Music
Truckin', got my tips down to steer
Keep truckin', like the dude of man together
All less in line, just keep truckin'
Oh, oh, oh, oh, oh.
Arrows of neon are flashing my keys out on Main Street.
Chicago, New York, Detroit, and it's all on the same street.
A typical city in Baltimore, a typical daydream.
Hang it up and see what tomorrow brings.
Dallas got a salt machine.
Houston, too close to New Orleans. New York, got the ways and means and just won't let you be.
Woo! We are back. Episode 30, True North, the investment grade Bitcoin podcast. We are cooking
here. And without further ado, we're going to start with a quick intro of True North World.
Let's hit it.
It became very apparent that my time and energy was much better spent in this arena.
We're talking about people that are making a lot of money and they want to focus on Bitcoin.
Sailor is always talking about Bitcoin as fire in cyberspace.
I like to say I majored in Bitcoin, minored in MicroStrategy.
A concentrated position in one stock.
A strategy without a Bitcoiner hat on.
It's all powered by this capital market arbitrage.
Setting sail with Satoshi and Sailor.
If I could make a contribution that was going to be fully aligned with Bitcoin.
So pretty much went all in.
Been no looking back at this point.
A Bitcoin only feed.
Just Bitcoin and strategy.
I titled this one conviction as a service for that exact point.
Really needed some hope for my future and found Bitcoin.
All right.
Welcome back.
Episode 30, True North, the investment grade Bitcoin podcast.
I've got sun shining through.
Tim is in Prague.
It's four o'clock in the morning there.
We've got Soleil and Adrian on the call tonight, and I think it'll be a good one.
It might be a little quick because not much has changed since last week, except some drama in the market sentiment department.
And I hope you like that quick intro video there.
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.
So we are drumming up some interest there, and each one of the pieces will be released over the next, I think, two weeks.
So hope you guys follow along and get to see some of the content that we put together.
We put a lot of time and energy into that event, and hopefully we can do another one here in the near future.
So without further ado, we'll get into the agenda for tonight.
So we're going to go over a quick leverage update as we do every week.
Talk about market sentiment, which has been a bit poor recently.
And I think rightfully so.
There's been a little bit of chop and sideways and ups and downs in both directions.
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.
BTC yield as a concept.
We'll do the S&P 500 tracker.
We'll look at the earnings, the potential earnings update for MSTR moving forward into the future.
What would that look like?
And we'll get into an et cetera department.
We'll talk about fixed income.
We'll talk about the Fed, maybe war nodes, some of the work that everybody else has been doing behind the scenes.
and talk about some valuation things. And yeah, you're right, Chris, nothing changed.
Yeah. Strategy bought 10,000 Bitcoin. I guess that counts as change.
So yeah, appreciate everybody in the comments, keep them coming. And I think we'll have some
time at the end. Maybe we'll go through some questions. Cool. Well, with that, we will jump
right into the leverage update and I will share my screen here.
Jeff, you said the word leverage. We got to say this is not financial advice.
Oh, yeah. Oh, yeah. Back to you, Tim. Hold on. Let me get you back on here.
Go ahead. Over to you, Tim.
All right. Whether you're in Las Vegas, Orlando, or Prague, this may be entertaining,
but it's not financial advice. Back to you, Jeff.
Boom. We're back. None of this is financial advice. Oh, a little bit of background. If
is your first time watching a True North podcast on episode 30. Our goal is to be the investment
grade Bitcoin podcast. We're here talking about strategy. We're talking about Bitcoin treasury
companies. We're talking about any corporation that's adding Bitcoin to their balance sheet.
What does that look like? How are these equities trading in the market? What are these new fixed
income products that these companies are designing? What is a convertible bond? We hit on all these
different instruments and kind of what's happening in the market every week. So we've been doing this
since October. And our goal is to educate the community because we all have different backgrounds
and different perspectives on the market. And yeah, this is the biggest story in all of finance.
Companies adding Bitcoin to their balance sheet and the increasing financial strength that they're
continuing to have in the market. So great time to be talking about Bitcoin. Great time to be
talking about strategy. Great time to be talking about Bitcoin treasury companies. There's clearly
a lot of energy in the space right now. Just looking at how much capital has been raised
every week for strategy and even some of these Bitcoin treasury companies that are moving really
quickly. So without further ado, we'll jump into the leverage update. And this is important. We
share this every single week because the commentary is strategy is incredibly over levered. They're
levered to the gills. They're taking on so much debt to buy Bitcoin. And when you actually just
zoom out and you look at some of the math, it doesn't look that bad. So that's the reason we
show it. As of this week, so 6-18-2025, MSTR holds 592,100 Bitcoin. That's an increase from last
week of 10,100 Bitcoin. One more week without using the MSTR ATM. So we got the billion dollar
buy from STRD, I think about 76-ish million from the other two instruments, the ATM on the other
instruments, STRF and STRK, which is big. That's the third week in a row there hasn't been MSTR ATM.
So I think the MSTR ATM bears have been a little bit quieter. It's just shifted to,
why isn't the stock performing? Which is just a funny sentiment shift.
So Bitcoin held, $592,100 Bitcoin held at the price when I started the episode is around $104,960.
dollars so they have 62 billion dollars of assets 8.2 billion of debt 3.3 billion of preferred stock
net capital held on balance sheet is 50.5 billion 50.5 billion just to put this into perspective
it's a huge number it's just a totally monumental number um the uh the the this would this would
represent the third largest reinsurance entity in the entire globe so my background being in
reinsurance. There are a hundred plus reinsurance entities that exist in the entire global reinsurance
ecosystem. And this would be the third largest. Just the net capital held on balance sheet would
be the third largest reinsurance company. So that's a very significant amount of money that
they hold. It's a relatively niche market, but it would be very, very, very big.
In terms of leverage ratio, so just taking the assets relative to the debt, the leverage ratio
was 18.6% debt coverage multiple of 5.4. That means over every instrument that they have,
they have 5.4 times the amount of assets than they do debt on the balance sheet.
So what does that mean? That means that the Bitcoin price would need to go down below $13,890
and stay there for an extended period of time in order for the assets to be worth the liabilities
and strategy to be in any sort of circumstance where they wouldn't be able to pay out their
debt into the future, into perpetuity. So really, I mean, these figures are huge. There's a reason we
start with this every single week, because this is one of the strongest financial companies on the
entire planet, let alone, it's definitely the strongest Bitcoin treasury company by magnitudes,
right? Multiples greater than any other company out in the entire market. Yeah, there are some
companies that exist that have less debt or no debt, but you can argue if you don't have any debt,
you're inefficiently allocating capital on your balance sheet. So just some things to take into
consideration. There's also another column here, a pro forma column that's outlining what the
leverage ratio would look like if all of the convertible debt that's currently trading in
the money were to convert into equity. All the convertible debt that's currently trading in the
the money is hedged by short positions. So there are short positions that are matched effectively
probably one-to-one with the equity that each one of these convertible debt holders holds.
So if these convertible bonds do get converted into equity, they would likely cancel out one-to-one
the short interest and the equity. So there likely wouldn't be much movement on the stock,
and that would drop the debt on the balance sheet from $8.2 billion down to $5 billion.
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?
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.
but I think there's going to be people who are executing the strategy well, like a meta planet.
And then I think we're going to have to be very careful about the dozens, maybe hundreds,
of Bitcoin treasury companies that are going to pop up on the back of this hype.
Yeah, I mean, there's going to be a ton that are going to be popping up over time, right?
I think it's tough to say, right?
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.
But I mean, we're still in incredibly early days.
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.
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.
So I really, it's going to take so long.
like I was on a phone call earlier today and we're just talking about timeline, right? Like
they're a private company and they're looking to go public and potentially start running a strategy.
They've got a good underlying business. They're relatively small and we're talking 12 months out,
right? Like eight to 12 months starting from private today in order to get public and have
liquidity in the public markets. So it's not a really fast thing. Any company that's gone public
or gone through this process with a pipe recently, they're either already been public or they've
already had full audited financials, all of these things. And they were already really close to
being able to go through this process already. And that's how they've been able to enter the
public arena. So it just takes a bit of time. And I think it's going to take a lot longer than
many people think for more of these companies to come onto the scene.
I would agree. I've had conversations with previous clients. I've had conversations with
individuals that I know that work for Fortune 500 companies and leadership positions and whatnot.
And if a company even were to consider this, to your point, if they were to start right now,
it's a year to 18 months out before they could actually go live with it, I think, in terms of,
one, getting buy-in, and two, actually making it work. So I do think we have a lot more time here.
With regards to bear market, I'm still thinking through how deep that bear market can go. I do
think we're going to see a retracement, obviously, but I still don't know if we're going to see that
80% drawdown that we have in the past. But yeah, I know we've said this a lot on the show,
we are still early and i do think that to salel's point with the sentiment it is people chasing
squirrels but it's also a lot of um what it's a lot of cost basis bias so someone that's newer
in the trade they're far more impatient than someone's been in it for like two years right
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
lot of individuals that i've seen their posts i've seen that they got in right around the top at 543
or just after they are some of the loudest ones that are the most frustrated and they're the ones
that are talking about i sold all my msdr to rotate into x y or z yeah um and it's kind of
weird we went from people saying i sold all my msdr to roll into misty and now they're saying now a
lot of people say they sold all the msdr roll into another play and i'm seeing people that sold they
sold msdr from misty going from from msdr to misty to one of these other plays and it's like you're
burning your cash every single time you do that have you sat down with like at least a spreadsheet
to plan this thing out um the answer is no but that's that's one of the questions that i ask
and i'm just i just think that people need to really have a long time horizon or if they're
going to rotate are you is it really worth it to burn your whole position to do hopefully be
hopefully be in a non-taxable account right there's there's that as well so it's like you're
getting eaten with taxes and you're rotating your position into a new play that's potentially more
volatile yeah i i just think there's a lot of impatience there's a lot of gambling going on
and um you know that's going to rectify itself like it always does one one so late to your point
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
tracking this every day i was like doing it manually in excel but on october 4th uh strategy
was ranked 267th largest company by market cap on October 4th. So what is that? Eight months ago?
