WBD309 Audio Transcription
Tesla’s $1.5bn Bitcoin Buy with American HODL & Preston Pysh
Interview date: Tuesday 9th February
Note: the following is a transcription of my interview with American HODL & Preston Pysh. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to American HODL and Preston Pysh, author, engineer & the host of The Investor Podcast. We discuss Tesla's announcement, MicroStrategy's influence and corporations scrambling to buy Bitcoin.
“There is this global game of musical chairs going on and the music is slowing and the chairs are getting fewer and fewer, and at some point the music stops, and what happens when the music stops?”
— American HODL
Interview Transcription
Peter McCormack: Are you ready, HODL, we're recording?
American HODL: I'm ready.
Peter McCormack: All right, man, good to see you.
American HODL: I was born ready, bro.
Peter McCormack: And Preston, how are you doing, man?
Preston Pysh: Hey, doing great. Great to be here, Peter.
Peter McCormack: Thank you both for coming on, we've got a lot to get through. I'm using my standing desk for the first time today. I thought I'd do an interview standing.
American HODL: Look how trendy you are, man?
Peter McCormack: Trendy?
American HODL: You've got a standing desk? Are you drinking a hemp milk latte?!
Peter McCormack: I've got a glass of wine, dude. I'm celebrating! No, I put my back out. I had to get this new desk so I could stand up a bit more because -- what the fuck are we talking about?! Dude, listen, Tesla, let's start. I've got some financial shit to go through with Preston. You go first, HODL, tell me about your day?
American HODL: Well, okay, first of all I woke up and it's 5.00 am, I immediately check my phone. I see Elon, I go like this, "Oh, Ah, Elon!" I started screaming, I scared my dog; everybody in the house is like, "What's going on?" I have never woken up quite this bullish before and I had to explain to my wife what was going on. I was like, "This is the first domino". All the dominoes are set to fall after this one. I can't contain the bullish feeling I have inside. I want to open my window and just scream at my neighbours and be like, "I'm bullish as hell! I'm so bullish right now!" It was a great morning for me.
Peter McCormack: Good man. Preston, tell me about your day, dude?
Preston Pysh: You know, it's pretty exciting when you have the world's richest person, who runs a monster tech firm, that's known for breaking all precedents in technology stack $1.5 billion on his balance sheet. So, I think from a narrative standpoint, it's going to -- if it wasn't a talking point in the boardrooms before, it's definitely a talking point in boardrooms right now. And I think, as we look to the price move that I'm kind of anticipating from now into April, which I think is going to be fairly unprecedented how much Bitcoin's going to move in such a short amount of time, I think it's only going to compound the talking point of what it is that they just did.
Peter McCormack: Yeah, so it was afternoon for me. So, I was watching this Britney Spears documentary the New York Times just did. Hey, stop it!
Preston Pysh: You too?
Peter McCormack: No, because on Defiance, we started work on a show about Britney Spears about three months ago, and then they announced theirs, so I was watching it. And, I get tagged in a tweet and it comes up on my phone and it was something like, "Oh, Pete, you can buy your Tesla now". So, I click on it and I see a CNBC article. I thought it was a joke, so I'm checking the URL and I was like, "No, this is a fucking joke".
Obviously, it's not a joke, and we've had a wild day ever. But no, I'm with you, Preston. Now, it's a little bit like, when people were having Bitcoin on their balance sheet before, it's a little bit risky, bit embarrassing; now, not to have Bitcoin on your balance sheet is going to be slightly embarrassing.
Preston Pysh: Really embarrassing, especially if the price runs like we expect it to. If you don't understand it, which I think most people just don't; they're looking at it and saying, "This is emotional; these people are all going to get rekked", and they don't understand that it's actually mathematical. And the thing that's driving it right now is a total supply suffocation of coins that were supplied last May at the halving event.
Until people do the hard work of trying to understand what that means, they're going to continue to look at it on a linear chart and say, "That doesn't make any sense". But, if they zoom out and they look at it on a log chart, what they're seeing is very normal. There's nothing that's abnormal about this and in my opinion, you're not even at the tip of the iceberg on this move right now.
Peter McCormack: I'll tell you something else that's stuck out for me recently, I'll let you go in on this one as well, HODL, but I brought this up on Clubhouse earlier. Everything that Saylor's done has been pretty fucking amazing, right? Really, he's been one of the big drivers for a lot of the narrative this year. But, the most important thing I think he's done recently actually is the two $10 million buys he's done. It's not the big buys; it's these $10 million buys where he's kind of made the point, "We're not done". They're essentially stacking sats.
Then I go and read -- actually, I think PlanB put it out, and I go and read what they said in the filing and they said, I've got it here, "They might begin accepting Bitcoin as a form of payment for our products, which we may or may not liquidate upon receipt". And I think we're approaching that point now that people aren't going to want to sell their Bitcoin.
Preston Pysh: Exactly. So, this is a perfect example of what I've talked about for more than a year now about how important free cash flows are going to be for businesses. So, whether the company accepts Bitcoin or not really doesn't matter, because if you're Michael Saylor, every dollar that comes through his door, he understands how much of that is going to turn into free cash flow.
So, let's just say the number's 10%; I don't know what his margins are, but let's just say they're 10%. So, for every dollar that comes through the door, his accounting department is taking 10% of that, 10 cents, and turning it into Bitcoin. The rest are going to be paid out in fiat-denominated expenses, until they're not, and that's just what he's doing.
So, whether he's accepting it at checkout or not, I just don't really think it matters, because these companies that understand what in the world's happening, they're saying, "Hey, whatever free cash flows I've got that are getting banked onto my balance sheet, I want it in Bitcoin". That's the play; it's the new share buyback and the sooner the companies figure that out, the faster they're going to realise that they can protect themselves from what's about to happen.
Peter McCormack: HODL, what do you think this is going to mean for the narrative now?
American HODL: Well, I said this on Clubhouse -- look at us, just a bunch of influencers hanging out on Clubhouse all day! No, but I said this on Clubhouse earlier, and I think this is the profound takeaway from today's announcement, and why I think it's the first big domino to fall is that, today the world got a little less short Bitcoin, because once you add Bitcoin into the S&P 500, suddenly there is a tremendous amount of the world that now indirectly owns Bitcoin; that's why it's so bullish.
