1
00:00:00,000 --> 00:00:05,000
Captioning provided has waived

2
00:00:30,000 --> 00:00:34,900
I'll tell you what's wrong before I get off the floor

3
00:00:34,900 --> 00:00:36,440
Don't break me down

4
00:00:36,440 --> 00:00:43,360
You wanna stay out with your fancy friends

5
00:00:43,360 --> 00:00:47,380
I'm telling you it's gotta be the end

6
00:00:47,380 --> 00:00:48,880
Don't break me down

7
00:00:48,880 --> 00:00:53,040
No, no, no, no, no

8
00:00:53,040 --> 00:00:59,820
I'll tell you what's wrong before I get off the floor

9
00:00:59,820 --> 00:01:01,220
Don't let me down.

10
00:01:03,860 --> 00:01:06,040
Don't let me down.

11
00:01:08,020 --> 00:01:10,120
Don't let me down.

12
00:01:11,320 --> 00:01:11,600
Woo!

13
00:01:12,100 --> 00:01:12,920
Here we go.

14
00:01:13,300 --> 00:01:14,360
Welcome back.

15
00:01:14,700 --> 00:01:16,100
True North, episode 56.

16
00:01:16,740 --> 00:01:18,980
Wednesday, February 18th.

17
00:01:19,560 --> 00:01:21,200
And we are excited to be here.

18
00:01:21,320 --> 00:01:22,860
We're going to get after it today.

19
00:01:22,860 --> 00:01:29,760
We've got myself, Mason Soleil, Dan Hillary, Tim Kotzman, and I believe Green will be joining us in a bit.

20
00:01:29,820 --> 00:01:35,780
We are here to jump into it and talk about everything in the world of Bitcoin and securitized

21
00:01:35,780 --> 00:01:40,960
finance. And we've got a quick little episode for you tonight. Excited to be here. So today,

22
00:01:41,120 --> 00:01:47,120
we are planning to talk about the strategy purchase this week and the relativity of the

23
00:01:47,120 --> 00:01:51,860
purchase, where it came from, all of those things, strategy world announcement and speculation,

24
00:01:52,100 --> 00:01:56,060
what's on the horizon here. And we'll talk about next week. We've got our True North event,

25
00:01:56,140 --> 00:01:59,400
which is going to be a great event. We'll give you a preview of what the schedule will look like.

26
00:01:59,400 --> 00:02:00,520
That will be live tomorrow.

27
00:02:01,260 --> 00:02:02,700
What's the next drivers for Bitcoin?

28
00:02:02,960 --> 00:02:05,960
And then talk about AI and productivity expansion.

29
00:02:06,380 --> 00:02:11,780
For those of you that are new here, True North, the investment grade Bitcoin podcast, we talk

30
00:02:11,780 --> 00:02:12,820
about Bitcoin.

31
00:02:12,940 --> 00:02:15,080
We talk about Bitcoin backed securities.

32
00:02:15,340 --> 00:02:20,000
We talked about Bitcoin treasury companies and how these things are changing over time,

33
00:02:20,500 --> 00:02:26,300
broad macro landscape, and want to be at the forefront of this industry.

34
00:02:27,120 --> 00:02:30,460
So without further ado, Mason, it's been a while.

35
00:02:30,820 --> 00:02:31,720
And Tim, it's been a while.

36
00:02:31,800 --> 00:02:32,700
Glad to have you guys back.

37
00:02:32,800 --> 00:02:35,060
Maybe I'll kick it over to Tim for not financial advice.

38
00:02:35,280 --> 00:02:39,660
And then we'll do a round around the horn about what everybody's thinking about.

39
00:02:41,220 --> 00:02:42,000
Thanks, Jeff.

40
00:02:42,540 --> 00:02:48,100
Ladies and gentlemen, what you're about to hear may be amazing, but it's not financial advice.

41
00:02:48,840 --> 00:02:50,940
It's it's investment grade.

42
00:02:50,940 --> 00:02:57,020
it's going to be live in Vegas next week, but it's for educational and informational purposes only.

43
00:02:57,480 --> 00:03:02,600
Jeff, back to you. Perfect. We'll keep it with you, Tim. You had a big week last week

44
00:03:02,600 --> 00:03:08,860
at Bitcoin Investor Week. How'd it go? Give us a lay of the land. What was it like? What was

45
00:03:08,860 --> 00:03:14,220
sentiment like? How many people were there? Was it packed? What were the conversations like when

46
00:03:14,220 --> 00:03:19,120
you were there? Yeah. I mean, I think the reality was it was a little lighter than it would be in a

47
00:03:19,120 --> 00:03:25,820
raging bull market but i would guess my guesstimate a thousand people it was definitely

48
00:03:25,820 --> 00:03:34,980
bigger than past conferences hey grain mike's here and um i mean i posted recently you can just

49
00:03:34,980 --> 00:03:40,020
do things in a bear market i saw a lot of relationship building i mean ed and i were

50
00:03:40,020 --> 00:03:44,600
having meetings with people that are about to launch products that have a wait list with

51
00:03:44,600 --> 00:03:50,300
hundreds of millions of dollars worth of like people wanting to do things with a product that's

52
00:03:50,300 --> 00:03:57,880
not ready and launched yet um you know met with a founder who was in stealth mode and launching

53
00:03:57,880 --> 00:04:08,000
shortly so i mean i know it sounds obvious but i think the only thing that feels worse in my stomach

54
00:04:08,000 --> 00:04:14,100
than like the depths of a bear market is like when you're trying to build something too fast

55
00:04:14,100 --> 00:04:19,720
in a bull market and you just have so much FOMO and you're just like, uh, there's other people

56
00:04:19,720 --> 00:04:25,260
coming to market. There's other people doing this stuff. If I, if I sleep, I'm going to be behind.

57
00:04:25,740 --> 00:04:31,160
So no time to sleep, but a bears are a great time for building. And that's what everybody's

58
00:04:31,160 --> 00:04:35,820
working on right now. I know I'm working around the clock. I know Dan's working around the clock,

59
00:04:35,920 --> 00:04:39,600
Mason, Soleil, Mike, everybody's cooking here. Maybe I'll kick it over to Mason. What are you

60
00:04:39,600 --> 00:04:43,440
thinking about? What's, uh, what's going on in your neck of the woods? Yeah. I mean, I I've been

61
00:04:43,440 --> 00:04:50,620
on a little bit of a world tour over here. I was down in El Salvador for Plan B. And that was a

62
00:04:50,620 --> 00:04:57,400
pretty wild conference. I feel like all of Latin America was there and some of North America as

63
00:04:57,400 --> 00:05:05,640
well. And that was pretty hardcore cypherpunk libertarian, kind of traditional Bitcoin ethos.

64
00:05:05,880 --> 00:05:13,420
And yeah, there's a lot going on. And that was an event largely sponsored by Tether. So it was

65
00:05:13,420 --> 00:05:19,740
fascinating to see what's happening in that ecosystem. I know amongst Bitcoiners, stablecoins

66
00:05:19,740 --> 00:05:29,220
are kind of controversial, but I actually had a conversation with a True North fan who works at

67
00:05:29,220 --> 00:05:37,260
Tether. I can't say much more than that, but he's from England. And we were talking about Tether,

68
00:05:37,260 --> 00:05:45,740
And he made a very good point that stable coins, they've now reached around 500 million people, right?

69
00:05:45,740 --> 00:05:54,340
So very large product market fit for people in emerging markets or people who don't have access to bank accounts.

70
00:05:54,500 --> 00:06:00,760
And I think there's 3 million people globally who don't have banks or are underbanked.

71
00:06:00,760 --> 00:06:14,400
And what he said was stable coins are really, have done a huge humanitarian good that even Bitcoin has failed to fulfill because of its volatility, right?

72
00:06:14,640 --> 00:06:21,480
People in emerging markets want the consistency of, you know, the stable value of a dollar.

73
00:06:21,780 --> 00:06:23,680
We know it's not stable. It goes down over time.

74
00:06:23,880 --> 00:06:28,300
But it appears stable, right?

75
00:06:28,300 --> 00:06:30,020
Yeah, it's the digital dollar, right?

76
00:06:30,020 --> 00:06:35,400
Anybody in all of these other countries, they look to the United States as the leader.

77
00:06:35,600 --> 00:06:36,960
They've got the most stable currency.

78
00:06:37,680 --> 00:06:41,460
You look at all of these other countries, they're experiencing rapid deflation of their

79
00:06:41,460 --> 00:06:43,760
currencies, and they're looking for other things to hold.

80
00:06:44,240 --> 00:06:48,760
Historically, it's kind of hard to get like, these people aren't getting US bank accounts.

81
00:06:49,280 --> 00:06:54,980
But if they could get that exposure on their cell phone and anywhere in the world via USDT,

82
00:06:55,140 --> 00:06:55,940
that's interesting.

83
00:06:56,360 --> 00:06:57,260
That's super interesting.

84
00:06:57,260 --> 00:07:10,140
And if they're able to have some stability and make sure that, you know, they could buy groceries the next week when they get paid, like that capital coming in the door instantly goes from a bank account over into something that they think is more stable.

85
00:07:10,680 --> 00:07:17,140
Granted, it is going down over time, but it's more stable for their operations and their daily things.

86
00:07:17,820 --> 00:07:18,720
So, yeah, fascinating.

87
00:07:19,520 --> 00:07:20,880
So I was going to say, oh, go ahead.

88
00:07:20,880 --> 00:07:40,580
No, sorry. I was just going to say, and then I was at plan B, which was very vibrant. And then I went to, you know, Bitcoin investor week, right? And that's a very different scene. That's the suit coiners or the bankers. And it was a pretty funny contrast, right?

89
00:07:40,580 --> 00:07:47,780
the the the kind of general vibe that i got there was there was a lot of traditional finance guys

90
00:07:47,780 --> 00:07:54,640
who were like reluctantly there like some some reluctant gray hair bankers who were trying to

91
00:07:54,640 --> 00:08:01,040
figure out what the hell is going on and uh and and just one last antidote i was in the bathroom

92
00:08:01,040 --> 00:08:06,120
i was waiting in line for the bathroom and i i heard two journalists talking and i i picked up

93
00:08:06,120 --> 00:08:10,480
one of them was from business insider and they were talking and they're like well it's really

94
00:08:10,480 --> 00:08:17,900
confusing because bitcoin's down like 50 but everyone's really calm like no one cares i'm like

95
00:08:17,900 --> 00:08:23,780
welcome to bitcoin man this is this is what we do here yeah i i had a couple phone calls this last

96
00:08:23,780 --> 00:08:30,100
week it was last friday and uh the guy i was talking to is like man you're a you're a breath

97
00:08:30,100 --> 00:08:34,520
of fresh air you're you seem relatively calm and you're happy and i'm like yeah i'm not concerned

98
00:08:34,520 --> 00:08:39,020
but apparently all of the other phone calls he's had people are like losing their head

99
00:08:39,020 --> 00:08:44,620
yeah it's a it's a strange place to be yeah we have no nerve endings we don't feel pain anymore

100
00:08:44,620 --> 00:08:50,320
what is pain french bread but but mason you're right the the stable coins things reminded me like

101
00:08:50,320 --> 00:08:56,580
i'm as toxic toxic of a bitcoin maxi as anybody but to a certain extent that's almost like first

102
00:08:56,580 --> 00:09:02,120
world problems you know what i mean when you've got these people that are drowning because of

103
00:09:02,120 --> 00:09:07,900
inflation and they can just cling to the dollar as a lifeline you kind of can't hold it against

104
00:09:07,900 --> 00:09:13,480
them you know what i mean like yeah the um to have fun you know staying poor thing just really falls

105
00:09:13,480 --> 00:09:17,400
flat when when people are struggling and it's you're just doing the best they can you know

106
00:09:17,400 --> 00:09:24,960
they're doing the best they can yeah it's better than their local currency exactly so i mean that

107
00:09:24,960 --> 00:09:30,420
that's really that's really it anything else soleil off the top of your head since we're on you here

108
00:09:30,420 --> 00:09:47,260
Yeah, I mean, what Tim was talking about reminded me of when housing was going through the roof and everybody wanted to be a realtor and flip. And then when, what was it, 2007, 2008, everything crashed. And they didn't know how to sell a house because they just thought it was easy mode.

109
00:09:47,260 --> 00:09:56,700
But the people who are building in Bitcoin right now in a bear, that's like going and trying to be a realtor in 2008, 2009 after the crash.

110
00:09:56,800 --> 00:10:08,020
Like you are really going to have a trial by fire and you're going to probably learn things that benefit you in the long run instead of just trying to get by on easy mode.

111
00:10:09,900 --> 00:10:11,500
Bingo. Absolutely.

112
00:10:12,280 --> 00:10:13,220
You got to build in a bear.

113
00:10:13,680 --> 00:10:15,400
Over to you, Dan.

114
00:10:17,260 --> 00:10:29,480
Yeah, I'm psyched. Things have been going really well. For me, we had a flash 500k mint last night at Buck, so we're pretty jacked up. I mean, Stretch has been trading at par.

115
00:10:29,480 --> 00:10:41,240
And I think this idea that Bitcoin is going to go to zero is mostly a retail kind of hysteria, fear, sentiment situation.

116
00:10:41,660 --> 00:10:50,420
Because if institutional buyers believed Bitcoin had significant downside from here, the credit quality of a lot of these products would be in real jeopardy.

117
00:10:50,420 --> 00:11:00,820
Like, for example, like, let's say, you know, and I don't know the exact numbers, Jeff, but like some of the Bitcoin, I think Strive has close to a 50% amplification ratio.

118
00:11:01,080 --> 00:11:01,420
Correct.

119
00:11:01,560 --> 00:11:12,920
And if the expectation across the broader market was that Bitcoin was to fall another 50%, then the, you know, equity minus the liquidation preference of the preferreds would be in significant jeopardy.

120
00:11:13,540 --> 00:11:16,920
And furthermore, you know, the credit quality of the preferreds would be going down.

121
00:11:16,920 --> 00:11:22,560
And the market's not pricing that in to both Strive stock and Strive preferreds.

122
00:11:22,560 --> 00:11:31,400
And it's not pricing it in right now to MSTR common, which is trading at the largest premium to book value it has in a long time.

123
00:11:32,440 --> 00:11:39,780
And the preferreds are trading extremely well, looking, you know, stretch trading at 99 and change today after the ex-dividend date.

124
00:11:39,900 --> 00:11:44,480
So clearly the market isn't that bearish on Bitcoin, I think is the takeaway here.

125
00:11:44,480 --> 00:11:50,120
Yeah, that probability of zero thing is so interesting, right? You look at the banking

126
00:11:50,120 --> 00:11:59,320
frameworks. So US banks subscribe to Basel III banking framework, and that effectively treats

127
00:11:59,320 --> 00:12:07,360
Bitcoin as like a zero on a balance sheet. So there's a risk weighting of 1,250%,

128
00:12:07,840 --> 00:12:13,280
meaning that there's 0% credit. You have zero ability as a bank to leverage against Bitcoin

129
00:12:13,280 --> 00:12:17,720
holding on the balance sheet. Why does that exist? Because it's volatile. And there's some thought

130
00:12:17,720 --> 00:12:23,260
that there's a probability that Bitcoin goes to zero. Now, if you think about just the general

131
00:12:23,260 --> 00:12:28,540
framework of like, does that even make sense? Like, how do I compare this from fiat compared

132
00:12:28,540 --> 00:12:32,560
to Bitcoin? And you look at all of the individual characteristics of fiat compared to Bitcoin

133
00:12:32,560 --> 00:12:38,740
and every single characteristic of Bitcoin is better than fiat. And so you start to think about

134
00:12:38,740 --> 00:12:42,740
probability of Bitcoin going to zero. Okay. What's the probability that the internet turns off?

135
00:12:43,280 --> 00:12:49,820
And there's so many other things that can happen to the fiat ecosystem before the Bitcoin ecosystem.

136
00:12:49,820 --> 00:13:04,380
It's interesting and ironic that the United States is on a Switzerland banking regulation platform, yet they're touting we want to be the crypto capital of the world.

137
00:13:04,380 --> 00:13:19,600
I think this is a big target for 2026 that could potentially change, which would have really big second and third order effects to banks holding Bitcoin, strategy getting credit ratings, rating agencies having to take this seriously, build risk models.

138
00:13:20,460 --> 00:13:28,580
And I think that's really the next frontier of Bitcoin regulation and crypto regulation in this economy.

139
00:13:29,500 --> 00:13:33,980
So, I mean, Clarity Act on Calci is like 90% right now passing this year.

140
00:13:34,380 --> 00:13:41,740
up from 50 a couple weeks ago pretty interesting signal yeah went vertical today uh over to you mike

141
00:13:41,740 --> 00:13:42,540
what do you think about

142
00:13:45,260 --> 00:13:51,740
no i think it goes back to uh what ben workman said a while back that you can't rent conviction

143
00:13:51,740 --> 00:13:56,060
you have to do your own research figure out what's going on and you know nothing's changed

144
00:13:56,060 --> 00:14:02,940
with all the macro that we're seeing and so the only question is you know price um and so so for

145
00:14:02,940 --> 00:14:07,760
my view, it's, does the price kind of, you know, let's just say this price, price action

146
00:14:07,760 --> 00:14:12,180
sucks. Sure. But the long-term trend is the same. So you just have to be unflappable with

147
00:14:12,180 --> 00:14:17,500
it. And if people have been listening to us, what is this? Our 56, what's, what number

148
00:14:17,500 --> 00:14:24,000
is this? 56. 56. I mean, did I think that we'd have 56 podcasts, you know, across over

149
00:14:24,000 --> 00:14:28,260
a year? No, but so, so, so for my view, I'm looking forward to seeing everybody next week

150
00:14:28,260 --> 00:14:34,340
in Las Vegas, talk to them in person. And I think that you just have to figure out what you're going

151
00:14:34,340 --> 00:14:39,580
to do in the future. And if you didn't invest in Bitcoin or MSTR or a Bitcoin treasury company,

152
00:14:39,920 --> 00:14:45,340
your question is, what isn't going to get displaced in the future? I think that's the

153
00:14:45,340 --> 00:14:50,520
hardest part. If you pivot out of it, what else are you going to invest in? That's about my-

154
00:14:50,520 --> 00:14:54,380
What else looks good? I had this problem when I was

155
00:14:54,380 --> 00:15:02,700
in the reinsurance world post my GME investment scenario. I was like, what do I put my money into?

