Stephan Livera Podcast

“This bear market is... Well, this is my third bear market. And I think each bear market is very different. When I got in 2017 or I got in December of 2017, that 2018, 2019 for me was just so wild west. It was like, my money's kind of gone. The 2022 bear market was... It was actually really bad. It was bad because all the assets were going down. You also had the fraud and the contagion within crypto as well.”

“No, I've never believed in it. Again, coming in 2017, I never, I don't believe I ever heard the phrase four year cycle. The first time I ever came across the four year cycle was kind of like, I think it was like 2021 when it kind of just then happened in November. But then if you look at the mathematics behind the actual issuance rate into Bitcoin and its market cap, I would imagine that even 2020 halving had very little impact. So I think most of it is a self-fulfilling prophecy.”

“Looking at the data, what's really interesting was in December 2025, over a 30 day period, one million Bitcoin was sold from long term holders. One million Bitcoin. The biggest debate we have in Bitcoin right now is quantum on Satoshi's coins, a million Bitcoin. But for me, in a way that we've proven to the market that, all right, the price goes down, but it can take a million Bitcoin to be sold over a 30 day period. Like it can hold it.”

“The two main support lines for Bitcoin are the realized price and the 200-week moving average. The realized price being the average price of all coins in circulation is like 54,000 realized price and 58,000 is the 200-week moving average. Bitcoin typically uses the 200-week moving average as support each bear market. And it tends to go below the realized price every cycle.”

“No one actually bought any Bitcoin between 20,000 and 30,000, or even 20,000 to 35,000. No one bought anything. I can get the chart after, but the stat is over 600,000 Bitcoin have been purchased on this drawdown between 60,000 and 70,000 dollars. I think it got to a level where, all right, you have people. I could make an argument why Bitcoin goes to 40,000. Doesn't mean it goes there. I just think enough people and enough people with size said, okay, 60,000 is cheap.”

“I think it's also important to observe what Bitcoin has done during the Iran war or the Middle East conflict. So the war started on February 28th and Bitcoin was at about 67,000. But going into that, the sentiment was shocking. Even I was like, 55,000 is nailed on. The lowest we went was like 63, and we haven't looked back since. I think Bitcoin is up 15% since the war started. Gold is down 5, 6%. Silver is down 12 or so.”

“He came out today with a 22,000 Bitcoin purchase for $1.6 billion, which is the fifth biggest purchase ever since he started his strategy, which is incredible. So like he has proved to the market that he can raise well over a billion in a depressed bear market. So then you had stretch at $1.18 billion and the common stock at $3,400 million. The total dividend obligations just crossed over 1 billion, but he's literally just raised 1.18 billion in one week on one preferred.”

“What I take such huge comfort in is that the company's done a four year cycle. Like any crypto company that has survived four years is almost bulletproof. Like the FTX didn't survive four years. So you do have to be put on a pedestal, pedestal if you have survived four years as a company in this industry.”

“The paradoxically, it's like the time people come to you interested in buying Bitcoin and doing DCA is in the bull cycle, but it's actually really crucial that you do it during the bear cycle. Make sure you're DCA-ing through the bear cycle, right? You're not going to catch the exact bottom, but just make sure you're buying a little bit. Ideally, just buy a little bit every day.”

“Yeah, the bear cycle is way more important than the bull cycle. And it's just that volatility is so important. And that's why when you buy gold or the S&P 500, it's like the returns are terrible because there's no vault. And that's the issue. It's the volatility that actually gives you those returns. And it doesn't make any sense until you actually buy it through a bear market. You look at your returns, you're like, now that really does make sense.”

“I'd say Cluster Mempool is replacing all of that with a framework that can actually reason about things properly, taking arbitrary dependencies into account and do away with all the heuristics and replace it with one rule is, does this make things better or not?”

“I would go as far as saying this is the entire reason why Bitcoin has proof of work. The point of having proof of work is that anyone can join the mining market. Bitcoin's decentralization and censorship resistance ultimately boils down if things go really wrong. The final protection is you can become your own miner, maybe even at a loss, but hopefully not at a big one.”

