's right? Are we looking at a capitulation in a broken market or a shakeout that sets up for the next major leg higher? Now, Michael Turpin has argued that Bitcoin is in the fall phase of its cycle with more short-term pain possible, but that the long-term structural case remains intact. Joining me now to break down the volatility is Michael Turpin. Michael is a true pioneer in the digital asset space, having been a strategic investor and venture capitalist in the industry since 2012. Good timing. Uh he currently serves as a founder and chief executive officer of transform ventures uh and as the author of Bitcoin super cycle. Michael has developed a four seasons kind of framework to track market patterns and institutional behavior. Now Michael, you've seen every major boom and bust in this sector for over a decade. Welcome back to Kiko. >> Thank you back. And now I got to chat to you about kind of the volatility because your framework is built around reoccurring time patterns but you know obviously today we're dealing with massive geopolitical volatility. We had Trump escalation followed immediately by this reports of Iran and Oman's protocol for the straight of hormuse. I bring that up because how does your cycle model account for these types of kind of rapid external shocks? So that's macro and macro is less important than the supply and demand and the fear and greed that has repeated every single cycle. Satoshi in the white paper and a supplicant writings said that as long as the amount of net buying of Bitcoin in any four-year um period between havingss higher than the amount of new Bitcoin mined, the price has to go up. It's math. And so far that's been true. First having was $12. Second havinging was 670. third hand was $8,700 and the most recent having in 2024 was $64,000. All of the volatility that scares people off or brings them in um is based on fear and greed. And I identified uh as far back as 2015, my thesis on seasons of Bitcoin that is there are um behaviors that happen in the exact same order every cycle based on fear and greed. Bitcoin spring happens today the having miners all of a sudden wildly unprofitable because they have the same expenses and halfs but instead of it going down it stays flat because for every selling that somebody wants to buy bitcoin summer is the day you reach a new all-time high and it goes up like a rocket ship that's when the bubble pops about 9 to 11 months later and then when the bubble pops that's Bitcoin fall that's what we're in right now and that's when retail in particular panics in at the top they're panic selling at the bottom And that gives the opportunity for people like me who understands the cycles to buy in at the bottom and then just ride it all the way up to new all-time highs which has happened every single cycle. The longest period is Bitcoin winter. That is the 18 months or so that between the capitulation event that I believe is still coming in roughly October, one year after the bubble popped and uh the next having which is going roughly uh March of 2028. >> Yeah. What what kind of specific behavior are you watching right now that says sentiment is stretched enough to to buy against? Well, um you know, um I I also have one Bitcoin super cycle fund and we we've been buying anything below 60K. So, we've only had one uh one uh one buy so far, but uh we've got things from 60 all the way back down to uh to 40. And uh I think it's going to go down between 40 and 55. Um and again, the macro has not been that big of affect. If you look at what the price of Bitcoin was the day before um the the Iran war, it was 68,000 yesterday. 67,000. I think it's up to 66. It's been pretty flat. So, that has not been as big of an effect as um you know, the supply and demand and the fear and greed that happens in Bitcoin fall. you'd mentioned about uh selling. That was really immediately after um the several months after the um after the all-time high and many of them just had planned on selling at the top of the bubble like like like me. Um and um you know just the other day there was a uh Satoshi era whale wallet that bought 12,000 Bitcoin. So um it's starting to happen that some of the ones are saying low enough. I sold at 110. I'm going to buy back at 65. And uh you repeat that a few cycles and you do quite well. >> So I mean the core part of that kind of ratchet effect in the thesis is where institutions take Bitcoin out of circulation but but crypto quantities broader market selling is still kind of overwhelming that demand with whales now distributing. What tells you that the structure is kind of still intact? >> Yeah are not distributing anymore. They are not buying right now. distribution happened at the top and um you know there's two different forms maybe three of institutions that weren't in here four years ago um the biggest one is ETFs um and the ETFs is really retail I mean it's not you know black rockck buying for their own account it's you know retail that was afraid of opening up a Coinbase wallet four years ago or going on to MetaMask and they're like saying oh now that uh you know my financial advisor says I should 5% of my uh my overall assets um into um into an ETF or either Bitcoin or Salon or whatever the thesis is. Obviously, we believe Bitcoin is the most important one to have most of your digital assets in for the riskreward. Um you know that that uh they tend to act like uh retail does every uh cycle, first generation retail, and you sure enough you see that there's there's net outflows when the price is down and net inflows when the price is up. And that's the exact opposite of how you should be behaving. On the other hand, the DATs particularly led by Michael Sailor, um they've been basically uh structured as permanent capital, never selling. And so the more that you have there, I mean, Michael Sailor is certainly on track to have a million Bitcoin in the next year. And I think his ultimate goal is to have maybe 2.1 million, which would be 10 all bitcoin. And that's not going to move. He's not selling. He's got this amazing structure where he's got several different instruments totaling $42 billion now to buy. >> Yeah. When you brought up ETFs there for a second. How exactly has it kind of changed? I remember when we first started covering it, there was a lot of excitement about these spot Bitcoin ETFs coming to market. Have they made Bitcoin structurally stronger or or just more tied to kind of the broader macro flows and institutional positioning? >> I know. I think they more acceptable for retail that hasn't yet been in. So that increases the amount of uh net Bitcoin whether it's you know abstracted through an ETF it's still buying Bitcoin. Um but again so far um the ETF buyers are overwhelmed um you know retail four years from now they won't be they'll be second generation um and maybe some new ones come in but the new retail tends to act every single cycle. um like scare the little pup. They go in and they panic buy it at the top because all their friends are making money and then they panic sell as soon as it goes down. And that's the exact opposite of the you know this isn't unique to Bitcoin. I mean Roth shell hundreds of years ago said you must buy when there's blood in the streets blood. >> The treasury thing has been interesting. I mean we've talked about it a little bit. We're seeing those Bitcoin treasury sellers like Empory Digital Genius Group. they're kind of they they fully exited their positions. They're not small retail holders. Does that challenge the idea that this new