156
00:15:03,040 --> 00:15:08,680
What else looks good? And I kept doing due diligence, due diligence, due diligence.

157
00:15:09,740 --> 00:15:17,420
And I mean, Bitcoin is what I landed on. Yeah. I just posted something, I don't know,

158
00:15:17,420 --> 00:15:23,060
a half hour ago. And it was showing what happened was I was on a space a while back

159
00:15:23,060 --> 00:15:31,380
And then somebody had posted for CAGR, they just said that Bitcoin has retraced where it was two years ago or three years ago.

160
00:15:31,840 --> 00:15:33,920
And I'm like, that's not a CAGR calculation.

161
00:15:34,180 --> 00:15:40,940
So what I did was I did the CAGR each starting at the beginning of the year and the end of the calendar year with what the calculation was.

162
00:15:41,060 --> 00:15:44,280
But there was something else bothering me about that.

163
00:15:44,360 --> 00:15:48,700
And I'm going to paste the link into what we're talking about right now.

164
00:15:48,700 --> 00:15:52,760
And it was the 50-week moving average.

165
00:15:53,060 --> 00:15:56,760
And so as of right now, the 50-week moving average is $99,000.

166
00:15:56,860 --> 00:15:58,000
Now, are we trading below that?

167
00:15:58,120 --> 00:15:58,300
Sure.

168
00:15:58,660 --> 00:16:03,940
So when you compare the same price from now and two years ago, the 50-week moving average

169
00:16:03,940 --> 00:16:09,000
back then was $34,000.

170
00:16:09,460 --> 00:16:12,960
So you're not comparing two things that are equal because this moving average keeps on

171
00:16:12,960 --> 00:16:13,080
going.

172
00:16:13,160 --> 00:16:14,260
It's setting a new floor.

173
00:16:14,380 --> 00:16:15,760
So we get hung up on the price.

174
00:16:16,380 --> 00:16:22,180
But the reality is that 50-week moving average keeps on getting higher.

175
00:16:22,180 --> 00:16:26,580
So there, I just posted the link into the chat so people can click on it and see.

176
00:16:27,460 --> 00:16:35,380
The 200-week moving average has gone up 2,780 days in a row.

177
00:16:37,100 --> 00:16:37,500
Yeah.

178
00:16:37,840 --> 00:16:44,480
And so if you look at the 200-week moving average, it just continues going up.

179
00:16:44,560 --> 00:16:48,040
And that's why I say we've been – Jack Maulers has said this before.

180
00:16:48,040 --> 00:16:52,480
It's like, oh, well, we've been in a bull market for the past 16 years.

181
00:16:53,240 --> 00:16:54,360
The spot price changes.

182
00:16:54,860 --> 00:16:56,420
So I think that's the only difference.

183
00:16:57,100 --> 00:17:01,060
And so this doesn't shake me out at all because I've seen this happen before.

184
00:17:03,140 --> 00:17:04,720
Yeah, it's funny, right?

185
00:17:05,120 --> 00:17:08,280
So I was doing an analysis this week in over 200 week moving averages.

186
00:17:08,280 --> 00:17:16,600
I was comparing Bitcoin, ETH, Tesla, S&P 500, QQQ, NVIDIA, Microsoft, Apple.

187
00:17:16,600 --> 00:17:21,880
and I was just looking at the 200 week moving averages just to compare, see what, you know,

188
00:17:21,880 --> 00:17:28,900
like are there instances where other assets have gone down? So ETH, for example, something around

189
00:17:28,900 --> 00:17:35,780
six or 7% of the days in the last, since 2018, the 200 week moving average has gone down. So

190
00:17:35,780 --> 00:17:39,020
there are periods of time where it's going up and there's periods of times where it's going down.

191
00:17:39,200 --> 00:17:45,880
Bitcoin over that same horizon up into the right every single day for 2,780 days in a row. Tesla

192
00:17:45,880 --> 00:17:52,420
was another example where the 200 week moving average, about five to 7% of the time actually

193
00:17:52,420 --> 00:17:58,400
experienced days where it was going down. So you could say theoretically, Tesla may be more volatile

194
00:17:58,400 --> 00:18:04,820
than Bitcoin based on that metric, starting to think about days of variance up and down on the

195
00:18:04,820 --> 00:18:11,580
200 week moving average. And then I look back on some early times with Apple. So I was looking at

196
00:18:11,580 --> 00:18:18,900
Apple from like 1990 to 2005 and looking at the 200 week moving average, obviously dotcom bubble

197
00:18:18,900 --> 00:18:24,780
in there, but, uh, there was significant volatility, uh, in the 200 week moving average for Apple when

198
00:18:24,780 --> 00:18:31,740
it was 14 or 15 years old. So they can very, very similar, uh, spot to where Bitcoin is today being

199
00:18:31,740 --> 00:18:39,340
a, you know, 14, 15 year old asset. Um, so yeah. Interesting statistics there. Yeah. Is that why,

200
00:18:39,340 --> 00:18:45,860
I think Bitcoin improves like every portfolio sharp ratio because it goes up so much more than it goes down.

201
00:18:45,960 --> 00:18:51,060
It just makes everything safer, even though it's everybody thinks it's so volatile.

202
00:18:52,800 --> 00:19:03,940
Yeah, everyone thinks it's volatile, but you look at the scale of returns relative, the scale of returns and the timing of the returns, and it just drifts higher.

203
00:19:04,040 --> 00:19:06,800
That 200 week moving average just continuously is drifting higher.

204
00:19:06,800 --> 00:19:13,380
Yeah. And so if you look at the chart, this is Tesla, which you just mentioned. And the yellow

205
00:19:13,380 --> 00:19:19,000
line is the 50 and the white line is the 200. And it's for whatever, this is a weekly chart. You

206
00:19:19,000 --> 00:19:25,020
can tell by it says up here in the corner that right there where it says the W. So this is a

207
00:19:25,020 --> 00:19:30,480
weekly candles. And so when the yellow line drops below this, now, if this was a daily chart,

208
00:19:30,480 --> 00:19:35,920
we would call this a death cross. And then this is a golden cross. But this is in 2023.

209
00:19:36,380 --> 00:19:40,540
Tesla was way below its 200-week moving average, and it did it twice.

210
00:19:40,640 --> 00:19:43,420
It had a double bottom here, and then it recovers back up again.

211
00:19:44,060 --> 00:19:47,540
And then I'm going to switch this now to Bitcoin.

212
00:19:48,460 --> 00:19:55,640
If you look at Bitcoin, the troughs aren't as long or below this 200.

213
00:19:55,640 --> 00:20:01,160
This over here, these big drops that took place was in 2022.

214
00:20:01,160 --> 00:20:07,680
So this was the Terra Luna collapse and then FTX in June.

215
00:20:07,840 --> 00:20:08,840
So that's what that happened.

216
00:20:09,280 --> 00:20:14,180
And then we were kind of like in a crypto winter because there wasn't any good news.

217
00:20:14,520 --> 00:20:20,480
I think the difference where we are now, and this over here is the 50-week moving average.

218
00:20:20,580 --> 00:20:22,320
We peaked at 102,000.

219
00:20:22,520 --> 00:20:25,440
And now we're down to, oh, 99,000.

220
00:20:26,140 --> 00:20:28,760
Because it's over, this is the, sorry, the 50-week.

221
00:20:28,760 --> 00:20:31,600
It takes 50 weeks for really to reset down.

222
00:20:31,740 --> 00:20:33,760
50 weeks is just about a year.

223
00:20:33,960 --> 00:20:37,240
But the 200-week moving hour just continues to go up.

224
00:20:37,340 --> 00:20:40,900
And this was the buying indicator that Matt Cole was talking about.

225
00:20:41,420 --> 00:20:43,340
And we didn't even touch it.

226
00:20:44,260 --> 00:20:56,838
So it 58 I don think we getting there But with that go ahead Yeah it probable There is a probability that we get there

227
00:20:57,698 --> 00:21:00,278
It's tough. You never know you're at a bottom until you've passed it.

228
00:21:01,578 --> 00:21:04,138
So it's a tricky component here.

229
00:21:04,178 --> 00:21:05,698
You've got so many things on the horizon, right?

230
00:21:05,698 --> 00:21:07,818
We've got and we could get into.

231
00:21:10,838 --> 00:21:13,258
Oh, we lost them.

232
00:21:13,618 --> 00:21:14,278
Lost Jeff.

233
00:21:14,998 --> 00:21:16,338
I guess we lost Jeff.

234
00:21:16,698 --> 00:21:18,958
Can you pull up Tesla again, Mike?

235
00:21:19,078 --> 00:21:25,358
Because that reminded me of the pain and suffering that I went through at the end of 2022 because I was a Tesla holder back then.

236
00:21:26,478 --> 00:21:27,458
And Jeff's back.

237
00:21:28,178 --> 00:21:28,758
Hey, what's up, Jeff?

238
00:21:29,698 --> 00:21:30,098
Yeah.

239
00:21:31,238 --> 00:21:32,058
Yeah, real quick.

240
00:21:32,158 --> 00:21:36,978
So, like, it just reminds me of strategy a little bit because I rode Tesla down from 400 to 100.

241
00:21:37,478 --> 00:21:41,918
And over that six to nine month period, it wasn't like Tesla was worse, right?

242
00:21:41,918 --> 00:21:42,998
Their cars were better.

243
00:21:43,258 --> 00:21:44,058
They had more data.

244
00:21:44,058 --> 00:22:09,238
They were closer to solving autonomy. They were closer to optimists. But the market was only, you know, willing to pay 25% of what it was before that. And, you know, strategy is accumulating like a like a madman. And it's, it's almost like an impossible argument to say that, you know, strategy is worth less than it was at all time highs. It doesn't make any sense.

245
00:22:09,238 --> 00:22:18,118
Yeah. And I'm going to switch this to daily. So here's your typical daily chart. And maybe this

246
00:22:18,118 --> 00:22:25,718
is helpful for people to read this. When the 50-day moving average drops below the 200-day

247
00:22:25,718 --> 00:22:31,838
moving average, we call this a death cross. Now, when it comes back above it, that's a golden cross.

248
00:22:32,258 --> 00:22:37,358
But what you see here is that you don't know that you're in the bottom. And then you'll see that the

249
00:22:37,358 --> 00:22:48,038
price action because the yellow line is the 50-day moving average. Once you cross the 200-day

250
00:22:48,038 --> 00:22:53,858
moving average, that's giving you the indicator that you're going there. There's a lag because

251
00:22:53,858 --> 00:22:59,538
it's 50 days. It averages the previous 50 days. So you have to make a commitment. So then if you

252
00:22:59,538 --> 00:23:03,978
buy in here and you're like, oh, it's going to follow through and then it doesn't, you get faked

253
00:23:03,978 --> 00:23:09,438
out and then it continues going higher. So it continues going up. So this is your typical

254
00:23:09,438 --> 00:23:16,678
golden, this is your death cross and then your golden cross. But if you switch it to weekly,

255
00:23:17,438 --> 00:23:23,058
so you just change the chart and then you're like, it gives you much less noise. And this is on

256
00:23:23,058 --> 00:23:33,658
Tesla. You could do the same thing for MSTR. And, you know, like I said, the price dropped here

257
00:23:33,658 --> 00:23:44,398
I think for a variety of reasons, and we've probably talked about this all before, but I think that from my view is I think it's, you know, we're not going to stay here that long.

258
00:23:44,478 --> 00:23:45,678
I really think it's going to recover.

259
00:23:46,198 --> 00:23:52,218
And then when you compare it back to 2020, I mean, I mean, the stock took a mega run.

260
00:23:52,458 --> 00:23:56,918
You know, when they started doing this in 2020, if you look back to there, wow.

261
00:23:56,918 --> 00:23:59,958
I mean, that's pretty, you know, that was awesome.

262
00:23:59,958 --> 00:24:06,238
but it pales into comparison where we are today because of the 10 for one split, right?

263
00:24:06,258 --> 00:24:07,598
When they first started this.

264
00:24:08,158 --> 00:24:09,498
So, I mean, that's my view.

265
00:24:10,118 --> 00:24:10,238
Yeah.

266
00:24:10,278 --> 00:24:14,418
The only valid reason I can see to panic sell is if you think it's going to zero.

267
00:24:15,118 --> 00:24:18,698
But if Bitcoin doesn't go to zero, then strategy is not going to zero.

268
00:24:18,878 --> 00:24:21,118
And if Bitcoin is not going to zero, then it's going to a million.

269
00:24:21,498 --> 00:24:23,558
So that's how I think about it.

270
00:24:24,178 --> 00:24:25,198
It's like so binary.

271
00:24:25,858 --> 00:24:28,138
Go ahead, Mike.

272
00:24:28,138 --> 00:24:28,778
You know what I was going to say?

273
00:24:28,818 --> 00:24:29,518
It was kind of weird.

274
00:24:29,958 --> 00:24:33,018
is that it's always doom and gloom.

275
00:24:33,258 --> 00:24:34,918
It's either everything is going to zero

276
00:24:34,918 --> 00:24:36,598
or everything's going to infinity.

277
00:24:36,938 --> 00:24:38,518
It's either you're out of a job,

278
00:24:38,638 --> 00:24:39,878
you're never going to work forever,

279
00:24:39,958 --> 00:24:42,438
or you have a great job, whatever it is.

280
00:24:42,678 --> 00:24:45,838
It's always like one way or the other way.

281
00:24:45,898 --> 00:24:48,338
It's never like there's any middle ground going on.

282
00:24:48,718 --> 00:24:49,818
Like strategy, it's like, well,

283
00:24:49,818 --> 00:24:55,158
if Bitcoin goes to 8,000 and it stays there for four years,

284
00:24:56,298 --> 00:24:58,058
then they'll have to refinance.

285
00:24:58,158 --> 00:24:59,638
People like you see, they're going to get screwed.

286
00:24:59,958 --> 00:25:02,758
And it's like, they won't be able to refinance.

287
00:25:02,878 --> 00:25:05,018
What's the chance of Bitcoin going to 8,000?

288
00:25:05,358 --> 00:25:10,438
What's the chance of Bitcoin going to any price and staying there for four years?

289
00:25:10,918 --> 00:25:17,278
I mean, if you were to say that for any stuff, what's the chance of Tesla dropping to $100 and then staying there for four years?

290
00:25:18,358 --> 00:25:18,598
Right?

291
00:25:18,958 --> 00:25:19,638
That's a cool hack.

292
00:25:19,638 --> 00:25:23,138
Are they going to be able to finance the rockets or the, you know?

293
00:25:23,738 --> 00:25:24,058
Yeah.

294
00:25:24,058 --> 00:25:37,998
It's like saying, what's the chance that you guys produce 10%, you sell 10% of your current annualized car sales next year, and then you're stuck at that number for the next three years forever?

295
00:25:39,638 --> 00:25:40,998
It's a ridiculous statement.

296
00:25:40,998 --> 00:25:42,558
Well, we're going to try to sell more cars.

297
00:25:42,658 --> 00:25:43,418
I don't know what you're talking about.

298
00:25:45,678 --> 00:25:48,078
We're going to work and try to sell more cars.

299
00:25:48,178 --> 00:25:48,638
Yeah, exactly.

300
00:25:48,918 --> 00:25:51,158
I mean, obviously, that is a possibility, right?

301
00:25:51,238 --> 00:25:53,298
That's a risk you take as a car salesman.

302
00:25:54,058 --> 00:25:57,018
There's a risk you take as a Bitcoin purchase man.

303
00:25:57,678 --> 00:25:58,938
And that's the price of Bitcoin.

304
00:26:00,118 --> 00:26:01,778
Yeah, exactly.

305
00:26:03,038 --> 00:26:05,678
Mike, you bring up the moving averages.

306
00:26:05,818 --> 00:26:07,198
I think the moving averages are interesting.

307
00:26:07,358 --> 00:26:08,438
They are a lagging indicator.

308
00:26:08,618 --> 00:26:12,418
So you're not going to know that things are changing until they've kind of changed.

309
00:26:12,798 --> 00:26:13,978
So there is that component.

310
00:26:13,978 --> 00:26:24,218
But I was doing some analysis on the on the downside and thinking about 2022 as a proxy for what a bear market might look like.

311
00:26:24,258 --> 00:26:34,278
And I personally believe that the duration of this bear market is going to be shorter and the depth is going to be shorter as well, just because of the underwriting the entire situation.

312
00:26:34,278 --> 00:26:40,698
Think about 2022. The price of Bitcoin went up to 30 percent below the 200 week moving average.

313
00:26:40,698 --> 00:26:49,398
So if you think about the 200 week moving average today, 200 week moving average is 58,000, 30% below 58,000 would be about 40,000.

314
00:26:49,958 --> 00:26:52,678
And you think about the landscape of what happened in 2022.

315
00:26:52,978 --> 00:26:56,798
And we're talking like literal mayhem, financial mayhem.

316
00:26:57,378 --> 00:26:59,558
Silicon Valley Bank goes bankrupt.

317
00:26:59,918 --> 00:27:03,458
You've got FTX, Celsius, BlockFi collapse.

318
00:27:03,558 --> 00:27:08,138
You've got a political regime that's literally looking to kill all of crypto.

319
00:27:08,138 --> 00:27:14,418
interest rates go from zero to five and like everything is just complete mayhem.

320
00:27:15,118 --> 00:27:21,158
And you look at where we're at now, right now, everything seems relatively stable.

