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Music

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Truckin', got my tips down to steer

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Keep truckin', like the dude of man together

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All less in line, just keep truckin'

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Oh, oh, oh, oh, oh.

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Arrows of neon are flashing my keys out on Main Street.

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Chicago, New York, Detroit, and it's all on the same street.

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A typical city in Baltimore, a typical daydream.

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Hang it up and see what tomorrow brings.

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Dallas got a salt machine.

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Houston, too close to New Orleans. New York, got the ways and means and just won't let you be.

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Woo! We are back. Episode 30, True North, the investment grade Bitcoin podcast. We are cooking

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here. And without further ado, we're going to start with a quick intro of True North World.

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Let's hit it.

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It became very apparent that my time and energy was much better spent in this arena.

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We're talking about people that are making a lot of money and they want to focus on Bitcoin.

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Sailor is always talking about Bitcoin as fire in cyberspace.

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I like to say I majored in Bitcoin, minored in MicroStrategy.

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A concentrated position in one stock.

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A strategy without a Bitcoiner hat on.

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It's all powered by this capital market arbitrage.

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Setting sail with Satoshi and Sailor.

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If I could make a contribution that was going to be fully aligned with Bitcoin.

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So pretty much went all in.

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Been no looking back at this point.

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A Bitcoin only feed.

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Just Bitcoin and strategy.

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I titled this one conviction as a service for that exact point.

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Really needed some hope for my future and found Bitcoin.

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All right.

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Welcome back.

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Episode 30, True North, the investment grade Bitcoin podcast.

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I've got sun shining through.

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Tim is in Prague.

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It's four o'clock in the morning there.

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We've got Soleil and Adrian on the call tonight, and I think it'll be a good one.

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It might be a little quick because not much has changed since last week, except some drama in the market sentiment department.

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And I hope you like that quick intro video there.

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We are going to be releasing the content that we created from the True North World event that we had in Orlando on the back of Strategy World.

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So we are drumming up some interest there, and each one of the pieces will be released over the next, I think, two weeks.

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So hope you guys follow along and get to see some of the content that we put together.

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We put a lot of time and energy into that event, and hopefully we can do another one here in the near future.

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So without further ado, we'll get into the agenda for tonight.

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So we're going to go over a quick leverage update as we do every week.

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Talk about market sentiment, which has been a bit poor recently.

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And I think rightfully so.

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There's been a little bit of chop and sideways and ups and downs in both directions.

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We'll talk about Bitcoin use cases and collateral because I think that's just something we need to continue to hit on because I think a lot of people aren't really wrapping their heads around it.

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BTC yield as a concept.

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We'll do the S&P 500 tracker.

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We'll look at the earnings, the potential earnings update for MSTR moving forward into the future.

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What would that look like?

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And we'll get into an et cetera department.

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We'll talk about fixed income.

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We'll talk about the Fed, maybe war nodes, some of the work that everybody else has been doing behind the scenes.

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and talk about some valuation things. And yeah, you're right, Chris, nothing changed.

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Yeah. Strategy bought 10,000 Bitcoin. I guess that counts as change.

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So yeah, appreciate everybody in the comments, keep them coming. And I think we'll have some

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time at the end. Maybe we'll go through some questions. Cool. Well, with that, we will jump

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right into the leverage update and I will share my screen here.

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Jeff, you said the word leverage. We got to say this is not financial advice.

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Oh, yeah. Oh, yeah. Back to you, Tim. Hold on. Let me get you back on here.

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Go ahead. Over to you, Tim.

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All right. Whether you're in Las Vegas, Orlando, or Prague, this may be entertaining,

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but it's not financial advice. Back to you, Jeff.

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Boom. We're back. None of this is financial advice. Oh, a little bit of background. If

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is your first time watching a True North podcast on episode 30. Our goal is to be the investment

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grade Bitcoin podcast. We're here talking about strategy. We're talking about Bitcoin treasury

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companies. We're talking about any corporation that's adding Bitcoin to their balance sheet.

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What does that look like? How are these equities trading in the market? What are these new fixed

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income products that these companies are designing? What is a convertible bond? We hit on all these

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different instruments and kind of what's happening in the market every week. So we've been doing this

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since October. And our goal is to educate the community because we all have different backgrounds

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and different perspectives on the market. And yeah, this is the biggest story in all of finance.

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Companies adding Bitcoin to their balance sheet and the increasing financial strength that they're

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continuing to have in the market. So great time to be talking about Bitcoin. Great time to be

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talking about strategy. Great time to be talking about Bitcoin treasury companies. There's clearly

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a lot of energy in the space right now. Just looking at how much capital has been raised

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every week for strategy and even some of these Bitcoin treasury companies that are moving really

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quickly. So without further ado, we'll jump into the leverage update. And this is important. We

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share this every single week because the commentary is strategy is incredibly over levered. They're

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levered to the gills. They're taking on so much debt to buy Bitcoin. And when you actually just

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zoom out and you look at some of the math, it doesn't look that bad. So that's the reason we

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show it. As of this week, so 6-18-2025, MSTR holds 592,100 Bitcoin. That's an increase from last

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week of 10,100 Bitcoin. One more week without using the MSTR ATM. So we got the billion dollar

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buy from STRD, I think about 76-ish million from the other two instruments, the ATM on the other

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instruments, STRF and STRK, which is big. That's the third week in a row there hasn't been MSTR ATM.

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So I think the MSTR ATM bears have been a little bit quieter. It's just shifted to,

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why isn't the stock performing? Which is just a funny sentiment shift.

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So Bitcoin held, $592,100 Bitcoin held at the price when I started the episode is around $104,960.

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dollars so they have 62 billion dollars of assets 8.2 billion of debt 3.3 billion of preferred stock

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net capital held on balance sheet is 50.5 billion 50.5 billion just to put this into perspective

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it's a huge number it's just a totally monumental number um the uh the the this would this would

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represent the third largest reinsurance entity in the entire globe so my background being in

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reinsurance. There are a hundred plus reinsurance entities that exist in the entire global reinsurance

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ecosystem. And this would be the third largest. Just the net capital held on balance sheet would

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be the third largest reinsurance company. So that's a very significant amount of money that

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they hold. It's a relatively niche market, but it would be very, very, very big.

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In terms of leverage ratio, so just taking the assets relative to the debt, the leverage ratio

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was 18.6% debt coverage multiple of 5.4. That means over every instrument that they have,

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they have 5.4 times the amount of assets than they do debt on the balance sheet.

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So what does that mean? That means that the Bitcoin price would need to go down below $13,890

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and stay there for an extended period of time in order for the assets to be worth the liabilities

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and strategy to be in any sort of circumstance where they wouldn't be able to pay out their

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debt into the future, into perpetuity. So really, I mean, these figures are huge. There's a reason we

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start with this every single week, because this is one of the strongest financial companies on the

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entire planet, let alone, it's definitely the strongest Bitcoin treasury company by magnitudes,

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right? Multiples greater than any other company out in the entire market. Yeah, there are some

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companies that exist that have less debt or no debt, but you can argue if you don't have any debt,

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you're inefficiently allocating capital on your balance sheet. So just some things to take into

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consideration. There's also another column here, a pro forma column that's outlining what the

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leverage ratio would look like if all of the convertible debt that's currently trading in

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the money were to convert into equity. All the convertible debt that's currently trading in the

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the money is hedged by short positions. So there are short positions that are matched effectively

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probably one-to-one with the equity that each one of these convertible debt holders holds.

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So if these convertible bonds do get converted into equity, they would likely cancel out one-to-one

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the short interest and the equity. So there likely wouldn't be much movement on the stock,

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and that would drop the debt on the balance sheet from $8.2 billion down to $5 billion.

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So again, looking at the leverage ratio, incredibly under leveraged in my opinion, under leveraged in many other people's opinion, with a 13.4% leverage ratio and a debt coverage multiple of 7.4. So incredibly well over collateralized. I have zero concern on the financial strength of this company and their ability to pay out their debt or their preferred stock into the future. Anybody else have anything to add?

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Yeah, I think some of the sentiment is, it just seems like bored strategy investors chasing squirrels to a certain extent, like just kind of getting distracted by the new shiny object, which I think we'll probably talk about it later.

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but I think there's going to be people who are executing the strategy well, like a meta planet.

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And then I think we're going to have to be very careful about the dozens, maybe hundreds,

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of Bitcoin treasury companies that are going to pop up on the back of this hype.

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Yeah, I mean, there's going to be a ton that are going to be popping up over time, right?

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I think it's tough to say, right?

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We've got, what, a half a dozen or a dozen now that are popping up and they're adopting this, you know, a beta strategy where they're all, you know, using ATM and using operating business to generate more cash flow to bring more Bitcoin on the balance sheet.

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But I mean, we're still in incredibly early days.

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And I still think that there's a possibility that there's going to be a bear market at some point in the future when, you know, there's just a little bit of skittishness in the market to adopt a Bitcoin treasury strategy.

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And that could be a really opportunity, a really good opportunity for any company that's maybe on the sidelines to start putting in work to adopt a Bitcoin treasury standard into the future.

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So I really, it's going to take so long.

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like I was on a phone call earlier today and we're just talking about timeline, right? Like

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they're a private company and they're looking to go public and potentially start running a strategy.

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They've got a good underlying business. They're relatively small and we're talking 12 months out,

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right? Like eight to 12 months starting from private today in order to get public and have

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liquidity in the public markets. So it's not a really fast thing. Any company that's gone public

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or gone through this process with a pipe recently, they're either already been public or they've

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already had full audited financials, all of these things. And they were already really close to

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being able to go through this process already. And that's how they've been able to enter the

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public arena. So it just takes a bit of time. And I think it's going to take a lot longer than

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many people think for more of these companies to come onto the scene.

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I would agree. I've had conversations with previous clients. I've had conversations with

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individuals that I know that work for Fortune 500 companies and leadership positions and whatnot.

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And if a company even were to consider this, to your point, if they were to start right now,

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it's a year to 18 months out before they could actually go live with it, I think, in terms of,

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one, getting buy-in, and two, actually making it work. So I do think we have a lot more time here.

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With regards to bear market, I'm still thinking through how deep that bear market can go. I do

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think we're going to see a retracement, obviously, but I still don't know if we're going to see that

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80% drawdown that we have in the past. But yeah, I know we've said this a lot on the show,

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we are still early and i do think that to salel's point with the sentiment it is people chasing

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squirrels but it's also a lot of um what it's a lot of cost basis bias so someone that's newer

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in the trade they're far more impatient than someone's been in it for like two years right

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like i'm i'm fine with the price activity the way i see it right now and a lot of us are but in a

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lot of individuals that i've seen their posts i've seen that they got in right around the top at 543

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or just after they are some of the loudest ones that are the most frustrated and they're the ones

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that are talking about i sold all my msdr to rotate into x y or z yeah um and it's kind of

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weird we went from people saying i sold all my msdr to roll into misty and now they're saying now a

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lot of people say they sold all the msdr roll into another play and i'm seeing people that sold they

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sold msdr from misty going from from msdr to misty to one of these other plays and it's like you're

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burning your cash every single time you do that have you sat down with like at least a spreadsheet

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to plan this thing out um the answer is no but that's that's one of the questions that i ask

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and i'm just i just think that people need to really have a long time horizon or if they're

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going to rotate are you is it really worth it to burn your whole position to do hopefully be

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hopefully be in a non-taxable account right there's there's that as well so it's like you're

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getting eaten with taxes and you're rotating your position into a new play that's potentially more

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volatile yeah i i just think there's a lot of impatience there's a lot of gambling going on

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and um you know that's going to rectify itself like it always does one one so late to your point

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right people like if you zoom out and adrian to your point as well i uh i haven updated any of this data and it could actually be helpful if somebody in the in the stream wants to help me update this but uh for a while you know i do the daily updates of like where these companies rank like how strategy ranks to other companies so i stopped tracking in october october 4th i was

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tracking this every day i was like doing it manually in excel but on october 4th uh strategy

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was ranked 267th largest company by market cap on October 4th. So what is that? Eight months ago?

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Eight months.

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Eight months ago. And the market cap was $35 billion. And what is this? And the price is $176.

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Fast forward, right? Anybody that was buying the stock here, or even in September,

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anybody that was buying a stock in September, you were able to buy a stock in September for $114.

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Sentiment was horrible. Sentiment was horrible in September.

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Completely horrible. And it was very similar to where we are right now where,

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anybody looking back, if they bought in September, they were taking on a tremendous risk. They were

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taking on significantly more risk because the company in September was a $22 billion market

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cap company there's significantly more risk with a smaller company than a larger company

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and i mean what how much bitcoin did they have in their balance sheet at that point too that was

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9 30 24 they had 252 000 bitcoin on the balance sheet so now the bitcoin is more than doubled

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more than double their holdings yeah it's more than doubled and

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And let's see, the stock has quadrupled, nearly quadrupled. And that's kind of where we're at

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today. You look back to where things were previously, like strategies are not slowing down.

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They are picking up steam. They're incredibly strong right now. They're de-levered. They're

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now able to capitalize on an ATM on any of these new instruments that they've got in the market

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and bring this capital in the door without tapping the ATM on MSTR. So there's no, there's no like

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instant dilution. So they're able to add the Bitcoin to the balance sheet without having this

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kind of instant dilution impact, which is incredibly powerful, right? Like that's,

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they didn't have that back in September, but you knew that they would, right? You knew that there

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was things on the horizon. You're like, they're going to be able to monetize this Bitcoin stack

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greater than what they're doing right now. And like, now we have the products, like strategy has

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the products and it they're they can tap a a 600 trillion dollar pool of capital for these products

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over the next 20 years and people are getting bored because you know the ibit to mstr is down

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25 bips on the day right like are you kidding me it's such a weird it's such a weird thing and the

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sentiment is just so strange how it kind of follows it it's like infectious it's kind of a kind of a

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wildfire. Yeah.

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And we also do have people that are pushing a narrative as well, right?

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That are screaming into the ether of the online world as loud as they possibly can

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and doing their best to create noise that people just kind of latch onto and they run

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with it. Kind of like, so a little squirrel point. The noise is a squirrel and they keep

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chasing the noise, right? So you have a lot of situations now where, and we sound so corny

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saying it where people really need to zoom out like september was bad i'm sure you remember like

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was it after march or was it april when the price when we ticked up over like we hit what 1999

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and then the price oh march yeah it was like march 15 we hit 1999 and 99 cents yeah and then

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and then slam down to like 101 you know yeah people were were all were all over us at that

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point too and then yeah then then they go for us again you know so it's just it's just a cycle that

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we're going to see and i think that um what's funny is that i distinctly remember people that

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were crying the loudest and was some of the meanest comments back in march they're now the ones saying

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relax to everyone so we're going to see that that trend continue when we roll into this next uptrend

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here and we're probably going to have the same conversation unfortunately in 2026 and 2027 and

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2028 until the next um having so i think people i think people are going to look back on episode 30

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and be like that was the equivalent of 1999 yeah yeah and and you like to your point adrian then

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you have people like colleen right in the comments fidelity asked me in september what are you

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thinking and she just said you'll see right that's called conviction like there's plenty of people

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out there that know how to buy bitcoin we all know how to buy bitcoin but like do you have the courage

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and conviction and then you know i guess while we're in the notes shout out to adam livingston

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right someone made a uh comment about he's the uh where is it where is it his um his pre-workout i

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saw that yeah yeah your videos are wild no no he's i i love adam i think i could say we love adam so

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making great content i mean anybody that's interested in talking about this stuff just

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get get on like go buy a microphone a yeti blue microphone it costs 80 dollars get a logitech

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camera that i'm using right now it costs 65 and just start talking like um it goes it goes a really

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goes a really long way uh i mean to that point it's like you look at the price action and i know

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we were saying this a few months ago like now's the time to build right if you have any interest

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in researching this or starting a business or getting a job in bitcoin which historically

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it's been kind of hard to make money in bitcoin like now's the time to like just go on somebody

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else's podcast, start a podcast, do some long form posts, like just do something if you want to

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kind of like get involved, get active, because literally, you know, who knows what the future

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holds, but like all I'm hearing call after call after call is we're looking for a CIO, we're

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looking for a digital strategy person, we're looking for an opera, like a capital markets

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person. We're looking for an advisor. And it's like, the opportunities are finally starting to

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percolate, which is arguably pretty exciting. And hopefully, with all this corporate adoption,

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it's like, we can actually build something and hopefully, fingers crossed, knocking on wood,

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stuff doesn't blow up in our face. Because we're in the next chapter now. We're not in

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last cycle or two cycles ago yeah oh yeah if you if you want to get a job in bitcoin just start

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talking about bitcoin nobody knows you exist unless you know like uh well it's just it's a

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bit harder to uh to know people exist without talking in the space for sure and adrian to your

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point about you know every time you jump ship or you know you're gonna have a little bit of

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friction there and maybe lose you kind of have to ask yourself are you an investor or a trader

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because a lot of the gains that people are seeing,

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like, yeah, if you got into strategy

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and it's just the same price it was a month ago,

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and then you see people getting outsized gains

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with MetaPlanet or something,

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a lot of the people that are posting about that are traders.

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And they're very good at it.

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And if you're not, if you're an investor,

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you have to ask yourself, can you do what they're doing?

