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I see a red door and I want it into black

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No colors anymore, I want them to turn black

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I see those girls walk by dressed in their summer clothes

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I have to turn my head until my darkness goes

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I see a line of cars in their art into black

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With flowers and my love won't never to come back

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I see people turn their heads and quickly look away

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Like a new phone, baby, it just happens every day

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I look inside myself and see my heart is black

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I see my red door, I just have it into black

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Maybe then I'll fade away and I'll have to face the facts

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It's not easy to ease it up when your whole world is black

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And more will my green circle turn a deeper blue

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Woo! Here we go!

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Alright, episode 47. We are back.

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The Capital Fortress.

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We're going to talk about the abandoned baby breakout, maybe a little bit.

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But we've got a lot to talk about in a short amount of time.

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We're going to try to do this in an hour.

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We have got a crew here.

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I think there is a poly market on whether or not we get done in an hour.

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We'll see how fast we do this.

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Okay, I'll stop sharing my screen.

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Thank you, everybody.

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Welcome to episode 47 of True North, the investment-grade Bitcoin podcast.

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We are here.

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We are talking about Bitcoin.

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We are talking about financialization of Bitcoin.

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We're talking about securitization of Bitcoin and everything in between.

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We focus primarily on MSDR, but everything in the space.

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but MSDR is the clear leader here with 650,000 Bitcoin and they are pioneering the path and

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creating the digital credit vehicle of the future. So tonight we've got myself, Mason,

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Adrian. Adrian hasn't been on a while. Mason haven't been on a while. So thanks. Thanks for

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coming guys. And then we've got Dan and Grain of Salt. And let's just jump right into it. Actually

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real quick. Let's hit this. Ladies and gentlemen, what you're about to hear may be amazing,

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but it is not financial advice. It's for informational and educational purposes only.

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Jeff, back to you. All right, Tim, crushing it. This is not financial advice. We are here having

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fun and talking about all of these things. So first of all, actually, I'm going to share my

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screen one more time. There are a couple exciting events on the horizon. The first one being

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Strategy World. This is in February of 2026. It's coming up very fast, February 23rd

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through February 26th. If you want to go to Strategy World, I went last year. I know many

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people on the screen went two years ago as well. And it is an incredible event. There's a lot of

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electricity there. You can hear, you know, you could be at the front end of what's happening in

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Bitcoin finance. It's like taking one of the Bitcoin conferences and just really focusing it

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on financialization of Bitcoin. They also have the side event, or not side event, it's really the

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AI business as well, that they've got tons of different panels and people talking about those

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things too. So if you want to learn more about the AI business and you want to learn more about

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the Bitcoin. It's a really interesting event. We do have a code. The code is TrueNorth with a capital

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T and a capital N that'll get you 20% off at checkout. There you go. You can see it right there.

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And additionally, similar to last year, we are going to have a side event, an inside event at

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TrueNorth or TrueNorthWorld. And it's going to be inside StrategyWorld. It will be on Monday,

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February 23rd. There will be 150 tickets. This will be very interactive, a little bit different

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than last year. We want this to be a chance for everybody to interact with all the folks of True

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North, the retail people, hoping to get a couple of guests as well. And last year, the strategy

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execs at Fong stopped by and had a quick talk as well. So a great chance to meet other people,

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talk about MSTR, really focused on MSTR and Bitcoin treasuries and everything happening in

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the space. So if you are interested in attending, please check it out. We will send the link in the

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chat. We will also post it after this. It is on Luma True North Inside Event at Strategy World.

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We are going to have a really fun after party after this. So on Monday night, we are going to

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host drinks and food similar to what we did last year. And you do not have to have a ticket to

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strategy world to attend true north world this year and i think that's pretty much it anything

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else to add there guys you guys want to add some color on strategy world event

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oh no just like the last oh go ahead yeah i mean after last year like last year's was i thought a

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smashing success and we got a lot of time with everybody perspectives and share opinions i think

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across the board and i think this year is going to be even an even more flat format so like i'm

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really excited to talk and discuss kind of how the last year's been for everyone. And especially

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considering we're not kind of going into price strength by any means this February, I think it'll

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be really interesting to see who's there and kind of who's weathering the storm and build some strong

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relationships out of it. Yeah, zero tourists. Yeah, there's no tourists here.

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the first 50 tickets cost uh two uh two shares of stretch 2.1 shares of stretch uh the second

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50 tickets cost 3.2 shares of stretch and the last 50 tickets cost 4.4 shares of stretch you

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can think of it that way uh or if you're on the preferred equities maybe that makes sense

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yeah this um the last stretch well i was almost at the last true north world the first time we

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the true north world it was a it was a huge um success like dan said for me it was actually rather

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shocking um meeting a lot of people that were so interested in actually meeting us and wanting to

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get to know us and whatnot and all the conversations um so i think it will be interesting to see what

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depending on the price action where we're going to be at um in february and the kind of people

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that we have showing up there like angston said no tourists so we should have more um of a dedicated

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investor base, but I'm excited for it regardless. I think it should be really, really fun.

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Cool. All right. It'll be a good time. We don't make money off this. We may make a little bit of

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money in sponsorships or something like that, but we're going to run this very thin. We want this

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to be a good time and exciting for everybody joining. So come hang out. It was really fun

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last year. It's great talking to people and not feeling like the crazy one, talking to my friends

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about Bitcoin and MSDR all the time. So cool. All right, let's jump into it. I will stop screen

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share here and we will shift gears. Okay. USD Reserve. Big deal. Strategy just recently over

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the last 8.75 days, sold $1.44 billion of common stock equity, and have now built a cash USD

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reserve to effectively be there in case of emergency to pay dividends into the future.

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And they've dubbed this the battery for the digital credit vehicle. And a few things are

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really fascinating here. To me, the things that jump out is instantly this reduces the risk profile

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of the preferreds drastically. Just psychologically, it may not have changed the dynamics, but

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psychologically, that's a significant buffer there. They're going to have nearly two years of

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cash buffer to pay the dividends and can continue to operate this vehicle into perpetuity.

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with this cash buffer. They've got 71 years of payment based on the current price of Bitcoin.

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That's stable. That's incredibly stable. And the rating agencies will also start to see this

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cash reserve. They now have to give credit for the cash because it's real cash. It's not just

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Bitcoin. Previously, the credit rating agencies gave zero credit for the Bitcoin. Now they've got

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1.44 billion of cash. So you can compare that to the liabilities or the obligations on the horizon.

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And I've also, you know, near the end, if we've got some time, I've got some credit framework thinking about CET bank scores in comparison to large, too big to fail banks.

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And we can compare like what what a credit rating would look like if you gave, you know, Bitcoin 30 percent credit or 20 percent credit.

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We can compare. So I'm going to kick it over to you guys.

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What do you guys think? I mean, this is big, right?

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There's a lot of noise, bears and bulls, both directions.

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And some people hate it. Some people love it.

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The Bitcoin Maxis hate it, but the Bitcoin Maxis generally didn't know what was going on to begin with.

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And then there's the small cohort of people that can see both sides of the thing.

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Yeah, I think the USD reserve is a pretty big deal.

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So kind of like what you said, the preferreds being able to scale is a confidence game.

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I think a lot of investors are going to want to know that the dividends would be paid.

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and the fact that strategy took the step to establish that the reserve says that they're

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being very, very serious and very, very mindful of ensuring the dividends at least for the next

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18, 12 to 24 months. And some people have even said that it somehow undermines the Bitcoin

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thesis because there is fiat and so on and so on and so forth. But I don't think it undermines

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the thesis. I think, in fact, it underwrites it is the way I would frame it. Being able to

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guarantee the preferred dividends for the next two or so years gives investors confidence to say

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that I bought into stretch, I bought into strikes, I bought into strife, I bought into stride.

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They might even do one for stream for all we know. And I know that my dividends are going to come to

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me for the next 12 to 24 months. That allows them to get to steady state, I think a lot quicker.

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I think the market perception of them will change a lot quicker. I think that the reality of it is

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is that a lot of Bitcoin maxis, as you say, hate this because everything is fiat, fiat is trash,

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so on and so on and so forth. But strategy doesn't represent the securitization of Bitcoin. It

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doesn't represent the Bitcoinization of security. Strategy needs to exist in a market, in a capital

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market, and needs to be able to function in capital markets. And I think they're taking

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steps in order to make that happen with this USE reserve. And I think this would be good for

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forward-looking valuations. I think this would be good for credit ratings. I think this would be good

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for everything that they're trying to do, especially if we weather a downturn and they

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are able to still be paying out the dividends and they're able to maintain the dividend structure

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even in a bear market. Because that was one of the biggest criticisms, right? If you have a

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big Bitcoin downturn, how are they going to pay for the dividends? I think they kind of just knock

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that out immediately. And in my view, I think they should be building a cash reserve in perpetuity.

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everything that they do going forward should be seen kind of holistically in my view it's not just

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about acquiring bitcoin it's about maintaining the capital structure and in all market conditions

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and i think that a usd reserve helps that and given the fact that they've had something like

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they've had over 1.17 trillion dollars in trading volume year to date i think that they have a lot

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of legway to be able to accumulate a cash position even in a market downturn and maintain

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the stability of the overall capital structure.

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Because I really do think that strategy represents an economy and people need to start seeing

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it that way versus just a smattering of offerings and equities.

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So I think it's good overall.

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That's just my view.

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Yeah, if you look at the risk model that they published on their website, I'm just going

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to share it real quick.

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And this is based on the presentation.

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We can kind of roll through this a little bit with you guys.

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one thing that this risk model doesn't take into consideration is the cash reserve.

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So this is assuming a 45% BTC volatility and a 10% BTC ARR, but it doesn't assume

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utilizing the cash reserve before the Bitcoin kicks in, before having to sell the Bitcoin to

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kick in. So it's missing this component of stability of having the cash reserve buffer

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for two years. So it pushes out the, it reduces the risk and pushes the credit spread even wider

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across the board. And you can take even more conservative figures. You could take 60% BTC

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volatility and 10% BTC ARR. And I think these would still look really attractive relative to

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other things in the market. Go ahead. Go ahead, Dan.

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Yeah, I think you're right, Jeff. And I think there is some sort of efficient frontier of the USD reserve relative to the Bitcoin reserve. Because if you take it to an extreme, if you were all USD, right, we get full credit for the USD on the balance sheet, but we wouldn't be growing the balance sheet at 30 ARR as is laid out by the Bitcoin growth rate.

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So like, I think they've probably done a lot of work behind the scenes to determine that, in fact, two years with the dividend payments is kind of the optimal one's perspective as to strength of dividend payments to weather a bear market.

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But then also two, to maintain enough BTC on the balance sheet to have the volatility and potential returns to outpace the preferreds for the common holder.

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So they've probably spent a lot of times behind the scenes trying to figure out kind of what the optimal amount of USD reserve is, I think.

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Funny enough, I almost disagree with you. I'm sure they've done it. I'm sure they've done a ton of work.

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You think they flubbered it?

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No, no, no, no, no, no. Not what I'm going for.

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Sailor probably felt comfortable with the existing business model.

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And they raised $1.44 billion in cash in eight days, like eight trading days.

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It proved the business model works.

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like when when when bitcoin was down when strategy stock price was down everything was hammered

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sentiment was horrible the stock didn't even really move in those eight days and it was over

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a holiday like and they raised i agree i think something changed in the last what i heard was

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that two weeks ago this was not a consideration yeah for strategy interesting but then in the

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last two weeks something changed yeah i think it's i think it's also important to put 1.4 billion

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perspective strategies market cap or microstrategy market cap was 5 billion in in the bottom of of

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2022 yeah it might even be lower than i think it was like four or five billion right so that it's

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it's absurd the the amount of capital that they raise and i think from my perspective i think

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they're doing it for the skeptics, right? I think it's exactly right. Like, Sailor was definitely

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happy with the business model, but I think institutional capital is skeptical. And what

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they're trying to do is season the asset, right? This is brand new. All these are brand new. These

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didn't exist this time last year, right? So that combined with the four-year cycle FUD, which is

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definitely in the mind of institutions as well, right? Three years up, one year down,

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then having two years of dividends. In their mind, if the four-year cycle continues,

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and if strategy falls below 1MNAV, they're going to be able to pay regardless. And that's kind of

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the sentiment that I heard from Fong in his interview with the What Bitcoin Did channel was,

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He said, we're going to pay the dividends. We're going to continue to do it.

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We're being tested right now and we're going to show the market.

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We are going to come out of this stronger.

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Really good points.

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Yeah.

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So kind of like what Jeff was saying about approves the business model with the fact that they were able to able to raise the capital so quickly in the last in those eight days or eight and a half days when sentiment was in the shitter.

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that that in my mind was one of the most telling things for me because you know the atm has been

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something that people belabored for a long time and i've done you know a lot of analysis on the

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atm to see if it actually is driving price and the fact that they were able to do that

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get the usd reserve established get this out to the market bring the signaling to the market

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change the overall perspective of the preferred offerings i think is a major win that people are

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of underestimating because it shows that strategy the demand for it persists even in these in this

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downturn cycle and the demand for these preferred offerings i think has been somewhat validated

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because they must have seen the impetus to do it right if they thought this was something that was

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going to um be something that they're going to have to kind of trot along to make work i don't

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know if they would have pulled the trigger on this at this point especially with the market being

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where it's at. I believe that internally they probably are seeing that there is persistent

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demand for the preferred offerings. I think the volume bears that out. And I think they see this

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as a major turning point for the preferreds, given the fact that even the oldest one is what,

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Strike? And it's not even a year yet. I think it'll be a year in February 1st. So

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it really validates the model. And I think that this is going to be more

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more respected and more be seen as a more effective form of capital allocation that

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they're doing as this goes on. So for, I don't, I still don't get the people that are funding the

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fact that they have a USD reserve. I don't get that angle because they have to pay out the

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dividends in USD. So why wouldn't they have a USD reserve? But I think the market's just going

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to come around to it the more time goes on. And as the months go on and as we go into year one and

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then year two and then year three and so on and so forth of the preferreds i think that they're

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really going to scale so i've become more excited about the perspective of the prefers given the

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fact that they've taken this step you know the foot the foot has been just eviscerated

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it has been i do have to say if you're a complete bitcoin maxi then in fact the usd reserve

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technically decreases your edge in in the arbitrage in the kegger between bdc and usd

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So I do understand why some people may be a little bit hesitant to adopt it.

