Thank you.
All right, here we go.
Woo!
MSTR True North, episode 24. We are going to get after it. We're going to have some fun today.
And we are here with the whole crew. There we go. Let's get this off the screen.
All right. We're back. Episode 24, The Bitcoin Orchestra. We're here to talk about
everything going on in the Bitcoin ecosystem, in the Bitcoin world right now, including MSTR,
of course. We've got a fun agenda today. We're going to talk about MSTR Leverage Update. We're
going to get into Strategy World and MSTR True North World and what's going on on the True North
World update, the Bitcoin Orchestra and Financial Harmony. We're going to talk about all of these
products that are in the market right now and kind of give some perspective onto where we're at in
the world of financial products. A little bit of background on mortgage-backed securities and the
timeline, the development and expansion of mortgage-backed
securities starting in the 1960s.
Maybe a little bit on decoupling, talk about liquidity,
troubled asset relief program, Powell, Panic the movie
from 2018 on the 2008 Great Financial Crisis.
And we're gonna have a conversation.
We're gonna see where it goes.
So we have not really prepared much for this.
We've got a lot of topics and we will get after it.
So without further ado, maybe I'll kick it over to Tim for not financial advice.
Hey, can you hear me?
I can hear you.
All right.
I'm broadcasting live from upstairs at PubKey, so pretty cool.
Everything you're going to hear tonight is not financial advice.
Might be fun.
Might be entertaining.
You might fall asleep to Ben Workman doing his thing.
but not financial advice. So, um, did I come up here for the first time tonight and see
Fong's signature and put my signature on the wall right beside him? Maybe back to you, Jeff.
Amazing. Yeah. And Tim was actually playing the guitar, the, uh, deep purple smoke on the water
intro. So thank you. Thank you, Tim. All right. That was sexy, sexy DJ voice right there.
Yeah. He's got the perfect mic and everything. So, okay. And for those that are new here,
MSTR True North. This is a group of people we get together every week. We talk about what's going on
on MicroStrategy, what's going on with Bitcoin. Everybody on the screen has been in this trade
for an incredibly long time and are very invested in the outcome of the market and all of the macro
and micro impacts throughout the trade. So we're all constantly thinking about what's going on in
the market. We all have different backgrounds and all have different perspectives. So we bring this
holistic view of the market. So let's get after it. We are going to jump into the MSTR financial
leverage. So let me share my screen going back here. Okay. So we do this weekly. So this is the
MSTR financial leverage update. MSTR bought more Bitcoin, about 3,000 Bitcoin over the last week.
and this should say 4 16 25 they now hold 531 644 bitcoin the bitcoin price right before this was
84 322 and for a total bitcoin assets held of 44.8 billion dollars 8.2 billion dollars of debt
which doesn't include preferred stock 1.6 billion dollars preferred stock and net capital if you're
to take the assets minus the debt minus the preferred stock, you're sitting at $34.9 billion
of net capital. That net capital alone would be one of the top 250 companies ranked by market cap
if you're just to take that net capital and compare it to the market cap of some of the top
publicly traded equities. So it's a very significant value that strategy is holding
in excess of the debt that they've got on the balance sheet.
We've got a total leverage ratio of 21.9% and a debt coverage multiple of about 5.5%.
And the Bitcoin price needed for the assets to be less than the liabilities would be around $15,469.
Again, that's just a proxy number.
That number doesn't mean anything.
Bitcoin would have to trade down below that number and stay there for an extended period of time in order for...
And strategy to not have an ability to refinance their debt in order for that to potentially be a problem.
So it's exciting times.
Exciting times to be following MSTR.
Exciting times to be following Bitcoin.
and it's one of the strongest financial companies I have ever seen in my entire life.
Strategy would be the third largest solo reinsurance entity on the planet just from
the capital held alone. So very, very large, very strong financially. Okay. And with that,
maybe we'll kick it over to a grain of salt. We'll talk a little bit about Strategy World,
MSTR True North World and what's going on
on that front?
