Mauricio Di Bartolomeo: Gold vs. Bitcoin Credit, the $40K Bitcoin Debate and Ledn's S&P Bitcoin Bond

A

This will be the first time we're announcing this. We're going to have gold backed loans. We have the king of digital hard assets, hard money which is bitcoin. Now we have the physical king, which is gold. Bitcoin's not quite there at the sovereign level yet, but gold is historically has been.

B

It seems like we have an ideological battle right now. A lot of people are against the idea of anything credit like when it comes to bitcoin.

A

The beautiful thing about bitcoin is that it means different things for different people. I've had so many calls with a couple. Husband's a bitcoiner, wife's pregnant, wife wants to buy a bigger place. Husband doesn't want to transfer the bitcoin to someone else's custody, but husband has, you know, now a couple million dollars worth of bitcoin and wife says, well, isn't the whole point of this so that we can have a good life and like enjoy our time? Like the goal here is for you to use the product in a way that benefits you.

B

We have Maurizio DiBartolomeo, co founder of Leden back in the house. Maurizio, great to see you and we're so happy that Leden is a partner of the show. Thank you so much. How's it?

A

It's going great. Very happy to be here in Prague and excited to see do this again.

B

There's so much to talk about since we last had our conversation. So let's just kind of start out with the news. I mean there are a lot of announcements, new products that are coming out. So why don't we just go ahead and start there. What's Leden up to?

A

Sure. So this will be the first time we're announcing this, so I'm pretty happy to share that we're going to be listing xout so. So Gold is coming to the Leden platform. You're going to be able to buy it and hold it alongside with bitcoin. And we're also rolling support for more stablecoins, more functionality across the platform for usdt. So now USDT is going to have full compatibility across all of our products, disbursements, repayments, et cetera. And we're also going to be listing usat. So the US Genius act stablecoin for Tether. So basically what going to have now we have the king of digital hard assets, hard money which is bitcoin. Now we have the physical king which is gold in a tokenized representation. And now we have the stable coins that the world runs on. And so you can take a loan with your bitcoin, you can use your stable coins to effectively earn yield. Now you can buy gold. And coming soon, later this year, we're going to have gold backed loans which a lot of our clients have asked for. And to me, it's a very fascinating and compelling complement for the portfolio. We've all seen gold's performance over the last 12, 24 months. And you get a lot of the same hard money attributes and benefits with a lot less volatility because of course, it's a much bigger market cap, it's a sovereign reserve. Bitcoin's not quite there at the sovereign level yet, but the goal is historically has been, and it's a great way to complement the high quality products and assets we already support.

B

Well, we have a lot of listeners who are hardcore bitcoiners, bitcoin only. But I have a lot of people in the audience who love bitcoin and gold.

C

So tell me a little bit more

B

about how this decision came to be. Why did you decide to venture into this other asset?

A

Yes, great question. So at ledn, we also have a lot of clients that are very into gold. And the question came up, you know, we were asked many times by our clients, hey, you know, would you guys consider listed gold? I really love the idea of tokenized gold because a lot of people that have physical gold have a hard. Physical gold is a hard asset to manage. You have to put it in a vault somewhere. It's not really easy to get financing for it. It's not really easy to transfer it or move it around if you want to. And so with the tokenization of gold as an asset, you're seeing a lot of the same things that happen when you tokenize the dollar, right? When we tokenize a dollar and you put it on a rail and you call it a stablecoin, all of a sudden the entire world can access it. It's much the distribution amplifies in a way that you could never reach in a physical format. Right. And now anybody that has a wallet that supports stablecoins can now also use that same rail to use gold to hold gold. And that makes gold a lot more versatile. That makes gold a lot more dynamic. And we think that it's a great compliment. A lot of the bitcoiners actually that we work with, during the metals rally, they were saying, I have gold, I have silver, can I bring it to Latin, Can I borrow against it? Because my portfolio has grown a lot. And so I want to use this wealth I don't want to part ways in my gold. I love using you guys to borrow against my bitcoin. I would love to be able to do so with my gold. And so we got thinking and of course like we know the Tether team very well, like they're an investor in Latin and we got talking and I think their product is fascinating. It's growing very, very fast. I love the, for me personally, I really like the way it's designed and you know, it was something that we thought was a good idea, a good complement to a portfolio and our clients wanted it and so that's how the decision came about.

