Rob and Jerry from Digital Asset News discuss conservative Bitcoin price targets and the four-year cycle
Rob from Digital Asset News and Jerry from Costa Rica co-host a Sunday stream discussing Bitcoin price predictions, historical cycle patterns, and real-world topics including island living and Bitcoin mining costs.
Summary
Rob and Jerry open by acknowledging that price predictions in crypto are largely worthless, backing this up with references to past videos showing how badly analysts — including themselves — have missed their targets. Jerry specifically recalls listening to Raoul Pal, Mike Novogratz, and Anthony Pompliano, noting that despite their knowledge, none came close to calling the market correctly. Rob and Jerry walk through Bitcoin's historical cycle data, examining return on investment from all-time lows to all-time highs and from all-time high to all-time high across multiple cycles, noting a consistent reduction in multiples over time. Based on this trend, Rob lays out a conservative personal strategy: bulk buying around $60K, selling half at $150K, and another 20% at $170K. Jerry adds nuance around Bitcoin's fixed supply and supply-demand dynamics, arguing that the asset may not behave like traditional markets. The conversation extends into Q&A covering Bitcoin mining costs, property taxes in Puerto Rico, island living including the ongoing water shortage and the impact of the Jones Act on import costs, and Jerry's new computing venture, Computal.io.
Key Takeaways
FULL TRANSCRIPT
Introduction and the Problem with Price Predictions
Rob: Hello everybody. Welcome to the Sunday stream with Jerry from Costa Rica. Jerry, how's things going?
Jerry: Beautiful Costa Rica. Life is moving forward. Nice to have everybody with us today. Hello.
Rob: Yeah, welcome back everybody. I know how tough it is in the bear market. So I thought we would do something a little fun today because it's Sunday Funday. I don't do this too often because I think that price predictions are just worthless. They are. And I think they set people up for failure. But I wanted to give something of like a little entertainment value, get Jerry's feedback, and kind of see where my head's at right now with price prediction.
So before we get into it, a little disclaimer: everybody's wrong. Everybody. There is a link in the description for these videos and for this presentation. I would urge you to go take a look at it. People have been wrong since the very beginning. I did a video about nine months ago where I just talked about how everybody's wrong — even me. I was the last one on the list, and I show you how I fumbled the ball. And then after that one, I did an update — everybody was wrong again — and that was in 2025, roughly six months ago or so.
So what I wanted to do was just say, hey, look, price predictions are fun, but they're worthless. And they can bring you down a little bit, but they can also make you realize that you have to have a plan before you go into it instead of listening to these guys.
Jerry, what do you remember from back in the day — 2020, 2021 — when we were getting these price predictions, and then the more recent ones?
Jerry: I can tell you this has carried with me for a long time. One of my most vivid emotional memories of that time was my lack of knowledge and understanding of how markets truly work. I did seek out mentors and talking heads that I could attach to, and because I didn't necessarily know how things worked, I would listen to them. So I listened to Raoul Pal. I listened to Mike Novogratz. I listened to Anthony Pompliano.
And one of the things that was really interesting — my takeaway from that — is that regardless of how educated and knowledgeable a person is, the market is so big and so vast and has so many variables that nobody gets it right. Not even close. Like, when I was putting this together about how wrong they were, I took a look at these predictions and they were astronomical, crazy numbers.
Rob: And I think the problem — just getting onto your point, Jerry — is that we have this dichotomy. There's a split. There are people on the very ultra-conservative end — the Dan Penas, the Jamie Dimons of the world — saying it's going to zero. And then you've got the Drapers and the Tom Lees of the world going it's going to a million, a bajillion, whatever else. And I think that's where people get stuck, because they're like, "Oh, well, these guys have been in finance. Draper got it right in 2014 when he bought a boatload of Bitcoin from the Department of Justice auction. Tom Lee has been in traditional finance for so long. They must get it right. Someone's got to be right."
And it's not those guys, because those guys don't agree with my bags of Bitcoin and altcoins. Anyhow, that's how I see it. I think we just need to be a little bit conservative — in the middle, or even more conservative, towards the Dan Pena end of things. Jerry, what are your thoughts?