Hey, so it's been going great. We're really looking forward
to seeing everybody that's signed up to go to
MSTR True North in Orlando.
We have, I believe, seven remaining
attendee tickets.
We have two remaining sponsor tickets.
So they're going really fast. As we said
before, if you'd like
to attend, you do have to purchase
a Strategy World ticket. Along with that, we have
our own code, MSTR True North.
So that sign-up page is there.
it's ready to go. We're looking forward to see everybody. We've really been working a lot on the
content, what we're going to present. We have a few surprises for everybody, which we're not going
to mention until you get there. So I think it's really great. And next week, we will be at the
Bitwise event in New York City. And you should stay tuned to see if potentially we have a little
meetup in New York City at a bar on Wednesday night, and we'll be there on Thursday. So that's
what I have right now for for Strategy World and MSCR True North in Orlando.
And just to just to top it up there, we have seven tickets remaining. So seven tickets remaining on
the general admission side, you must have a Strategy World pass in order to attend. This is
occurring on Monday, May 5th of Strategy World. So Strategy World goes from Monday, May 5th through
I think Thursday, May 8th, something like that. And we have two sponsor level tickets remaining.
A sponsor level ticket is only $500. That gets your name up on our presentations. It will,
you know occur in between slides we'll give everybody a shout out you have the ability to
pass out pamphlets if you want and that includes a ticket to mstr true north world as well
all of this information is up on mstrtruenorth.org and you can find more information there you can
get the event bright you can go grab a ticket there and we look forward to seeing everybody
the whole crew that's on the screen will be there and uh yeah we look forward to having
conversations. We've got a party afterwards. Drinks are included. I think we'll have some
light bites from 7 to 9 p.m. And yeah, it's going to be a great time.
And by the way, if the party continues going, we could extend it even longer. So let's get
everybody out there and have a really good time. We're not limited by that timeframe. So I want
everybody to get out there. And I think the event will be great itself for the conference, but we're
really looking forward to the party. I think this whole thing is just going to be incredible. I mean,
I think everyone's going to be surprised when you see the list of companies that have stepped up to support this with the sponsorships.
I've been just completely surprised by the reach that this has had since it used to just be a group of guys keeping everyone up till midnight to talk about one single stock on the Internet.
And all of a sudden now we've got a conference at kind of the Super Bowl of events for people that cover microstrategy.
and the companies that have stepped up to support us as we're doing this and to, you know, make the
party possible has been really awesome. So keep an eye out. We'll be getting those out there on
the website here pretty soon so that you guys can all show support to these companies.
Yeah. And there's even a couple of people that bought tickets that said they want to remain
anonymous, but I think you'll be able to spot them immediately. So I think that we're not announcing
certain things and you'll see when we get there. We're also working on recording the event so we
could actually present it afterwards and the presentation materials will also look to post
the agenda that that jeff is showing right now there will be a check-in that'll happen before
in order to get your wristbands and then you'll be able to get inside to the conference we're
going to start at 12 noon sharp you can see the agenda as we go through it there's also the
strategy world party you have to have a strategy ticket to get into that and then our party is from
seven tonight. Bingo. Nailed it. And we're not going to provide any lunch or anything. So I know
that lunch is kind of smack dab in the middle of our keynote. So I would be grabbing food if,
if you need to before, before the event. Perfect. All right. Thanks, Green. Anybody else have
anything to add on the true North world? Just as crazy to it got to this point.
you had told me when when you when you told me that when you and i um talked back in february
last year that by may of the following year we would have an event we would have our own little
conference we would have our own um focus at the event i would have been like right that doesn't
seem like it makes any sense at that point i was still posting the dream on face every time we rip
up 20%. So this, this is crazy to see. I'm looking forward to it.
It should be exciting. Yeah, I just I just think it's great.
We are the living embodiment of you can just do things. You
can just do it. Yeah, exactly. We are that meme you can just
do it. We mean this existence. We literally did. Like we got
together, we started messaging each other. We liked the stock,
we started talking even more. We started streaming and the rest
kind of just just kind of happened.