Peter McCormack: Well, the other important thing, and Preston, you probably want to chime in on this, but I think what's happened is Elon Musk and Tesla have added to that regulatory moat around Bitcoin now. Elon has a lot of influence; we saw that with him moving out from California to Texas. He's got a lot of influence and I think now, it creates a bigger problem for any regulators that want to bring in some kind of draconian rules around Bitcoin.
Preston Pysh: No doubt about it. I mean, at this point, you have so much entrenchment on the corporate balance sheets, and can you imagine what the entrenchment is on the private side? Who in the world's talking about buying Bitcoin if you're a private company? I know I'm sure not, right, if you're one of these people that are trying to stack a lot or you're a large private company. That's something that I think is also not talked about.
Ross is a perfect example from the MicroStrategy. Here's a guy that pretty much nobody even knew of, who's probably got a $5 billion position, or whatever; I know he said the big number where he's going to be by the end of the year. But, here's a guy who's got billions in Bitcoin and no one even knew who he was. So, how many more of those people are out there; how many of those types of people own private companies and are just trying to put as much on their balance sheet as possible; let alone the publicly traded companies that are stacking it on their balance sheet?
I tweeted today, "I think it's the shot heard round the world", and I really think that it is, because of who did it, the company that did it and him being known for being a tech person, a person who can see where the future's kind of going. So, if you're sitting on your laurels not doing anything, dude, wake up!
Peter McCormack: Well, Tim Cook's going to be looking, Jack Dorsey's probably going to be considering more; who else? We've got no idea, but I think what we're expecting to see now over the next few weeks, few months, is other people putting their play in.
And I think it's a race, right, HODL; it's a race because everybody wished they'd got in when MicroStrategy did, whatever their original purchase was, like $11,000; then the second one at $23,000; and now they're seeing it at $45,000; it's probably going to go over $50,000 in the next few days; and to everyone, it's a race, because if you don't get in at $50,000, you're going to get in at $100,000. If you don't get in at $100,000, it's going to be $150,000.
American HODL: Totally. I've been analogising it to a game of musical chairs, right. There's this global game of musical chairs going on and the music is slowing, and the chairs are getting fewer and fewer; and at some point, the music stops. And what happens when the music stops?
Preston Pysh: And, I'm just that kid who's standing next to that chair and not moving to the next one, right; just waiting to sit down on it and clogging up the line!
American HODL: I'm that kid who's sitting on 100 chairs and I'm not letting anybody get to any of them!
Peter McCormack: I'm that guy going round the chairs with a microphone, asking them about their chair strategy!
Preston Pysh: Why are we talking about chairs; you need to sell your chairs, folks.
American HODL: All right; everybody sell their chairs for Bitcoin. Peter would be mad at us all.
Peter McCormack: No, you two are sat in chairs right now; I'm the one stood up here! Let's just be straight now. Jesus, what the fuck happened today, HODL? I know for you, because you've been shouting at your friends for a long time, right? You've been evangelising Bitcoin, they haven't been listening. I'm the same.
If you go to my Facebook, it's a shrine of Bitcoin tweets from about $4,000 all the way up to $44,000. I'm kind of scared to do it now, because I think they all think I'm a prick because they missed out. But, we're going to have this unit bias issue that's going to be a real issue for people.
American HODL: Oh, yeah. And, the shitcoin narratives; they're out there and there are a lot of people who are still YOLOing into shitcoins and Dogecoin to the moon, right; like, "Dogecoin to $1"; I'm hearing a lot of that. I sat in a Doge room and listened to the Doge "investors" talk about their Doge thesis today and I was just like, "Man…" You can't help but feel bad for these people, because they don't understand the game that's being played, right.
This is a game of musical chairs like I said. And so, if you're the kid that goes to sit on the floor in the corner, you think you're taking part in the same game, but you're not taking part in the same game.
Peter McCormack: Well, you went into the corner and got five more chairs and tried to start a new game, and no one else wanted to play!
American HODL: Yeah, exactly. You're saying the trash can is a chair; that's basically what you're doing!
Peter McCormack: I was arguing with a guy on Twitter the other day about Dogecoin where he was basically arguing the fundamentals of Doge being better and then saying, "Oh, well you're lucky, you got in Bitcoin early". And I was like, why the fuck am I wasting my time arguing about the fundamentals of Doge versus Bitcoin? That's a conversation that's a waste of time.
Let me ask you though, Preston, even this morning I sent out a shitty tweet about Elon Musk and I had a gif of lemmings where it says, "Paradise", and as they head towards paradise, they're falling into the lava. I was like, this is when Elon Musk tweets about Doge. Should we give him any criticism for this, because in some ways it was so obvious now, in retrospect, obviously; but, in retrospect it was obvious what he was up to. But, I think a lot of people would have bought Dogecoin based on his tweets.
Preston Pysh: Well then if you do, you didn't pass the intelligence test.
Peter McCormack: No, that's fair.
Preston Pysh: I'm about free and open markets. So, if you make your investing decision because some person goes out and says, "Dogecoin", and it turns out to not be a good choice, well that's your own stupid mistake. I'm so tired of everyone treating every other person like they don't have personal responsibility for themselves to make decisions. That's what this whole thing's about, man; do the hard work, take responsibility for yourself, for every decision you make, and move out. If you can't figure it out; I'm sorry, you didn't pass the test.
This is a test of critical thinking, right, and if there's one thing we've learned, we need people who have authority in the future that have deep, critical thinking skills. So, you know what; I applaud them; I think it's great, because all the people that have stepped into this and bought it, the Dogecoin, congratulations, you're going to have less influence in the future because you didn't pass the critical thinking test.
American HODL: I love the point that Preston's making about personal responsibility and, you know, it's kind of like this. Bitcoin requires extreme personal responsibility and extreme ownership, right, and that is fundamentally a race to the top. It's a race towards heaven; it's a race to better yourself.
The fiat currency power games that we see playing out in our society, you know, political currency games basically which is like, "Hey, the money printer's whirring. Go ahead and send it our direction, send it to our particular class or group or tribe or sect or religion. We want some of that free money". That's a race to occupy the victim position, because you're making a claim that, I'm the bigger victim so therefore, I need more of a handout; and, that is fundamentally a race to the bottom.
Take personal responsibility for yourself; take ownership over your life. And here's the thing. Hodling sounds corny. Hodling starts with loving yourself, because you have to escape this trap of nihilism that the world is in, and you have to think that you can have a better future; and then, you have to put aside money for yourself in the future and then believe in yourself and believe in that future.