C

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B

So talk to me about how this actually works because people have heard the headlines that Tether now actually I think owns more gold than bitcoin. They've been buying gold, they've been buying land, so they're actually custodying the gold and issuing the token. So it's you guys aren't holding any gold, right?

A

Correct. So Tether is the. Or Tether is the issuer of Tether Gold. And every Token of Xat is a representation of a bar held at their vaults, and they control the vaults. The vaults are in Switzerland. And it's basically a way of. It's almost like a digital receipt of the gold that is in the vault that you can then use to move around, use as collateral, buy it or hold it. And again, it's very similar to buying a lot of treasuries or a bunch of T bills and then giving you the token of those T bills. And that's a dollar, right? And so the way the product works is very simple. They buy the gold, they keep it in the vault, and they issue the token. And so to me, I think it's a very. Again, I really like the idea of making the asset that's physical, hard to move and boring, more dynamic, more transferable, and divisible now. Much easier.

B

So what do you say to the bitcoiners listening to this that went, wait a second, we already did this, right? Issuing receipts, and then all of a sudden they have this much gold, but they're issuing so many more receipts. Like, is there proof of reserves? How do you trust that system when it's been broken in the past?

A

No, listen, it's a great question. And the interesting thing, at least, that I find very interesting about gold is that anybody listening or I guess most people that are familiar with the way in which you buy and hold gold today is most people buy the gold and they don't keep it at home. Most people buy the gold and they put it in a vault somewhere, and you're already having to trust somebody to custody this gold and to take care of this gold and keep it safe by default. The most common way of holding gold has an element of what you would call counterparty risk, in the sense that you are putting it somewhere else and you're trusting that person to keep it safe in this way, that's not really changing. You're still having the gold in a. In a vault that somebody else manages, and you're getting the token for it. I would argue that you have even more versatility to hedge your risks once you have the token versus when you don't have the token. And so I actually think that this is a very akin to hoarding a big pile of cash in your house versus having some dollar stablecoins. Right? And so it's not necessarily replacing you custodying your own gold, but it does give you a layer of a lot more versatility for the people that are already used to just having to put it in a vault somewhere. Or trust someone else to hold it. This time you're doing basically the same, but you're getting a token that gives you a lot more versatility.

B

Talk to me a little bit about the bear market that we've been seeing. How's it been running the company? And why do you think that we've, we've really suffered this kind of drawdown when everything else is hitting all time high? All time high.

A

It's a great question. I'm not gonna tell you that I have a crystal ball or that I have the answer. I think one thing that I will say in terms of what we are seeing in our flows. Cause right now we just tested 60 again a few days ago, right? And we did that in February. So when we tested 60 in February, we did see some liquidations. It caught some people off guard. Many people weren't really expecting it. And then we saw some people, you know, sometimes proactively take risk off. They were making partial repayments like getting their LTVs healthy, which is, you know, what you want to see in a market like this. But this time around when we hit 60, it was a completely different experience. There were basically nobody or very few people were caught off guard. And you saw a lot of people step in to buy the dip. And interestingly, you would think that, you know, people are only borrowing when the market's high. But the opposite is also true because a lot of people felt uncomfortable borrowing at the highs, right? And now that they see bitcoin here at these levels, some of them are borrowing to buy the dip. Some of them are borrowing because they wanted to borrow at a lower price to reduce the risk, because they see now the risk of bitcoin going lower than here, as much lower than dropping from 125. And so it's interesting because the book has been incredibly resilient. And for me, obviously for us as operators, we love to see that. But the bear market, it's interesting. I'm not going to tell you I have a crystal ball. I think in terms of what I hear from some of the investors and forecasts, I think the market is expected to be, or many people are expecting to be under pressure for the rest of the summer. And I think a lot of people are expecting a bounce back or a rally on the way to the midterms. So to be determined, right? Like when everybody expects something. The other thing is I don't and you know, not financial advice, but the behavior that I've seen and the price action that I've seen at 60s makes me think that it is rather unlikely that we're going to go test the 40s. I'm not saying that it can't happen but I see a lot of people like taking it as almost a given that we're going to go into the 40s and they're just waiting to buy the dip at 40. And in the same way that when you expect everybody told you it was going to go to 150 didn't really happen, we didn't really get there. It was telegraphed. I starting to see some of that same dynamic on like the over bearishness that we're going to get to 40 because everybody's looking at S and P at all time highs, bitcoin at the lows and everybody's saying well gravity is going to impact the S and P at some point.