321
00:27:22,158 --> 00:27:27,218
I mean, there are some, some of the smaller treasury companies that might be sweating it

322
00:27:27,218 --> 00:27:33,178
a little bit with their, like with margin calls associated with their, the debt on their balance

323
00:27:33,178 --> 00:27:40,178
sheets. However, we're talking about peanuts relative to the entire scale of everybody else

324
00:27:40,178 --> 00:27:44,678
in the marketplace or right. Like Mason, you were just looking at tether. You were just with tether

325
00:27:44,678 --> 00:27:50,598
down in El Salvador. They're strong. They're incredibly strong right now. Like the tether

326
00:27:50,598 --> 00:27:54,078
FUD is like out the, out the window, right? Like we've moved on to other things. It's now

327
00:27:54,078 --> 00:28:01,638
called FUD and, uh, you know, whatever, whatever the flavor of the month is. And, uh, you were

328
00:28:01,638 --> 00:28:05,158
just in a completely different position. You look at strategies balance sheet in the depth of the

329
00:28:05,158 --> 00:28:14,818
of the 2022 bear market, their leverage ratio was 120%. Like their leverage ratio right now is 12%.

330
00:28:15,818 --> 00:28:21,078
Like Bitcoin could drop another 50% here and their leverage ratio would go to 24%.

331
00:28:22,218 --> 00:28:26,058
Their amplification from the preferred equities would be higher, right? They've got some dividends

332
00:28:26,058 --> 00:28:29,638
that they'd have to pay, but that scale of it is just ridiculously small.

333
00:28:29,638 --> 00:28:43,138
Yeah. And I think we should recognize, you know, when Fong, I think it was Fong or Saylor, when they said they have a PhD in leverage and that they've seen, you know, they've been through a thing or two.

334
00:28:43,518 --> 00:28:46,998
I think that we should recognize, OK, we're in a bear market right now.

335
00:28:47,258 --> 00:28:49,698
And ultimately, like this is good for a strategy.

336
00:28:50,138 --> 00:28:51,798
It's it's kind of inevitable.

337
00:28:52,558 --> 00:28:53,878
Bitcoin's going to have a bear market.

338
00:28:54,498 --> 00:28:57,598
The preferreds were going to, you know, have to go through that.

339
00:28:57,598 --> 00:29:03,158
literally like in order for them to to sell preferreds into the market bitcoin was going

340
00:29:03,158 --> 00:29:09,618
to have to have some extreme volatility and have them go through it but and keep paying the like

341
00:29:09,618 --> 00:29:14,538
yeah yeah the dividends and keep paying right like they have to prove themselves they have to go

342
00:29:14,538 --> 00:29:20,798
through some pain and and we're experiencing that right now and i think the the demand on the other

343
00:29:20,798 --> 00:29:28,718
side for it is going to be, and it might take a few years, like, I don't know. But I think the

344
00:29:28,718 --> 00:29:34,418
demand on the other side, as they continue to prove themselves, the case only grows stronger.

345
00:29:35,598 --> 00:29:38,278
But Mason, they're below their cost basis on their Bitcoin purchases.

346
00:29:40,538 --> 00:29:44,298
It's such like an irrelevant, like, it's so ridiculous.

347
00:29:44,298 --> 00:29:47,618
Hasn't every Bitcoiner been below their cost basis? Isn't that a rite of passage?

348
00:29:47,618 --> 00:29:53,858
yes you like buy the top you're like always buying the top my dcas from you know the last year and a

349
00:29:53,858 --> 00:30:00,398
half are below my gauze basis on those yeah 100 and with you talking about mason you know saying

350
00:30:00,398 --> 00:30:05,378
that we're in a bear market um i think it was nick sabo that said that he thought the top was actually

351
00:30:05,378 --> 00:30:12,938
end of 2024 and if that's the case then we actually had an all-time high in october in a

352
00:30:12,938 --> 00:30:17,738
bear market, if that's true. And I, you know, I don't know if we've been in a bear market the

353
00:30:17,738 --> 00:30:22,878
whole time, but just because of debasement and inflation, somehow we managed to have a Bitcoin

354
00:30:22,878 --> 00:30:26,798
all time high during a bear market. I don't know. Has that ever happened?

355
00:30:28,238 --> 00:30:32,338
Yeah. I think what Zaba was saying, I think he measures it through Bitcoin gold.

356
00:30:32,338 --> 00:30:32,898
Exactly.

357
00:30:33,698 --> 00:30:40,438
If you look at that chart, we've been in a brutal drawdown, even worse than fiat terms,

358
00:30:40,438 --> 00:30:51,318
right? Yeah, we're at 13 ounces of Bitcoin. And if you look at it through like a multi-year,

359
00:30:53,398 --> 00:30:57,238
it looks like we went to the top of the range and kind of rejected. And now we're at the bottom of

360
00:30:57,238 --> 00:31:05,878
the range. You know, TA is whatever, but it's interesting to look at. And we're just kind of,

361
00:31:05,878 --> 00:31:12,598
of consolidating here. And I think if you're a Bitcoiner, you fundamentally believe Bitcoin is

362
00:31:12,598 --> 00:31:21,258
better than gold. And there's no reason that the Bitcoin market cap should be smaller than it,

363
00:31:21,258 --> 00:31:29,498
or it should be larger, right? Of course, that's going to take potentially decades to happen.

364
00:31:29,498 --> 00:31:33,078
just gold has a 5,000 year head start.

365
00:31:33,398 --> 00:31:37,338
But I believe someday Bitcoin will get there.

366
00:31:37,518 --> 00:31:41,478
And what a tremendous opportunity in gold terms.

367
00:31:43,218 --> 00:31:43,618
Yeah, for sure.

368
00:31:44,158 --> 00:31:45,518
Yeah, so this chart that we're looking at here.

369
00:31:46,418 --> 00:31:47,138
Go ahead.

370
00:31:47,578 --> 00:31:48,078
Go ahead, Dan.

371
00:31:48,318 --> 00:31:48,758
No, go ahead.

372
00:31:48,838 --> 00:31:49,038
Go ahead.

373
00:31:49,458 --> 00:31:50,538
Yeah, this chart we're looking at here,

374
00:31:50,598 --> 00:31:54,958
it's showing December 2024 peak in Bitcoin gold chart.

375
00:31:54,958 --> 00:32:02,818
And since then, we're trading very near the 2022, 2023 bottoms for the Bitcoin gold ratio.

376
00:32:04,258 --> 00:32:05,258
Historical bottoms.

377
00:32:06,778 --> 00:32:10,678
You know, I mean, that's just pretty amazing that that's the level there.

378
00:32:10,838 --> 00:32:16,878
Given the adoption that we've had and where we are, I mean, I just I would have never expected that.

379
00:32:16,978 --> 00:32:20,138
So in my view, I think that we're at the bottom.

380
00:32:20,138 --> 00:32:29,138
um you know it's surprising because gold finally got a run it's like we waited 20 years for it

381
00:32:29,138 --> 00:32:37,078
well i didn't wait 20 years because i don't own it yeah it's uh it's hard not to look at like 2020

382
00:32:37,078 --> 00:32:42,938
and think we're it seems like the setup is pretty similar to kind of like march 2020 ironically

383
00:32:42,938 --> 00:32:48,118
by the way you know you know what the comical part about gold is and with bitcoiners i know

384
00:32:48,118 --> 00:32:52,258
the Bitcoiners aren't a fan of gold, but one of the reasons why gold ran up is because central

385
00:32:52,258 --> 00:32:59,678
banks bought it. And there's a lot of Bitcoiners that are anti-central banks buying Bitcoin. But

386
00:32:59,678 --> 00:33:02,838
the only reason why the gold really got a bid is because the central banks bought it.

387
00:33:03,498 --> 00:33:10,238
So all those gold bugs are like, you need the central banks to buy your bags because nobody

388
00:33:10,238 --> 00:33:16,118
else was really doing it to drive the price higher. It wasn't your uncle, your crazy uncle,

389
00:33:16,118 --> 00:33:19,058
Jimmy in Nebraska going to buy gold.

390
00:33:19,178 --> 00:33:21,378
He wasn't the guy that caused the price of gold to spike higher.

391
00:33:22,018 --> 00:33:22,558
Come on, Mike.

392
00:33:22,698 --> 00:33:23,818
You don't own any gold.

393
00:33:24,318 --> 00:33:27,158
I don't own any gold at all.

394
00:33:27,538 --> 00:33:30,158
You're not crazy, Uncle Mike?

395
00:33:30,658 --> 00:33:31,398
No, I'm not crazy.

396
00:33:31,398 --> 00:33:32,638
Mike's Gen X, not a boomer.

397
00:33:32,898 --> 00:33:33,578
So he doesn't own gold.

398
00:33:33,598 --> 00:33:34,058
I'm not a boomer.

399
00:33:34,298 --> 00:33:35,238
I'm Gen X.

400
00:33:35,538 --> 00:33:37,238
So, Tim, you keep on switching hats.

401
00:33:37,278 --> 00:33:38,098
What's going on there?

402
00:33:38,478 --> 00:33:39,578
I'm on Team Bitcoin.

403
00:33:40,138 --> 00:33:41,018
You're on Team Bitcoin.

404
00:33:41,618 --> 00:33:41,838
Yeah.

405
00:33:42,618 --> 00:33:43,658
The relentless pursuit.

406
00:33:43,658 --> 00:33:44,478
Yeah, look.

407
00:33:44,478 --> 00:33:49,678
like i think the ms the bitcoin gold ratio is interesting right like remind me what percentage

408
00:33:49,678 --> 00:33:57,598
of total assets is gold i think it's um you know single digits right what of what gold's total

409
00:33:57,598 --> 00:34:05,518
assets worldwide wealth well yeah like gold's 35 trillion market cap yeah out of yeah gold's 35

410
00:34:08,158 --> 00:34:13,598
yeah it's debatable so so regardless right like let's just assume it's

411
00:34:13,598 --> 00:34:19,198
single percentages four or five percent so four percent four percent of gold so like i think that

412
00:34:19,198 --> 00:34:25,278
the bitcoin gold ratio is very difficult to say like that should trend upwards over time at all

413
00:34:25,278 --> 00:34:31,438
times right because like gold is still kind of a marginal portion of all worldwide wealth so if

414
00:34:31,438 --> 00:34:36,398
you're benchmarking two assets that make up small portions of total household wealth it's difficult

415
00:34:36,398 --> 00:34:40,878
like at that point you're kind of pair trading right whereas if you look at bitcoin adoption

416
00:34:40,878 --> 00:34:43,918
and Bitcoin structural increase in price relative to fiat,

417
00:34:44,018 --> 00:34:47,198
I do think that's more robust.

418
00:34:47,538 --> 00:34:49,958
I want to believe that there's a world in which

419
00:34:49,958 --> 00:34:52,178
the Bitcoin gold ratio really, really matters

420
00:34:52,178 --> 00:34:53,118
over long periods of time.

421
00:34:53,258 --> 00:34:54,698
But I just don't think it can

422
00:34:54,698 --> 00:34:57,718
because of how insignificant gold is

423
00:34:57,718 --> 00:34:59,038
actually relative to total wealth.

424
00:34:59,598 --> 00:35:02,258
Maybe a Bitcoin real estate ratio

425
00:35:02,258 --> 00:35:07,998
would be an interesting chart as well.

426
00:35:08,438 --> 00:35:09,058
So that's my point.

427
00:35:09,218 --> 00:35:10,538
There's just so much noise.

428
00:35:10,878 --> 00:35:17,518
yeah gold's gold's highly volatile relative to total assets in the world and it's it's actually

429
00:35:17,518 --> 00:35:23,258
eating assets right now so don't don't don't take gold or bitcoin underperformance relative to gold

430
00:35:23,258 --> 00:35:27,618
as some sign that it's like failing it just means gold's outperforming like that's that's the

431
00:35:27,618 --> 00:35:33,018
pointer is there any asset that's not manipulated that you can compare bitcoin to i don't think so

432
00:35:33,018 --> 00:35:35,018
right? Like everything is...

433
00:35:35,018 --> 00:35:36,418
You could say like M2

434
00:35:36,418 --> 00:35:38,538
adjusted

435
00:35:38,538 --> 00:35:39,518
fiat

436
00:35:39,518 --> 00:35:43,238
is my opinion the best baseline

437
00:35:43,238 --> 00:35:44,278
for like Bitcoin growth.

438
00:35:45,578 --> 00:35:45,738
Yeah.

439
00:35:46,638 --> 00:35:48,838
Like an M2 comparison? Like M2 adjusted?

440
00:35:50,358 --> 00:35:51,038
Yeah, you

441
00:35:51,038 --> 00:35:53,038
just take like it's fiat price, but then

442
00:35:53,038 --> 00:35:55,038
over time you adjust the

443
00:35:55,038 --> 00:35:55,758
fiat price

444
00:35:55,758 --> 00:35:59,098
relative to M2 money supply growth,

445
00:35:59,398 --> 00:36:01,058
right? So like

446
00:36:01,058 --> 00:36:02,878
an inflation adjusted Bitcoin price.

447
00:36:03,018 --> 00:36:07,098
this is essentially what you do but you use your own inflation and distant index which is m2 instead

448
00:36:07,098 --> 00:36:14,378
of cpi yeah that makes sense yeah and that you could argue that's kind of the cost of capital too

449
00:36:15,898 --> 00:36:22,138
right because like i'm on me so i could show that right now so exactly what yeah yes give me one

450
00:36:22,138 --> 00:36:27,818
second i'll just i'll pull it up and i'll just noodle before you get in there like um i mean if

451
00:36:27,818 --> 00:36:33,158
if the cost of capital of the S&P is like sub 10% over the past 20 years-ish, right? Then you've

452
00:36:33,158 --> 00:36:40,298
got M2 at like 7-ish percent. So there are real parallels there. Like M2, money supply growth is

453
00:36:40,298 --> 00:36:43,898
kind of the cost of capital. So you're subtracting out the cost of capital and Bitcoin's performance

454
00:36:43,898 --> 00:36:50,238
over the cost of capital. I think that's a pretty reasonable index. Yeah. So the easy way to do it

455
00:36:50,238 --> 00:36:56,618
in trading view, in the top, I just typed in BTCUSD. So I'm not sure which, maybe this is

456
00:36:56,618 --> 00:37:03,458
probably bit stamp. And then the, cause you get a longer time horizon with it. And then, and then

457
00:37:03,458 --> 00:37:10,418
the, and, and what it uses for the denominator right there is M2 from, from, from the federal

458
00:37:10,418 --> 00:37:15,498
reserve. So this adjusts for the money supply increasing. And it's kind of amazing that it

459
00:37:15,498 --> 00:37:21,198
basically just about touched the 200 week moving average. We're back to exactly, you know, you know,

460
00:37:21,198 --> 00:37:26,578
money supply adjusted there. The crazy part was, you know, I thought that when they did all this

461
00:37:26,578 --> 00:37:33,818
money printing that happened during COVID in 2020, I thought we would have rocketed up to a price

462
00:37:33,818 --> 00:37:41,018
of Bitcoin of well above 100,000 because we basically doubled, we're at whatever, almost

463
00:37:41,018 --> 00:37:49,938
38.7 trillion is where we are today. And we were at $20 trillion of US debt. That's not the same as

464
00:37:49,938 --> 00:37:54,998
money supply. But I would have thought that given the money printing, that we would have just

465
00:37:54,998 --> 00:37:59,178
rocketed way higher and that money just did not flow into Bitcoin for whatever reason in the last

466
00:37:59,178 --> 00:38:04,238
cycle. But it looks like in this cycle, you know, it continues going up. So adjusted for money supply,

467
00:38:04,878 --> 00:38:10,518
Bitcoin, it's amazing how it just tagged that metric. Well, actually it did.

468
00:38:13,038 --> 00:38:17,838
For some reason on the averages, it doesn't show it, even though you see it on the screen,

469
00:38:17,918 --> 00:38:23,178
it still shows it as zero, but it looks like it definitely touched the 200 week moving average.

470
00:38:23,178 --> 00:38:31,738
so yeah but one one thing i find interesting is trying to unpack you know what why are we here

471
00:38:31,738 --> 00:38:37,098
like what got us here right everything's going well uh everything's really positive and then

472
00:38:37,098 --> 00:38:41,518
people are speculating is it quantum fud is it you know what what's happened over the last couple

473
00:38:41,518 --> 00:38:47,758
of weeks and i think there are some of the people that i follow i mean jeff park and what what's

474
00:38:47,758 --> 00:38:53,818
going or the folks that are talking at NYDIG think that there's a over the last couple of weeks with

475
00:38:53,818 --> 00:38:59,058
the run up in commodities prices and the correlation between Bitcoin and other equities,

476
00:38:59,058 --> 00:39:03,558
there was a high correlation between a bunch of other equities and multi strategy funds.

477
00:39:04,258 --> 00:39:07,898
And when there's high correlation, you don't anticipate high correlation. You anticipate

478
00:39:07,898 --> 00:39:13,698
these instruments to move in a different fashion. So when there is high correlation,

479
00:39:13,698 --> 00:39:22,058
the default move in high correlation situations is to delever and de-risk.

480
00:39:23,198 --> 00:39:26,998
So with the increase in commodities prices, these multi-strat funds were

481
00:39:26,998 --> 00:39:32,538
deleveraging their balance sheets because of the correlation with software and AI and all these

482
00:39:32,538 --> 00:39:36,578
other things that are going on. And everybody's trying to wrap their heads around it. What happened?

483
00:39:36,578 --> 00:39:43,618
We were at 90K where we had 126K 90 days ago. We were at an all-time high 90 days ago.

484
00:39:43,698 --> 00:39:51,238
what's happened in the last nine days. From a structural perspective, nothing has changed with

485
00:39:51,238 --> 00:40:00,378
Bitcoin. Nothing. If anything, things are more positive today than they were 90 days ago.

486
00:40:01,498 --> 00:40:08,338
So yeah, it's an interesting landscape. I think one other thing, and I just saw this right before

487
00:40:08,338 --> 00:40:16,198
I came on here, I'm going to share my screen. And Dan, you reminded me of it is the like,

488
00:40:16,198 --> 00:40:22,718
like pricing Bitcoin and gold and thinking about the relativity of gold and to global total assets.

489
00:40:22,718 --> 00:40:27,638
And this kind of brings me back to this, like risk is mispriced globally, everywhere, across all

490
00:40:27,638 --> 00:40:34,318
assets, equities, bonds, everywhere. And I saw this right before I jumped on here, ironically,

491
00:40:34,318 --> 00:40:38,698
from Financial Times who doesn't care about Bitcoin or the Bitcoin-backed equity instruments.