That's what we see, like people who are entering the Bitcoin economy; they just have so much optimism and hope and the energy there, right; it's just so palpable, and I think that's just a growing trend and I love to see it.
Preston Pysh: The people who would have bought Dogecoin, how many questions do you think they were asking about the investment thesis for owning it? They were just buying it because one person was tweeting about it without any type of information as to why he was tweeting about it, and they just went out and bought it. They didn't ask a single, solitary question, but yet they're all I've been hearing in Clubhouse, broadcasting why they own it.
So, instead of asking questions and being in receive mode; they're in transmit mode; they're in broadcast mode. That's not how you invest; that's not how you think about solving a critical problem, or critical thinking around a problem to know how to invest your money. You need to be in receive mode and asking the right questions in order to generate the right investment thesis. So, do I feel bad for them? Hell, no, I don't feel bad for them. It's a service that's being provided. All these altcoins are a service to Bitcoin.
American HODL: That's a great point, Preston, and if people are new to Bitcoin, I mean when I was new to Bitcoin, I shut my mouth for basically the first three years, and I just listened to people that were smarter than me, because there's a lot to understand here; it's incredibly complex. So, don't feel like you have to go out and stake your claim and say this is the way things are because honestly, at the beginning, you probably don't really understand the way things are. So, sitting and listening and sort of sifting ideas for yourself is absolutely the best investment strategy that you can employ.
Peter McCormack: I did kind of the opposite, but as a strategy as well. I learnt in public and went and made a podcast and got everybody on and asked all the questions and figured it out in public; and, it was quite a shameful process to go through at times, but I did learn a lot. When you're in front of everyone getting yelled at for asking dumb questions, you learn a lot quickly.
Preston Pysh: You and me both, Peter. I remember coming into this in 2015 like HODL and many others, and it was a lot of questions. And, a lot of the times, you look really silly, right, because you're asking things and there are these really smart people that step in and come off the top rope and put you in your place really fast. But you know what; there's no better teacher than looking like a fool in front of a bunch of people.
So, I would encourage people; ask questions. Don't get on here and tell me what it is that you know. Ask a question and see how I respond, or see how somebody else responds, and then take it from there. That's how you can always make somebody look like the fool that they are, is not by telling them anything, it's by asking them the question that they can't respond to, because you do know maybe what the outcome is. I'm not saying that I have the answers; that's for damn sure, right. I'm saying, if you really want to understand something, you ask questions, you don't tell.
Peter McCormack: Well the thing is, when you think about it, there's actually a Dogecoin room on Clubhouse itself; it's pretty dumb. But, I think a lot of people are looking for some kind of confirmation bias, they want other people to tell them, "Yeah, I've done the same, I'm right", etc, and I went through it. I shitcoined to begin with, got rekked, learned about it. And I think some people at the start of that cycle that maybe I was at four years ago; HODL, I don't know if you shitcoined; Preston, I don't know if you shitcoined; but, I went through that process.
American HODL: I traded a little bit of Ethereum, just a little bit, but I made a lot of money off of it and I flipped it for Bitcoin.
Peter McCormack: Nice.
Preston Pysh: I think it's a natural progress for people because, if you think you're going to step into this and understand it from a technical standpoint from the beginning, I mean come on, give me a break; there's no way somebody's going to really understand all the technical nuances of this, let alone understand the macroeconomics of what's taking place and what it's trying to solve. Good luck!
American HODL: Yeah, and I think the unit bias thing is an important point that we should hit on while we're on this subject, because people think that Doge is cheap and they're buying a bunch of Doge and it's like buying a lottery ticket. They're saying to themselves, "What if Doge one day goes to $40,000 or something", which is a crazy thing to think. But, these people are unsophisticated retail investors and so that's their lottery ticket, right.
But, I think the thing to understand is, in the future, if Bitcoin takes over the entire world, like eats the entire world like we think it's going to, the average net worth will be 70,000 sats, right. So, you can go out today and buy 1 million sats for $440. So, that's the way in which you need to think about it. You're taking territory on the Bitcoin blockchain; you are getting a piece of ultra-scarce real estate. It's like buying Manhattan real estate in 1776 during the foundation of the American economy. That's what this is; that's the opportunity here.
Peter McCormack: It's your score. Your sats is your score in this game.
American HODL: Absolutely.
Peter McCormack: And that leads me to another point, and I think it's going to come up against a lot of what you were tweeting about today, Preston. I've mentioned this in so many interviews recently, but I was doing an interview with Jaime from Hut 8 mining, and we were talking about the fact they hold Bitcoin on the balance sheet and what she's been doing with that. Part of it was loaning it out to get yield; part of it was holding it, because during tough times they can use it to borrow against, because it's pristine collateral. The one thing they don't want to do is sell it.
I was like, "Okay, well my business is like a microcosm of yours. I've got a small amount of Bitcoin on my balance sheet". But in doing that, over the last year, I've increased the capital on the balance sheet by 150%. Now, next year, if I want to grow my business, say I want to launch another podcast, I don't have to go and borrow money, I mean I don't have to borrow money off an institution, I don't have to give away equity; but, I can use that Bitcoin, I can leverage that, I can borrow pounds and I can grow my business.
But, the one thing I don't want to do is ever sell that Bitcoin now. It represents value on the balance sheet, but it's not a value I want to sell. It's a value I just want to use to grow my business, or if at any point I sell my business, hopefully I get to take it with me. But, I'm kind of in that zone now of like, how do I get through life not selling my Bitcoin, but using it to live the life I want to lead, or grow my business how I want to grow it; does that make sense?
Preston Pysh: Yeah, absolutely. And it's going to take some folks some time to figure out how powerful what you're saying there is, because they don't necessarily understand how valuable Bitcoin is. When you look at Michael Saylor and the amount that he's purchased, let's just keep the numbers simple. If he's got $1 billion worth of Bitcoin on his balance sheet, and it's bigger than that now; but, if you lend that out into an over-collateralised market, and that's a really important piece for people to understand, because everyone's used to lending and borrowing in the old system where it was the old fractional reserve.
Bitcoin markets are not like that. Now, there might be some companies that are under-collateralised; you don't want to be dealing with them. If you're doing any type of lending, it's all going to eventually evolve to over-collateralised loans, because no one's going to lend their money unless that's the situation.