B

Yes.

A

And that's going to bring selling pressure. We've been seeing the S and P now down 5,6% over the last three days and Bitcoin's holding steady. We've seen gold and silver get hammered last week. Bitcoin's holding steady. And so I am what I'm seeing what I think is seller exhaustion. I think those people that were going to caught off guard, they're already caught off guard. I have not seen any single person at this conference being like yeah, I'm selling at 60, I'm done, you know and so I'm cautiously optimistic. I think we're going to have a more resilient summer than people expect and I do expect to see some type of bounce back. Some people are waiting to see the SpaceX IPO is going to mint 4,000 new millionaires. Right. Where are those people going to put their money? Will some of them buy bitcoin? I'm not sure but I again I think we're going to see a resilient summer and I think this results to the upside sometime in the fall.

B

Well I took out my first bitcoin backed loan with let in first of all it was a very fast and easy experience. But also I mean the price drew down and I did, I got one of those alerts where it's like you have to add collateral, you have to top off luckily you guys have that auto top off that people can activate which they should. But it just, it just did give me a little bit of like wow, things can change really drastically and you do have to be very careful and when you're taking out one of these loans you have to be aware that the price can drop and you have to Be ready to add more collateral. Right. So can you talk a little bit about that? Because I mean, obviously we've been seeing

A

it in this market 100% and I actually try to make this point every time I present or I have an opportunity to speak or answer questions. Bitcoin is a volatile asset. Okay? There's a reason our loans go out at 50% loan to value is because we want to give people an ample cushion also. That's a design choice. There are companies out there that will say, oh yeah, borrow up to 70, it's all good. I don't think that that's a product, candidly that most people can use and sleep at night. That's a product that has to be a 70% LTV loan. You really have to be actively managing that thing because you really have not a lot of room to respond. So our loans start at 50. They're designed to give you as much of a cushion as possibly can. That doesn't mean you can't over collateralize. The loan starts at 50 and you need at least enough bitcoin to get it to that level. But you can send more if you wish to, to give yourself a better cushion. Many of our clients do that. I have clients that are almost obsessive about this. They put their loans in single digit LTVs. And I'm not saying everybody should do that. That's almost like an extreme. That is an extreme in our book. But you do need to plan to our budget that that loan may need extra bitcoin and you should have a plan. Not only do you need to have the bitcoin trigger ready, one thing that happens often is that people try to play it too close to the line. So they'll get that email, they'll just say, oh well, we're going to keep watching price. I have to go home and get my hardware wallet and I have to run some errands and then just let the day go by or let, you know, a couple days go by and then all of a sudden the loans at 75 LTV, you're trying to send a transaction, network's clogged, it takes two hours to confirm and your loan got liquidated. And so I say have a plan budget at least 50% to 100% of the initial bitcoin amount that you used as collateral and have a plan to react. Turn on auto top up, right? Like that's the best. No single client that has turned on auto top up with a sufficient balance has gotten liquidated. And we love that. That to me is one of my favorite stats. However, not everybody wants to or not everybody does. And so that's usually when you, when you don't have a plan is when you get caught off guard. Right. What I love the most is we have clients sending collateral before they get the email.

B

Yeah.

A

And like that's the type of person that is going to have a great outcome and their loans not going to get liquid. Nobody wants liquidate loans by the way. We don't want to liquidate loans. It is a necessary part of our risk management because if you don't do that, if you let alone go underwater and that happens too many times, the whole book is at risk. So there is no human intervention on this matter. And in fact like when you try to do that and when you try to like play around and potentially be kind or nice, you're exposing a lot of other people to that risk. Right. And so we are. This, this is a volatile asset, is volatile to the upside. Yes we can, we all love that. But what you have to watch for is that volatility to the downside that you know, it has been a part of this industry for you know, since inception.

B

Something I wanted to ask you about is it seems like we have an ideological battle right now in the space. A lot of people are against the idea of anything credit like when it comes to bitcoin. They don't like bitcoin backed loans, they don't like the treasury companies, they don't like anything sort of resembles the old system that Bitcoin allows us to escape from. How do you see it? Because you know, I really liked Saylor's recent article about how there are these four different camps and they, they should work in tension. But we kind of all need each other. You need to have both the fundamentalists that are protecting the integrity of the network but also those who are the capitalists and the builders that are offering products that will onboard more people.