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But from the perspective of it increases adoption of the preferreds because the credit rating agencies and institutions are much more confident in strategy's balance sheet now, I do think in the long term it is the best move.

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But I do also understand the Bitcoin maxi perspective of like, why are you ATMing to buy USD?

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So I'll take the opposite end of that just for conversation's sake.

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I've been in Bitcoin since 2012.

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I'm about, I have been as toxic a maxi as possible for many, many years until I would say the last three.

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Bitcoin, you buy Bitcoin using fiat.

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Bitcoin is priced in fiat.

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You are growing your nominal wealth in Bitcoin terms, but you're still pricing it in fiat.

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So people that are saying that the maximalist stance of we don't get why you're ATMing to get USD,

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I think that it's more of a philosophical stance than a practical one.

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So I understand that many think that cash is trash, fiat is trash, so on and so on and so forth.

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But having this absolutist stance, even as someone that's been in Bitcoin for so long,

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it doesn't even make sense to me anymore.

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So I am of the mindset that I think people are just saying this to say it.

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They don't like what Saylor is doing, so therefore they're finding flaws in it no matter what he does.

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so so i think that can be true yeah chris mentioned something here that i was literally

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about to say uh increase the torque so i'm sure that they had a buyer that came to them and said

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hey if you guys had u.s dollars on your balance sheet two billion dollars worth two years of

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reserve we're gonna buy you know five billion dollars you know and it's like i like this but

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I'm a little sketched out. You're raising capital via the ATM. And if you had a bunch of dollars

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and you could pay the dividends for a couple of years, maybe I'd be willing to take that risk.

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So while this was a short-term change in Bitcoin per share or exposure per share by bringing in

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dollars in the door, there was an opportunity cost of not doing this. And if they wouldn't

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have done this, maybe that buyer would never buy. And so not only does it help with the ratings,

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not only does it help with the risk it helps with bringing it opens capital doors And I sure that this kicks open capital doors Yeah Right The question

235
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I think you're completely right.

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The question of how are you going to pay the dividends? And you say,

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well, I'm going to use the common stock ATM. It just sounds uncomfortable to most people.

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This is a new model, right? They can raise capital because their stock trades $3.6 billion a day.

239
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they only need to raise $2.2 billion a day on their common stock ATM.

240
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I loved the presentation, how he walked through it.

241
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Six bips of the daily trading volume.

242
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That's insane, right?

243
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They tapped the ATM for 4.5% of the daily trading volume for eight and a half days

244
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and raised $1.44 billion.

245
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And all they need to do is raise $2.2 million a day.

246
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I think they're going to be able to do it

247
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because you've got all these algorithms that are running back and forth

248
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and trading the stock back and forth day to day.

249
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There's so much liquidity in the stock

250
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because it's powered by Bitcoin.

251
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That's one of the elements here

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of why you put Bitcoin on your balance sheet.

253
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It makes your stock attractive to all of these algorithms

254
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and everything that could go in between

255
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all of these instruments.

256
00:23:17,335 --> 00:23:20,335
Yeah, Jeff, I think a big part of this

257
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was just a proof of concept, right?

258
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let's raise

259
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a billion and a half dollars

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and stick in cash.

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Let's demonstrate that to the market.

262
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Let's make them feel safe that we have

263
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the capital. And like you said,

264
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it's going to kick open doors for capital.

265
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If you're not,

266
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if you don't see the value

267
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in this, I'm not sure

268
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what else they could do.

269
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Look at how commercial real estate is.

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That's what I'm saying. Some people just don't like it

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and they're not going to like it, no matter what they do.

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and i think that's what we're seeing with a lot of the criticism um so and to just one of the

273
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volume honestly we're gonna get past the criticism in like two days like the fud has disappeared

274
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like if you don't like it you're gone anyway like you're probably you probably don't even hold the

275
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stock and you know if if you didn't like it and you sold that day like the stocks already turned

276
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back around and of course we've hit the uh what is it called the uh baby baby breakout so you know

277
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I'm just going to YOLO my life savings on that.

278
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I'm just kidding.

279
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I want to chime in real quick.

280
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We're back.

281
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We're back.

282
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Yeah.

283
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I think they're going to go to closer to $3 billion.

284
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I think they're going to – because Fong said – I re-listened to his short clip that came out,

285
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and then I said it was like a 331, the clip that came out earlier today.

286
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And it says, hey, we may go to two to three years of having a cash reserve.

287
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And so I think that if they're going to start doing a lot of preps, then I think that they're going to let this run.

288
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They're going to hit that.

289
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And so, look, folks, the math is really simple.

290
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Just use simple round numbers.

291
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If Bitcoin's 100,000 and they have 650,000 Bitcoin, that's $65 billion.

292
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2% of $65 billion is $1.3 billion, right?

293
00:25:12,236 --> 00:25:12,956
What does that mean?

294
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$1.3 billion is pretty close to 1.44, which ended up being 21 months.

295
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So they only have to dilute the stock 2%.

296
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This year, they diluted the stock at 13%.

297
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And so what's going to happen is next year, they really don't have to hit the MSCR ATM

298
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unless the MNAV goes up and goes higher.

299
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And that's when they can arbitrate, when Saylor says he can arbitrage that difference,

300
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the delta between 1.0 and 1.25 or 1.5 or 2.0. So I think what they've done here is I think they're

301
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going to expand this out to two and a half, three years. And as they increase the prefs that are

302
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outstanding, of course, the amount of months will drop down because they'll do more prefs next year.

303
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So I think that's what they just, so they have these different levers. The key term back in,

304
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there's always with CEOs, there's always like the flywheel effect or levers. Now they have

305
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multiple levers to pull. The MCR ATM, they have the cash balance, they have the preps.

306
00:26:15,116 --> 00:26:18,916
Did they say what they're going to do with that cash? Are they going to park it in treasuries?

307
00:26:19,515 --> 00:26:23,876
I'm sure they're going to ladder it. I'm sure we will find out.

308
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Sure.

309
00:26:24,416 --> 00:26:30,696
And I'm sure that they will ladder it into different duration treasuries,

310
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just as an insurance company would. If I don't need this, I'm going to park it in a certain place

311
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and let it sit there.

312
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I would assume.

313
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And I think, Gray, your point's really well taken

314
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because think about it.

315
00:26:42,736 --> 00:26:43,995
We talked a lot about,

316
00:26:44,055 --> 00:26:45,196
and I don't think we've talked about it enough,

317
00:26:45,555 --> 00:26:48,095
the effects of amplification on the balance sheet.

318
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And so initially when they came out the press,

319
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I think the most exciting thing for me

320
00:26:51,916 --> 00:26:52,976
and a lot of investors was like,

321
00:26:53,255 --> 00:26:57,116
okay, they can go from having a 20% debt to equity ratio

322
00:26:57,116 --> 00:26:59,696
to upping that to 30, 40, even 50%

323
00:26:59,696 --> 00:27:01,716
because this is permanent capital

324
00:27:01,716 --> 00:27:03,896
that doesn't have to get refinanced or paid back.

325
00:27:03,896 --> 00:27:04,136
Okay.

326
00:27:04,136 --> 00:27:11,095
okay so based on that and now with the usd cash reserve i think you could get institutional

327
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investors especially high yield bond investors who may be interested in stride or maybe convertible

328
00:27:15,736 --> 00:27:20,855
investors interested in a product like strike structure bitcoin they may be comfortable with

329
00:27:20,855 --> 00:27:26,055
a higher leverage ratio maybe 40. and if you believe in bitcoin's keger over the next 10 years

330
00:27:26,055 --> 00:27:30,535
this is where the stock gets interesting if you enter at around a 1m nav and they're able to

331
00:27:30,535 --> 00:27:37,575
maintain a sustainable 30, 40, 50% debt to equity ratio via the prefs, your outperformance

332
00:27:37,575 --> 00:27:41,816
relative to Bitcoin is extremely substantial, like very, very substantial.

333
00:27:42,156 --> 00:27:45,015
So that leverage ratio, in my opinion, and that's what I've said from the beginning,

334
00:27:45,075 --> 00:27:48,236
I feel like is like the leverage ratio is everything for Bitcoin treasury.

335
00:27:48,616 --> 00:27:52,376
And if this enables them a higher leverage ratio, this is the kind of the golden goose

336
00:27:52,376 --> 00:27:54,656
in terms of Bitcoin outperformance over the next 10 years.

337
00:27:56,956 --> 00:27:57,976
Yeah, 100%.

338
00:27:57,976 --> 00:28:01,055
And the crazy thing is the math works.

339
00:28:02,456 --> 00:28:09,116
If you have two to three years of dividend reserve, you can crank the leverage ratio higher.

340
00:28:09,575 --> 00:28:19,995
I've been running several simulations on the back end using Monte Carlo Sims and different models and different price paths, etc.

341
00:28:19,995 --> 00:28:33,816
And it's crazy. If you don't have to sell any of the Bitcoin, you could probably go at like 100% leverage or 100% amplification and the math still works.

342
00:28:35,355 --> 00:28:36,555
Which is insane.

343
00:28:37,116 --> 00:28:42,995
You look at 100% amplification, you're like, well, actually the math still works.

344
00:28:44,156 --> 00:28:46,095
Well, and that's like the insurance company model, right?

345
00:28:46,095 --> 00:28:50,855
Or like what they've been saying about now is like, you know, we could lend out our reserves.

346
00:28:51,335 --> 00:28:57,656
And that's what I was so interested about strategy from the beginning is like right now, the way they're structuring their Bitcoin yield, right?

347
00:28:57,676 --> 00:29:10,136
Via ATM issuance at a premium, arbitrage on the MNAV, and then plus the leverage while Bitcoin increases, which increases their Bitcoin per share over time as the leverage melts or as the prepped events melt relative to the Bitcoin carrier.

348
00:29:10,616 --> 00:29:13,835
That is all diminishing Bitcoin yield over time.

349
00:29:13,976 --> 00:29:15,515
Unfortunately, that's just the nature of the math.

350
00:29:15,515 --> 00:29:37,995
But if you were able to lend out the Bitcoin at four or 5% through a hold bracket bank in sort of a safe manner, that's exponential Bitcoin yield. And now you can put real price to earnings ratios on the amount of Bitcoin yield that they're creating inside their capital structure. So I think in terms of the argument for higher and higher MNAS, they can get to that exponential Bitcoin yield like games over, they've won.

351
00:29:37,995 --> 00:29:49,995
Yeah. One of the things I think the emperor said this as well, and I completely agree with it is I think the likelihood that they touch this cash reserve is very low.

352
00:29:49,995 --> 00:30:07,956
I think that there's a high likelihood that it's business as usual unless we see, you know, like catastrophic movement in equity market and Bitcoin market all at once in a correlated fashion.

353
00:30:07,995 --> 00:30:21,416
Otherwise, I wouldn't be surprised if they actually don't use the common stock ATM very much anymore for capital because they've got plenty of capital and they use it just to pay the dividends and they've got the USD cash reserve.

354
00:30:21,416 --> 00:30:26,355
And then they just sell the absolute shit out of the preferreds.

355
00:30:27,055 --> 00:30:36,835
And, you know, all of the business models, you go to insurance companies, you go everywhere and you try to you really push on the rating agencies to give you something.

356
00:30:36,835 --> 00:30:42,095
something greater than B minus and rate each individual product.

357
00:30:42,095 --> 00:30:44,676
Like they've got an issue of credit rating, which is great,

358
00:30:44,676 --> 00:30:47,515
but each product itself isn't rated.

359
00:30:47,656 --> 00:30:50,876
So once the products themselves get rated, that's another, you know,

360
00:30:50,936 --> 00:30:53,055
kick the door open. There's capital coming in the door.

361
00:30:53,936 --> 00:30:56,376
Yeah, I think, yeah, I think, I think you're right.

362
00:30:56,416 --> 00:30:58,035
I think that they're going to get to, like I said,

363
00:30:58,095 --> 00:31:03,156
I think it's going to be a two to three year cash buffer and they're going to

364
00:31:03,156 --> 00:31:05,936
just be able to ATM in order to pay that. Because like I said,

365
00:31:05,936 --> 00:31:13,795
If we get some help from Bitcoin at $100,000, that's $65 billion, at 2% to raise $1.3 billion,

366
00:31:14,015 --> 00:31:18,015
which they don't need because it's only $800 million per year right now.

367
00:31:18,176 --> 00:31:21,575
The number is going to grow, but they only need so much each quarter.

368
00:31:22,095 --> 00:31:27,456
So you divide 2% out by each quarter, right?

369
00:31:27,555 --> 00:31:31,116
And then it ends up being 0.5% of what they have to sell, which is a small number.

370
00:31:31,456 --> 00:31:32,196
So you did the calculation.

371
00:31:32,196 --> 00:31:36,275
What was your calculation, Jeff, on how many Bitcoins you think they're going to add next year?

372
00:31:36,916 --> 00:31:37,636
I had a number.

373
00:31:38,716 --> 00:31:41,656
Oh, should we go back to our guesses from earlier this year?

374
00:31:41,855 --> 00:31:44,916
Because I think Dan has nailed it on the head.

375
00:31:44,916 --> 00:31:45,755
I think I nailed it.

376
00:31:46,176 --> 00:31:47,716
I think he nailed it on the head.

377
00:31:47,815 --> 00:31:49,575
I think I got it on the T, unfortunately.

378
00:31:50,255 --> 00:31:54,456
Unless they come out with a crazy preferred between the Canadian preferred between now and the end of the year.

379
00:31:55,136 --> 00:31:56,896
Yeah, I'll have to find it.

380
00:31:56,896 --> 00:31:58,876
What do you guys think it's going to be for next year, though?

381
00:31:59,456 --> 00:32:01,696
You think they're going to add 100,000 Bitcoins next year?

382
00:32:01,696 --> 00:32:02,616
I think they will, Grant.

383
00:32:03,275 --> 00:32:03,775
I think they will.

384
00:32:03,815 --> 00:32:05,216
I think they'll add 100,000 Bitcoin.

