1
00:00:00,120 --> 00:00:02,680
You may not know this, but if 
you're holding a traditional 

2
00:00:02,680 --> 00:00:06,320
financial portfolio through a 
traditional financial advisor, 

3
00:00:06,400 --> 00:00:11,600
you might be traditionally. 
Today we're going to breakdown 

4
00:00:11,600 --> 00:00:13,880
why your wealth is evaporating 
behind the scenes. 

5
00:00:13,880 --> 00:00:16,720
And if you stick around to the 
end of the video, you may just 

6
00:00:16,720 --> 00:00:19,520
find out how Bitcoin can fix it.
Imotions. 

7
00:00:19,520 --> 00:00:23,160
This is beyond Bitcoin. 
Hop in, you curious Kangaroos. 

8
00:00:23,320 --> 00:00:31,680
Let's dive in. 
You are a smart investor, right?

9
00:00:31,960 --> 00:00:34,680
You plan for your future. 
You watch this channel for your 

10
00:00:34,680 --> 00:00:37,520
daily dose of Bitcoin. 
Or maybe you've never heard or 

11
00:00:37,520 --> 00:00:39,120
seen a Bitcoin video, I don't 
know. 

12
00:00:39,200 --> 00:00:41,760
This video does count towards 40
hours of Bitcoin podcast per 

13
00:00:41,760 --> 00:00:45,000
week, just if you were curious. 
Anyway, let's assume you have a 

14
00:00:45,000 --> 00:00:48,920
financial advisor or a pension 
plan or any kind of traditional 

15
00:00:48,920 --> 00:00:51,320
financial product. 
What if I told you this entire 

16
00:00:51,320 --> 00:00:55,000
sector of our economy has been 
running the same exact formula 

17
00:00:55,040 --> 00:00:57,400
for 80 years? 
What if I told you that? 

18
00:00:57,440 --> 00:00:59,920
What would you do? 
That 80 year formula is called 

19
00:00:59,920 --> 00:01:03,680
modern portfolio theory. 
Not modern monetary theory, Not 

20
00:01:03,840 --> 00:01:07,440
modern economic theory. 
Modern portfolio theory, Modern 

21
00:01:07,440 --> 00:01:10,960
portfolio theory, or MPT for 
short, has been the cornerstone 

22
00:01:10,960 --> 00:01:13,640
of economic theory for 
executives, economists, 

23
00:01:13,800 --> 00:01:17,320
investors and institutions for 
80 years. 

24
00:01:17,440 --> 00:01:19,320
That means we've been living 
with the same investment 

25
00:01:19,320 --> 00:01:23,520
strategy for almost a century. 
The big thought behind MPT is 

26
00:01:23,520 --> 00:01:27,400
the idea that there's such a 
thing as the risk free asset. 

27
00:01:27,600 --> 00:01:31,000
At some point in history, 
government backed bonds became 

28
00:01:31,000 --> 00:01:35,400
the idea of this risk free 
asset, meaning they were assumed

29
00:01:35,400 --> 00:01:38,360
to stay incredibly stable. 
I mean, we're talking about the 

30
00:01:38,360 --> 00:01:43,120
base of the pyramid here, folks.
According to MPT, the bonds or 

31
00:01:43,120 --> 00:01:46,440
the risk free assets are what 
hold the economy up. 

32
00:01:46,920 --> 00:01:50,560
And because of this, economists 
and financial engineers would 

33
00:01:50,560 --> 00:01:53,800
develo more and more 
sophisticated models that relied

34
00:01:54,160 --> 00:01:57,680
on the same idea that there's 
such a thing as a riskfree 

35
00:01:57,840 --> 00:02:00,000
asset. 
I had a conversation with my 

36
00:02:00,000 --> 00:02:03,000
friend Fundamentals about it. 
Fundamentals has been an actuary

37
00:02:03,000 --> 00:02:06,240
for publicly traded companies 
for over 30 years, and he just 

38
00:02:06,240 --> 00:02:09,400
so happens to be the author of a
new book titled Bitcoin for 

39
00:02:09,400 --> 00:02:12,120
Institutions where he dives into
the reasons why BlackRock 

40
00:02:12,120 --> 00:02:15,600
changed their tune about Bitcoin
or why individuals will always 

41
00:02:15,600 --> 00:02:18,800
outbid institutions for Bitcoin.
If you want to see a video about

42
00:02:18,800 --> 00:02:21,400
those topics, you can click one 
of the links above wherever they

43
00:02:21,400 --> 00:02:23,160
land. 
Here is a clip from that 

44
00:02:23,160 --> 00:02:27,960
conversation. 
Modern portfolio theory is if 

45
00:02:27,960 --> 00:02:31,440
there's a law of the land in 
finance, it's that it's very 

46
00:02:31,440 --> 00:02:34,280
well accepted. 
It came from a long lineage of 

47
00:02:34,480 --> 00:02:38,120
University of Chicago economists
who won Nobel Prizes. 