A

Yes. I think the world is not, the world does not have uniform preferences. Right. Like a lot of people in this conference love this concept of self sovereignty. Right. Be your own bank, have your own money. But at the same time that is a big responsibility. Right. Like and I know to a lot of people it says oh but having your self custody wallet is just a trivial thing. Everybody should do it. And I'm not suggesting they shouldn't. I'm not saying everybody shouldn't have their self custody. I would love for everybody to like have the desire and the, and the means or technical abilities to do it. But the Reality is like, a lot of people don't want this, right? Like, I'll give you an example. My dad's a bitcoiner, okay? My dad was a bitcoiner before I was a bitcoiner. And he would never be the guy that could manage his own hardware, wallets. Like, he's just not that type of person. He does not want to. He doesn't want that responsibility. He's actually okay trusting someone else or someone else, a third party custody service. Does that mean he's not a bitcoiner? Like, does that mean he shouldn't have access to, you know, holding bitcoin in the way he wants to hold it? I don't think there's a one size fits all. And I think actually the beautiful thing about bitcoin is that it means different things for different people. And you can use it for what's for your own benefit in the way that it's most comfortable to you. I don't think there should be a sort of a limitation on how you should use Bitcoin. The whole point of this thing is that it is permissionless and it is unstoppable, right? And if you take bitcoin and you do something with it and there's demand for the product, that means that there's a market for it. And so I don't, I'm not saying that there shouldn't be proponents of self custody and that self custody isn't a great thing or that these type of credit instruments, like these types of credit instruments help, I tell you, because I've seen it, right? Like there was a, there was a tweet about three days ago of a guy that said, I was in a tight spot, I didn't want to sell my bank, my wife lost her job. And these guys came through for me. And he screenshots Leden because he was able to come in, take a loan to finance his, the lack of the second income while his wife was unemployed, use the loan for what he needed, and then diligently paid back the loan over time and took back his Bitcoin. And he says, I hope I never need a loan again. And I actually think that's great. It's like, I don't want you to have a loan for longer than you needed, right? Like, a loan is not something that people wake up and they're like, oh, yeah, this is a great day for a loan. Like, a loan is something that, you know, you bought an asset for, I don't know, 20, $50,000. That asset went to $250,000. You want to move? I'll give you another example, right? I've had so many calls in my time at Leeden with a couple, okay? The couple comes in. Husband's a bitcoiner, hardcore bitcoiner. Wife's pregnant, okay? They're living in a one bedroom apartment. Wife wants to buy a bigger place. Husband doesn't want to transfer the bitcoin to someone else's custody. Husband is a maximalist self custody guy. But husband has now a couple million dollars worth of bitcoin. And wife says, well, isn't the whole point of this so that we can have a good life and like enjoy our time? Like we have limited time on this earth? Like, what are you going to do? Put your bitcoin in your grave when you go? And so the husband's like, well, but baby, you know, it's like, you're not supposed to do this and all this stuff, but then they start reading about it and they go into like legal agreements. And most of the time these are people that don't often have a lot of experience with financing or loans or just have general distrust for the system. But you'd be surprised how many people have actually done well with a mortgage or done with other types of loans. And they say, oh yes, this is fantastic. Why would I sell it? It, if I can structure the loan properly, I can write off the interest from my income. It's, it's very tax efficient. It does not, you know, does not generate a taxable event in most jurisdictions. So financially it's a product that makes sense. And so if you don't like it and it's not, it's not a product that you want to use, that's fine. Nobody has a gun to your head telling you to take a loan. But you, you shouldn't be, you know, upset that somebody found use in a product that allowed them to keep their bitcoin, buy their house and potentially pay back that loan and get back that bitcoin? Like that's, that's the goal. Like the goal here is to you, for you to use the product in a way that benefits you. And if that means don't use it, then don't use it.

C

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B

I'm glad you articulated it that way because I've had a hard time understanding it. Like what is so fundamentally wrong with the idea of I borrow money, I pay you back with interest obviously, because that's your incentive for loaning me the money. And it just so happens that the collateral is bitcoin. Like what is the thing that people are so angry about?