385
00:32:05,476 --> 00:32:05,676
Yeah.

386
00:32:05,936 --> 00:32:08,676
I don't think they'll add more than that, but I think they will.

387
00:32:08,995 --> 00:32:11,295
Because I think Bitcoin will be higher by the end of the 26th.

388
00:32:11,295 --> 00:32:14,775
My simulation came in between 85,000 and 100,000.

389
00:32:14,976 --> 00:32:19,116
And it really depended upon how much help they get from Bitcoin itself.

390
00:32:19,315 --> 00:32:21,775
If Bitcoin trades sideways, it'd be 85,000.

391
00:32:22,116 --> 00:32:26,995
If Bitcoin went up, then I think that – and if it goes up, you assume that there'd be volatility with it.

392
00:32:26,995 --> 00:32:31,275
My simulations came in 85 on the low side, 100,000 on the high side.

393
00:32:31,696 --> 00:32:32,636
Yeah, that makes a lot of sense.

394
00:32:33,275 --> 00:32:35,255
It's just a monster war chest of Bitcoin.

395
00:32:36,196 --> 00:32:38,176
Just absolutely enormous.

396
00:32:39,196 --> 00:32:41,355
I think it could be higher, like 150K.

397
00:32:42,355 --> 00:32:45,236
Like 25% BTC yield would be 150K.

398
00:32:45,315 --> 00:32:47,295
And that would be just pure yield over and above.

399
00:32:49,835 --> 00:32:53,755
Yield, not addition, not treasury assets, but per share.

400
00:32:53,916 --> 00:32:54,136
Right.

401
00:32:55,255 --> 00:32:57,995
I think they have to come up with somehow to explain,

402
00:32:58,095 --> 00:32:59,216
like we were saying in the beginning of the call,

403
00:32:59,295 --> 00:33:01,116
that if they have this cash buffer,

404
00:33:01,116 --> 00:33:06,075
how does it change their credit spreads because now all of a sudden it takes that risk off the

405
00:33:06,075 --> 00:33:11,136
table for the next 21 months or 24 months i'm working on it oh you're working on that i'm

406
00:33:11,136 --> 00:33:17,936
working on it yeah yeah it's it's tricky that it's tricky like when you put it in the sim but

407
00:33:17,936 --> 00:33:23,916
yeah i'm working on it i do want to talk about i think go ahead yeah this is no great go ahead

408
00:33:23,916 --> 00:33:29,116
yeah so i had talked about this and i want to go to eps for a second so um when they did the

409
00:33:29,116 --> 00:33:34,495
revised and I published this on December 2nd. Well, that was yesterday, I guess. I published

410
00:33:34,495 --> 00:33:41,075
this that what was missing in the document, they had two targets. They had one at 85,000 and one

411
00:33:41,075 --> 00:33:51,795
at 110,000. And so 85,000 was their new bear case scenario that what happens if on December 31st,

412
00:33:51,795 --> 00:33:58,255
it was 85,000 that they would have a net loss for the year. And then at 110 means that the Q4

413
00:33:58,255 --> 00:34:05,295
would be positive. So I was like, what's the over under? And so we calculated that the over under is

414
00:34:05,295 --> 00:34:12,736
if Bitcoin is 97,000 or higher on December 31st, the whole year has positive EPS.

415
00:34:13,595 --> 00:34:19,675
Okay. If they hit 110,000 Q4 is positive EPS, and then they'll make 19 bucks a year.

416
00:34:19,835 --> 00:34:25,135
So if it's like 98,000, the EPS is going to be really small for the year because Q4

417
00:34:25,135 --> 00:34:27,155
is going to be a negative.

418
00:34:27,775 --> 00:34:29,736
But these are your two numbers,

419
00:34:30,255 --> 00:34:35,135
97,000 and 110,000 on December 31st.

420
00:34:35,456 --> 00:34:36,135
And I think that's,

421
00:34:36,255 --> 00:34:40,075
people like football or professional sports,

422
00:34:40,115 --> 00:34:42,815
that's the over under is 97,000.

423
00:34:42,815 --> 00:34:44,095
And I prefer it to be at 110.

424
00:34:45,675 --> 00:34:47,876
Green, Bitcoin's working for you right now.

425
00:34:49,536 --> 00:34:50,196
It's working.

426
00:34:50,456 --> 00:34:51,396
What are we at, 94?

427
00:34:53,436 --> 00:34:54,456
Just under, I think.

428
00:34:55,135 --> 00:34:55,476
94?

429
00:34:56,115 --> 00:34:56,976
93 and a half.

430
00:34:57,255 --> 00:34:58,376
I'm blowing on the price chart.

431
00:34:58,376 --> 00:34:58,775
Yeah.

432
00:35:01,775 --> 00:35:08,376
You know, the other part, I want to bring up one last part on the prefs, and this is something that people always, they seem to overlook this.

433
00:35:09,075 --> 00:35:11,595
So, Saylor uses the term digital credit.

434
00:35:12,356 --> 00:35:23,655
The prefs are, even though they're in an equity, perpetual prefs, even though that's what they are, right, in an equity wrapper, they're actually classified as credit.

435
00:35:24,155 --> 00:35:29,516
So when they issue these prefs, it does not increase the outstanding shares for the MSTR.

436
00:35:29,755 --> 00:35:31,615
When I say MSTR, I mean the MSTR stock.

437
00:35:31,916 --> 00:35:35,075
And when I say the prefs, it's STRK, F, C, D.

438
00:35:36,615 --> 00:35:41,416
And so for those, it does not change the outstanding shares on MSTR.

439
00:35:41,556 --> 00:35:43,135
That's why it's non-dilutive.

440
00:35:43,736 --> 00:35:45,536
This is where people miss this part.

441
00:35:45,536 --> 00:35:47,335
I've talked to some really, really smart people.

442
00:35:47,496 --> 00:35:49,416
They're like, well, it's in an equity wrapper.

443
00:35:49,736 --> 00:35:51,835
I go, yeah, but it's classified as credit.

444
00:35:51,835 --> 00:35:54,295
That's why if you look up on the website, it says credit.

445
00:35:54,675 --> 00:35:56,516
It does not dilute the MSTR shareholder.

446
00:35:56,835 --> 00:36:00,075
There's an obligation that has to be paid, which is the yield.

447
00:36:00,556 --> 00:36:05,115
That's why they established, we talked all for 35 minutes about the cash buffer.

448
00:36:05,635 --> 00:36:12,835
But that's why if they hammer the prefs, that's why the amplification goes up because it's not diluting the MSTR.

449
00:36:14,936 --> 00:36:17,075
Well, and the reason, exactly.

450
00:36:17,075 --> 00:36:39,255
Exactly. And that's so, so attractive for a Bitcoin bull or a maxi, right? Because in your brokerage account, what can you construct of like a Bitcoin ETF sort of situation, right? You can have like, okay, maybe you can have 30% debt to leverage the debt to equity in your brokerage account using like a bit, but you have a margin call provision and that can change on a daily basis.

451
00:36:40,135 --> 00:36:43,056
So what Saylor says is like, what's a margin loan?

452
00:36:43,236 --> 00:36:44,175
It's a one week.

453
00:36:44,275 --> 00:36:45,736
It's one week money, right?

454
00:36:45,996 --> 00:36:46,936
What are the prefs?

455
00:36:47,635 --> 00:36:49,655
They're permanent capital for strategy.

456
00:36:49,655 --> 00:37:01,856
So if they can up their amplification to, say, 40%, they will effectively have a better credit stack or leverage Bitcoin stack than anyone can create in any margin account.

457
00:37:01,856 --> 00:37:02,396
Any form.

458
00:37:02,815 --> 00:37:03,396
In any form.

459
00:37:03,396 --> 00:37:10,356
Yeah. And so that becomes an extremely attractive wrapper for Bitcoin maxis for everyone.

460
00:37:11,315 --> 00:37:15,956
And it's not like, and people say, well, you could just buy, you know, 2x leverage Bitcoin ETF.

461
00:37:16,115 --> 00:37:18,775
And it's like, well, that's 2x leverage on the daily.

462
00:37:19,615 --> 00:37:20,775
Yeah, it's completely different.

463
00:37:21,155 --> 00:37:27,655
2x leverage on the daily. And that's not 2x leverage annually. It's 2x leverage on the daily.

464
00:37:27,655 --> 00:37:32,956
So that is not an instrument to hold long term into the future.

465
00:37:32,956 --> 00:37:39,115
like it's going to if the price of it the price of bitcoin goes down you know ten dollars the it's

466
00:37:39,115 --> 00:37:43,516
going to go down twenty dollars and then you now have to go back up even higher it's going to have

467
00:37:43,516 --> 00:37:48,956
decay over time as a leverage instrument it's like a short-term thing so like if you want amplified

468
00:37:48,956 --> 00:37:55,755
bitcoin exposure you buy amplified bitcoin equities with permanent bitcoin right you know exactly what

469
00:37:55,755 --> 00:38:00,716
you're paying at ten percent a year that's my dividend obligation as an mstr common holder to

470
00:38:00,716 --> 00:38:07,356
the pref holders okay 10 a year i have the bitcoin now all i have to bet on is the bitcoin

471
00:38:07,356 --> 00:38:13,196
appreciating faster than the obligations which i owe to the pref holders and i retain that as bitcoin

472
00:38:13,196 --> 00:38:19,036
per share in the common it's a very simple kind of formula and they set it up such that it's

473
00:38:19,036 --> 00:38:24,556
permanent and you have no decay over time other than the prep drag yeah as saylor said it's the

474
00:38:24,556 --> 00:38:28,876
law of thermodynamics you have like the excess volatility and it all goes to the common

475
00:38:28,876 --> 00:38:38,075
yeah i just want to say something um they've done everything they they've got tables they've got the

476
00:38:38,075 --> 00:38:43,835
website on strategy.com they've got every table every number you could want they tell you that

477
00:38:43,835 --> 00:38:53,755
the uh leverage ration net leverage um btc years right they tell you that it's 74.8 years 21 months

478
00:38:53,755 --> 00:39:00,236
in in usd reserve so they tell in every single table imaginable right they have the credit shares

479
00:39:00,236 --> 00:39:04,235
outstanding all this is listed every single purchase of bitcoin they've done over the past

480
00:39:04,235 --> 00:39:10,635
five years so all this information on the website then they actually do it in a presentation with

481
00:39:10,635 --> 00:39:15,835
bar charts and they got this really cool rocket ship that's got a height and they say that the

482
00:39:15,835 --> 00:39:21,436
the cash reserve is the freaking battery right and it's like i love it right so then they have

483
00:39:21,436 --> 00:39:28,635
this figurative reason how this works and somebody's like you know there it is and so somebody is like

484
00:39:28,635 --> 00:39:32,715
i know everything should be an electric car well you know maybe i don't want to charge a car and

485
00:39:32,715 --> 00:39:37,036
drive to la you know from where i live and and you don't want to stop to do it you just want to stop

486
00:39:37,036 --> 00:39:41,996
for gas and go and you don't want to do it so what's better an all gas car a hybrid car an

487
00:39:41,996 --> 00:39:46,315
electric car some people have an electric car and some people have a hybrid or a gas car they have

488
00:39:46,315 --> 00:39:51,615
have two different vehicles right and so when you see something like this people like ah he's doing

489
00:39:51,615 --> 00:39:57,556
these fancy drawings i'm like what else do you want the dude to do i'm like and then you go and

490
00:39:57,556 --> 00:40:03,315
then go up two slides go to slide 10 yeah right and then they got the table right and then they

491
00:40:03,315 --> 00:40:09,235
got this oh that's too complex it's like you know what give me a break i mean yeah it's it's pretty

492
00:40:09,235 --> 00:40:15,016
ironic people criticizing the the drawing and then not understanding it you know you know there's a

493
00:40:15,016 --> 00:40:16,016
There's a bar chart.

494
00:40:16,135 --> 00:40:19,715
If you go up showing the, what's the one where they have the huge bar and a really small,

495
00:40:19,815 --> 00:40:20,655
oh, you're right there, seven.

496
00:40:22,496 --> 00:40:22,815
Yeah.

497
00:40:23,595 --> 00:40:24,356
The relativity.

498
00:40:25,275 --> 00:40:26,856
The reserve relative to dividends.

499
00:40:26,976 --> 00:40:28,356
Well, they're like, that doesn't make sense.

500
00:40:28,456 --> 00:40:29,155
Show me the picture.

501
00:40:29,315 --> 00:40:31,696
And then they show the picture and you're like, ah, I don't like the picture.

502
00:40:31,896 --> 00:40:32,315
It seems like.

503
00:40:34,036 --> 00:40:34,996
Too many memes.

504
00:40:34,996 --> 00:40:35,735
Too many memes.

505
00:40:37,996 --> 00:40:39,835
And then they do all the math for you.

506
00:40:39,916 --> 00:40:44,795
74 years of dividend coverage and 1.3, they need Bitcoin to go up by 1.35.

507
00:40:45,016 --> 00:40:48,856
And I love the escape velocity, cruise speed, stall speed.

508
00:40:51,315 --> 00:40:56,815
Yeah, the BTC stall speed was an interesting one to think about.

509
00:40:57,595 --> 00:41:04,235
Where Bitcoin's got to go down 19% compounded annually for 10 years in a row.

510
00:41:05,456 --> 00:41:12,335
In order for the business model to like, in order for the assets to be worth the value of the dividends.

511
00:41:12,335 --> 00:41:18,655
or the value of the notion of outstanding this is crazy i saw some somebody had said on x well

512
00:41:18,655 --> 00:41:24,016
if bitcoin goes to 10 400 then sailor is screwed i want to tell you something if bitcoin goes to

513
00:41:24,016 --> 00:41:29,715
10 400 which i really hope it never does and you get people always like oh i would just go buy as

514
00:41:29,715 --> 00:41:34,715
much as i can i'll tell you right now the world will be a miserable place not bitcoin the whole

515
00:41:34,715 --> 00:41:41,135
world will be a miserable place if bitcoin drops down to 10 400 right to have a 90 drop from here

516
00:41:41,135 --> 00:41:44,896
I think that you will wish that that did not happen.

517
00:41:45,696 --> 00:41:46,815
I think you're right, Grant.