So, that is a big change and not only is that a big change, but the 24/7/365 aspect of it allows you to liquidate the escrow of whoever is borrowing your Bitcoin immediately, and it's over-collateralised, so your risk is pretty much key management. Well, now you have lending that you control your own keys still. So, even that portion of the risk is taken away.
So, let's just say today, the interest rates on lending Bitcoin are 4%. Well, Michael Saylor, in his situation with $1 billion of Bitcoin, is making $40 million a year on lending out his Bitcoin in an over-collateralised loan environment that trades 365 days a year. Last time I checked, his free cash flows on his company for the year was around $30 million to $40 million. So now, that Bitcoin, that magic internet money that you can't even touch, is generating the same type of return and the same type of profit that all of the people that work at his company are doing.
It's going to take time to wrap their head around how powerful that is, but it's totally insane and mind-blowing. And, if you don't think that people are going to be lending out their Bitcoins, there are more of these peer-to-peer lending platforms that are over-collateralised and trade 365 days a year; as there are more of them, because I'm not just going to go to one of these platforms, I'm going to distribute it across maybe five or ten of these platforms; as these get more mature, watch out.
If I want to keep going on this, this is where for me, the hyperbitcoinisation scenario turns from a qualitative discussion over to a quantitative discussion. To date, the only thing I've really talked about with respect to hyperbitcoinisation, which I think the possibilities of that playing out here in the near term future is a lot higher than people realise, it was mostly based around the discussion of trust and trust eroding and being ploughed into Bitcoin. Now it's actually, for me, starting to look like it's more mathematical; so, let me explain what I'm talking about.
So, for people that want to implement -- a lot of this yield that you're seeing that's being harvested in USD terms, like if you have your money in a bank account today, you could tokenise that dollar and collect 10% interest on it right now, through these over-collateralised markets, through lending and people capturing spreads on the long and short. With Bitcoin, if you want to short sell and do this long-short arbitrage-type deal, let me just give you an example.
If you went and bought Bitcoin for $42,000 today, you could then step into a June futures contract and sell it for $46,000 and you'd capture roughly a $4,000 yield on that over the next 4.5 months -- sorry, you'd capture an 8.4% return over the next 4.5 months. Then next month, you just do it again and then you do it again. So, the yields that are being captured by somebody that's doing this, and that's a risk-free way; you're going long and you're going short simultaneously and you're capturing these spreads, and then you're doing it every single month with the free cash flows that you're working with.
So, that's how these yields are being captured. The exciting part, if you own Bitcoin, with this scenario, is for them to borrow the Bitcoin; because, the only way you can go short is you have to have Bitcoin, real Bitcoin, to go short. Well, guess what; they've got to borrow it. So, they're coming into the borrowing market, they have to over-collateralise, or at least they're going to have to get there if they're not there right now; they will because there's going to be nobody lending you the Bitcoins unless you're over-collateralised. So, they have to over-collateralise.
The money, it doesn't matter what they're bringing to the table; if they're bringing fiat to over-collateralise, or if they're bringing, you know whatever coin, tokenised coin, it doesn't matter; because, as soon as they step in and they put it in escrow, whoever's working that exchange is going to immediately turn it into Bitcoin for the lender's behalf.
So now, what's happening, because it's over-collateralised, and I'm just going to use simple numbers so people understand the numbers, right; 2 Bitcoin go in, but 1 Bitcoin comes out to do the long-short arbitrage trade. So, what does that do to the market, when 2 go in and get locked up and 1 goes back into the free and open market? Well, that's supply suffocation, right?
It's the same supply suffocation that we see being provided through the four-year halving event. But now, it's getting doubled down in the derivatives market, because there's this massive spread that traders just want to capture naturally. When volatility and prices go higher, more people want to put on this trade because, guess what; they make even more money, they make even more "risk-free" yield by going long and short at the exact same time.
So for me, this is a perpetual engine that is sucking supply of Bitcoin out of the market. And, what I think it's going to do, my opinion on what this is going to mean, is this is going to make the interest rates that you're capturing by lending out your Bitcoin go even higher than the 4% you're seeing today. Maybe it's going to go up to 10%. Maybe it's going to go up to 15%. Hell, it might even go higher than 20%, depending on how high the price goes and how violent the volatility gets, and how many people actually start to recognise that if you're implementing a long-short strategy in the market today and you're not doing it with Bitcoin, you're out in left-field, dude; you're lost in the sauce, because the yields that you're able to capture with this strategy in Bitcoin are massive; unprecedented; no one can even understand it.
So, let me play out the scenario even a little bit more, and I know I'm going really long here --
American HODL: Keep going, keep going.
Preston Pysh: What if yields start blowing out to, let's just say, 15% or 20%. How in the world are you going to sit in the fixed income market, making your 1% on your ten-year treasury, "Oh my God, the yields are blowing out in the fixed income market on the ten-year trades; they're at 1.1%", instead of 1%, right. And then, you're looking over in this Bitcoin market and it's going 5%, 10%, 15%, 20%.
I think there's going to be this realisation for anybody that's spent some time in fixed income saying, "Hold on a second. Maybe inflation isn't 1% when I look at it in fiat terms, like I'm being told. Maybe this thing over here on this free and open market is actually the real interest rates". It's going to make minds melt in fixed income, if what I'm describing plays out.
So then, how in the world do you hold those floodgates of all this money that's pent-up fixed income like a spring that's been so compressed that it's unfathomable to even think about, because yields are at 0%, which means that they've been bid to kingdom come at $120 trillion and $20 trillion of it is negative yielding; that's how insane this market's been bid. And you think it's just going to stay there and it's not going to be like pulling a pin and unleashing the floodgates? Get the hell out of here, you're out of your mind; which is only going to make the underlying Bitcoin go higher; which is only going to attract more people into this long-short strategy; which is only going to make the yields go higher.
Peter McCormack: How does that end though; what's the endgame on that?
Preston Pysh: I'll talk the endgame on that. So, yields keep going higher and then the big narrative is going to be, "These yields, what are they going to go to; 50%?" That's going to be the talking point. And people are going to say, "We've got to shut this thing -- this thing is chaos because yields are going to the moon".
But, guess what, when these yields are going up, everybody in stocks is going to be saying, "I probably need to sell some of this and buy Bitcoin and start lending it out". And so, what happens to the capitalisation rates on equities? Well, they actually start getting priced back into reality. Instead of them being a P/E of 35, maybe they start getting priced at a P/E of 10, maybe even 5; because, if I'm able to capture 20% interest rate in Bitcoin -- this is all hypothetical, right. I'm just playing out the scenario the way I kind of see it going down, right.