48
00:02:38,400 --> 00:02:41,920
And it goes back to this. 
There's this notion of a risk 

49
00:02:41,920 --> 00:02:45,480
free asset that everything is 
benchmarked against. 

50
00:02:45,680 --> 00:02:50,680
So if you believe such a thing 
exists, which a lot of people 

51
00:02:50,680 --> 00:02:56,000
do, right, And at the time in 
like the 50s when this started 

52
00:02:56,000 --> 00:03:00,120
getting traction, the US 
Treasury, you know, the US bond,

53
00:03:00,240 --> 00:03:04,840
US full, full faith and credit 
of the US was AAA, no question. 

54
00:03:04,840 --> 00:03:08,280
So this U.S. 
Treasury curve was considered 

55
00:03:08,280 --> 00:03:12,320
the risk free asset and it was 
the benchmark for which all of 

56
00:03:12,320 --> 00:03:15,200
the assets possible in the 
universe would be benchmarked 

57
00:03:15,200 --> 00:03:17,240
again. 
So you start with this notion of

58
00:03:17,240 --> 00:03:20,520
the risk free asset and then 
what you do is then you have 

59
00:03:20,520 --> 00:03:24,680
another notion called the market
portfolio, which is basically 

60
00:03:24,680 --> 00:03:27,360
like what's a port? 
What is if I could create a 

61
00:03:27,360 --> 00:03:30,520
portfolio of every asset that 
existed in the market, can I 

62
00:03:30,520 --> 00:03:33,920
abstract it into one thing and 
say I'm invested in that right 

63
00:03:33,920 --> 00:03:37,440
now this is before like the S&P 
existed this concept, right? 

64
00:03:37,440 --> 00:03:41,880
So the S&P index, you know, the 
Dow Jones, these indices were 

65
00:03:41,880 --> 00:03:45,600
created to try to try to 
construct something that would 

66
00:03:45,640 --> 00:03:47,680
essentially behave like this 
thing called the market 

67
00:03:47,680 --> 00:03:50,000
portfolio. 
So you have a risk free asset 

68
00:03:50,320 --> 00:03:53,880
and you have a market portfolio 
between these two things. 

69
00:03:54,160 --> 00:03:57,440
Yeah, you're looking for a 
portfolio that maximizes your 

70
00:03:57,440 --> 00:04:00,920
return on a risk adjusted basis.
This is the most layman way I 

71
00:04:00,920 --> 00:04:03,880
can put it. 
The risk is nothing more than 

72
00:04:03,920 --> 00:04:07,160
like price volatility and return
is returned. 

73
00:04:07,160 --> 00:04:09,880
So you just take those two 
things and then you try to 

74
00:04:09,880 --> 00:04:12,200
optimize within your risk 
tolerance. 

75
00:04:12,200 --> 00:04:15,680
So what you have is on one end 
of the spectrum, your risk free 

76
00:04:15,680 --> 00:04:17,320
asset. 
And then on the other end of the

77
00:04:17,320 --> 00:04:22,360
spectrum is all of your money is
in this market portfolio, right?

78
00:04:22,360 --> 00:04:26,960
And so somewhere between your 
risk free asset and your all 

79
00:04:26,960 --> 00:04:31,560
equity asset is a risk spectrum 
that you're looking to optimize.

80
00:04:31,560 --> 00:04:34,920
And modern portfolio theory 
gives a framework to do this 

81
00:04:34,920 --> 00:04:39,360
mathematically, to give yourself
the impression that you can 

82
00:04:39,360 --> 00:04:44,080
actually optimize for this, and 
you can invest in the portfolio 

83
00:04:44,080 --> 00:04:48,160
that truly, truly gives you the 
optimal balance with between 

84
00:04:48,160 --> 00:04:51,320
risk and return. 
I got a question, yes, where, 

85
00:04:51,320 --> 00:04:54,880
where does BlackRock fit in 
modern portfolio theory and how,

86
00:04:54,960 --> 00:04:57,160
how did it discover Bitcoin as 
its fix? 