Jerry: Here's the thing. Right and wrong can really only be understood in the context of history. You can't predict right or wrong. It's not a forward-looking unit of measure. It can only be associated with a statement in history. And so one of the things I've come to realize is that nobody can predict direction and specificity — like the price on a given day. Like, "In October, Bitcoin will be a million dollars." Anybody who utters those words is doing so for reasons other than stating a fact. It's not a fact. It's speculation built on all these variables and most likely will not come true.
And so what I try to do is find people who have an understanding of the trend, and I've become more of a trend guy. I am in the camp that Bitcoin will be more valuable in the future than it is now. And so I've created a strategy to invest that takes those things into account. I don't ever try to predict a top or a bottom. Like if you were to ask me, "Jerry, do you think the bottom is in on Bitcoin?" I would say there are a lot of indicators that say it is. However, we all know all it takes is one black swan to pop in, or a bunch of new information that was never known before, and we could be down in the 30s in a week. That's how this works. So it's really tough to predict specifics. I try to go with trend, if that makes sense.
The Four-Year Cycle and Historical Patterns
Rob: Trend is your friend till the end — and then it's not. But yeah, that would lead us into talking about trends and the historical part of it. This would be the big thing, just to reiterate and bring everybody back if you're not familiar — and I'm sure most of you are.
This is how everything has played out, and it's amazing how as we get more data points they become recurring themes. It always starts with a halving, and you get an all-time high, a dip, and a reset. That happened in 2012 to 2015. 2016 halving, all-time high, dip, reset. 2020 halving, all-time high 2021, dip, reset. 2024 halving, 2025 all-time high. We are in the dip stage, which is the big bear market, and we're going into a reset.
And just before people say that's dumb because four years is just some type of self-fulfilling prophecy — you might be right. But I will tell you it's not just Bitcoin. It is also in the stock market and traditional markets. It's also followed along a four-year cycle. Now I don't know if Satoshi Nakamoto planned it that way, but it lines up perfectly with the midterm years, which we are in — 2026, a midterm year. And that is the lowest time. We can see, as far as stock projections going back to 1923, that the midterm year is always the worst-performing year. And that lines up with our dip and reset years.
I've been in since 2017. Me and Jerry got in at pretty much the same time. Every single time going into the big blowoff top, people will say, "Just wait for this to happen and it's going to blow up." That happened in 2018, 2019. That happened in 2020 to 2021. That's happening right now in 2025. "Just wait for this thing to happen and it will blow up."
Jerry, before I start to get into this — because I think we're in the prime time frame of what we were supposed to have — what are your thoughts on what we just went over, as far as midterm years and things like that?
Jerry: I completely agree. There's no disputing historical fact. And on the topic of what are the catalysts for takeoff — I so vividly remember what we needed. We needed the corporate accounting structure to be able to account for Bitcoin as a go-to-market product, not a "you have to fix a price at its lowest point" situation. "If we get that, boom, this will happen." And then the very next year it was, "Well, if the SEC got off our back and allowed Bitcoin ETFs to happen, boom, that would be the catalyst that takes us to the stratosphere." It seemed like exactly every year there were three or four identified catalysts that would structurally be the foundation for the next great parabolic move to the upside.
I agree. And I was one of those guys that held my hopes on a lot of those catalysts.
All the Catalysts That Came True — and Didn't Deliver
Rob: Yeah, I did too. And those catalysts — I mean, they were not too far away. And this is why I want to bring this up, because we're going to take a look at return on investment from the all-time lows, the all-time highs, and then all-time highs to all-time highs.
When you take a look at this, I want you to think about what else could we have gotten to really push us into that frothy, fantastic bull market — which really wasn't that much of a blowoff top, in my personal opinion.
So again: just wait for this and this will happen.
ETF — I heard about this, and Jerry talked about this — I heard about this since I got in in 2017. "Wait till this ETF comes, because once it happens that means mainstream adoption and we're going to go to a million." Okay, well, that did happen, and it was nice, but a million — I don't think that actually happened.
"But wait for this, Rob, because when the ETFs come, that means the big institutions come in — the BlackRocks, the Fidelitys, the VanEcks. That's going to be huge." Yeah, those also came, and they're still here.