492
00:40:39,658 --> 00:40:45,638
Blue Owl, which is a private credit fund, has permanently halted redemptions at private

493
00:40:45,638 --> 00:40:53,458
credit fund aimed at retail investors. Ouch. We're talking private. Okay. So this is private

494
00:40:53,458 --> 00:40:59,118
credit. So folks that retail investors that are interested in getting like 8, 9, 10% yield,

495
00:40:59,118 --> 00:41:04,258
They gave their money to Blue Owl for a private credit instrument.

496
00:41:05,198 --> 00:41:10,238
And now it's stuck there and they can no longer get the money out and they're not getting paid the yield.

497
00:41:11,318 --> 00:41:19,638
And that looks a bit sketchy relative to a digital credit instrument that's backed by 3x a pile of Bitcoin.

498
00:41:20,458 --> 00:41:24,818
You can calculate the risk 24-7, 365, fully liquid in a brokerage account.

499
00:41:24,818 --> 00:41:30,158
and you can move that money in and out whenever you want based on liquidity profiles.

500
00:41:30,158 --> 00:41:56,196
So it just fascinating to see this stuff It like this announcement came as part of a billion sale of credit assets across three of its funds So Blue Owl has had to liquidate funds and exposure and they halting withdrawals from retail investors You hate to see that right Like it doesn exist with digital credit

501
00:41:56,196 --> 00:42:03,676
Jeff, what's really interesting here, and this might be a little bit of like an Overton window shift.

502
00:42:04,716 --> 00:42:12,216
If you said to someone, you know, maybe two years ago, would you rather, and this is before the preferreds, of course,

503
00:42:12,316 --> 00:42:17,996
but would you rather have a credit instrument backed by SaaS cash flows or backed by Bitcoin?

504
00:42:18,816 --> 00:42:24,216
On average, I personally believe the people would pick the SaaS cash flows.

505
00:42:24,216 --> 00:42:26,256
That's something that they understand, right?

506
00:42:26,256 --> 00:42:27,896
And they're like, oh, software, right?

507
00:42:27,996 --> 00:42:31,676
Like high margin business growth, so on and so forth.

508
00:42:32,096 --> 00:42:39,996
But, you know, what we've seen in the equity markets recently with SaaS, what was it?

509
00:42:40,676 --> 00:42:43,796
300 billion wiped out in market cap.

510
00:42:44,116 --> 00:42:49,976
So insane, insane margin or multiple compression, right?

511
00:42:49,976 --> 00:43:03,836
And a lot of these private credit instruments, they're not all backed by SaaS companies, but they're all companies that can theoretically be disruptive, right?

512
00:43:03,916 --> 00:43:05,916
They have a moat that they have to maintain.

513
00:43:06,056 --> 00:43:12,456
They have some competitive scarcity that they need to, they have to compete.

514
00:43:12,596 --> 00:43:15,036
Whereas Bitcoin, you don't have to compete, right?

515
00:43:15,196 --> 00:43:16,776
It's just mathematical scarcity.

516
00:43:16,776 --> 00:43:18,376
And it's scalable.

517
00:43:18,376 --> 00:43:23,516
like all of these like i think that's something that kind of blew me away about this blue owl

518
00:43:23,516 --> 00:43:28,456
thing like if i were blue owl they probably have no idea this digital credit stuff is happening

519
00:43:28,456 --> 00:43:32,376
probably zero but if they did i would be trembling in my boots

520
00:43:32,376 --> 00:43:39,156
i would i would be wanting to figure out how to like what is going on with these high yield

521
00:43:39,156 --> 00:43:42,876
instruments over here they're what do you mean they're liquid i can hold them in a brokerage

522
00:43:42,876 --> 00:43:48,276
account all right they're backed by three x you know like transparent they're transparent and these

523
00:43:48,276 --> 00:43:55,956
products look like crap compared to something that you can literally observe all the time

524
00:43:56,836 --> 00:44:03,556
right completely different hey jeff i got a quick question on the strategy balance sheet

525
00:44:04,196 --> 00:44:10,756
how much is goodwill zero they don't carry any goodwill on the brown sheet it's zero zero you

526
00:44:10,756 --> 00:44:16,916
know my new term for anybody when i say to them is i'll be like i'll ask them by the way how much

527
00:44:16,916 --> 00:44:24,676
goodwill does that company carry on its balance sheet? Because goodwill means somebody has appraised

528
00:44:24,676 --> 00:44:31,236
a value for something that means zero. Yeah. Right? Yeah. It's so funny. I mean, intangible

529
00:44:31,236 --> 00:44:37,876
assets are another one on there. Those are like logos. You can value your logo as an intangible

530
00:44:37,876 --> 00:44:45,796
asset. And then accounts receivable is another one. Accounts receivable are not as certain as a

531
00:44:45,796 --> 00:44:50,416
a lot of people think. And that's a number that just kind of constantly gets massaged if you're

532
00:44:50,416 --> 00:44:55,336
a company that's bringing in cash flow because you've got more accounts receivable the next

533
00:44:55,336 --> 00:45:00,316
quarter than you did the last quarter. And what doesn't actually come through can kind of get

534
00:45:00,316 --> 00:45:05,396
swept under the rug and you don't actually see it. So there's several accounting things that you

535
00:45:05,396 --> 00:45:11,956
don't really see in quarterly financial statements that are opaque compared to an instrument that

536
00:45:11,956 --> 00:45:19,076
trade that trades 24, 7, 365. Oh my God. Somebody, somebody commented on my, uh, on one of my posts

537
00:45:19,076 --> 00:45:25,116
that were like, you know, Bitcoin, Bitcoin's dying and, uh, there's no demand. And my response was

538
00:45:25,116 --> 00:45:34,036
like, Bitcoin's traded $36 billion today. It's volume was greater than, was like 20% greater

539
00:45:34,036 --> 00:45:41,256
than Nvidia, more than double Apple, right? Bitcoin is more, had more volume than all of

540
00:45:41,256 --> 00:45:49,416
publicly traded securities like individually. It is more liquid than everything. That's interesting.

541
00:45:49,416 --> 00:45:53,336
It continues to be interesting. You look at strategy stock, right? They're the 250th largest

542
00:45:53,336 --> 00:46:02,296
stock, yet they're consistently top 25 largest publicly traded equity daily. Why? Because it's

543
00:46:02,296 --> 00:46:08,456
observable, right? You can calculate it. There's infinite trading pairs. MSTR is a proxy, is like

544
00:46:08,456 --> 00:46:11,956
like a leveraged proxy on Bitcoin. Now you can take different perspectives and the computers

545
00:46:11,956 --> 00:46:18,456
are constantly calculating risk and correlation and, you know, how it's, how it operates everywhere

546
00:46:18,456 --> 00:46:27,736
within the market. So. Hey, Jeff, I love your post about FYI. FDR has a higher enterprise value than

547
00:46:27,736 --> 00:46:34,276
Solana. Yeah, that, that was a bit of a surprise to me. Think about back to 2022, like bear market

548
00:46:34,276 --> 00:46:40,496
in 2022. I don't think that was the case. I don't think MSDR had a higher enterprise value than

549
00:46:40,496 --> 00:46:46,836
Solana. I think Solana was still like a, I don't know, $10 billion deal and strategy would hit what,

550
00:46:46,936 --> 00:46:53,016
a billion and a half in the bear market in 2022. So the, I didn't know that. And it hits me as,

551
00:46:53,016 --> 00:46:58,696
I mean, you hear the talking heads on CNBC talking about Ethereum and back in the day,

552
00:46:58,756 --> 00:47:03,676
at least Solana as though it's like the next Bitcoin. And so to see this comparison now,

553
00:47:03,676 --> 00:47:06,576
it's like, wait, question number one, what?

554
00:47:07,296 --> 00:47:07,996
Yeah, yeah.

555
00:47:08,336 --> 00:47:10,116
Well, it's what's a better,

556
00:47:10,776 --> 00:47:13,356
what has a larger total addressable market?

557
00:47:14,016 --> 00:47:15,136
MSTR or Solana?

558
00:47:18,856 --> 00:47:19,696
I don't know.

559
00:47:21,916 --> 00:47:23,876
Yeah, stable coins backwards, right?

560
00:47:24,776 --> 00:47:26,836
Yeah, like I think that the demand,

561
00:47:26,956 --> 00:47:30,136
the demand for the preferred instruments is massive.

562
00:47:30,136 --> 00:47:33,116
The total addressable market for the preferred instruments

563
00:47:33,116 --> 00:47:35,456
is astronomical, right?

564
00:47:35,476 --> 00:47:35,876
It's huge.

565
00:47:36,076 --> 00:47:39,276
I don't know, 100 trillion, 200 trillion.

566
00:47:39,596 --> 00:47:41,756
Yeah, I think the capital assets

567
00:47:41,756 --> 00:47:44,616
have way more value over time

568
00:47:44,616 --> 00:47:46,116
than these like infrastructure layers

569
00:47:46,116 --> 00:47:47,156
because infrastructure layers

570
00:47:47,156 --> 00:47:47,996
are extremely lightweight

571
00:47:47,996 --> 00:47:49,336
and pretty much interchangeable.

572
00:47:49,596 --> 00:47:50,896
Like it's tech, right?

573
00:47:50,956 --> 00:47:52,316
It's tech built on code.

574
00:47:52,916 --> 00:47:54,836
And there is some like network effects to it.

575
00:47:54,876 --> 00:47:56,376
So like I don't completely discount that.

576
00:47:56,376 --> 00:47:58,476
But it doesn't matter if the SDRC

577
00:47:58,476 --> 00:48:00,376
is trading on the NASDAQ,

578
00:48:01,116 --> 00:48:02,476
you know, on an exchange

579
00:48:02,476 --> 00:48:08,736
somewhere else 24-7 on Robinhood on their own, you know, whatever, internal trading on Ethereum,

580
00:48:09,056 --> 00:48:14,136
like buck trades on Solana backed by the asset. Like ultimately the capital network backed by

581
00:48:14,136 --> 00:48:21,296
energy is the Bitcoin. And then the US, like the enforcement comes from the SEC in terms of creating

582
00:48:21,296 --> 00:48:27,596
these securitized Bitcoin products, right? So SDRC being that. So you need the capital,

583
00:48:27,596 --> 00:48:32,216
You need the regulation to create the two forms of actual money.

584
00:48:33,196 --> 00:48:37,416
And then the infrastructure by which it trades just has to be kind of like secure.

585
00:48:37,896 --> 00:48:42,596
But it doesn't really matter how that happens, in my opinion.

586
00:48:43,296 --> 00:48:43,396
Yeah.

587
00:48:44,176 --> 00:48:44,696
Jeff.

588
00:48:44,816 --> 00:48:46,296
And I think we're going to make them.

589
00:48:47,376 --> 00:48:48,396
No, sorry.

590
00:48:49,896 --> 00:48:52,156
Can you – I shared my screen.

591
00:48:52,416 --> 00:48:53,656
Can we talk about this?

592
00:48:53,716 --> 00:48:55,876
This has to do with the recent buy.

593
00:48:55,876 --> 00:48:57,716
Is there any way we could zoom in?

594
00:48:58,516 --> 00:48:58,756
Oh, yeah.

595
00:48:59,076 --> 00:48:59,656
There we go.

596
00:49:00,096 --> 00:49:00,276
Yeah.

597
00:49:00,556 --> 00:49:03,496
So I created this with Claude.

598
00:49:03,816 --> 00:49:05,876
And I was thinking about two things.

599
00:49:05,936 --> 00:49:13,056
I was thinking about, all right, strategy is relentlessly accumulating Bitcoin, right, with over 700,000 Bitcoin.

600
00:49:13,156 --> 00:49:14,036
That's the orange line.

601
00:49:14,356 --> 00:49:16,996
And then you have the Bitcoin left to be mined.

602
00:49:17,976 --> 00:49:22,956
That's going down daily by 450 coins a day, right?

603
00:49:22,956 --> 00:49:52,876
And in my mind, I see these two lines and they're going to converge. So I asked Claude to create this for me. And I think it's pretty staggering. And when you project it out, I think it's going to be, you know, depending on market conditions or depending on how much equity they can sell, I think this would be around 2028, 2029, where these two converge and strategy will have more Bitcoin.

604
00:49:52,956 --> 00:50:00,276
than the release schedule for the rest of history.

605
00:50:00,856 --> 00:50:01,896
Till 2140.

606
00:50:02,436 --> 00:50:03,536
Yeah, 2140.

607
00:50:04,116 --> 00:50:06,936
And another really interesting thing here,

608
00:50:06,936 --> 00:50:14,656
I didn't realize we're 20 days from less than a million Bitcoin to be mined.

609
00:50:14,936 --> 00:50:16,316
That's going to happen in 20 days.

610
00:50:17,576 --> 00:50:18,776
We should throw a party.

611
00:50:19,976 --> 00:50:20,176
Yeah.

612
00:50:22,956 --> 00:50:52,476
Yeah. Wow. I'm just just thinking here. I mean, so we've got the we've got the having is 450 Bitcoin a day. Prior to that, it was 900 Bitcoin. People are saying like the new supply doesn't matter anymore. And I think that's bullshit because it really like it's still 450 Bitcoin at the end of the day. Right. Like what's 450 Bitcoin multiplied by what's today's price? 65,000. That's $29 million of new supply that's hitting the market every single day.

613
00:50:52,956 --> 00:51:01,716
And we know that the miners generally are selling this supply so they can utilize the capital for new infrastructure,

614
00:51:01,716 --> 00:51:06,296
you know, OPEX, CapEx, you know, whatever it may be.

615
00:51:06,836 --> 00:51:16,096
And you think back to last cycle, it was 900 Bitcoin a day times 365 days, four years.

616
00:51:16,216 --> 00:51:20,016
1.3 million Bitcoin came out newly minted last cycle.

617
00:51:20,016 --> 00:51:23,956
and let's just say an average price of $40,000.

618
00:51:24,476 --> 00:51:31,736
That's $52 billion of capital that needs to get eaten up of new supply

619
00:51:31,736 --> 00:51:32,736
that happened last cycle.

620
00:51:32,996 --> 00:51:36,256
And it's probably a bit higher this cycle.

621
00:51:37,176 --> 00:51:40,616
So that's still serious capital that needs to get eaten up.

622
00:51:40,616 --> 00:51:45,376
That's assuming no historical holders are exiting Bitcoin

623
00:51:45,376 --> 00:51:46,516
and moving on to other things.

624
00:51:47,556 --> 00:51:48,556
It's a lot of capital.

625
00:51:48,556 --> 00:51:56,956
also what's what's crazy um when you realize how much bitcoin this is right and and you kind of

626
00:51:56,956 --> 00:52:02,216
look at any projection of how bitcoin is going to be whether it's the power law and then you

627
00:52:02,216 --> 00:52:12,016
look at mstr's market cap mstr is still so small like nvidia trades in mstr every like every day

628
00:52:12,016 --> 00:52:16,956
every day, just like a boom, boom, like, like it's nothing like a few percent.

629
00:52:19,456 --> 00:52:26,196
Yeah. That relativity is so important. The, the, uh, oh, shoot Mason, I got rid of the wrong

630
00:52:26,196 --> 00:52:31,756
screen here. I want to get rid of that one. Yeah. That relativity is important. Yeah. You think

631
00:52:31,756 --> 00:52:36,156
about size and scale. Like why does it, why does Nvidia trade like that? What, why do people hold

632
00:52:36,156 --> 00:52:41,956
Nvidia? Why do people hold equity? Why do people hold any of these stocks? They don't pay a dividend.

633
00:52:42,016 --> 00:52:51,216
right this has been kind of my argument from the very beginning like they why do you why back in

634
00:52:51,216 --> 00:52:56,036
2021 when i was trying to figure out like where to park my money i you know ended up getting a house

635
00:52:56,036 --> 00:53:01,716
and uh and then i was like okay i need to find a place to park my money i needed to store value

636
00:53:01,716 --> 00:53:10,736
i was making money and i wanted to store it and i wanted to save it for later and so i was thinking

637
00:53:10,736 --> 00:53:17,536
okay, store of value, inherently thinking about risks of like mag seven, like, okay,

638
00:53:17,536 --> 00:53:22,016
what can happen here with these companies? Like, why do people hold these companies? Like

639
00:53:23,216 --> 00:53:27,136
Apple, for example, I used to have a coworker that told me, oh, I, every time I get a paycheck,

640
00:53:27,136 --> 00:53:32,256
I just put, you know, 8% of it into Apple because, you know, he pulled up his iPhone. He was like,

641
00:53:32,256 --> 00:53:36,336
I just treat it as a savings account. That's how he, that was how he invested. And that was his

642
00:53:36,336 --> 00:53:43,136
mindset and like i'm sure he still does it to this day and it just didn't feel right to me and

643
00:53:43,136 --> 00:53:48,816
so you think about okay store value bitcoin is actually scarce apple's not scarce uh

644
00:53:48,816 --> 00:53:58,296
bitcoin can likely withstand a company like apple over time and it trades at 1xpe like there's no

645
00:53:58,296 --> 00:54:02,456
there's no multiple bitcoin doesn't trade in a multiple it is what it is it's commodity

646
00:54:02,456 --> 00:54:07,696
and then you think about a company holding that commodity what's that company worth like how do

647
00:54:07,696 --> 00:54:12,316
you value this company like and mike we talk we talk about this all the time like how do you value

648
00:54:12,316 --> 00:54:20,296
a store of value equity that's got more store of value a more of the highest value store of value

649
00:54:20,296 --> 00:54:25,036
than any other company on the planet how do you value that it's tricky super tricky

650
00:54:25,036 --> 00:54:30,496
i think it's higher i think it's a lot higher i think it's higher than everything else i think it's

651
00:54:30,496 --> 00:54:37,996
It's way higher than everything else and likely an order of magnitude, maybe not order of magnitude, but like there's going to be a gap.

652
00:54:38,216 --> 00:54:41,936
Like right now, there's a gap between NVIDIA and I think the next closest is Apple.

653
00:54:42,096 --> 00:54:45,116
I think it's like four and a half trillion versus three point eight trillion.