class of owner is fundamentally more patient and and strategic? >> Well, I think the new out of DATs and I'm working with right now that's looking uh at potentially launching one um made mistake of immediately buying Bitcoin at the top. They thought, oh, it's going we're acting like, you know, like like newbies. And um I think they just figure that you know hit while the while the iron's hot and raise a lot of money and immediately buy Bitcoin and keep buying Bitcoin forever. Um and the problem is that the market is not as patient. I mean you need to be as patient as a biotech investor if you're going to wait through all the cycles as a public market uh investor who's used to quarter by quarter results. I think the mistake is that most stats should have raised when like VCs do raised when uh there's bullish sentiment but then how long had bought when there's bearish sentiment? >> Yeah. Do do you think other treasury companies can realistically replicate that or or is strategy kind of in its own category? >> I do believe um that are are coming on board. I know of a couple of them. >> Yeah. Interesting. Interesting. You got to give me a little insight here. I mean it it feels like, you know, even the sovereigns are looking at Bitcoin a little bit on that strategic reserve side. We've seen it with gold where there was a little bit of central bank selling. There was some forced illquidity that needed to be covered. Is that kind of what's happening with the price sensitivity on the Bitcoin side, too? >> Well, we're we're just at the of the, you know, the prospect of having um you know, sovereigns uh uh have strategic reserves for Bitcoin. And a lot of it has to do with the um average age of the voter. Um if you look in the United States, I saw a statistic that over 50% of millennials have exposure to Bitcoin and crypto um as opposed to a very small percentage of uh you know 60 year olds. You know, you've got a lot of experience in this game. You're also in a lot of different rooms, boardrooms. You talk to a lot of people. What are you hearing from the venture side right now? Is Capital coming back into crypto in a serious way? As you mentioned, those big whales waking up again. Is is this the the beginning of of that stacking event? >> So, the whales are different than the venture investors, right? The venture investors are looking for looking for new tokens. Um and again I'm a um a general partner at uh Kuma Capital which is a fund of funds for early stage smaller crypto VCs as well as a GP at Sigma which is um you know just had completed it in the bull market and uh now they're looking for the price to fall to be able to get really good deals on tokens they believe in and that's just you know again same same thesis of uh sell high buy low that but on a venture perspective with a longer time frame. Uh I've noticed that with altcoins, unlike Bitcoin, Bitcoin has had a higher high every single cycle. It's been very predictable and I expect that that's going to happen despite diminishing returns um for at least the next 20 years because we only have 4% of the world that has exposure to Bitcoin. It's about seven or eight% for crypto overall. And yet um we're 96% out of Bitcoin in terms of the amount that's been mined. and it'll take 115 years to go and get the rest of it. And so at some point you're gonna have a supply shock. And that typically happens in Bitcoin summer. And when you have supply shock, that's when all of a sudden people really FOMO in. We had a little bit of supply shock in October of 2013 when literally Coinbase just was shut down every day with with, you know, strategic, sorry, with um, you know, with going offline and the rumor was that they just ran out of coins to sell. And I believe that you know with a fixed supply of Bitcoin and an all-time low right now of of the last five years or so the markets and this is in a bare market that when you get to the next bull market there's almost no new coins coming on board this uh you know 450 a day now next having it goes to 225 a day and Michael Sailor will buy that and plenty more of himself. >> Yeah. Yeah. Absolutely. I mean you know that's a a pretty interesting chart too right? I mean, it should take that price to new highs, almost like a squeeze. Hey, as you look for for new venture opportunities, which parts of the technology stack are kind of getting your your attention most right now? You mentioned it, but is the opportunity more in new tokens or is it in that underlying infrastructure being built around, you know, payments, AI, digital assets, that kind of thing? So I consider it to be sort of like a I'm a barbell investor. So I've got uh Bitcoin is the the solid sort of you know reliable um you know investment that always goes up over time. And if you uh you know go and sell at the top and buy back at the bottom you you compound that. Um and whereas your venture investments are obviously um you know a riskier uh beta with higher returns if you uh have the right manager or you or you pick the right uh entities. Yes, I think that um for pure equity plays there's a huge move right now in capitalizing on stable coins. Um it's it's it was up you know 800% in growth the year before the Genius Act that's moving in similar numbers now. You've got giant payment companies like uh uh you know like Stripe and PayPal having their own uh stable coin plays. There's going to be a real um we are just at the tip of the iceber being used for um just global payments remittances uh corporate payments and then you add in AI um decentralized AI AI involving crypto that's the biggest opportunity of the next uh four years. Um they've already I have a few investments in that space. Morpheus. Um, and there's a few other ones that are just brand new that they have not really um, you know, gone out as public coins or or as um, sort of um, equity that's sold to anybody. But there will be a consolidation in that space. And you just figure that when there's Obel claw was a huge um um you know we're going vertical right now in the AI space and it just doesn't make sense to me if there's gonna be tens of thousands of agents per company running around doing everything from payroll to purchasing to negotiating that they're going to go in and do that with Payal. Um they're going to have their own currency and that currency will be stable coins and there'll be governance tokens that control how that's spent. So, I mean, if we got saw that little bit of the top of the market and we saw that sell-off event, you know, you you mentioned you were buying some Bitcoin under 60,000 in this market. Are you shifting that barbell more towards Bitcoin or or are these falling valuations actually making the venture side much more attractive? >> Well, they're both they're both in the same uh lock step. So, um Bitcoin is heading towards its lows and so is the venture market. So, it's time to buy from both of them. uh the time to sell and wait was uh was last year in the bull market. >> When you look at the rising debt stress and and and now we're seeing these reports of redemption pressure in parts of private credit, do you see that is the kind of environment that ultimately pushes more capital towards Bitcoin? >> Well, um you still have centralized entities. I mean, when you had the the crash of 2022, and again, your crashes are in the midterm year every time. Um it was in 2014, 2018, 2022, and here we are in 2026. And I believe that Satoshi programmed it that way. Um you know, the having is always in the presidential year so far. We're not exactly