Eight months.
Eight months ago. And the market cap was $35 billion. And what is this? And the price is $176.
Fast forward, right? Anybody that was buying the stock here, or even in September,
anybody that was buying a stock in September, you were able to buy a stock in September for $114.
Sentiment was horrible. Sentiment was horrible in September.
Completely horrible. And it was very similar to where we are right now where,
anybody looking back, if they bought in September, they were taking on a tremendous risk. They were
taking on significantly more risk because the company in September was a $22 billion market
cap company there's significantly more risk with a smaller company than a larger company
and i mean what how much bitcoin did they have in their balance sheet at that point too that was
9 30 24 they had 252 000 bitcoin on the balance sheet so now the bitcoin is more than doubled
more than double their holdings yeah it's more than doubled and
And let's see, the stock has quadrupled, nearly quadrupled. And that's kind of where we're at
today. You look back to where things were previously, like strategies are not slowing down.
They are picking up steam. They're incredibly strong right now. They're de-levered. They're
now able to capitalize on an ATM on any of these new instruments that they've got in the market
and bring this capital in the door without tapping the ATM on MSTR. So there's no, there's no like
instant dilution. So they're able to add the Bitcoin to the balance sheet without having this
kind of instant dilution impact, which is incredibly powerful, right? Like that's,
they didn't have that back in September, but you knew that they would, right? You knew that there
was things on the horizon. You're like, they're going to be able to monetize this Bitcoin stack
greater than what they're doing right now. And like, now we have the products, like strategy has
the products and it they're they can tap a a 600 trillion dollar pool of capital for these products
over the next 20 years and people are getting bored because you know the ibit to mstr is down
25 bips on the day right like are you kidding me it's such a weird it's such a weird thing and the
sentiment is just so strange how it kind of follows it it's like infectious it's kind of a kind of a
wildfire. Yeah.
And we also do have people that are pushing a narrative as well, right?
That are screaming into the ether of the online world as loud as they possibly can
and doing their best to create noise that people just kind of latch onto and they run
with it. Kind of like, so a little squirrel point. The noise is a squirrel and they keep
chasing the noise, right? So you have a lot of situations now where, and we sound so corny
saying it where people really need to zoom out like september was bad i'm sure you remember like
was it after march or was it april when the price when we ticked up over like we hit what 1999
and then the price oh march yeah it was like march 15 we hit 1999 and 99 cents yeah and then
and then slam down to like 101 you know yeah people were were all were all over us at that
point too and then yeah then then they go for us again you know so it's just it's just a cycle that
we're going to see and i think that um what's funny is that i distinctly remember people that
were crying the loudest and was some of the meanest comments back in march they're now the ones saying
relax to everyone so we're going to see that that trend continue when we roll into this next uptrend
here and we're probably going to have the same conversation unfortunately in 2026 and 2027 and
2028 until the next um having so i think people i think people are going to look back on episode 30
and be like that was the equivalent of 1999 yeah yeah and and you like to your point adrian then
you have people like colleen right in the comments fidelity asked me in september what are you
thinking and she just said you'll see right that's called conviction like there's plenty of people
out there that know how to buy bitcoin we all know how to buy bitcoin but like do you have the courage
and conviction and then you know i guess while we're in the notes shout out to adam livingston
right someone made a uh comment about he's the uh where is it where is it his um his pre-workout i
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
making great content i mean anybody that's interested in talking about this stuff just
get get on like go buy a microphone a yeti blue microphone it costs 80 dollars get a logitech
camera that i'm using right now it costs 65 and just start talking like um it goes it goes a really
goes a really long way uh i mean to that point it's like you look at the price action and i know
we were saying this a few months ago like now's the time to build right if you have any interest
in researching this or starting a business or getting a job in bitcoin which historically
it's been kind of hard to make money in bitcoin like now's the time to like just go on somebody
else's podcast, start a podcast, do some long form posts, like just do something if you want to
kind of like get involved, get active, because literally, you know, who knows what the future
holds, but like all I'm hearing call after call after call is we're looking for a CIO, we're
looking for a digital strategy person, we're looking for an opera, like a capital markets
person. We're looking for an advisor. And it's like, the opportunities are finally starting to
percolate, which is arguably pretty exciting. And hopefully, with all this corporate adoption,
it's like, we can actually build something and hopefully, fingers crossed, knocking on wood,
stuff doesn't blow up in our face. Because we're in the next chapter now. We're not in
last cycle or two cycles ago yeah oh yeah if you if you want to get a job in bitcoin just start
talking about bitcoin nobody knows you exist unless you know like uh well it's just it's a
bit harder to uh to know people exist without talking in the space for sure and adrian to your
point about you know every time you jump ship or you know you're gonna have a little bit of
friction there and maybe lose you kind of have to ask yourself are you an investor or a trader
because a lot of the gains that people are seeing,
like, yeah, if you got into strategy
and it's just the same price it was a month ago,
and then you see people getting outsized gains
with MetaPlanet or something,
a lot of the people that are posting about that are traders.
And they're very good at it.
And if you're not, if you're an investor,
you have to ask yourself, can you do what they're doing?
and if you can't then maybe you have to just kind of like remember your diamond hands
bitcoin training and not try to do something that you're not really capable of doing
yeah you call it chasing the squirrel i call it chasing the rabbit
like interchangeable interchangeable commentary but it's the same thing um
if you see someone posting that they made x amount of dollars on on whatever trade and and
you try to chase that, you're going to get blown up by the mere fact that you're chasing
it. If you were a trader, you would have seen that move and you would have anticipated that
move. If you see someone else make a move and you're trying to follow that, you're likely
going to get blown up in all likelihood, unless you have the conviction to hold through up
and downs and you're just kind of switching positions from one to the next. But most people
aren't doing that. They're getting spooked from one position into another one and then
They're going to get spooked from that one back into the old one.
And they're going to constantly be chasing and they're going to burn all their capital.
Yeah.
That's what I'm seeing happening a lot.
I think if you get in late, you might have missed some of the gains.
And if you don't get out early enough, then you'll get stuck holding the bag.
Yeah.
I think it's good to evaluate consistently.
Consistently evaluate your investments.
I think all investors should do that.
And with this, with MSTR in particular, you sit back and you look at it.
And it's like all the math still mess, you know, like the, the scale is there.
The mode is there.
The financial strength is there.
The products are there.
The toolkit's there.
And there's nothing that like for me, again, this has been like a, I go back to this story
all the time.
I have like uncles in the past that have told me I could have bought Apple at 82 cents.
and you know it's just that that story you know when i was younger and i was like well you didn't
you know it's like you could have bought apple at 82 cents but you didn't and even if you did
like would you have held on to it probably not you probably would have sold it for
you know ten thousand dollars to go buy a honda accord like you know it's just
i don't want to ever have that story and i want to know that i feel like i have the best
trade of the next decade. And that's what I've been searching for. And I feel like I found it.
I mean, Bitcoin, Bitcoin, I found it with Bitcoin. And then it was like, oh my God,
here's a company that's completely going to transform how the world operates by using Bitcoin
and using the Bitcoin as collateral in different use cases and different forms. So yeah, it's pretty
It's pretty hard for me to kind of change my perspective on that. I can't undo the math.
I can't take the math down. I look at the math of some of these other deals like, yeah, some of the
other deals may move faster, but you're also taking on tremendous risk in all of these other deals
that is hard to conceptualize because this market has never existed before.
And I think a lot of the market is really miscalculating risk on some of these other plays,
primarily like liquidity risk and how to get in and out of these different instruments right if
you're like if you've got to call your broker on the phone to be able to invest in a product in a
different international jurisdiction imagine how hard it is when you want to sell that one
and what if what if you want to sell it when everybody else wants to sell it
and what if there are no buyers when everybody else wants to sell it
So liquidity starts to become really paramount in some of the, especially if you're in scale
on any of these deals in particular.
Well, yeah, I did a post about that, like it was last week, to be very, very careful
if you're doing these OTC trades in size, because you can get caught on the wrong side
of liquidity very easily.
And people jumped on me all over it.
And they're saying that the liquidity for MetaPlanet is fine when I mentioned like three
or four other ones as well.
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.
when you see a 40% drawdown,
you're all of a sudden going to have the conviction
to hold onto it and have diamond hands
when you got out of MSTR
because it wasn't giving you enough returns.
I don't think that's the case.
I think that people are chasing gains,
which is fine,
but if you're chasing gains with your whole position,
the likelihood of you timing that move correctly
and staying in it long enough
to get your position to where you want it to be
are significantly diminished
if you are the kind of person
that's going to be shifting from one position to another.
Now, if you have a position
and you perhaps leverage that position
or you have excess capital
that you put into a different position,
that's a different comment.
That's a different kind of a scenario.
But if you shift your money constantly like that,
if you don't really plan out what you're doing,
you're going to get burnt.
And I'm talking as someone that's done that in the past
and gotten burnt.
so be mindful of what it is you do because the second you think you're smart the market's going
to slap you upside the head and show you that you're not yeah and where does everybody go in
a flight to safety what's safe right what instrument that's the perfect point because
this one's for you jeff i know you like to talk about insurance you like talk about reinsurance
you like forest fires and um you probably talk about re-reinsurance if there is such a thing
Retro, there is. Yeah, retro.
Okay, of course there is.
But like there's, you know, in talking about the bear market,
there's trees that require a forest fire to actually reproduce.
Redwoods.
Like, yeah, well, yeah, there's a couple other ones.
But like the seeds won't sprout if there's no forest fire.
And if you think about that as a bear market, you know,
the forest is going to get cleared,
and there's going to be some big-ass trees that survive.