654
00:54:45,116 --> 00:54:59,716
But I think there should be theoretically a gap even higher between, in my opinion, MSTR and whatever the highest is because of that store of value nature and the trend of the US dollar over time.

655
00:55:00,496 --> 00:55:09,416
And thinking about that possibility for disruption, you know, with your buddy buying Apple, it's like, okay, they sell phones or they make phones.

656
00:55:09,596 --> 00:55:10,796
Well, they actually don't make phones.

657
00:55:11,056 --> 00:55:14,416
They write the code that's going to go onto the phones and then they send those.

658
00:55:15,236 --> 00:55:21,296
I can't remember which podcast I was watching, but they were like, no, they actually send that to someone else and somebody else makes the phones.

659
00:55:21,436 --> 00:55:23,376
Like somebody makes that in China somewhere.

660
00:55:23,376 --> 00:55:32,756
And so if your whole business model is on the software that goes onto the hardware, that can be disrupted and that is being disrupted.

661
00:55:33,356 --> 00:55:37,336
You know, like all of software is getting disrupted. People are vibe coding, you know, apps.

662
00:55:38,356 --> 00:55:45,596
So that, you know, the possibility for these companies for disruption, I think, is very high.

663
00:55:47,856 --> 00:55:53,356
Yeah, it's funny. I've seen a lot of feedback from people that have had these like high level coding jobs.

664
00:55:53,376 --> 00:55:54,876
and they're like, oh, you know, a vibe.

665
00:55:54,876 --> 00:55:57,376
They're just talking shit about vibe coding and they're like, oh,

666
00:55:57,836 --> 00:56:01,476
somebody vibe coding isn't going to take over some of these software things.

667
00:56:01,476 --> 00:56:03,676
Like it's you still need some technical capability.

668
00:56:04,316 --> 00:56:08,776
And my response to that is like, we're just this thing is just

669
00:56:08,776 --> 00:56:10,776
we're just getting started for now.

670
00:56:10,776 --> 00:56:14,576
Like, yeah, well, this is just getting started like it is on.

671
00:56:14,836 --> 00:56:16,536
It is on a trajectory to get way better.

672
00:56:16,536 --> 00:56:19,636
Think about what we know of the vibe coding software now

673
00:56:20,216 --> 00:56:22,116
and where it's actually where it's truly at.

674
00:56:22,116 --> 00:56:27,876
it's true like it's the worst it'll ever be right we don't know like the people that are actually at

675
00:56:27,876 --> 00:56:32,316
the forefront of what these models are doing like we're probably actually six months behind

676
00:56:32,316 --> 00:56:41,776
jeff i i had a i had a fun um like mental exercise because if you've been using ai from from the

677
00:56:41,776 --> 00:56:49,756
beginnings it's like chat gbt1 you're able to do this so i want you to imagine the ai as um

678
00:56:49,756 --> 00:56:58,716
um its capability imagine it as a person or a group of people right so like I think when

679
00:56:58,716 --> 00:57:03,516
when chat gbt first came out like it was like a fast high schooler it was like a high schooler

680
00:57:03,516 --> 00:57:11,316
that could type really fast and then you know the next model was maybe like a a college student or

681
00:57:11,316 --> 00:57:17,756
two that that could you know write a paper and imagine them at like full speed like 3x

682
00:57:17,756 --> 00:57:28,676
spits out a paper. And now with, with, uh, Sonnet or, or Opus 4.6, it's like, I have like a,

683
00:57:28,676 --> 00:57:36,176
a team of 10 brilliant engineers, software engineers, right. And they're going so fast.

684
00:57:36,176 --> 00:57:44,796
And if you think about like, what would it cost to, to hire 10 brilliant software engineers

685
00:57:44,796 --> 00:57:51,556
to, you know, at your command, write code for you and do it very fast. First of all,

686
00:57:51,556 --> 00:57:56,696
it's not even feasible, but secondly, it's way more than $20 a month.

687
00:57:57,956 --> 00:58:03,256
Oh yeah. Yeah. Yeah. We've, we, let's strive. We've spent like, I don't know,

688
00:58:03,576 --> 00:58:09,056
four or $500 of credits on these like models, creating dashboards and stuff. And it's just

689
00:58:09,056 --> 00:58:13,976
Like the the output, the value of the output that we've gotten out of it is just.

690
00:58:15,236 --> 00:58:17,096
Hundreds of thousands of dollars, like

691
00:58:18,436 --> 00:58:21,396
might maybe even more like I'm just maybe millions.

692
00:58:21,476 --> 00:58:26,576
I'm just imagining like how like four years ago, the amount of time it would have taken

693
00:58:26,916 --> 00:58:31,776
to get the output that we that like we're able to get in a week or a day.

694
00:58:32,156 --> 00:58:35,996
I've got my my analyst working on this stuff and he comes back to me later in the day.

695
00:58:35,996 --> 00:58:36,696
He's like, oh, it's done.

696
00:58:36,696 --> 00:58:37,536
Check it out.

697
00:58:37,536 --> 00:58:41,216
And I'm just consistently blown away, like consistently.

698
00:58:41,816 --> 00:58:45,476
And yeah, I mean, my old my old company, we used to have these

699
00:58:46,476 --> 00:58:49,816
like pretty sophisticated reinsurance models where we'd go in,

700
00:58:49,816 --> 00:58:53,016
we take an entire insurance company's portfolio, like all of the data

701
00:58:53,016 --> 00:58:57,296
of all of the policyholders, all of the claims, and we go shove it into this computer,

702
00:58:57,296 --> 00:59:00,816
this external computer that sat on a cloud drive, and we'd run that portfolio

703
00:59:00,816 --> 00:59:04,556
through a catastrophe simulations like ten thousand simulations

704
00:59:04,556 --> 00:59:07,356
of hurricanes running over Florida and Georgia and all this stuff.

705
00:59:08,176 --> 00:59:10,896
And then we take that output, which would be a massive file

706
00:59:12,276 --> 00:59:15,696
of all these different perils running, running all this information.

707
00:59:15,696 --> 00:59:19,956
And then we take that output huge file and we shove it into this other piece of software

708
00:59:19,956 --> 00:59:24,296
and we'd be able to create structured tranches on on that data

709
00:59:25,036 --> 00:59:28,656
and then identify what the what the output is outside of it.

710
00:59:28,656 --> 00:59:32,216
So you'd see like, OK, your expected loss on each one of these tranches is X.

711
00:59:32,216 --> 00:59:35,916
And you can see how that changes depending on how you structure the reinsurance.

712
00:59:36,676 --> 00:59:47,936
That platform took a decade to build and probably $25 million of employee work, five or seven people dedicated to it for a decade.

713
00:59:48,116 --> 00:59:49,516
It took forever.

714
00:59:50,756 --> 00:59:54,096
And the type of stuff that we're building, we could do it in a week.

715
00:59:54,976 --> 00:59:56,696
And it's insane.

716
00:59:57,096 --> 00:59:59,396
The level of progress is insane.

717
00:59:59,396 --> 01:00:07,296
And even just thinking about the catastrophe models, like we used to license this model as RMS or AIR, VerRisk.

718
01:00:07,456 --> 01:00:08,736
These are publicly traded companies.

719
01:00:08,856 --> 01:00:10,096
VerRisk is a publicly traded company.

720
01:00:11,636 --> 01:00:19,136
They have these models that have data and information where you can run these catastrophe simulations.

721
01:00:20,096 --> 01:00:27,676
I think our company paid, oh man, we probably paid like $2.5 million to $5 million a year just to license that model.

722
01:00:29,396 --> 01:00:33,156
And like I'm imagining somebody could make that.

723
01:00:33,156 --> 01:00:35,396
Yes. So I'm just going to make it.

724
01:00:35,396 --> 01:00:38,696
I'm just going to make it and launch it.

725
01:00:38,696 --> 01:00:40,776
And just like then it's then it's there.

726
01:00:40,776 --> 01:00:42,836
It's like, oh, here's open source RMS.

727
01:00:42,836 --> 01:00:44,576
Like here's open source AIR.

728
01:00:44,576 --> 01:00:49,576
And like the incentive is there.

729
01:00:49,576 --> 01:00:51,836
Like it's just not very.

730
01:00:51,836 --> 01:00:54,396
I don't think it's very difficult to do something like that.

731
01:00:54,396 --> 01:00:58,676
And that's I mean, that's going to completely change how all of

732
01:00:58,676 --> 01:01:04,516
companies interact uh the computers are going to demand and this is something dan i think you brought

733
01:01:04,516 --> 01:01:08,356
up a couple weeks ago it's like people are going to turn into idea guys like the people that are

734
01:01:08,356 --> 01:01:17,316
just doers like you're gone senior idea guy junior idea guy idea analyst you know like you're paid to

735
01:01:17,316 --> 01:01:28,756
have new ideas that's it yeah yeah i think i think the the past few weeks month to me uh you know

736
01:01:28,756 --> 01:01:38,116
jeff you always say risk is misprice and i i think the the market is beginning to appreciate that with

737
01:01:38,116 --> 01:01:43,876
you know the speed of disruption from ai in certain sectors uh but even sectors that you

738
01:01:43,876 --> 01:01:47,416
You wouldn't think of some financials got hit.

739
01:01:48,256 --> 01:01:49,756
Trucking got hit, right?

740
01:01:50,656 --> 01:01:56,096
From, you know, the potential of Tesla doing self-driving.

741
01:01:56,876 --> 01:01:59,216
But there are –

742
01:01:59,216 --> 01:02:02,156
Sorry, trucking got hit by a truck.

743
01:02:02,376 --> 01:02:02,716
That's all.

744
01:02:02,716 --> 01:02:03,156
Yeah.

745
01:02:04,016 --> 01:02:06,856
There's so much capital.

746
01:02:06,856 --> 01:02:17,956
There's so much resources, wealth, value that is reliant on business models that may not

747
01:02:17,956 --> 01:02:19,616
work in the future.

748
01:02:19,616 --> 01:02:38,114
And a lot of those companies if I them the easiest thing for them to do is just come into Bitcoin right you can take whatever cash they have and bitcoin is shelter they they in the storm in in the battle of like the competitive

749
01:02:39,074 --> 01:02:49,074
uh marketplace for providing value and if they have any form of capital the way that they could

750
01:02:49,074 --> 01:02:58,354
ride this out and actually prosper from the AI productivity is by going into Bitcoin and maybe

751
01:02:58,354 --> 01:03:04,994
like laying low and figuring out what is next. So I could see that as a potential adoption wave

752
01:03:06,434 --> 01:03:14,514
in the next few years. I'm just going to share my screen here. Okay, let's explore it, right?

753
01:03:14,514 --> 01:03:20,274
so outside of the s p 500 there are thousands of companies in the market right outside of the s p

754
01:03:20,274 --> 01:03:25,074
500 you're looking at still like 16 billion dollar companies these are legit companies right you're

755
01:03:25,074 --> 01:03:31,154
talking to hyatt hotels etc but how many no name how many of these no-name companies like f5

756
01:03:31,794 --> 01:03:38,994
right it was like f5 is like a security uh like a security company that i used to use f5 to like

757
01:03:38,994 --> 01:03:44,834
get on my computer and citrix web apps or something like that and like okay that's a 15 billion dollar

758
01:03:44,834 --> 01:03:50,194
company i i i don't i don't know what they're doing like does that get eviscerated what's their

759
01:03:50,194 --> 01:03:54,434
balance sheet look like are they strong like that are they disrupted and you start to look at some

760
01:03:54,434 --> 01:04:01,074
of these companies and like who are these these are these are several publicly traded

761
01:04:03,474 --> 01:04:08,434
like decently large companies 15 billion dollars is nothing to slouch out i mean that's probably

762
01:04:08,434 --> 01:04:16,674
anywhere from 200 to you know thousands of employees where like do these things just get

763
01:04:16,674 --> 01:04:26,114
eviscerated i have no idea reinsurance group of america that's funny transunion mason and i are

764
01:04:26,114 --> 01:04:31,314
working on our true north presentation i just want to like allude to it so yeah we compare the time

765
01:04:31,314 --> 01:04:38,034
to 100 million arr across companies over history and the first company the fastest company 10 years

766
01:04:38,034 --> 01:04:44,034
ago to 100 million ARR with Salesforce. And it took about, Mason, what was it? It was like five

767
01:04:44,034 --> 01:04:49,314
years, something like that, right? It was quite a while. And now, right now, the fast company to

768
01:04:49,314 --> 01:04:57,174
100 million ARR is lovable in eight months. And we overlay that with the average lifespan of the

769
01:04:57,174 --> 01:05:06,594
S&P 500 corporation. And that has dropped from in 1964 to 33 years to a projected 12-year average

770
01:05:06,594 --> 01:05:08,454
lifespan in 2027. 12-year

771
01:05:08,454 --> 01:05:10,254
lifespan for S&P 500 company?

772
01:05:11,214 --> 01:05:12,614
Yeah. So when you think about

773
01:05:12,614 --> 01:05:13,694
these things, this is

774
01:05:13,694 --> 01:05:15,914
the data behind disruption.

775
01:05:16,574 --> 01:05:18,434
So yeah, you can't bet any of these things will be around.

776
01:05:19,054 --> 01:05:20,574
Salesforce was 10 years,

777
01:05:20,834 --> 01:05:22,294
not five. 10 years.

778
01:05:22,554 --> 01:05:22,954
Thanks, Mason.

779
01:05:25,434 --> 01:05:26,034
So lifespan

780
01:05:26,034 --> 01:05:28,694
being included in the S&P

781
01:05:28,694 --> 01:05:30,534
500 or literally dying?

782
01:05:31,034 --> 01:05:32,494
Gone? No longer

783
01:05:32,494 --> 01:05:33,174
exists anymore?

784
01:05:33,174 --> 01:05:39,894
or like it's listed on the s&p so okay listed on the s&p so if they fall out of the index

785
01:05:39,894 --> 01:05:45,194
then yeah technically okay so let's look at falling out of the index means they didn't perform

786
01:05:45,194 --> 01:05:50,794
right and lovable is literally a no code ai app builder

787
01:05:50,794 --> 01:05:57,014
no code which its business model is probably eviscerated

788
01:05:57,014 --> 01:06:06,774
probably and you you look at okay so this is page four let's go to page five which is uh

789
01:06:06,774 --> 01:06:12,054
company 400 through 500 and you think about like how this may change over time so this is

790
01:06:12,054 --> 01:06:16,854
to your point like saying the date of disruption how many of these are going to turn over why would

791
01:06:16,854 --> 01:06:24,454
they turn over um and which ones are ripe for disruption how many companies are going to get

792
01:06:24,454 --> 01:06:32,034
disrupted in the middle of their IPO? Just, hey, IPO and their business has already been disrupted

793
01:06:32,034 --> 01:06:37,854
and replaced. Oh, man. It's probably going to be pretty rough for IPOs out there unless

794
01:06:37,854 --> 01:06:44,594
you're, I think you got to get in before open AI, like whenever open AI

795
01:06:44,594 --> 01:06:52,874
does their IPO. I mean, that's going to probably be, in my opinion, the top of whatever this AI

796
01:06:52,874 --> 01:07:01,234
rush is because it's going to be so big like it's going to be the biggest IPO out there I don't know

797
01:07:01,234 --> 01:07:06,334
if I want to follow that like that's going to take that's going to take so much capital out of the

798
01:07:06,334 --> 01:07:12,354
ecosystem right this IPO coming like this company coming public will take so much so much capital

799
01:07:12,354 --> 01:07:16,574
out of the ecosystem it's going to be so long before a company that's that large goes through

800
01:07:16,574 --> 01:07:25,694
another IPO. Like what's the next one? Well, SpaceX is an IPO. Apparently. Or is that going

801
01:07:25,694 --> 01:07:31,454
to get rolled into, right? XAI goes into SpaceX, SpaceX goes into Tesla. That's like every Tesla

802
01:07:31,454 --> 01:07:35,814
holder's wet dream, right? It's like if you just become the mega conglomerate of everything Elon

803
01:07:35,814 --> 01:07:41,614
Musk, it's like an Elon ETF. Right? A boring company gets rolled in, Neuralink gets rolled

804
01:07:41,614 --> 01:07:48,334
in it's the elon etf it's like berkshire um yeah i mean you look at these companies like the top the

805
01:07:48,334 --> 01:07:57,454
the lowest so ranked from 400 to 500 of top publicly traded companies and i mean

806
01:07:59,054 --> 01:08:05,534
yeah half of these can probably just flop out of there blue owl look blue owl is probably in

807
01:08:05,534 --> 01:08:11,994
the S&P 500 and that was the company we just brought up literally permanently halting redemptions

808
01:08:11,994 --> 01:08:17,474
at private credit fund aimed at retail investors. Then you look at the strategy is a $40 billion

809
01:08:17,474 --> 01:08:20,874
company with these perpetual preferred equity instruments that are publicly traded and they

810
01:08:20,874 --> 01:08:25,454
got two and a half years of dividend payable in cash and they're not included in this.

811
01:08:27,034 --> 01:08:31,394
Crazy. Tons of people's retirements are just plowing into these companies.

812
01:08:31,394 --> 01:08:34,394
And they just don't even know. By default because it's the S&P 500.

813
01:08:34,394 --> 01:08:37,194
Dick's Sporting Goods. I went there this weekend.

814
01:08:38,474 --> 01:08:40,054
I was talking to Grant earlier today.

815
01:08:40,534 --> 01:08:45,514
And yeah, SGRC is going to like, you know how we talk about Bitcoin as a binary outcome?

816
01:08:46,074 --> 01:08:56,814
I mean, SGRC is also a binary outcome because they have enough dividend payments right now to cover kind of the majority of the human lifespan, especially if Bitcoin goes up a little bit.

817
01:08:58,234 --> 01:09:02,434
And so ultimately, you know, these products are money good for our lifetimes.

818
01:09:02,434 --> 01:09:07,214
and people are going to want to extract the high yield out of them for the foreseeable future.