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and if you can't then maybe you have to just kind of like remember your diamond hands

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bitcoin training and not try to do something that you're not really capable of doing

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yeah you call it chasing the squirrel i call it chasing the rabbit

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like interchangeable interchangeable commentary but it's the same thing um

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if you see someone posting that they made x amount of dollars on on whatever trade and and

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you try to chase that, you're going to get blown up by the mere fact that you're chasing

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it. If you were a trader, you would have seen that move and you would have anticipated that

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move. If you see someone else make a move and you're trying to follow that, you're likely

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going to get blown up in all likelihood, unless you have the conviction to hold through up

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and downs and you're just kind of switching positions from one to the next. But most people

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aren't doing that. They're getting spooked from one position into another one and then

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They're going to get spooked from that one back into the old one.

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And they're going to constantly be chasing and they're going to burn all their capital.

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Yeah.

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That's what I'm seeing happening a lot.

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I think if you get in late, you might have missed some of the gains.

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And if you don't get out early enough, then you'll get stuck holding the bag.

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Yeah.

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I think it's good to evaluate consistently.

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Consistently evaluate your investments.

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I think all investors should do that.

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And with this, with MSTR in particular, you sit back and you look at it.

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And it's like all the math still mess, you know, like the, the scale is there.

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The mode is there.

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The financial strength is there.

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The products are there.

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The toolkit's there.

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And there's nothing that like for me, again, this has been like a, I go back to this story

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all the time.

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I have like uncles in the past that have told me I could have bought Apple at 82 cents.

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and you know it's just that that story you know when i was younger and i was like well you didn't

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you know it's like you could have bought apple at 82 cents but you didn't and even if you did

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like would you have held on to it probably not you probably would have sold it for

281
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you know ten thousand dollars to go buy a honda accord like you know it's just

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i don't want to ever have that story and i want to know that i feel like i have the best

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trade of the next decade. And that's what I've been searching for. And I feel like I found it.

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I mean, Bitcoin, Bitcoin, I found it with Bitcoin. And then it was like, oh my God,

285
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here's a company that's completely going to transform how the world operates by using Bitcoin

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and using the Bitcoin as collateral in different use cases and different forms. So yeah, it's pretty

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It's pretty hard for me to kind of change my perspective on that. I can't undo the math.

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I can't take the math down. I look at the math of some of these other deals like, yeah, some of the

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other deals may move faster, but you're also taking on tremendous risk in all of these other deals

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that is hard to conceptualize because this market has never existed before.

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And I think a lot of the market is really miscalculating risk on some of these other plays,

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primarily like liquidity risk and how to get in and out of these different instruments right if

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you're like if you've got to call your broker on the phone to be able to invest in a product in a

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different international jurisdiction imagine how hard it is when you want to sell that one

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and what if what if you want to sell it when everybody else wants to sell it

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and what if there are no buyers when everybody else wants to sell it

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So liquidity starts to become really paramount in some of the, especially if you're in scale

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on any of these deals in particular.

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Well, yeah, I did a post about that, like it was last week, to be very, very careful

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if you're doing these OTC trades in size, because you can get caught on the wrong side

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of liquidity very easily.

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And people jumped on me all over it.

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And they're saying that the liquidity for MetaPlanet is fine when I mentioned like three

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or four other ones as well.

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So that's a good point. And someone else, someone in the chat said that people are rotating from MSTR into other things and they're not shifting around after that. Yeah, I call shenanigans on that. We are seeing what people are saying. And if you're getting spooked out of MSTR into another position, you're trying to tell me that you're not going to get spooked out of that one.

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when you see a 40% drawdown,

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you're all of a sudden going to have the conviction

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to hold onto it and have diamond hands

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when you got out of MSTR

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because it wasn't giving you enough returns.

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I don't think that's the case.

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I think that people are chasing gains,

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which is fine,

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but if you're chasing gains with your whole position,

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the likelihood of you timing that move correctly

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and staying in it long enough

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to get your position to where you want it to be

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are significantly diminished

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if you are the kind of person

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that's going to be shifting from one position to another.

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Now, if you have a position

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and you perhaps leverage that position

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or you have excess capital

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that you put into a different position,

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that's a different comment.

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That's a different kind of a scenario.

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But if you shift your money constantly like that,

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if you don't really plan out what you're doing,

329
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you're going to get burnt.

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And I'm talking as someone that's done that in the past

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and gotten burnt.

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so be mindful of what it is you do because the second you think you're smart the market's going

333
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to slap you upside the head and show you that you're not yeah and where does everybody go in

334
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a flight to safety what's safe right what instrument that's the perfect point because

335
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this one's for you jeff i know you like to talk about insurance you like talk about reinsurance

336
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you like forest fires and um you probably talk about re-reinsurance if there is such a thing

337
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Retro, there is. Yeah, retro.

338
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Okay, of course there is.

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But like there's, you know, in talking about the bear market,

340
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there's trees that require a forest fire to actually reproduce.

341
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Redwoods.

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Like, yeah, well, yeah, there's a couple other ones.

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But like the seeds won't sprout if there's no forest fire.

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And if you think about that as a bear market, you know,

345
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the forest is going to get cleared,

346
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and there's going to be some big-ass trees that survive.

347
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And then the landscape is going to be favorable for those survivors.

348
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But some of these SPACs or whatever that sprout up, they might not be mature and they might not be able to survive that.

349
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So choose your company that can survive or even better thrive.

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Yeah, retain.

351
00:29:55,366 --> 00:30:04,526
like have have this kind of retention strength, like strength in retention, the ability to withstand any any market turbulence.

352
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And there's there's safety in that. Right.

353
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So it's so interesting. It's like the market is treating MSTR as like.

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Like almost like a stable, like, you know, a stable company, but they are a growth company, like make no mistake.

355
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Like MSTR is a growth company.

356
00:30:24,306 --> 00:30:29,466
Like, yeah, the technical Bitcoin yield may be lower,

357
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but if strategy adds 500,000 Bitcoin in the next 12 months,

358
00:30:33,386 --> 00:30:36,606
right, like that's going to push Bitcoin higher.

359
00:30:36,606 --> 00:30:52,812
That going to push any historical earnings higher That going to double Bitcoin per share with safety Safety and liquidity And that should carry a premium That should carry a significant premium

360
00:30:52,812 --> 00:30:57,612
And it's funny. I mean, we put Jim Chanos up on the screen at the very beginning and he's part of

361
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our episode picture. But it's really interesting that I don't think he's really grasping or

362
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or conceptualizing like these uh the preferred instruments and how powerful these preferred

363
00:31:08,492 --> 00:31:14,412
instruments are like not selling mstr stock and still being able to buy bitcoin and add bitcoin

364
00:31:14,412 --> 00:31:22,812
to the balance sheet without using the mstr atm like that's that's monumental is like absolutely

365
00:31:22,812 --> 00:31:28,972
massive huge he's making a slightly reworked version of carrisdale capital's argument

366
00:31:28,972 --> 00:31:37,032
that's all he's doing which which he's probably got more money too well right and and and less

367
00:31:37,032 --> 00:31:46,272
drug dependency but um the the reality of it is is that yeah so what right now is going on is that

368
00:31:46,272 --> 00:31:49,932
strategy is a victim of their own success the reason why i've been using the economy example

369
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is that economies are stable they're going to see ebbs and flows but i think that what's going on is

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they're building out a stable economy and they're going to keep scaling it and what and once the

371
00:32:00,312 --> 00:32:03,752
market gets wise to that that's when that additional multiple is going to come on

372
00:32:03,752 --> 00:32:09,992
and it's not going to be about you know just how much bitcoin can they create onto the balance

373
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sheet it's going to be about the fact that they are now a monopoly they have this entire this

374
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entire economy built out around them they have all these new offerings well they're not new

375
00:32:19,032 --> 00:32:22,552
anymore but they have these offerings and they're probably going to scale the offerings and i think

376
00:32:22,552 --> 00:32:26,712
to your point that's where that the additional multiples are going to be seen because what do

377
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you do when you have a company that is near a trillion dollars in market cap they have dividend

378
00:32:32,552 --> 00:32:36,312
plays they have all these different offerings on the balance sheet and they keep accreting

379
00:32:37,272 --> 00:32:42,472
an asset that keeps appreciating in value year over year you know four-year cycle over four-year

380
00:32:42,472 --> 00:32:46,392
cycle and it's just going to keep scaling eventually the market's going to get wise to

381
00:32:46,392 --> 00:32:51,272
that and the market's going to price in a multiple the challenge with it is that i think is that the

382
00:32:51,272 --> 00:32:55,992
market first has to understand bitcoin which they don't and then they have to understand strategy

383
00:32:55,992 --> 00:33:01,512
which is on top of it which they clearly don't so we do have a bit of a learning curve that's still

384
00:33:01,512 --> 00:33:05,752
still in front of us that we have to have to um weather but i think that we're going to get there

385
00:33:05,752 --> 00:33:11,192
it's just that people need to have a longer time horizon yeah he's fun to follow on x but i think

386
00:33:11,192 --> 00:33:15,832
he said something along the lines of well i'm just doing what's what sailor's doing i'm just selling

387
00:33:15,832 --> 00:33:22,272
strategy and buying Bitcoin with it. And that sounds clever and all, but, and actually I kind

388
00:33:22,272 --> 00:33:27,012
of had, I had a kind of, I kind of had a similar thinking, you know, being a covered call seller.

389
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I was like, well, you know, if sailors do it, I'll do it. But see, I actually understand that

390
00:33:32,432 --> 00:33:36,592
when it rallies and it rips your face off, that my shares are getting called away. Like I don't

391
00:33:36,592 --> 00:33:43,632
have this delusion that that's not a risk, but the way that he's describing it is, is,

392
00:33:43,632 --> 00:33:50,192
is actually fundamentally flawed because in order to short it, you have to borrow the shares and

393
00:33:50,192 --> 00:33:55,512
then immediately sell them. So you need the price to go down. Sailor doesn't need the price to go

394
00:33:55,512 --> 00:34:01,632
down to win. And not only that, you actually have to pay interest on the shares that you borrowed.

395
00:34:01,632 --> 00:34:07,512
So there's a carry cost. So if you don't get, you know, if you don't win that bet in 30 days,

396
00:34:07,512 --> 00:34:14,492
60 days, 90 days, 180 days. You're paying interest the whole time. So it's a completely

397
00:34:14,492 --> 00:34:20,832
different scenario. And like, you know, Sailor doesn't have to cover if the price goes up.

398
00:34:21,072 --> 00:34:24,552
You know what I mean? Sailor's not getting squeezed. He's got an infinite money printer

399
00:34:24,552 --> 00:34:29,552
because the way that a company is formed, he can just print as many shares as he need to.

400
00:34:30,132 --> 00:34:34,292
And he's got the preferreds where he can buy back the stock if the MNAV contracts.

401
00:34:35,012 --> 00:34:41,972
so it's it's not at all like short selling you know even if it sounds clever to to say that

402
00:34:43,332 --> 00:34:47,172
yeah and ryan just said one of the points that i've been making a lot and what a lot of us

403
00:34:47,172 --> 00:34:51,172
have been making sailor's a net buyer of bitcoin he doesn't care about the price he's price agnostic

404
00:34:52,292 --> 00:34:58,532
so regardless of um what chanos is trying to do sailors is going to keep buying bitcoin

405
00:35:00,852 --> 00:35:03,812
and i think this really all comes down to the collateral component

406
00:35:04,292 --> 00:35:11,112
Right? Like so many people are continuing to miss this. And I'm going to try to make this

407
00:35:11,112 --> 00:35:18,832
incredibly clear. So hang with me here. So Bitcoin is collateral. Okay. Bitcoin is the best collateral

408
00:35:18,832 --> 00:35:24,232
the planet's ever seen. It's fully liquid. You can trade it 24, 7, 365. You can see it, you know

409
00:35:24,232 --> 00:35:31,512
where it's at, yada, yada. Now, somebody made the argument earlier today in Twitter, it was

410
00:35:31,512 --> 00:35:37,312
real estate has yield. Bitcoin doesn't have yield. And I was just like, oh my God,

411
00:35:37,352 --> 00:35:41,272
people are still missing it. People are still missing everything that's going on here with

412
00:35:41,272 --> 00:35:45,452
MSTR, right? Like real estate, right? If you hold a piece of real estate, you're using that

413
00:35:45,452 --> 00:35:51,452
collateral to generate like rental income, right? That is a, that is a yield that you are getting

414
00:35:51,452 --> 00:35:58,312
off of parking your capital in one location. Now, same thing is happening here. It's just in a

415
00:35:58,312 --> 00:36:03,592
little bit of a different format and it's a little bit weird because it's never existed before.

416
00:36:04,392 --> 00:36:10,612
Now, strategy, they hold Bitcoin on their balance sheet, right? They've got now 592,000 Bitcoin on

417
00:36:10,612 --> 00:36:16,312
their balance sheet. Okay. That's a ton of power. There's $62 billion of power of the best collateral

418
00:36:16,312 --> 00:36:20,452
that the world's ever seen. Okay. So they're holding all this money on their balance sheet

419
00:36:20,452 --> 00:36:28,272
and what can you do with it? Well, they are collateralizing different tranches of risk

420
00:36:28,312 --> 00:36:30,472
on their balance sheet,

421
00:36:31,592 --> 00:36:36,592
they're using the position within the capital stack

422
00:36:37,272 --> 00:36:40,492
as different risk return collateral tranches.

423
00:36:41,592 --> 00:36:43,252
And the reason they're able to do that

424
00:36:43,252 --> 00:36:46,512
is because they are holding all of this Bitcoin.

425
00:36:47,392 --> 00:36:51,012
And every instrument, every time they use the ATM

426
00:36:51,012 --> 00:36:54,112
and sell Strife or sell Strike

427
00:36:54,112 --> 00:36:56,752
or sell a billion dollars of Stride,

428
00:36:56,752 --> 00:37:02,752
They are yielding dollars from holding the Bitcoin as collateral.

429
00:37:03,412 --> 00:37:08,132
So they're able to make a yield on holding all this money on their balance sheet.

430
00:37:08,832 --> 00:37:15,552
Now, by structuring these instruments up into the capital stack,

431
00:37:16,052 --> 00:37:17,792
MSTR takes on the most risk.

432
00:37:18,532 --> 00:37:21,292
STRD is the next closest to risk.

433
00:37:21,532 --> 00:37:23,092
STRK next closest to risk.

434
00:37:23,132 --> 00:37:26,732
STRF gets further away from risk and the convertible bonds

435
00:37:26,732 --> 00:37:34,732
most senior. So those risk return profiles, you're giving away, if you buy any of those products,

436
00:37:35,372 --> 00:37:49,292
you are giving away upside in return for downside protection. So in those circumstances,

437
00:37:49,292 --> 00:37:55,132
MSTR shareholders are taking the excess upside and the excess downside of the Bitcoin risk,

438
00:37:55,132 --> 00:38:02,492
the collateral. Me as a Bitcoin maxi, triple maxi, I take that risk all day, every day.

439
00:38:03,932 --> 00:38:07,292
Because I don't think Bitcoin is going to zero. I think it's going to infinity.

440
00:38:08,012 --> 00:38:13,852
And I want to be part of that trade. So that's how I view it. I think people just are not

441
00:38:13,852 --> 00:38:20,572
conceptualizing this collateral component. This is really powerful. And that's what makes this

442
00:38:20,572 --> 00:38:27,452
whole thing work is they're going to go convince capital buyers, fixed income buyers that, hey,

443
00:38:28,412 --> 00:38:32,492
dip your toe in the water. The water is warm. Come by this instrument. It's six times over

444
00:38:32,492 --> 00:38:39,372
collateralized by all of this Bitcoin that I hold on my balance sheet. That's it. That's how it works.

445
00:38:39,372 --> 00:38:46,652
They are earning yield on Bitcoin. It's just a non-traditional way. So does that make sense?

446
00:38:46,652 --> 00:38:49,772
Well, for us, yes.

447
00:38:49,772 --> 00:38:54,412
Yeah, it's just like, I think just a lot of people aren't,

448
00:38:57,772 --> 00:39:02,732
they aren't like wrapping their heads around it. So yeah, it's just an interesting,

449
00:39:03,292 --> 00:39:10,012
I think it's really helpful to say that over and over and over again, because they are generating

450
00:39:10,012 --> 00:39:14,412
yield. Everybody's like, oh, I thought strategy was going to be a Bitcoin bank. Well, guess what

451
00:39:14,412 --> 00:39:20,092
they are. They're doing it right now. But the size and scale that they're able to do it is for a $600

452
00:39:20,092 --> 00:39:26,332
trillion market. They don't have to build out banking infrastructure and deal with all these

453
00:39:26,332 --> 00:39:32,412
regulators and hire 10,000 people to run regional strategy banks all over the place. Instead,

454
00:39:32,412 --> 00:39:38,332
they've got a capital team of five issuing a billion dollars of a fixed income instrument on a

455
00:39:38,332 --> 00:39:48,572
fucking friday you know like there's this is the most efficient usage of the bitcoin to generate

456
00:39:48,572 --> 00:39:55,532
bitcoin yield and people just aren't conceptualizing that like this is this is it this is the best idea

457
00:39:55,532 --> 00:40:01,452
they've got it they're sitting on it and they have a they have a moat that nobody else can tap into

458
00:40:01,452 --> 00:40:06,332
right the size and scales just come like they're 50 times larger than meta planet

459
00:40:08,332 --> 00:40:12,192
And how foolish is it that they share the playbook in and of itself?