518
00:41:47,436 --> 00:41:51,615
What will NVIDIA be at if Bitcoin goes down to $10,400?

519
00:41:52,135 --> 00:41:53,376
It'd be like $40.

520
00:41:54,815 --> 00:41:56,835
Yeah, Bitcoin is a macro asset now.

521
00:41:56,936 --> 00:42:02,536
So dropping down that far, it says that there's far more issues going on globally and macroeconomically.

522
00:42:02,735 --> 00:42:05,255
So that scenario, everyone's fucked.

523
00:42:06,496 --> 00:42:08,916
There's $2 trillion of capital stored in it.

524
00:42:08,916 --> 00:42:15,155
yeah so i i coming back to what i said what's going on is that people have people are falling

525
00:42:15,155 --> 00:42:18,916
into a few camps right now one it's a ponzi scheme no matter what sailor does they're going to say

526
00:42:18,916 --> 00:42:22,996
ponzi ponzi ponzi ponzi ponzi because they don't like what he's doing so that that's that camp and

527
00:42:22,996 --> 00:42:30,675
the other camp is they missed it yeah the other campus people that missed it or that are um pissed

528
00:42:30,675 --> 00:42:36,916
off for whatever reason that they have a group of individuals that are in this equity that um others

529
00:42:36,916 --> 00:42:41,795
that they missed then i think the final camp is just that i i don't want to call them the doomers

530
00:42:41,795 --> 00:42:45,715
but there's especially with what's been going on in the markets right now there's a growing

531
00:42:46,436 --> 00:42:51,476
sense of people that want to see the market crash yeah to be the ones that say i told you so

532
00:42:52,115 --> 00:42:56,275
bitcoin is overvalued nvidia is overvalued palantir's everything's overvalued needs to crash

533
00:42:56,996 --> 00:43:01,076
blah blah blah blah i think that's that's what we're seeing a lot of the loudest voices are

534
00:43:01,076 --> 00:43:06,036
so at this point strategy can do whatever whatever they can whatever they can but they're not going to

535
00:43:06,916 --> 00:43:10,356
change anyone's mind so i think the path is forward and i think that's what we're doing here

536
00:43:10,356 --> 00:43:15,315
and i think that's what they're trying to do and um yeah it's just weird what's going on man no

537
00:43:15,315 --> 00:43:21,556
matter everything that they come up with in terms of fud strategy finds a way to address it and then

538
00:43:22,275 --> 00:43:26,436
either the goalpost gets shifted or people don't like what they did to address it or like grain

539
00:43:26,436 --> 00:43:33,155
said they don't like the graphic or they don't like the table or they don't like whatever i think

540
00:43:33,155 --> 00:43:39,655
think we need to accept that they just don't like it yeah and the institutional sentiment is not what

541
00:43:39,655 --> 00:43:45,496
you see on x like not even remotely close that's i think that's just one of the biggest yeah it's

542
00:43:45,496 --> 00:43:48,655
just like there's so many people working behind the scenes on this stuff and there's so much you

543
00:43:48,655 --> 00:43:54,476
don't see uh everywhere else and those doomers are the same ones that are waiting for house prices to

544
00:43:54,476 --> 00:44:13,531
crash right it like okay if house prices crash do you have your job still you know like is that Is that a place that you want to be Jeff yeah i think a lot of these people waiting for the crash fundamentally don understand that we in an inflationary system that at this point

545
00:44:13,531 --> 00:44:22,311
is requiring all assets to go up over time in a pretty steady manner in order to stay afloat and

546
00:44:22,311 --> 00:44:29,111
to keep functioning so if if we do get a 10k 15k even 20k bitcoin in some kind of

547
00:44:29,111 --> 00:44:35,511
crash, maybe like we saw with COVID, I think we'll see massive amounts of liquidity and,

548
00:44:35,511 --> 00:44:42,071
and which will lead to a melt up. And I think I think a melt up is far more likely in the next

549
00:44:42,071 --> 00:44:50,091
five to five, three to five years or so. And honestly, it's, it's more painful for the average

550
00:44:50,091 --> 00:44:54,731
person, you know, with a crash, at least everyone, you know, the people who have nothing still have

551
00:44:54,731 --> 00:45:02,371
nothing right with the melt up the the rich get richer and the uh the k-shaped economy widens and

552
00:45:02,371 --> 00:45:06,811
that's kind of the the mechanism that we've been seeing in our current inflationary system in which

553
00:45:06,811 --> 00:45:14,831
asset prices go up with inflation goods go up as well wages stagnate rich get richer and and the

554
00:45:14,831 --> 00:45:22,931
poor or the working class get left behind yeah 100 i think i think pretty much yeah the owning

555
00:45:22,931 --> 00:45:26,131
owning assets is pretty much going to be the only way that people are going to get ahead. And I

556
00:45:26,131 --> 00:45:30,211
honestly do think that if you use a real estate example, people that are waiting for a real estate

557
00:45:30,211 --> 00:45:33,371
crash, for instance, like you said, Jeff, do you still have your job? That's one thing they don't

558
00:45:33,371 --> 00:45:37,411
think about. Another thing they don't think about is while you're looking over here, waiting for

559
00:45:37,411 --> 00:45:41,291
this to fail, what other opportunities are you missing over here? AI has turned into a secular

560
00:45:41,291 --> 00:45:47,011
trade. Bitcoin has been a secular movement that's slowly becoming more and more

561
00:45:47,011 --> 00:45:52,531
ingrained into corporate and institutional structures. While you're waiting for everyone

562
00:45:52,531 --> 00:45:58,051
to fail to be able to point at them and say that i told you so you can very likely find yourself in

563
00:45:58,051 --> 00:46:03,571
a position in one three five years where everything asset prices have gone up even if we do see a

564
00:46:03,571 --> 00:46:12,451
massive correction or crash and you're still left holding nothing so i i it may be more of a

565
00:46:12,451 --> 00:46:17,571
beneficial use of time if people find ways to invest where they can or find ways to advance

566
00:46:17,571 --> 00:46:24,851
where they can because the government is not going to help you and we're kind of all being left on

567
00:46:24,851 --> 00:46:30,051
our own to figure things out and like group groups like this and groups other groups that exist online

568
00:46:30,051 --> 00:46:34,291
are kind of grassroots in that way where it's everyday individual people that are trying to

569
00:46:34,291 --> 00:46:38,211
figure figure this thing out as they go along which is what strategy is doing they're figuring

570
00:46:38,211 --> 00:46:42,531
this out as they go along which is why they've been bumps in the road but again some people just

571
00:46:42,531 --> 00:46:46,451
don't like it and we're going to see what's going to happen with it i think it's going to be

572
00:46:46,451 --> 00:46:52,491
be successful. I think that the USD reserve is a huge move. I think that they've given themselves

573
00:46:52,491 --> 00:46:59,011
an impressive runway for at least the next one to two years. And I think this is where things get

574
00:46:59,011 --> 00:47:03,951
really interesting, especially where bank custody comes into play, where the whole calculus of the

575
00:47:03,951 --> 00:47:10,591
entire system becomes different. I really think that strategies on the cusp of having, I'm not

576
00:47:10,591 --> 00:47:14,431
going to call it like a price breakout or anything like that, but hitting a point of steady state

577
00:47:14,431 --> 00:47:20,971
stability. Phase one was kind of announcing the Bitcoin treasury plan. I think phase two is the

578
00:47:20,971 --> 00:47:25,051
preferred. So what we're seeing right now, and I think phase three is going to be where things get

579
00:47:25,051 --> 00:47:32,351
really interesting. We're headed there. I've got to show the estimates because we actually have a

580
00:47:32,351 --> 00:47:41,091
race here and it's pretty close. So Adrian, you're right on the nose right now. If strategy doesn't

581
00:47:41,091 --> 00:47:46,651
purchase any more Bitcoin. You are the winner, the closest to the pin winner. 650,000 Bitcoin.

582
00:47:47,511 --> 00:47:58,711
Ironically, if they would have bought Bitcoin with $1.44 billion, they would have 665,000

583
00:47:58,711 --> 00:48:05,931
Bitcoin. So it's a fight. We'll see how many more Bitcoin are purchased in the next couple of weeks

584
00:48:05,931 --> 00:48:12,331
year leading up to the end of the year but um my my money's probably on ben uh getting getting a

585
00:48:12,331 --> 00:48:20,391
little bit closer on this one i think gladiator was too bullish yeah gladiator was very bullish

586
00:48:20,391 --> 00:48:25,571
uh i was very bullish myself well because god candles were loading and that's why he had a

587
00:48:25,571 --> 00:48:31,411
bigger number yeah doubled they were loaded and we were going to be able to instantly atm the

588
00:48:31,411 --> 00:48:38,191
stock every week that's what i was figuring i think i think all of our expectations for for

589
00:48:38,191 --> 00:48:44,551
what bitcoin was going to do and then hence strategy stock was was probably overextended

590
00:48:44,551 --> 00:48:51,051
at that point i think so right i think so yeah absolutely well this was yeah we did this on 1231

591
00:48:51,051 --> 00:48:57,451
and then they had 446 000 bitcoin at the time i mean that's pretty crazy like adrian being right

592
00:48:57,451 --> 00:49:03,171
on the nose at 650 and ben being on also also we had like we had like two minutes to calculate this

593
00:49:03,171 --> 00:49:09,651
like not we did yeah it was it was live on the show i think i think i think uh you know new year's

594
00:49:09,651 --> 00:49:14,651
everyone's going to start doing calculus from from from this point to try to get closest to

595
00:49:14,651 --> 00:49:23,991
10 for next year i might i might hold 888 for uh for 26 yeah be the bull for 26 okay the i want to

596
00:49:23,991 --> 00:49:30,351
show one more thing. We're coming up on 49 minutes here. So I pulled up, I had a listener send me some

597
00:49:30,351 --> 00:49:38,071
information on CET ratios, and I thought these are interesting. So these are like shock ratios.

598
00:49:38,071 --> 00:49:43,591
So the Federal Reserve sets each large US bank CET1 requirement at the sum of four and a half

599
00:49:43,591 --> 00:49:52,531
percent. So what I've pulled here from perplexity is current CET1 ratios on the largest banks in the

600
00:49:52,531 --> 00:49:59,191
world, TD Bank, Norda Bank, JP Morgan, Morgan Stanley, et cetera. And they have these CET

601
00:49:59,191 --> 00:50:07,471
ratios in around 15%, 16%. So large, too big to fail banks, large international banks have

602
00:50:07,471 --> 00:50:16,211
roughly 13% to 14% CET ratios. This is to show effectively how good your bank is at

603
00:50:16,211 --> 00:50:24,811
at weathering shocks in the system. So if you have a higher percentage here,

604
00:50:24,951 --> 00:50:29,931
that means you've got effectively more liquid assets. You are a safer entity if you have a

605
00:50:29,931 --> 00:50:35,771
higher percentage. That's why the Federal Reserve sets the large bank's ET requirement at four and

606
00:50:35,771 --> 00:50:42,571
a half percent. Now, what I wanted to do is back into like, you know, what if Basel gave credit

607
00:50:42,571 --> 00:50:46,711
for Bitcoin, what would that number need to be? What would the credit for Bitcoin need to be

608
00:50:46,711 --> 00:50:56,351
in order for strategy to have a similar CET1 ratio? Which is interesting. It's an interesting

609
00:50:56,351 --> 00:51:03,731
exercise. So a CET1 ratio, if you gave 26% credit for the Bitcoin on the balance sheet,

610
00:51:04,071 --> 00:51:10,371
so effectively the $60 billion worth of Bitcoin held on the balance sheet is worth $15.8 billion

611
00:51:10,371 --> 00:51:18,811
dollars from the solvency perspective, you'd have a CET1 ratio and the as-if basis of 7.2%.

612
00:51:18,811 --> 00:51:24,991
So you would be within the target that the Federal Reserve sets for large US banks.

613
00:51:25,731 --> 00:51:30,891
And this is including the USD Reserve of 1.4 billion. Without the USD Reserve of 1.4 billion,

614
00:51:30,891 --> 00:51:39,691
these metrics change quite a bit because the numerator and the denominator take into

615
00:51:39,691 --> 00:51:47,711
consideration your liquid like USD assets. So the numerator is common equity equals assets minus

616
00:51:47,711 --> 00:51:54,691
debt minus the preferred notional. So you get to a numerator of 1.2 billion here in this exercise.

617
00:51:54,691 --> 00:52:01,191
And the denominator is your Bitcoin on a markdown basis and then the USD reserve. So 17.3 billion.

618
00:52:01,671 --> 00:52:04,631
One thing that's really interesting here. So if you change this to 30%,

619
00:52:04,631 --> 00:52:10,871
percent, your CET1 ratio on an as if basis is 18.6%. So that would be better than any

620
00:52:11,751 --> 00:52:20,631
of the largest international banks on the planet. And it doesn't seem outlandish to give 30% credit

621
00:52:20,631 --> 00:52:25,991
for the Bitcoin on the balance sheet. So that's equivalent to saying, you know, in a shock scenario,

622
00:52:26,791 --> 00:52:31,911
would you be able to liquidate 650,000 Bitcoin for an average price of $28,000?

623
00:52:31,911 --> 00:52:38,151
I think we could comfortably say that would likely be the case.

624
00:52:39,311 --> 00:52:40,851
That would likely be the case.

625
00:52:41,231 --> 00:52:48,371
And Grant, what do they value your crypto assets, like any sort of MSTR or Bitcoin ad, when looking at your credit worthiness?

626
00:52:48,631 --> 00:52:51,071
When they looked at me, they valued it at 50%.

627
00:52:51,071 --> 00:52:56,491
And I think one of the parts that drives me nuts about this is that the Basel rules.

628
00:52:56,491 --> 00:53:05,591
So that is value that a bank needs to have 8%, and then they can do 12.5 to 1 leverage and lend out the rest.

629
00:53:05,991 --> 00:53:07,071
That's the Basel rules.

630
00:53:07,591 --> 00:53:12,791
And then Bitcoin has a volatility rate of 1,250%.

631
00:53:12,791 --> 00:53:14,491
So it makes it horrendous.

