Bitcoin's Role in the Future Financial System

Joe Kosari, a commercial litigator and Bitcoin supporter, believes in Bitcoin's potential due to its ability to serve as a neutral asset amid declining sovereign debt markets.

### Joe Kosari: Bitcoin Litigator and Macro Economy Analyst
* 🪙 Joe Kosari has been involved with Bitcoin since 2015, initially finding it challenging to **undermine from a technological and economic perspective**.
* 📧 His "aha moment" with Bitcoin was when he sent a transaction, realizing it was like sending an email, **transcending traditional notions of asset possession and transfer**.
* 🏦 Kosari views Bitcoin as an "**alternative monetary system**" and a potential "**global monetary alternative**."
* 🔐 He explains that while you can exercise dominion and control over Bitcoin through the private key, it's not a **traditional possessory asset**.
* 🏛 Kosari handles legal cases involving Bitcoin, including **commercial disputes**, **disputes over possessory rights**, and **issues with exchanges**.
* 📈 He believes the biggest regulatory challenges for Bitcoin moving forward are related to **custody and lending**.
* 💸 Regarding the macro economy, Kosari sees significant government spending as a **clear bullish case**, as well as the need for a **suitable alternative for the dollar to challenge its hegemony**.
* 🌍 He emphasizes that macroeconomic movements are "**glacial**" and take a **long time to play out**, and while he acknowledges the risks of high debt levels and potential inflation, he tries to focus on analyzing the **next 5 to 10 years**.

### Bitcoin: The Path to Becoming a Core Macro Asset
* 📉 The guest believes that Bitcoin's recent consolidation around the **$60k range** is **extremely bullish**, especially after the launch of **spot Bitcoin ETFs**.
* 🏦 The guest predicts that larger players, particularly commercial banks, will look to **diversify away from government debt** to other assets like **gold, equities, and Bitcoin** due to the issues with **sovereign debt markets**.
* 🔒 The guest anticipates that globally, some countries will try to pass **draconian rules to prevent individuals from self-custodying Bitcoin**, but in the United States, such rules could face **constitutional challenges**.
* 🔄 The guest agrees that privacy tools for Bitcoin should be **ethically given away**, **truly decentralized**, and **not influenced by anyone profiting from them**.
* 🇺🇸 The guest's friends in politics believe that Bitcoin and crypto will be a **wedge issue** in the upcoming presidential campaign, with the Trump camp trying to contrast themselves as **pro-crypto** against the Biden camp.
* 🧐 The guest acknowledges the importance of **privacy tools for Bitcoin** but warns that any efforts to **obfuscate or obscure transactions and hide privacy** will likely face **tough legal challenges**.
* 🌎 The guest expresses optimism about the American system's ability to eventually put in place **better rules**, with the courts playing a **crucial role** in curbing legislative and executive overreach.
* 🎙 The guest concludes by highlighting the significance of mainstream actors like the president and presidential candidates talking about Bitcoin, moving it from an **idiosyncratic, anti-establishment asset** to a **more mainstream one**.

Joe Carlasare: How Bitcoin Will Integrate with Legacy Financial and Judicial System

Natalie Brunell is an investing journalist, podcaster and Bitcoin educator who hosts the Coin Stories Podcast on Apple, Google Play and Spotify. 

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Natalie Brunell

Joe Kosari's Journey into Bitcoin and Cryptocurrency Law

Joe Kosari became involved in Bitcoin in 2015, initially being skeptical but later drawn to its technological and economic potential as an alternative monetary system.

His pivotal moment was realizing the unique nature of Bitcoin transactions, transcending traditional asset possession and transfer.

Kosari's legal focus on Bitcoin is driven by his belief in its potential as a global monetary alternative and his deep understanding of its distinctive characteristics.

Bitdeer is enhancing Bitcoin mining efficiency with its experienced leadership team.

A quarter of the workforce is focused on research and development, while also venturing into high-performance computing through a partnership with Nvidia.

The company is facing legal issues related to possessory rights of Bitcoin and is advocating for a clear regulatory framework in the industry.

Regulatory Challenges in the Financial System for Bitcoin and Stablecoins

Bitcoin's integration into the financial system raises issues of custody, lending, and regulatory clarity, especially regarding its volatile nature.

The treatment of stable coins and their role in addressing the global debt crisis is questioned, as their potential growth is unlikely to cover the escalating levels of national debt.