460
00:40:12,572 --> 00:40:18,292
Like, you know, back in, I think Tesla's got some things that they could have patented and they're just like,

461
00:40:18,492 --> 00:40:19,752
nah, screw it, we'll open source it.

462
00:40:20,232 --> 00:40:24,352
Because they know that their lead is insurmountable.

463
00:40:25,012 --> 00:40:27,892
And that's the position that strategy's in.

464
00:40:28,212 --> 00:40:32,012
They can just open the playbook to anybody who wants to reproduce it.

465
00:40:32,552 --> 00:40:34,532
Because who cares if they even caught up?

466
00:40:34,692 --> 00:40:36,852
That would just pump Bitcoin.

467
00:40:36,852 --> 00:40:43,812
Like if there's multiple companies out there with a million Bitcoin eventually, it just pumps their bag.

468
00:40:43,912 --> 00:40:53,452
And like you mentioned the preferreds and like a billion in the stride, the third preferred coming out.

469
00:40:53,532 --> 00:40:57,452
That was just like a big swinging STR capital D moment.

470
00:40:57,572 --> 00:40:57,992
You know what I mean?

471
00:40:57,992 --> 00:41:06,252
Like there's no way that anyone else is going to catch up with the levers that strategy has at their disposal.

472
00:41:06,852 --> 00:41:07,852
No.

473
00:41:07,852 --> 00:41:10,352
Yeah, there's no way.

474
00:41:10,352 --> 00:41:14,792
And somebody was also saying that, hold on, Adrian, somebody was also saying like, okay,

475
00:41:14,792 --> 00:41:18,292
at a future point in time, won't everybody just sell their MSTR to buy Bitcoin?

476
00:41:18,292 --> 00:41:23,232
And the answer is no, because a lot of people will, right?

477
00:41:23,232 --> 00:41:26,532
A lot of people will be buying Bitcoin and do their Bitcoin thing.

478
00:41:26,532 --> 00:41:29,152
But at some point, like you have so much Bitcoin, it doesn't matter.

479
00:41:29,152 --> 00:41:32,152
Like if I have more Bitcoin or if I have more MSTR, at some point, it just doesn't matter

480
00:41:32,152 --> 00:41:34,152
anymore.

481
00:41:34,152 --> 00:41:43,392
And so at that point, the reason you wouldn't do that is because I personally, Jeff, can't

482
00:41:43,392 --> 00:41:49,252
go issue investment grade Bitcoin backed preferred equity instruments on my own portfolio at

483
00:41:49,252 --> 00:41:50,252
3% yield.

484
00:41:50,252 --> 00:41:57,152
Right now they're paying nine or whatever they're paying, but they're going to go down to three.

485
00:41:57,152 --> 00:42:01,292
And they're going to be able to issue billions and billions and billions of dollars of capital

486
00:42:01,292 --> 00:42:04,052
at like a 3% interest rate.

487
00:42:04,052 --> 00:42:09,332
I can't do that. There's no way I'm going to be able to do that. And that's, that's what,

488
00:42:09,332 --> 00:42:13,972
that's the power here is like, they've got all this money, they've got the toolkit,

489
00:42:13,972 --> 00:42:19,092
they're able to do things that we can't do. And that many, that many other companies can't do.

490
00:42:21,732 --> 00:42:28,212
So then the scale of that is just like, it's like magnitudes greater than other companies.

491
00:42:28,212 --> 00:42:36,392
so um like it's just a i wouldn't i guess what i'm trying to say here is i wouldn't get uh

492
00:42:36,392 --> 00:42:41,652
depressed at the price action and just like zoom out sit on your hands turn off the internet just

493
00:42:41,652 --> 00:42:46,592
like go out touch grass this is like this is dead man portfolio stuff like this is you hold

494
00:42:46,592 --> 00:42:49,732
on to this for the rest of your life and apparently i have nukes

495
00:42:49,732 --> 00:42:58,132
with um nukes and you were on it today and i just noticed what the hell that was about

496
00:42:58,132 --> 00:43:05,892
or the name jeff was on it rather no but yeah so the the thing the the thing is i i do really do

497
00:43:05,892 --> 00:43:11,412
i do think that the um there are a lot of individuals in the market that don't understand

498
00:43:11,412 --> 00:43:14,772
bitcoin they don't understand financial markets they don't understand capital markets they don't

499
00:43:14,772 --> 00:43:18,932
understand the preferreds they don't understand how they operate and and you're right we're gonna

500
00:43:18,932 --> 00:43:27,012
have to keep repeating that message over and over again before it kind of settles and um

501
00:43:29,492 --> 00:43:34,932
when it really does i think that's when everyone's going to have the oh moment when it comes to

502
00:43:34,932 --> 00:43:41,412
strategy and but what price will will we be at by that point is the question so for those that are

503
00:43:41,412 --> 00:43:46,932
in it now if you can sit in your hands and enjoy the next four years and see where we're at by the

504
00:43:46,932 --> 00:43:51,752
the next cycle because if you look at where we were in 2020 to now, I would not have thought

505
00:43:51,752 --> 00:43:57,072
this was possible. That they would be approaching 600,000 Bitcoin, they would have a massive

506
00:43:57,072 --> 00:44:01,572
options market, they would have all these offerings. So what are they going to be able

507
00:44:01,572 --> 00:44:06,592
to do in another four years? I think that people really, really need to sit down and think about

508
00:44:06,592 --> 00:44:11,212
that. Take a look at what they've done, take a look at where they started and just project that

509
00:44:11,212 --> 00:44:16,172
to the future. And I think it could give you a little bit of clarity.

510
00:44:17,372 --> 00:44:20,612
And I'm going to hit on this question here. Why will 3% yield be attractive?

511
00:44:21,272 --> 00:44:25,712
Because I think it's an interesting question. And I've said this multiple times. I think

512
00:44:25,712 --> 00:44:32,472
STRF will be the risk-free rate at a future point in time. So think about why is the US 10-year

513
00:44:32,472 --> 00:44:41,812
treasury at 4% attractive. Cause you know, you're going to get your 4%, right? Like that, that's the

514
00:44:41,812 --> 00:44:45,552
only, that's the only reason it's attractive because you as government can print money. You

515
00:44:45,552 --> 00:44:48,512
know, you're going to get your 4%. It is the risk-free rate. There's a reason it's called

516
00:44:48,512 --> 00:44:54,212
the risk-free rate. They can print money. Now at some point, you know, if, if strategy continues

517
00:44:54,212 --> 00:44:57,452
to grow at this pace that they're going to grow and they're sitting on 2 million Bitcoin at a

518
00:44:57,452 --> 00:45:01,572
future point in time and a 10% leverage ratio, STRF is going to be the risk-free rate.

519
00:45:02,312 --> 00:45:07,872
That is your zero risk instrument. That is what you're going to compare the rest of the market

520
00:45:07,872 --> 00:45:14,612
to is some sort of risk-free rate, risk-free interest rate. And this concept of strategy as

521
00:45:14,612 --> 00:45:21,952
a bank, a lot of people, and we kind of got to this at the end of our last episode where we were

522
00:45:21,952 --> 00:45:27,872
kind of conceptualizing like a world where you can store your energy without decay and everything in

523
00:45:27,872 --> 00:45:34,352
the world needs to be redesigned right um like let's think about a bank of the future is the

524
00:45:34,352 --> 00:45:42,672
bank of the future a debt-based bank or is it an equity-based bank right because all we know about

525
00:45:42,672 --> 00:45:48,752
banks right now is they're debt-based what about an equity-based economy and you have these other

526
00:45:48,752 --> 00:45:51,492
these other instruments that pay you into perpetuity over time.

527
00:45:51,492 --> 00:45:54,652
And that's maybe maybe that's how society gets paid is they hold all these equity

528
00:45:54,652 --> 00:45:59,692
instruments instead of debt instruments because they're all benefiting from

529
00:46:00,252 --> 00:46:10,958
the global economy shoving their energy and storing their energy in the best asset on the planet And that flows through to strategy and you getting paid to live your life by holding

530
00:46:10,958 --> 00:46:15,258
these equity based debt, these equity instruments instead of debt instruments, right? Instead of

531
00:46:15,258 --> 00:46:19,738
lending against your Bitcoin, what if it's an equity instrument? So I don't know. I think the

532
00:46:19,738 --> 00:46:24,158
whole world needs to get redesigned and rethought like on a Bitcoin based system. It's really

533
00:46:24,158 --> 00:46:28,518
tricky. And it also makes when you go to the outside world and try to talk about this stuff,

534
00:46:28,518 --> 00:46:33,698
it uh so that's that part starts to make you sound like you're in a cult

535
00:46:33,698 --> 00:46:40,198
right like i'm i'm okay with it i went and got beers last night and it's just like

536
00:46:40,198 --> 00:46:44,878
you know with some of my old reinsurance grow workers and it's just like

537
00:46:44,878 --> 00:46:53,438
kind of blank stares you know like what oh my god what are you talking about uh you know and i just

538
00:46:53,438 --> 00:46:57,398
i use them as the bellwether like i think that i think all the people i used to work with are

539
00:46:57,398 --> 00:47:04,078
really smart people all in their own individual ways. But this hasn't even clicked yet. It hasn't

540
00:47:04,078 --> 00:47:09,118
been a priority yet. They're all complaining about their comp. They're all complaining about

541
00:47:09,118 --> 00:47:13,618
their bonuses. It's not rising as much as they thought. They're working harder than they've ever

542
00:47:13,618 --> 00:47:19,018
worked. And that same problems that I was kind of going through when I was kind of back into

543
00:47:19,018 --> 00:47:25,078
meat grinder. And it's just not very exciting place to be. Yeah, I think they're going to have

544
00:47:25,078 --> 00:47:31,798
to put like no talking about bitcoin on the uh rules of the sauna outside the door because that's

545
00:47:31,798 --> 00:47:35,678
all i want to talk about i'm stuck in there for two minutes you're like you're like stretching

546
00:47:35,678 --> 00:47:40,478
and you know talking about bitcoin that's funny that's hilarious oh yeah every time

547
00:47:40,478 --> 00:47:48,638
okay guys what else what what's next on the uh on the agenda use cases i mean so late you wanted

548
00:47:48,638 --> 00:47:53,798
to talk you wanted to hit on use cases you want to hit on that yeah i mean i think all of these

549
00:47:53,798 --> 00:47:59,658
these Bitcoin treasury companies that come out and Mason and Dan provided a framework. I think

550
00:47:59,658 --> 00:48:05,218
it was two episodes ago. And we're going to have to start figuring out a way to determine

551
00:48:05,218 --> 00:48:10,378
what Bitcoin treasury companies are legit or not. Because when there's hundreds to choose from

552
00:48:10,378 --> 00:48:17,198
and you want to have multiple positions if you believe in second best, I guess.

553
00:48:17,198 --> 00:48:26,538
um and so i like to think about uh you know shit coins as listing their red flags like when someone

554
00:48:26,538 --> 00:48:32,578
tells me oh they made money on such and such altcoin i don't attack their altcoin specifically

555
00:48:32,578 --> 00:48:42,698
i just say look for me red flags are on crypto are um you know pre-mine proof of stake centralized

556
00:48:42,698 --> 00:48:44,618
and no fixed supply.

557
00:48:45,258 --> 00:48:48,438
And I don't attack their asset directly.

558
00:48:48,638 --> 00:48:49,978
I just let them think about it.

559
00:48:50,098 --> 00:48:51,558
And if whatever they're investing in

560
00:48:51,558 --> 00:48:53,198
has any of those red flags,

561
00:48:53,238 --> 00:48:55,378
I just let them figure it out on their own.

562
00:48:56,158 --> 00:48:57,758
And I think we can probably do the same thing

563
00:48:57,758 --> 00:48:59,038
with Bitcoin treasury companies.

564
00:49:00,038 --> 00:49:02,878
Do they have cash inflows via products or services?

565
00:49:03,558 --> 00:49:06,778
Or can they create these financial products

566
00:49:06,778 --> 00:49:07,718
like strategy's doing?

567
00:49:08,798 --> 00:49:11,178
And someone was asking earlier,

568
00:49:11,178 --> 00:49:14,678
how do they pay the yield on the preferreds?

569
00:49:15,498 --> 00:49:18,018
And the answer is they either pay for it

570
00:49:18,018 --> 00:49:19,318
with the money that they're making

571
00:49:19,318 --> 00:49:23,538
or they can sell ATM on the common stock shares

572
00:49:23,538 --> 00:49:24,378
if they have to.

573
00:49:25,098 --> 00:49:28,218
But as long as the cost of that

574
00:49:28,218 --> 00:49:29,618
is less than Bitcoin's CAGR,

575
00:49:30,118 --> 00:49:31,178
then it's accretive.

576
00:49:32,778 --> 00:49:35,518
So Bitcoin is the hurdle rate.

577
00:49:36,098 --> 00:49:37,858
That's basically what I'm saying about that.

578
00:49:37,858 --> 00:49:43,538
right it's like refinancing your debt right like uh i don't know if um

579
00:49:43,538 --> 00:49:49,458
if if you need to refinance your house for whatever reason you could go out and do that

580
00:49:49,458 --> 00:49:55,058
again i think i said this last week honestly i should say it every single week right strategy

581
00:49:55,058 --> 00:50:01,338
holds 62 to 62 billion dollars of bitcoin they hold 10 billion dollars of debt so they have 50

582
00:50:01,338 --> 00:50:07,478
billion dollars in net capital let's say if the price of bitcoin fell 50 tomorrow and it goes

583
00:50:07,478 --> 00:50:14,798
down to what, 50 grand. They're going to have $30 billion of assets and $10 billion of debt.

584
00:50:15,618 --> 00:50:22,818
I'm going to underwrite that loan all day, every day. I want to take that risk. And there are going

585
00:50:22,818 --> 00:50:27,238
to be other people in the market that are going to be throwing money at them. Yeah, the terms may

586
00:50:27,238 --> 00:50:31,198
not be as great as what they've got right now, but they're going to be able to raise capital

587
00:50:31,198 --> 00:50:34,578
because they still are in an incredibly strong position,

588
00:50:34,718 --> 00:50:39,558
even if the price of Bitcoin goes down 60% or 70%.

589
00:50:39,558 --> 00:50:40,898
I mean, if that were the case,

590
00:50:40,998 --> 00:50:44,018
I mean, strategy is just going to buy all the Bitcoin, right?

591
00:50:44,518 --> 00:50:46,318
They're going to issue so much stride.

592
00:50:46,418 --> 00:50:47,718
They're just going to buy all the Bitcoin

593
00:50:47,718 --> 00:50:50,218
and it's going to go back up.

594
00:50:51,378 --> 00:50:52,278
Yeah, and these other companies,

595
00:50:53,058 --> 00:50:53,938
it's going to be,

596
00:50:54,858 --> 00:50:56,978
that's another thing that you're going to have to look at is,

597
00:50:57,358 --> 00:50:58,678
are the things that they're doing

598
00:50:58,678 --> 00:51:00,358
with their Bitcoin encumbered or not?

599
00:51:00,358 --> 00:51:05,178
Like, I think strategies, one of the first deals that they did, their Bitcoin was encumbered.

600
00:51:05,338 --> 00:51:07,398
And then they were able to get out of that deal.

601
00:51:07,418 --> 00:51:08,858
And they're like, no, we're not doing that again.

602
00:51:09,558 --> 00:51:12,438
But I don't know, you might be able to get more favorable terms, right?

603
00:51:12,458 --> 00:51:14,558
If you're actually putting the Bitcoin up.

604
00:51:15,258 --> 00:51:20,138
If you're small, I mean, strategies already kind of got an escape velocity at that point.

605
00:51:20,198 --> 00:51:22,258
They can get favorable terms.

606
00:51:22,698 --> 00:51:26,038
But these other companies, that's going to be something that you're going to have to evaluate.

607
00:51:26,038 --> 00:51:32,718
you know have they said that they will or will not sell their bitcoin will they loan it

608
00:51:32,718 --> 00:51:36,618
will they borrow against it and like i said will it be encumbered or not

609
00:51:36,618 --> 00:51:42,418
it reminds me well some of these companies it reminds me of

610
00:51:42,418 --> 00:51:49,598
it was during the pump after covid and i don't know if anybody remembers when people were trying

611
00:51:49,598 --> 00:51:55,838
to chase the next tesla but this company named nicola came out and nkla and there was a

612
00:51:55,838 --> 00:52:04,298
a merger with VTIQ, I believe it was the SPAC or whatever. And this guy, this guy ended up getting

613
00:52:04,298 --> 00:52:12,618
convicted for fraud, right? So you got to be careful changing the next strategy, right?

614
00:52:15,918 --> 00:52:23,098
You know, things like, you know, we were hinting around at like the, the pipe investors and where

615
00:52:23,098 --> 00:52:29,038
there's a lockout, a lockup period, or whether they can just dump on retail as soon as they get

616
00:52:29,038 --> 00:52:35,878
their shares, things like that. These are all things that you need to take in account, whether

617
00:52:35,878 --> 00:52:40,938
there's just hype or whether there's, you know, history of shitcornery like Amara, you know,

618
00:52:40,938 --> 00:52:46,898
they used to mine Caspa. So there's all of these things that can tip you off for red flags.