87
00:04:57,280 --> 00:04:59,200
Good questions. 
Let's get to them. 

88
00:04:59,440 --> 00:05:02,320
But first I want to give a shout
out to our sponsors of the show,

89
00:05:02,720 --> 00:05:06,840
SAT 123.com. 
These guys are the go to in a 

90
00:05:06,840 --> 00:05:10,600
crisis when the grid goes down 
or when you lose communication 

91
00:05:10,600 --> 00:05:13,360
with friends or loved ones or 
local agencies. 

92
00:05:13,880 --> 00:05:18,040
SAT 123 offers a variety of 
communication devices, Faraday 

93
00:05:18,040 --> 00:05:21,440
bags, and solar power solutions 
so you can make sure you're 

94
00:05:21,440 --> 00:05:25,560
ready for any disaster. 
Go to sat123.com and use the 

95
00:05:25,560 --> 00:05:28,720
promo code simply for 15% off 
your purchase. 

96
00:05:29,120 --> 00:05:31,400
Great deal, link in the 
description below. 

97
00:05:31,720 --> 00:05:34,080
As I mentioned earlier, 
BlackRock completely changed 

98
00:05:34,080 --> 00:05:36,600
their investment strategy at the
end of 2023. 

99
00:05:36,600 --> 00:05:39,880
Beginning of 2024. 
That means that all financial 

100
00:05:39,880 --> 00:05:43,960
advisors, executives and 
institutions that you rely on to

101
00:05:43,960 --> 00:05:46,680
keep your money and grow your 
money, they all look to 

102
00:05:46,680 --> 00:05:48,360
BlackRock for the direction of 
the market. 

103
00:05:48,680 --> 00:05:51,440
BlackRock has been running the 
MPT playbook for their entire 

104
00:05:51,440 --> 00:05:54,120
existence. 
Larry Fink grew up in the heyday

105
00:05:54,120 --> 00:05:56,520
of MPT. 
The thought is as long as you 

106
00:05:56,520 --> 00:06:00,080
have a risk free asset in place,
you can weight your portfolio. 

107
00:06:00,080 --> 00:06:04,240
60% stocks and 40% bonds. 
Government backed bonds. 

108
00:06:04,240 --> 00:06:06,240
Remember. 
The problem here is that when 

109
00:06:06,240 --> 00:06:09,080
Blackrock's balance sheet was 
hemorrhaging during the British 

110
00:06:09,080 --> 00:06:13,880
bailout of September of 2022, 
Think realized that not only 

111
00:06:13,880 --> 00:06:21,040
were bonds not risk free, they 
were risk E ha ha ha hey, they 

112
00:06:21,040 --> 00:06:24,080
had to find something to replace
bonds for fear of being bailed 

113
00:06:24,080 --> 00:06:27,080
out by a government whose 
currency they were operating in,

114
00:06:27,080 --> 00:06:30,520
just like in the UK. 
By that logic, that's 40% of 

115
00:06:30,520 --> 00:06:32,040
their treasury that they had to 
dump. 

116
00:06:32,160 --> 00:06:35,680
For a financial megalith like 
BlackRock, that is no easy task.

117
00:06:35,840 --> 00:06:37,320
And what do they even dump it 
for? 

118
00:06:37,720 --> 00:06:40,800
In Travi, Bitcoin is somewhere 
in there trying to figure out 

119
00:06:40,800 --> 00:06:43,240
where to fit in. 
Whereas I'm saying, well, I'm 

120
00:06:43,240 --> 00:06:46,120
saying two things. 
I'm saying 1 Bitcoins actually 

121
00:06:46,120 --> 00:06:48,440
the risk free asset. 
More importantly, BlackRock 

122
00:06:48,440 --> 00:06:51,480
thinks bitcoins the risk free 
asset and that's a case I make 

123
00:06:51,480 --> 00:06:53,800
very strongly in the book. 
Here's what I think they 

124
00:06:53,800 --> 00:06:56,040
decided. 
OK, I don't know when their 

125
00:06:56,040 --> 00:06:59,640
Bitcoin journey started, but 
like, the boat decided it had to

126
00:06:59,640 --> 00:07:04,600
leave the port after the UK Bank
of England pension situation. 

127
00:07:04,600 --> 00:07:06,880
You're asking me to read the tea
leaves of what BlackRock did. 