And then the landscape is going to be favorable for those survivors.
But some of these SPACs or whatever that sprout up, they might not be mature and they might not be able to survive that.
So choose your company that can survive or even better thrive.
Yeah, retain.
like have have this kind of retention strength, like strength in retention, the ability to withstand any any market turbulence.
And there's there's safety in that. Right.
So it's so interesting. It's like the market is treating MSTR as like.
Like almost like a stable, like, you know, a stable company, but they are a growth company, like make no mistake.
Like MSTR is a growth company.
Like, yeah, the technical Bitcoin yield may be lower,
but if strategy adds 500,000 Bitcoin in the next 12 months,
right, like that's going to push Bitcoin higher.
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
And it's funny. I mean, we put Jim Chanos up on the screen at the very beginning and he's part of
our episode picture. But it's really interesting that I don't think he's really grasping or
or conceptualizing like these uh the preferred instruments and how powerful these preferred
instruments are like not selling mstr stock and still being able to buy bitcoin and add bitcoin
to the balance sheet without using the mstr atm like that's that's monumental is like absolutely
massive huge he's making a slightly reworked version of carrisdale capital's argument
that's all he's doing which which he's probably got more money too well right and and and less
drug dependency but um the the reality of it is is that yeah so what right now is going on is that
strategy is a victim of their own success the reason why i've been using the economy example
is that economies are stable they're going to see ebbs and flows but i think that what's going on is
they're building out a stable economy and they're going to keep scaling it and what and once the
market gets wise to that that's when that additional multiple is going to come on
and it's not going to be about you know just how much bitcoin can they create onto the balance
sheet it's going to be about the fact that they are now a monopoly they have this entire this
entire economy built out around them they have all these new offerings well they're not new
anymore but they have these offerings and they're probably going to scale the offerings and i think
to your point that's where that the additional multiples are going to be seen because what do
you do when you have a company that is near a trillion dollars in market cap they have dividend
plays they have all these different offerings on the balance sheet and they keep accreting
an asset that keeps appreciating in value year over year you know four-year cycle over four-year
cycle and it's just going to keep scaling eventually the market's going to get wise to
that and the market's going to price in a multiple the challenge with it is that i think is that the
market first has to understand bitcoin which they don't and then they have to understand strategy
which is on top of it which they clearly don't so we do have a bit of a learning curve that's still
still in front of us that we have to have to um weather but i think that we're going to get there
it's just that people need to have a longer time horizon yeah he's fun to follow on x but i think
he said something along the lines of well i'm just doing what's what sailor's doing i'm just selling
strategy and buying Bitcoin with it. And that sounds clever and all, but, and actually I kind
of had, I had a kind of, I kind of had a similar thinking, you know, being a covered call seller.
I was like, well, you know, if sailors do it, I'll do it. But see, I actually understand that
when it rallies and it rips your face off, that my shares are getting called away. Like I don't
have this delusion that that's not a risk, but the way that he's describing it is, is,
is actually fundamentally flawed because in order to short it, you have to borrow the shares and
then immediately sell them. So you need the price to go down. Sailor doesn't need the price to go
down to win. And not only that, you actually have to pay interest on the shares that you borrowed.
So there's a carry cost. So if you don't get, you know, if you don't win that bet in 30 days,
60 days, 90 days, 180 days. You're paying interest the whole time. So it's a completely
different scenario. And like, you know, Sailor doesn't have to cover if the price goes up.
You know what I mean? Sailor's not getting squeezed. He's got an infinite money printer
because the way that a company is formed, he can just print as many shares as he need to.
And he's got the preferreds where he can buy back the stock if the MNAV contracts.
so it's it's not at all like short selling you know even if it sounds clever to to say that
yeah and ryan just said one of the points that i've been making a lot and what a lot of us
have been making sailor's a net buyer of bitcoin he doesn't care about the price he's price agnostic
so regardless of um what chanos is trying to do sailors is going to keep buying bitcoin
and i think this really all comes down to the collateral component
Right? Like so many people are continuing to miss this. And I'm going to try to make this
incredibly clear. So hang with me here. So Bitcoin is collateral. Okay. Bitcoin is the best collateral
the planet's ever seen. It's fully liquid. You can trade it 24, 7, 365. You can see it, you know
where it's at, yada, yada. Now, somebody made the argument earlier today in Twitter, it was
real estate has yield. Bitcoin doesn't have yield. And I was just like, oh my God,
people are still missing it. People are still missing everything that's going on here with
MSTR, right? Like real estate, right? If you hold a piece of real estate, you're using that
collateral to generate like rental income, right? That is a, that is a yield that you are getting
off of parking your capital in one location. Now, same thing is happening here. It's just in a
little bit of a different format and it's a little bit weird because it's never existed before.
Now, strategy, they hold Bitcoin on their balance sheet, right? They've got now 592,000 Bitcoin on
their balance sheet. Okay. That's a ton of power. There's $62 billion of power of the best collateral
that the world's ever seen. Okay. So they're holding all this money on their balance sheet
and what can you do with it? Well, they are collateralizing different tranches of risk
on their balance sheet,
they're using the position within the capital stack
as different risk return collateral tranches.
And the reason they're able to do that
is because they are holding all of this Bitcoin.
And every instrument, every time they use the ATM
and sell Strife or sell Strike
or sell a billion dollars of Stride,
They are yielding dollars from holding the Bitcoin as collateral.
So they're able to make a yield on holding all this money on their balance sheet.
Now, by structuring these instruments up into the capital stack,
MSTR takes on the most risk.
STRD is the next closest to risk.
STRK next closest to risk.
STRF gets further away from risk and the convertible bonds
most senior. So those risk return profiles, you're giving away, if you buy any of those products,
you are giving away upside in return for downside protection. So in those circumstances,
MSTR shareholders are taking the excess upside and the excess downside of the Bitcoin risk,
the collateral. Me as a Bitcoin maxi, triple maxi, I take that risk all day, every day.
Because I don't think Bitcoin is going to zero. I think it's going to infinity.
And I want to be part of that trade. So that's how I view it. I think people just are not
conceptualizing this collateral component. This is really powerful. And that's what makes this
whole thing work is they're going to go convince capital buyers, fixed income buyers that, hey,
dip your toe in the water. The water is warm. Come by this instrument. It's six times over
collateralized by all of this Bitcoin that I hold on my balance sheet. That's it. That's how it works.
They are earning yield on Bitcoin. It's just a non-traditional way. So does that make sense?
Well, for us, yes.
Yeah, it's just like, I think just a lot of people aren't,
they aren't like wrapping their heads around it. So yeah, it's just an interesting,
I think it's really helpful to say that over and over and over again, because they are generating
yield. Everybody's like, oh, I thought strategy was going to be a Bitcoin bank. Well, guess what
they are. They're doing it right now. But the size and scale that they're able to do it is for a $600
trillion market. They don't have to build out banking infrastructure and deal with all these
regulators and hire 10,000 people to run regional strategy banks all over the place. Instead,
they've got a capital team of five issuing a billion dollars of a fixed income instrument on a
fucking friday you know like there's this is the most efficient usage of the bitcoin to generate
bitcoin yield and people just aren't conceptualizing that like this is this is it this is the best idea
they've got it they're sitting on it and they have a they have a moat that nobody else can tap into
right the size and scales just come like they're 50 times larger than meta planet
And how foolish is it that they share the playbook in and of itself?
Like, you know, back in, I think Tesla's got some things that they could have patented and they're just like,
nah, screw it, we'll open source it.
Because they know that their lead is insurmountable.
And that's the position that strategy's in.
They can just open the playbook to anybody who wants to reproduce it.
Because who cares if they even caught up?
That would just pump Bitcoin.
Like if there's multiple companies out there with a million Bitcoin eventually, it just pumps their bag.
And like you mentioned the preferreds and like a billion in the stride, the third preferred coming out.
That was just like a big swinging STR capital D moment.
You know what I mean?
Like there's no way that anyone else is going to catch up with the levers that strategy has at their disposal.
No.
Yeah, there's no way.
And somebody was also saying that, hold on, Adrian, somebody was also saying like, okay,
at a future point in time, won't everybody just sell their MSTR to buy Bitcoin?
And the answer is no, because a lot of people will, right?
A lot of people will be buying Bitcoin and do their Bitcoin thing.
But at some point, like you have so much Bitcoin, it doesn't matter.
Like if I have more Bitcoin or if I have more MSTR, at some point, it just doesn't matter
anymore.
And so at that point, the reason you wouldn't do that is because I personally, Jeff, can't
go issue investment grade Bitcoin backed preferred equity instruments on my own portfolio at
3% yield.
Right now they're paying nine or whatever they're paying, but they're going to go down to three.
And they're going to be able to issue billions and billions and billions of dollars of capital
at like a 3% interest rate.
I can't do that. There's no way I'm going to be able to do that. And that's, that's what,
that's the power here is like, they've got all this money, they've got the toolkit,
they're able to do things that we can't do. And that many, that many other companies can't do.
So then the scale of that is just like, it's like magnitudes greater than other companies.
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
depressed at the price action and just like zoom out sit on your hands turn off the internet just
like go out touch grass this is like this is dead man portfolio stuff like this is you hold
on to this for the rest of your life and apparently i have nukes
with um nukes and you were on it today and i just noticed what the hell that was about
or the name jeff was on it rather no but yeah so the the thing the the thing is i i do really do
i do think that the um there are a lot of individuals in the market that don't understand
bitcoin they don't understand financial markets they don't understand capital markets they don't
understand the preferreds they don't understand how they operate and and you're right we're gonna
have to keep repeating that message over and over again before it kind of settles and um
when it really does i think that's when everyone's going to have the oh moment when it comes to
strategy and but what price will will we be at by that point is the question so for those that are
in it now if you can sit in your hands and enjoy the next four years and see where we're at by the
the next cycle because if you look at where we were in 2020 to now, I would not have thought
this was possible. That they would be approaching 600,000 Bitcoin, they would have a massive
options market, they would have all these offerings. So what are they going to be able
to do in another four years? I think that people really, really need to sit down and think about
that. Take a look at what they've done, take a look at where they started and just project that
to the future. And I think it could give you a little bit of clarity.