819
01:09:07,214 --> 01:09:12,214
And so every year the dividends continue to get paid, considering SDRC has only been around for

820
01:09:12,214 --> 01:09:16,254
whatever it is, six months or so, like they get stronger. The credit quality of an instrument,

821
01:09:17,274 --> 01:09:20,514
you know, I don't actually think it's the right framework for assessing the credit quality of

822
01:09:20,514 --> 01:09:26,554
the instrument, but it's how people are naturally bred to understand risk, is that every year the

823
01:09:26,554 --> 01:09:31,394
dividends get paid, it's more likely that the next year the dividend will get paid again in people's

824
01:09:31,394 --> 01:09:36,974
lines. And that's how big institutions even work, unfortunately. It's that they'll see a three-year

825
01:09:36,974 --> 01:09:39,754
track record, a four-year track record, a five-year track record, a six-year track record. I was

826
01:09:39,754 --> 01:09:45,974
talking to Dylan and Claire about this today. And at that period of time, one, what's the interest

827
01:09:45,974 --> 01:09:53,534
rate on stretch? I think it's a lot lower than it is now. And two, how big is stretch? And considering

828
01:09:53,534 --> 01:09:58,714
it's stable and fully liquid, there's no other products in the market that you can swap in and

829
01:09:58,714 --> 01:10:02,474
out of with millions and millions of dollars liquidity and you kind of bet on your principle

830
01:10:02,474 --> 01:10:07,994
being stable amidst changing interest rate market conditions so you know nothing nothing really beats

831
01:10:07,994 --> 01:10:14,474
that other than a money market fund right now capital will flow into serc there's no doubt

832
01:10:14,474 --> 01:10:23,114
capital will flow into serc so here's here's something interesting this is uh this is i just

833
01:10:23,114 --> 01:10:29,994
pulled up Twilio to just do a little balance sheet analysis here. So Twilio is what? They're a $16.9

834
01:10:29,994 --> 01:10:39,114
billion company. The earnings for 2025, they made $110 million. A couple of years ago in 2022,

835
01:10:39,114 --> 01:10:48,554
they lost a billion dollars. They have, what is this? They have about technically $7.8 billion

836
01:10:48,554 --> 01:10:53,994
dollars in net assets so that's assets minus liabilities so let's go double check it and grain

837
01:10:53,994 --> 01:10:59,674
you're gonna love this so you've got 9 billion in assets but really 5.2 billion of that 9.7 billion

838
01:10:59,674 --> 01:11:07,674
is goodwill so really it's what 4.5 billion dollars of assets and

839
01:11:07,674 --> 01:11:14,394
and 613 million of accounts receivable.

840
01:11:15,474 --> 01:11:17,754
And so you look at that ratio.

841
01:11:18,074 --> 01:11:19,254
I mean, is that disruptible?

842
01:11:20,214 --> 01:11:20,894
Probably.

843
01:11:23,034 --> 01:11:25,234
You know, I think that's where we,

844
01:11:26,094 --> 01:11:28,114
the consensus right now from TradFi

845
01:11:28,114 --> 01:11:31,194
is that companies are valued on cashflow.

846
01:11:31,934 --> 01:11:34,594
So goodwill, which is just,

847
01:11:34,874 --> 01:11:36,594
goodwill is just goodwill.

848
01:11:36,594 --> 01:11:41,874
I mean, basically, it's a value of zero that we're ascribing a value to it.

849
01:11:42,734 --> 01:11:48,034
And they just don't use that when they determine the credit worthiness of a company.

850
01:11:48,154 --> 01:11:49,694
They just base it on the cash flows.

851
01:11:50,874 --> 01:11:56,294
And once that shifts, people will be like, oh, there's a company that had four or five

852
01:11:56,294 --> 01:11:58,134
or $10 billion of goodwill.

853
01:11:58,534 --> 01:12:01,214
Why did we just view that as a valuation?

854
01:12:01,394 --> 01:12:02,674
It was because of the cash flow.

855
01:12:03,174 --> 01:12:05,234
And eventually, this is going to change.

856
01:12:05,234 --> 01:12:11,934
and and i think i think for us is that when it does change you know i would tell us you guys we

857
01:12:11,934 --> 01:12:16,714
should not gloat that much when it happens because we'll be like well we told you so

858
01:12:16,714 --> 01:12:23,454
and and we're gonna wake up one day and and it's gonna happen so um maybe we should do the uh

859
01:12:23,454 --> 01:12:29,594
predictions for strategy world coming up uh yeah real quick let's talk about the true north event

860
01:12:29,594 --> 01:12:34,854
so we've got true north event coming up next week that will be on monday february 23rd we'd love to

861
01:12:34,854 --> 01:12:39,674
see people there. We've got a quick schedule. Let's run through this. We'll make this bigger

862
01:12:39,674 --> 01:12:47,354
so everybody can see it. Maybe we'll put it here. Boom. Okay. Event schedule. So we're

863
01:12:47,354 --> 01:12:51,514
going to have intro and groundwork with the True North team. Dan and Mason, they've alluded

864
01:12:51,514 --> 01:12:56,094
to this. They've got a presentation. They've called it the gravity trade. I've already seen

865
01:12:56,094 --> 01:13:00,494
it. It looks great. Look forward to seeing that. Then there will be a break. And then

866
01:13:00,494 --> 01:13:05,574
we'll get into our segments that we're going to be speaking with industry experts. We've got a

867
01:13:05,574 --> 01:13:11,054
macro panel where James Lavish and Pierre Richard will be on the macro panel. Dan will be interviewing

868
01:13:11,054 --> 01:13:15,714
them and participating in part of that conversation. Next one, digital credit permeating traditional

869
01:13:15,714 --> 01:13:21,214
finance. So myself and Matt Gannon from Barclays. So we have a bulge bracket bank that will be

870
01:13:21,214 --> 01:13:25,454
involved in this. And then I think we are going to have one more guest on that one as well. We're

871
01:13:25,454 --> 01:13:30,274
going to be talking about from Barclays perspective, from a banking perspective, how is this

872
01:13:30,274 --> 01:13:35,494
industry evolving? How do the conversations go? What's happening on that side? Next, Bitcoin at

873
01:13:35,494 --> 01:13:38,854
scale. We've got a grain of salt, Ben Workman. We've got somebody else from the industry that

874
01:13:38,854 --> 01:13:46,254
we're working on there to talk about what's happening just generally with how do you buy

875
01:13:46,254 --> 01:13:49,974
hundreds of millions of dollars of Bitcoin? Where does it go? How do you interact with

876
01:13:49,974 --> 01:13:55,174
the trading partners? Those types of things. The next section on where's the Bitcoin Lebowski?

877
01:13:55,174 --> 01:13:58,094
Let's talk to Anchorage Digital and BitGo.

878
01:13:58,214 --> 01:14:02,854
So we've got Manuel Andriani and Mike Belshi from two custodians.

879
01:14:02,954 --> 01:14:03,694
We can talk about trading.

880
01:14:03,794 --> 01:14:04,634
We can talk about custody.

881
01:14:05,094 --> 01:14:06,994
How does institutional grade custody work?

882
01:14:07,734 --> 01:14:09,354
BitGo is a publicly traded company.

883
01:14:10,514 --> 01:14:12,374
And that is evolving.

884
01:14:12,494 --> 01:14:14,334
It's a very fascinating conversation.

885
01:14:15,314 --> 01:14:18,434
And then lastly, Bull, an institutional case for Amplified Bitcoin.

886
01:14:19,134 --> 01:14:22,034
And it'll be Matt Hogan and Matt Cole talking about,

887
01:14:22,034 --> 01:14:28,154
let's get everybody bulled up on Amplified Bitcoin and digital credit and the future of this

888
01:14:28,154 --> 01:14:33,754
landscape. So it will be a ton of fun. I look forward to seeing everybody there. If you do not

889
01:14:33,754 --> 01:14:38,934
have tickets yet, there are still some tickets available. I think there are 25 tickets available.

890
01:14:39,614 --> 01:14:43,074
Check it out. It's in the chat. Be part of the True North side event experience.

891
01:14:43,394 --> 01:14:46,734
In the evening, we also have an event from 8 to 11 p.m. We've got a party.

892
01:14:47,394 --> 01:14:51,694
There will be food. There will be drinks and networking with everybody that's attended the

893
01:14:51,694 --> 01:14:57,274
event, please check it out. And if you've got any questions, feel free to reach out and we are,

894
01:14:57,514 --> 01:15:04,114
we're happy to chat right on. That's all I've got. Maybe over to you,

895
01:15:04,754 --> 01:15:10,094
grain strategy world. What are we thinking? Oh, he's gone to Boston.

896
01:15:11,214 --> 01:15:16,334
I think he wanted to do predictions. Prediction. I mean, I'm, I'm thinking, uh,

897
01:15:16,754 --> 01:15:21,674
they announced the Canadian one's going to be struck, which, you know, Canada rhymes with

898
01:15:21,674 --> 01:15:22,114
Canuck.

899
01:15:23,254 --> 01:15:25,554
So it's got to be STRU.

900
01:15:25,914 --> 01:15:26,834
Strike and struck.

901
01:15:28,494 --> 01:15:29,054
Yes.

902
01:15:29,234 --> 01:15:31,434
So strategy world is from,

903
01:15:31,514 --> 01:15:32,194
what is this?

904
01:15:32,334 --> 01:15:33,534
It's from Tuesday.

905
01:15:37,034 --> 01:15:40,594
There's an opening ceremony on Monday and then it's from Tuesday through

906
01:15:40,594 --> 01:15:41,194
Thursday.

907
01:15:41,314 --> 01:15:43,034
I think most of the events are Tuesday and Wednesday.

908
01:15:43,414 --> 01:15:46,014
There is a big keynote on Tuesday from Fong.

909
01:15:46,154 --> 01:15:49,474
And then Michael Saylor comes in to talk about digital credit at 1 PM.

910
01:15:49,474 --> 01:15:53,854
There are several other things that are happening throughout the day. So bank's perspective of

911
01:15:53,854 --> 01:15:59,894
investing in digital credit. There is executive panels from TD Ameritrade. Bitcoin is entering

912
01:15:59,894 --> 01:16:06,694
the capital markets era. Very interesting equity analyst roundtable. So talking about

913
01:16:06,694 --> 01:16:12,234
strategy, TD Ameritrade benchmark. It'll be a very interesting perspectives all the way around.

914
01:16:15,374 --> 01:16:18,094
Mike, do you have some predictions? What do you think is happening here?

915
01:16:19,474 --> 01:16:35,074
Um, what I think is happening, I think they're going to announce some new products and they had made the allusion to, I stepped away for a second, you know, whether it's the Canadian prefs or they're going to do something different with a pref product there.

916
01:16:35,214 --> 01:16:40,914
I think they're also going to announce a new form of guidance in terms of the ATMs and the amount left on it.

917
01:16:40,914 --> 01:16:54,614
I think that if they don't tell us what the ATMs will be, they'll say, look, in the future, whatever, 30, 60, 90 days, we will do some type of new offering.

918
01:16:54,834 --> 01:16:56,354
And I think that's what we'll hear about it.

919
01:16:56,454 --> 01:16:57,574
So we heard about it previously.

920
01:16:57,994 --> 01:17:00,114
I think there'll definitely be slides on that.

921
01:17:00,254 --> 01:17:03,614
And so I'm looking forward to hearing that, especially the guidance on the ATMs.

922
01:17:06,274 --> 01:17:08,914
I'm skeptical that they'll put out any guidance on the ATMs.

923
01:17:08,914 --> 01:17:11,394
I mean, they put out guidance on stretch, which makes sense.

924
01:17:11,514 --> 01:17:13,754
Maybe guidance on the other prefs.

925
01:17:14,114 --> 01:17:15,294
I would be interested to see that.

926
01:17:15,374 --> 01:17:19,394
I mean, they haven't raised any capital on the other preferred equities in quite a while.

927
01:17:20,454 --> 01:17:21,014
They haven't.

928
01:17:21,134 --> 01:17:31,154
And when I mean guidance, it's like when they first announced the $21 billion plan and then the follow-up $21 billion plan, what I think is they're going to have a new plan.

929
01:17:31,354 --> 01:17:32,174
I don't know how many.

930
01:17:32,534 --> 01:17:36,294
They're going to pick a dollar amount and they're going to tell us what that is.

931
01:17:36,294 --> 01:17:42,634
and i think that you know they they have not told us um they've given us some guidance the low medium

932
01:17:42,634 --> 01:17:46,594
high in the last deck that we saw but i think they're going to give us more guidance about

933
01:17:46,594 --> 01:17:51,794
what their what their dollar amounts are as opposed to just a percentage that's an idea

934
01:17:51,794 --> 01:17:55,074
and that makes sense to me because aren't they going to blow through their stretch atm

935
01:17:55,074 --> 01:18:04,314
before you know it well they raised 78 million last week let's take a peek at that so they raised

936
01:18:04,314 --> 01:18:06,154
78 million last week.

937
01:18:06,474 --> 01:18:06,954
This is

938
01:18:06,954 --> 01:18:09,934
last week's

939
01:18:09,934 --> 01:18:11,514
8K.

940
01:18:13,274 --> 01:18:14,334
So they

941
01:18:14,334 --> 01:18:16,514
raised 78 million. There's 3.5

942
01:18:16,514 --> 01:18:17,374
billion left.

943
01:18:18,614 --> 01:18:20,694
So, I mean, that could last quite a while.

944
01:18:20,914 --> 01:18:22,614
Just kind of depends on how much demand

945
01:18:22,614 --> 01:18:24,494
increases, right? If the price of Bitcoin goes

946
01:18:24,494 --> 01:18:26,194
higher, does stretch demand increase?

947
01:18:27,814 --> 01:18:28,614
I don't know.

948
01:18:29,474 --> 01:18:30,174
Does demand for

949
01:18:30,174 --> 01:18:32,754
amplified Bitcoin increase?

950
01:18:32,754 --> 01:18:39,434
it probably does right like that would be rational like if the if the capital stack doubles

951
01:18:39,434 --> 01:18:46,954
and this thing is you know five seven x over collateralized like why would i not get 12 percent

952
01:18:46,954 --> 01:18:51,614
you know 11 percent yield whatever that number is i would suspect the demand goes higher

953
01:18:51,614 --> 01:18:56,674
yeah but if you think about you know three and a half billion let's assume it's a hundred million

954
01:18:56,674 --> 01:19:02,834
dollars a week that only lasts for 35 weeks if you if you chop it down to you know to 50 million

955
01:19:02,834 --> 01:19:08,674
then it's 70 weeks so it's a little bit over a year and a half um we'll see if they just leave

956
01:19:08,674 --> 01:19:13,234
it the way it is i mean i i do think they're going to announce something about that what we're seeing

957
01:19:13,234 --> 01:19:21,634
here i don't know what it is though this is my take i don't think they're gonna announce anything

958
01:19:21,634 --> 01:19:25,394
Yeah, they might not. They might not announce anything.

959
01:19:25,814 --> 01:19:26,454
They don't have to.

960
01:19:26,894 --> 01:19:32,894
Yeah, I think the focus is going to be on digital credit education

961
01:19:32,894 --> 01:19:36,634
and getting as much stretch out the door as possible.

962
01:19:36,914 --> 01:19:39,954
I think that's kind of what I picked up from the last earnings call

963
01:19:39,954 --> 01:19:48,594
is that strategy has been in this evolving phase for the past.

964
01:19:48,594 --> 01:19:56,694
really five, six years now. And I think we've finally hit a kind of

965
01:19:57,214 --> 01:20:08,574
a state in which we can bear down and laser, like what Sailor says, laser focus on the mission,

966
01:20:08,574 --> 01:20:15,054
on the strategy. And that's selling stretch. It's pretty clear, like all the other preferreds,

967
01:20:15,054 --> 01:20:20,714
it just complicates everything. It's just stretch. We're focusing on stretch. We want to sell stretch.

968
01:20:21,914 --> 01:20:31,614
You know, we're going to have, have people build on stretch. And that's, that's what I want to hear.

969
01:20:31,714 --> 01:20:38,014
I want to hear the plan of how, how, you know, how are they talking to people? How are they

970
01:20:38,014 --> 01:20:45,534
marketing it uh in a conversation going yeah what what what are the avenues um

971
01:20:45,534 --> 01:20:51,494
yeah don't they need to stretch for don't they need to stretch for europe though too

972
01:20:51,494 --> 01:20:59,394
look that's assuming there's like investable capital in europe right you know the best thing

973
01:20:59,394 --> 01:21:04,714
they could do is they could they could take out a marketing plan with uh freaking uh aarp

974
01:21:04,714 --> 01:21:10,834
and send it to everybody that's over the age of 55 years old and say, look, we have this thing that

975
01:21:10,834 --> 01:21:17,354
pays, what's the current rate on stretch? 11.25%? 11.25%, yeah. Right. It pays 11.25%,

976
01:21:17,354 --> 01:21:24,234
return of capital. They should partner with AARP and send it out to all the retirees and say,

977
01:21:24,954 --> 01:21:31,234
get off of, it's not a CD, demand your 11% from your broker. And they should-

978
01:21:31,234 --> 01:21:32,114
That's a really good idea, Grant.

979
01:21:32,114 --> 01:21:52,054
Right. I mean, let's just be realistic. They're not going to sell it. The Bitcoin is like, oh, we're only getting 11%. We want amplification. We want MSTR. We own Bitcoin, the high volatility, 11% a year. I think that it's an awesome product. But I think the right group to market it towards is a bunch of retirees. Pick where it is and then pitch it.

980
01:21:52,054 --> 01:21:59,734
i would do a road show for all those different locations in in florida texas new york whatever

981
01:21:59,734 --> 01:22:04,854
arizona and and i would i would pitch it there i would do a mailing a mailing campaign

982
01:22:06,294 --> 01:22:10,854
and and do that that would that would drive adoption of stretch from the retail side

983
01:22:10,854 --> 01:22:14,294
it's not going to be getting a bunch of retirees to go to vegas for this

984
01:22:16,054 --> 01:22:21,174
what is it called when you when you get a bunch of people in a room and then they like test a product

985
01:22:22,054 --> 01:22:30,494
beta testers beta testing yeah yeah oh uh yeah when they're like oh does this product taste good

986
01:22:30,494 --> 01:22:35,494
and stuff yeah yeah yeah like let's let's get a bunch of retirees in the room and and pitch them

987
01:22:35,494 --> 01:22:39,914
you know 50 different times and see which one's the most effective like

988
01:22:39,914 --> 01:22:45,874
or just give them give them extra 5 000 bucks every month and see if they're happier or less

989
01:22:45,874 --> 01:22:55,474
happy focus group focus group that was it thank you i think that's the classic play here you know

990
01:22:55,474 --> 01:22:59,034
or or buy stretch and get a toaster they're like oh i gotta buy you know

991
01:22:59,034 --> 01:23:07,374
back in the no but guys back in the old days yeah toaster invest in toasters

992
01:23:07,374 --> 01:23:12,934
no you know it was open up a bank account and you get a you have a choice of a free toaster

993
01:23:12,934 --> 01:23:16,774
or a pan or something, people would do that.