“If we were to end up in a situation where just that there is so much economic activity going through these private transaction rails, where the network just doesn't have visibility into it, it ultimately makes it harder to enter the mining market. Because say there's three big companies that have a private mempool that you can submit things to. And as a miner, you really have no choice but to contract with one or most of these, because otherwise you just miss out on a substantial portion of fee income and are unable to compete with those who do.”

“The immediate motivation was this example of actually you can end up in a state today in a Mempool. Obviously, not likely would need a pathological adversarially constructed situation, but where the very first transactions that would be evicted if the Mempool fills up, the first thing that gets evicted is actually the very first transaction you'd want to mine. And this is obviously undesirable.”

“With Cluster Mempool, there are no more ancestor or descendant limits, instead, there are cluster limits. Think of it as a... Continue with the analogy of ancestors and descendant in a family tree. Cluster is just the widest possible extended family thing. It's like your parents and children, your grandparents and grandchildren, also aunts and uncles, nieces and nephews, their parents, their children. And so in Cluster Mempool, we have a limit of 64 transactions in a cluster.”

“You can construct pathological Mempools, where you have a whole sequence of transactions, where they're all, every parent has two children and every child has two parents, and they're sort of connected as a trellis, where the optimal ordering is going from left to right. The best transactions are in the left, the worst transactions are in the right. And now, a single new transaction comes in that pays a huge fee and attaches on the right, and now suddenly the best order becomes you go from right to left.”

“I think at a high level, things become simpler in the sense that you can adopt a strategy of, I'll just bump the fee. Like I do a replacement, it doesn't make its way through, I just bump the fee a bit more. And if it still doesn't work, I bump the fee more, replace it with another transaction. And this will just work. Where in the past, you could try to follow the 425 rules, but as far as I know, nobody actually does. In practice, people already adopt this, you know, try and see approach.”

“We can't, right? There are many reasons for, obviously, no, they cannot, or we cannot guarantee it, because if they would, we wouldn't need a blockchain in the first place. Just accept whatever transactions are in the shared mempool first. The whole consensus problem is solved. We just cannot do that due to, you know, that there's no centralized party that can impose a single ordering on everything.”

“There's been a relatively recent idea by Anthony Towns to do this block template sharing, which addresses some of this in a limited way, but it's a pretty simple idea. So the idea is like add a protocol extension that nodes can negotiate with each other. It's not a consensus change or anything entirely opt-in, where you can ask your peer if you were to create a block right now, what would it contain?”

“I'm trying very hard to sort of after, to an extent after SegWit, but even more after Taproot, I'm trying to stay out of all consensus change discussions. Yeah. I just feel like I had my fair share there. And, you know, it's, I'd rather stay out of that.”

“the thing was like, you know, probably everyone heard about the BIP 110 discussion and people were making various really weird claims around it. And one of those claims was that the data in the transaction, like if it's contiguous, then there could be legal issues stemming from it. And I thought that this is really a weird argument because like if you are some sort of criminal that splits your files into different chunks, then of course you wouldn't be deemed not guilty just because you split the files. That doesn't make any sense.”

“There is no way it can do that. There will always be many ways of doing it. It's funny because the first programming project for Bitcoin that I ever made that had anything to do with Bitcoin was specifically to steganographically put messages into the Bitcoin blockchain as a series of valid and they are not even fake, like completely valid addresses that you have private keys to so you can spend from them. So it's absolutely indistinguishable. And without the knowledge where to find it, nobody can find it.”

“Recently, I have calculated that the transaction I put into the Bitcoin chain costed me 9 million times more than monthly subscription to a cloud service I pay for.”

“If the data is in between, then this is super harmful for network because the public key gets stored into the UTXO set. And this can never be pruned from the node, ever. Because if someone did prune it, that could become a huge chain split or network split. So people would see different versions of transactions. And this would be completely catastrophic and kill Bitcoin, basically, probably.”