And I'm going to hit on this question here. Why will 3% yield be attractive?
Because I think it's an interesting question. And I've said this multiple times. I think
STRF will be the risk-free rate at a future point in time. So think about why is the US 10-year
treasury at 4% attractive. Cause you know, you're going to get your 4%, right? Like that, that's the
only, that's the only reason it's attractive because you as government can print money. You
know, you're going to get your 4%. It is the risk-free rate. There's a reason it's called
the risk-free rate. They can print money. Now at some point, you know, if, if strategy continues
to grow at this pace that they're going to grow and they're sitting on 2 million Bitcoin at a
future point in time and a 10% leverage ratio, STRF is going to be the risk-free rate.
That is your zero risk instrument. That is what you're going to compare the rest of the market
to is some sort of risk-free rate, risk-free interest rate. And this concept of strategy as
a bank, a lot of people, and we kind of got to this at the end of our last episode where we were
kind of conceptualizing like a world where you can store your energy without decay and everything in
the world needs to be redesigned right um like let's think about a bank of the future is the
bank of the future a debt-based bank or is it an equity-based bank right because all we know about
banks right now is they're debt-based what about an equity-based economy and you have these other
these other instruments that pay you into perpetuity over time.
And that's maybe maybe that's how society gets paid is they hold all these equity
instruments instead of debt instruments because they're all benefiting from
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
these equity based debt, these equity instruments instead of debt instruments, right? Instead of
lending against your Bitcoin, what if it's an equity instrument? So I don't know. I think the
whole world needs to get redesigned and rethought like on a Bitcoin based system. It's really
tricky. And it also makes when you go to the outside world and try to talk about this stuff,
it uh so that's that part starts to make you sound like you're in a cult
right like i'm i'm okay with it i went and got beers last night and it's just like
you know with some of my old reinsurance grow workers and it's just like
kind of blank stares you know like what oh my god what are you talking about uh you know and i just
i use them as the bellwether like i think that i think all the people i used to work with are
really smart people all in their own individual ways. But this hasn't even clicked yet. It hasn't
been a priority yet. They're all complaining about their comp. They're all complaining about
their bonuses. It's not rising as much as they thought. They're working harder than they've ever
worked. And that same problems that I was kind of going through when I was kind of back into
meat grinder. And it's just not very exciting place to be. Yeah, I think they're going to have
to put like no talking about bitcoin on the uh rules of the sauna outside the door because that's
all i want to talk about i'm stuck in there for two minutes you're like you're like stretching
and you know talking about bitcoin that's funny that's hilarious oh yeah every time
okay guys what else what what's next on the uh on the agenda use cases i mean so late you wanted
to talk you wanted to hit on use cases you want to hit on that yeah i mean i think all of these
these Bitcoin treasury companies that come out and Mason and Dan provided a framework. I think
it was two episodes ago. And we're going to have to start figuring out a way to determine
what Bitcoin treasury companies are legit or not. Because when there's hundreds to choose from
and you want to have multiple positions if you believe in second best, I guess.
um and so i like to think about uh you know shit coins as listing their red flags like when someone
tells me oh they made money on such and such altcoin i don't attack their altcoin specifically
i just say look for me red flags are on crypto are um you know pre-mine proof of stake centralized
and no fixed supply.
And I don't attack their asset directly.
I just let them think about it.
And if whatever they're investing in
has any of those red flags,
I just let them figure it out on their own.
And I think we can probably do the same thing
with Bitcoin treasury companies.
Do they have cash inflows via products or services?
Or can they create these financial products
like strategy's doing?
And someone was asking earlier,
how do they pay the yield on the preferreds?
And the answer is they either pay for it
with the money that they're making
or they can sell ATM on the common stock shares
if they have to.
But as long as the cost of that
is less than Bitcoin's CAGR,
then it's accretive.
So Bitcoin is the hurdle rate.
That's basically what I'm saying about that.
right it's like refinancing your debt right like uh i don't know if um
if if you need to refinance your house for whatever reason you could go out and do that
again i think i said this last week honestly i should say it every single week right strategy
holds 62 to 62 billion dollars of bitcoin they hold 10 billion dollars of debt so they have 50
billion dollars in net capital let's say if the price of bitcoin fell 50 tomorrow and it goes
down to what, 50 grand. They're going to have $30 billion of assets and $10 billion of debt.
I'm going to underwrite that loan all day, every day. I want to take that risk. And there are going
to be other people in the market that are going to be throwing money at them. Yeah, the terms may
not be as great as what they've got right now, but they're going to be able to raise capital
because they still are in an incredibly strong position,
even if the price of Bitcoin goes down 60% or 70%.
I mean, if that were the case,
I mean, strategy is just going to buy all the Bitcoin, right?
They're going to issue so much stride.
They're just going to buy all the Bitcoin
and it's going to go back up.
Yeah, and these other companies,
it's going to be,
that's another thing that you're going to have to look at is,
are the things that they're doing
with their Bitcoin encumbered or not?
Like, I think strategies, one of the first deals that they did, their Bitcoin was encumbered.
And then they were able to get out of that deal.
And they're like, no, we're not doing that again.
But I don't know, you might be able to get more favorable terms, right?
If you're actually putting the Bitcoin up.
If you're small, I mean, strategies already kind of got an escape velocity at that point.
They can get favorable terms.
But these other companies, that's going to be something that you're going to have to evaluate.
you know have they said that they will or will not sell their bitcoin will they loan it
will they borrow against it and like i said will it be encumbered or not
it reminds me well some of these companies it reminds me of
it was during the pump after covid and i don't know if anybody remembers when people were trying
to chase the next tesla but this company named nicola came out and nkla and there was a
a merger with VTIQ, I believe it was the SPAC or whatever. And this guy, this guy ended up getting
convicted for fraud, right? So you got to be careful changing the next strategy, right?
You know, things like, you know, we were hinting around at like the, the pipe investors and where
there's a lockout, a lockup period, or whether they can just dump on retail as soon as they get
their shares, things like that. These are all things that you need to take in account, whether
there's just hype or whether there's, you know, history of shitcornery like Amara, you know,
they used to mine Caspa. So there's all of these things that can tip you off for red flags.
I like that.
I think that's a valuable point.
So, I mean, right.
We've got these new deals are coming into the market and they are, it's helpful to look
at the terms and how the terms are designed.
Cause that those concepts of like alt coins, right?
Like a pre-mine or a pipe, right?
They could be kind of think of them almost similarly, like as a pre-mine, you got, you
you know, coins before they hit the market. It's like, well, what's a pipe? A pipe is a
private investment in a public equity before, you know, before they go public. So they're getting
access to shares, but basically before they're, they're going public at a cheaper price.
And I think it's valuable to look at what those look like. And, you know, I'm not saying that
those are going to kill the stock completely, but it might be, it might be a really volatile time.
Like once the deals on, once these deals close, it could be really volatile as everybody's trying
to figure out like, okay, what is this thing actually worth when all of the shares are available
in public trading? And the interesting thing is the lockup periods for those, which it seems pretty
crazy, but I think the market has shifted such that those people that have those pipe investments
just have very little lockup, like little to no lockup. So once the deal closes,
their shares are potentially liquid, which is just a unique thing to keep in mind.
If you've got people that are sitting on a 10X as a deal closes, they might be looking
to capitalize on the 10X as the deal closes because you never know where their funds came
from.
And people are wondering like, oh, who's selling Bitcoin right now?
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.
So I don't know.
We might, I think that is what's going on.
Like vol is compressed right now.
Like somebody mentioned or asked about like, what's up with the IV on MSDR?
Well, it's like everybody's selling the people that were buying the retail that was buying options are, you know, vol traders.
They love the quick money, quick hits.
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.
So that changes the volatility profile of these different instruments.
So I think that's kind of what's going on in the marketplace right now.
Not financial advice, but I'm not touching their NACA with a six-foot moto.
until after the lockup period.
There could be opportunities to scoop some of these things up
at depressed prices at some point in the future.
Yeah, but one of the reasons why I've been saying
that alt-season is dead is because the Bitcoin ecosystem
has swelled to such a point that the treasury companies
are acting like the alts, like we've all been discussing, right?
So people are chasing these altcoin-like gains
with these other treasury companies.
I'm not saying whether that's good or bad, but what I am saying is like with most
highly sentiment-driven, frenzy-driven
things, there will be a crash.
And after the crash is when you're going to find out what's what. So you're going to find
out, you know, is company A going to survive versus
company B? And are you going to be the person, again, like I was saying
earlier, that's going to be smart enough to get your money out before that happens? And if they do
have lockups they do have all these other things you really need to dig into what these companies
are doing versus chasing the pup so um there's definite considerations that come into play
yeah and look i'm not i'm not necessarily trying to convince people to go crazy go crazy in any one
direction on one of these things but i think just i think it's helpful to think about like why you
hold things like why are you holding something um why do you hold any equity why do you why do why
Why do people hold Microsoft?
A lot of people hold Apple.
It's for a reason.
It fits into their portfolio.
They've got some sort of design.
So it's like, okay, well, why do you hold these other instruments?
And are you willing to ride it if it drops to 80%?
I don't know.
I mean, I think I bought MSTR in 21 at like 970.
And I wrote it down to 122.
I was like holy shit um at that point I was just you know finding money under the cushions the
couch cushions to go buy as much mstr as humanly possible but I I had to I took it on the chin
and I had to sit with it I've taken it on the chin five you know four or five times since then
right we've like wrote it to the top write it back down wrote it to the top wrote it back down
and it's so funny I think the bitcoin therapist posted about this like he just posted the chart
people are really fading this chart it was like the five-year chart of mstr and it's like you see
this like little blip over you know 21 and now you're like looking at this chart that's just like
literally straight vertical like the last year and people are freaking out because you know
intraday mstr to ibid is down 25 bips because you've got short sellers in low volume when
people are chasing shiny things. It's just weird.