632
00:53:15,391 --> 00:53:18,931
You just really can't have on the balance sheet the way the Basel rules look at it.

633
00:53:18,931 --> 00:53:25,511
But the comical part about this is that in, I believe it was in 2020 or 2022, the Fed said

634
00:53:25,511 --> 00:53:32,011
U.S. banks can keep zero on their balance sheet and lend out everything, 100%.

635
00:53:32,591 --> 00:53:37,711
So Basel says 8%, which is 12.5 to 1 leverage.

636
00:53:38,591 --> 00:53:45,891
And guys, the reason why this is so hard for people to understand, strategy has 11% debt

637
00:53:45,891 --> 00:53:47,071
on their website.

638
00:53:47,071 --> 00:53:51,671
That means they have 89% total equity, right?

639
00:53:52,491 --> 00:53:54,771
Basel is the exact opposite.

640
00:53:55,091 --> 00:53:56,811
It's on MSDR.

641
00:53:58,511 --> 00:54:00,471
Yeah, net leverage is 11%.

642
00:54:00,471 --> 00:54:02,171
Strategy is the opposite.

643
00:54:02,311 --> 00:54:04,811
That means they have 89% that they're holding.

644
00:54:05,571 --> 00:54:10,551
That's the equity part of this, meaning after you strip away that debt,

645
00:54:10,671 --> 00:54:13,271
they're left with the remaining amount, which is 89%.

646
00:54:13,271 --> 00:54:15,731
But everybody else is the reverse.

647
00:54:15,731 --> 00:54:19,651
and Basel rules, you only need to have 8% of the good stuff.

648
00:54:19,951 --> 00:54:21,571
The rest of it could be thin air.

649
00:54:22,271 --> 00:54:25,411
And then people are like, oh, well, strategy is leveraged to the hilt.

650
00:54:25,591 --> 00:54:27,031
And I'm like, no, you're exact.

651
00:54:27,391 --> 00:54:28,791
The numbers are too close.

652
00:54:28,791 --> 00:54:31,991
So people think they're the same and they're not.

653
00:54:32,071 --> 00:54:33,311
I don't know how this doesn't get through.

654
00:54:33,411 --> 00:54:36,171
Oh, strategy's levered way up on this.

655
00:54:36,631 --> 00:54:37,451
No, he's not.

656
00:54:37,451 --> 00:54:41,191
If anything, he's the exact opposite of what the Basel rules are.

657
00:54:41,271 --> 00:54:43,671
I never heard of the set one rules are here,

658
00:54:43,671 --> 00:54:48,851
but this it we live in we're in backwards world because we have the good stuff and people are like

659
00:54:48,851 --> 00:54:53,031
oh i'm just going to call you a ponzi because i i don't have time to listen and figure out what's

660
00:54:53,031 --> 00:55:01,271
going on yeah yeah i mean absolutely it's yeah you see a lot of these like oh it shows you how

661
00:55:01,271 --> 00:55:06,051
fragile the structure is and you're like well actually the math is showing that they're probably

662
00:55:06,051 --> 00:55:11,611
one of the strongest companies on the planet like if you try to put them in a similar framework

663
00:55:11,611 --> 00:55:15,471
of any of these banks or any of these other institutions.

664
00:55:15,751 --> 00:55:16,891
And even just looking at this, right?

665
00:55:16,951 --> 00:55:20,931
Like TD Bank has a 16.6% CET ratio.

666
00:55:21,171 --> 00:55:24,311
So they have an S&P issuer credit rating of A.

667
00:55:26,431 --> 00:55:26,871
Right.

668
00:55:27,051 --> 00:55:29,611
And so one of the things that came back when I was researching,

669
00:55:29,611 --> 00:55:32,111
I just happened to be researching this yesterday

670
00:55:32,111 --> 00:55:36,571
because I was on a space and Joe Carlos rightfully called me out

671
00:55:36,571 --> 00:55:39,251
because on Basel rules, I said that Bitcoin is valued,

672
00:55:39,411 --> 00:55:41,331
effectively valued at zero.

673
00:55:41,331 --> 00:55:49,771
He's like, no, it isn't. It's a tier two asset and it's valued at 1,250% volatility. Well, in effect, you just can't have it.

674
00:55:49,771 --> 00:55:51,051
That's zero. That's zero.

675
00:55:51,471 --> 00:55:56,511
In effect, it's zero. But anyway, so when I was just looking at this-

676
00:55:56,511 --> 00:55:57,991
1,250% volatility.

677
00:55:58,151 --> 00:56:01,131
Right, volatility. And so therefore, no bank's going to have this.

678
00:56:01,251 --> 00:56:01,671
It's zero.

679
00:56:01,671 --> 00:56:08,171
I did some research on this and I was going to bring up some other point about this, but I was like, this is absurd.

680
00:56:08,171 --> 00:56:15,151
it's i don't know how we explain this to people anymore it's we tried everything you just got to

681
00:56:15,151 --> 00:56:21,271
do the math i well part of the problem for me is i'm just i think it's because of how bitcoin is

682
00:56:21,271 --> 00:56:26,051
so perceived we are coming at it from a perspective of individuals that believe that bitcoin is a

683
00:56:26,051 --> 00:56:29,271
pristine asset believe that it's going to be the future aspect of the world so on and so forth

684
00:56:29,271 --> 00:56:34,911
the world wasn't there yet so i i think with a lot of this it's not just an education thing

685
00:56:34,911 --> 00:56:40,371
of the perception thing. And as Bitcoin becomes more stable and it becomes more of the market cap

686
00:56:40,371 --> 00:56:47,091
grows and the price goes up and it becomes far more ingrained into market structures,

687
00:56:47,451 --> 00:56:52,791
that perception will change. I don't know if this is a matter of education. I think it's a matter of

688
00:56:52,791 --> 00:56:57,491
perception and what people think and feel around Bitcoin. So as the sentiment around Bitcoin changes,

689
00:56:57,491 --> 00:57:00,491
a lot of the challenges that we're seeing right now with a lot of the ways that it's valued and

690
00:57:00,491 --> 00:57:05,471
viewed will change as well. Adrian, I completely agree with that. And that's kind of the takeaway

691
00:57:05,471 --> 00:57:15,351
that I've been thinking about this past year, right? We saw Bitcoin go to 125. We saw BlackRock

692
00:57:15,351 --> 00:57:23,791
or that was last year, but BlackRock's largest source of revenue is the Bitcoin ETF. We're seeing

693
00:57:23,791 --> 00:57:34,151
pretty broad, I guess, beginning stages of acceptance of Bitcoin as a genuine asset.

694
00:57:34,151 --> 00:57:42,831
And I think it's going to take 10 years to really change the sentiment of the past 10 years.

695
00:57:43,371 --> 00:57:49,631
Think about how Bitcoin was reported on for the past 10 years, kind of the programming or the

696
00:57:49,631 --> 00:57:55,231
narratives that have been spread bad for the environment, volatile scams, all these coming

697
00:57:55,231 --> 00:58:02,711
from Jamie Dimon, Larry Fink, all these figures which are prominent and well-respected in the

698
00:58:02,711 --> 00:58:13,191
traditional finance realm. And I really think sentiment is a, you know, it's going to take a

699
00:58:13,191 --> 00:58:21,251
wild to to turn it around it's a tugboat or not a tugboat a uh it's like a cruise ship

700
00:58:21,251 --> 00:58:29,731
you know you know what guys you see i i don't think it gets fixed and and and i think i think

701
00:58:29,731 --> 00:58:33,451
i think what's going to happen here is you're going to have a group of people i've said this

702
00:58:33,451 --> 00:58:40,471
before if you like if you realize that you have to buy assets whether it's a house mag seven stocks

703
00:58:40,471 --> 00:58:41,711
Bitcoin

704
00:58:41,711 --> 00:58:43,631
Bitcoin treasury companies

705
00:58:43,631 --> 00:58:44,811
You buy that

706
00:58:44,811 --> 00:58:45,691
You have assets

707
00:58:45,691 --> 00:58:47,311
We believe in the debasement trade

708
00:58:47,311 --> 00:58:51,651
And the AI is a debasement of human capital

709
00:58:51,651 --> 00:58:53,451
Because a robot can do

710
00:58:53,451 --> 00:58:55,671
Is just as effective as 10 people

711
00:58:55,671 --> 00:58:57,571
And so what's going to happen is

712
00:58:57,571 --> 00:58:59,751
Is that the people that prepare themselves

713
00:58:59,751 --> 00:59:01,351
Will be in great shape

714
00:59:01,351 --> 00:59:03,551
And those people will love life

715
00:59:03,551 --> 00:59:04,491
And that'll be utopia

716
00:59:04,491 --> 00:59:06,091
And for the people that are like

717
00:59:06,091 --> 00:59:07,891
You know the rich just got richer

718
00:59:07,891 --> 00:59:09,691
And they just don't want to see this

719
00:59:09,691 --> 00:59:10,871
This is what I was going to say before.

720
00:59:11,351 --> 00:59:15,111
As soon as somebody says to me, I wish house prices would crash so I could buy a house.

721
00:59:15,731 --> 00:59:18,531
Well, the internet bubble basically burst in 2001.

722
00:59:18,651 --> 00:59:19,711
You could have bought a house then.

723
00:59:20,011 --> 00:59:21,951
Then there was a crash in 2009.

724
00:59:22,251 --> 00:59:25,691
You could have bought houses then because you had a great financial crisis.

725
00:59:25,911 --> 00:59:27,111
Nobody could sell their houses.

726
00:59:27,731 --> 00:59:30,911
And they had loan modifications.

727
00:59:31,571 --> 00:59:33,091
And you could go buy these houses.

728
00:59:33,451 --> 00:59:35,871
And you can get them out of bankruptcy and whatever.

729
00:59:36,151 --> 00:59:36,911
And so they had that.

730
00:59:36,991 --> 00:59:37,311
Go buy.

731
00:59:37,591 --> 00:59:38,431
Well, I guess you couldn't buy them.

732
00:59:38,431 --> 00:59:41,051
And then they're like, oh, well, we need to have a reset.

733
00:59:41,471 --> 00:59:45,151
Well, I think we had a reset in 2020 with low interest rates and people didn't.

734
00:59:45,491 --> 00:59:49,531
At that point, nobody was really moving because of COVID, but you had low interest rates.

735
00:59:49,611 --> 00:59:53,671
That was the prime time to buy a house because they printed the crap out of the money.

736
00:59:53,771 --> 00:59:56,051
You didn't want to wait till 2022 when inflation kicked in.

737
00:59:56,351 --> 00:59:56,711
Right.

738
00:59:56,971 --> 01:00:00,191
And then you had the inflation go in.

739
01:00:00,271 --> 01:00:02,211
So then, you know, when do you want to buy a house?

740
01:00:02,271 --> 01:00:04,071
It's like you had these three opportunities.

741
01:00:04,171 --> 01:00:05,251
You never jumped on it.

742
01:00:05,251 --> 01:00:08,671
So when I just hear that, I just immediately discount those people immediately.

743
01:00:09,131 --> 01:00:12,951
So I think you'll end up with two groups of people.

744
01:00:13,331 --> 01:00:16,071
People that did the homework, they did the work, they listened to a space,

745
01:00:16,471 --> 01:00:20,071
a bunch of people talking about artificial money, artificial intelligence.

746
01:00:20,611 --> 01:00:21,851
Those people love life.

747
01:00:21,951 --> 01:00:23,611
And every day they're like, wow, this is awesome.

748
01:00:23,891 --> 01:00:27,691
I can't wait to see what Bitcoin goes to or what chip NVIDIA comes out with.

749
01:00:28,331 --> 01:00:30,291
And those people will be like, this is great.

750
01:00:31,351 --> 01:00:33,331
Well, I think there's – so I would agree with that,

751
01:00:33,331 --> 01:00:35,971
but there's a little bit of nuance because I couldn't have bought a house in

752
01:00:35,971 --> 01:00:38,691
2000. I was a little bit young at the time.

753
01:00:39,431 --> 01:00:40,351
That's the problem.

754
01:00:41,691 --> 01:00:42,551
That's the problem.

755
01:00:43,091 --> 01:00:48,211
So I think there's a generational factor here, which is valid.

756
01:00:48,531 --> 01:00:53,091
So I think that you have a lot of, so I'm a millennial, you have the Zoomers,

757
01:00:53,091 --> 01:00:54,891
you have, you know, we are,

758
01:00:55,071 --> 01:01:00,791
I think we're the cohort that you hear a lot from that just doesn't like the

759
01:01:00,791 --> 01:01:01,471
way things are going,

760
01:01:01,471 --> 01:01:07,391
but you also have older individuals like Gen X and boomers that are saying the things that

761
01:01:07,391 --> 01:01:11,471
Gray is saying, right? But to Gray's point, they did have opportunities. The problem is they

762
01:01:11,471 --> 01:01:16,311
couldn't capitalize on opportunity then because they were not in position to do so. So now in

763
01:01:16,311 --> 01:01:19,691
their mind, they're just seeing it all over again for a whole different set of reasons.

764
01:01:20,591 --> 01:01:26,551
Because I think it's not fair to assume that it's just, you're not smart, you're not working

765
01:01:26,551 --> 01:01:35,071
hard you're not paying attention i i'm so it's the best let me let me clarify this so um so i

766
01:01:35,071 --> 01:01:40,591
totally get what you're saying about the generational cohorts what i'm saying is if if you're 25 years

767
01:01:40,591 --> 01:01:46,191
old this is not financial advice but if you're listening to this 25 years old then you probably

768
01:01:46,191 --> 01:01:51,171
think i want to buy a house in five years you know and you're going to 10 years whatever the number

769
01:01:51,171 --> 01:01:55,091
is right you want to start a family and do that not have to worry about paying rent and build equity

770
01:01:55,091 --> 01:01:58,611
have a place to live because you like the community, whatever it is, or the weather.

771
01:01:59,371 --> 01:02:03,431
And what happens is you have to invest your money in some form of assets. You can't do it just on

772
01:02:03,431 --> 01:02:07,951
your job alone. And so then how are you going to divide up those assets into those investments?

773
01:02:08,491 --> 01:02:12,531
And I think the two biggest trades right now are artificial intelligence and artificial money.