“if you are using some alternative opcode. So let's say hypothetically, even if BIP 110 were to be activated on the heaviest chain, and it was, you know, everyone was using Bitcoin with BIP 110, spammers who want to economize on their cost could use an alternate inscription method, and they would be only paying 0.4% more. It's actually a bit less than that, but let's say 0.4%. Right, so listen, think about that. Do you believe that if someone is spamming the chain today, that you are going to deter that person by making them pay 0.4% more?”

“And what happens if Lightning Network breaks? All the coffee transactions suddenly go to the chain. Suddenly you have like maybe thousand times, 10,000 times more spam in the chain from the transactions that would have otherwise been on Lightning. So like, you know, like the biggest optimization and the biggest anti-spam. That's a funny thing. Like Lightning Network is the biggest anti-spam technology in Bitcoin, because like if you are putting stuff on like, if you are transacting over Lightning Network is so much cheaper that then it makes economic sense to pay higher fees on the channel opening and closing transactions, and those can then drive out the spam.”

“I think Shesic ran the number. He actually ran the numbers. I've posted this. I've been sharing it as well for people. He ran the numbers on what difference did Taproot make. And that number is like 12%. Okay, so basically, even without Taproot, you're paying 12% more. And even without the current inscription envelope, people are just going to be paying 0.4% more. So even if we took away Taproot, we took away Op-Eve. You're forcing the spammers to pay 12.4% more. Is that really going to move the needle?”

“if we want to decrease spam, then the only option is to decrease the block size. I wouldn't decrease the witness discount that some people proposed because the witness discount is still important to avoid people from making too many outputs. It might make sense to reduce the segment discount if combined with something like cross-input signature aggregation or something else.”

“if you are willing to change your node, because you fear that the government will persecute you for storing illegal content, you will be willing to change your node, because you are fearing government persecuting you for enforcing 21 million Bitcoins kept. If the government says, okay, whoever runs Bitcoin node, which enforces the 21 million kept will be jailed. So either run our hard fork that removes the kept or go to jail. What will you do? Based on the current situation, there will be IPv110. Supporters will probably change their node.”

“And the differentiating factor and the reason why we've been working on Numopay was because we wanted to see tap to pay in Bitcoin. We're all kind of jealous about the fiat payment experience with you tap your phone and the payment goes through instantly and takes maybe a second or two. And with Bitcoin, we kind of achieved good UX over the last couple of years, but we stagnated a little bit in terms of we all converge to QR codes and scanning, showing QR codes.”

“So that is a purely offline payment. Your customer's phone doesn't really, doesn't even need to be online for it. As long as there is some eCash in the phone, the eCash will travel directly from one phone to the other without even touching the internet. And that has a couple of very cool features or, you know, gives, first of all, it is instant.”

“So for this, we have built in the auto withdrawal with lightning address. And what this looks like is very simple. When you set up the wallet, you can go into the settings and you say, enable auto withdrawal, and then you can set a threshold, an amount threshold. For example, it could be 50,000 satoshis and enter a lightning address from your non-custodial lightning node or any other wallet that provides your lightning address.”

“But the biggest blocking factor for Bitcoin today, I think, is not kind of the existence of the tech. It's more the UX side and kind of convincing people to stay on board. And I've noticed or experienced this multiple times myself, that I go into a store, as you said, there's like, there's the Bitcoin enthusiast's owner of the store, who set up a POS device like months ago. And then as other workers join or, you know, another cashier works at the counter today, and they might not know how to use Bitcoin. And so on that day, you cannot pay with Bitcoin, but you have to come back when the owner is back in the store.”

“Another project that I'm thinking of is Portal, for example. Portal is a new Bitcoin inspired kind of a wallet and identity management app. And they're partnering also with a Bitcoin conference in this year where they are selling the tickets as Cashu tokens. So you will have kind of privacy preserving tickets for a conference, for a Bitcoin conference that cannot be double spent. So you can also sell them or give them to someone else. It's a big problem in the ticketing world is double spending, because when you go online and you buy a ticket, which is just a PDF file, for example, how do you know that the same ticket hasn't been sold to three other people?”