A

I'm not sure. You know, I had a, I had a really interesting debate I think with Jimmy Song back in Plan B about the morality of lending, right? And then some of the arguments that people make is like lending is immoral because it's part of like a fiat money printing ecosystem.

B

But even with bitcoin, even with ethical money, essentially, because bitcoin's the most ethical, moral form of money, I think, right? So even in that system they think lending is unethical.

A

Well, there's just people that think that lending, regardless of the collateral lending is unethical. Like some people hold that view and in fact, which is interesting, like some religions have even tried to ban lending historically only to be defeated because humanity always finds a way, right? Like credit is older than coin money. We were lending each other seeds and goats before there was an actual coin, right? Because credit is just a part of how you do business, right? Like me lending you dollars backed by bitcoin is not different than me lending you seeds backed by your goats so you could, you can raise your crop and give me back the seeds after you harvest. It's not It's a, it's a commercial transaction. It's a consenting transaction between two willing adults. And so can, can it go wrong? Can people sometimes break terms? People default on the loans 100% that happens. Can lending be done irresponsibly? Have lending companies blown up? Absolutely. But there have also been lending companies that have been up for hundreds of years and many people that have been very successful using loans. I would argue that if, you know, it's interesting because people don't see a mortgage as a bitcoin back loan equivalent. A mortgage is a short on the dollar backed by a property. It is a loan on your bitcoin is no different than a mortgage on your bitcoin. So imagine if you wanted to buy a house but you were against mortgages. How, you know, how well could you do it? The other thing is like, mortgages have created enormous amount of wealth for the boomers. Loans when used right, can be a massive benefit and a tailwind for you in the fiat world. But it's like any tool. If you want to use a chainsaw, you can obviously cut a tree much faster. But if you use a chainsaw wrong, you can hurt yourself. So it's not so much the tool itself, it's how people use it.

B

So do you think that there is kind of an evolution in terms of just how people are viewing the whole space? You've got sort of the OGs that are more traditional and they want bitcoin to look a certain way and be used in a certain way, which is kind of interesting, right, because we're all supposed to be freedom experts. And then there are the, the new, you know, the institutions coming in and they're making bitcoin kind of look like the traditional system. And, and so the OGs are like, we don't like that. Is that sort of the core tension?

A

So I, I wouldn't see it that way because first of all, you would be surprised how many OGs have let alone, and how many of like people that are, you know, very influential in the bitcoin space, work with lead. Because as much as you're a bitcoiner, bitcoiners have lives too. Like bitcoiners have kids. Bitcoiners have to buy homes, like invest in businesses, and they don't want to sell their bitcoin. And a lot of these guys are financially smart, right? Like, they understand that if they structure this, they can write off the interest and when used, right? And if you have enough bitcoin to collateralize it and you can get comfortable with the person issuing you the loan. Like a loan is a financial transaction that if used correctly, again, can give you a tailwind in the fiat world. So I think there's some of that, there might be a little bit of posturing, I would say, in terms of like, you have to toe a certain line because of, you know, pressure or whatever it is. But I think what's happening is you're. There's a lot of people coming into Bitcoin and as more people come in, the different voices start representing different views of different cohorts. Right. And in the financial world now, I will say there is a very big difference between a credit instrument like SCRC and a credit instrument like Ledens Bond. Those are two. At a surface, you could look at them as credit instruments, but they're very different instruments and they represent very different things. When you're buying strc, you are effectively lending money to Michael or you're buying the token. You're buying a preferred share in exchange for an interest. Right. But now there's no liquidation risk for you as the buyer of that sdrc. But the performance of that STRC depends on somebody else's actions managing that Treasury. Does that make sense? When we issue a lead and bond? A lead and bond is a representation of the dollar loan that we gave to, you know, say you, Natalie, and the bitcoin for that loan is put in custody with Fidelity. If you default on that loan, that bitcoin gets sold, that facility gets repaid. The yield on that bond has very little to do with what Leden how leading operates. It has, it has no connection to let in equity.

B

It's.