Operation Chokepoint 2.0 — "I know, Rob, but once the government comes in and is for us, which will happen, then watch it go up and to the right. Because government support — that's all we need."
"And then if we get the government support, then the CFTC and the SEC will be in line. When Gary Gensler steps down, that's when we go to a million, Rob."
"And then if we could just get rid of sleepy Joe Biden — if we could get a pro-crypto president, things will go up and to the right. Half a million to a million." Now, little did we know he was a crypto president, but mostly for meme coins, and he made a boatload of money.
And then lastly, "You've got to learn from your mistakes. Because if we can learn from the mistakes of Voyager, Celsius, Luna, FTX, then we won't do that again." Which is true — we didn't. I don't think anything's collapsed so far. Digital asset treasuries came in — Strategy and a whole host of different ones — which actually did happen, and MicroStrategy did sell a little bit, but nothing collapsed.
So with all this time, and with four-year cycle momentum, you put all this together — $250,000, half a million, a million dollars — well, it didn't work out like that.
So let me ask Jerry, because he was here when I was here. Jerry, do you remember those talking points?
Jerry: Every one of those catalysts — I was right there and agreed with 100%. I was like, "If these things happen, we will have the structural foundation for these parabolic explosions to the upside," because what they represented was astronomical pools of capital into the asset class that were otherwise prohibited from entry. They had their big bags of cash just waiting to deploy once these structural elements were in place. And hello — everything you just showed has come to fruition. And what are we sitting at? 63 grand.
Rob: Yeah, something like that. It's pretty good. I'll take 63 grand.
Jerry: Not bad. It's not bad if you bought in when we were able to buy in early. I'm not complaining, folks. However, it's nowhere near where I thought it would be.
Return on Investment Across Cycles
Rob: Yeah, I think a lot of people feel that way. And again, just watch those videos — everybody was wrong, and you'll see how wrong they were and how big it was. Even me. I even show you my price predictions, which is why I try not to do them too much.
But anyhow, getting back to this part here, there are two things we want to look at: all-time low to all-time high, and all-time high to all-time high. It's interesting how the return on investment actually reduces. And this is normal, right? We didn't get in when Bitcoin was a dollar. Maybe some of you did and you're listening to this from your yacht as you sail past your private islands — congratulations.
But let's look at all-time lows to all-time highs. This is the time to buy. This is when me and Jerry are buying. A lot of people are buying — the smart ones, reasonably.
In 2013 we were at $1,000 somewhere around there, and then the cycle collapsed to only $172, and everybody's like, "Ah, look at those morons with their internet nerd money. It's never going to go anywhere. Good luck, losers." And then it went from $172 to $20,000. That's a 116x. I'll take that.
And then it fell down to $3,217. Again — "Nerds, losers, what are you doing?" Well, we'll just buy right here. And we did a 21x from $3,217. So 116x to a 21x — that's a significant reduction in return on investment.
And then we went from $67,000 down to $15,742 — remember FTX, Voyager, Celsius, Three Arrows Capital, you name it, it collapsed. And then from $15,742, we did an 8x. That's not too bad.
So here's my thought process. You go from 116x to 21x to 8x. Jerry, I'm going to do some quick math here. That's a reduction, right?
Jerry: Yes.
Rob: Okay. So if we just go from 116 to 21, that's about a sixth. And then 21 to 8 — that's about a third. And then 8 to whatever it is next time — maybe it's a 3x from the low. What's the low? Roughly $58,000. 58 times 3 is $174,000, $175,000 somewhere around there. That's where we could go. And that's somewhat conservative, but I'm going to go even lower than that.
Jerry, before we go down to the next one, what are your thoughts on this?
Jerry: Well, there is a tremendous amount of validity in the way you're framing this. I think the one part that isn't being accounted for is the sheer fact that there are only 21 million Bitcoin ever going to exist, and a reasonable amount of that 21 million we can say is lost — meaning there's only X available in the pool, and a lot of that is already locked up in what we'll call laser eyes. And so the free flow of the asset is basically coming from miners. That is the majority of what will be available for purchase — the new Bitcoin coming into circulation from the algorithm.