128
00:07:06,880 --> 00:07:10,000
And what I'd say is there's a 
couple of things that came out 

129
00:07:10,000 --> 00:07:13,800
like, OK, there was this report 
that suggested that they would 

130
00:07:13,920 --> 00:07:16,320
recommend an 85% allocation into
Bitcoin. 

131
00:07:16,480 --> 00:07:18,960
At some point, this capitulation
came together. 

132
00:07:19,040 --> 00:07:22,800
We don't normally read asset 
allocation reports from 

133
00:07:23,080 --> 00:07:26,120
companies like BlackRock. 
I've written many of them. 

134
00:07:26,120 --> 00:07:29,120
No one's ever seen them, right? 
They don't go out into the 

135
00:07:29,120 --> 00:07:31,160
public. 
We were meant to see this one. 

136
00:07:31,280 --> 00:07:34,200
We were meant to see that 
BlackRock had this 

137
00:07:34,320 --> 00:07:36,440
recommendation. 
If you're putting all these 

138
00:07:36,440 --> 00:07:39,440
pieces together, you're like, 
OK, well, first they don't want 

139
00:07:39,440 --> 00:07:42,480
to deal at the country level. 
They don't want to deal with any

140
00:07:42,480 --> 00:07:44,160
country's central bank or 
government. 

141
00:07:44,160 --> 00:07:47,760
So selling their assets is a 
problem. 

142
00:07:47,760 --> 00:07:51,480
Selling Bitcoin is no problem. 
Liquidity managing bitcoins 

143
00:07:51,480 --> 00:07:55,240
price is much easier than bonds 
because you have the ETF from a 

144
00:07:55,240 --> 00:07:58,640
modern portfolio theory 
perspective, you end up with a 

145
00:07:58,640 --> 00:08:01,080
really strong case that Bitcoin 
crowds out everything. 

146
00:08:01,160 --> 00:08:04,720
These are the ingredients for 
BlackRock going all in on 

147
00:08:04,720 --> 00:08:07,800
something they had previously 
said was only for criminals. 

148
00:08:07,960 --> 00:08:12,240
So that told me for sure at the 
very least their kick that they 

149
00:08:12,600 --> 00:08:14,960
they would replace all the bonds
with Bitcoin and that still 

150
00:08:14,960 --> 00:08:17,840
doesn't even cover it right. 
So when you think about it 

151
00:08:17,840 --> 00:08:21,520
further, if you look at the 
market portfolio, there's 

152
00:08:21,520 --> 00:08:25,160
nothing in there that can 
compete with Bitcoin in AMPT 

153
00:08:25,240 --> 00:08:28,000
framework. 
If you really do it, Bitcoin 

154
00:08:28,000 --> 00:08:30,840
would end up without with if you
don't constrain it. 

155
00:08:31,040 --> 00:08:35,039
A lot of assets have very 
attractive like sharp ratios, a 

156
00:08:35,039 --> 00:08:37,360
very attractive risk adjusted 
returns and you have to 

157
00:08:37,360 --> 00:08:40,360
constrain them in this model. 
Otherwise the model will 

158
00:08:40,360 --> 00:08:44,320
allocate everything to a hedge 
fund or private equity or 

159
00:08:44,320 --> 00:08:45,760
Bitcoin. 
But if you really look at 

160
00:08:45,760 --> 00:08:49,280
Bitcoin against all of these, it
just kicks end up, it ends up 

161
00:08:49,280 --> 00:08:52,480
kicking out all of these things.
And so I think BlackRock thought

162
00:08:52,760 --> 00:08:56,200
very deeply about Bitcoin in 
this modeling, looked at it in 

163
00:08:56,200 --> 00:09:00,880
an unconstrained way and saw 
that a yes, you can, you can use

164
00:09:00,880 --> 00:09:03,800
it as a risk free asset, but I 
think it also takes over the 

165
00:09:03,800 --> 00:09:07,160
market portfolio from a risk 
adjusted return basis. 

166
00:09:07,280 --> 00:09:10,200
And it's like that's sort of 
mind blowing if you think about 

167
00:09:10,200 --> 00:09:12,920
it, because there's never, you 
know, you could work in finance 

168
00:09:12,920 --> 00:09:16,200
for 100 years and never see an 
asset that does anything like 

169
00:09:16,200 --> 00:09:17,880
that. 
So what are we doing? 

170
00:09:18,120 --> 00:09:20,160
Like what are we even really 
doing? 

171
00:09:20,240 --> 00:09:22,560
You have to imagine that they 
went through this process of 

172
00:09:22,560 --> 00:09:24,680
denial for a while. 
Like this can't be. 