A

It's basically a standalone dollar loan to an individual that's collateralized with physical Bitcoin. The we've had zero defaults in the history of let alone. Right. And so you've led dollars, you will get paid those dollars. You're not buying equity in any company. You're not behind the bondholders in the capital stack. It's very different instruments. And so in the sense of Michael Saylor or an STRC as just an example of a preferred, you're buying this preferred and that preferred equity performs based on how the company does. Right. The lead and bond is different. It's supposed to be a fixed, clipped yield that you're going to get and that your assurances is that it's completely disconnected from lending to get run over by a bus and that bond will still continue to go. It's a bankruptcy remote SPV structure. And so it's a, it's a very different product funding, a very different activity.

B

Can you share a little bit more? Because this was kind of big news. It was the first institutional grade bond that was issued by Leden.

C

Right.

A

So, yeah, I would love to touch on this because it's a massive, I think it's a hugely transformative transaction for both Leden and the industry. So what we did is maybe I'll give you some context on why we did it. So at Leaden, we lend dollars and part of our job is to ensure that we're always going to have the right amount of dollars for the demand that we're forecasting. The worst thing that can happen is you show up to lend for a loan and we don't have dollars. Right, you don't want that. So we're always forecasting how much cash we're going to need and how are we going to get that cash so that we can then deploy it when the demand arrives. Based on our forecasts, we think that the Bitcoin backed loan market can reach $1 trillion within five to 10 years.

C

Just where is it at now?

A

Right now at a consumer level, it's around $3 billion.

B

Okay.

A

And Latin holds 30% of that market. So one in three loans globally are done in Latin. So right now only 0.2% of Bitcoin is being used as collateral for consumer loans. If you look at equities, the margin, the amount of equities used for margin is 2%. If you look at real estate, 60 to 70% of all homes have a mortgage. So the adoption rate for Bitcoin used as collateral is increasing. If you layer that on top of an increasing market cap, you realize, and I have a chart that I wish I could share here, but you realize you can get to a trillion pretty quickly if adoption continues to rise and the market cap continues to rise, you need line of sight to a trillion dollars in five to ten years. So then the question is, what market can support that? Because there's not a balance sheet in the world that can lend you a trillion dollars and just be cool. So you say, okay, well where do we get this money? How do mortgages do this? How do auto loans do this? And the answer to that is the ABS Market Asset Backed securitization market. What banks do is they'll issue $500 million worth of mortgages, package up all those mortgages into a bond and sell it off into the institutional market. Okay, to do this you need, it's a very high bar to meet because the ABS market. 90 to 95% of all issuances in this bond market have to be what's called investment grade. If you don't get investment grade, you only get 5 to 10% of the buyers in that bond pool, which is minimal. And the big buyers, pension funds, endowments, etc. They need this investment grade rating because investment grade means a third party ratings agency like the S and P, like S and P Global or Moody's, came in and did effectively an X ray of your entire business. So we wanted to be the first company to issue a bond in this market. So we engage S and P about a year and a half ago now. And we worked with them for a very long time. They came in, they asked us a lot of questions, they checked everything about our businesses, review legal agreements, et cetera, and then we structured the 1. We selected fidelity as the custodian, we selected Jeffries as the underwriter for the book. And we worked really hard with the goal of reaching investment grade. It's a very high bar because you need a lot of history, operational history. So we had that. We have eight years of perfect track record. You need scale because in a bond in a market like this, an offering under 200 million is just not big enough. But to offer 200 million, you need to have an inventory of loans that's multiples of that amount. So at the time of issuance, we had about a billion dollars in our book. So we have plenty of loans to vent back into the facility if some of these get repaid. You need a clean regulatory posture, which we have. And you need to be willing to let S and P come in and basically look at everything. You need to be proud of your back end, which we are. And so we worked with them. It was a very long process and we're very happy to say that we did get investment grade. The bond offering was two times oversubscribed on the senior, three times on the junior.

B

Congratulations.

A

Fantastic success. Thank you. And anybody with a Bloomberg terminal can check it out, which I also think is pretty cool. And, and so what does that do? So what that does is now there's line of sight to get funding for bitcoin backed loans in the largest, you know, bond market there is in the world. It is the most transparent way of funding. Everybody can see that that deal is public. You can see S P's report, you can see how many loans are in there, how much bitcoin, what's the custodian, how much we pay, compare that, how much we charge, make sure Our business is sound, and so it gives the client a lot more transparency. And I think that's also going to allow us to do some really unique things, because we are the only company out there, I think, in the world that has access to that market to fund these types of loans. And that allows for some really unique things that I would be very happy to share as we are able to develop those and put them to market. But I'm very, very excited about that direction.