We've never had assets like that in the past to model forward predictions on. And so I think that's the part that complicates the 3x and 4x projections. This is such a supply-and-demand asset — it's not a traditional market asset. The price will actually be set off of the open markets that are reporting sales and purchases. So are contracts being established where miners are pre-selling Bitcoin they're going to generate at specific market prices, therefore never hitting the retail market, therefore never adjusting the retail price we see through open disclosed sales in marketplaces? I'm not totally sure how that's going to work in the future, but I can tell you there are fewer and fewer Bitcoin being available. Therefore, if demand continues to outstretch supply, you could see 10, 20, 30, 40x moves in the market when you factor in leverage.
So there are a lot of these dynamics in play that make it really hard to model, because there's never been anything like this before. All we can do is say we know the known amount of Bitcoin being produced — that's known. We can extrapolate a demand for it. And then we can even speculate a level of leverage on that and how that will impact retail price. Maybe we should have AI build an algorithm to do this prediction for us and see what it comes up with.
But I think you're going to see moves much greater than 3x at times, pending demand. 3x from a specific point — not 3x from all-time lows. You're saying correct?
Rob: Right. So that could be 10x the low.
Jerry: Yeah. I mean, it can be.
Rob: But I'll just throw it to this real quick. If we do that and say, "Okay, well, we could do like a 6x or a 10x from whatever else," my question is — this last cycle, it seemed like we had it all. And then demand, leverage, nation states buying up Bitcoin — which they are. The only thing that would be missing from this right here is making Bitcoin a world reserve currency, which is not going to happen. Not anytime soon. Not in my lifetime. I don't think it could. And then the Federal Reserve.
Jerry: Exactly. Central bank.
Rob: Yeah. The Fed did not lower their overnight rate. And that's just it. Like, if we look at that and go, "Demand — what else do we need?" I mean, for Pete's sake. And then people say, "Well, you know, Donald J. Trump was the crypto president, but mostly for him." I've got to tell you, if there's a different president coming in, they're not going to be — especially on the other side — very tolerant of Bitcoin. Not that Bitcoin needs it, but I'm just saying if you want to talk about what the factors are.
All-Time High to All-Time High Returns
So there are all-time lows to all-time highs, and then also all-time highs to all-time highs. Because people say, "Well, what about buying at the all-time highs?" And it was awesome — if you would have bought in 2011 instead of being in grade school, some of you, then you could have bought Bitcoin and done a 40x. Why could you not stop going to kindergarten and buy that?
So we had 40x. Then of course 2013 to 2017, it was a 16x. Again, this is all-time highs to all-time highs, which is the wrong time to buy. It's a great time to sell. But even if you screwed up like I did — I bought around $17,500 in 2017 — and you just wait, it goes to $67,000. That's more than a 3.4x. And then $67,000 in 2021 to the October 2025 high — that's about a 1.8x.
Jerry, quick math again. 40x to 16x — that's a negative. All right, just making sure. So that's about a 60% drop somewhere around there. 16x to 3.4x is quite a drop — roughly 47%. And then 3.4x to 1.8x — that's also a drop, roughly 50% reduction in return on investment.
So I'm like, okay, let's just be conservative instead of being fill-in-the-blank. "This is going to a bajillion." Let's just say it goes from 40x, 16x, 3.4x, 1.8x — let's just do 1.5. So what's 1.5 times $126,000? You're looking at like $180,000 to $190,000 somewhere around there. Correct me in the comments section.
Jerry: Almost two.
Rob: Yeah, because $125,000 times two is $250,000. That can't be it. So 1.5 times $126,000 — somewhere around $180,000. Got it. So that's where my head's at as far as this goes.
But then here's another thing — is that where you should wait for and sell? Jerry, this goes to you.
Jerry: For me, I've come to rely on the good old-fashioned dollar cost average, and I've completely accepted that that's my lot in life. I will be a DCA guy. And if I do sell — see, I'm also in the "don't sell certain assets" camp. I won't sell certain things. I think certain assets like real estate and Bitcoin are better off borrowing against them if you need money, because the barrier to entry is extremely high. Buying a piece of property or buying a home requires a lot of capital. So to sell it versus borrow against it — there's a whole set of reasons. And I think Bitcoin will fall into that same category.