The demand for treasuries from stable coin markets may provide buying pressure, but it won't ultimately solve the underlying debt problem.

The Impact of US Debt on the Global Economy

The US has a significant comparative advantage in managing debt due to its access to a money printer, unlike other countries with dollar-based debt.

The value of the US dollar has remained strong compared to other fiat currencies, increasing purchasing power for those holding US dollars.

Predicting the future of the US dollar as the global reserve currency and reserve asset is complex, with a potential shift away from it over the long term, but the timeline for this change is uncertain, possibly extending beyond the next 10 years.

The Pace of Change in Technology and Government Systems

Technology is rapidly evolving, with significant changes in the past 10 years, while government systems like the court and law are slow to adapt.

There are contrasting views on a possible deflationary bust, with the bearish case predicting a significant selloff in asset prices, but government stimulus and intervention may prevent this collapse.

The government's active spending and targeted approaches make it challenging to identify the catalyst for a potential deflationary spiral.

The Current State of the Economy and Future Predictions

The economy shows mixed signals, with high asset values but also significant struggles for many people.

The bullish case for the future is increased government spending and tame inflation, allowing the Fed to ease off.

On the other hand, the bearish case raises concerns about the sustainability of the current level of spending and the potential for a painful recession in the near future.

The Impact of Government Stimulus on the Economy

The massive government stimulus has created a psychological reliance on handouts during times of pain, potentially setting a precedent for even more significant spending in the next recession.

The cycle may only end when government debts are substantially higher, and there is trouble with long-term interest rate expectations, potentially leading to a funding issue in the treasury market.

The interviewee remains optimistic about the future, particularly bullish on bitcoin, and believes in human ability to solve any problem, expressing a positive outlook despite the uncertain economic environment.

The Role of Bitcoin in the Financial System

Bitcoin's potential impact on the financial system is still uncertain, but it is expected to attract bigger players, especially from the private sector, looking to diversify away from government debt.

The cryptocurrency is seen as a neutral and stable asset, which could become attractive to commercial banks, potentially becoming part of their portfolio.

Despite the consolidation of Bitcoin's price, it is viewed as a bullish sign, and the lack of significant movement is not seen as a negative indicator, especially in the context of the recent ETF launch.

There is no belief that Bitcoin's price is being suppressed.

Bitcoin's Relationship with News Events and Future Predictions

The launch of CME Futures and Bitcoin Futures ETFs have historically coincided with market peaks, but Bitcoin has performed well after the ETFs launch.

Financial firms are currently strategizing the allocation of Bitcoin in model portfolios, which may lead to steady flows of capital into the cryptocurrency.

The practice of shorting futures and buying spot in the Bitcoin market is not manipulation, and organic demand for buying can lead to a "gamma squeeze," potentially causing market players to blow up.

Globally, there may be attempts to pass restrictive laws on self-custody of Bitcoin, but there is a belief that such rules would not hold up constitutionally in the United States.

The Future of Bitcoin Regulation in the United States

Bitcoin regulation is likely to face resistance from judges and justices who hold Bitcoin, potentially leading to decisions that prioritize liberty and freedom.

The US government is expected to fiercely challenge any efforts to obfuscate or obscure Bitcoin transactions for reasons of national security and taxation.

The American system is designed to anticipate and prevent government overreach, with checks and balances in place to challenge unconstitutional laws and executive overreach, providing a level of protection for individual liberties.

The Long-Term Outlook on American Policies and Privacy Issues

American policies, including controversial ones like mask mandates, are often challenged in the courts and eventually adjusted for the better.

Privacy concerns, surveillance, and overreach, especially in the case of tech companies, are acknowledged as pivotal issues that require solutions and new legislation.

The profit-driven nature of privacy tools and the ethical dilemma of profiting from them raise questions about their decentralized and uninterrupted functionality, contrasting with the original concept of Bitcoin.

The Increasing Focus on Bitcoin and Crypto in the Presidential Campaign

There is a growing belief that Bitcoin and crypto will be a key issue in the upcoming presidential campaign, with the Trump orbit hoping to attract younger voters with this stance.

The contrast between the two sides' positions on crypto is expected to play a significant role in the election, potentially affecting the SEC's decisions and changing the national discourse.

The mainstream focus on Bitcoin by both the president and presidential candidates is unprecedented and is expected to have a substantial impact on the market.