Let's just say I can capture 20% on interest rates by lending out Bitcoin. Would I buy an equity market just in S&P 500, or a Nasdaq market, if the P/E is 5; probably not. It would have to be lower than 5 because, at a P/E of 5, that's 20% to own equities. Well, why in the world would I own equities giving me 20% yield when my fixed income, by lending out Bitcoin "risk-free", is also giving me 20%; that makes no sense? It's a simple maths problem.
So, the equities have to start getting below whatever it is, if it's 20%, 15%, 10% that you're getting on the borrowing. Once equities start giving you a better return than ones you're getting in fixed income, well then all of a sudden, now it makes more sense to start owning equities instead of lending out your Bitcoins. That's how I see it all kind of playing out.
Peter McCormack: Okay, so what you're saying is that Bitcoin is going to force the repricing of everything back into realistic terms?
Preston Pysh: Absolutely. I mean, there's no other way that this could play out, if we actually believe that Bitcoin's going to become global money.
Peter McCormack: This is how it eats everything, right? I'm not going to tell people here what you told me the other day, but we had a private conversation; you gave me some projections and I was like, "Well, that's pretty bullish", and I went and told my son and he was like, "Yeah, that's pretty mental. But, I didn't know why it would get to that point. I thought it could, but I didn't know why. And I guess this is the catalyst for that?
Preston Pysh: Yes. The catalyst is -- and, you could do this today. Let me just give you a scenario that you could implement today. Let's say you're a person and you're hearing this conversation and saying, "This guy sounds like a nutjob. What I want to do is I just want to keep my money in fiat, in dollars, but I want to capture these 10% returns on the yield". Well, you can do that.
Look at Gemini, for example. And I think where a lot of this is going to go is, in banking, you're going to get your paycheque; you're going to have it deposited to something similar to Gemini; and, while it's sitting in there, you're going to collect 10% interest on your fiat and you can still pay your fiat-denominated expenses for the month out of that account. As it's sitting there and you're waiting to pay these expenses, you're going to be collecting -- I mean, the yield today on USDC, or Gemini USD, is 10%. And, those yields are lower than what you could get in a peer-to-peer lending market. They're higher than that in a peer-to-peer lending market.
So, when I look at Avanti and what's happening over there with Caitlin Long, this is where they're going. They're going to a place where -- a fool will keep his money in Wells Fargo and collect nothing interest rate. What you're going to do is you're going to go to an Avanti, you're going to have your paycheque deposited there and if you want to buy Bitcoin with whatever free cash flows you have, whatever disposable income you have left over, of course that's what you're going to buy; you're going to buy Bitcoin and then you'll lend it out.
If you have fiat denominated expenses in the meantime, until we get into this scenario that we're describing, you're going to keep your money in some type of USDC coin, you're going to collect your 10% interest and then you're going to pay -- it will be swapped back into the old legacy system to pay your fiat bills at the end of the month. I suspect a lot of these companies are going to start accepting these tokens, because they want to immediately start collecting the interest upon receipt.
Peter McCormack: What does this mean for the dollar then, Preston, because the scenario you're describing is -- like, I already consider Bitcoin a pristine piece of collateral, something I never want to get rid of, never want to lose; and, any pounds I own which are outside of cash flow, personal or business, out of six-week cash flow, is going into Bitcoin and I'm accepting that, and that's the life I'm living, right.
But, what does this actually mean for the dollar, because if Bitcoin keeps doing this, it keeps, in my mind, it keeps devaluing the dollar, it keeps devaluing the pound; so, does this lead to ultimate destruction of the dollar or the pound, or is it a repricing; is this a devaluation; what's going on here?
Preston Pysh: It's a total meltdown of fiat currency, but it's going to take place at whatever time the market deems necessary; but, all the gears are in motion for it to happen. And, when people say, "Oh my God, everyone talking about hyperinflation; they're crazy", well, no, it is hyperinflation. This is the hyperinflation of every fiat currency when majored in Bitcoin.
You could probably go back to 2012 and what you could buy a Snickers bar for, now you're buying cars with the same amount, in Bitcoin terms; that's hyperinflation. Bitcoin has gone up, in dollar terms, 200% since inception, and I kind of suspect it's only going to get more aggressive going into the rest of this year.
Peter McCormack: The next thing I want to ask you, going back to like I say, there are a lot of companies looking at MicroStrategy and looking at Saylor and, especially when he bought $450 million worth, we were all like, "Hero!", but a lot of people were thinking, "You're fucking crazy, man". People like Mike Green and Peter Schiff were thinking, "You've taken $450 million of your treasury and you've put it into Bitcoin". That was a great decision. Then he did his convertible on another $650 million and again, a lot of companies are probably now looking back and going, "God, should have done what he did when he did it, and now Bitcoin's just about to tag $45,000".
So in my head I'm like, well who is going to be the MicroStrategy of nation states? Who is going to be that first mover where all the other countries go, "Shit, they did it at $50,000 [or] $60,000. We should have done it then"; and that is a different game-changer once a nation state does it.
Preston Pysh: Well, you're already seeing -- I just read something before we started recording that the Mayor of Miami is trying to do this on the balance sheet of their local government. So, when you think of how it's going down, it starts with the individual, it then moves to the corporations, it then moves to the local governments and then it starts moving to the nation states. Does it do it exactly in that order; maybe not, but for all intents and purposes, that's kind of how I see it materialising moving forward.
Your point earlier about the entrenchment is so valid and I think anybody looking at this saying, "Hey, we need to ban this" is totally missing how impactful such a decision would be at this point in the game, because you are not shutting this down on a global scale. You can shut down the exchanges of your local country, whatever, but all they're doing is tripping, and they're tripping in a 100 metre dash that's going to come down to who the fastest person is. And let me tell you, there's not a second chance to redo the shotgun start.
Peter McCormack: HODL, I was just saying to Preston, I was talking through the point with MicroStrategy, you know, when it first did the $450 million, a lot of companies were thinking, "Woah, what are you up to? That's a lot of money to be putting into Bitcoin; that's a bit risky". And that first purchase looks great, and then the convertible note again, whatever it was; I can't remember what the number was. But again, "Woah, what is he up to?" Looks like a really smart decision now.