774
01:02:13,111 --> 01:02:17,491
And so from there, where do you want to be in five or 10 years? Well, I think that I would

775
01:02:17,491 --> 01:02:24,471
probably want to invest in those mag seven companies or strategy or Bitcoin. And that

776
01:02:24,471 --> 01:02:29,871
will get you to buying a house down the road. If you don't want to buy a house, don't buy one.

777
01:02:30,091 --> 01:02:35,951
Great. Where's the money going to come? I'm not trying to make excuses for people. I'm just

778
01:02:35,951 --> 01:02:39,411
trying to get perspective. Where's the money going to come from? College tuition is out of control,

779
01:02:39,411 --> 01:02:44,871
and it has been for about a decade. If you are a person that was not born into an upper middle

780
01:02:44,871 --> 01:02:49,771
class family and you had to take our student loans, like I did, are you going to be someone

781
01:02:49,771 --> 01:02:53,851
that's going to work four jobs like I did? Because I've been everything from a bouncer at a bar,

782
01:02:54,471 --> 01:03:00,071
to a janitor, to a security guard, while working as an analyst. Not everyone is cut out for that

783
01:03:00,071 --> 01:03:03,591
because there's a reason why I don't have children right now. There's a reason why I'm

784
01:03:03,591 --> 01:03:08,951
not married right now. There's cost benefits to everything. So the reality of it is that it's not

785
01:03:08,951 --> 01:03:14,951
just about making the investment. It's about being positioned to do so and doing what you need to do

786
01:03:14,951 --> 01:03:19,971
to position yourself. And that requires a lot of sacrifice for a lot of people. So for many people,

787
01:03:19,971 --> 01:03:24,651
depending on how they were raised. Family is important. They want to have family. They want

788
01:03:24,651 --> 01:03:28,651
to have a house. They want to have all this other stuff. So they focus on that. They have a job,

789
01:03:28,651 --> 01:03:33,831
but they're not focused on it in the sense of this job is going to be what I do to pay the bills.

790
01:03:33,931 --> 01:03:37,611
I'm going to have another job to make investments. Then I'm going to have another job to make sure

791
01:03:37,611 --> 01:03:43,091
that I have something for a rainy day. Everything is a cost-benefit analysis in life. And not

792
01:03:43,091 --> 01:03:48,931
everyone is positioned to make the same cost-benefit analyses. So what you're saying is valid. I'm not

793
01:03:48,931 --> 01:03:54,171
saying that it's not, but what I'm trying to put across is as someone that deals with individuals

794
01:03:54,171 --> 01:03:59,931
that are much younger than me on a daily basis, I'm still hearing the same story from all these

795
01:03:59,931 --> 01:04:05,491
younger developers. They went to college, but they have tons and tons of debt. They're making

796
01:04:05,491 --> 01:04:14,191
150 grand a year, but they still can't pay their student loans. I'll say one thing. So look,

797
01:04:14,191 --> 01:04:22,611
my net worth was zero at age 33. In 2000, I'm 58. I guess the math works out. So in 2000,

798
01:04:22,671 --> 01:04:27,991
I got to Silicon Valley, my net worth was zero. And so, and I did not get married until I was

799
01:04:27,991 --> 01:04:34,531
37 years old. So what happened is I did exactly what you just said there. It was miserable. I

800
01:04:34,531 --> 01:04:39,051
lived in a crappy apartment, a one bedroom apartment that I was able to go to work for it.

801
01:04:39,151 --> 01:04:43,471
And what did I do when I got the first great job during, you know, right after it started in the

802
01:04:43,471 --> 01:04:49,531
internet bubble in in in 1997 and when once I did that I was able to build up

803
01:04:49,531 --> 01:04:53,251
and save money and get ahead and I did not get married and not get kids and I

804
01:04:53,251 --> 01:05:00,471
did not own a house I did not own a house until 2005 so I was already like

805
01:05:00,471 --> 01:05:03,871
35 years old before I bought my first house I did not get my first house from

806
01:05:03,871 --> 01:05:07,951
I was at 25 years old that did not happen so I worked my ass off for 10

807
01:05:07,951 --> 01:05:15,511
years and and to be honest with you you know given that i my you know it's kind of weird because

808
01:05:15,511 --> 01:05:21,451
at that point i was like i just had to do it there was there was that's just the way it was

809
01:05:21,451 --> 01:05:26,411
that but that works for you that works for me but what i'm trying to say is for a lot of people

810
01:05:26,411 --> 01:05:35,271
for most people that that decision is not as straightforward i totally agree yeah so it's

811
01:05:35,271 --> 01:05:40,791
really hard there's a lot that goes into it and i think that a lot of this is the fact that we've

812
01:05:40,791 --> 01:05:45,911
been kind of we're kind of living in a reality where like grain just pointed out the world is

813
01:05:45,911 --> 01:05:51,431
shifting but the narrative is not shifting with it and what's happening right now is that we're

814
01:05:51,431 --> 01:05:56,471
there's a wide disconnect between what people are being told is reality what actually is happening

815
01:05:56,471 --> 01:06:02,551
ai is happening bitcoin is happening yeah and to us it makes sense because we're in it but what

816
01:06:02,551 --> 01:06:15,286
I trying to tell you is that there are a lot of people that I know that are highly intelligent highly educated should know this that are completely blind to it It the millennials dilemma You see you got all of

817
01:06:15,286 --> 01:06:23,646
these millennials now are approaching their highest earning years in their life, right? They're like

818
01:06:23,646 --> 01:06:28,447
like mid-30s, early 40s,

819
01:06:29,086 --> 01:06:31,546
and they're coming up to the point of,

820
01:06:31,867 --> 01:06:34,346
what do I do with my money?

821
01:06:35,266 --> 01:06:36,286
Like I'm making money.

822
01:06:37,226 --> 01:06:38,506
And while I'm making money,

823
01:06:38,566 --> 01:06:40,186
I can't buy a house because I can't afford it.

824
01:06:42,626 --> 01:06:44,646
Okay, so if I can't buy a house,

825
01:06:44,646 --> 01:06:46,387
I need to put my money somewhere else.

826
01:06:46,447 --> 01:06:47,246
I can't hold cash.

827
01:06:47,466 --> 01:06:48,806
That's just clearly not working.

828
01:06:48,867 --> 01:06:50,286
I'm not making money fast enough.

829
01:06:50,746 --> 01:06:51,907
So I got to go put it somewhere else.

830
01:06:51,907 --> 01:07:00,186
And it's like, all right, well, maybe I had my, my, you know, all my money in the S&P 500 over the last decade.

831
01:07:00,186 --> 01:07:08,606
And that's not going anywhere. I like don't feel any richer, like $250,000 in your, you know, 401k at age 35.

832
01:07:08,606 --> 01:07:13,606
Like that's still just not that much money anymore. All right. So then, okay, what do I do?

833
01:07:13,947 --> 01:07:20,266
Do I go buy Mag 7? You know, like, well, these are already the most valuable companies in the entire market.

834
01:07:20,266 --> 01:07:21,367
This seems kind of risky.

835
01:07:21,506 --> 01:07:24,706
Like, I wish I could have bought Apple when I was born, but I can't.

836
01:07:25,026 --> 01:07:27,447
Like, I can't go back and buy Apple.

837
01:07:27,646 --> 01:07:32,186
So, all right, now, like, I'm not going to buy bonds because those are for boomers.

838
01:07:32,326 --> 01:07:33,326
Like, those look horrible.

839
01:07:33,746 --> 01:07:36,546
Like, that's underperforming the S&P 500.

840
01:07:37,246 --> 01:07:40,606
And then you look at, like, AI.

841
01:07:40,806 --> 01:07:42,466
Okay, AI looks really interesting.

842
01:07:42,626 --> 01:07:43,666
Bitcoin looks really interesting.

843
01:07:43,766 --> 01:07:45,166
It's like, it's what's left.

844
01:07:45,166 --> 01:07:52,486
and the people that are leaning into AI and using AI and learning from AI very quickly are going to

845
01:07:52,486 --> 01:07:58,867
succeed here because they can use math very quickly. Like if you go talk to most people,

846
01:07:58,867 --> 01:08:02,326
most people, grain, like you live in Silicon Valley, you're at the front end. You like,

847
01:08:02,427 --> 01:08:06,266
you know what's going on AI, but like my father-in-law came over for Thanksgiving and he's

848
01:08:06,266 --> 01:08:14,446
like, he's not using any LLMs. Like he's getting to retirement and like, I'm like,

849
01:08:14,446 --> 01:08:20,106
oh just throw it in chat gpt he's like no he's like i haven't so so people that are using this

850
01:08:20,106 --> 01:08:27,386
stuff are going to run circles around everybody else that's not yeah jeff like that and that's

851
01:08:27,386 --> 01:08:32,026
what i'm saying like for me i love it it's working to my my advantage right now because i have

852
01:08:32,026 --> 01:08:40,006
tripled my output and sorry to cut you off mason but that's that's the thing in the past

853
01:08:40,006 --> 01:08:44,646
socioeconomic power was cascading at the top. And now I think what's going on is that it's

854
01:08:44,646 --> 01:08:50,366
productive power that's cascading at the top as well with AI. And so it's creating a different

855
01:08:50,366 --> 01:08:56,526
kind of bifurcation in the market. And what you just said is very, very true because there's

856
01:08:56,526 --> 01:09:02,386
several very successful individuals that are executives that I have to report to, give reports

857
01:09:02,386 --> 01:09:08,767
to, give project plans to, so on and so forth. They don't use LLMs, but they're making a half

858
01:09:08,767 --> 01:09:09,627
million dollars a year.

859
01:09:11,127 --> 01:09:12,727
They're going to get

860
01:09:12,727 --> 01:09:14,667
they're going to run into a wall here

861
01:09:14,667 --> 01:09:16,667
pretty hard in the next two years, I think.

862
01:09:17,287 --> 01:09:18,866
And that's going to be very, very

863
01:09:18,866 --> 01:09:20,866
disruptive. And then what happens?

864
01:09:21,846 --> 01:09:22,627
It's great for me.

865
01:09:22,866 --> 01:09:24,807
I'm going to land on my feet because I've been

866
01:09:24,807 --> 01:09:26,966
neck deep in this since Chad GBT came out.

867
01:09:27,287 --> 01:09:27,386
But

868
01:09:27,386 --> 01:09:30,627
just like Green said, he works.

869
01:09:30,627 --> 01:09:32,886
He didn't buy a house.

870
01:09:32,986 --> 01:09:34,707
He didn't have kids. He didn't get married. He did all

871
01:09:34,707 --> 01:09:36,886
that stuff. Okay, that's great. But that's us.

872
01:09:37,707 --> 01:09:37,966
Wait a second.

873
01:09:37,966 --> 01:09:39,406
Wait, I did get married.

874
01:09:39,606 --> 01:09:40,406
I did all that.

875
01:09:40,406 --> 01:09:40,787
No, I know.

876
01:09:42,287 --> 01:09:44,086
I'm talking about when you were coming up, right?

877
01:09:44,287 --> 01:09:45,926
So you delayed things a little bit.

878
01:09:46,366 --> 01:09:53,747
But so it's just very, very strange for me to see that this is kind of affecting everything across all socioeconomic groups.

879
01:09:54,627 --> 01:09:56,826
You have people that are very successful that don't know what's coming.

880
01:09:57,066 --> 01:09:59,886
You have people that are trying to make it that don't know what's coming.

881
01:10:00,646 --> 01:10:03,446
And it's not just Bitcoin anymore.

882
01:10:03,546 --> 01:10:04,326
It's also AI.

883
01:10:04,506 --> 01:10:05,526
And they're kind of converging.

884
01:10:05,526 --> 01:10:07,747
And it's going to be really interesting to see.

885
01:10:07,966 --> 01:10:14,886
not in a good way but yeah first first off green i i know you're not a boomer green you're not a

886
01:10:14,886 --> 01:10:20,406
boomer and uh i did not refer to you as a boomer second i'm gonna pass the mic over to mason

887
01:10:20,406 --> 01:10:26,207
because he's been trying to jump in there let's mason give us some wisdom yeah i i mean i think

888
01:10:26,207 --> 01:10:31,366
what we're talking about is the money's fundamentally broken right people feel like

889
01:10:31,366 --> 01:10:37,566
they're they're falling behind because their time and energy their money you know their time and

890
01:10:37,566 --> 01:10:41,326
energy in an abstracted form is literally being siphoned away from them.

891
01:10:41,326 --> 01:10:45,787
And that's what Bitcoin fixes is that instead of, yeah,

892
01:10:45,986 --> 01:10:50,446
instead of, instead of having to research, you know,

893
01:10:50,526 --> 01:10:53,946
instead of your father-in-law having to research AI stocks with,

894
01:10:53,946 --> 01:10:58,526
with chat GVT or Grog or Gemini, like the,

895
01:10:58,526 --> 01:11:02,066
the layman doesn't want to do that. And, and that's what,

896
01:11:02,167 --> 01:11:03,506
that's what Bitcoin provides.

897
01:11:03,506 --> 01:11:09,366
It's a long-term viable solution for everyone's problem, which is how do you keep your money?

898
01:11:10,366 --> 01:11:12,727
And it's long-term in that it's sustainable.

899
01:11:13,026 --> 01:11:15,167
You can do it for 50 years.

900
01:11:15,207 --> 01:11:16,386
You can do it for 100 years.

901
01:11:16,627 --> 01:11:24,106
You buy Bitcoin and you hold it and you either sell it or you spend it when you need that capital in the future.

902
01:11:24,106 --> 01:11:37,127
And I think what strategy represents is a bridge between what people maybe are not necessarily comfortable with holding Bitcoin.

903
01:11:37,267 --> 01:11:38,247
That's what the preferreds are.

904
01:11:38,707 --> 01:11:44,727
And then what the common is to me is investing in a Bitcoin-denominated world, right?

905
01:11:45,006 --> 01:11:50,006
I think we are investors who have a framework, which Bitcoin is the hurdle rate.

906
01:11:50,207 --> 01:11:53,247
And in my mind, there's only two ways to do that.