four-year cycle. We're more like 46 and a half month cycle so far. The less the most recent ones have been 47 months because if it was a pure four-year cycle, then the having would always be on uh of the Genesis block January 3rd. Instead, it's 210,000 blocks. And that has to do with the uh the speed of um mining the I have a whole chapter in my book about how the whole mining algorithms work to make it roughly every four years that you then uh go and cut the amount of Bitcoin distributed during that four-year period in half. >> You know, you you said that these mid-year crashes keep repeating, you know, in these in these midterm kind of years that Satoshi may have designed the system that way. Uh, are you saying that this this cycle behavior is kind of embedded in in Bitcoin's design or that the market have simply learned to trade around it? >> I would say that's that's so far been the data. >> Yeah. >> Yeah. Yeah. That's fascinating. >> And I I also have a thesis that uh it's not the bankruptcy that caused the crash. It's the popping the bubble and all the um overleveraging that takes about a year to sort of uh work its way through the system. And you know, we haven't even we have not a good old uh giant bankruptcy yet. I mean, the two crashes that have happened since the bubble pop, the 1010 and then um the uh the February crash, you know, were, you know, sort of guesswork in terms of how that happened. that brought us down to 80K was supposed to be a deleveraged market maker from Binance that collateral and had five days of straight selling 9 to5 um New York time and um in February it was rumored to be a a Hong Kong hedge fund that was not that was overleveraged in uh in IBIT and uh so we have not had anything close to an FTX. Doesn't mean we have to but uh if it happens it's usually going to happen like right around that one-year mark after the bubble. Interesting. Uh, I don't know if you saw these reports this morning. Google's quantum AI team has raised fresh concerns about how quickly quantum computing could challenge current cryptography. Our audience owns a lot of physical gold and silver, right? I mean, they will say bullion can't be hacked. What do you say when these types of reports come? Is there any validity to it? Well, >> it's a long ways away. Um and I believe that the for Bitcoin killer and for other protocols as well go and um have solutions either on the wallet level or on the protocol level. I mean Bitcoin has already had several upgrades when the fees got too high and people thought it was going to kill Bitcoin back in 2017 when you had the famous Bitcoin fork. Um they eventually uh got to uh having the programmers and the miners agree which you know in the code they have to have 95% agreement with the miners and then the and then the developers have to build it. So it takes a while which is a good thing not to have rapid consensus but uh the same will happen with quantum when it gets to be a problem. The other thing is who's actually going to hack uh bitcoin if if it's mainly Google and IBM that have the technology. I mean you just can't go and steal a giant data center with restricted chips and have North Koreans run it. And if in some if some way they were able to sort of reverse engineer the chips and the hardware and the data centers and the software, you think they go after Bitcoin before they went after JP Morgan because SHA 256 runs the entire banking system, too. >> Yeah. Yeah. You know, we have many guests on. We've had Leon on many times. We talk about that US debt burden and the pressure it puts on monetary policy. um tr how does that translate into into the next kind of spring summer phase of your framework? >> Sure. So um you know it's interesting that um a lot of the debt cycles have sort of coincided with these cycles probably because it's the presidential promises and theities um and uh so it's it's it's been historical that typically when there's a debasement trade that gold gets you know sort of the pump first which they obviously did last year um and then Bitcoin follows later and um it's happened a couple of times and I think it's going to probably happen Again, you know, I I like to say about the monetary, it's like what Hemingway said about bankruptcy. It happened slowly then suddenly. >> Yeah, it's wild. I did it surprise you that that price action on the the gold prices last year with all of the the central banks kind of picking it up. Obviously, they haven't really touched Bitcoin yet. There's some conversation. There's some rumor around some of these sovereigns having, you know, maybe not central bank touching it, but something else touching it. anything surprise you there? >> Um I expected gold to go up. I actually had it in my book talking about what a super cycle is and um you know the had said that there were two super cycles in the last 100 years in the commodities markets. One was of course the 70s when uh you know you had the cause being a fivey year or longer um you know um trend that the that impacts the the value thesis and that was when uh you know gold became legal for Americans to own and we went off the uh the gold standard that ended up you know being a forex gold in the 70s one uh was a broaderbased commodity super cycle in the 90s because of China buy um CME in I think 23 uh and I quoted the looked and said, "Too early to tell, but we think there may be a new sup super cycle building based on monetary debate." Yep. >> That debasement trade was there. Um, and you know, if governments push, they've been really pushing hard towards CBDC's and and tighter kind of digital asset oversight. Does that end up helping Bitcoin by validating the need for decentralization or does it threaten the whole premise? >> I'd say neither. And certainly the United States pushing that. Um, Europe has been, you know, there's a there's there's sort of a a push back about why do you need a central bank digital currency? The government has enough control and they should people are afraid of uh, you know, sort of the ways social credit scores are used in China that, you know, you're going to basically have just the government stopping you buying things because they're like, "Yeah, you know what? We don't want you to buy something that's, you know, uh, you know, like fast food or or uh or this type of car." And uh I think that CBDC's are unnecessary because you have you have stable coins and stable coins are now you know I like to say that Satoshi failed in his original vision. I mean the white paper's title is uh electronic peer-to-peer cat. Um but he he he succeeded wildly in having it be the digital narrative. But without Bitcoin having succeeded um as digital gold, you would not have and Tether, you know, the I actually worked with the original Tether team in Santa Monica in 2014. So it was just wild watching it grow from this experimental, you know, uh use case to now being, you know, a $300 billion industry and growing very fast. I mean, Scott Bess said he thought it would be so by the end of the decade. >> Yeah. And I mean, you know, they they also have that huge gold reserve, too. I mean, how important are stable coins and tether to your kind of broader Bitcoin thesis now? Are they becoming a real bridge in into the system or are they still mostly kind of that liquidity tool for for crypto traders? >> No, it's definitely moved from liquidity tool for crypto traders to savings account for the third world. Um because you know years ago one of the big um expansions of Bitcoin was um you know people in Nigeria or in