And I'm not, and look, this is not us judging people for anyone that's watching this. Because
for instance, I bought my first strategy shares on leverage from my Bitcoin holdings, right? So
I bought against my Bitcoin and I bought strategy with it. So I'm not saying that it's a wrong
thing to chase gains. What I am saying is, do you have a plan? Do you actually understand what it
is you're doing? A lot, some of these companies have been around for what, like a month,
two months that are really running right now have i held positions in them yes but by the same token
i i understand what it is i'm going after but i but i also understand what the primary goal is i'm
not selling my bitcoin i'm not selling my strategy to do it so um granted not everyone is in that
position but just be aware that if like jeff just said are you prepared to take it on the chin
because I don't want to see in three months
people in the threads on Twitter talking about,
oh, this company sucks because I bought in a blah, blah, blah,
and I lost all my money.
It's like, well, that's kind of the risk
that you're implicitly undertaking
when you get involved with an equity.
You're taking on that risk.
Just same thing as with strategy,
just same thing as with Bitcoin.
So just be mindful of that and be aware of
not just the pump, but also the dump
because one sometimes follows the other.
I mean, all that said, I'm still incredibly bullish on the future of all this stuff.
Oh, yeah.
It just, it could be weird, right?
There could, there's going to be weird things that happen in the next eight months and upside, upside and downside.
And be prepared for it.
Yeah, there's room in the forest for a few other trees.
They're not all dogs.
You know what I mean?
There's going to be some good, there's going to be some good ones.
absolutely but but you got to own the outcome though because you're not gonna you're not gonna
share gains with people so don't i mean it's gonna sound harsh but don't share losses either
right like just own it you made the move you took you took you took the gains great you take the loss
sorry but investing is not a team sport yeah don't gladiator your positions i i do i do think we're
in a great period of time or to like just not post positions even if even if the next you know
two or three months do see a sort of rally. Just stay calm because there's a lot of juice left in
the tank and think long term. It's really interesting. I think all of this stuff might
come to a head at the same time. Obviously, the Fed held interest rates flat today. We saw that.
And you've got the president screaming at the top of his lungs to drop interest rates,
saying that he could do a better job of being the chairman of the Fed than Powell, which is an
interesting commentary. But I mean, he's got what, nine months left on his job before somebody else
is hired or put into place. So I think at least there's probably going to be some interest rates
coming down at some point in the future. So what does that mean?
Like what is the impact on that? Interest rates come down, it means the cost of capital comes down,
not only for the US government, but for everybody else on the planet.
Right? Like you want to go buy a home, it's cheaper to go buy a home. You want to issue debt
as a company, it's cheaper to issue debt because the risk-free rate is going lower.
So what does that mean? That means all the preferred instruments that strategy is offering,
the interest rates on those are going to, the yields of those are going to fall and the prices
of those are going to rise which results in even significantly more torque on the msdr balance
sheet because they're able to issue issue money issue capital at a cheaper relative rate so it's
going to be more efficient in how they're buying bitcoin into the future and generally the interest
rates coming down is bullish for risk assets and we're at this unique segue where uh you know
bitcoin is this like combo risk on asset and risk off asset at the same time and you've got micro
strategy is a is like this asset that's holding you know more of the risk on and risk off asset
at the same time and with a significant moat and ability to monetize different uh market structures
in different ways so i mean that can that can happen q3 q4 on top of potential s p 500 inclusion
and just market frenzy when all risk assets blast into new all-time highs with potential
quantitative easing and the money like the money printer just starts humming and the world starts
moving faster so um yeah it's uh it'll be interesting timing i think the next couple
months the next couple of quarters um just watching all of this come together it's almost like a
a huge story is coming together at the end of the year well so like what what if we play a little
bit of as advocate here i think you're right about interest rates but what if powell decides to say
i've got however much time left i'm not going to lower interest rates unless absolutely 100%
forced to do so at least like the market conditions force him to do so or something along those lines
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.
so we still have tariff uncertainty so let's say that takes a while to to like rectify interest
rates don't come down as much as they probably as the market thinks that they should and we have a
prolonged not not a bear market but prolonged lull where we're just kind of trotting along
a hundred thousand and msdr at what it is for the next six to nine months like are people
mentally prepared for that outcome as well because i i think that would be the worst outcome for a
a lot of people because to Soleil's point about people getting bored, I think the boredom
will go from boredom to frustration to despondence very quickly. And we're going to start to see
a lot of people exiting the market. And then when the market turns, interest rates come down,
uncertainty and whatnot goes away. Liquidity also is going to be on the uptick by that point
as well significantly. You have people chasing the gains again, and then we're going to pump
even harder than we would have before. So I just think that people need to understand what they
hold and be patient if you can and just sit on your hands that's the best thing you can do whether
you hold bitcoin or strategy sitting on your hands is the best approach yeah the only time i've really
gotten hurt is when i try to get cute chasing things sorry go ahead tim yeah no it reminds me
of the one comment ben just made in the chat it's like you know it's hard to recover from a negative
80 percent meaning just protect the base it reminds me of um somebody posted recently if you don't
already own one bitcoin and you're investing in this stuff like i don't know what to tell you and
like investing is an individual sport hashtag ben workman but it's it's like yeah like bitcoin
and then everything else protect the base grow the base yeah yeah think about it don't sell it my god
the people selling bitcoin for all these other plays are just blowing my mind right now but
i i don't i'm not gonna judge whatever yeah there's a bunch of tickers i just i can't even
keep track of the stuff that people are oh my god it's so crazy like i'm thinking about them so i
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
full-time job like identifying yeah i can't i can't deep dive all that shit no no way i i mean
you'd have to be just consuming content 24 7 365 at two times speed and that's difficult to do
yeah that's corporate media like if you get on there like oh money now or you know whatever
they're gonna come up and they're gonna talk about 10 15 20 stocks or whatever you a financial
analyst cannot be an expert in 20 stocks we cover one and it's a freaking full-time job like i quit
my job and i just work harder researching one stinking stock than i ever did when i had a w-2 job
yeah yeah i mean it's it's real uh it's totally real it's hard to keep track of all of these
things that are going on but i mean especially to pick like if you were to add another another
stock to your profile i mean that's why it might be interesting to hold some of these new instruments
like own b or if you just want like that extra exposure but i think it'll be interesting to see
like how how that even evolves right like are we going to start to see like uh instruments that
have all these Bitcoin treasury companies, but not include miners and not include strategy.
It's just like, think of it like a growth fund, like the Russell 2000, but for Bitcoin
treasury companies that are under $5 billion.
That's coming.
So that's a shortcoming.
And it's just going to be people throwing capital at these things left and right.
and then that's a you get diversified exposure that way or i mean alternatively you just go
throw money at all of them try to do it yourself but uh yeah i think that's how the that's how the
space evolves is you're going to see all these new instruments new products that are just sort
of kind of wrapping all these pieces in different uh in different forms or i mean i'm just imagining
a product like uh 50 of these tiny bitcoin treasury companies and 50 strike you know
There's all kinds of blends you can do with it, though.
That's the thing.
You can do like infinite.
You can do all kinds of blends.
But like, look, so I know I've been posting about these things.
And the thing about it is, and everyone that DMs me about them, one, I don't give them financial advice.
And two, I make sure to tell them I have not sold Bitcoin.
I have not sold strategy.
Right?
So I'm leveraging it or I'm using excess capital that I have to open new positions.
And even still, proportionally, that is nowhere near the size of my strategy position or my Bitcoin position.
My Bitcoin position is larger than my strategy position.
my strategy position is exponentially larger than the positions I have in these other companies.
That's not me disparaging them. That's not me saying that I think they're bad investments.
That's me saying that I know that they're risky plays. And I know, as we've discussed here,
that they're essentially the altcoin plays of the cycle, right? There's going to be boom,
there's going to be bust. So I'm aware of that. To those that are selling their entire positions of
whatever, be mindful that that's less an investment and more of a gamble.
Now, if you're okay with that gamble, more power to you.
It is your prerogative.
But just be aware of what it is you're doing because a lot of these companies,
I'm not going to say one in particular, but a lot of these companies are going to provide you
with outsized return possibility, but it's also going to provide you with an opportunity
to lose everything.
what do you think about something like the bitcoin standard etf where like you're not even
in the index you're not even in the etf unless you have a thousand bitcoin like does that seem
rational like with all of the entrance yeah own b oh so that that was what jeff was mentioning
own b you have to be you have to have over a thousand bitcoin if you want exposure to a lot
of these companies that have over 1,000 Bitcoin. Now, that's going to be miners. That's going to
be strategy. That's going to be similar. That's going to be, I assume, GME. I don't know if
they've included them yet or not. But all the companies with over 1,000 Bitcoin will be,
I think, are going to be included into that ETF in varying position sizes.