994
01:23:16,774 --> 01:23:17,774
I mean-

995
01:23:17,774 --> 01:23:18,774
People love pans.

996
01:23:18,774 --> 01:23:19,934
People love free stuff.

997
01:23:19,992 --> 01:23:25,612
stuff. So I would, I would, I would go pitch that. I mean, I, that's what I would, you know,

998
01:23:25,612 --> 01:23:29,992
that's what I'll tell sailor and Fong, dude, you gotta, you gotta sponsor AARP, do a mailer.

999
01:23:30,872 --> 01:23:34,812
I was like, I was copy trading with my brother-in-law trying to teach him how to sell

1000
01:23:34,812 --> 01:23:38,752
options or whatever. And so I have him sell this option and he picks up like a hundred bucks in

1001
01:23:38,752 --> 01:23:43,432
premium. And it was a few days before stretch pays the dividends. So I'm like, you know,

1002
01:23:43,432 --> 01:23:47,012
don't leave it sitting in cash. I'm like, just buy one share of stretch. I mean, it was just

1003
01:23:47,012 --> 01:23:52,452
literally one share. But a couple of days later, he's like, why do I have this pending 94 cent

1004
01:23:52,452 --> 01:23:56,672
deposit? Like, because you just got paid a dividend. It's like, oh, well, that's cool.

1005
01:23:57,192 --> 01:24:01,012
You know what I mean? Like, he didn't even know that, you know, I was just having him buy this

1006
01:24:01,012 --> 01:24:07,632
thing as his dry powder that's better than a melting ice cube. And, you know, just it's going

1007
01:24:07,632 --> 01:24:13,972
to permeate every area of finance, I think. There's going to be tons of tons and uses for this.

1008
01:24:13,972 --> 01:24:18,952
A couple of things I've found over the last couple of weeks that are pretty interesting

1009
01:24:18,952 --> 01:24:25,552
is at least my broker doesn't do it yet. Dividends are not reinvested. So I actually

1010
01:24:25,552 --> 01:24:30,112
have to go in and reinvest the dividends with the preferred instruments, which is crazy.

1011
01:24:30,112 --> 01:24:34,812
If you buy like a dividend stock, you can select drip, but none of the preferreds for

1012
01:24:34,812 --> 01:24:35,812
some reason.

1013
01:24:35,812 --> 01:24:36,812
Really?

1014
01:24:36,812 --> 01:24:40,732
Yeah. If that's the case somewhere else, please tell me. I mean, we're trying to figure this

1015
01:24:40,732 --> 01:24:52,172
out um but uh yeah we we are we are seeing that uh across other brokerages but there there's you

1016
01:24:52,172 --> 01:24:56,892
know not everybody even offers all of these products either right i got a few text messages

1017
01:24:56,892 --> 01:25:02,572
from friends like hey i can't get this here and so it's like okay well we've got to go go figure

1018
01:25:02,572 --> 01:25:09,772
out how to get this in different places right like uh i mean stretch for example was just added to

1019
01:25:09,772 --> 01:25:14,412
x stocks which is a tokenized like stock platform and there are there are several tokenized stock

1020
01:25:14,412 --> 01:25:18,532
platforms they could be on five or six different tokenized stock platforms where stretch can be

1021
01:25:18,532 --> 01:25:27,072
there and you can you know go in and out of different different systems and get paid the

1022
01:25:27,072 --> 01:25:30,892
dividend in those different systems like be based in ethereum or solana or all these other things

1023
01:25:30,892 --> 01:25:37,392
so yeah there's still a lot of work to be done and then i i think in my opinion going back to

1024
01:25:37,392 --> 01:25:39,072
strategy world was going to happen there.

1025
01:25:39,232 --> 01:25:44,792
Like talking about framework for rating agencies, regulation,

1026
01:25:45,012 --> 01:25:45,932
what's on the horizon.

1027
01:25:47,312 --> 01:25:50,412
I mean, we just saw Scott Bessent come out.

1028
01:25:50,492 --> 01:25:50,912
What do you say?

1029
01:25:50,912 --> 01:25:56,392
The administration is removing all regulatory barriers against Bitcoin and

1030
01:25:56,392 --> 01:25:56,652
crypto.

1031
01:25:57,852 --> 01:25:59,332
Like I literally said that yesterday.

1032
01:26:00,812 --> 01:26:01,812
What does that mean?

1033
01:26:03,892 --> 01:26:04,572
Clarity Act.

1034
01:26:04,672 --> 01:26:06,692
Like how does that impact what strategy is doing?

1035
01:26:06,692 --> 01:26:09,512
Is that part of the conversation?

1036
01:26:10,172 --> 01:26:12,392
Does the Basel 3 framework come up?

1037
01:26:12,952 --> 01:26:14,772
Is that a battleground?

1038
01:26:14,872 --> 01:26:16,052
Is that what people are pushing for?

1039
01:26:17,692 --> 01:26:21,232
Some of those things I think would be top of mind discussions.

1040
01:26:23,812 --> 01:26:24,492
Here we go.

1041
01:26:24,592 --> 01:26:27,692
Somebody just said no drip on E-Trade for SDRC or SATA.

1042
01:26:29,552 --> 01:26:31,052
Interactive Broker does it apparently.

1043
01:26:31,052 --> 01:26:37,292
but yeah i mean we're still we're still finding out that there are several brokerage platforms

1044
01:26:37,292 --> 01:26:43,352
that people use day to day and that stuff just doesn't exist on there um so there's just work

1045
01:26:43,352 --> 01:26:49,452
to be done across all these different platforms and make these things more available so so i i

1046
01:26:49,452 --> 01:26:56,652
want to quote um max plank because sometimes this comes up um and what max playing he's famous for

1047
01:26:56,652 --> 01:27:03,232
saying, a famous physicist, a new scientific truth does not triumph by convincing its opponents

1048
01:27:03,232 --> 01:27:08,212
and making them see the light, but rather its opponents eventually die and a new generation

1049
01:27:08,212 --> 01:27:15,472
grows up that is familiar with it. And so what I think is going to happen is there's going to be

1050
01:27:15,472 --> 01:27:21,752
people that are going to, as Stretch came out in July, it's whatever, seven months old.

1051
01:27:22,092 --> 01:27:26,212
What's going to happen is, is there's going to be a generation of people that start using Stretch

1052
01:27:26,212 --> 01:27:30,112
and say, hey, I'm used to getting 11% paid monthly, right?

1053
01:27:30,772 --> 01:27:34,012
And the new platforms are, if you want to sign,

1054
01:27:34,052 --> 01:27:35,612
if your bank isn't going to give it to you,

1055
01:27:35,732 --> 01:27:38,652
there's a lot of friction with an old person going to sign up with it.

1056
01:27:39,212 --> 01:27:41,952
But that's the reason why a lot of banks bought brokerage houses.

1057
01:27:42,572 --> 01:27:45,132
So you can make that, you go talk to a different person in your branch,

1058
01:27:45,172 --> 01:27:46,432
you say, oh, here's a brokerage account.

1059
01:27:46,512 --> 01:27:50,192
Oh, we have money and oh, we can go do this for you and go take care of that.

1060
01:27:50,192 --> 01:27:56,552
So I think that banks are going to be the biggest distributors of STRC.

1061
01:27:56,852 --> 01:27:58,692
And it's just a matter of time.

1062
01:27:59,352 --> 01:28:03,812
And they realize that if they don't do this, this is why everybody's talking about the

1063
01:28:03,812 --> 01:28:05,012
Clarity Act.

1064
01:28:05,672 --> 01:28:13,792
But, you know, if look, if Tether could pay you 4% and STRC is paying you 11% and it's

1065
01:28:13,792 --> 01:28:19,492
our return of capital, I think that the easy choice there is to go for STRC, right?

1066
01:28:19,492 --> 01:28:26,212
i i don't think that it takes two hours to explain that it's gonna take a little while we just saw

1067
01:28:26,212 --> 01:28:30,852
with our 500k mint last night on buck we we checked the chain history and these guys were

1068
01:28:30,852 --> 01:28:35,492
holding the sky stable coin which is a stable coin that pays out yield but i think it's backed by t

1069
01:28:35,492 --> 01:28:39,812
bills so it pays out like whatever it is three and a half percent and the guys just slugged you know

1070
01:28:39,812 --> 01:28:45,492
they they dumped they dumped it and slugged right into stretch or into buck another you know back

1071
01:28:45,492 --> 01:28:46,992
back by structure now getting 10%.

1072
01:28:46,992 --> 01:28:48,452
So I think like more and more people are like,

1073
01:28:48,532 --> 01:28:50,652
oh, like this thing keeps paying that 10%.

1074
01:28:50,652 --> 01:28:51,812
Why not buy it?

1075
01:28:52,612 --> 01:28:53,012
Right.

1076
01:28:53,112 --> 01:28:56,812
The best thing, like Soleil,

1077
01:28:56,852 --> 01:28:58,732
what you had said about your brothers that,

1078
01:28:59,152 --> 01:29:00,752
wait a second, I got 94 cents.

1079
01:29:01,172 --> 01:29:03,532
So for every 100 bucks, it's like,

1080
01:29:03,592 --> 01:29:05,192
well, I put more in, I get paid more.

1081
01:29:05,452 --> 01:29:07,312
Once people start getting used to that,

1082
01:29:07,852 --> 01:29:09,552
then they buy more of it.

1083
01:29:09,612 --> 01:29:10,792
I think that that's what happens.

1084
01:29:10,932 --> 01:29:15,232
And so even the first prep

1085
01:29:15,232 --> 01:29:19,932
is only a year old. I think that's one of the hardest things to get people used to this.

1086
01:29:20,412 --> 01:29:23,592
We've been talking about this for a year, but if people don't know what the prefs are.

1087
01:29:23,892 --> 01:29:28,892
Look, I had never really heard of it. I tangentially heard of preferred stocks before

1088
01:29:28,892 --> 01:29:33,452
strategy did it, but I always thought that it wasn't something that I was very much interested

1089
01:29:33,452 --> 01:29:50,070
in So I never really looked at it I think Strike was released about a year ago I think it like a one anniversary of of strike Yeah So I believe it was January So so we had the one year anniversary and I think getting that point across is is is the key part So I think that you know that where we are

1090
01:29:50,070 --> 01:29:57,570
today. Yeah. Another thing just as a piece of information I found out this week is, right. So

1091
01:29:57,570 --> 01:30:02,750
all of the perpetual preferred equity instruments from strategy have options on them, which I think

1092
01:30:02,750 --> 01:30:06,870
is fascinating. Dan, you've done some research, except strike, I believe, right? Like there's

1093
01:30:06,870 --> 01:30:12,450
an options chain to go in and out on leverage on some of these. So Seda doesn't have an

1094
01:30:12,450 --> 01:30:17,250
options chain. And it needs to have 7 million shares before an options chain is available

1095
01:30:17,250 --> 01:30:22,750
from, I guess, the options clearinghouse. So there's like things to look forward to on

1096
01:30:22,750 --> 01:30:29,230
the horizon. For us thinking about that, that structure in place as well, which is interesting,

1097
01:30:29,230 --> 01:30:34,470
because that opens up different pools of capital that are interested in taking different positions

1098
01:30:34,470 --> 01:30:39,010
in different ways with leverage. And leverage on the perpetual preferred instruments is

1099
01:30:39,010 --> 01:30:45,930
interesting. I'm going to leave you guys with some hopium here.

1100
01:30:46,690 --> 01:30:47,390
Do it. Rip it.

1101
01:30:47,930 --> 01:30:52,870
Sure. MSTR was trading over $400 a share in July of last year, so it's not that long ago.

1102
01:30:53,690 --> 01:30:58,570
Let's just assume that Jeff Park, I think he's right. The whole thing that would happen with this

1103
01:30:58,570 --> 01:31:04,750
hedge fund based in Hong Kong that blew up with using IBIT options, software as a service. We've

1104
01:31:04,750 --> 01:31:09,330
been talking about this for two weeks. The guy Parker, I think that those guys are right.

1105
01:31:10,070 --> 01:31:18,810
I think that in my view is where's the hopium? If in a down market for SaaS due to AI and Bitcoin

1106
01:31:18,810 --> 01:31:24,870
price going down, and what happened on October 10th with the whole Binance thing where it lost

1107
01:31:24,870 --> 01:31:31,210
the peg on that oracle not related to Bitcoin cause this sell off. My view is the same thing

1108
01:31:31,210 --> 01:31:38,890
can happen in reverse. So whatever price MSTR is at in the future, if the price of Bitcoin ramps up

1109
01:31:38,890 --> 01:31:46,810
and somebody is short on MSTR or on Bitcoin, we will see the same thing happen what we saw in 2024.

1110
01:31:47,230 --> 01:31:52,890
You'll see the price of MSTR triple in 90 days and people will be like, oh my God,

1111
01:31:52,890 --> 01:31:56,010
when's it going to drop again? And you just pointed him, well, I guess you should have bought

1112
01:31:56,010 --> 01:32:02,150
on February 18th to 2026. It's the same thing that will happen the reverse way.

1113
01:32:02,730 --> 01:32:09,070
But the difference is, is that Bitcoin's a finite asset and we have not seen that happen yet.

1114
01:32:09,550 --> 01:32:15,510
True price discovery on it, the convexity, that's the part that will kick in. The other part is that

1115
01:32:15,510 --> 01:32:22,330
strategy has tripled the amount of Bitcoin per share, right? They had less than 200,000, sorry,

1116
01:32:22,890 --> 01:32:27,350
They had less than 200,000 Bitcoins January 1st, 2024.

1117
01:32:27,770 --> 01:32:29,630
Now they have over 700,000.

1118
01:32:29,850 --> 01:32:32,710
I do know that they were issuing shares.

1119
01:32:32,830 --> 01:32:34,450
So they have double the Bitcoin per share.

1120
01:32:34,910 --> 01:32:39,850
But if it gets a run this time, it's fundamentally different because the shares have more Bitcoin

1121
01:32:39,850 --> 01:32:40,330
in it.

1122
01:32:40,870 --> 01:32:44,970
And I think from that perspective, when that hits, that's what we're all thinking about.

1123
01:32:45,190 --> 01:32:47,730
It's not a question of if that happens.

1124
01:32:47,810 --> 01:32:49,170
It's just a matter of when.

1125
01:32:49,170 --> 01:32:56,890
and on the prefs on strc if the price of that ratchets up they just what do they do they then

1126
01:32:56,890 --> 01:33:02,550
atm more bitcoin which feeds that is a feedback loop to what we've been talking about and think

1127
01:33:02,550 --> 01:33:11,190
about it if they can do 78 million dollars what was it this week in strc in a week right in a

1128
01:33:11,190 --> 01:33:17,490
bull market with things running and strc is ramping up then you would think the number's got to be

1129
01:33:17,490 --> 01:33:22,950
larger. It's not smaller. Yeah, it's way larger. I think that the scale is really interesting too.

1130
01:33:23,090 --> 01:33:27,770
Like as Bitcoin price goes up, they get de-levered, right? They get de-amplified.

1131
01:33:28,470 --> 01:33:31,710
And so you think about the scale of the balance sheet that they've got right now. Again,

1132
01:33:31,910 --> 01:33:37,110
we haven't seen the perpetual preferred equity model in a bull market yet. And we haven't seen

1133
01:33:37,110 --> 01:33:42,610
what the equity can do in that market yet. And people think that it shouldn't work, right? So

1134
01:33:42,610 --> 01:33:47,410
you got people shorting the stock. I think there's upwards of 10 to 15% of MSDR stock shares

1135
01:33:47,410 --> 01:33:52,390
outstanding to being shorted. Thinking about the structure of the balance sheet and what that looks

1136
01:33:52,390 --> 01:33:55,730
like in the future. I mean, what do we know about strategy? They're going to be selling tons of

1137
01:33:55,730 --> 01:33:59,990
equity, common equity, preferred equity. That's likely going to be the case in the future.

1138
01:34:00,430 --> 01:34:06,850
But there kind of becomes a point, an inflection point where the balance sheet is so big that

1139
01:34:06,850 --> 01:34:14,610
selling common equity is just less lucrative and they like don't need to do it. Right. So I'm just

1140
01:34:14,610 --> 01:34:19,990
looking at the price of or the balance sheet, I just plug this in.

1141
01:34:20,710 --> 01:34:25,730
If if Bitcoin does a triple from here, which Dan, I think you said this the other day,

1142
01:34:26,690 --> 01:34:28,450
people don't remember what a triple feels like.

1143
01:34:28,450 --> 01:34:32,330
A triple feels good and a triple could be on the horizon.

1144
01:34:32,330 --> 01:34:38,170
So if Bitcoin triples from here, 66 to 200,000, the the amplification on their balance

1145
01:34:38,170 --> 01:34:41,470
sheet goes to 11 percent, like the debt on the balance sheet goes to 4 percent.

1146
01:34:41,470 --> 01:34:53,290
So their capacity to issue, to keep it at a 33% amplification, it is that, what is that on a percentage basis?

1147
01:34:56,030 --> 01:35:03,610
That's a, that times that.