B

Seems like there's so much exciting developments happening even though Bitcoin's prices suppress, these companies are building. So that's great to hear.

A

Bear markets are for building.

B

Before we wrap up, I did want to ask you about Venezuela because you shared your story the last time we talked. People were fascinated by your background, how you actually got into Bitcoin, the way that you came over here and built the business. But we had some news in the last couple of months related to your country. I would love to hear your feedback because now, I mean, in today's world, it's like something flares up, we hear about it nonstop for a week or so, and then something else replaces it.

C

Right.

B

Obviously now everyone's attention is more on the Iran war and what's happening in the stock market. But can you share what was your reaction to the US government going in, taking Maduro and. And what's happening in Venezuela now? Because a lot of us are not hearing about it.

A

It's a great question. So, first of all, I have to say, as a Venezuelan, it is a little bit. A little bit. It is weird to see Apaches flying over Caracas and, you know, firing things down to just like. Like you. You live there. You know, I didn't grow up in Caracas, but I would go all the time. My brother lived in Caracas for many years, so I've seen those mountains and seeing those Apaches fly through, it felt like I was watching a movie, right? Like, I found out at like 3am I woke up. For whatever reason, I woke up late that night and my friend, my phone was like buzzing and blowing up from my high school chat, from when I grew up, and all these guys were sending these Apache photos. Nobody knew what was happening. And then you wake up and Maduro's gone. And so for me, it was like disbelief. I was shocked when I saw it. Now, that aside, as conflicting as it is to see Apaches flying down and sort of shooting at Venezuela, I am incredibly happy that there has been some justice because for all the damage that that night caused in Caracas, Maduro has done multiples of that to our country over the last 12 years. That guy deserves to be in jail. And so does a lot of more people that are still down there. So I think it is for Venezuela, it is a massive breath of fresh air. Everybody back home is happy and excited because at least there's now a shot, a possibility. Nobody's taking this as a given, by the way. Like, we're not yet. We're not there yet. Where, oh, my God, I'm gonna buy my ticket. I'm flying back and people are going down and saying, yes, that's it. Like, pack it up, boys, we're going back home. It's not at that level yet, but people are very optimistic. I've received so many calls from investors, friends, people in different industries saying, when are you going? Is it time to invest? Should I be looking at real estate? I want to buy land in Margarita and I'm excited. Listen, nobody wants to see Venezuela win more than me. Like, I would love, love for the country to turn back around and just build back into a beacon of freedom. Like what's happening in El Salvador. Like, I would love nothing else. Is it a clear shot? Like, there's still a lot to be done. A lot of those bad guys are still down there. They're still running amok. Like, justice hasn't really fully been served. We need democratic elections. We need to rebuild our institutions. There's a lot of work that needs to be done to clean up that central bank. It's a mess. But I think that there's a shot now and that there's enough Venezuelans that are smart and willing and hungry and ambitious that can build this back. But cleaning house after 30 year or 20 some years of dictatorship is not something happens overnight. And when I describe Venezuela, people ask me, like, how are things there now? Okay, yeah. So if you imagine Venezuela before January 3rd, it was just a constant decline. Like, it was just, you know, it was certainly continuing a decline. It was just like the speed of the decline. Right. So sometimes it was like, very sloped, sometimes it was like, not as bad. And when Gen 3 happened, it just stopped declining. It's not bouncing back up just yet. But things are no longer getting worse. Right? Like, if you look at oil production is through the roof. I think oil production has more than tripled or doubled at least since January 3rd. So that's good for the country. I'm not really sure where those flows are going in terms of cash and who's managing those payments, because it's unclear right now. But I think there was news actually last week that they're trying to clean up the mining arc. So Venezuela has a lot of problems with illegal gold mining. We have a lot of gold, but it's all mined illegally and that's getting cleaned up. There was some news out earlier this week that they're cleaning it up, I would argue, in anticipation of new rare earth and mining efforts from American companies. And so again, you know, if you look at the mine, if you look at the video that rolled out yesterday when the military showed up to the illegal mines and you see how those people are running away from those mines, man, that's, that's a sad state of affairs. And like the stories you hear from what happens in those mines, the way they treat people, the type of human abuse that happens in those illegal mining operations, it's a horrible thing to have in a country. And so acknowledging it, like cleaning it

B

up, like even the US military came in and broke it.