If you want exposure to all of them, that's a perfectly rational decision. I still wouldn't
recommend selling your Bitcoin for it or selling your strategy to do it. But if you want to have
exposure to all these companies and catch a potential upside sure but if you're if you're
taking all of your strategy you're selling it you're dumping it into one of these otc plays
i i'm just i'm just gonna i'm just trying to urge caution there and understand that
yeah they've been running hot but can you tolerate losing losing that can you can you tolerate that
80 drawdown that ben mentioned and that's protect the base protect the base right like even when i
do options even when i do options i do not go below my cost basis i don't go in the money i'm
always trying to protect the base of whatever it is i have so really understand that now if you
haven't made money if you wanted to strategy and you're down do what you gotta do but even still
understand what you own strategy is more likely to go up and give your money back over time more
than you are going to make the money chasing a lot of these other things with your whole stack
so just really really be mindful of that have a plan sit down with a spreadsheet for christ's sake
and model some stuff out do something besides saying numbers going up i'm going to chase it now
that's that's the only thing i want to say yeah yeah and and just to address people in the in the
chat they seem a little concerned tim is drinking espresso in a hotel conference room at 11 p.m
well it's 5 13 a.m local time and the conference is starting in like three hours so i'm just
trying to wake up actually right there's a little bit of a time difference
six hours getting on the just getting on the time yeah yeah don't worry about tim and caffeine he
basically injects into his veins at this point so he's good true it's like it's like true north in
the morning is actually kind of feels feels great feels great so uh adrian what what you were kind
of talking about i think the general theme that we've been discussing here is like position sizing
is incredibly important and the kelly criterion comes to mind and the kelly criterion is uh like
how to appropriately weight positions in like betting or gambling or you know options trading
or even portfolio management and the the way this works the way kelly criterion works is you take the
probability of a win multiplied by what that win is at a future point in time, like the long-term
value of that win. And then you take the probability of a loss and then what is the value of a loss?
And that helps you determine like this expected value equation and how you should position size
any particular trade. And so you think about, like it makes you think about long-term trajectory
of like any of any one of these instruments and why they could be where they could be at a future
point in time what's the probability of that and so one thing that brought up a lot previously is
this copycat risk that's in the market for a lot of these smaller entities that maybe aren't doing
anything um you know earth shattering maybe they got some cash flow on their balance sheet and
they're running an atm they've got some coverable debt they're not different at all yeah they just
may not be differentiated. So maybe they hold a lot of Bitcoin in their balance sheet and maybe
they're growing it consistently, but there are others that are going to copycat everything that
they can copycat, but also doing alpha strategies to go attack different capital pools in different
capital markets that might be a little bit more appealing to hold relative to other companies.
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.
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.
And it's going to pull energy and premium away from any company that maybe is just using cash flow to buy Bitcoin.
And you have to be able to assess risk and opportunity cost because those are not the
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
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.
That is not something that is open to everyone.
I understand that.
Not everyone has enough that will be enough to worth borrowing against.
I understand that.
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.
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.
if you think about what Jeff talks about all the time with strategies leverage ratio,
if I'm taking out X amount of dollars and I know that I'm going to have to cover Y amount of dollars
if we have a prolonged market drawdown, I make sure that I have that amount coming in.
And that's part of the calculation that I do before I make any of these plays.
So when you see me post about something, I've already been looking into opportunities
and waiting to leverage my holdings for new opportunities weeks in advance.
That's how I'm able to make the move. That's what a lot of traders are doing.
That's what a lot of individuals that you're seeing posting these things are doing.
They're not chasing the rabbit or they're not chasing the squirrel.
They've made a plan.
They've made an exit.
They have the capital to allocate to a new position, and then they do so when they've done that assessment.
So be very, very mindful of what you're doing because I really don't want to see come the end of this year,
strategy goes to $1,000 and someone's like, I should have just seen strategy.
and all we're going to be able to do is tell you,
well, yeah, you shouldn't have taken your whole stack
and put it into company XYZ.
Take 1% to 5% if you must,
or if you're able to do it on leverage in a safe way
because you have capital coming in, do that.
But all the YOLO posts I'm seeing,
first about Misty and now about all these other auxiliary OTC plays,
it just makes me very, very nervous.
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.
uh yeah no you brought up misty and i think uh it's probably a good time to chat about misty i
mean i know soleil you've uh you've done your mst msty competition we should get an update on that
but but maybe while you pull that up or before you pull that up uh when i noticed some statistics on
misty and i saw like a new trend in the misty community and the misty thread and the new trend
is shifting part of their MISTI position into winter.
Oh, God.
Winter.
Yeah.
I mean, not financial advice, but okay.
Saylor said there is no winter.
There is no winter.
Right, right, right.
But what I've seen now is like 70% MISTI, 30% winter.
So, right.
So MISTI is selling covered calls and then winter is cash secured puts.
Is that what they're doing?
No, I think winter is covered puts.
Unless I misunderstand it.
Yeah, basically they're short.
Maybe it's covered puts.
W-A-T-E-R.
Anyway.
So wait, they're rolling the Misty dividend into winter?
No, they're positioning into both Misty and winter.
Both trade strategy.
In different directions.
and monetizing volatility in different directions misty is a hedge it's it's kind of a hedge
i think so i guess if you think that there's going to be a bear market maybe you want to be
on the winter side but if if you think there's going to be a bear market and you you everybody
shifts their position from the misty side to the winter side maybe that relieves i don't really
know maybe that relieves pressure uh from all the covered call selling at the money i have no idea
anyway it was just an interesting i i need to wrap my head around this uh like what what's
happening there but people are doing that people are buying both and holding both in different
positions but i mean think about the size and scale here misty is four billion dollar per four
billion dollars of aum which is huge you've got four billion dollars of aum that's selling weekly
calls on mstr every week which is nuts it's a lot of cell pressure and then you've got winter which
is now i don't know 27 million dollar aum so just tiny in comparison but if people start to think
that we're going into a bear market maybe that capital shifts or rotates and winter is a synthetic
put there we go huh okay maybe i don't understand it because i do see that it's supposed to be an
inverse msty position yeah that's that's why i'm a little confused as well
yeah well i guess i'll have to think about it yeah dig into that i i saw today i was like wow
that seems that seems odd if it's inverse so is that like is it long you know i don't know
yeah i don't have time to even attempt to do that so yeah maybe maybe we'll put soleil on it so
check out the trades to see see what they're doing i know that'll be the next challenge
i'll trade the uh winter how is how is your uh how's your competition going yeah so when adrian
mentioned that people were getting bored with strategy getting into misty and then they were
getting bored with misty and getting into something else i knew they were going to get bored with it
as soon as the most recent dividend came out and it had dropped from 10 to 7 and we're like okay
here we go. You're not getting your regular 10% dividends. And it'll just be kind of on to the
next thing. But yeah, so January 23rd, the covered call ETF position since then is basically flat.
They might have been down half a percent or something. And luckily, I've been holding on
to my small lead, I'm up about five grand, which, you know, over that six month, five
month period is only about 3%.
But, you know, it's doing better, even a little bit better than holding spot strategy over
that time period.
So, yeah, good enough.
the real interesting part is going to be who captures the most upside during a rally
so i know imst was was claiming that they were going to try to position themselves to capture
more upside but they haven't really been afforded an opportunity to see if that's going to happen
yet so the next time we push to 650 750 a thousand you know whatever the next um
The next leg up, exactly.
It's going to be very interesting to see how those two trade.
But I did notice when I evaluated both of their positions last week,
they were both taking long positions.
I actually liked IMSTs a little bit better
because they just were leaving some of their synthetic shares uncovered.
That was their long.
but msty was like it looked like they were buying debit spreads like 10 to 14 days out
and i just thought that was kind of ludicrous so not not really a fan
all right we should probably do a separate episodes on both of those
yeah those those things that are going on there because i mean you could do you could do five
hours of research and do a five-hour episode probably on each one of these individual products
just trying to unpack like each one of their individual trades,
which is why this whole space is so crazy, right?
Because you could do some,
you can create so much content in with just one product on one stock and spend
all your time looking into it and how it works and why it works.
Let alone people are out here YOLOing of five,
five million dollar market cap companies in the UK.
It's just crazy.
Yeah.
I covered both of those ETFs like three days in a row on my channel and just,
you know, going every single day, downloading their positions, trying to match up the calls
that they bought with the puts that they sold.
Okay, these are the synthetics.
And after three days that I was like, I'm sick of this.
I'm done.
I can't do it anymore.
Like, you know, I covered it.
I was like, okay, this is what they're doing.
But I can't do this every day.
Like the first ETF that creates a dashboard like strategies with like metrics and like,
and all kinds of stuff, that ETF will distinguish themselves from all of the others.
Like I shouldn't have to go and figure out how much call away value they have built into their
covered calls and how much premium per assets under management they're doing. Like I should
just be able to go to their website and there should be a dashboard there. And then I should
be able to compare apples to oranges between the etfs and and see those things so if if jay and
jeff are listening um the first one to get that stuff you know distinguishes themselves from the
rest of the pack i i would agree and i think that that's maybe they should hire you to do some of
this stuff because they can you see you can get some great insight options i think quite frankly
yeah they can't pay yeah there's probably no dollar number they can pay so they can do that
oh my god like i'll do it for free but there's no way in hell i'll do it for money
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
okay i understand what they're doing no more i can't i can't take it anymore jeff breaking news
who's the special guest special guest is bobo uh bitcoin bobo yeah he's coming to hang out tonight
yeah my dog is currently sitting outside my office door wanting to get in i'm not gonna let him in
though there he goes he's off uh yeah crazy um all right well i i think that i think one other thing
just to bring up right so mstr hasn't used the mstr they haven't used the mstr atm over the last
three weeks which that has been the primary capital raise for mstr for the past i don't know
eight months right and now they don't use it three three weeks in a row and the price of bitcoin still
at 105 000 that's bullish to me like that's that means there's there's capital that's still coming
in the door and buying this stuff and holding the price up uh and there's significant demand
outside of strategy in the market right like yeah i mean last well i guess last week they bought a
billion, 10,000 Bitcoin. But still, I think it's really, really interesting to see the relative
strength of Bitcoin over this time horizon as well. Well, I think that's really all I got. Oh,
should we talk about S&P 500 maybe? Go ahead, Adrian. Yeah. So I was going to say that,
and this just shows how quickly the market gets bored. Everyone watching this, do y'all realize
we've been just like trotting along at 100k for how many days now uh yeah well like uh i don't know
like have there been 60 days 60 days above 100k something something like that and
i think everyone forgets that there was a time that on this call we were saying oh when bitcoin
crosses 100k it's going to be an epic moment because because whenever the whenever the first
time bitcoin crossed 100k everyone was so euphoric and then they got bored with it within like two
days and now we've been trending at that at that price point strategy is is teetering on having
600 000 bitcoin they've got all these prefers there's so many reasons to be bullish about
what's coming on in the market that we just need patience and i think that people are losing that
perspective because they're look i don't know if it's like they're looking for a dopamine hit or
or if it's boredom or whatever it is, if it's just boredom.