Rob: I've already sold Bitcoin. I sold five of them back at the end of 2022 and I regret it every single day. But you know, like you said — mortgages, getting in for real estate loans and things like that. I mean, you can do it. But I think the problem is that people do those loans at the wrong time. Like when I did the loans — I did a loan in December 2021 with Celsius, and they gave me the money and I got a nice house in Puerto Rico. It was pretty nice. And then like four or five months later: "Hey, margin call." Paid that. "Hey, margin call next month." Paid that. "Hey, margin call." Paid that. And then it got liquidated because Celsius went bankrupt. So that would be my little thing. I know people talk about why don't you just do loans — I did that route. Not going to do that again. I have PTSD.
Rob's Personal Strategy and Scaling Out
Anyhow, to finish this up and get into the Q&A — going back and looking at it, I would always talk about CoinGlass and these bull market peak indicators, and I'm going to pull a note from Dan Pena: zero. None of them hit. I did better with fractals and scaling out in 2021.
Like here — I called Ethereum and I said, "Okay, I think Ethereum is going to go to $4,800," just on fractals, just throwing it out there. I didn't really rely on indicators, and it worked out pretty well. And I said, "I'm going to sell 20% when it hits $2,000. I'm going to sell 20% when it hits $5,000, 20% at $7,000" — because I thought it would go to $10K like everybody said. It didn't. So at least in that one I got the first 20% off. Not too bad.
Chainlink — I thought it would go to over $35, and it did. It hit $51, which made sense to me at that point. So I did this. I still screwed up because I didn't sell at $35. I was like, "Nope, it's going to go higher," and I didn't sell. Bitcoin all-time high — disaster. Thought it would go to $100,000. But thankfully I did sell at $60K and got out there. So not too bad.
The whole point of the story is I did better with just fractals and scaling out than trying to depend on some indicators. That was just me.
So this is my thought process: I want to bulk buy at $60K somewhere around here. I want to sell half at $150K and 20% at $170K. Am I going to time the top? Nope. Am I going to sell too early? Goddamn right I am. But this is my thought process right now. It may change. But here it is. Use a little bull mania indicator from Ivan on Tech and be done with it.
Jerry, thoughts on this craziness?
Jerry: You know, again, back to what you're doing — you're probably taking into account, with your "I'm going to buy at $60K and sell at $150K and a portion at $170K," some long-term view. Maybe you don't feel that you want to continue to be a buyer and investor into your 70s. That very well may be a part of your overall strategy. Therefore, having quality of life during your late 50s and into your 60s is a higher priority than stacking wealth. I think that's very important. Every one of us has got to make all these different decisions because they play a part in how we create a strategy.
And so looking at your strategy, the first thing that comes to my mind is that Rob doesn't necessarily look like he wants to be a big buyer when those prices come. You're going to be doing other things with your money. Maybe you'll be taking more trips with your wife around the world. It doesn't look like you're going to be in a wealth-building strategy.
I'm starting to get that same thought as you, only I'm looking at what assets can I consolidate into that will pay me to own them. And therefore I get the best of appreciation with some cash flow, because that's really the only liability Bitcoin has — it doesn't have a cash flow.
Rob: Yeah. And it'd be nice if it did. It's like real estate — real estate's great because you can own it, you get a little cash flow if you rent it out the right way. It's going to eat you up on some of the costs though — taxes, maintenance, and stuff like that — which really do suck. But it is what it is.
So Jerry, good show today. I like this part. I just want to say: price predictions are worthless. What we just did was fun, but don't take it to the bank. Those are just my plans. My goals are not your goals. And I'm being ultra-conservative. I think if people would be more ultra-conservative with their price ranges, they'd be a little bit happier. But that's what it is. I know people want to hear about the next 10x and to the moon. I don't know what to tell you. I think we've moved out of that speculation crazy 1,000x era and now we're into more of the traditional investor mode moving forward. For every dollar you put in, you can get $2.50 back. That's not bad. Or maybe even three if you want to do Bitcoin. If you want to do meme coins like Jerry does, then that's on you.