the Philippines or whatever um you know where wherever there was a a high um you know uh higher inflation that the dollar people wanted dollars and the way they could get it was uh uh the closest thing would be bitcoin. The bitcoin even though it was volatile did better over you know multi-year period than uh the art peso and things like that. Now that you have basically uh a dollar redeemable um you know um you know product called the stable coin that's what most people who are just using it for their daily purchases um I I've I've I've said that basically in the future all the global stuff will have basically two um they'll have a savings account in Bitcoin and they'll have a checking account uh in uh in in Tether or other stable coins. Wild. Yeah. So, it won't be it's not creating a parallel system that kind of grows without needing Bitcoin at the center of it. I take it >> it helps and it hurts, right? So, in other words, it hurts that people are buying stable coins instead of Bitcoin in the third world for day-to-day usage have wallets. they eventually discover that um you know if they all of a sudden have more than just that week's grocery money they should put it in something that doesn't uh you know sort of uh deflate three or four% a year uh but something that grows over time much higher level >> you know that that kind of brings us to to you know liquidity and the money printing scenario I mean you've said AI driven disruption could eventually force the biggest money printing in history what would have to happen economically and politically for that scenario to kind of play out Well, um I'm I'm a little bit more of a techno optimist. I think that uh as certain jobs go away on this will happen in the next five years, the next book I'm working on is called Pandora's Blocks and it's talking about how crypto plus AI plus robotics is going to fundamentally change the economy in the next five years and change society in the next 15. And um you're going to have you you are going to have human creativity. Everybody doesn't want to just sit around and get UBI. they will find ways of working with the technology to go and improve and innovate even faster. Not just say well I can't be a lawyer anymore because uh you know Gemini or Grock does it better than me. They'll say oh now that they have these tools I can create these new products that will make it uh you know we're going to create uh AIdriven uh court systems or trade AI small claims. Somebody's got to build that and it's not the agents uh building it although they're going to do the final build out. Yeah. So if if if AI turns out to be kind of more deflationary than inflationary, does that delay the timetable for the next leg of the super cycle? >> No, I think well the super cycle is what happens when you hit supply shock because so far there's been diminishing returns. Um you had a 100x growth in the price of Bitcoin having the high in 201213 and then 80 5% crash and four years later you had 30x which was still phenomenal and then you had and and you know life-changing. Then you had an 83% crash. Um if you again he sold the top and bought back at the bottom, he did unbelievably well. Um the third time I was projecting uh 10x, but it ended up being 8x because of a bad macro Biden's war on crypto. And if rapid raise of interest rates, but if interest rates were more important than the having, we'd still be around $8,000 Bitcoin. And uh this last time I was projecting 3x was again 133 and we only got 2x. And uh you know uh that was probably the biggest macro effect. A lot of people expected positive macro and tailwinds instead of headwinds because Trump being uh pro crypto. But you know we didn't pass the clarity act. And we did have all the tariffs and uh that was really at least if not the cause at least the excuse for uh for the 1010 uh crash which happened exactly on the cycle where it should have. up. Um it may have been something where people are ready to uh sell whales and the institutions that are following the in terms of thesis. Um you know just said here here's an opportunity to sell and cash out. >> Yeah. And you know, to your point, I mean, we're we're now seeing, I saw today, just a report, we're now seeing major players like Coinbase, Stripe, Cloudflare. Um, they're pushing further into that X42, which is a protocol designed to let AI agents and software make payments directly over the interview o over the internet without human intervention. Just for the viewers, uh, does that kind of machine-to-achine payment infrastructure accelerate your super cycle timeline? >> I don't think that accelerates it. It simply provides um you know more um uh rationale for people who were previously afraid of uh of digital assets to say oh it's like a but if you have a wallet then it's not foreign for you to understand Bitcoin. >> Listen that was fascinating. I I really appreciate you joining us today walking us through your thesis during such a high stakes week for the markets. Uh been interesting watching. Um, you said that this is going to still hurt a little bit for people and we get written back at home. You know, people that don't have a ton of liquidity and maybe they're leveraged, maybe they've leared about leverage. Uh, what do you say to people that are kind of fearful right now in this market? >> Well, I mean, if you bought at the top, the good news about Bitcoin is just hold it on for four years and you're gonna find a time that you're uh you're, you know, above uh water again. Uh the best thesis is you bought at 110 and you can afford to buy some at 65 55, you know, dollar cost average. The only time that the dollar cost averaging doesn't work is during uh Bitcoin fall. You don't want to be dollar cost averaging into lower lows, but the rest of the time it's fine. >> Yeah. Yeah. It feels like it's found a little bit of footing here. All right, Michael. Appreciate your time today. Thanks so much. >> My pleasure. >> All right. And a big thank you to our sponsor, Swan Bitcoin, your partner for generational wealth. If you're looking to build a long-term position, you can learn more at swamp.com/kitco. Now, on a personal note, I'm heading out for a little family vacation after this show with my wife and our son. I'll be back on the air and behind the desk as soon as we can. But while I'm away, the channel is in good hands. We have several of our regular technical analyst experts, including our favorite Gary Wagner, scheduled to steer us through these volatile markets and to keep you updated on the latest price action. And to our viewers, we want to hear from you. Is the current market set up a structural fracture or just a temporary shakeout? Let us know your thoughts in the comments below. Make sure to hit the button to subscribe to Kicko News and turn on notifications so you never miss an update. We're almost at a million subscribers, so you need to help us get there. Tell your friends. Appreciate you watching. I'm Jeremy Safford. We'll see you soon. Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. 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The Debt Trap: Why Gold Pumps First and Bitcoin Follows | Michael Terpin
Summary
Transcript
In focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. Global markets are navigating a high stakes tugof-war today following an address to the nation where President Trump signal harder strikes against Iran. We're now seeing reports that Iran and Oman are drafting a protocol to monitor traffic through the straight of Hormuse. Now, this news has caused oil prices to to retreat from their session highs, and it's also helped stocks par some of their earlier losses. But in the crypto sector, the stress seems to remain here. According to onchain data, the largest Bitcoin holders have kind of turned into net sellers right now, and public companies like Riot platforms continue to reduce their holdings. But at the same time, legacy firms like Franklin Templant are pushing deeper into the space. So, who's right? Are we looking at a capitulation in a broken market or a shakeout that sets up for the next major leg higher? Now, Michael Turpin has argued that Bitcoin is in the fall phase of its cycle with more short-term pain possible, but that the long-term structural case remains intact. Joining me now to break down the volatility is Michael Turpin. Michael is a true pioneer in the digital asset space, having been a strategic investor and venture capitalist in the industry since 2012. Good timing. Uh he currently serves as a founder and chief executive officer of transform ventures uh and as the author of Bitcoin super cycle. Michael has developed a four seasons kind of framework to track market patterns and institutional behavior. Now Michael, you've seen every major boom and bust in this sector for over a decade. Welcome back to Kiko. >> Thank you back. And now I got to chat to you about kind of the volatility because your framework is built around reoccurring time patterns but you know obviously today we're dealing with massive geopolitical volatility. We had Trump escalation followed immediately by this reports of Iran and Oman's protocol for the straight of hormuse. I bring that up because how does your cycle model account for these types of kind of rapid external shocks? So that's macro and macro is less important than the supply and demand and the fear and greed that has repeated every single cycle. Satoshi in the white paper and a supplicant writings said that as long as the amount of net buying of Bitcoin in any four-year um period between havingss higher than the amount of new Bitcoin mined, the price has to go up. It's math. And so far that's been true. First having was $12. Second havinging was 670. third hand was $8,700 and the most recent having in 2024 was $64,000. All of the volatility that scares people off or brings them in um is based on fear and greed. And I identified uh as far back as 2015, my thesis on seasons of Bitcoin that is there are um behaviors that happen in the exact same order every cycle based on fear and greed. Bitcoin spring happens today the having miners all of a sudden wildly unprofitable because they have the same expenses and halfs but instead of it going down it stays flat because for every selling that somebody wants to buy bitcoin summer is the day you reach a new all-time high and it goes up like a rocket ship that's when the bubble pops about 9 to 11 months later and then when the bubble pops that's Bitcoin fall that's what we're in right now and that's when retail in particular panics in at the top they're panic selling at the bottom And that gives the opportunity for people like me who understands the cycles to buy in at the bottom and then just ride it all the way up to new all-time highs which has happened every single cycle. The longest period is Bitcoin winter. That is the 18 months or so that between the capitulation event that I believe is still coming in roughly October, one year after the bubble popped and uh the next having which is going roughly uh March of 2028. >> Yeah. What what kind of specific behavior are you watching right now that says sentiment is stretched enough to to buy against? Well, um you know, um I I also have one Bitcoin super cycle fund and we we've been buying anything below 60K. So, we've only had one uh one uh one buy so far, but uh we've got things from 60 all the way back down to uh to 40. And uh I think it's going to go down between 40 and 55. Um and again, the macro has not been that big of affect. If you look at what the price of Bitcoin was the day before um the the Iran war, it was 68,000 yesterday. 67,000. I think it's up to 66. It's been pretty flat. So, that has not been as big of an effect as um you know, the supply and demand and the fear and greed that happens in Bitcoin fall. you'd mentioned about uh selling. That was really immediately after um the several months after the um after the all-time high and many of them just had planned on selling at the top of the bubble like like like me. Um and um you know just the other day there was a uh Satoshi era whale wallet that bought 12,000 Bitcoin. So um it's starting to happen that some of the ones are saying low enough. I sold at 110. I'm going to buy back at 65. And uh you repeat that a few cycles and you do quite well. >> So I mean the core part of that kind of ratchet effect in the thesis is where institutions take Bitcoin out of circulation but but crypto quantities broader market selling is still kind of overwhelming that demand with whales now distributing. What tells you that the structure is kind of still intact? >> Yeah are not distributing anymore. They are not buying right now. distribution happened at the top and um you know there's two different forms maybe three of institutions that weren't in here four years ago um the biggest one is ETFs um and the ETFs is really retail I mean it's not you know black rockck buying for their own account it's you know retail that was afraid of opening up a Coinbase wallet four years ago or going on to MetaMask and they're like saying oh now that uh you know my financial advisor says I should 5% of my uh my overall assets um into um into an ETF or either Bitcoin or Salon or whatever the thesis is. Obviously, we believe Bitcoin is the most important one to have most of your digital assets in for the riskreward. Um you know that that uh they tend to act like uh retail does every uh cycle, first generation retail, and you sure enough you see that there's there's net outflows when the price is down and net inflows when the price is up. And that's the exact opposite of how you should be behaving. On the other hand, the DATs particularly led by Michael Sailor, um they've been basically uh structured as permanent capital, never selling. And so the more that you have there, I mean, Michael Sailor is certainly on track to have a million Bitcoin in the next year. And I think his ultimate goal is to have maybe 2.1 million, which would be 10 all bitcoin. And that's not going to move. He's not selling. He's got this amazing structure where he's got several different instruments totaling $42 billion now to buy. >> Yeah. When you brought up ETFs there for a second. How exactly has it kind of changed? I remember when we first started covering it, there was a lot of excitement about these spot Bitcoin ETFs coming to market. Have they made Bitcoin structurally stronger or or just more tied to kind of the broader macro flows and institutional positioning? >> I know. I think they more acceptable for retail that hasn't yet been in. So that increases the amount of uh net Bitcoin whether it's you know abstracted through an ETF it's still buying Bitcoin. Um but again so far um the ETF buyers are overwhelmed um you know retail four years from now they won't be they'll be second generation um and maybe some new ones come in but the new retail tends to act every single cycle. um like scare the little pup. They go in and they panic buy it at the top because all their friends are making money and then they panic sell as soon as it goes down. And that's the exact