619
00:52:46,898 --> 00:52:49,898
I like that.

620
00:52:49,898 --> 00:52:53,898
I think that's a valuable point.

621
00:52:53,898 --> 00:52:54,898
So, I mean, right.

622
00:52:54,898 --> 00:53:03,198
We've got these new deals are coming into the market and they are, it's helpful to look

623
00:53:03,198 --> 00:53:05,198
at the terms and how the terms are designed.

624
00:53:05,198 --> 00:53:07,798
Cause that those concepts of like alt coins, right?

625
00:53:07,798 --> 00:53:10,198
Like a pre-mine or a pipe, right?

626
00:53:10,198 --> 00:53:16,698
They could be kind of think of them almost similarly, like as a pre-mine, you got, you

627
00:53:16,698 --> 00:53:20,578
you know, coins before they hit the market. It's like, well, what's a pipe? A pipe is a

628
00:53:21,178 --> 00:53:27,538
private investment in a public equity before, you know, before they go public. So they're getting

629
00:53:27,538 --> 00:53:31,838
access to shares, but basically before they're, they're going public at a cheaper price.

630
00:53:32,738 --> 00:53:37,378
And I think it's valuable to look at what those look like. And, you know, I'm not saying that

631
00:53:37,378 --> 00:53:41,878
those are going to kill the stock completely, but it might be, it might be a really volatile time.

632
00:53:41,878 --> 00:53:46,658
Like once the deals on, once these deals close, it could be really volatile as everybody's trying

633
00:53:46,658 --> 00:53:51,298
to figure out like, okay, what is this thing actually worth when all of the shares are available

634
00:53:51,298 --> 00:53:58,578
in public trading? And the interesting thing is the lockup periods for those, which it seems pretty

635
00:53:58,578 --> 00:54:05,898
crazy, but I think the market has shifted such that those people that have those pipe investments

636
00:54:05,898 --> 00:54:11,418
just have very little lockup, like little to no lockup. So once the deal closes,

637
00:54:11,418 --> 00:54:17,538
their shares are potentially liquid, which is just a unique thing to keep in mind.

638
00:54:17,978 --> 00:54:24,618
If you've got people that are sitting on a 10X as a deal closes, they might be looking

639
00:54:24,618 --> 00:54:30,778
to capitalize on the 10X as the deal closes because you never know where their funds came

640
00:54:30,778 --> 00:54:31,018
from.

641
00:54:31,218 --> 00:54:34,198
And people are wondering like, oh, who's selling Bitcoin right now?

642
00:54:34,198 --> 00:54:46,338
Well, it might be Bitcoin OGs selling Bitcoin to go invest in pipes to get instant two Xs and pull that out and go buy more Bitcoin.

643
00:54:46,498 --> 00:54:46,898
So I don't know.

644
00:54:47,018 --> 00:54:49,318
We might, I think that is what's going on.

645
00:54:49,558 --> 00:54:51,758
Like vol is compressed right now.

646
00:54:51,958 --> 00:54:55,558
Like somebody mentioned or asked about like, what's up with the IV on MSDR?

647
00:54:55,558 --> 00:55:03,558
Well, it's like everybody's selling the people that were buying the retail that was buying options are, you know, vol traders.

648
00:55:03,558 --> 00:55:06,278
They love the quick money, quick hits.

649
00:55:06,878 --> 00:55:17,238
So they're taking that capital and they're shoving it into Smarter Web Company and MetaPlanet and these other instruments because they're chasing those types of returns as options traders.

650
00:55:17,538 --> 00:55:22,298
So that changes the volatility profile of these different instruments.

651
00:55:22,978 --> 00:55:26,398
So I think that's kind of what's going on in the marketplace right now.

652
00:55:26,398 --> 00:55:33,238
Not financial advice, but I'm not touching their NACA with a six-foot moto.

653
00:55:33,558 --> 00:55:36,138
until after the lockup period.

654
00:55:37,278 --> 00:55:39,838
There could be opportunities to scoop some of these things up

655
00:55:39,838 --> 00:55:42,478
at depressed prices at some point in the future.

656
00:55:44,018 --> 00:55:46,118
Yeah, but one of the reasons why I've been saying

657
00:55:46,118 --> 00:55:49,918
that alt-season is dead is because the Bitcoin ecosystem

658
00:55:49,918 --> 00:55:54,078
has swelled to such a point that the treasury companies

659
00:55:54,078 --> 00:55:55,978
are acting like the alts, like we've all been discussing, right?

660
00:55:56,298 --> 00:55:59,278
So people are chasing these altcoin-like gains

661
00:55:59,278 --> 00:56:01,758
with these other treasury companies.

662
00:56:01,758 --> 00:56:05,758
I'm not saying whether that's good or bad, but what I am saying is like with most

663
00:56:05,758 --> 00:56:09,838
highly sentiment-driven, frenzy-driven

664
00:56:09,838 --> 00:56:13,358
things, there will be a crash.

665
00:56:14,078 --> 00:56:18,018
And after the crash is when you're going to find out what's what. So you're going to find

666
00:56:18,018 --> 00:56:21,878
out, you know, is company A going to survive versus

667
00:56:21,878 --> 00:56:25,878
company B? And are you going to be the person, again, like I was saying

668
00:56:25,878 --> 00:56:29,918
earlier, that's going to be smart enough to get your money out before that happens? And if they do

669
00:56:29,918 --> 00:56:33,038
have lockups they do have all these other things you really need to dig into what these companies

670
00:56:33,038 --> 00:56:38,878
are doing versus chasing the pup so um there's definite considerations that come into play

671
00:56:40,158 --> 00:56:46,558
yeah and look i'm not i'm not necessarily trying to convince people to go crazy go crazy in any one

672
00:56:46,558 --> 00:56:50,318
direction on one of these things but i think just i think it's helpful to think about like why you

673
00:56:50,318 --> 00:56:57,678
hold things like why are you holding something um why do you hold any equity why do you why do why

674
00:56:57,678 --> 00:56:59,178
Why do people hold Microsoft?

675
00:56:59,478 --> 00:57:00,458
A lot of people hold Apple.

676
00:57:02,158 --> 00:57:03,498
It's for a reason.

677
00:57:03,738 --> 00:57:04,818
It fits into their portfolio.

678
00:57:05,258 --> 00:57:06,738
They've got some sort of design.

679
00:57:06,898 --> 00:57:08,738
So it's like, okay, well, why do you hold these other instruments?

680
00:57:08,938 --> 00:57:11,558
And are you willing to ride it if it drops to 80%?

681
00:57:13,798 --> 00:57:14,518
I don't know.

682
00:57:14,878 --> 00:57:23,258
I mean, I think I bought MSTR in 21 at like 970.

683
00:57:23,978 --> 00:57:26,078
And I wrote it down to 122.

684
00:57:26,078 --> 00:57:32,558
I was like holy shit um at that point I was just you know finding money under the cushions the

685
00:57:32,558 --> 00:57:38,838
couch cushions to go buy as much mstr as humanly possible but I I had to I took it on the chin

686
00:57:38,838 --> 00:57:44,318
and I had to sit with it I've taken it on the chin five you know four or five times since then

687
00:57:44,318 --> 00:57:48,238
right we've like wrote it to the top write it back down wrote it to the top wrote it back down

688
00:57:48,238 --> 00:57:52,538
and it's so funny I think the bitcoin therapist posted about this like he just posted the chart

689
00:57:52,538 --> 00:57:56,258
people are really fading this chart it was like the five-year chart of mstr and it's like you see

690
00:57:56,258 --> 00:58:01,698
this like little blip over you know 21 and now you're like looking at this chart that's just like

691
00:58:01,698 --> 00:58:07,758
literally straight vertical like the last year and people are freaking out because you know

692
00:58:07,758 --> 00:58:17,038
intraday mstr to ibid is down 25 bips because you've got short sellers in low volume when

693
00:58:17,038 --> 00:58:20,238
people are chasing shiny things. It's just weird.

694
00:58:21,078 --> 00:58:25,278
And I'm not, and look, this is not us judging people for anyone that's watching this. Because

695
00:58:25,278 --> 00:58:30,258
for instance, I bought my first strategy shares on leverage from my Bitcoin holdings, right? So

696
00:58:30,258 --> 00:58:34,778
I bought against my Bitcoin and I bought strategy with it. So I'm not saying that it's a wrong

697
00:58:34,778 --> 00:58:40,958
thing to chase gains. What I am saying is, do you have a plan? Do you actually understand what it

698
00:58:40,958 --> 00:58:44,458
is you're doing? A lot, some of these companies have been around for what, like a month,

699
00:58:44,458 --> 00:58:53,478
two months that are really running right now have i held positions in them yes but by the same token

700
00:58:53,478 --> 00:58:59,738
i i understand what it is i'm going after but i but i also understand what the primary goal is i'm

701
00:58:59,738 --> 00:59:06,598
not selling my bitcoin i'm not selling my strategy to do it so um granted not everyone is in that

702
00:59:06,598 --> 00:59:11,798
position but just be aware that if like jeff just said are you prepared to take it on the chin

703
00:59:11,798 --> 00:59:13,798
because I don't want to see in three months

704
00:59:13,798 --> 00:59:17,178
people in the threads on Twitter talking about,

705
00:59:18,078 --> 00:59:20,578
oh, this company sucks because I bought in a blah, blah, blah,

706
00:59:20,638 --> 00:59:21,438
and I lost all my money.

707
00:59:21,498 --> 00:59:24,038
It's like, well, that's kind of the risk

708
00:59:24,038 --> 00:59:25,478
that you're implicitly undertaking

709
00:59:25,478 --> 00:59:27,278
when you get involved with an equity.

710
00:59:27,418 --> 00:59:28,638
You're taking on that risk.

711
00:59:29,078 --> 00:59:30,498
Just same thing as with strategy,

712
00:59:30,598 --> 00:59:31,698
just same thing as with Bitcoin.

713
00:59:32,238 --> 00:59:35,498
So just be mindful of that and be aware of

714
00:59:35,498 --> 00:59:38,898
not just the pump, but also the dump

715
00:59:38,898 --> 00:59:41,158
because one sometimes follows the other.

716
00:59:41,798 --> 00:59:50,098
I mean, all that said, I'm still incredibly bullish on the future of all this stuff.

717
00:59:51,238 --> 00:59:51,798
Oh, yeah.

718
00:59:51,798 --> 00:59:53,918
It just, it could be weird, right?

719
00:59:54,118 --> 01:00:02,578
There could, there's going to be weird things that happen in the next eight months and upside, upside and downside.

720
01:00:03,478 --> 01:00:04,678
And be prepared for it.

721
01:00:05,158 --> 01:00:07,198
Yeah, there's room in the forest for a few other trees.

722
01:00:07,318 --> 01:00:08,198
They're not all dogs.

723
01:00:08,278 --> 01:00:08,518
You know what I mean?

724
01:00:08,538 --> 01:00:10,738
There's going to be some good, there's going to be some good ones.

725
01:00:11,798 --> 01:00:15,478
absolutely but but you got to own the outcome though because you're not gonna you're not gonna

726
01:00:15,478 --> 01:00:19,638
share gains with people so don't i mean it's gonna sound harsh but don't share losses either

727
01:00:20,838 --> 01:00:26,918
right like just own it you made the move you took you took you took the gains great you take the loss

728
01:00:26,918 --> 01:00:35,318
sorry but investing is not a team sport yeah don't gladiator your positions i i do i do think we're

729
01:00:35,318 --> 01:00:41,238
in a great period of time or to like just not post positions even if even if the next you know

730
01:00:41,798 --> 01:00:47,878
two or three months do see a sort of rally. Just stay calm because there's a lot of juice left in

731
01:00:47,878 --> 01:00:54,758
the tank and think long term. It's really interesting. I think all of this stuff might

732
01:00:54,758 --> 01:01:00,678
come to a head at the same time. Obviously, the Fed held interest rates flat today. We saw that.

733
01:01:01,478 --> 01:01:04,918
And you've got the president screaming at the top of his lungs to drop interest rates,

734
01:01:04,918 --> 01:01:10,918
saying that he could do a better job of being the chairman of the Fed than Powell, which is an

735
01:01:10,918 --> 01:01:17,798
interesting commentary. But I mean, he's got what, nine months left on his job before somebody else

736
01:01:17,798 --> 01:01:23,678
is hired or put into place. So I think at least there's probably going to be some interest rates

737
01:01:23,678 --> 01:01:26,638
coming down at some point in the future. So what does that mean?

738
01:01:26,664 --> 01:01:30,824
Like what is the impact on that? Interest rates come down, it means the cost of capital comes down,

739
01:01:30,824 --> 01:01:33,704
not only for the US government, but for everybody else on the planet.

740
01:01:34,264 --> 01:01:38,344
Right? Like you want to go buy a home, it's cheaper to go buy a home. You want to issue debt

741
01:01:38,344 --> 01:01:42,104
as a company, it's cheaper to issue debt because the risk-free rate is going lower.

742
01:01:43,224 --> 01:01:47,144
So what does that mean? That means all the preferred instruments that strategy is offering,

743
01:01:47,144 --> 01:01:51,384
the interest rates on those are going to, the yields of those are going to fall and the prices

744
01:01:51,384 --> 01:01:56,584
of those are going to rise which results in even significantly more torque on the msdr balance

745
01:01:56,584 --> 01:02:03,784
sheet because they're able to issue issue money issue capital at a cheaper relative rate so it's

746
01:02:03,784 --> 01:02:08,104
going to be more efficient in how they're buying bitcoin into the future and generally the interest

747
01:02:08,104 --> 01:02:14,024
rates coming down is bullish for risk assets and we're at this unique segue where uh you know

748
01:02:14,024 --> 01:02:20,264
bitcoin is this like combo risk on asset and risk off asset at the same time and you've got micro

749
01:02:20,264 --> 01:02:26,584
strategy is a is like this asset that's holding you know more of the risk on and risk off asset

750
01:02:26,584 --> 01:02:33,464
at the same time and with a significant moat and ability to monetize different uh market structures

751
01:02:33,464 --> 01:02:42,184
in different ways so i mean that can that can happen q3 q4 on top of potential s p 500 inclusion

752
01:02:42,184 --> 01:02:50,504
and just market frenzy when all risk assets blast into new all-time highs with potential

753
01:02:50,504 --> 01:02:54,744
quantitative easing and the money like the money printer just starts humming and the world starts

754
01:02:54,744 --> 01:03:02,884
moving faster so um yeah it's uh it'll be interesting timing i think the next couple

755
01:03:02,884 --> 01:03:08,404
months the next couple of quarters um just watching all of this come together it's almost like a

756
01:03:08,404 --> 01:03:15,124
a huge story is coming together at the end of the year well so like what what if we play a little

757
01:03:15,124 --> 01:03:18,864
bit of as advocate here i think you're right about interest rates but what if powell decides to say

758
01:03:18,864 --> 01:03:23,984
i've got however much time left i'm not going to lower interest rates unless absolutely 100%

759
01:03:23,984 --> 01:03:29,964
forced to do so at least like the market conditions force him to do so or something along those lines

760
01:03:29,964 --> 01:03:46,304
But if conditions remain within a tolerance that he can somehow justify not lowering rates or lowering rates very, very, very, very little, and we have a prolonged cycle as a result.