Q&A: Bitcoin at a Million Dollars and Currency Devaluation
All right, everybody. Let's get into the Q&A because this is the best part of the show. Now, this is right up Jerry's alley. If Bitcoin is a million dollars, then fiat is in serious trouble and we're all screwed. Not financial advice. Jerry, you're always talking about refinancing debt. What happens here?
Jerry: This is really interesting. Pending what the borrowing environment is like at that particular stage — because Bitcoin being a million dollars a coin, the outside economy and the valuation of currency is going to play a big part of that.
Two things come to mind when I think about the value of currency. If the debt obligation in the currency that's being borrowed — if the demand is high, then it doesn't really matter about the degradation, the devaluation of it. It doesn't matter if your purchasing power goes down by 300% or 1,000%. If the demand on the currency is still high — and the only way that would be is that you can only buy something you want with that currency, or your debt is denominated in that currency — as long as those things stand, inflation isn't really a thing. It will affect the price, but if the price is denominated in something that's so diminimus, then it's not a big deal.
Rob: Yeah. I mean, what if it takes a million dollars to buy a gallon of milk?
Jerry: Well, it happens in Zimbabwe. And so looking at it in those terms, I try to always think of purchasing power — not the value of Bitcoin in dollar terms. Will one Bitcoin buy me a thousand more gallons of milk than it will today? Then I'm in good shape.
Rob: Yeah. Well, that is true. Because if we take a look at real estate prices — in 2012 it would take you hundreds of thousands of Bitcoin to buy a house. Now, depending on where you're at, it'll take you three, four, five Bitcoin, which is a heck of a lot. So all you had to do is just buy and hold. That's essentially what it is. That works out pretty well for a lot of people. Right now in the downtime, you think to yourself, "Well, how can I optimize?" I think that's the big thing. Even Michael Saylor asked that question, I'm sure.
All right, let's see. Time-based targets are way better than price-based. Price-based is okay if you want to have an early trigger — like you would exit if price goes to X or October, whichever comes first. And that's a lot of what the traders do. And I've got to tell you, crypto might be the ultimate asset for traders.
And then this one — Jerry, remember this? Dubsky says that one random Reddit poster wasn't wrong. You remember that? Back in the day, some guy said October 6th. I remember it was Scott Melker who actually posted that like two or three months before we had the October 6th blowoff top. He said something like, "This lives rent-free in my head." And he posted this thing from Reddit where it says October 6th, 2025 will be the absolute top. And I'm like, "That's bull, because we've got all these things going — we've got the CFTC, the SEC, we've got a president, we've got an ETF. This is ridiculous."
Jerry: And we got corporate tax structure in our favor. All this stuff.
Rob: Yeah. Fair accounting is nailed. A new SEC chair coming in.
Jerry: Yeah. Gary Gensler's gone. Although, as a reminder, Gary Gensler was the tiebreaking vote for the ETF.
Rob: So hey — Owner says, "Take profits. Best advice Rob ever gave." I have to admit I didn't invent that, but yes, it worked out pretty well. Owner says no banana zone. News flash. Yeah.
Yousef says Saylor said he's dying with a seed phrase. And that is — but MicroStrategy is not dying with their seed phrase. So I'm sure Saylor's got a ton of Bitcoin, but it's different.
Q&A: Bitcoin Mining Costs
Crux of Crypto says Bitcoin will cost $180K to mine in 2028 globally. If it goes to $175K, it will never be profitable for a whole cycle — either Super Cycle or Bitcoin bricks. You know, it does cost a lot to mine Bitcoin. I thought right now it was around $70K to $72K to mine Bitcoin, but it may have dropped. And I know in some countries — specifically Iran — they were getting subsidized to mine Bitcoin so they could go ahead and sell it. That's why they were actually in the Strait of Hormuz asking for Bitcoin. But Jerry, what are your thoughts on this one?
Jerry: So the variable cost — a kilowatt hour of electricity — is literally 85% of what determines the cost to mine Bitcoin. It's coming from the input of electricity. And one of the things I'm finding really interesting is that there are certain regions around the world that are collapsing the cost to produce a kilowatt of power. I'm in Costa Rica and we have hydroelectric coming online producing at two and a half to three cents a kilowatt hour. That is ridiculously low.