opposite of the you know this isn't unique to Bitcoin. I mean Roth shell hundreds of years ago said you must buy when there's blood in the streets blood. >> The treasury thing has been interesting. I mean we've talked about it a little bit. We're seeing those Bitcoin treasury sellers like Empory Digital Genius Group. they're kind of they they fully exited their positions. They're not small retail holders. Does that challenge the idea that this new class of owner is fundamentally more patient and and strategic? >> Well, I think the new out of DATs and I'm working with right now that's looking uh at potentially launching one um made mistake of immediately buying Bitcoin at the top. They thought, oh, it's going we're acting like, you know, like like newbies. And um I think they just figure that you know hit while the while the iron's hot and raise a lot of money and immediately buy Bitcoin and keep buying Bitcoin forever. Um and the problem is that the market is not as patient. I mean you need to be as patient as a biotech investor if you're going to wait through all the cycles as a public market uh investor who's used to quarter by quarter results. I think the mistake is that most stats should have raised when like VCs do raised when uh there's bullish sentiment but then how long had bought when there's bearish sentiment? >> Yeah. Do do you think other treasury companies can realistically replicate that or or is strategy kind of in its own category? >> I do believe um that are are coming on board. I know of a couple of them. >> Yeah. Interesting. Interesting. You got to give me a little insight here. I mean it it feels like, you know, even the sovereigns are looking at Bitcoin a little bit on that strategic reserve side. We've seen it with gold where there was a little bit of central bank selling. There was some forced illquidity that needed to be covered. Is that kind of what's happening with the price sensitivity on the Bitcoin side, too? >> Well, we're we're just at the of the, you know, the prospect of having um you know, sovereigns uh uh have strategic reserves for Bitcoin. And a lot of it has to do with the um average age of the voter. Um if you look in the United States, I saw a statistic that over 50% of millennials have exposure to Bitcoin and crypto um as opposed to a very small percentage of uh you know 60 year olds. You know, you've got a lot of experience in this game. You're also in a lot of different rooms, boardrooms. You talk to a lot of people. What are you hearing from the venture side right now? Is Capital coming back into crypto in a serious way? As you mentioned, those big whales waking up again. Is is this the the beginning of of that stacking event? >> So, the whales are different than the venture investors, right? The venture investors are looking for looking for new tokens. Um and again I'm a um a general partner at uh Kuma Capital which is a fund of funds for early stage smaller crypto VCs as well as a GP at Sigma which is um you know just had completed it in the bull market and uh now they're looking for the price to fall to be able to get really good deals on tokens they believe in and that's just you know again same same thesis of uh sell high buy low that but on a venture perspective with a longer time frame. Uh I've noticed that with altcoins, unlike Bitcoin, Bitcoin has had a higher high every single cycle. It's been very predictable and I expect that that's going to happen despite diminishing returns um for at least the next 20 years because we only have 4% of the world that has exposure to Bitcoin. It's about seven or eight% for crypto overall. And yet um we're 96% out of Bitcoin in terms of the amount that's been mined. and it'll take 115 years to go and get the rest of it. And so at some point you're gonna have a supply shock. And that typically happens in Bitcoin summer. And when you have supply shock, that's when all of a sudden people really FOMO in. We had a little bit of supply shock in October of 2013 when literally Coinbase just was shut down every day with with, you know, strategic, sorry, with um, you know, with going offline and the rumor was that they just ran out of coins to sell. And I believe that you know with a fixed supply of Bitcoin and an all-time low right now of of the last five years or so the markets and this is in a bare market that when you get to the next bull market there's almost no new coins coming on board this uh you know 450 a day now next having it goes to 225 a day and Michael Sailor will buy that and plenty more of himself. >> Yeah. Yeah. Absolutely. I mean you know that's a a pretty interesting chart too right? I mean, it should take that price to new highs, almost like a squeeze. Hey, as you look for for new venture opportunities, which parts of the technology stack are kind of getting your your attention most right now? You mentioned it, but is the opportunity more in new tokens or is it in that underlying infrastructure being built around, you know, payments, AI, digital assets, that kind of thing? So I consider it to be sort of like a I'm a barbell investor. So I've got uh Bitcoin is the the solid sort of you know reliable um you know investment that always goes up over time. And if you uh you know go and sell at the top and buy back at the bottom you you compound that. Um and whereas your venture investments are obviously um you know a riskier uh beta with higher returns if you uh have the right manager or you or you pick the right uh entities. Yes, I think that um for pure equity plays there's a huge move right now in capitalizing on stable coins. Um it's it's it was up you know 800% in growth the year before the Genius Act that's moving in similar numbers now. You've got giant payment companies like uh uh you know like Stripe and PayPal having their own uh stable coin plays. There's going to be a real um we are just at the tip of the iceber being used for um just global payments remittances uh corporate payments and then you add in AI um decentralized AI AI involving crypto that's the biggest opportunity of the next uh four years. Um they've already I have a few investments in that space. Morpheus. Um, and there's a few other ones that are just brand new that they have not really um, you know, gone out as public coins or or as um, sort of um, equity that's sold to anybody. But there will be a consolidation in that space. And you just figure that when there's Obel claw was a huge um um you know we're going vertical right now in the AI space and it just doesn't make sense to me if there's gonna be tens of thousands of agents per company running around doing everything from payroll to purchasing to negotiating that they're going to go in and do that with Payal. Um they're going to have their own currency and that currency will be stable coins and there'll be governance tokens that control how that's spent. So, I mean, if we got saw that little bit of the top of the market and we saw that sell-off event, you know, you you mentioned you were buying some Bitcoin under 60,000 in this market. Are you shifting that barbell more towards Bitcoin or or are these falling valuations actually making the venture side much more attractive? >> Well, they're both they're both in the same uh lock step. So, um Bitcoin is heading towards its lows and so is the venture market. So, it's time to buy from both of them. uh the time to sell and wait was uh was last year in the bull market. >> When you look at the rising debt stress and and and now we're seeing these reports of redemption pressure in parts of