But it's like, if you had told me in 2020
that we would have been at 100K and straight,
you've been doing all this stuff out of,
I would have been through the roof.
So like, don't get shaken out by your own boredom.
Like just stay the course.
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
we didn't have strike and strife and stride. We didn't have the ability to get all these
additional revenue streams coming in while things were going down. So now that things aren't even
going down, I think that there's a lot of reasons to be optimistic. And let's just write this thing
out and see where it goes. But sorry, you're going to talk about the S&P 500. Yeah, we've just the
last 40 days, 41 days in a row have been over 100k. Bitcoin's been over 100k. People are bored.
They're getting their Amazon packages and they're getting their Amazon packages in four hours. And
uh you know they're like i need this now i need i need bitcoin to go to 120 i need to go 150k
tomorrow it reminds me of the nine inch nail song i hurt myself today to see if i still feel
we're just all dead like waiting for like unless it's 125 150 it's like don't even bother me with
the price right or maybe every day is exactly the same and everyone's like i believe i can see the
future tomorrow bitcoin is going to be 100k well and they're just like numb to it or something i
know man it's weird it's weird how how people have gotten this numb this quickly to bitcoin mean at
this price yeah and maybe let's talk about that a little bit and i i'm trying not to jinx this stuff
but right so we're thinking about q2 earnings q2 closes in what 12 days q2 closes in 12 days
price of bitcoin's at 104 000 about 105 000 if bitcoin closes at 95 000 based on the amount of
uh bitcoin if bitcoin closes 95 000 on june 30th 12 days from now 95 000 or up
strategy would have a 6.4 billion dollar earnings gain in q2 that would clear the last four quarters
of negative earnings by a billion dollars. So that's a huge, it's a monumental number,
regardless of everything else, right? They added $12.7 billion of retained earnings to their
balance sheet last year. So the strategy made $12.7 billion last year. Now in Q2, this is over
and above the $5 billion that they lost in Q1 because the price of Bitcoin went from, I don't
know, $93,000 down to $82,000 at the close of Q1. And now we start with the base of $82,000 going
up to where we're at today. So basically what I'm pointing out here is we've got a lot of wiggle
room. We've got a deal, well, maybe not a lot, but we've got a decent amount of wiggle room
for strategy, for the price of Bitcoin to potentially go down and strategy is still
posting a monumental, like positive net income gain that people will start to realize and
recognize what's going on here so even if the price of bitcoin closes at 95 000 a q2 eps estimate of
about 23 dollars per share if you just take you know industry average um look at s p 500 average
p e ratios 26 you're looking at a price of something like 702 so obviously there's a bunch
of people that are probably in the chat and they're probably online and that they're talking crap
about this these earnings aren't real earnings and you know they're never going to get traded at a
they're never going to get traded or valued at a multiple of their earnings well it's like
you know that's an agree to disagree thing i think that every dollar of earnings is important like
why do you hold any stock you hold stock for the long-term appreciation of the equity which is a
function of their financial strength which is a function of like the amount of earnings and money
that they can generate and retain for the long run. So I think every dollar of earnings should
be treated similarly. So regardless of whether or not it comes from Bitcoin or fiat cash flowing
enterprises. So I think that's exciting. I mean, let's just plug in 105 in here, right? So that's
where we're at today. So if everything just stayed flat for another 12 days, you're looking at
something like 12.3 billion dollar gain huge deal well this would be pretty monumental
and the bears and the footers are going to themselves when it happens that's going to be great
and then they got people in here so lawrence uh interesting question shouldn't the p ratio be like
a bank well like what is uh what is jp morgan's p ratio let's look it up um somebody looked that up
Goldman Sachs. What's Goldman Sachs PE ratio?
And while you're doing that, people were asking in the chat,
do I hold covered calls over earnings?
And just out of pure superstition and paranoia,
I generally take as many of them off as I can.
I'm not saying it's going to run up,
but I'm still too scared to keep them on.
All right. So JP Morgan's got a PE ratio of 13. Goldman Sachs got a PE ratio of 14.4.
Right now, Strategies PE ratio is like eight or seven, something like that. And again, you think
about why is it that? Why are earnings priced at a premium? Why is Apple trade at a high PE ratio?
Why do any of these growth stocks trade at a PE ratio? Because the idea is that all equities are
forward looking. All equities are a function of what the value of it's going to be in the future.
And why would strategy trade like a fiat bank when it's a Bitcoin bank?
You've got fiat. It's like you're comparing things that just aren't the same, right? You've
got fiat instruments. You're providing all these things in fiat land with a zero. Everything that
they hold is depreciating right you can't retain those earnings because that everything is
depreciating now if you're a bitcoin bank you should be valued higher because everything is
appreciating relative to the dollar that's like measured in so it's an interesting interesting
question interesting point i don't think it's incredibly valid but uh it's worth bringing up
and you look at the multiples like price to book value or multiple net asset value
of any of these other companies why do they all trade so high like what's palantir at i don't know
500x multiple of their net assets why why do they trade like that should their should their pe
decrease over maybe it might take decades but as bitcoin's compound annual growth rate
diminishes,
maybe it should contract
along
directly correlated with
Bitcoin's CAGR.
What?
It depends on how well they're leveraging it, though.
What? Say that again, Adrian?
It depends on how well they're leveraging their Bitcoin holdings
by that point.
Looking over the course of several decades, how many offerings
do they have at that point?
How many different ways are they
existing in the market?
how systemically important and systemically relevant are they in the market so bitcoin's
carrier could could decrease but their holdings could be so large and bitcoin's price came so high
that they still demand that multiple because they can still give out their these div payments they
could still do all these things with different offerings everyone's still getting their strats
like we talked about last week right everyone's still getting their strat payment so you know
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.
I don't see why not.
I mean, so Bitcoin's at 100K right now.
Let's fast forward 25 years.
Bitcoin's at 500K.
They have over a million Bitcoin.
They have a, what is that, a $5 trillion market cap, right?
Yeah, that would be, yeah, a million times $500,000 would be $5 trillion.
Yeah, $5 trillion market cap.
and they have a $5 trillion market cap
that has all these different preferred offerings on top of it.
They probably have different variations of them by that point.
They're paying out these dividends.
I mean-
It's the safest equity to hold on the planet.
Right.
Because when Bitcoin is 500,000,
people always talk about,
well, is it going to retrace down 80%?
Well, what people don't realize is
at a $500,000 Bitcoin,
it's going to take a lot of capital to leave the market
to substantially push it down, right?
And at that point, when the market cap is that,
when the market cap and price per Bitcoin is that high,
what is really going to motivate that 80% drawdown?
At that point, are people still chasing the pump?
Are people still chasing gains?
I don't think so.
I think Bitcoin becomes a more stable asset.
The higher the price it goes,
the less sharp those drawdowns are going to become.
So by default, strategy becomes more stable as a result, right?
And if strategy is more stable as a result,
and they can issue these offerings on top of Bitcoin
and they can have these offerings,
like Jeff's been saying,
these are not offerings that are backed by fiat.
These are offerings that are backed by a hard asset.
All of these different offerings at that point,
in my mind, would have to demand a multiple on the common.
It just stands to reason.
And there's a comment here,
and I brought this up earlier,
and I think this might be the same person
I was chatting with on X.
At that point, would it not make sense
to sell some mstr and buy the same dollar amount of btc i think you can see this multiple different
ways right how much bitcoin do you already have how good is your life you know do like are you
able to do stuff with bitcoin that you're unable to do with mstr is there a benefit of holding mstr
over bitcoin and my response to that is if i held bitcoin or to do um i can't issue three you know
5% debt, fixed income instruments on my own Bitcoin, but MSDR can. That's why I hold it.
I hold it because I'm getting a tax deferred dividend reinvestment program via MSDR paid in
Bitcoin. That's why I hold it. And I can't do that. Because they're so fucking big, they're able to
do things corporately in the capital markets that I can't do because I don't have that scale of
capital. I can't go issue 0% convertible debt. I can't take on that kind of leverage, but I would
rather hold those types of equity instruments and use them to my benefit. And even if you think about
and I love this thought process, even if you think about a fully Bitcoin-denominated
ecosystem in the future. Right? So there's going to be more than 21 million of Bitcoin worth of value
in the world. Right? Because not everything's going to be for sale at the same time.
Right? You're going to have so there's gonna be 21 million Bitcoin, right? We know that there's
gonna be 21 million Bitcoin. But there's also going to be value stored in houses,
tons of value stored in houses, because people still need to live people like desirable places
to live. Even if you price those as Bitcoin, that means that there's going to be a hundred million
Bitcoin worth of value in the world, but it's just not all for sale at the same time.
And what's going to be the value of holding equities at a point in time in the future?
Am I going to hold an equity in a hardware wallet that's fully divisible that I can divide up sats
and I can pay? Let's say Soleil goes out and we go get beers and I pay Soleil and MSDR shares.
strats, right? Micro strats. Like if you don't think the future is going that way, you're crazy.
Right? Like the future is getting, the future is getting faster, like way, way, way, way, way faster.
And we're going to see that the use case of holding these things is going to change and evolve over
time with the digital economy. And that's where, that's where we're going. Um, there's no if,
hands or butts about it. Like that's, that's where it's going.
In my mind, a future, a future like that. And again,
this is me talking more as more of a Bitcoin or perhaps we're just trying to
bring a different perspective in a future like that.
It makes sense to hold Bitcoin and MSDR and maybe even playing,
playing devil's advocate.