907
01:11:53,247 --> 01:12:19,526
It's either invested in treasury companies, which are doing this essentially arbitrage, short fiat, long Bitcoin, or it's some version of Bitcoin venture capital, which you are investing in businesses that are building out the infrastructure of Bitcoin and are accumulating Bitcoin.

908
01:12:19,526 --> 01:12:38,646
So their Bitcoin per share or their Bitcoin stack is growing. And other than that, I don't know how you outperform in a sustainable way. I see a lot of people trading. I think they'll get repped. And yeah, that's why I'm a Bitcoin advocate.

909
01:12:38,646 --> 01:12:43,127
it i think i think one of the really interesting things about bitcoin and strategy and these

910
01:12:43,127 --> 01:12:50,807
bitcoin equities is this is the first time ever myself like trading in the equity market where i

911
01:12:50,807 --> 01:12:57,046
felt like doing the math has given me alpha like you can't do the math on like how many chips nvidia

912
01:12:57,046 --> 01:13:03,207
is going to sell you hope right like you take a structural bet on like how society is shifting

913
01:13:03,207 --> 01:13:06,426
and moving and like how Tesla, how many cars is Tesla going to sell?

914
01:13:07,046 --> 01:13:07,167
Right.

915
01:13:07,167 --> 01:13:12,586
Like, you know, you've got all these metrics that will tell you pretty much nothing because

916
01:13:12,586 --> 01:13:15,826
you can't compare anything to the, any, anything else in the rest of the market.

917
01:13:15,826 --> 01:13:20,127
So you've got like all of these things that, you know, people say that they use for relativities

918
01:13:20,127 --> 01:13:21,227
in different sectors and stuff.

919
01:13:21,346 --> 01:13:27,446
But like at the end of the day, the, the alpha here is that if you do the math on this stuff,

920
01:13:27,486 --> 01:13:31,966
if you do the math on Bitcoin, right, Bitcoin is a math problem, right?

921
01:13:31,966 --> 01:13:37,767
like itself like bitcoin is math money it's physics money and it's a it's a relativity you

922
01:13:37,767 --> 01:13:44,106
think of like the relative the the relative size of like the population and how many there are

923
01:13:44,106 --> 01:13:50,926
and you take you take uh assumptions on probability curves of adoption and all of these things and you

924
01:13:50,926 --> 01:13:58,426
can actually run this math and front run it but you can't do that in really anything else so

925
01:13:58,426 --> 01:14:01,486
it's been really appealing to me from that perspective.

926
01:14:02,426 --> 01:14:06,986
So I want to say, this is going to sound a little bit off, but it'll make sense. And I'll get to the

927
01:14:06,986 --> 01:14:13,787
point real fast. I was meeting Tim a few years ago in New York to do some, we were meeting various

928
01:14:13,787 --> 01:14:19,846
people in New York, Bitcoin related, this is five years ago. And so he had an office in the Freedom

929
01:14:19,846 --> 01:14:24,707
Tower on whatever, the 80th floor is like this hoteling thing. So I get there and I said,

930
01:14:24,707 --> 01:14:30,207
I said, oh, we're going to meet with some clients there. And I said, hey, we need a room with a

931
01:14:30,207 --> 01:14:34,627
whiteboard. And the woman looked at me. She's like, what is this, like kindergarten? I'm like,

932
01:14:34,986 --> 01:14:39,586
no, there's like a whiteboard. And we had these dry erase markers in different color.

933
01:14:39,727 --> 01:14:46,546
And she goes, we don't have that at all. And I'm like, oh, I'm like, okay. She goes,

934
01:14:46,586 --> 01:14:53,046
we can get you an easel with like this flip paper on it. I'm like, okay, this is four years ago.

935
01:14:53,046 --> 01:14:54,506
This is not in the Freedom Tower.

936
01:14:54,646 --> 01:14:58,546
This is the tier A on 85th floor, whatever it is, a phenomenal view.

937
01:14:59,146 --> 01:15:05,526
In Silicon Valley, when you go for an interview, when you get through that stage, we have these whiteboards in all of these rooms.

938
01:15:05,606 --> 01:15:10,606
You go in there and you're talking to somebody and you're like, great, I read your resume.

939
01:15:11,186 --> 01:15:21,906
I want you to go over there on the whiteboard and diagram the packet walkthrough or the logical throughput of what this design is because then I know how you think.

940
01:15:21,906 --> 01:15:24,326
I want you to draw and go diagram it on the whiteboard.

941
01:15:24,646 --> 01:15:25,086
That's it.

942
01:15:25,146 --> 01:15:25,646
Right there.

943
01:15:25,727 --> 01:15:26,167
Go do it.

944
01:15:26,606 --> 01:15:27,426
I'll shut up.

945
01:15:27,787 --> 01:15:28,347
Go do it.

946
01:15:28,686 --> 01:15:33,486
And it's amazing that in Silicon Valley, I will tell you that you'll typically get, because

947
01:15:33,486 --> 01:15:37,866
before they come in for the in-person interview, pretty much you can weed out those people.

948
01:15:37,986 --> 01:15:39,866
Usually 75% of the people are able to do that.

949
01:15:40,267 --> 01:15:44,506
If I had to do that anywhere else except for Silicon Valley, I would think that 98% of

950
01:15:44,506 --> 01:15:45,227
the people would fail.

951
01:15:45,627 --> 01:15:50,446
And so what you just said, Jeff, is create an Excel spreadsheet, create a yield curve,

952
01:15:50,446 --> 01:15:51,466
create all this stuff.

953
01:15:51,906 --> 01:15:53,906
The amount of people that can do that is like this big.

954
01:15:54,866 --> 01:15:57,506
And in Silicon Valley, you just go draw this all out.

955
01:15:57,646 --> 01:15:59,446
And this is how the business model is going to flow.

956
01:15:59,526 --> 01:16:00,986
And this is where our customers are, our TAMs.

957
01:16:01,127 --> 01:16:02,767
And we're able to draw this.

958
01:16:03,167 --> 01:16:06,326
So I think that's my takeaway is that as soon as you ask people to do this,

959
01:16:06,386 --> 01:16:09,807
and they don't teach that skill in school from what I can tell.

960
01:16:11,146 --> 01:16:13,106
Yeah, math is in short supply.

961
01:16:13,287 --> 01:16:14,526
Math is in short supply.

962
01:16:15,366 --> 01:16:15,906
Well, it's math.

963
01:16:16,006 --> 01:16:17,446
It's just this thinking process.

964
01:16:17,627 --> 01:16:20,807
And I don't, you know, it's one of those things that I just don't know

965
01:16:20,807 --> 01:16:25,526
the people that are teaching and mason congratulations to you you've done exactly

966
01:16:25,526 --> 01:16:30,006
and the same thing with dan and jeff you guys the younger guys adrian you're a little bit older than

967
01:16:30,006 --> 01:16:36,566
right so um you guys have you you jumped on an industry for me i jumped on the internet bubble

968
01:16:36,566 --> 01:16:41,767
in the 90s from that was the fastest growing industry in the 90s but he said to me goes i

969
01:16:41,767 --> 01:16:46,886
don't know what the internet is go figure it out still friends with him to this day very successful

970
01:16:46,886 --> 01:16:54,247
lawyer. That's what he said to me in 1998. And I was like, the internet, that's for downloading

971
01:16:54,247 --> 01:17:01,686
whatever. And anyway, so for me, that's what I did. But you guys embraced it. Jeff, you got a

972
01:17:01,686 --> 01:17:06,227
job in this. And this is where we are today. And that was the fastest growing space, right?

973
01:17:06,546 --> 01:17:09,707
Yeah, it's fastest growing. And it will be the fastest growing space for a while.

974
01:17:10,366 --> 01:17:13,807
It was. And by the way, for the old timers, if they don't know this,

975
01:17:13,807 --> 01:17:19,767
Apple almost went out of business. Microsoft bailed out Apple. And in reverse, why would

976
01:17:19,767 --> 01:17:25,787
Microsoft bail out Apple? Microsoft bailed out Apple. This is a decade before the iPhone,

977
01:17:25,986 --> 01:17:30,167
because if Apple would have went out of business, the thought process was the US government would

978
01:17:30,167 --> 01:17:35,747
have broken up Microsoft because it would have a monopoly, even though it has a default monopoly on

979
01:17:35,747 --> 01:17:41,586
just enterprise software. So Microsoft bailed out Apple. And then a decade later, Apple came out

980
01:17:41,586 --> 01:17:43,026
with the iPhone, right?

981
01:17:43,106 --> 01:17:43,646
So you have to think,

982
01:17:43,727 --> 01:17:45,046
and Steve Jobs left Apple.

983
01:17:45,127 --> 01:17:45,986
You should watch the movies

984
01:17:45,986 --> 01:17:47,586
on what happened back in the old days.

985
01:17:47,966 --> 01:17:50,167
Everything changed after the iPhone came out.

986
01:17:50,326 --> 01:17:52,466
And you guys are living in that generation now.

987
01:17:52,566 --> 01:17:54,546
It's not the access to information.

988
01:17:54,986 --> 01:17:56,366
It's the ability to figure out

989
01:17:56,366 --> 01:17:57,326
what am I going to do with it?

990
01:17:59,127 --> 01:17:59,486
Bingo.

991
01:17:59,646 --> 01:18:00,307
I'll go on mute now.

992
01:18:01,227 --> 01:18:01,506
All right.

993
01:18:01,546 --> 01:18:02,787
Well, we're on hour 18.

994
01:18:03,066 --> 01:18:04,747
I got to pack.

995
01:18:04,826 --> 01:18:06,066
I'm going to Abu Dhabi tomorrow.

996
01:18:06,307 --> 01:18:07,966
So at the ass crack of dawn,

997
01:18:08,046 --> 01:18:09,727
I got a 24 hour day of flying,

998
01:18:09,847 --> 01:18:10,566
which is crazy.

999
01:18:11,586 --> 01:18:17,347
But I guess maybe final thoughts, I'm going to throw this out there and you guys can react to it as well.

1000
01:18:18,127 --> 01:18:28,646
Vanguard's now allowing Bitcoin and crypto, which is crazy, Bitcoin and crypto ETFs to be traded on their platform.

1001
01:18:29,646 --> 01:18:31,026
That started on Monday.

1002
01:18:31,026 --> 01:18:35,727
We've also seen the price of Bitcoin rise, which is pretty interesting, interesting timing.

1003
01:18:35,727 --> 01:18:44,646
and MSCI. I think there's going to be a time and place to make some noise about this. It looks like

1004
01:18:44,646 --> 01:18:52,146
Sailor is going to be in conversation with MSCI here soon. And I encourage everybody to make some

1005
01:18:52,146 --> 01:18:57,566
noise as we get into the end of the year on this MSCI topic. I think there will be some publications

1006
01:18:57,566 --> 01:18:58,707
that we can rally behind.

1007
01:18:59,466 --> 01:19:08,826
And it will be a good topic to put pressure on, you know, Senate and House members and

1008
01:19:08,826 --> 01:19:13,506
political members and any pressure that we can apply through this group would be great

1009
01:19:13,506 --> 01:19:13,847
as well.

1010
01:19:14,267 --> 01:19:16,086
So that's kind of my final thought.

1011
01:19:16,326 --> 01:19:18,826
And I'll pass it over to, let's say, Adrian.

1012
01:19:19,106 --> 01:19:19,526
Final thoughts.

1013
01:19:20,826 --> 01:19:21,207
Yeah.

1014
01:19:21,326 --> 01:19:25,307
So with Vanguard, I mean, sooner or later, they all bend the knee.

1015
01:19:25,426 --> 01:19:27,446
So that was going to happen.

1016
01:19:27,566 --> 01:19:28,866
at one point or another.

1017
01:19:29,307 --> 01:19:32,506
With MSCI, I got into Yahoo Finance,

1018
01:19:33,106 --> 01:19:34,686
and you and I got into Bitcoin Magazine

1019
01:19:34,686 --> 01:19:35,926
on our thoughts around MSCI.

1020
01:19:36,227 --> 01:19:37,267
So I think that you're right

1021
01:19:37,267 --> 01:19:40,046
that we can apply a lot of pressure with that

1022
01:19:40,046 --> 01:19:42,247
because their rationale doesn't really make any sense.

1023
01:19:42,386 --> 01:19:44,307
It's clearly punitive, it's clearly retroactive,

1024
01:19:44,426 --> 01:19:47,006
and it's clearly a discretionary,

1025
01:19:47,347 --> 01:19:49,526
well, what I call part of a hit job on MSCI.

1026
01:19:49,767 --> 01:19:51,366
So I think that that's going to be

1027
01:19:51,366 --> 01:19:53,086
a very interesting conversation coming up

1028
01:19:53,086 --> 01:19:55,287
in the next coming weeks

1029
01:19:55,287 --> 01:20:00,227
because they included strategy without issue in May 2024.

1030
01:20:00,686 --> 01:20:06,506
Now, magically, JP Morgan is rattling the saber about delisting

1031
01:20:06,506 --> 01:20:09,807
and MSCI is coming around to it, which just doesn't make any sense,

1032
01:20:10,106 --> 01:20:16,046
especially when you look into the fact of what is the impetus, really,

1033
01:20:16,207 --> 01:20:18,506
when strategy trades over a trillion dollars a year

1034
01:20:18,506 --> 01:20:21,847
and with all the other ETFs and associated products

1035
01:20:21,847 --> 01:20:23,686
We're at over close to 1.4 trillion.

1036
01:20:24,826 --> 01:20:25,866
It's not a fund.

1037
01:20:25,966 --> 01:20:27,006
It doesn't operate like a fund.

1038
01:20:27,146 --> 01:20:30,326
I think that that is a very, very nebulous stance to take, especially when you already

1039
01:20:30,326 --> 01:20:32,686
included them and they've been in for almost a year already.

1040
01:20:32,886 --> 01:20:35,086
So I'm interested to see where that goes.

1041
01:20:36,146 --> 01:20:39,926
Insurance companies are operating companies and they are structured finance companies.

1042
01:20:40,106 --> 01:20:41,386
That is quite literally what they do.

1043
01:20:41,446 --> 01:20:44,546
They do structured finance and they're considered operating companies.

1044
01:20:45,227 --> 01:20:51,826
If you were to replace real estate with Bitcoin and say, oh, we're not going to do this.