A

No, the Venezuelan military, but from pressure of. Because they, Everybody's known about these illegal gold mines forever. But there's. Just because the government was at. The regime in Venezuela was in cahoots. They never did anything about it. Right. And now they have pressure to say, wait, why can't the companies get in there? Well, no, because it's run by parallel militaries and illegal gangs. Also we can't go in there because there's gangs. Okay, like, don't you guys have the bigger guns? Aren't you guys the military? Like, how are you gonna let gangs run the most valuable part of the country? And so they're now saying, oh, you were what? That's actually not a bad idea. We should probably go clean up our gold mines and actually start, you know, extracting some of that gold for ourselves instead of letting it go to illegal operations. And so many things that are so obvious are now, you know, for example, there's like now an anti bribery thing going around in Minnesota. It's like, we should not have more corrupt police. There should be a rally. Here's a tipping line so that every time a cop is trying to extort you, you can call this number. I'm like, where were you for the last 20 years? Like this has been happening forever. But now all of a sudden it's like they've woken up and Del C and the regime there is trying really, really hard to do everything the US wants so that the US allows them to stay or allows them to run on the next election or allows them to like not get sent straight to Jail. I don't know how that's gonna play out, but it's very interesting, it's fascinating.

B

I mean, seeing the celebrations of the people when he was taken out. But to your point, it's like normally when our country has been involved in regime change, it often doesn't go well for the folks that are living there. And it's almost like one bad leaders replaced with sort of another bad leader, but just one that's in cahoots with our government. I mean you just don't, you just don't know, right? You have high hopes, but the average person, they, they don't get to see a lot of the wealth creation that, that happens in these very resource rich countries like Venezuela. It just sort of pools to, you know, transnational organizations and to the political parties. So I, I have high hopes for Venezuela, but it's just kind of like what, you know, what's next?

A

No, I'm with you. And again, there's no, there's no perfect answer. But even if you compare the reaction of the Venezuelan people versus Iran, okay, like look at, I know there are different scales and different geopolitical conflicts, but in Venezuela when the people are oppressed and you took out a, a dictator and nobody. There was not a single shot fired back at the Apaches. Like I think there was one, there was like one rogue rocket that some guy launched. During the entire operation there was no response. There was no outrage. There was no outrage from the regime. There was like, please give him back to us. Like there was, there was like a video being like, please, we love, like they're back but please send them back.

B

And I think some American politicians were actually saying that, which is crazy.

A

No. And, but the Venezuelan people, there were no protests. They just see a single protest. No. Did you see a single. No. People didn't go out and celebrate because they were afraid that they were going to get shot. But you know what happened after Venezuela won the World Baseball Classic? Venezuela took the opportunity when we won the World Baseball Classic, it's actually so beautiful to watch because when they took out Maduro, most Venezuelans couldn't go out on the streets because they were afraid that the army was going to come and be like shoot the demonstrates as they've always done. And so you couldn't celebrate Maduro's capture, but when Venezuela won the World Baseball Classic you had some pent up celebrations to unload. And the party that happened in local Venezuela because Miami had already celebrated the Gen 3, but in Venezuela, the party lit up when Venezuela won the World Baseball Classic because now you can celebrate. But you can see in the people that they were celebrating January and the Baseball Classic.

B

Interesting.

A

But it was that opportunity to finally come out and, like, let loose, and it was really fun to watch.

B

That's so interesting. Well, thank you so much for the update and the perspective, because I know that so many people just loved hearing your story and I know you're watching what's happening there closely. So, Mal, it's been great to have you back on the show. Any final thoughts?

A

No. Let's do this again in a few months and we'll have more updates.

B

I'm sure you will. I'm sure you will. Thanks so much. Where can people find you?

A

Hollywoodleden is our Twitter handle. Leaden IO is our website. I am Cryptonomist with an A at the end. Cryptonomista. And yeah, DMs are open.

C

Thanks so much for checking out this episode of Coin Stories. If you haven't already, please subscribe to the show and turn on those notifications so you never miss new content. This show is for educational and entertainment purposes only. Nothing should constitute as official investment advice, and you should always do your own research. My inbox is open. If you want to share feedback or guest suggestions, just reach out to us@infoalkingbitcoin.com we'll see you next time.