761
01:03:46,304 --> 01:03:51,984
so we still have tariff uncertainty so let's say that takes a while to to like rectify interest

762
01:03:51,984 --> 01:03:57,504
rates don't come down as much as they probably as the market thinks that they should and we have a

763
01:03:57,504 --> 01:04:02,464
prolonged not not a bear market but prolonged lull where we're just kind of trotting along

764
01:04:02,464 --> 01:04:08,384
a hundred thousand and msdr at what it is for the next six to nine months like are people

765
01:04:08,384 --> 01:04:14,224
mentally prepared for that outcome as well because i i think that would be the worst outcome for a

766
01:04:14,224 --> 01:04:18,724
a lot of people because to Soleil's point about people getting bored, I think the boredom

767
01:04:18,724 --> 01:04:24,204
will go from boredom to frustration to despondence very quickly. And we're going to start to see

768
01:04:24,204 --> 01:04:28,804
a lot of people exiting the market. And then when the market turns, interest rates come down,

769
01:04:29,124 --> 01:04:33,164
uncertainty and whatnot goes away. Liquidity also is going to be on the uptick by that point

770
01:04:33,164 --> 01:04:37,164
as well significantly. You have people chasing the gains again, and then we're going to pump

771
01:04:37,164 --> 01:04:41,564
even harder than we would have before. So I just think that people need to understand what they

772
01:04:41,564 --> 01:04:46,764
hold and be patient if you can and just sit on your hands that's the best thing you can do whether

773
01:04:46,764 --> 01:04:53,404
you hold bitcoin or strategy sitting on your hands is the best approach yeah the only time i've really

774
01:04:53,404 --> 01:04:57,724
gotten hurt is when i try to get cute chasing things sorry go ahead tim yeah no it reminds me

775
01:04:57,724 --> 01:05:03,324
of the one comment ben just made in the chat it's like you know it's hard to recover from a negative

776
01:05:03,324 --> 01:05:10,604
80 percent meaning just protect the base it reminds me of um somebody posted recently if you don't

777
01:05:10,604 --> 01:05:17,004
already own one bitcoin and you're investing in this stuff like i don't know what to tell you and

778
01:05:17,004 --> 01:05:26,924
like investing is an individual sport hashtag ben workman but it's it's like yeah like bitcoin

779
01:05:27,964 --> 01:05:35,964
and then everything else protect the base grow the base yeah yeah think about it don't sell it my god

780
01:05:35,964 --> 01:05:41,484
the people selling bitcoin for all these other plays are just blowing my mind right now but

781
01:05:42,044 --> 01:05:47,564
i i don't i'm not gonna judge whatever yeah there's a bunch of tickers i just i can't even

782
01:05:47,564 --> 01:05:54,364
keep track of the stuff that people are oh my god it's so crazy like i'm thinking about them so i

783
01:05:54,364 --> 01:05:58,364
know some of them but there's gonna be more that pop up for sure it's a full-time job it's a full

784
01:05:58,364 --> 01:06:06,124
full-time job like identifying yeah i can't i can't deep dive all that shit no no way i i mean

785
01:06:06,124 --> 01:06:14,124
you'd have to be just consuming content 24 7 365 at two times speed and that's difficult to do

786
01:06:14,124 --> 01:06:19,924
yeah that's corporate media like if you get on there like oh money now or you know whatever

787
01:06:19,924 --> 01:06:27,044
they're gonna come up and they're gonna talk about 10 15 20 stocks or whatever you a financial

788
01:06:27,044 --> 01:06:34,004
analyst cannot be an expert in 20 stocks we cover one and it's a freaking full-time job like i quit

789
01:06:34,004 --> 01:06:43,124
my job and i just work harder researching one stinking stock than i ever did when i had a w-2 job

790
01:06:43,124 --> 01:06:51,944
yeah yeah i mean it's it's real uh it's totally real it's hard to keep track of all of these

791
01:06:51,944 --> 01:06:57,444
things that are going on but i mean especially to pick like if you were to add another another

792
01:06:57,444 --> 01:07:02,184
stock to your profile i mean that's why it might be interesting to hold some of these new instruments

793
01:07:02,184 --> 01:07:10,204
like own b or if you just want like that extra exposure but i think it'll be interesting to see

794
01:07:10,204 --> 01:07:16,104
like how how that even evolves right like are we going to start to see like uh instruments that

795
01:07:16,104 --> 01:07:22,144
have all these Bitcoin treasury companies, but not include miners and not include strategy.

796
01:07:23,024 --> 01:07:31,384
It's just like, think of it like a growth fund, like the Russell 2000, but for Bitcoin

797
01:07:31,384 --> 01:07:35,124
treasury companies that are under $5 billion.

798
01:07:35,804 --> 01:07:36,624
That's coming.

799
01:07:36,984 --> 01:07:38,524
So that's a shortcoming.

800
01:07:38,744 --> 01:07:44,524
And it's just going to be people throwing capital at these things left and right.

801
01:07:44,524 --> 01:07:48,904
and then that's a you get diversified exposure that way or i mean alternatively you just go

802
01:07:48,904 --> 01:07:56,104
throw money at all of them try to do it yourself but uh yeah i think that's how the that's how the

803
01:07:56,104 --> 01:07:59,184
space evolves is you're going to see all these new instruments new products that are just sort

804
01:07:59,184 --> 01:08:04,504
of kind of wrapping all these pieces in different uh in different forms or i mean i'm just imagining

805
01:08:04,504 --> 01:08:13,524
a product like uh 50 of these tiny bitcoin treasury companies and 50 strike you know

806
01:08:14,224 --> 01:08:15,884
There's all kinds of blends you can do with it, though.

807
01:08:15,944 --> 01:08:16,304
That's the thing.

808
01:08:16,304 --> 01:08:17,304
You can do like infinite.

809
01:08:17,904 --> 01:08:19,084
You can do all kinds of blends.

810
01:08:20,024 --> 01:08:22,124
But like, look, so I know I've been posting about these things.

811
01:08:22,164 --> 01:08:26,104
And the thing about it is, and everyone that DMs me about them, one, I don't give them financial advice.

812
01:08:26,184 --> 01:08:28,044
And two, I make sure to tell them I have not sold Bitcoin.

813
01:08:28,164 --> 01:08:28,964
I have not sold strategy.

814
01:08:29,964 --> 01:08:30,224
Right?

815
01:08:30,284 --> 01:08:34,124
So I'm leveraging it or I'm using excess capital that I have to open new positions.

816
01:08:34,124 --> 01:08:40,864
And even still, proportionally, that is nowhere near the size of my strategy position or my Bitcoin position.

817
01:08:41,484 --> 01:08:43,504
My Bitcoin position is larger than my strategy position.

818
01:08:43,524 --> 01:08:48,844
my strategy position is exponentially larger than the positions I have in these other companies.

819
01:08:49,304 --> 01:08:53,424
That's not me disparaging them. That's not me saying that I think they're bad investments.

820
01:08:53,944 --> 01:08:58,424
That's me saying that I know that they're risky plays. And I know, as we've discussed here,

821
01:08:58,524 --> 01:09:02,184
that they're essentially the altcoin plays of the cycle, right? There's going to be boom,

822
01:09:02,244 --> 01:09:10,024
there's going to be bust. So I'm aware of that. To those that are selling their entire positions of

823
01:09:10,024 --> 01:09:15,444
whatever, be mindful that that's less an investment and more of a gamble.

824
01:09:16,044 --> 01:09:18,664
Now, if you're okay with that gamble, more power to you.

825
01:09:18,724 --> 01:09:19,504
It is your prerogative.

826
01:09:20,144 --> 01:09:24,224
But just be aware of what it is you're doing because a lot of these companies,

827
01:09:24,744 --> 01:09:29,844
I'm not going to say one in particular, but a lot of these companies are going to provide you

828
01:09:29,844 --> 01:09:34,704
with outsized return possibility, but it's also going to provide you with an opportunity

829
01:09:34,704 --> 01:09:35,504
to lose everything.

830
01:09:35,504 --> 01:09:44,384
what do you think about something like the bitcoin standard etf where like you're not even

831
01:09:44,384 --> 01:09:50,564
in the index you're not even in the etf unless you have a thousand bitcoin like does that seem

832
01:09:50,564 --> 01:09:58,504
rational like with all of the entrance yeah own b oh so that that was what jeff was mentioning

833
01:09:58,504 --> 01:10:02,884
own b you have to be you have to have over a thousand bitcoin if you want exposure to a lot

834
01:10:02,884 --> 01:10:05,944
of these companies that have over 1,000 Bitcoin. Now, that's going to be miners. That's going to

835
01:10:05,944 --> 01:10:09,464
be strategy. That's going to be similar. That's going to be, I assume, GME. I don't know if

836
01:10:09,464 --> 01:10:13,944
they've included them yet or not. But all the companies with over 1,000 Bitcoin will be,

837
01:10:14,264 --> 01:10:18,184
I think, are going to be included into that ETF in varying position sizes.

838
01:10:18,484 --> 01:10:23,344
If you want exposure to all of them, that's a perfectly rational decision. I still wouldn't

839
01:10:23,344 --> 01:10:29,104
recommend selling your Bitcoin for it or selling your strategy to do it. But if you want to have

840
01:10:29,104 --> 01:10:34,224
exposure to all these companies and catch a potential upside sure but if you're if you're

841
01:10:34,224 --> 01:10:39,344
taking all of your strategy you're selling it you're dumping it into one of these otc plays

842
01:10:41,344 --> 01:10:46,784
i i'm just i'm just gonna i'm just trying to urge caution there and understand that

843
01:10:47,344 --> 01:10:54,304
yeah they've been running hot but can you tolerate losing losing that can you can you tolerate that

844
01:10:54,304 --> 01:11:00,064
80 drawdown that ben mentioned and that's protect the base protect the base right like even when i

845
01:11:00,064 --> 01:11:06,624
do options even when i do options i do not go below my cost basis i don't go in the money i'm

846
01:11:06,624 --> 01:11:11,664
always trying to protect the base of whatever it is i have so really understand that now if you

847
01:11:11,664 --> 01:11:17,984
haven't made money if you wanted to strategy and you're down do what you gotta do but even still

848
01:11:17,984 --> 01:11:22,464
understand what you own strategy is more likely to go up and give your money back over time more

849
01:11:22,464 --> 01:11:26,304
than you are going to make the money chasing a lot of these other things with your whole stack

850
01:11:26,304 --> 01:11:31,184
so just really really be mindful of that have a plan sit down with a spreadsheet for christ's sake

851
01:11:31,184 --> 01:11:36,464
and model some stuff out do something besides saying numbers going up i'm going to chase it now

852
01:11:36,464 --> 01:11:41,824
that's that's the only thing i want to say yeah yeah and and just to address people in the in the

853
01:11:41,824 --> 01:11:47,424
chat they seem a little concerned tim is drinking espresso in a hotel conference room at 11 p.m

854
01:11:47,424 --> 01:11:53,984
well it's 5 13 a.m local time and the conference is starting in like three hours so i'm just

855
01:11:53,984 --> 01:11:56,864
trying to wake up actually right there's a little bit of a time difference

856
01:11:57,424 --> 01:12:03,024
six hours getting on the just getting on the time yeah yeah don't worry about tim and caffeine he

857
01:12:03,024 --> 01:12:07,664
basically injects into his veins at this point so he's good true it's like it's like true north in

858
01:12:07,664 --> 01:12:15,184
the morning is actually kind of feels feels great feels great so uh adrian what what you were kind

859
01:12:15,184 --> 01:12:22,064
of talking about i think the general theme that we've been discussing here is like position sizing

860
01:12:22,064 --> 01:12:28,704
is incredibly important and the kelly criterion comes to mind and the kelly criterion is uh like

861
01:12:28,704 --> 01:12:35,184
how to appropriately weight positions in like betting or gambling or you know options trading

862
01:12:35,184 --> 01:12:43,984
or even portfolio management and the the way this works the way kelly criterion works is you take the

863
01:12:43,984 --> 01:12:51,104
probability of a win multiplied by what that win is at a future point in time, like the long-term

864
01:12:51,104 --> 01:12:57,744
value of that win. And then you take the probability of a loss and then what is the value of a loss?

865
01:12:58,084 --> 01:13:02,764
And that helps you determine like this expected value equation and how you should position size

866
01:13:02,764 --> 01:13:13,724
any particular trade. And so you think about, like it makes you think about long-term trajectory

867
01:13:13,724 --> 01:13:18,124
of like any of any one of these instruments and why they could be where they could be at a future

868
01:13:18,124 --> 01:13:23,424
point in time what's the probability of that and so one thing that brought up a lot previously is

869
01:13:23,424 --> 01:13:29,004
this copycat risk that's in the market for a lot of these smaller entities that maybe aren't doing

870
01:13:29,004 --> 01:13:33,784
anything um you know earth shattering maybe they got some cash flow on their balance sheet and

871
01:13:33,784 --> 01:13:38,844
they're running an atm they've got some coverable debt they're not different at all yeah they just

872
01:13:38,844 --> 01:13:44,484
may not be differentiated. So maybe they hold a lot of Bitcoin in their balance sheet and maybe

873
01:13:44,484 --> 01:13:52,004
they're growing it consistently, but there are others that are going to copycat everything that

874
01:13:52,004 --> 01:13:57,044
they can copycat, but also doing alpha strategies to go attack different capital pools in different

875
01:13:57,044 --> 01:14:03,844
capital markets that might be a little bit more appealing to hold relative to other companies.

876
01:14:03,844 --> 01:14:13,744
So having that additional energy and that premium on your stock is incredibly valuable because it allows you to be more efficient with these beta strategies that everybody else can do.

877
01:14:15,504 --> 01:14:23,724
And so it's kind of like a self-fulfilling cycle of if you have a really good alpha strategy, it makes your beta strategy better.

878
01:14:23,944 --> 01:14:30,224
And it's going to pull energy and premium away from any company that maybe is just using cash flow to buy Bitcoin.

879
01:14:30,224 --> 01:14:35,084
And you have to be able to assess risk and opportunity cost because those are not the

880
01:14:35,084 --> 01:14:47,578
same thing So if you moving into these other positions and so let say you someone like myself who has a lower cost basis for Bitcoin has a lower cost basis for strategy

881
01:14:48,218 --> 01:14:55,438
For me, I'm assessing risk, but I'm also assessing opportunity cost, which is why I leverage my holdings and I don't sell them.

882
01:14:55,718 --> 01:15:00,098
That is not something that is open to everyone.

883
01:15:00,398 --> 01:15:01,138
I understand that.

884
01:15:01,298 --> 01:15:04,598
Not everyone has enough that will be enough to worth borrowing against.

885
01:15:04,718 --> 01:15:05,418
I understand that.

886
01:15:05,418 --> 01:15:20,238
But that's also one of the reasons why I maintain multiple streams of income. So whether I'm doing that from getting options premium, whether I'm doing that through my consulting, whether I'm doing that through whatever means, if I'm leveraging my holdings, I can cover drawdowns.

887
01:15:21,078 --> 01:15:34,818
I can cover the market turns, right? That's also part of my assessment. So even though I'm taking on additional risk, I'm also able to say that that risk is managed somewhat.

888
01:15:34,818 --> 01:15:38,418
if you think about what Jeff talks about all the time with strategies leverage ratio,

889
01:15:39,058 --> 01:15:43,978
if I'm taking out X amount of dollars and I know that I'm going to have to cover Y amount of dollars

890
01:15:43,978 --> 01:15:48,418
if we have a prolonged market drawdown, I make sure that I have that amount coming in.

891
01:15:48,798 --> 01:15:52,118
And that's part of the calculation that I do before I make any of these plays.

892
01:15:52,958 --> 01:15:56,698
So when you see me post about something, I've already been looking into opportunities

893
01:15:56,698 --> 01:16:00,518
and waiting to leverage my holdings for new opportunities weeks in advance.

894
01:16:01,438 --> 01:16:04,678
That's how I'm able to make the move. That's what a lot of traders are doing.

895
01:16:04,678 --> 01:16:08,018
That's what a lot of individuals that you're seeing posting these things are doing.

896
01:16:08,218 --> 01:16:10,938
They're not chasing the rabbit or they're not chasing the squirrel.

897
01:16:11,518 --> 01:16:12,998
They've made a plan.

898
01:16:13,598 --> 01:16:14,558
They've made an exit.

899
01:16:15,078 --> 01:16:19,478
They have the capital to allocate to a new position, and then they do so when they've done that assessment.

900
01:16:20,258 --> 01:16:26,458
So be very, very mindful of what you're doing because I really don't want to see come the end of this year,

901
01:16:26,618 --> 01:16:29,658
strategy goes to $1,000 and someone's like, I should have just seen strategy.

902
01:16:29,658 --> 01:16:31,998
and all we're going to be able to do is tell you,

903
01:16:31,998 --> 01:16:37,958
well, yeah, you shouldn't have taken your whole stack

904
01:16:37,958 --> 01:16:40,958
and put it into company XYZ.

905
01:16:41,838 --> 01:16:44,638
Take 1% to 5% if you must,

906
01:16:45,058 --> 01:16:47,578
or if you're able to do it on leverage in a safe way

907
01:16:47,578 --> 01:16:49,598
because you have capital coming in, do that.

908
01:16:50,118 --> 01:16:53,058
But all the YOLO posts I'm seeing,

909
01:16:53,438 --> 01:16:56,798
first about Misty and now about all these other auxiliary OTC plays,

910
01:16:57,498 --> 01:16:59,078
it just makes me very, very nervous.

911
01:16:59,658 --> 01:17:11,558
And I've been posting about them, but even still in every post, they say, can you manage risk? Do you understand the risks? And everyone kind of forgets that last sentence and focuses on, well, how do I buy this? How do I buy this? How do I buy this? Sorry, Jeff, go ahead.

912
01:17:11,558 --> 01:17:16,898
uh yeah no you brought up misty and i think uh it's probably a good time to chat about misty i

913
01:17:16,898 --> 01:17:24,018
mean i know soleil you've uh you've done your mst msty competition we should get an update on that

914
01:17:24,018 --> 01:17:30,218
but but maybe while you pull that up or before you pull that up uh when i noticed some statistics on

915
01:17:30,218 --> 01:17:37,498
misty and i saw like a new trend in the misty community and the misty thread and the new trend

916
01:17:37,498 --> 01:17:42,738
is shifting part of their MISTI position into winter.

917
01:17:44,958 --> 01:17:45,358
Oh, God.

918
01:17:45,478 --> 01:17:45,698
Winter.

919
01:17:46,218 --> 01:17:46,538
Yeah.

920
01:17:47,158 --> 01:17:49,498
I mean, not financial advice, but okay.

921
01:17:49,518 --> 01:17:50,878
Saylor said there is no winter.

922
01:17:51,598 --> 01:17:52,858
Saylor said there is no winter.

923
01:17:52,858 --> 01:17:53,398
There is no winter.

924
01:17:53,658 --> 01:17:54,398
Right, right, right.