private credit, do you see that is the kind of environment that ultimately pushes more capital towards Bitcoin? >> Well, um you still have centralized entities. I mean, when you had the the crash of 2022, and again, your crashes are in the midterm year every time. Um it was in 2014, 2018, 2022, and here we are in 2026. And I believe that Satoshi programmed it that way. Um you know, the having is always in the presidential year so far. We're not exactly four-year cycle. We're more like 46 and a half month cycle so far. The less the most recent ones have been 47 months because if it was a pure four-year cycle, then the having would always be on uh of the Genesis block January 3rd. Instead, it's 210,000 blocks. And that has to do with the uh the speed of um mining the I have a whole chapter in my book about how the whole mining algorithms work to make it roughly every four years that you then uh go and cut the amount of Bitcoin distributed during that four-year period in half. >> You know, you you said that these mid-year crashes keep repeating, you know, in these in these midterm kind of years that Satoshi may have designed the system that way. Uh, are you saying that this this cycle behavior is kind of embedded in in Bitcoin's design or that the market have simply learned to trade around it? >> I would say that's that's so far been the data. >> Yeah. >> Yeah. Yeah. That's fascinating. >> And I I also have a thesis that uh it's not the bankruptcy that caused the crash. It's the popping the bubble and all the um overleveraging that takes about a year to sort of uh work its way through the system. And you know, we haven't even we have not a good old uh giant bankruptcy yet. I mean, the two crashes that have happened since the bubble pop, the 1010 and then um the uh the February crash, you know, were, you know, sort of guesswork in terms of how that happened. that brought us down to 80K was supposed to be a deleveraged market maker from Binance that collateral and had five days of straight selling 9 to5 um New York time and um in February it was rumored to be a a Hong Kong hedge fund that was not that was overleveraged in uh in IBIT and uh so we have not had anything close to an FTX. Doesn't mean we have to but uh if it happens it's usually going to happen like right around that one-year mark after the bubble. Interesting. Uh, I don't know if you saw these reports this morning. Google's quantum AI team has raised fresh concerns about how quickly quantum computing could challenge current cryptography. Our audience owns a lot of physical gold and silver, right? I mean, they will say bullion can't be hacked. What do you say when these types of reports come? Is there any validity to it? Well, >> it's a long ways away. Um and I believe that the for Bitcoin killer and for other protocols as well go and um have solutions either on the wallet level or on the protocol level. I mean Bitcoin has already had several upgrades when the fees got too high and people thought it was going to kill Bitcoin back in 2017 when you had the famous Bitcoin fork. Um they eventually uh got to uh having the programmers and the miners agree which you know in the code they have to have 95% agreement with the miners and then the and then the developers have to build it. So it takes a while which is a good thing not to have rapid consensus but uh the same will happen with quantum when it gets to be a problem. The other thing is who's actually going to hack uh bitcoin if if it's mainly Google and IBM that have the technology. I mean you just can't go and steal a giant data center with restricted chips and have North Koreans run it. And if in some if some way they were able to sort of reverse engineer the chips and the hardware and the data centers and the software, you think they go after Bitcoin before they went after JP Morgan because SHA 256 runs the entire banking system, too. >> Yeah. Yeah. You know, we have many guests on. We've had Leon on many times. We talk about that US debt burden and the pressure it puts on monetary policy. um tr how does that translate into into the next kind of spring summer phase of your framework? >> Sure. So um you know it's interesting that um a lot of the debt cycles have sort of coincided with these cycles probably because it's the presidential promises and theities um and uh so it's it's it's been historical that typically when there's a debasement trade that gold gets you know sort of the pump first which they obviously did last year um and then Bitcoin follows later and um it's happened a couple of times and I think it's going to probably happen Again, you know, I I like to say about the monetary, it's like what Hemingway said about bankruptcy. It happened slowly then suddenly. >> Yeah, it's wild. I did it surprise you that that price action on the the gold prices last year with all of the the central banks kind of picking it up. Obviously, they haven't really touched Bitcoin yet. There's some conversation. There's some rumor around some of these sovereigns having, you know, maybe not central bank touching it, but something else touching it. anything surprise you there? >> Um I expected gold to go up. I actually had it in my book talking about what a super cycle is and um you know the had said that there were two super cycles in the last 100 years in the commodities markets. One was of course the 70s when uh you know you had the cause being a fivey year or longer um you know um trend that the that impacts the the value thesis and that was when uh you know gold became legal for Americans to own and we went off the uh the gold standard that ended up you know being a forex gold in the 70s one uh was a broaderbased commodity super cycle in the 90s because of China buy um CME in I think 23 uh and I quoted the looked and said, "Too early to tell, but we think there may be a new sup super cycle building based on monetary debate." Yep. >> That debasement trade was there. Um, and you know, if governments push, they've been really pushing hard towards CBDC's and and tighter kind of digital asset oversight. Does that end up helping Bitcoin by validating the need for decentralization or does it threaten the whole premise? >> I'd say neither. And certainly the United States pushing that. Um, Europe has been, you know, there's a there's there's sort of a a push back about why do you need a central bank digital currency? The government has enough control and they should people are afraid of uh, you know, sort of the ways social credit scores are used in China that, you know, you're going to basically have just the government stopping you buying things because they're like, "Yeah, you know what? We don't want you to buy something that's, you know, uh, you know, like fast food or or uh or this type of car." And uh I think that CBDC's are unnecessary because you have you have stable coins and stable coins are now you know I like to say that Satoshi failed in his original vision. I mean the white paper's title is uh electronic peer-to-peer cat. Um but he he he succeeded wildly in having it be the digital narrative. But without Bitcoin having succeeded um as digital gold, you would not have and Tether, you know, the I actually worked with the original Tether team in Santa Monica in 2014. So it was just wild watching it grow from this experimental, you know, uh use case to now being, you know, a $300 billion industry and growing very fast. I mean, Scott Bess said he thought it would be so by the end of the decade. >> Yeah. And I mean, you know, they they also have that huge gold