“So I believe that privacy needs to be a default, and you should not have to decide or research or figure out how to improve your privacy if you want everyone to use it. So we should be working on solutions where the user even doesn't need to care whether it's a private method or not. They should be just basically thrown into a privacy preserving system by default. And that's why also using privacy preserving systems must be as smooth as using any other system out there, because it just requires too much effort for most users to even climb over that hill.”

“But for most developers, and it's probably like above 95% of developers, AI agents today produce already better code than them. And they're not only producing better code, but they're also producing it 100 times faster than any developer can do. So if you're a developer, then you're already too late if you haven't adopted this, but you still have a chance. You still have a chance to save yourself, because the output efficiency that you gain from using these tools correctly is just mind-blowing.”

“And if you're a developer out there who is kind of looking for a purpose and figuring out what to do in the next couple of months, I urge you to consider joining the Bitcoin open-source development space. We are working as a very large group of people all around the world with strong purpose into a singular direction, which is pushing Bitcoin as a global monetary system on the Internet. Reconsider if your job is boring and you work in a stupid tech startup that you never supported, then just quit, start contributing to Bitcoin, look for grants, look for companies that can help you support that, and join us.”

“Bitcoin should be able to outperform traditional stock markets by at least twice over a long period of time. And so if you think about an 8% withdrawal rate, which sounds kind of crazy, you're going to be selling down potentially 8% of your Bitcoin stack. But it really is just math, right? If at the end of the day, that is the performance that you are getting from Bitcoin, then that 8% withdrawal rate will actually work for you.”

“I call this Aikido finance, right? If you're familiar with Aikido, it's like using your opponent's weight and momentum against them, right? That's what the speculative attack is that Pierre Richard kind of coined back in the day and that we talk about a lot in the Bitcoin world. And so the fact that we have these tools available to us is great.”

“The way that I would approach this question is, I want to exhaust all of the fiat financing mechanisms that I have before I encumber my Bitcoin. Because you're going to be borrowing at lower rates. Like a mortgage again is a perfect example of this. If you can borrow against your house at 6-7%, you're getting this rate on the fiat money at much lower than what you can certainly can currently do with Bitcoin back loans. And it's not callable relative to your house.”

“A lot of people think about reaching financial independence as like a light switch. You either are financially independent or you're not. And what this allows you to do is think about it more like a spectrum, more like a journey, instead of this on off switch that I think people sometimes get hung up on. And that helps you to maintain motivation as you're going through this.”

“You're creating income actually in a fairly tax-efficient way. The long-term capital gains tax in the US at least is lower than short-term capital gains and lower than ordinary income tax. And so especially if your expenses are quite large, and you're in that like, coast fire to fat fire range, and you're wanting to live well in your retirement, you're probably going to have larger expenses, which means you're probably going to need more income. And if you're earning that through ordinary income or through dividends, which are taxed at ordinary income rates, then you're probably going to pay more taxes.”

“What is actually the lifestyle that you want to maintain when you reach financial independence? What's your aspirational lifestyle? And maybe it makes sense in order to think about your FIRE number based off of your current spending. Well, what is that aspirational lifestyle spending actually going to be? Do I want to have a golf membership that's going to cost me $10,000 a year that I don't have now? Well, if that's part of your goal, then you should build that into the expense structure that you're using to calculate that FIRE goal for.”

“If you retire, you don't want to go back to work, you don't want to go sit in a corporate office, but you like to travel, well, maybe one way to deal with a bear market is to rent your house out and go move somewhere cheaper around the world for a year so that your expenses drop. And now all of a sudden, you're in a much better place. Maybe you can't do that with kids, and so you've got to think about that. So it's all dynamic and flexible, but the key point here is be very intentional about it.”

“If you are actually holding your own Bitcoin, you're holding your own keys, you're doing that in a self-sovereign way, you not only get financial independence, but you also get this sovereignty aspect overlaid on it. If you are just in the traditional financial independence retire early movement, you've got a portfolio full of stocks, and it may be worth $2 million or whatever. There are scenarios where you lose access to all of that money, because you've got this counterparty risk, you've got this systemic risk built into this approach that you're taking.”