925
01:17:54,398 --> 01:17:59,538
But what I've seen now is like 70% MISTI, 30% winter.

926
01:18:00,158 --> 01:18:00,898
So, right.

927
01:18:01,058 --> 01:18:06,258
So MISTI is selling covered calls and then winter is cash secured puts.

928
01:18:06,258 --> 01:18:07,658
Is that what they're doing?

929
01:18:08,178 --> 01:18:10,438
No, I think winter is covered puts.

930
01:18:10,658 --> 01:18:11,818
Unless I misunderstand it.

931
01:18:12,098 --> 01:18:13,538
Yeah, basically they're short.

932
01:18:13,798 --> 01:18:15,118
Maybe it's covered puts.

933
01:18:16,518 --> 01:18:17,818
W-A-T-E-R.

934
01:18:18,518 --> 01:18:18,738
Anyway.

935
01:18:18,878 --> 01:18:22,698
So wait, they're rolling the Misty dividend into winter?

936
01:18:23,818 --> 01:18:27,698
No, they're positioning into both Misty and winter.

937
01:18:27,898 --> 01:18:29,298
Both trade strategy.

938
01:18:31,778 --> 01:18:33,658
In different directions.

939
01:18:33,658 --> 01:18:42,478
and monetizing volatility in different directions misty is a hedge it's it's kind of a hedge

940
01:18:42,478 --> 01:18:46,958
i think so i guess if you think that there's going to be a bear market maybe you want to be

941
01:18:46,958 --> 01:18:52,178
on the winter side but if if you think there's going to be a bear market and you you everybody

942
01:18:52,178 --> 01:18:58,798
shifts their position from the misty side to the winter side maybe that relieves i don't really

943
01:18:58,798 --> 01:19:05,078
know maybe that relieves pressure uh from all the covered call selling at the money i have no idea

944
01:19:05,078 --> 01:19:10,558
anyway it was just an interesting i i need to wrap my head around this uh like what what's

945
01:19:10,558 --> 01:19:15,698
happening there but people are doing that people are buying both and holding both in different

946
01:19:15,698 --> 01:19:21,678
positions but i mean think about the size and scale here misty is four billion dollar per four

947
01:19:21,678 --> 01:19:26,178
billion dollars of aum which is huge you've got four billion dollars of aum that's selling weekly

948
01:19:26,178 --> 01:19:35,838
calls on mstr every week which is nuts it's a lot of cell pressure and then you've got winter which

949
01:19:35,838 --> 01:19:43,078
is now i don't know 27 million dollar aum so just tiny in comparison but if people start to think

950
01:19:43,078 --> 01:19:49,958
that we're going into a bear market maybe that capital shifts or rotates and winter is a synthetic

951
01:19:49,958 --> 01:19:59,638
put there we go huh okay maybe i don't understand it because i do see that it's supposed to be an

952
01:19:59,638 --> 01:20:05,158
inverse msty position yeah that's that's why i'm a little confused as well

953
01:20:07,558 --> 01:20:12,518
yeah well i guess i'll have to think about it yeah dig into that i i saw today i was like wow

954
01:20:12,518 --> 01:20:19,398
that seems that seems odd if it's inverse so is that like is it long you know i don't know

955
01:20:19,958 --> 01:20:25,838
yeah i don't have time to even attempt to do that so yeah maybe maybe we'll put soleil on it so

956
01:20:25,838 --> 01:20:30,318
check out the trades to see see what they're doing i know that'll be the next challenge

957
01:20:30,318 --> 01:20:36,598
i'll trade the uh winter how is how is your uh how's your competition going yeah so when adrian

958
01:20:36,598 --> 01:20:40,418
mentioned that people were getting bored with strategy getting into misty and then they were

959
01:20:40,418 --> 01:20:43,698
getting bored with misty and getting into something else i knew they were going to get bored with it

960
01:20:43,698 --> 01:20:48,678
as soon as the most recent dividend came out and it had dropped from 10 to 7 and we're like okay

961
01:20:48,678 --> 01:20:56,518
here we go. You're not getting your regular 10% dividends. And it'll just be kind of on to the

962
01:20:56,518 --> 01:21:04,138
next thing. But yeah, so January 23rd, the covered call ETF position since then is basically flat.

963
01:21:04,398 --> 01:21:11,858
They might have been down half a percent or something. And luckily, I've been holding on

964
01:21:11,858 --> 01:21:19,158
to my small lead, I'm up about five grand, which, you know, over that six month, five

965
01:21:19,158 --> 01:21:25,158
month period is only about 3%.

966
01:21:25,158 --> 01:21:34,038
But, you know, it's doing better, even a little bit better than holding spot strategy over

967
01:21:34,038 --> 01:21:34,798
that time period.

968
01:21:34,798 --> 01:21:39,098
So, yeah, good enough.

969
01:21:39,098 --> 01:21:43,938
the real interesting part is going to be who captures the most upside during a rally

970
01:21:43,938 --> 01:21:51,178
so i know imst was was claiming that they were going to try to position themselves to capture

971
01:21:51,178 --> 01:21:57,138
more upside but they haven't really been afforded an opportunity to see if that's going to happen

972
01:21:57,138 --> 01:22:04,778
yet so the next time we push to 650 750 a thousand you know whatever the next um

973
01:22:04,778 --> 01:22:07,738
The next leg up, exactly.

974
01:22:08,798 --> 01:22:12,718
It's going to be very interesting to see how those two trade.

975
01:22:13,718 --> 01:22:17,338
But I did notice when I evaluated both of their positions last week,

976
01:22:17,518 --> 01:22:19,358
they were both taking long positions.

977
01:22:20,618 --> 01:22:22,898
I actually liked IMSTs a little bit better

978
01:22:22,898 --> 01:22:27,318
because they just were leaving some of their synthetic shares uncovered.

979
01:22:27,818 --> 01:22:28,898
That was their long.

980
01:22:28,898 --> 01:22:37,418
but msty was like it looked like they were buying debit spreads like 10 to 14 days out

981
01:22:37,418 --> 01:22:43,458
and i just thought that was kind of ludicrous so not not really a fan

982
01:22:43,458 --> 01:22:49,078
all right we should probably do a separate episodes on both of those

983
01:22:49,078 --> 01:22:55,038
yeah those those things that are going on there because i mean you could do you could do five

984
01:22:55,038 --> 01:22:58,558
hours of research and do a five-hour episode probably on each one of these individual products

985
01:22:58,558 --> 01:23:00,938
just trying to unpack like each one of their individual trades,

986
01:23:01,078 --> 01:23:04,018
which is why this whole space is so crazy, right?

987
01:23:04,038 --> 01:23:05,198
Because you could do some,

988
01:23:05,338 --> 01:23:12,698
you can create so much content in with just one product on one stock and spend

989
01:23:12,698 --> 01:23:15,418
all your time looking into it and how it works and why it works.

990
01:23:15,598 --> 01:23:18,178
Let alone people are out here YOLOing of five,

991
01:23:18,358 --> 01:23:20,818
five million dollar market cap companies in the UK.

992
01:23:20,998 --> 01:23:21,478
It's just crazy.

993
01:23:21,478 --> 01:23:21,698
Yeah.

994
01:23:22,098 --> 01:23:28,338
I covered both of those ETFs like three days in a row on my channel and just,

995
01:23:28,338 --> 01:23:33,978
you know, going every single day, downloading their positions, trying to match up the calls

996
01:23:33,978 --> 01:23:35,858
that they bought with the puts that they sold.

997
01:23:36,038 --> 01:23:37,218
Okay, these are the synthetics.

998
01:23:37,638 --> 01:23:39,778
And after three days that I was like, I'm sick of this.

999
01:23:39,838 --> 01:23:40,218
I'm done.

1000
01:23:40,378 --> 01:23:41,518
I can't do it anymore.

1001
01:23:42,098 --> 01:23:43,958
Like, you know, I covered it.

1002
01:23:43,998 --> 01:23:45,318
I was like, okay, this is what they're doing.

1003
01:23:45,818 --> 01:23:47,798
But I can't do this every day.

1004
01:23:48,258 --> 01:23:55,198
Like the first ETF that creates a dashboard like strategies with like metrics and like,

1005
01:23:55,198 --> 01:24:00,898
and all kinds of stuff, that ETF will distinguish themselves from all of the others.

1006
01:24:01,758 --> 01:24:09,298
Like I shouldn't have to go and figure out how much call away value they have built into their

1007
01:24:09,298 --> 01:24:15,958
covered calls and how much premium per assets under management they're doing. Like I should

1008
01:24:15,958 --> 01:24:20,258
just be able to go to their website and there should be a dashboard there. And then I should

1009
01:24:20,258 --> 01:24:26,518
be able to compare apples to oranges between the etfs and and see those things so if if jay and

1010
01:24:26,518 --> 01:24:33,738
jeff are listening um the first one to get that stuff you know distinguishes themselves from the

1011
01:24:33,738 --> 01:24:40,598
rest of the pack i i would agree and i think that that's maybe they should hire you to do some of

1012
01:24:40,598 --> 01:24:44,358
this stuff because they can you see you can get some great insight options i think quite frankly

1013
01:24:44,358 --> 01:24:51,158
yeah they can't pay yeah there's probably no dollar number they can pay so they can do that

1014
01:24:51,158 --> 01:24:55,398
oh my god like i'll do it for free but there's no way in hell i'll do it for money

1015
01:24:58,278 --> 01:25:05,718
i mean do it that means you're doing it for love no i i did it for that three days and i was like

1016
01:25:05,718 --> 01:25:11,798
okay i understand what they're doing no more i can't i can't take it anymore jeff breaking news

1017
01:25:11,798 --> 01:25:19,958
who's the special guest special guest is bobo uh bitcoin bobo yeah he's coming to hang out tonight

1018
01:25:21,078 --> 01:25:25,638
yeah my dog is currently sitting outside my office door wanting to get in i'm not gonna let him in

1019
01:25:25,638 --> 01:25:34,278
though there he goes he's off uh yeah crazy um all right well i i think that i think one other thing

1020
01:25:34,278 --> 01:25:41,158
just to bring up right so mstr hasn't used the mstr they haven't used the mstr atm over the last

1021
01:25:41,158 --> 01:25:47,218
three weeks which that has been the primary capital raise for mstr for the past i don't know

1022
01:25:47,218 --> 01:25:52,138
eight months right and now they don't use it three three weeks in a row and the price of bitcoin still

1023
01:25:52,138 --> 01:25:58,298
at 105 000 that's bullish to me like that's that means there's there's capital that's still coming

1024
01:25:58,298 --> 01:26:05,198
in the door and buying this stuff and holding the price up uh and there's significant demand

1025
01:26:05,198 --> 01:26:10,818
outside of strategy in the market right like yeah i mean last well i guess last week they bought a

1026
01:26:10,818 --> 01:26:18,678
billion, 10,000 Bitcoin. But still, I think it's really, really interesting to see the relative

1027
01:26:18,678 --> 01:26:25,678
strength of Bitcoin over this time horizon as well. Well, I think that's really all I got. Oh,

1028
01:26:25,818 --> 01:26:31,518
should we talk about S&P 500 maybe? Go ahead, Adrian. Yeah. So I was going to say that,

1029
01:26:31,758 --> 01:26:38,318
and this just shows how quickly the market gets bored. Everyone watching this, do y'all realize

1030
01:26:38,318 --> 01:26:45,958
we've been just like trotting along at 100k for how many days now uh yeah well like uh i don't know

1031
01:26:45,958 --> 01:26:53,658
like have there been 60 days 60 days above 100k something something like that and

1032
01:26:53,658 --> 01:27:01,498
i think everyone forgets that there was a time that on this call we were saying oh when bitcoin

1033
01:27:01,498 --> 01:27:06,598
crosses 100k it's going to be an epic moment because because whenever the whenever the first

1034
01:27:06,598 --> 01:27:11,718
time bitcoin crossed 100k everyone was so euphoric and then they got bored with it within like two

1035
01:27:11,718 --> 01:27:19,318
days and now we've been trending at that at that price point strategy is is teetering on having

1036
01:27:19,318 --> 01:27:24,278
600 000 bitcoin they've got all these prefers there's so many reasons to be bullish about

1037
01:27:24,278 --> 01:27:29,078
what's coming on in the market that we just need patience and i think that people are losing that

1038
01:27:29,078 --> 01:27:33,878
perspective because they're look i don't know if it's like they're looking for a dopamine hit or

1039
01:27:33,878 --> 01:27:37,258
or if it's boredom or whatever it is, if it's just boredom.

1040
01:27:37,258 --> 01:27:40,298
But it's like, if you had told me in 2020

1041
01:27:40,298 --> 01:27:41,758
that we would have been at 100K and straight,

1042
01:27:41,758 --> 01:27:43,078
you've been doing all this stuff out of,

1043
01:27:43,078 --> 01:27:44,838
I would have been through the roof.

1044
01:27:44,838 --> 01:27:49,298
So like, don't get shaken out by your own boredom.

1045
01:27:49,298 --> 01:27:50,918
Like just stay the course.

1046
01:27:50,918 --> 01:28:05,032
If you been in it long enough you already know this but to the newer people stay the course That how you gonna to make the money That how you going to see the gains That how you going to get the returns especially now I mean when we were suffering through the drawdowns of MSTR

1047
01:28:05,252 --> 01:28:11,032
we didn't have strike and strife and stride. We didn't have the ability to get all these

1048
01:28:11,032 --> 01:28:15,892
additional revenue streams coming in while things were going down. So now that things aren't even

1049
01:28:15,892 --> 01:28:22,092
going down, I think that there's a lot of reasons to be optimistic. And let's just write this thing

1050
01:28:22,092 --> 01:28:27,852
out and see where it goes. But sorry, you're going to talk about the S&P 500. Yeah, we've just the

1051
01:28:27,852 --> 01:28:34,012
last 40 days, 41 days in a row have been over 100k. Bitcoin's been over 100k. People are bored.

1052
01:28:35,312 --> 01:28:40,872
They're getting their Amazon packages and they're getting their Amazon packages in four hours. And

1053
01:28:40,872 --> 01:28:46,872
uh you know they're like i need this now i need i need bitcoin to go to 120 i need to go 150k

1054
01:28:46,872 --> 01:28:52,392
tomorrow it reminds me of the nine inch nail song i hurt myself today to see if i still feel

1055
01:28:52,392 --> 01:28:58,732
we're just all dead like waiting for like unless it's 125 150 it's like don't even bother me with

1056
01:28:58,732 --> 01:29:03,452
the price right or maybe every day is exactly the same and everyone's like i believe i can see the

1057
01:29:03,452 --> 01:29:08,412
future tomorrow bitcoin is going to be 100k well and they're just like numb to it or something i

1058
01:29:08,412 --> 01:29:14,252
know man it's weird it's weird how how people have gotten this numb this quickly to bitcoin mean at

1059
01:29:14,252 --> 01:29:21,612
this price yeah and maybe let's talk about that a little bit and i i'm trying not to jinx this stuff

1060
01:29:25,692 --> 01:29:34,652
but right so we're thinking about q2 earnings q2 closes in what 12 days q2 closes in 12 days

1061
01:29:34,652 --> 01:29:43,052
price of bitcoin's at 104 000 about 105 000 if bitcoin closes at 95 000 based on the amount of

1062
01:29:44,092 --> 01:29:50,812
uh bitcoin if bitcoin closes 95 000 on june 30th 12 days from now 95 000 or up

1063
01:29:52,012 --> 01:30:00,652
strategy would have a 6.4 billion dollar earnings gain in q2 that would clear the last four quarters

1064
01:30:00,652 --> 01:30:08,892
of negative earnings by a billion dollars. So that's a huge, it's a monumental number,

1065
01:30:09,452 --> 01:30:14,172
regardless of everything else, right? They added $12.7 billion of retained earnings to their

1066
01:30:14,172 --> 01:30:20,092
balance sheet last year. So the strategy made $12.7 billion last year. Now in Q2, this is over

1067
01:30:20,092 --> 01:30:24,812
and above the $5 billion that they lost in Q1 because the price of Bitcoin went from, I don't

1068
01:30:24,812 --> 01:30:33,452
know, $93,000 down to $82,000 at the close of Q1. And now we start with the base of $82,000 going

1069
01:30:33,452 --> 01:30:39,052
up to where we're at today. So basically what I'm pointing out here is we've got a lot of wiggle

1070
01:30:39,052 --> 01:30:43,292
room. We've got a deal, well, maybe not a lot, but we've got a decent amount of wiggle room

1071
01:30:43,292 --> 01:30:46,652
for strategy, for the price of Bitcoin to potentially go down and strategy is still

1072
01:30:46,652 --> 01:30:54,732
posting a monumental, like positive net income gain that people will start to realize and

1073
01:30:54,732 --> 01:31:02,732
recognize what's going on here so even if the price of bitcoin closes at 95 000 a q2 eps estimate of

1074
01:31:02,732 --> 01:31:10,412
about 23 dollars per share if you just take you know industry average um look at s p 500 average

1075
01:31:10,412 --> 01:31:18,172
p e ratios 26 you're looking at a price of something like 702 so obviously there's a bunch

1076
01:31:18,172 --> 01:31:21,772
of people that are probably in the chat and they're probably online and that they're talking crap

1077
01:31:21,772 --> 01:31:26,332
about this these earnings aren't real earnings and you know they're never going to get traded at a

1078
01:31:26,332 --> 01:31:30,012
they're never going to get traded or valued at a multiple of their earnings well it's like

1079
01:31:30,012 --> 01:31:35,052
you know that's an agree to disagree thing i think that every dollar of earnings is important like

1080
01:31:35,052 --> 01:31:41,212
why do you hold any stock you hold stock for the long-term appreciation of the equity which is a

1081
01:31:41,212 --> 01:31:45,932
function of their financial strength which is a function of like the amount of earnings and money

1082
01:31:45,932 --> 01:31:56,572
that they can generate and retain for the long run. So I think every dollar of earnings should

1083
01:31:56,572 --> 01:32:02,492
be treated similarly. So regardless of whether or not it comes from Bitcoin or fiat cash flowing

1084
01:32:03,052 --> 01:32:08,652
enterprises. So I think that's exciting. I mean, let's just plug in 105 in here, right? So that's

1085
01:32:08,652 --> 01:32:13,612
where we're at today. So if everything just stayed flat for another 12 days, you're looking at

1086
01:32:13,612 --> 01:32:20,812
something like 12.3 billion dollar gain huge deal well this would be pretty monumental

1087
01:32:22,572 --> 01:32:26,972
and the bears and the footers are going to themselves when it happens that's going to be great

1088
01:32:29,452 --> 01:32:34,332
and then they got people in here so lawrence uh interesting question shouldn't the p ratio be like

1089
01:32:34,332 --> 01:32:43,372
a bank well like what is uh what is jp morgan's p ratio let's look it up um somebody looked that up

1090
01:32:43,372 --> 01:32:45,392
Goldman Sachs. What's Goldman Sachs PE ratio?