173
00:09:24,800 --> 00:09:27,880
So like that was the that was 
the triggering event for 

174
00:09:28,040 --> 00:09:31,400
everything that basically has 
happened since September of 

175
00:09:31,400 --> 00:09:33,840
2022. 
I think when they go back and 

176
00:09:33,840 --> 00:09:37,600
rewind the tape on that, there's
nothing they could have done to 

177
00:09:37,600 --> 00:09:41,560
have averted that other than 
don't ever be in bonds to begin 

178
00:09:41,560 --> 00:09:45,720
with and be in something simpler
that's country less. 

179
00:09:46,160 --> 00:09:50,360
That is based on one thing that 
they can invent an ETF to track.

180
00:09:50,800 --> 00:09:54,200
I believe going forward, 
BlackRock wants to kick out all 

181
00:09:54,200 --> 00:09:56,800
their bonds and replace them 
with Bitcoin. 

182
00:09:56,840 --> 00:09:59,920
They want to manage clients 
using Bitcoin, not bonds, right?

183
00:09:59,920 --> 00:10:02,400
So the question is, how do you 
do you just kick out? 

184
00:10:02,800 --> 00:10:05,840
If bonds are the support beam 
for modern portfolio theory, 

185
00:10:05,840 --> 00:10:08,040
right? 
Do you just Kick It Out and let 

186
00:10:08,040 --> 00:10:11,440
the whole thing topple over? 
Is Bitcoin the new Mt? 

187
00:10:11,720 --> 00:10:14,040
These are the exact questions 
you should be asking your 

188
00:10:14,040 --> 00:10:18,640
financial advisors, your pension
planners or your local taxman 

189
00:10:18,640 --> 00:10:21,200
that you text occasionally. 
The more Bitcoin's price 

190
00:10:21,200 --> 00:10:25,240
continues to rise, the more this
80 year old model thing doesn't 

191
00:10:25,240 --> 00:10:27,960
make sense. 
If bonds can fluctuate at such 

192
00:10:27,960 --> 00:10:31,160
dramatic rates with such 
diminishing returns, maybe we 

193
00:10:31,160 --> 00:10:34,640
need a new risk free asset. 
One that is scarce and supply 

194
00:10:35,160 --> 00:10:37,200
and can't be controlled by any 
one person. 

195
00:10:37,200 --> 00:10:40,200
One that is global and not 
national and has final 

196
00:10:40,200 --> 00:10:43,120
settlement built in. 
You know what I'm talking about,

197
00:10:43,560 --> 00:10:45,400
Bitcoin, Yes, that's what I'm 
talking about. 

198
00:10:45,400 --> 00:10:48,840
You got it, you win. 
Now I've got an offer for you. 

199
00:10:48,840 --> 00:10:51,440
How would you like to get a hold
of some risk free sats? 

200
00:10:51,800 --> 00:10:54,920
SAS Mining lets you mine real 
Bitcoin on your terms. 

201
00:10:54,920 --> 00:10:58,760
No trading, no middle men, no 
noise, just proof of work 

202
00:10:58,840 --> 00:11:01,480
straight to your wallet. 
They host and operate your 

203
00:11:01,480 --> 00:11:05,240
mining rigs using 100% renewable
hydro, so you're stacking 

204
00:11:05,240 --> 00:11:08,400
sovereign SAS with clean energy 
without lifting a wrench. 

205
00:11:09,000 --> 00:11:13,720
This isn't passive income, it's 
an active exit from Fiat, from 

206
00:11:13,720 --> 00:11:16,360
dependence, and from the lie. 
Book a call with one of their 

207
00:11:16,360 --> 00:11:20,040
expert team members at SAS 
mining.com and mine your way out

208
00:11:20,040 --> 00:11:23,840
of this junkie system today. 
Thank you so much for watching 

209
00:11:23,840 --> 00:11:26,000
if you like this content you 
want to see more you can give 

210
00:11:26,000 --> 00:11:30,160
that like button a little tap 
give it a little tappy or you 

211
00:11:30,160 --> 00:11:32,360
can subscribe to the simply 
Bitcoin channel for daily 

212
00:11:32,360 --> 00:11:35,160
content daily that's every 
single day something new and 

213
00:11:35,160 --> 00:11:38,680
exciting about Bitcoin imotions.
This is beyond Bitcoin. 

214
00:11:38,680 --> 00:11:41,680
Until we meet again, we've. 
Only just begun.