reserve, too. I mean, how important are stable coins and tether to your kind of broader Bitcoin thesis now? Are they becoming a real bridge in into the system or are they still mostly kind of that liquidity tool for for crypto traders? >> No, it's definitely moved from liquidity tool for crypto traders to savings account for the third world. Um because you know years ago one of the big um expansions of Bitcoin was um you know people in Nigeria or in the Philippines or whatever um you know where wherever there was a a high um you know uh higher inflation that the dollar people wanted dollars and the way they could get it was uh uh the closest thing would be bitcoin. The bitcoin even though it was volatile did better over you know multi-year period than uh the art peso and things like that. Now that you have basically uh a dollar redeemable um you know um you know product called the stable coin that's what most people who are just using it for their daily purchases um I I've I've I've said that basically in the future all the global stuff will have basically two um they'll have a savings account in Bitcoin and they'll have a checking account uh in uh in in Tether or other stable coins. Wild. Yeah. So, it won't be it's not creating a parallel system that kind of grows without needing Bitcoin at the center of it. I take it >> it helps and it hurts, right? So, in other words, it hurts that people are buying stable coins instead of Bitcoin in the third world for day-to-day usage have wallets. they eventually discover that um you know if they all of a sudden have more than just that week's grocery money they should put it in something that doesn't uh you know sort of uh deflate three or four% a year uh but something that grows over time much higher level >> you know that that kind of brings us to to you know liquidity and the money printing scenario I mean you've said AI driven disruption could eventually force the biggest money printing in history what would have to happen economically and politically for that scenario to kind of play out Well, um I'm I'm a little bit more of a techno optimist. I think that uh as certain jobs go away on this will happen in the next five years, the next book I'm working on is called Pandora's Blocks and it's talking about how crypto plus AI plus robotics is going to fundamentally change the economy in the next five years and change society in the next 15. And um you're going to have you you are going to have human creativity. Everybody doesn't want to just sit around and get UBI. they will find ways of working with the technology to go and improve and innovate even faster. Not just say well I can't be a lawyer anymore because uh you know Gemini or Grock does it better than me. They'll say oh now that they have these tools I can create these new products that will make it uh you know we're going to create uh AIdriven uh court systems or trade AI small claims. Somebody's got to build that and it's not the agents uh building it although they're going to do the final build out. Yeah. So if if if AI turns out to be kind of more deflationary than inflationary, does that delay the timetable for the next leg of the super cycle? >> No, I think well the super cycle is what happens when you hit supply shock because so far there's been diminishing returns. Um you had a 100x growth in the price of Bitcoin having the high in 201213 and then 80 5% crash and four years later you had 30x which was still phenomenal and then you had and and you know life-changing. Then you had an 83% crash. Um if you again he sold the top and bought back at the bottom, he did unbelievably well. Um the third time I was projecting uh 10x, but it ended up being 8x because of a bad macro Biden's war on crypto. And if rapid raise of interest rates, but if interest rates were more important than the having, we'd still be around $8,000 Bitcoin. And uh this last time I was projecting 3x was again 133 and we only got 2x. And uh you know uh that was probably the biggest macro effect. A lot of people expected positive macro and tailwinds instead of headwinds because Trump being uh pro crypto. But you know we didn't pass the clarity act. And we did have all the tariffs and uh that was really at least if not the cause at least the excuse for uh for the 1010 uh crash which happened exactly on the cycle where it should have. up. Um it may have been something where people are ready to uh sell whales and the institutions that are following the in terms of thesis. Um you know just said here here's an opportunity to sell and cash out. >> Yeah. And you know, to your point, I mean, we're we're now seeing, I saw today, just a report, we're now seeing major players like Coinbase, Stripe, Cloudflare. Um, they're pushing further into that X42, which is a protocol designed to let AI agents and software make payments directly over the interview o over the internet without human intervention. Just for the viewers, uh, does that kind of machine-to-achine payment infrastructure accelerate your super cycle timeline? >> I don't think that accelerates it. It simply provides um you know more um uh rationale for people who were previously afraid of uh of digital assets to say oh it's like a but if you have a wallet then it's not foreign for you to understand Bitcoin. >> Listen that was fascinating. I I really appreciate you joining us today walking us through your thesis during such a high stakes week for the markets. Uh been interesting watching. Um, you said that this is going to still hurt a little bit for people and we get written back at home. You know, people that don't have a ton of liquidity and maybe they're leveraged, maybe they've leared about leverage. Uh, what do you say to people that are kind of fearful right now in this market? >> Well, I mean, if you bought at the top, the good news about Bitcoin is just hold it on for four years and you're gonna find a time that you're uh you're, you know, above uh water again. Uh the best thesis is you bought at 110 and you can afford to buy some at 65 55, you know, dollar cost average. The only time that the dollar cost averaging doesn't work is during uh Bitcoin fall. You don't want to be dollar cost averaging into lower lows, but the rest of the time it's fine. >> Yeah. Yeah. It feels like it's found a little bit of footing here. All right, Michael. Appreciate your time today. Thanks so much. >> My pleasure. >> All right. And a big thank you to our sponsor, Swan Bitcoin, your partner for generational wealth. If you're looking to build a long-term position, you can learn more at swamp.com/kitco. Now, on a personal note, I'm heading out for a little family vacation after this show with my wife and our son. I'll be back on the air and behind the desk as soon as we can. But while I'm away, the channel is in good hands. We have several of our regular technical analyst experts, including our favorite Gary Wagner, scheduled to steer us through these volatile markets and to keep you updated on the latest price action. And to our viewers, we want to hear from you. Is the current market set up a structural fracture or just a temporary shakeout? Let us know your thoughts in the comments below. Make sure to hit the button to subscribe to Kicko News and turn on notifications so you never miss an update. We're almost at a million subscribers, so you need to help us get there. Tell your friends. Appreciate you watching. I'm Jeremy Safford. We'll see you soon. Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. 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