1045
01:20:51,826 --> 01:20:54,667
going to include companies with real estate assets greater than 50%.

1046
01:20:54,667 --> 01:20:56,807
That would just be an absolutely ludicrous statement.

1047
01:20:57,686 --> 01:20:59,566
So the fact that you say you can't, like,

1048
01:20:59,627 --> 01:21:03,847
you're just picking digital assets or you're picking Bitcoin at $2 trillion

1049
01:21:03,847 --> 01:21:04,727
asset.

1050
01:21:05,366 --> 01:21:08,426
Especially after you already included them without any fanfare.

1051
01:21:08,826 --> 01:21:10,906
You just included them.

1052
01:21:11,167 --> 01:21:13,227
Because we even talked about this last year.

1053
01:21:13,287 --> 01:21:16,207
I did the article on it with the Russell 1000 and all that stuff.

1054
01:21:16,207 --> 01:21:18,707
We went through what the weighting could look like and all that stuff.

1055
01:21:19,406 --> 01:21:21,807
And now all of a sudden they're talking about delisting it.

1056
01:21:21,826 --> 01:21:24,386
because digital asset, it just doesn't make any sense.

1057
01:21:24,966 --> 01:21:27,946
It's like they let the Trojan horse in the gate,

1058
01:21:28,426 --> 01:21:30,146
and now they're starting to realize it,

1059
01:21:30,146 --> 01:21:31,446
and they're like, oh, shit, oh, shit.

1060
01:21:32,046 --> 01:21:33,506
Well, that's what happened.

1061
01:21:33,847 --> 01:21:37,586
The timeline is, like, MetaPlanet announced their big buy,

1062
01:21:37,727 --> 01:21:39,486
and that's when MSCI put out the first notice.

1063
01:21:39,946 --> 01:21:41,727
And then everything kind of just cascaded from there.

1064
01:21:41,826 --> 01:21:42,747
I think Mason's right.

1065
01:21:42,826 --> 01:21:45,227
They realized what they kind of opened the door to,

1066
01:21:45,707 --> 01:21:47,347
and now they're starting to say, oh.

1067
01:21:49,046 --> 01:21:51,526
They should just make a whole new index,

1068
01:21:51,526 --> 01:21:52,247
is what they should do.

1069
01:21:52,747 --> 01:21:53,287
Yeah, they should.

1070
01:21:53,707 --> 01:21:54,127
They should.

1071
01:21:54,526 --> 01:21:57,847
They should do MSCI X digital assets.

1072
01:21:58,986 --> 01:21:59,227
Sure.

1073
01:21:59,826 --> 01:22:00,227
Yeah.

1074
01:22:00,326 --> 01:22:01,526
If you want to buy that

1075
01:22:01,526 --> 01:22:02,886
and not make it,

1076
01:22:02,966 --> 01:22:03,966
you want to underperform

1077
01:22:03,966 --> 01:22:04,886
the rest of the world,

1078
01:22:05,146 --> 01:22:06,026
go for it.

1079
01:22:06,307 --> 01:22:07,546
Go for it, right?

1080
01:22:07,667 --> 01:22:08,667
Like right on.

1081
01:22:08,847 --> 01:22:09,667
Okay, over to you, Dan.

1082
01:22:09,727 --> 01:22:10,207
Final thoughts.

1083
01:22:12,006 --> 01:22:13,046
I think the next year

1084
01:22:13,046 --> 01:22:14,146
is going to be really, really interesting.

1085
01:22:14,326 --> 01:22:15,066
You got Larry Fink

1086
01:22:15,066 --> 01:22:17,847
pumping this narrative

1087
01:22:17,847 --> 01:22:20,066
that tokenization of assets

1088
01:22:20,066 --> 01:22:24,347
is like the internet circa 1996.

1089
01:22:25,046 --> 01:22:29,526
So it's going to be interesting to see how Bitcoin as the money

1090
01:22:29,526 --> 01:22:36,026
and the actual energy currency fits into whatever these boys concoct

1091
01:22:36,026 --> 01:22:39,026
in terms of tokenized assets over the next year.

1092
01:22:39,127 --> 01:22:40,866
So I'm really curious to see how that goes out.

1093
01:22:41,366 --> 01:22:43,847
Yeah, I saw that picture with Brian Armstrong.

1094
01:22:44,167 --> 01:22:45,386
That was interesting.

1095
01:22:46,847 --> 01:22:49,747
Yeah, I think people need to remember Bitcoin's the digital money.

1096
01:22:50,066 --> 01:22:51,627
everything else is something else.

1097
01:22:52,767 --> 01:22:52,926
Yeah.

1098
01:22:53,466 --> 01:22:53,906
Bingo.

1099
01:22:54,707 --> 01:22:55,006
All right.

1100
01:22:55,026 --> 01:22:55,546
Over to Mason.

1101
01:22:57,926 --> 01:23:03,167
My first point is this is the most bullish I've heard Dan Hillary on,

1102
01:23:03,207 --> 01:23:03,926
on MSTR.

1103
01:23:04,227 --> 01:23:04,566
And maybe,

1104
01:23:05,307 --> 01:23:05,946
I don't know,

1105
01:23:05,986 --> 01:23:06,146
Dan,

1106
01:23:06,227 --> 01:23:06,566
how many,

1107
01:23:06,606 --> 01:23:07,707
how many months has it been?

1108
01:23:07,707 --> 01:23:07,826
I mean,

1109
01:23:07,906 --> 01:23:08,866
last time I was bullish,

1110
01:23:08,926 --> 01:23:11,667
it was $110 a share and it went to 500.

1111
01:23:12,247 --> 01:23:12,686
Yeah.

1112
01:23:12,986 --> 01:23:13,227
Yeah.

1113
01:23:13,267 --> 01:23:13,627
That's,

1114
01:23:13,627 --> 01:23:14,767
that's signal folks.

1115
01:23:15,667 --> 01:23:16,307
And he,

1116
01:23:16,347 --> 01:23:16,566
he,

1117
01:23:16,627 --> 01:23:17,847
he's bullish for good reason.

1118
01:23:17,946 --> 01:23:18,466
I mean,

1119
01:23:18,466 --> 01:23:29,046
I think we're getting to an apex of fear, of FUD, of misunderstanding.

1120
01:23:29,847 --> 01:23:32,627
And the strength, ironically, it's never been better.

1121
01:23:32,986 --> 01:23:41,526
Five preferreds, 650,000 Bitcoin, 1.4 billion in cash reserves.

1122
01:23:42,106 --> 01:23:43,946
And I think the capital is coming.

1123
01:23:43,946 --> 01:23:48,286
I think it might take – it's going to be gradual.

1124
01:23:48,466 --> 01:23:53,847
it might take five to 10 years for it to play out, but that's,

1125
01:23:53,966 --> 01:23:56,926
that's why we're here. Like it was never going to be easy.

1126
01:23:57,826 --> 01:24:03,267
And I think if you're here right now watching after this insane volatility,

1127
01:24:04,267 --> 01:24:09,286
you're, you're not a Taurus and congratulations and hold on tight.

1128
01:24:09,807 --> 01:24:12,847
Yeah. Hold on tight. Yeah. Mason, I liked your post.

1129
01:24:12,966 --> 01:24:15,566
You're at this point where it's like most polarizing, right?

1130
01:24:15,566 --> 01:24:26,167
Like people were incredibly bullish, including myself and everybody on the screen, when the price is at 530, 540.

1131
01:24:26,506 --> 01:24:29,066
And they had 275,000 Bitcoin.

1132
01:24:29,227 --> 01:24:30,106
What was the number?

1133
01:24:30,207 --> 01:24:31,486
It was like 275,000 Bitcoin.

1134
01:24:31,627 --> 01:24:32,326
It was 250.

1135
01:24:32,466 --> 01:24:34,026
It was like 252 or something.

1136
01:24:34,546 --> 01:24:34,986
250.

1137
01:24:35,566 --> 01:24:36,866
No prefs.

1138
01:24:37,286 --> 01:24:41,387
And they had just launched the 2121 plan right after the earnings call.

1139
01:24:41,387 --> 01:24:44,026
And it was one of these like, oh my God, scenarios.

1140
01:24:44,026 --> 01:24:48,326
and the stock absolutely ripped on top of the presidential election.

1141
01:24:48,566 --> 01:24:51,387
Obviously, 2025 has been just a damn whirlwind

1142
01:24:51,387 --> 01:24:55,207
in a crab bear market that we've had to just endure here.

1143
01:24:55,307 --> 01:24:56,227
But the math is good.

1144
01:24:56,326 --> 01:24:57,627
Like, the math is really good.

1145
01:24:57,807 --> 01:25:01,646
Like, the balance sheet itself is just so much stronger today

1146
01:25:01,646 --> 01:25:03,747
than it was at that period of time.

1147
01:25:03,747 --> 01:25:05,707
And you just sit back and you look at that.

1148
01:25:05,707 --> 01:25:10,286
And, like, to your point, like, we've reached max bearishness

1149
01:25:10,286 --> 01:25:15,406
when the balance sheet is just so much stronger than it's ever been.

1150
01:25:16,046 --> 01:25:16,167
Yeah.

1151
01:25:16,326 --> 01:25:19,566
I said a point of maximum asymmetry between strategies,

1152
01:25:19,747 --> 01:25:21,347
price, sentiment, and fundamentals.

1153
01:25:22,286 --> 01:25:22,506
Yeah.

1154
01:25:23,167 --> 01:25:23,686
Totally.

1155
01:25:24,286 --> 01:25:24,807
Totally.

1156
01:25:24,966 --> 01:25:26,006
Asymmetry, for sure.

1157
01:25:26,686 --> 01:25:26,887
All right.

1158
01:25:26,906 --> 01:25:27,466
Over to you, Green.

1159
01:25:28,686 --> 01:25:29,207
Yeah.

1160
01:25:29,307 --> 01:25:31,646
Look, it comes down to the debasement trade.

1161
01:25:31,646 --> 01:25:35,186
So the Treasury, there was an announcement that came out today.

1162
01:25:35,186 --> 01:25:42,807
They were trying to sell whatever the number is, $12 billion worth of treasuries, and it was triple oversubscribed.

1163
01:25:42,946 --> 01:25:43,887
The Treasury can't sell it.

1164
01:25:44,146 --> 01:25:47,686
But the Fed numbers come out tomorrow to see what happens with quantitative easing.

1165
01:25:48,066 --> 01:25:52,686
So I believe that happens 4 or 5 p.m. East Coast time, and I will post about that.

1166
01:25:52,767 --> 01:25:53,926
I did a tweet about this.

1167
01:25:54,286 --> 01:25:55,486
Everybody can look this up.

1168
01:25:55,486 --> 01:26:04,887
So it's fundamentally different this time given that the second largest line item is the interest payments in the federal budget.

1169
01:26:05,186 --> 01:26:11,747
it's interest only social security is higher and so this time is they have to print there's no way

1170
01:26:11,747 --> 01:26:17,186
around this and then we had some bad job numbers from adp today so what's going to happen we'll see

1171
01:26:17,186 --> 01:26:21,426
we'll know tomorrow and and the first thing about the treasury because the treasury is different than

1172
01:26:21,426 --> 01:26:26,066
the fed but for the treasury the fact that there was triple the amount that wanted to sell to

1173
01:26:26,066 --> 01:26:31,906
exchange out their their their treasuries on this means that there's there's stress in the system

1174
01:26:31,906 --> 01:26:34,707
So the Fed knows this in advance, right?

1175
01:26:35,146 --> 01:26:37,347
And so tomorrow is going to be important.

1176
01:26:37,707 --> 01:26:44,307
So if you're a big fan of Larry Lippard and Jeff Booth and Lynn Alden, nothing stops this train.

1177
01:26:45,667 --> 01:26:48,906
I think that Bitcoin could catch on and maybe you should get some.

1178
01:26:50,667 --> 01:26:53,446
And Jeff, have a great trip in Abu Dhabi.

1179
01:26:53,767 --> 01:26:55,887
Going to the Middle East, going to the desert.

1180
01:26:56,086 --> 01:26:57,066
Yeah, it should be a good time.

1181
01:26:57,406 --> 01:26:59,207
Bitcoin meta, first time out there.

1182
01:26:59,387 --> 01:27:00,127
I'll be there too.

1183
01:27:00,127 --> 01:27:12,406
So, if you're there, I think if you're at BitcoinMana for whatever reason, we are going to have a happy hour at some point.

1184
01:27:12,786 --> 01:27:13,406
Stay tuned.

1185
01:27:13,606 --> 01:27:16,686
Take a look at my profile.

1186
01:27:16,826 --> 01:27:17,546
We'll announce something.

1187
01:27:17,627 --> 01:27:18,646
It might be on the Strive page.

1188
01:27:18,646 --> 01:27:26,046
I think myself, Ben and Matt Cole will all be there from the Strive team and would love to chat digital credit and everything that's going on.

1189
01:27:26,387 --> 01:27:27,686
So, don't be shy.

1190
01:27:27,686 --> 01:27:33,627
yeah i was supposed to be there but i had to cancel my trip because all my good stuff so

1191
01:27:33,627 --> 01:27:40,006
i hope you guys have fun adrian's working hard always all right thanks everybody we're at an

1192
01:27:40,006 --> 01:27:46,667
hour and 27 of course we did not stay under an hour we tried kind of and we just let it roll we

1193
01:27:46,667 --> 01:27:51,086
were having a great conversation so thank you everybody for the time we will keep cooking uh

1194
01:27:51,086 --> 01:27:55,446
i do not think we will actually no we'll be on next week i think dan is leading the stream

1195
01:27:55,446 --> 01:27:57,906
next week because he will be

1196
01:27:57,906 --> 01:27:58,646
stateside.

1197
01:27:59,847 --> 01:28:01,186
Feel free to join next week.

1198
01:28:01,286 --> 01:28:02,127
You guys are going to get punished.

1199
01:28:04,286 --> 01:28:05,146
Punish them.

1200
01:28:05,526 --> 01:28:06,786
Punish them with the charts.

1201
01:28:07,906 --> 01:28:09,627
Thanks, everybody. We'll catch you

1202
01:28:09,627 --> 01:28:10,426
next week.