I'm wondering who is the MicroStrategy of nation states, because whoever does it first, like really does it, announces it; maybe they don't want to announce it, but if they do and they do it at $40,000, $50,000, the central banks have bought it, or whatever country -- and I'm talking about outside. Let's just forget the fact that Iran and Venezuela and North Korea, or whoever's mining it because they've got free energy; I'm talking about a legitimate use by government. And I'm thinking, is it a Chile; is it a Belgium; whoever, I don't care who it is; but the first one who does it is going to be the envy of all other nation states.
Then possibly, does it then become a war. Other countries are saying, "Well, they've done it, we're too late, so we're going to ban it". How does that all play out?
American HODL: Man, there's been a long sort of held belief in Bitcoin that the first central banks to adopt it are going to be the small and irrelevant central banks; and to some degree, that probably is already happening and we just maybe are not aware of it. But, I've been hearing chatter, like I've been hanging out a lot on Clubhouse. People are a lot more free on Clubhouse than they are on Twitter, and high-level people have been willing to tell me things.
So, this is all hearsay; I don't know anything. But, I've been hearing that there's high-level consideration going on inside the Federal Reserve, and I've been hearing that from sources that are reputable. And so, you kind of start to think, is the Federal Reserve going to take a position sooner rather than later; and it's almost like the Bitcoin and the dollar team up together to take down the world's shitcoins? I don't know if that's going to happen, but I'm starting to see something like that happening.
All this Wall Street involvement, like major American corporations, like Tesla putting it on the balance sheet, none of this escapes the Fed. They're not stupid; they're thinking about this. We don't know what they're going to do yet, we don't know what their play is, but I think it might surprise a lot of us.
Peter McCormack: Well, I wish we all had their ability to just print dollars and buy Bitcoin, because they could; they could print $10 billion and just go and buy $10 billion of Bitcoin. We can't do that; they can, and they have that ability.
American HODL: Exactly.
Preston Pysh: From a strategic standpoint, you're crazy to not be implementing that right now, for every country in the world, because no one's currency is backed by anything. So, if they're not doing that, they're just asleep at the wheel.
American HODL: Because it's like, you have to put Bitcoin on your balance sheet in order to stave off speculative attack; you just have to, especially if you're a country that's vulnerable to speculative attack. You could see a country like Nigeria, right? They had a pretty draconian action against Bitcoin, because they're scared of a scenario like that occurring.
But I think the Nigerian population understands, whether the Nigerian government does or does not understand, that they have no ability to control it. They only have the ability to control their citizens. They can throw their citizens in cages, but they can't stop Bitcoin from permeating their borders; they just can't. It's effervescent, it's omnipresent; Bitcoin is everywhere.
Peter McCormack: But if the Fed does it, isn't that a speculative attack on its own currency?
Preston Pysh: I would say yes, but at the same time, if you know you're going to be devoured, I think it was Steve Jobs that said, "You have to cannibalise yourself in Silicon Valley, because if you don't, you're going to die". And, I see this as being a very similar thing. You can continue to hold onto the past and tell yourself that this isn't going to happen, or you can cannibalise yourself and try to have the best positioning that would be possible in this new world that you're moving into.
I mean, tech is now stepping itself into government money and if you're not going to play the game and cannibalise yourself, you're going to be very far back from where you used to be, as far as the power that you used to wield.
American HODL: This is a common bull cycle FUD surrounding Bitcoin, that governments are going to ban Bitcoin. You heard it. Mike Green versus Nic Carter was a great example of that. Mike Green went out calling Nic Carter basically a terrorist and a criminal. I mean, that was the craziest interview I'd ever heard, and I thought Nic did a tremendous job on that. But, you're hearing this, "Governments will ban Bitcoin" from everyone, all across the board. And, it's this weird fear reaction that I don't think looks logically at the situation.
Governments have rubberstamped Bitcoin, the asset. They have okayed it. They are okay with Bitcoin as a store of value. Where the conversation is going to come with regulators is going to be Bitcoin as a network. How much censorship resistance are we going to be allowed; what's the cat-and-mouse game between devs and regulators; how does that play out? That's all TBD. But Bitcoin, the asset, has been rubberstamped by the powers that be, and it's A-okay.
Preston Pysh: And I would tell you Bitcoin, the network, is a change in the way that you think about taxes. So, this is going to take time for policymakers to come to grips with this, but they're used to being able to look back into the network of how money has worked historically and say, "Hey, right here, this transaction that happened between these two people for this big, giant dollar amount, that wasn't kosher, we want to tax it". And, what they're going to have to do is they're going to have to move to something that's way further downstream, to sales tax; then you have to focus on sales tax in order to collect the proceeds that are needed in order to run whatever form and size of government that you want to do in the future.
So, they're going to have to change the way they're going to think about it. They're not going to want to change the way that they've got to think about it, but I will tell you that the countries that adapt to that mindset of looking further downstream for the tax revenues and focussing on productive labour and productive goods that are being exported or made domestically, because that's how you can make sales tax, that's where you need to focus your energies if you're going to be competitive into the future. It's not an opinion, it's just me looking at the mechanics of how this works and understanding what you've got to do in order to adjust your positioning to the environment that you're going to be served.
Peter McCormack: Like Mayor Francis in Miami. By the way, we just tagged $45k, which is very cool. Yeah, and another thing that crosses my mind with this, Preston, is like, I don't know how much of Bitcoin is held by Americans, but I'm assuming it's the dominant country?
Preston Pysh: Yeah, I would agree. I think there's got to be 8 to 10 million Bitcoins in America; that's what I think. I think there's a lot of Bitcoin in America.
Peter McCormack: Well, I don't know if it's 20%, 30%, 40% of Bitcoin held by Americans; but actually, for the US Government to even consider, I mean, they're not going to ban Bitcoin, but just say they were. That's actually an economic attack on America itself. And actually, it damages an advantageous position that America has itself.
So in some ways, if the Fed was to put Bitcoin on the balance sheet, it maintains America's dominant position in the world, and it would therefore be interesting to see what someone like China does?
Preston Pysh: It will, as long as the spending habits of the elected appropriators in Congress understand that the habits of the past have to change drastically, as far as how they're allocating that capital and spending the tax receipts. If that mindset doesn't change and you have this mindset of, "Let's spend everything and get it out the door, because it's getting debased at a breakneck pace"; if that doesn't change, well it's going to be short-lived. And, the dominance or the power that was basically achieved in that changeover is going to be short-lived.