And so one of the great relationships I have here is with an outfit called Data Centers Costa Rica, and they are mining Bitcoin profitably. Now obviously the retail price — they wholesale their Bitcoin. They have agreements to sell Bitcoin at specified prices chronologically as they produce it, with a corporate strategy where they retain something like 7% of the Bitcoin they mine as a treasury strategy, but the rest they sell, and they have OTC agreements with brokers who acquire it at specified prices.
Rob: Why are we not doing some Bitcoin mining over there, Jerry?
Jerry: Well, I don't have the startup capital. It's pretty capital-intensive to start.
Rob: I know. I just thought it sounded good. I thought you were going to say, "Let's do it."
Okay. Krux says he's selling in 2029. I've got no problem with that. I feel like Ben's risk factors tell you all you need to know for when to buy or sell — especially for when to buy. But for selling, it's a little different. We're much better nowadays at calling somewhat of the bottom. You look at the 200-day moving average. You look at the 250-week moving average. Makes sense. You take a look at the four-year cycles. But as far as selling these tops — it's very difficult. I think personally it's more difficult to sell than to buy. I think everybody here in this chat knows exactly how to DCA, knows exactly how to dynamically DCA. The problem is layering out. I think that's the big one.
Jerry, thoughts on this?
Jerry: I think there are some good points that were made in the chat. If you're going to base acquisition or sale of Bitcoin on cost of production — which is very reasonable — you have to take a global average. Where is the majority of Bitcoin being mined? Remember back when you and I got into it, Rob, it was almost all being done in China.
Rob: China. Yeah.
Jerry: And electricity subsidized by municipalities was a big part of why it was so cheap for them to mine Bitcoin. But we know over the last several years that has changed. We've got a tremendous amount being mined in the United States now. And countries like El Salvador have jumped in, et cetera. And that geographical change has changed the cost structure of mining Bitcoin — not to mention the demand on the ASICs has driven prices up, and so on.
So if you look at it — one of the other commenters said AI is saying the average cost globally is $60,000. So if $60,000 is the average cost globally to create a Bitcoin, then taking a look at lows where the market might bottom, this could be a factor, a data point in factoring in bottoms. Let's say for argument's sake that Bitcoin has a $60,000 cost of production on average globally. Then sitting at $64,000, it's slightly profitable. And if that's the case, that is time to start stocking up.
Rob: But that's the trick — the people that want to stock up, they're not going to stock up. The people that know what time it is and have gone through this before — this is the opportunity. I think it's just the same thing. It's always rehashing the same narratives, the same things going over again. The ones that understand get rich. The ones that don't are like, "I'll just do it paycheck to paycheck."
Jerry: True story.
Q&A: Puerto Rico — Water, Property Taxes, and Island Life
Rob: Speaking of Puerto Rico — Puerto Rico has power issues and a garbage problem. Well, it does have power issues, that's for sure. There is an issue with the infrastructure. But more so than garbage, it has a water problem right now. We are going on roughly three weeks of intermittent water. That's why we have water trucks all over the place. Very, very depressing for my guests in the different properties. "Hey, what's up with the water?" I'm like, "Hey, it's Ocean Park, it's San Juan, it's Guaynabo — sorry, all those places. There's an issue with water. Don't look at us. Look at the water company, because they've just kind of neglected some of those things." And I'm sure they're doing the greatest job they can, but it's an issue.
And Ekko says, "Speaking of real estate, property can be taxed forever."
Jerry: I know.
Rob: And that's the bummer. But check this out. This is why I love Puerto Rico. Think about where you're at. Jerry's got some pretty low taxes in Costa Rica. But did you know that Puerto Rico enacted the Property Tax Act of 1991? The determination of property tax based on assessed values, with combined municipal and commonwealth rates typically falling between 8% and 11.83% of what you have to pay for property. Rob, that sounds awful — and you would be correct. However, there's one caveat. Property assessments are notoriously complex as they are normalized to much older base valuations, as of 1957.