1091
01:32:46,392 --> 01:32:52,492
And while you're doing that, people were asking in the chat,

1092
01:32:52,852 --> 01:32:55,592
do I hold covered calls over earnings?

1093
01:32:56,532 --> 01:33:02,072
And just out of pure superstition and paranoia,

1094
01:33:02,312 --> 01:33:04,572
I generally take as many of them off as I can.

1095
01:33:05,852 --> 01:33:07,552
I'm not saying it's going to run up,

1096
01:33:07,552 --> 01:33:10,232
but I'm still too scared to keep them on.

1097
01:33:13,372 --> 01:33:20,172
All right. So JP Morgan's got a PE ratio of 13. Goldman Sachs got a PE ratio of 14.4.

1098
01:33:20,592 --> 01:33:27,312
Right now, Strategies PE ratio is like eight or seven, something like that. And again, you think

1099
01:33:27,312 --> 01:33:35,612
about why is it that? Why are earnings priced at a premium? Why is Apple trade at a high PE ratio?

1100
01:33:35,752 --> 01:33:40,232
Why do any of these growth stocks trade at a PE ratio? Because the idea is that all equities are

1101
01:33:40,232 --> 01:33:46,072
forward looking. All equities are a function of what the value of it's going to be in the future.

1102
01:33:46,872 --> 01:33:52,792
And why would strategy trade like a fiat bank when it's a Bitcoin bank?

1103
01:33:54,472 --> 01:33:58,872
You've got fiat. It's like you're comparing things that just aren't the same, right? You've

1104
01:33:58,872 --> 01:34:06,312
got fiat instruments. You're providing all these things in fiat land with a zero. Everything that

1105
01:34:06,312 --> 01:34:10,552
they hold is depreciating right you can't retain those earnings because that everything is

1106
01:34:10,552 --> 01:34:15,112
depreciating now if you're a bitcoin bank you should be valued higher because everything is

1107
01:34:15,112 --> 01:34:20,712
appreciating relative to the dollar that's like measured in so it's an interesting interesting

1108
01:34:20,712 --> 01:34:25,592
question interesting point i don't think it's incredibly valid but uh it's worth bringing up

1109
01:34:26,312 --> 01:34:30,232
and you look at the multiples like price to book value or multiple net asset value

1110
01:34:30,232 --> 01:34:37,792
of any of these other companies why do they all trade so high like what's palantir at i don't know

1111
01:34:37,792 --> 01:34:46,532
500x multiple of their net assets why why do they trade like that should their should their pe

1112
01:34:46,532 --> 01:34:52,992
decrease over maybe it might take decades but as bitcoin's compound annual growth rate

1113
01:34:52,992 --> 01:34:54,332
diminishes,

1114
01:34:55,452 --> 01:34:57,192
maybe it should contract

1115
01:34:57,192 --> 01:34:59,252
along

1116
01:34:59,252 --> 01:35:02,552
directly correlated with

1117
01:35:02,552 --> 01:35:03,852
Bitcoin's CAGR.

1118
01:35:04,652 --> 01:35:04,852
What?

1119
01:35:04,852 --> 01:35:06,572
It depends on how well they're leveraging it, though.

1120
01:35:08,012 --> 01:35:09,072
What? Say that again, Adrian?

1121
01:35:09,472 --> 01:35:11,732
It depends on how well they're leveraging their Bitcoin holdings

1122
01:35:11,732 --> 01:35:12,212
by that point.

1123
01:35:12,432 --> 01:35:14,892
Looking over the course of several decades, how many offerings

1124
01:35:14,892 --> 01:35:15,812
do they have at that point?

1125
01:35:16,412 --> 01:35:18,472
How many different ways are they

1126
01:35:18,472 --> 01:35:19,752
existing in the market?

1127
01:35:19,752 --> 01:35:25,072
how systemically important and systemically relevant are they in the market so bitcoin's

1128
01:35:25,072 --> 01:35:29,072
carrier could could decrease but their holdings could be so large and bitcoin's price came so high

1129
01:35:29,072 --> 01:35:35,172
that they still demand that multiple because they can still give out their these div payments they

1130
01:35:35,172 --> 01:35:38,752
could still do all these things with different offerings everyone's still getting their strats

1131
01:35:38,752 --> 01:35:43,792
like we talked about last week right everyone's still getting their strat payment so you know

1132
01:35:43,792 --> 01:35:54,452
And if they've demonstrated 50 years of managing that leverage effectively, then maybe they would be able to command that PE for even longer.

1133
01:35:55,152 --> 01:35:56,032
I don't see why not.

1134
01:35:56,232 --> 01:35:59,152
I mean, so Bitcoin's at 100K right now.

1135
01:35:59,252 --> 01:36:01,232
Let's fast forward 25 years.

1136
01:36:01,352 --> 01:36:02,372
Bitcoin's at 500K.

1137
01:36:02,492 --> 01:36:03,952
They have over a million Bitcoin.

1138
01:36:04,792 --> 01:36:07,912
They have a, what is that, a $5 trillion market cap, right?

1139
01:36:08,012 --> 01:36:10,812
Yeah, that would be, yeah, a million times $500,000 would be $5 trillion.

1140
01:36:11,072 --> 01:36:12,792
Yeah, $5 trillion market cap.

1141
01:36:12,792 --> 01:36:15,192
and they have a $5 trillion market cap

1142
01:36:15,192 --> 01:36:17,712
that has all these different preferred offerings on top of it.

1143
01:36:17,952 --> 01:36:21,292
They probably have different variations of them by that point.

1144
01:36:21,752 --> 01:36:22,832
They're paying out these dividends.

1145
01:36:23,652 --> 01:36:23,992
I mean-

1146
01:36:23,992 --> 01:36:25,932
It's the safest equity to hold on the planet.

1147
01:36:26,672 --> 01:36:26,992
Right.

1148
01:36:27,372 --> 01:36:29,172
Because when Bitcoin is 500,000,

1149
01:36:29,832 --> 01:36:31,292
people always talk about,

1150
01:36:31,292 --> 01:36:34,592
well, is it going to retrace down 80%?

1151
01:36:35,072 --> 01:36:37,452
Well, what people don't realize is

1152
01:36:37,452 --> 01:36:39,752
at a $500,000 Bitcoin,

1153
01:36:40,572 --> 01:36:42,572
it's going to take a lot of capital to leave the market

1154
01:36:42,572 --> 01:36:45,192
to substantially push it down, right?

1155
01:36:45,692 --> 01:36:48,212
And at that point, when the market cap is that,

1156
01:36:48,312 --> 01:36:51,812
when the market cap and price per Bitcoin is that high,

1157
01:36:52,472 --> 01:36:54,992
what is really going to motivate that 80% drawdown?

1158
01:36:55,352 --> 01:36:57,392
At that point, are people still chasing the pump?

1159
01:36:57,452 --> 01:36:58,412
Are people still chasing gains?

1160
01:36:58,452 --> 01:36:59,052
I don't think so.

1161
01:36:59,372 --> 01:37:01,432
I think Bitcoin becomes a more stable asset.

1162
01:37:02,192 --> 01:37:03,652
The higher the price it goes,

1163
01:37:03,772 --> 01:37:05,572
the less sharp those drawdowns are going to become.

1164
01:37:05,932 --> 01:37:09,312
So by default, strategy becomes more stable as a result, right?

1165
01:37:09,872 --> 01:37:11,692
And if strategy is more stable as a result,

1166
01:37:11,692 --> 01:37:15,192
and they can issue these offerings on top of Bitcoin

1167
01:37:15,192 --> 01:37:17,392
and they can have these offerings,

1168
01:37:17,492 --> 01:37:18,372
like Jeff's been saying,

1169
01:37:18,872 --> 01:37:20,752
these are not offerings that are backed by fiat.

1170
01:37:20,932 --> 01:37:23,032
These are offerings that are backed by a hard asset.

1171
01:37:24,332 --> 01:37:26,412
All of these different offerings at that point,

1172
01:37:26,732 --> 01:37:30,712
in my mind, would have to demand a multiple on the common.

1173
01:37:31,092 --> 01:37:32,272
It just stands to reason.

1174
01:37:33,312 --> 01:37:34,852
And there's a comment here,

1175
01:37:34,852 --> 01:37:36,072
and I brought this up earlier,

1176
01:37:36,312 --> 01:37:37,572
and I think this might be the same person

1177
01:37:37,572 --> 01:37:39,332
I was chatting with on X.

1178
01:37:39,892 --> 01:37:41,172
At that point, would it not make sense

1179
01:37:41,172 --> 01:37:47,372
to sell some mstr and buy the same dollar amount of btc i think you can see this multiple different

1180
01:37:47,372 --> 01:37:54,152
ways right how much bitcoin do you already have how good is your life you know do like are you

1181
01:37:54,152 --> 01:38:01,012
able to do stuff with bitcoin that you're unable to do with mstr is there a benefit of holding mstr

1182
01:38:01,012 --> 01:38:10,492
over bitcoin and my response to that is if i held bitcoin or to do um i can't issue three you know

1183
01:38:10,492 --> 01:38:20,892
5% debt, fixed income instruments on my own Bitcoin, but MSDR can. That's why I hold it.

1184
01:38:21,452 --> 01:38:29,372
I hold it because I'm getting a tax deferred dividend reinvestment program via MSDR paid in

1185
01:38:29,372 --> 01:38:38,812
Bitcoin. That's why I hold it. And I can't do that. Because they're so fucking big, they're able to

1186
01:38:38,812 --> 01:38:46,812
do things corporately in the capital markets that I can't do because I don't have that scale of

1187
01:38:46,812 --> 01:38:52,492
capital. I can't go issue 0% convertible debt. I can't take on that kind of leverage, but I would

1188
01:38:52,492 --> 01:38:57,532
rather hold those types of equity instruments and use them to my benefit. And even if you think about

1189
01:38:59,692 --> 01:39:06,092
and I love this thought process, even if you think about a fully Bitcoin-denominated

1190
01:39:06,092 --> 01:39:14,892
ecosystem in the future. Right? So there's going to be more than 21 million of Bitcoin worth of value

1191
01:39:14,892 --> 01:39:19,612
in the world. Right? Because not everything's going to be for sale at the same time.

1192
01:39:20,972 --> 01:39:24,492
Right? You're going to have so there's gonna be 21 million Bitcoin, right? We know that there's

1193
01:39:24,492 --> 01:39:28,812
gonna be 21 million Bitcoin. But there's also going to be value stored in houses,

1194
01:39:29,372 --> 01:39:33,132
tons of value stored in houses, because people still need to live people like desirable places

1195
01:39:33,132 --> 01:39:37,612
to live. Even if you price those as Bitcoin, that means that there's going to be a hundred million

1196
01:39:37,612 --> 01:39:42,092
Bitcoin worth of value in the world, but it's just not all for sale at the same time.

1197
01:39:43,932 --> 01:39:47,832
And what's going to be the value of holding equities at a point in time in the future?

1198
01:39:48,612 --> 01:39:55,032
Am I going to hold an equity in a hardware wallet that's fully divisible that I can divide up sats

1199
01:39:55,032 --> 01:40:00,912
and I can pay? Let's say Soleil goes out and we go get beers and I pay Soleil and MSDR shares.

1200
01:40:00,912 --> 01:40:09,752
strats, right? Micro strats. Like if you don't think the future is going that way, you're crazy.

1201
01:40:10,752 --> 01:40:15,792
Right? Like the future is getting, the future is getting faster, like way, way, way, way, way faster.

1202
01:40:16,332 --> 01:40:22,432
And we're going to see that the use case of holding these things is going to change and evolve over

1203
01:40:22,432 --> 01:40:29,532
time with the digital economy. And that's where, that's where we're going. Um, there's no if,

1204
01:40:29,532 --> 01:40:31,772
hands or butts about it. Like that's, that's where it's going.

1205
01:40:32,932 --> 01:40:36,472
In my mind, a future, a future like that. And again,

1206
01:40:36,472 --> 01:40:39,452
this is me talking more as more of a Bitcoin or perhaps we're just trying to

1207
01:40:39,452 --> 01:40:41,832
bring a different perspective in a future like that.

1208
01:40:41,892 --> 01:40:46,292
It makes sense to hold Bitcoin and MSDR and maybe even playing,

1209
01:40:46,452 --> 01:40:47,312
playing devil's advocate.

1210
01:40:47,472 --> 01:40:51,832
Some of these other treasury companies that they're still around because if we

1211
01:40:51,832 --> 01:40:53,612
think it, if we scale it up to the future,

1212
01:40:53,752 --> 01:40:55,732
Bitcoin's 500,000 million dollars or whatever.

1213
01:40:55,732 --> 01:40:59,392
And the companies with Bitcoin on their balance sheet in my mind,

1214
01:40:59,392 --> 01:41:17,346
just like we seeing now are going to demand an additional premium because of that future that we envisioning right That on top of that if we think about the buy borrow die model if someone holds a bunch of Bitcoin backed equities whether we want to call them LBEs

1215
01:41:17,846 --> 01:41:23,126
BACs, whatever, they are an equity that is backed by Bitcoin on some level, a company that holds

1216
01:41:23,126 --> 01:41:28,726
Bitcoin on their balance sheet that is bolstering the strength of their company. If we take a buy,

1217
01:41:28,826 --> 01:41:32,546
borrow, die model, are those equities going to get the same kind of interest rates in the future?

1218
01:41:32,546 --> 01:41:35,006
where they get better interest rates for borrowing?

1219
01:41:35,806 --> 01:41:40,626
What kind of different ways is the market going to stratify itself?

1220
01:41:42,026 --> 01:41:45,746
Is Bitcoin borrowing, Bitcoin equity borrowing,

1221
01:41:46,266 --> 01:41:48,666
you're going to get a different kind of interest rate on that, right?

1222
01:41:49,066 --> 01:41:52,186
Then you have regular equities that you can open up margin on,

1223
01:41:52,226 --> 01:41:53,806
you can borrow against, what have you,

1224
01:41:54,386 --> 01:41:56,646
are going to have one set of interest rates.

1225
01:41:56,646 --> 01:42:00,146
Then perhaps IBIT, FBTC, the ETFs,

1226
01:42:00,206 --> 01:42:02,386
are they going to get differentiated interest rates

1227
01:42:02,386 --> 01:42:09,066
in the future because Bitcoin is now a stable asset, but it is now seen truly as digital gold,

1228
01:42:09,166 --> 01:42:13,546
right? Because if you go into a bank right now with tons of gold, they're going to smile

1229
01:42:13,546 --> 01:42:19,126
and they're going to let you borrow against that all day, right? So if Bitcoin truly gets to that

1230
01:42:19,126 --> 01:42:25,506
parity in terms of perception and market use of digital gold, and you have equities in your

1231
01:42:25,506 --> 01:42:31,886
portfolio, strategy, similar, whatever, and you can borrow against that, you may never have to sell

1232
01:42:31,886 --> 01:42:35,786
them. You can borrow against your Bitcoin, you can borrow against your strategy, and you can just

1233
01:42:35,786 --> 01:42:42,266
buy, borrow, die, and keep rolling that if the CAGR holds up and if the returns holds up. And if the

1234
01:42:42,266 --> 01:42:46,246
CAGR doesn't hold up and it's a steady state asset, they're just going to let you roll it anyway.

1235
01:42:46,766 --> 01:42:51,866
So you can probably be able to borrow money in perpetuity and just pay off the interest and pay

1236
01:42:51,866 --> 01:42:58,726
off what you want to pay off and just essentially do the buy, borrow, die model that Jeff Bezos,

1237
01:42:58,726 --> 01:43:03,526
Tim Cook, Mark Zuckerberg, all of the wealthy right now, they're not selling their assets.