Peter McCormack: Yeah, but we've all been through this. I mean, I don't know yourselves personally; I don't know you, HODL, personally on this, or you, Preston, but I'm historically financially irresponsible. I've always made good money, I've always had good jobs and made good money; and I've always blown it. I've always just bought stupid shit. I've never been a particularly good, strong saver until Bitcoin came along.
Bitcoin taught me financial responsibility, it taught me discipline; mainly because I just don't want to sell my Bitcoin, right? I kind of do, because I want to have some fun; but I just can't, because I've been forced into this financial discipline. It forced me into financial discipline with my company and I've never been in a better position with my company and personally.
Perhaps this is the lesson we all go through, and perhaps this is the lesson and something that will happen, whether it happens firstly at a state level, or at a federal level in the US, or wherever; but that kind of financial responsibility is now going to be forced upon the officials that govern us at any level?
American HODL: Dude, okay, we were talking about Bitcoin as personal responsibility earlier and, yeah, Bitcoin is extreme personal responsibility and here's why. When you incorrectly economically calculate in a Bitcoin system, with a hyper-scarce asset, with a sound money, the Bitcoins go away from you and they don't come back to you, because you have incorrectly economically calculated, whether that's through mal-investment; whether that's through trusting the wrong third-party; whether that's through your own self-custody solutions, like the guy who locked himself out of $220 million.
When you do things that are incorrect, the consequences are dire in a Bitcoin system, and it doesn't work that way in a fiat system. If you do things in a fiat system that are incorrect, you economically calculate incorrectly, you get a bailout, right? The powers that be print more money and they make you whole again. That's not capitalism.
Peter McCormack: It depends who you are.
American HODL: Well yeah, exactly. Bitcoin is real, true, free market capitalism, and capitalism, guess what boys and girls, it has winners and losers. So, yes, you have to become more responsible when you operate with Bitcoin, you just have to be, otherwise you will lose Bitcoin. A fool and his money are soon parted.
Peter McCormack: What do you think, Preston?
Preston Pysh: I have nothing to add to that. I think that was sheer brilliance, HODL.
American HODL: Thank you.
Peter McCormack: Listen, I'm only going to take another ten minutes of your time, because it's late here and I wanted to get a Tesla show out tomorrow. What's next, because I'm sat here looking at the prize and I'm sat here thinking, who's next? Are we going to see, you know, is Jack Dorsey going to come out with Square and say, "Shit, we've done some more", or are we going to see Apple come out?
Look, I know there are a couple on the sidelines that we're waiting to hear from, because people have told me. I know you, HODL, you've had people tell you; I don't know about you, Preston; but, what's next?
Preston Pysh: For me, the thing I'm really watching is this thesis that I've got on interest rates. I think you're going to continue to hear the next big tech company, you're going to hear another big brand name person say that they're buying it, and people are going to say that's what's driving the price up. Sure, it is driving the price up, but I think the thing that I'm looking at that's driving the price up is the supply suffocation. It's a lack of coins being on the market that's driving the price up. The fact that you have these big buyers stepping in is only enhancing that, adding to it.
The thing that I'm personally paying really close attention to is lending rates on Bitcoin. How does that market mature going into the next two quarters, because I suspect there's going to be a massive influx of demand for borrowers and Bitcoin that are trying to implement this long-short strategy. You brought up Mike Green earlier; that's how his fund Logica works. They go long-short and they capture a spread. So, the irony for me that he's not in this trade, based on these yields that we're seeing, is just kind of mind-blowing to me.
But, I think you're going to see more of these guys start stepping into the market to do this risk-free trade that's producing these massive returns; and, I think as the demand for borrowing goes up from these types of entities, and you combine it with people that are a little leery to lend their Bitcoins because they're used to a fractional-reserve system, and that's not what this is, this is an over-collateralised system, is only going to augment those yields as they go up. And if that's true and those yields keep going up, boy, watch out, because I just don't know how you're going to be able to put the genie back in the bottle at that point.
Peter McCormack: Well that supply shock comes from all angles, because you know what it's like, HODL? I mean, I know you're in that, "I'm not going to sell my Bitcoin" zone now, but three years ago I bet you were like, "If Bitcoin hits this, I might sell a couple, I might sell a few"? I think the narrative has changed.
American HODL: I probably was more in that zone and I think, over time, as you realise just how Bitcoin goes up forever, how it's designed to pump forever, you just go, "I'm not going to ever part with this"; you become like Gollum with the ring! At first you're like, "Oh, this is a shiny ring; I like it", and then after a while you're just like, "My precious. I'll never let this go". That's how I am with Bitcoin, you know.
I've been hearing the chatter too on Clubhouse. I've had high-level sources. People tell me, people who are signed to NDAs tell me that many companies that they are aware of are getting in on this. I think Preston was the most prescient with this. I don't think any of us saw the corporate treasury trade coming, except for this man right here. Preston called this well before everybody; maybe Preston and Andy Edstrom are the only guys I heard even talk about this.
And what's interesting is even boring companies, like not Elon Musk, the boring company, but plain, stable, vanilla, boring old companies, they have CFOs that get this and they're getting interested, and some of them have already made large buys and will be disclosing soon. I think the big thing that we're seeing is there's this sort of three-touch phenomenon with Bitcoin that we as individuals experience.
The first touch, you touch Bitcoin you go, "Oh, Bitcoin, that sounds stupid. What's that? I don't care". The second touch you go, "Huh, Bitcoin, that's still around? All right, interesting. Maybe I'll look into it later", but you don't do anything. Third touch you go, "Oh, shit, I need some of this Bitcoin. I can't believe it just keeps ripping in my face". And, I think the world is about to collectively go through its third touch; the "gradually, then suddenly" part of the cycle.
2013 was the first touch, "Bitcoin, huh? Nerd money; I don't get it". 2017 was the second touch, "What's this? Crypto case? Still seems dumb. I don't know, maybe I should get some; who knows?" Third touch, 2021, "Wait, Elon Musk just put it on the corporate balance sheet; Bitcoin is now part of the S&P 500; what's happening here?"