Here's what that means. They don't reassess the value the way they do in the United States, where the tax assessment office comes out and goes, "Nice house. It was $240,000. Now guess what? It's $300,000. You owe us more money." In Puerto Rico, they're like, "Okay, it's going to be between 8% and 11.83%." But the valuation of the house is from 1957. So if your house is — I don't know — Jerry buys a house for $10 million. They're like, "Well, in 1957 that was only worth $200,000." Jerry pays 11% of that per year. That's pretty much it. That's what makes Puerto Rico awesome. And the fact that it's right by the beach, and the weather, and the people are awesome.
Jerry, your thoughts?
Jerry: Well, a couple of things specifically as it pertains to Puerto Rico. It's always tough living on an island when your survival depends on inputs. And so the trick — at least when I was living in Hawaii — the trick was to minimize inputs. Collect rainwater. Grow as much food on your property as you possibly could to minimize needing to acquire your sustenance from a store, because everything in that store is being imported, which obviously has costs associated with it.
Anyway, I'm thinking you guys have a great future ahead of you. I've been watching the progress of innovation for desalination — in other words, taking ocean water and making it drinking water — as well as energy production. Did you see that little video I sent you on the small-scale nuclear power plant that's actually producing power right now? A company that's only three years old that built a nuclear power plant the size of a one-bedroom apartment, producing tons of gigawatts of power.
Rob: Yeah, I saw it.
Jerry: They just need to scale that, and pretty soon you'll be able to have one in your town.
Rob: I think that makes a lot of sense as opposed to a centralized electrical grid being maintained. That was the whole thing — I remember there was a documentary on Tesla, and that was his idea. Instead of having one main electrical grid, it would be in different neighborhoods. You have one here.
Jerry: Every municipality would have its own element.
Rob: Yeah, exactly. So we see — Jimmy says, "I think we need to set up a mining unit at Jerry's waterfall." Not a bad idea — powered by hydroelectric.
Yeah, Jerry is right. 40% to 50% move up is realistic considering the foundation is set. Very true. And RJ says, "Yeah, the island life is great, but too much has to be imported." That's another downfall. The Jones Act, which essentially means that if we have to get any type of imports, it has to come from a US shipping lane. We can't just get it right from Russia or right from China or something. It has to go to Florida, then it has to come down here, and then it increases the prices. And it's like, why are we doing this? If I was governor of Puerto Rico — which would never happen — that's the first thing I would try to repeal. But good luck with that.
Closing: Jerry's Computing Venture and Final Thoughts
Rob: All right, everybody. That's it for today. Well, a long time, Jerry — 46 minutes. Almost 50.
Jerry: Really? Wow. I would suggest — if anybody hasn't lived on an island — a vacation there for an extended period of time, two or three months. Give yourself a sense of what it really is to live on a thing like that. It can be the most glorious thing in the world. My 18 months on Hawaii on the Big Island was life-changing. It really changed the way I think about life. But it's like going from the fast lane — 60 to 80 miles per hour — down to the access road at 10 to 15. Walking.
Rob: Yeah, it's essentially walking. It is the island life, and that's just how it goes. But I've got to tell you, if you're worried about stress and longevity, it's probably the best thing to do — just get off that treadmill.
Anyhow, hey — Carex Crypto says, "Does Jerry have his own YouTube channel?" Jerry used to have his own YouTube channel. Well, it's still there and there's still a bunch of content on it, but I'm not active on it for several reasons.
Jerry: One, I get my fix right here with Rob every Sunday. And I'm just doing other things with my time, like building a company — Computal.io, et cetera.
Rob: Computal.io — what is that, Jerry?
Jerry: I'm building the Amazon of compute. One user account, access to all kinds of vetted vendors supplying compute — like going for your car and buying gasoline from different gas stations without having to have a different credit card to buy it.
Rob: Nice. I've got to tell you — and just to answer your question — yes, Jerry does have his own channel. It's very good stuff. "Understanding Inflation with Michael Saylor" three years ago. Nice. Yeah, I was active. There was a period of time where I was active.
Jerry: Michael Casey — didn't you have Raoul Pal on? I had Jungle Pal. Rob from Digital Asset News. I had a whole bunch of famous people.
Rob: And this guy's got a big head. All right. Let's see what else. I think that's it.