1238
01:43:03,646 --> 01:43:04,966
They borrow against them in perpetuity.

1239
01:43:05,366 --> 01:43:06,686
That's because they're collateral.

1240
01:43:07,486 --> 01:43:08,126
Exactly.

1241
01:43:08,486 --> 01:43:09,286
They're collateral.

1242
01:43:09,866 --> 01:43:10,986
The power of collateral.

1243
01:43:11,646 --> 01:43:12,426
That's what Justin said.

1244
01:43:12,426 --> 01:43:12,766
This is collateral.

1245
01:43:13,506 --> 01:43:22,906
Strategy has a massive moat of pristine, future-proof collateral that they can borrow against in

1246
01:43:22,906 --> 01:43:29,226
perpetuity that they can back up assets they can back up back up offerings against in perpetuity

1247
01:43:30,026 --> 01:43:35,546
that will demand a premium so if everyone's saying well this mdf should be one i'm just like

1248
01:43:35,546 --> 01:43:40,746
i don't know if you're really thinking it through yeah and i mean one thing that i think that channels

1249
01:43:40,746 --> 01:43:46,346
may not get is you can't un orange pill somebody you know once you're once you're orange like once

1250
01:43:46,346 --> 01:43:52,666
you take the orange bill you're like dude my whole world shifted i can't i can't read i can't

1251
01:43:52,666 --> 01:43:59,386
can't plug back in i can't i can't i can't take a blue pill either i can't take an xrp pill either

1252
01:44:00,026 --> 01:44:07,386
you know like it's just not gonna happen and it's like i don't think they really understand like

1253
01:44:07,386 --> 01:44:14,026
how strong of a holder and how like psychotic of a holder base this is right these people are

1254
01:44:14,026 --> 01:44:20,826
gonna hold this forever and they are the the lowest time preference people and these are the

1255
01:44:20,826 --> 01:44:24,986
people that are also holding strategy which just makes it even cooler well actually with the

1256
01:44:24,986 --> 01:44:29,146
exception of the traders the people that are following the blinds the blind squirrel chasing

1257
01:44:29,146 --> 01:44:39,226
the net but um but like last week the the weird thought process is sat and strat if the bitcoin

1258
01:44:39,226 --> 01:44:45,306
really does scale which you know it will does strategy get to such a level in the market where

1259
01:44:45,306 --> 01:44:53,086
they're seen as a completely different entity whatsoever from everything that exists,

1260
01:44:53,926 --> 01:44:57,246
given the size of their mode, given the size of their holdings, given the size of the amount

1261
01:44:57,246 --> 01:45:03,026
of collateral that they have, the offerings and so on and so forth. Can they get to a scale where

1262
01:45:03,026 --> 01:45:10,866
you have like the MAG-7, then you have strategy and the economy that they've built up around them

1263
01:45:10,866 --> 01:45:13,866
and people like what Jeff's been saying

1264
01:45:13,866 --> 01:45:15,166
and what we discussed last week,

1265
01:45:15,226 --> 01:45:17,066
people are living off the dividends, right?

1266
01:45:18,006 --> 01:45:20,606
I just imagine if someone has, I don't know,

1267
01:45:20,786 --> 01:45:22,566
thousands of shares of Strife right now

1268
01:45:22,566 --> 01:45:24,766
and they're able to keep adding to their positions

1269
01:45:24,766 --> 01:45:25,806
and we hit escape velocity

1270
01:45:25,806 --> 01:45:26,926
and they're living off their dividend.

1271
01:45:28,626 --> 01:45:28,746
Yeah.

1272
01:45:28,906 --> 01:45:30,426
Like what we're, like, do you see what I'm saying?

1273
01:45:30,486 --> 01:45:32,426
Like there's just so many different ways this thing can go.

1274
01:45:32,686 --> 01:45:35,146
So I think that people need to kind of like price that

1275
01:45:35,146 --> 01:45:37,466
into their skeptical models

1276
01:45:37,466 --> 01:45:38,766
when they're really trying to assess it.

1277
01:45:39,166 --> 01:45:40,286
And Chainos doesn't get all of this.

1278
01:45:40,286 --> 01:45:41,386
He just doesn't.

1279
01:45:41,726 --> 01:45:44,706
But the market will figure it out over time.

1280
01:45:45,906 --> 01:45:46,306
Yeah.

1281
01:45:47,106 --> 01:45:49,966
And I want to bring this up too, because I think this is a really good point.

1282
01:45:50,066 --> 01:45:51,366
I love the zero carry cost.

1283
01:45:51,506 --> 01:45:52,686
Store 12 words in your head.

1284
01:45:53,426 --> 01:45:58,626
And I think this is really valuable to think about competition in the market of the Mag 7.

1285
01:45:59,186 --> 01:46:00,586
Why is the Mag 7 really valuable?

1286
01:46:01,146 --> 01:46:04,346
Well, Apple is selling a ton of iPhones.

1287
01:46:04,546 --> 01:46:05,646
They're collecting a lot of data.

1288
01:46:05,646 --> 01:46:12,526
but in order to retain that wealth they either have to like buy back their stock so that they do

1289
01:46:12,526 --> 01:46:18,226
that but they also have retained earnings that they keep and that retained earnings is dwindling

1290
01:46:18,226 --> 01:46:24,666
and in order to continue to build that retained earnings you have to have more employees you have

1291
01:46:24,666 --> 01:46:29,606
to pay the employees you have to have like infrastructure for all the employees you have to

1292
01:46:29,606 --> 01:46:34,906
have um you know sweatshops in china that are building your iphones or like future robots that

1293
01:46:34,906 --> 01:46:38,906
building the iphones you've got to buy the chips you need all the energy to create all this stuff

1294
01:46:38,906 --> 01:46:46,486
and the cost of continued production of all of these things it just keeps going right it keeps

1295
01:46:46,486 --> 01:46:53,026
going and it's going to inflate over time and so you think about like the probability of

1296
01:46:53,026 --> 01:47:01,346
loss or deterioration from having to keep sustaining and growing that pace is really

1297
01:47:01,346 --> 01:47:06,246
tricky. Like you get to a point where you're just, you're so big, it just, you can't sustain a certain

1298
01:47:06,246 --> 01:47:09,746
growth rate. Now you look at a company like strategy that's holding all this capital and

1299
01:47:09,746 --> 01:47:13,706
they're retaining all this capital and they're retaining it and holding onto it cheaply. It's

1300
01:47:13,706 --> 01:47:17,646
not like holding real estate where you have vacancies and you got, you got like a ton of

1301
01:47:17,646 --> 01:47:23,086
maintenance and you know, the roof falls down. You got to replace the roof and you know, all this

1302
01:47:23,086 --> 01:47:29,946
other stuff. And like with strategy, you just, you just hold it. Like you just hold it digitally.

1303
01:47:29,946 --> 01:47:33,706
You don't even like, you don't even like, yeah, they've got to pay like their custody

1304
01:47:33,706 --> 01:47:38,326
fees and things, but I'm sure it's a hell of a lot less than holding $60 billion worth

1305
01:47:38,326 --> 01:47:38,826
of gold.

1306
01:47:39,506 --> 01:47:42,626
If you held $60 billion worth of gold, you got to think about like, where do I store

1307
01:47:42,626 --> 01:47:42,786
it?

1308
01:47:42,826 --> 01:47:43,846
How do I do all this stuff?

1309
01:47:44,086 --> 01:47:48,846
Like there's no other asset like it on the planet where you can just have so little carry

1310
01:47:48,846 --> 01:47:51,026
costs with the appreciation potential.

1311
01:47:51,526 --> 01:47:54,446
People also haven't understood that one.

1312
01:47:54,506 --> 01:47:58,306
That one's, that part is just totally underappreciated.

1313
01:47:59,946 --> 01:48:06,146
all right we're at an hour 48 tim it's like i'm sure the sun's coming up i i can't believe you're

1314
01:48:06,146 --> 01:48:11,606
here give us give us a rundown of bitcoin prog at least so far like i'm sure you just landed but

1315
01:48:11,606 --> 01:48:15,826
like what are you excited about you got some things in the horizon um there's a lot of people

1316
01:48:15,826 --> 01:48:21,886
there some good energy yeah i mean we'll see tim ever cut you off of guys i gotta drop all right

1317
01:48:21,886 --> 01:48:29,666
later adrian good night yep the the sun's coming up right so it might be midnight in new york but

1318
01:48:29,666 --> 01:48:42,406
it's 5 49 a.m in prog yeah got in early wednesday morning prog time uh met up with some guys right

1319
01:48:42,406 --> 01:48:49,106
walked around took i posted a picture of like the prog old car you can basically like take a car and

1320
01:48:49,106 --> 01:48:56,786
they zoom you around um i didn't know that prog is home to the largest castle in the world now

1321
01:48:56,786 --> 01:49:02,606
i still need to like go to chat and be like is there a certain definition of the word castle

1322
01:49:02,606 --> 01:49:09,206
because that seemed a little odd right like what prog is home to the world's largest castle

1323
01:49:09,206 --> 01:49:20,706
but um yeah uh oh castle complex whoa yeah okay interesting okay so yeah thursday today there's uh

1324
01:49:20,706 --> 01:49:26,586
the conference kicks off friday so it's like i guess thursday and friday is almost like an

1325
01:49:26,586 --> 01:49:32,706
industry day maybe like 2 000 people saturday is the main day maybe 10 000 people and you know

1326
01:49:32,706 --> 01:49:40,866
adam back say or everybody's here um more so for the friday saturday sessions um from what i'm

1327
01:49:40,866 --> 01:49:47,506
looking at on schedule so yeah no i uh was hanging out in the hotel lobby last night right i'm just

1328
01:49:47,506 --> 01:49:52,466
looking out the window i just see sam callahan just walking down the sidewalk um in the square

1329
01:49:52,466 --> 01:49:57,506
looking at the uh whatever the clock is called and right there's just like a sea of people and

1330
01:49:57,506 --> 01:50:01,226
I see like BTC sessions just like walking through the crowd.

1331
01:50:01,726 --> 01:50:05,566
So, you know, it's like conference vibes and, you know.

1332
01:50:05,646 --> 01:50:07,486
But you're in a cool European city.

1333
01:50:07,826 --> 01:50:07,946
Yeah.

1334
01:50:08,386 --> 01:50:08,686
Yeah.

1335
01:50:08,926 --> 01:50:18,546
When I was at the Bitcoin Investor Day in Paris, Matthias, one of the two brothers that runs this conference, he was like, you know, talking to me.

1336
01:50:18,606 --> 01:50:20,006
He's like, you got to come to Prague.

1337
01:50:20,486 --> 01:50:24,486
And like everything that everyone has hyped it up to be is true.

1338
01:50:24,586 --> 01:50:25,746
Like it's very cool.

1339
01:50:25,826 --> 01:50:26,686
It's very old.

1340
01:50:26,686 --> 01:50:33,526
It's almost like Parisian with like a little dash of Rome, but just like, you know, it's very affordable.

1341
01:50:33,986 --> 01:50:35,186
So yeah, very cool.

1342
01:50:35,926 --> 01:50:37,906
Damn, I'm feeling some serious FOMO now, Tim.

1343
01:50:39,266 --> 01:50:39,666
Sorry.

1344
01:50:40,366 --> 01:50:40,846
Yeah, me too.

1345
01:50:40,926 --> 01:50:41,706
I'm about to check flights.

1346
01:50:42,346 --> 01:50:43,506
Yeah, geez, get out there.

1347
01:50:43,706 --> 01:50:44,026
I'll be there.

1348
01:50:44,226 --> 01:50:44,866
I'll be there later.

1349
01:50:44,986 --> 01:50:45,606
Pick me up at the airport.

1350
01:50:47,426 --> 01:50:48,746
Well, thanks for joining, Tim.

1351
01:50:48,806 --> 01:50:49,606
Thanks for hopping on.

1352
01:50:49,786 --> 01:50:50,686
I appreciate the perspective.

1353
01:50:51,226 --> 01:50:55,726
Go hit the, get your boots on the ground, figure out what's going on down there.

1354
01:50:55,726 --> 01:50:58,206
and I know it's Bitcoin only, which is great.

1355
01:50:58,266 --> 01:50:58,946
No shit coinery.

1356
01:50:59,706 --> 01:51:01,686
And yeah, get the latest scoop

1357
01:51:01,686 --> 01:51:02,746
and we'll bring you on next week

1358
01:51:02,746 --> 01:51:03,806
and we'll chat through what's going on.

1359
01:51:04,966 --> 01:51:05,686
Sounds great.

1360
01:51:06,006 --> 01:51:06,266
Perfect.

1361
01:51:06,406 --> 01:51:06,766
Fun as well.

1362
01:51:07,366 --> 01:51:07,826
So late.

1363
01:51:07,946 --> 01:51:09,026
Last final thoughts.

1364
01:51:10,326 --> 01:51:12,166
I knew when you said this might be a short one.

1365
01:51:12,286 --> 01:51:13,366
I knew you were full of it,

1366
01:51:13,786 --> 01:51:19,246
but I think that this goes with the sentiment again

1367
01:51:19,246 --> 01:51:21,306
and I'm sorry that Adrian finished

1368
01:51:21,306 --> 01:51:22,726
or had to drop already,

1369
01:51:22,726 --> 01:51:33,386
But I think that earnings for strategy is the most important thing, but also the least important at the same time.

1370
01:51:33,466 --> 01:51:34,906
So it's almost like quantum earnings.

1371
01:51:36,606 --> 01:51:40,526
And I think it's the least important because we already know what the Bitcoin price is.

1372
01:51:40,926 --> 01:51:43,186
So we already know what strategy is worth.

1373
01:51:43,526 --> 01:51:48,846
But at the same time, and this, I think, affects the sentiment.

1374
01:51:48,846 --> 01:51:55,066
since strategy doesn't need to go to earnings to tell you where strategy was over the last three

1375
01:51:55,066 --> 01:51:59,186
months because we all know what what the bitcoin price was and we know how much bitcoin they

1376
01:51:59,186 --> 01:52:05,366
purchased i think investors of strategy are going to be looking to the earnings calls

1377
01:52:05,366 --> 01:52:12,106
for that reassurance about where they're going to in the future and so you know if we see some

1378
01:52:12,106 --> 01:52:17,626
people running off and pulling out some of their strategy money for meta planets or any of these

1379
01:52:17,626 --> 01:52:23,306
other things that are going to be popping up, I think it's going to be the plan that they lay out

1380
01:52:23,306 --> 01:52:29,066
at these earnings calls. That's really going to reassure the investors and keep them excited.

1381
01:52:30,506 --> 01:52:34,926
Right. Absolutely. And every single earnings call that strategy has put out has been just

1382
01:52:34,926 --> 01:52:40,406
in total banger since Q3 of 24, every single one, it's just been like, Whoa, oh my God, more stuff.

1383
01:52:40,406 --> 01:52:46,826
Yeah. It was like 21, 21. Oh yeah. Do 42, 42. So, you know, you just want to know that the,

1384
01:52:46,826 --> 01:52:57,166
that the company is going where we want it to go. Yeah, 100%. Yeah. I mean, Chris hit it. Nothing's

1385
01:52:57,166 --> 01:53:01,346
really changed. I mean, the thesis hasn't really changed. It's just like we keep going here and

1386
01:53:01,346 --> 01:53:04,926
there's some chop and there's some people complaining about short-term volatility.

1387
01:53:05,206 --> 01:53:10,486
But I do think, again, this is the biggest story in all of finance. Not just the Bitcoin treasury

1388
01:53:10,486 --> 01:53:15,686
companies, but really MSDR and how big MSDR is relative to these other companies in the market.

1389
01:53:15,686 --> 01:53:19,646
it. And people just don't really conceptualize it yet. They don't understand how powerful this

1390
01:53:19,646 --> 01:53:23,686
stuff is. So again, that's why we're talking about this. We're educating the market. Our goal

1391
01:53:23,686 --> 01:53:28,906
is to educate the market, talk about what's going on with finance background, understanding capital

1392
01:53:28,906 --> 01:53:36,346
markets and plowing through what's happening day to day. So I do not think we will have an episode

1393
01:53:36,346 --> 01:53:41,506
next week. Maybe we will. I don't think I'll be on it. My life is super hectic the next couple of

1394
01:53:41,506 --> 01:53:47,866
weeks and uh and i'll be back on here shortly but yeah thanks everybody for the time appreciate it

1395
01:53:47,866 --> 01:53:54,886
and uh we'll keep on cruising yeah let us know let us know jeff soleil and i can uh you know

1396
01:53:54,886 --> 01:54:00,886
maybe tag team hosting one of these and you know kind of stumble through it right yeah get through

1397
01:54:00,886 --> 01:54:06,906
there you go right on little moon math it yeah absolutely just you the moon math is good you

1398
01:54:06,906 --> 01:54:14,586
have the moon math. It's helpful. All right. 9,200 people. Thank you for joining. Appreciate the time

1399
01:54:14,586 --> 01:54:21,386
an hour and 54 and we are finished with episode 30 of the investment grade Bitcoin podcast. Cheers.

1400
01:54:22,746 --> 01:54:23,546
We're going higher.