Peter McCormack: Dude, there's a fourth touch, because the last six months I've been through that fourth touch. That fourth touch is like, "Shit, I need to put everything into this. Shit, that's not enough; I need to borrow money and put money into it. Shit!" I've got a new sponsor -- I'll tell you this one thing. I've got a new sponsor, right. How do I say, because I don't want to give sponsor numbers away? I told this new sponsor, "If you pay me in Bitcoin in advance, I'll give you a 10% discount". That's now up 55%.
You get to place where it's like, "Just get me into that Bitcoin". And look, this is a bull market and bear markets are going to be very different. I could have made the same trade and been down 55%. But, I'm also thinking a lot about, I did this interview with Dan Held the other day. We talked about the Bitcoin Supercycle and he said, "This one might be different. We keep looking at the other cycles and we're comparing the charts, but he said, "The big difference in this cycle is that people don't want to sell their Bitcoin, and there are markets to leverage their Bitcoin. And if we get into that mindset, then whatever the predictions are, they're going to be out the window".
American HODL: Yeah. And, that's what Preston was talking about earlier; I think we're going to see that.
Preston Pysh: Yeah, I mean who's going to want to sell their Bitcoin if they're making double-digit yield by lending it out in an over-collateralised borrower?
American HODL: My only point on this would be, for me personally, the risk reward is not right on these loan products yet, on these lending products. I don't think 6% is enough to give up my Bitcoin with all the risk that that entails, with that whole speech I went on about economic calculation and how, when Bitcoins go away from you, they never come back.
If you leave your Bitcoins with a trusted third party, yeah sure, you can sue them. But guess what; you're getting paid back in dollars, you're not getting paid back in Bitcoin. That's the Mt Gox creditors, you know.
Preston Pysh: So, when you look at things like Hodl Hodl and it's peer-to-peer and you're keeping your keys, that's why I'm saying it's so important to see how this market matures from the platform, from the lending platforms. And you see Adam Back and he's tweeting about using things like Hodl Hodl. I mean, this is maturing really fast and I think it's probably going to be one of the most aggressive areas.
I don't know that I would necessarily call some of them "decentralised platforms" yet, at least the ones that you would want to put some trust in, but they're getting there really fast. And the more that you're actually controlling the keys for both sides of that, whether you're borrowing or lending, the more interesting it's going to get by the day. So, that's where I'm looking at, and I think it's going to be one of the biggest areas of interest in the next six months.
Peter McCormack: Some wild shit. Right listen, look, I'm going to close out because it's getting late here; it's 11.00 pm. I appreciate both of your time at short notice. Man, where do we finish off? I'll tell you what; HODL, tell me, how does the rest of the year look for you; what do you think's going to happen?
American HODL: Man, I think that we are going through a phase in Bitcoin's adoption where guys like us are becoming irrelevant. I don't know when then history books get written about this that we'll actually be in there. So for me, it kind of looks like fading into the background, because the big players are coming in, the Elons, the Tim Cooks of the world, Jerome Powell, whatever he ends up doing, and that will be the shit that gets written about when Ron Chernow writes the history of this whole thing; you know what I mean?
Maybe Preston Pysh and Peter McCormack and American HODL are a slight footnote somewhere in one of the pages, right; but I think a lot of it -- we really bled for this thing and everybody in the first decade-plus of Bitcoin put a lot of their blood, sweat, tears and energy into this to make it come to fruition, and I'm so fucking proud of every single person that was a part of it, and it was a fucking beautiful thing. But, it's coming to the world stage now and it's not our precious little baby anymore.
It's grown up, Peter McCormack, and it's going off to college, man, and we've just got to be okay with letting it go and just live life to the fullest, man, and have its own experiences, you know!
Peter McCormack: You know what, you might be right actually. But, I think you say that, but we're still going to need the Michael Goldsteins and we're going to need the Pierre Rochards just guarding it just a little bit, the Matt Odells; a few of those bad arses in there. What about you, Preston; how does this play out, dude?
Preston Pysh: Oh, I think it's going to be epic. I think the price between now and mid-April is going to be gangbusters, way more than people are expecting. And then, I think you're going to go through some natural chop and volatility from there into the six figures by mid-summer, into the fall. So, I think it's going to be fascinating to watch. I can't wait to see the CNBC talking heads still not understand it.
It's going to be fun because everyone's looking at it and they're saying, "What is this thing?"; the same thing that you've seen with all the people that have been long Tesla, and all your traditional folks that were saying, "Oh, it's going to die here". It's the same exact lens being applied to Bitcoin, but probably 10X more so. So, it's going to be kind of fun to watch how this melts some minds here moving into the rest of the year.
American HODL: Preston, one of my favourite tweets so far was the tweet you put up six months ago with that ridiculous fucking parabola on it, and it wasn't enough. You didn't draw the line parabolic enough. That is the funniest thing to me, and I think that's what we're about to see; even more of that kind of thing.
Preston Pysh: I redrew it recently, so I keep adding to that August thread, and I redrew it. And, that's why I'm saying on the chart, now whether this happens or not, I've not idea, but the redraw that I just recently posted, I think last week, has the price of $95,000 in mid-April before it starts going into some chop. I have the line coming back down in the $50,000 range after that, I think in like May, or something like that.
But, when you start looking at the chop -- and it's not like I'm doing anything that's crystal ball here; all I'm doing is looking at the previous cycle. And I'm looking at how many days from the previous halving occurred; I'm looking at the percent that it was up that many days into the future, and just looking at the volatility that we've seen historically on the previous four-year cycle and just plotting it out. That's all there is to it.
If those numbers materialise themselves, which this cycle has been more aggressive than the last; if what we saw on the previous cycle happens, well we should be looking at something like $95,000 Bitcoin in mid-April. That's totally nuts, right?!
Peter McCormack: That's the chart you sent me, right?
Preston Pysh: Yeah.
Peter McCormack: Yeah, but you made that chart pre-Tesla.
American HODL: That's true.
Peter McCormack: You did, dude.
Preston Pysh: Oh, I know.
Peter McCormack: It's a game-changer. We've all got to go to bed and wake up tomorrow and see what this actually means. But, look, it is what it is. If we're in the footnotes, so be it, we'll be in the footnotes sat in Mexico drinking Margheritas at Satoshi's round table talking shit to each other. Who knows man? What a time to be alive! Love you bros, thanks for doing this. I'm sure we're going to talk a lot this year. Thanks, Elon; thanks, everyone. This is some wild shit, man. Take care, dudes; love it.
Preston Pysh: Thanks, Peter.
American HODL: In retrospect, it was inevitable.