Some of these other treasury companies that they're still around because if we
think it, if we scale it up to the future,
Bitcoin's 500,000 million dollars or whatever.
And the companies with Bitcoin on their balance sheet in my mind,
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
BACs, whatever, they are an equity that is backed by Bitcoin on some level, a company that holds
Bitcoin on their balance sheet that is bolstering the strength of their company. If we take a buy,
borrow, die model, are those equities going to get the same kind of interest rates in the future?
where they get better interest rates for borrowing?
What kind of different ways is the market going to stratify itself?
Is Bitcoin borrowing, Bitcoin equity borrowing,
you're going to get a different kind of interest rate on that, right?
Then you have regular equities that you can open up margin on,
you can borrow against, what have you,
are going to have one set of interest rates.
Then perhaps IBIT, FBTC, the ETFs,
are they going to get differentiated interest rates
in the future because Bitcoin is now a stable asset, but it is now seen truly as digital gold,
right? Because if you go into a bank right now with tons of gold, they're going to smile
and they're going to let you borrow against that all day, right? So if Bitcoin truly gets to that
parity in terms of perception and market use of digital gold, and you have equities in your
portfolio, strategy, similar, whatever, and you can borrow against that, you may never have to sell
them. You can borrow against your Bitcoin, you can borrow against your strategy, and you can just
buy, borrow, die, and keep rolling that if the CAGR holds up and if the returns holds up. And if the
CAGR doesn't hold up and it's a steady state asset, they're just going to let you roll it anyway.
So you can probably be able to borrow money in perpetuity and just pay off the interest and pay
off what you want to pay off and just essentially do the buy, borrow, die model that Jeff Bezos,
Tim Cook, Mark Zuckerberg, all of the wealthy right now, they're not selling their assets.
They borrow against them in perpetuity.
That's because they're collateral.
Exactly.
They're collateral.
The power of collateral.
That's what Justin said.
This is collateral.
Strategy has a massive moat of pristine, future-proof collateral that they can borrow against in
perpetuity that they can back up assets they can back up back up offerings against in perpetuity
that will demand a premium so if everyone's saying well this mdf should be one i'm just like
i don't know if you're really thinking it through yeah and i mean one thing that i think that channels
may not get is you can't un orange pill somebody you know once you're once you're orange like once
you take the orange bill you're like dude my whole world shifted i can't i can't read i can't
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
you know like it's just not gonna happen and it's like i don't think they really understand like
how strong of a holder and how like psychotic of a holder base this is right these people are
gonna hold this forever and they are the the lowest time preference people and these are the
people that are also holding strategy which just makes it even cooler well actually with the
exception of the traders the people that are following the blinds the blind squirrel chasing
the net but um but like last week the the weird thought process is sat and strat if the bitcoin
really does scale which you know it will does strategy get to such a level in the market where
they're seen as a completely different entity whatsoever from everything that exists,
given the size of their mode, given the size of their holdings, given the size of the amount
of collateral that they have, the offerings and so on and so forth. Can they get to a scale where
you have like the MAG-7, then you have strategy and the economy that they've built up around them
and people like what Jeff's been saying
and what we discussed last week,
people are living off the dividends, right?
I just imagine if someone has, I don't know,
thousands of shares of Strife right now
and they're able to keep adding to their positions
and we hit escape velocity
and they're living off their dividend.
Yeah.
Like what we're, like, do you see what I'm saying?
Like there's just so many different ways this thing can go.
So I think that people need to kind of like price that
into their skeptical models
when they're really trying to assess it.
And Chainos doesn't get all of this.
He just doesn't.
But the market will figure it out over time.
Yeah.
And I want to bring this up too, because I think this is a really good point.
I love the zero carry cost.
Store 12 words in your head.
And I think this is really valuable to think about competition in the market of the Mag 7.
Why is the Mag 7 really valuable?
Well, Apple is selling a ton of iPhones.
They're collecting a lot of data.
but in order to retain that wealth they either have to like buy back their stock so that they do
that but they also have retained earnings that they keep and that retained earnings is dwindling
and in order to continue to build that retained earnings you have to have more employees you have
to pay the employees you have to have like infrastructure for all the employees you have to
have um you know sweatshops in china that are building your iphones or like future robots that
building the iphones you've got to buy the chips you need all the energy to create all this stuff
and the cost of continued production of all of these things it just keeps going right it keeps
going and it's going to inflate over time and so you think about like the probability of
loss or deterioration from having to keep sustaining and growing that pace is really
tricky. Like you get to a point where you're just, you're so big, it just, you can't sustain a certain
growth rate. Now you look at a company like strategy that's holding all this capital and
they're retaining all this capital and they're retaining it and holding onto it cheaply. It's
not like holding real estate where you have vacancies and you got, you got like a ton of
maintenance and you know, the roof falls down. You got to replace the roof and you know, all this
other stuff. And like with strategy, you just, you just hold it. Like you just hold it digitally.
You don't even like, you don't even like, yeah, they've got to pay like their custody
fees and things, but I'm sure it's a hell of a lot less than holding $60 billion worth
of gold.
If you held $60 billion worth of gold, you got to think about like, where do I store
it?
How do I do all this stuff?
Like there's no other asset like it on the planet where you can just have so little carry
costs with the appreciation potential.
People also haven't understood that one.
That one's, that part is just totally underappreciated.
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
here give us give us a rundown of bitcoin prog at least so far like i'm sure you just landed but
like what are you excited about you got some things in the horizon um there's a lot of people
there some good energy yeah i mean we'll see tim ever cut you off of guys i gotta drop all right
later adrian good night yep the the sun's coming up right so it might be midnight in new york but
it's 5 49 a.m in prog yeah got in early wednesday morning prog time uh met up with some guys right
walked around took i posted a picture of like the prog old car you can basically like take a car and
they zoom you around um i didn't know that prog is home to the largest castle in the world now
i still need to like go to chat and be like is there a certain definition of the word castle
because that seemed a little odd right like what prog is home to the world's largest castle
but um yeah uh oh castle complex whoa yeah okay interesting okay so yeah thursday today there's uh
the conference kicks off friday so it's like i guess thursday and friday is almost like an
industry day maybe like 2 000 people saturday is the main day maybe 10 000 people and you know
adam back say or everybody's here um more so for the friday saturday sessions um from what i'm
looking at on schedule so yeah no i uh was hanging out in the hotel lobby last night right i'm just
looking out the window i just see sam callahan just walking down the sidewalk um in the square
looking at the uh whatever the clock is called and right there's just like a sea of people and
I see like BTC sessions just like walking through the crowd.
So, you know, it's like conference vibes and, you know.
But you're in a cool European city.
Yeah.
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.
He's like, you got to come to Prague.
And like everything that everyone has hyped it up to be is true.
Like it's very cool.
It's very old.
It's almost like Parisian with like a little dash of Rome, but just like, you know, it's very affordable.
So yeah, very cool.
Damn, I'm feeling some serious FOMO now, Tim.
Sorry.
Yeah, me too.
I'm about to check flights.
Yeah, geez, get out there.
I'll be there.
I'll be there later.
Pick me up at the airport.
Well, thanks for joining, Tim.
Thanks for hopping on.
I appreciate the perspective.
Go hit the, get your boots on the ground, figure out what's going on down there.
and I know it's Bitcoin only, which is great.
No shit coinery.
And yeah, get the latest scoop
and we'll bring you on next week
and we'll chat through what's going on.
Sounds great.
Perfect.
Fun as well.
So late.
Last final thoughts.
I knew when you said this might be a short one.
I knew you were full of it,
but I think that this goes with the sentiment again
and I'm sorry that Adrian finished
or had to drop already,
But I think that earnings for strategy is the most important thing, but also the least important at the same time.
So it's almost like quantum earnings.
And I think it's the least important because we already know what the Bitcoin price is.
So we already know what strategy is worth.
But at the same time, and this, I think, affects the sentiment.
since strategy doesn't need to go to earnings to tell you where strategy was over the last three
months because we all know what what the bitcoin price was and we know how much bitcoin they
purchased i think investors of strategy are going to be looking to the earnings calls
for that reassurance about where they're going to in the future and so you know if we see some
people running off and pulling out some of their strategy money for meta planets or any of these
other things that are going to be popping up, I think it's going to be the plan that they lay out
at these earnings calls. That's really going to reassure the investors and keep them excited.
Right. Absolutely. And every single earnings call that strategy has put out has been just
in total banger since Q3 of 24, every single one, it's just been like, Whoa, oh my God, more stuff.
Yeah. It was like 21, 21. Oh yeah. Do 42, 42. So, you know, you just want to know that the,
that the company is going where we want it to go. Yeah, 100%. Yeah. I mean, Chris hit it. Nothing's
really changed. I mean, the thesis hasn't really changed. It's just like we keep going here and
there's some chop and there's some people complaining about short-term volatility.
But I do think, again, this is the biggest story in all of finance. Not just the Bitcoin treasury
companies, but really MSDR and how big MSDR is relative to these other companies in the market.
it. And people just don't really conceptualize it yet. They don't understand how powerful this
stuff is. So again, that's why we're talking about this. We're educating the market. Our goal
is to educate the market, talk about what's going on with finance background, understanding capital
markets and plowing through what's happening day to day. So I do not think we will have an episode
next week. Maybe we will. I don't think I'll be on it. My life is super hectic the next couple of
weeks and uh and i'll be back on here shortly but yeah thanks everybody for the time appreciate it
and uh we'll keep on cruising yeah let us know let us know jeff soleil and i can uh you know
maybe tag team hosting one of these and you know kind of stumble through it right yeah get through
there you go right on little moon math it yeah absolutely just you the moon math is good you
have the moon math. It's helpful. All right. 9,200 people. Thank you for joining. Appreciate the time
an hour and 54 and we are finished with episode 30 of the investment grade Bitcoin podcast. Cheers.
We're going higher.