1148
01:35:03,610 --> 01:35:11,230
basically they had a 43 billion dollars of capacity to issue perpetual preferred equity

1149
01:35:11,230 --> 01:35:20,430
with bitcoin at a price of 200 okay how come your price of uh mstr doesn't oh you just plugging in

1150
01:35:20,430 --> 01:35:25,550
i've got no no price of mstr change but like that i mean obviously that would go higher

1151
01:35:25,550 --> 01:35:30,510
bitcoin goes to 200 000 if it didn't we'd have some serious problems but uh

1152
01:35:30,510 --> 01:35:36,330
But I guess what I'm saying is that there becomes a point where the scale is so large,

1153
01:35:36,330 --> 01:35:43,010
like the incentive to issue common, it gets smaller, I think.

1154
01:35:43,130 --> 01:35:44,370
I think, will they be issuing common?

1155
01:35:44,510 --> 01:35:44,930
Absolutely.

1156
01:35:45,210 --> 01:35:47,470
Like when there's significant volume coming in the door.

1157
01:35:47,750 --> 01:36:07,868
But I think this is still an incredibly interesting business model for the next four years the next eight years like the world is getting more digital The world is moving this way and it unstoppable right Like this AI stuff is unstoppable Like crypto is unstoppable

1158
01:36:08,768 --> 01:36:14,408
I mean, will regulatory regimes try to stop it and make changes and stuff? Absolutely. But

1159
01:36:14,408 --> 01:36:23,248
this stuff is unstoppable. And we haven't truly, to your point, we haven't truly seen what price

1160
01:36:23,248 --> 01:36:29,408
discovery looks like i mean november 24 was pretty euphoric but like yeah but going

1161
01:36:29,408 --> 01:36:36,268
go ahead if like 07 08 happens again or something like that where you're like okay financial mania

1162
01:36:36,268 --> 01:36:41,968
and everybody's running to hard assets yeah but i don't think that that's going to happen again

1163
01:36:41,968 --> 01:36:48,708
the reason why is because you know back we can look up in 07 and 08 we were probably at 15 maybe

1164
01:36:48,708 --> 01:36:54,888
$15 trillion in debt or maybe somewhere, you know, 12. And then during COVID, we were about 20

1165
01:36:54,888 --> 01:37:03,048
trillion. So we've added $18 trillion in debt. And so if people are like, that's the best it's

1166
01:37:03,048 --> 01:37:07,908
going to, every day is the best. It gets worse and worse every day for just the U.S. debt.

1167
01:37:08,308 --> 01:37:14,488
And the U.S. is 60% of the world financial markets, just overall for the world as an overall number.

1168
01:37:14,488 --> 01:37:44,428
So why do we keep on talking about this? If the if we're the best of the worst, right, or the best, you know, the best of the worst countries for doing this, we're $38 trillion in debt, that's not going to get any better. They're not going to balance the budget. It's almost it's a $1.8 trillion every year. That's the that's the deficit every year. And then that piles on to the debt. So it's not going to get any better. And that's why I'm saying this is just, you know, it goes back to your question, Jeff, what's what's a riskier bet? The dollar is going lower.

1169
01:37:44,488 --> 01:37:48,268
and we're going higher. The question is just how much and how soon?

1170
01:37:48,908 --> 01:37:57,888
So here's a fun fact. The US debt to GDP, so the ratio, the debt relative to gross domestic product

1171
01:37:57,888 --> 01:38:09,088
is cagering at 3.8% since 2008. Think about that for a second. GDP itself is going up 4.4% a year.

1172
01:38:09,088 --> 01:38:18,808
the debt to gdp that ratio is going up that is staggering at 3.8 percent right now the u.s debt

1173
01:38:18,808 --> 01:38:26,708
to gdp is 120 if you take that and you forecast it out to 2036 that's 170 the debt relative to

1174
01:38:26,708 --> 01:38:33,768
the country's gdp is 170 you forecast that out 10 years it was the world right because it gets

1175
01:38:33,768 --> 01:38:37,928
because what happens is it's going to grow every year that's what that that's what you're showing

1176
01:38:37,928 --> 01:38:42,528
about this yeah you know i'm gonna and by the way i heard this joke somebody said this there's two

1177
01:38:42,528 --> 01:38:47,368
economists walking down the street one economist says to the other economist i bet you won't eat

1178
01:38:47,368 --> 01:38:52,488
that dog crap for a hundred bucks and so the economist eats the dog crap then the same to

1179
01:38:52,488 --> 01:38:56,388
you know they're walking down the street again the one that ate the dog crap says to the other

1180
01:38:56,388 --> 01:39:02,028
economist says i bet you won't eat that dog crap for a hundred bucks and so that guy eats the dog

1181
01:39:02,028 --> 01:39:08,908
crap and so they walk into a bunch of more steps they go dude why did we just eat dog crap he's

1182
01:39:08,908 --> 01:39:18,308
like i don't care but we just added 200 to gdp okay on that note we're gonna have to go around

1183
01:39:18,308 --> 01:39:22,228
and do final thoughts like we're talking about economists eating dog poop and yeah right but

1184
01:39:22,228 --> 01:39:28,388
that's how gdp is calculated it could be bullish as long as it both goes back and forth it doesn't

1185
01:39:28,388 --> 01:39:35,328
matter what they do with it it's double counted even if it was for useless hey mike i have one

1186
01:39:35,328 --> 01:39:40,648
more joke that's that's almost as funny as that one but has nothing to do with uh economics have

1187
01:39:40,648 --> 01:39:50,148
you heard the muffin joke no no it's just rated r no two muffins were in the oven have you heard

1188
01:39:50,148 --> 01:39:55,368
this one no i don't think so he's just narrating his experience the other night the first muffin

1189
01:39:55,368 --> 01:39:59,528
And the first muffin says, is it just me or is it hot in here?

1190
01:40:00,008 --> 01:40:02,868
And the second muffin says, holy crap, a talking muffin.

1191
01:40:05,088 --> 01:40:05,828
All right.

1192
01:40:06,008 --> 01:40:07,288
Oh, yeah, we're going to end on that one.

1193
01:40:07,668 --> 01:40:09,228
Okay, that's Tim's final thoughts.

1194
01:40:09,308 --> 01:40:10,448
We've got talking muffins.

1195
01:40:11,348 --> 01:40:13,368
Stand up to close out the day.

1196
01:40:13,868 --> 01:40:14,688
It's a bear market.

1197
01:40:14,948 --> 01:40:15,728
Yeah, final jokes.

1198
01:40:16,188 --> 01:40:17,088
Everybody gets one joke.

1199
01:40:17,088 --> 01:40:18,708
You guys have to come up with a joke now.

1200
01:40:18,928 --> 01:40:19,508
Oh, God.

1201
01:40:21,808 --> 01:40:22,248
No.

1202
01:40:22,248 --> 01:40:25,728
So maybe over to you, Mason.

1203
01:40:26,048 --> 01:40:26,948
What's final thoughts?

1204
01:40:27,068 --> 01:40:27,468
Yeah, yeah.

1205
01:40:28,668 --> 01:40:34,528
If you really listen to what Graeme said about the fiscal situation of the US, you realize

1206
01:40:34,528 --> 01:40:42,508
that the mathematics lead to monetary debasement, to inflation, to increase money supply.

1207
01:40:42,508 --> 01:40:51,028
And when you are listening to the CNBC talking heads talk to Saylor, this is what they fundamentally

1208
01:40:51,028 --> 01:40:57,248
don't understand that Bitcoin's not going to $8,000 and staying there for four years

1209
01:40:57,248 --> 01:41:04,228
because of the fiscal situation of the government, right? Not only the fiscal situation of the

1210
01:41:04,228 --> 01:41:11,408
government, but from the onslaught of deflation that AI is going to bring and the monetary response

1211
01:41:11,408 --> 01:41:18,028
from that as well. And then just general Bitcoin adoption, right? So you have these three forces

1212
01:41:18,028 --> 01:41:21,028
that are going to drive Bitcoin up.

1213
01:41:21,208 --> 01:41:22,848
And if you are in this period

1214
01:41:22,848 --> 01:41:27,328
and you're worried about price

1215
01:41:27,328 --> 01:41:29,208
or you think Bitcoin's going to zero,

1216
01:41:29,388 --> 01:41:31,928
I think you fundamentally don't understand

1217
01:41:31,928 --> 01:41:35,108
the environment in which we are living in,

1218
01:41:35,108 --> 01:41:40,328
the realities, the physics of the situation.

1219
01:41:41,848 --> 01:41:43,028
This is a gift.

1220
01:41:43,188 --> 01:41:45,248
This is a gift for, you know,

1221
01:41:45,688 --> 01:41:47,668
the DIP's a gift for MSTR.

1222
01:41:48,028 --> 01:41:54,748
right? We're adding Bitcoin below cost basis and stretch is functioning well,

1223
01:41:55,868 --> 01:42:02,668
selling a hundred million in a week. That's pretty good. So I think you have to have that perspective.

1224
01:42:04,508 --> 01:42:12,908
Price is just price, right? And that should not set the narrative or your attitude. You need to

1225
01:42:12,908 --> 01:42:26,506
to have a larger thesis And you just need to look at the reality of the situation Like Bitcoin is going to go up eventually And right now it just an opportunity That all it is

1226
01:42:28,086 --> 01:42:28,926
Dealing with some people.

1227
01:42:29,986 --> 01:42:32,306
Do you mind if I follow up on Masons, Jeff?

1228
01:42:32,426 --> 01:42:32,686
Get it.

1229
01:42:34,146 --> 01:42:34,546
Yeah.

1230
01:42:34,746 --> 01:42:38,446
I mean, I think we all have to remember, like when we were buying during bear markets,

1231
01:42:38,446 --> 01:42:40,326
and it feels like we haven't been in a bear market for a while,

1232
01:42:40,386 --> 01:42:43,106
but when we were buying bear markets, you're forced to look at

1233
01:42:43,106 --> 01:42:45,006
and take a really, really long-term time horizon.

1234
01:42:45,006 --> 01:42:50,046
and you're also forced to buy not because you think the price will go up but because you believe

1235
01:42:50,046 --> 01:42:55,446
in the underlying asset and then you believe like in a long time that's not today the price will

1236
01:42:55,446 --> 01:42:59,486
ultimately be higher and that's that's really hard mentally like over the past three years

1237
01:42:59,486 --> 01:43:02,386
you've been like yeah they're going to probably be higher in like two months three months

1238
01:43:02,386 --> 01:43:06,906
four months now we're sitting in a position where it's like yeah you know it may take a little bit

1239
01:43:06,906 --> 01:43:12,706
to get reclaim an all-time high but then you have to determine where the value is and go back to

1240
01:43:12,706 --> 01:43:15,426
reading and you go back to studying instead of looking at price charts.

1241
01:43:15,806 --> 01:43:17,946
And I think that stuff's a really good reset for people.

1242
01:43:19,606 --> 01:43:22,806
Fundamentals back to the fundamentals and they haven't changed.

1243
01:43:24,386 --> 01:43:25,106
Nothing's changed.

1244
01:43:25,266 --> 01:43:25,906
That's kind of smart.

1245
01:43:26,006 --> 01:43:26,286
Exactly.

1246
01:43:26,446 --> 01:43:27,186
It's the whole thing, right?

1247
01:43:27,926 --> 01:43:29,006
Like nothing's changed.

1248
01:43:29,166 --> 01:43:32,526
You look like you sit back, it's the dead guy portfolio.

1249
01:43:32,726 --> 01:43:36,126
You sit back and you look at things like if you bought four years ago and you

1250
01:43:36,126 --> 01:43:39,226
opened your brokerage account right now, you'd be like, huh, interesting.

1251
01:43:39,586 --> 01:43:40,726
Like all the noise is gone.

1252
01:43:40,826 --> 01:43:42,266
You wouldn't even know, right?

1253
01:43:42,266 --> 01:43:45,586
You just look at, okay, over time, this is looking good.

1254
01:43:47,846 --> 01:43:48,726
Over to you, Tim.

1255
01:43:50,046 --> 01:43:50,486
Muffins?

1256
01:43:51,026 --> 01:43:51,286
Again?

1257
01:43:51,546 --> 01:43:51,906
Oh, no.

1258
01:43:52,066 --> 01:43:56,146
So on a serious note, I guess what comes to mind is just the news cycle,

1259
01:43:56,626 --> 01:44:02,626
like the pace of the news cycle along with the pace of AI.

1260
01:44:03,486 --> 01:44:06,726
So, I mean, Eleanor Territ posted maybe 15 minutes ago,

1261
01:44:06,726 --> 01:44:13,226
a third stablecoin yield meeting is set to take place at the white house tomorrow at 9 a.m

1262
01:44:13,226 --> 01:44:19,766
a small group representing crypto and banks is expected to attend so it's just like this stuff

1263
01:44:19,766 --> 01:44:29,166
is happening and it's taking time but um when these things hit the newswire i mean a narrative

1264
01:44:29,166 --> 01:44:35,286
any narrative that's constructive is all going to help and it's going to accelerate so i think the

1265
01:44:35,286 --> 01:44:40,486
convergence of however many things you want to put on the chart all happening and accelerating

1266
01:44:40,486 --> 01:44:49,586
is definitely what it feels like right now. 100%. Soleil. Yeah, so I was watching a Jeff Booth

1267
01:44:49,586 --> 01:44:57,106
podcast, as I do every time it comes out, and he was given this example of if you ask people,

1268
01:44:57,106 --> 01:45:02,266
if I folded a piece of paper 50 times, how thick would it be? And most people are like,

1269
01:45:02,266 --> 01:45:03,546
I don't know, two inches.

1270
01:45:04,386 --> 01:45:08,006
And the reason is we're so off is because we don't understand exponentials.

1271
01:45:08,126 --> 01:45:12,026
And the real answer is like 300,000 miles or something.

1272
01:45:12,186 --> 01:45:16,906
It gets you like, yeah, it gets you like three quarters of the weight of the sun.

1273
01:45:17,066 --> 01:45:21,106
Like you could just go back and forth to the moon like 100,000 times or something ridiculous.

1274
01:45:21,646 --> 01:45:25,226
And human minds just cannot comprehend exponentials.

1275
01:45:25,506 --> 01:45:26,966
But you know who can?

1276
01:45:27,846 --> 01:45:28,746
AI can.

1277
01:45:29,066 --> 01:45:29,506
Computers.

1278
01:45:29,506 --> 01:45:31,446
So they get it.

1279
01:45:32,266 --> 01:45:40,066
And so what I thought was going to happen is 2021 was going to be the, you know, the bull market of individual adoption.

1280
01:45:40,606 --> 01:45:43,766
2025, I thought, okay, we get Bitcoin treasury companies.

1281
01:45:44,386 --> 01:45:46,486
2029, we get nation state adoption.

1282
01:45:47,206 --> 01:45:48,426
And I thought that was it.

1283
01:45:48,486 --> 01:45:50,146
I thought nation states were the final boss.

1284
01:45:50,386 --> 01:45:53,786
And I thought we weren't going to get that until, you know, 2029-ish.

1285
01:45:54,286 --> 01:45:58,306
And we're getting them all now, but we're also getting agentic adoption.

1286
01:45:58,306 --> 01:46:10,626
And so they're going to want Bitcoin and they're going to be able to, you know, basically it'll be lines of code, writing lines of code and just creating more and more agents to buy more and more Bitcoin.

1287
01:46:11,026 --> 01:46:15,446
And we're getting all of these drivers in one cycle.

1288
01:46:15,626 --> 01:46:17,506
So I couldn't be more bullish.

1289
01:46:18,846 --> 01:46:20,886
So I love that point on computers.

1290
01:46:21,226 --> 01:46:23,966
And this is something I'm going to talk about strategy world as well.

1291
01:46:25,326 --> 01:46:26,826
Bitcoin is observable.

1292
01:46:26,826 --> 01:46:35,106
the digital credit products are observable computers love observations like that's data

1293
01:46:35,106 --> 01:46:41,466
that's information that can be made a decision can be made on that information and in a world of

1294
01:46:41,466 --> 01:46:49,266
expanding computer adoption and ai adoption the things that are observable are more interesting

1295
01:46:49,266 --> 01:46:55,526
to computers than things that are not and that that's where we're going like these computers are

1296
01:46:55,526 --> 01:46:58,926
going to move exponentially, right? Like we're, there's going to be more everywhere. They're

1297
01:46:58,926 --> 01:47:03,206
going to compute faster than ever before. And there's going to be more interest in these types

1298
01:47:03,206 --> 01:47:08,566
of instruments than anything else because the computers want them. Like they're more interested

1299
01:47:08,566 --> 01:47:14,266
in them because they can calculate the risk more frequently. They're like, they create trading

1300
01:47:14,266 --> 01:47:21,306
pairs, all of that stuff. So, I mean, so true. So true. It's going to be a good time.

1301
01:47:21,306 --> 01:47:29,926
right on it's going higher hey see you guys see you guys on sunday sunday boom yeah we're we're

1302
01:47:29,926 --> 01:47:34,186
in vegas we'll be there sunday i think uh we'll have some time i think a couple people will be

1303
01:47:34,186 --> 01:47:40,346
running around come hang out if you're around yeah true north world that will be on monday

1304
01:47:40,346 --> 01:47:44,426
and strategy world all of next week it's going to be a great time i think it's a big week uh

1305
01:47:44,426 --> 01:47:50,966
building energy here we've been going through just a period of just tremendous headwinds i feel like

1306
01:47:50,966 --> 01:47:54,826
everything in my life has been a headwind recently too it's like i had to take my dog to the emergency

1307
01:47:54,826 --> 01:48:00,386
vet because it got stuck stuck in its throat i got the flu uh and then i figured out i have a

1308
01:48:00,386 --> 01:48:05,586
like closed moss that i picked up in my luggage from dallas like everything bad is happening

1309
01:48:05,586 --> 01:48:12,686
it will turn things will turn around we will have tailwinds in the future uh and everybody

1310
01:48:12,686 --> 01:48:17,146
everybody's moving forward everybody's moving this industry forward banks are moving this industry

1311
01:48:17,146 --> 01:48:22,026
forward uh politics are moving this industry forward all these companies are moving this

1312
01:48:22,026 --> 01:48:28,586
industry forward and everybody's working like nothing has changed except the price so

1313
01:48:29,146 --> 01:48:34,666
look forward to seeing everybody next week appreciate the time that's it for episode 56

1314
01:48:34,666 --> 01:48:40,826
we'll catch you in two weeks from now see y'all later see ya