So I think this is great.
I want to see how many years we can do this in a row.
This should become a thing now is what I think.
Absolutely.
I think the next one's in February.
So we're already looking forward.
There's so many things going on.
And I cannot emphasize enough,
some of the small conferences,
I mean, we're going to have 150 people
at MSTR True North World,
I think something like 250 at Strategy World.
The small conferences that I've gone to historically
have been the absolute best.
You get just incredibly close face time
with some people that you never would imagine
that you get FaceTime with.
You can ask questions.
There's good conversation.
It's really personally,
it's helped my conviction
going to some of these conferences
and talking with some of these,
you know, well-known financial professionals
that are managing billions of dollars.
And you're like, oh my God,
you're a real person.
It actually goes a long way.
So yeah, pretty surreal.
The whole thing's pretty surreal.
And the conference is another immaculate conception
because we were just trying to have a party at first.
Yeah, that's true.
All of a sudden, I would have a freaking seminar.
became a lot more pressure all of a sudden huh first we were just going to be the good time guys
and you know we've got a conference going so what a turn of events that took
exactly one of a bar because someone in the in the chat just said i'd like it irresponsibly
long island iced tea that's the drink idea right there irresponsibly strong
yeah yeah we're gonna we're gonna have basically the tropical drinks being
served. Like Jeff said, we'll have small bites to eat. Somebody mentioned breakdancing. Well,
folks, we do read the tweets here, breakdancing. I will work on the music list. If people have
requests, you could post that up with songs you want us to play at the party. We'll see
what we could do with that. We did not hire a DJ that was not on the list, but maybe we'll
have to get working on that.
absolutely it's gonna be fun okay shall we shift gears topic number three this bitcoin orchestra
and financial harmony so uh thanks grain thanks thanks for all the hard work every actually one
more thank you to everybody on the screen there's people behind the screen that are doing a bunch of
work we have got this team that we just started to build and establish that has uh you know donated
a lot of time to growing this community and uh thank you to everybody that's put in a lot of time
and effort in growing and helping us out here. It's going to go a long way. We are this decentralized
node appear in the Bitcoin network that's growing MicroStrategy. And it's pretty incredible. The
community has really come together to help grow this. So ethos has gone a long way.
Yeah, there was a question about the event will be recorded. We will post it up. We'll post up the
the presentation that we're working on.
And then somebody had a question about
what happens if you miss check-in,
there'll be purple wristbands,
that'll be people, either the VIPs
or the people running it.
So if you just walk over a person with a purple wristband,
they'll be able to get you checked in
and give you an attendee wristband.
So we've worked on this
and there's a lot of pieces that we put together.
Yep, beautiful.
Thanks, Green.
Okay, let's get into this Bitcoin financial harmonies
because I think we're in this relatively new world of financial products that hasn't existed before.
And we are seeing the advancement and the securitization of Bitcoin that hasn't existed before.
We've seen this with strategy coming out with convertible bonds.
Now they've come out with preferred stock.
You've got strike.
And then they come out with another preferred stock that's strife, perpetual strife.
Now you've got MSTY and IMST and MSTU and MSTX.
And now those are those are seven products that are all correlated to Bitcoin moving directionally in the same direction that have different risk return metrics and can fit an entire portfolio.
And, you know, I tweeted this last weekend, I was playing with Monte Carlo simulations, because this is a really fascinating development and evolution of the Bitcoin network and the Bitcoin ecosystem that you can now have one portfolio that fits multiple different needs for a person, a portfolio, right?
So you can have leveraged long exposure and you can have reduced volatility bond like exposure all on one single asset being Bitcoin that this is securitized on.
And it's a really neat evolution because every single product has its own risk return metrics within that ecosystem.
system. And those risk return metrics can be run on, can be run in a Monte Carlo simulation,
which is 10,000 simulations running different, different volatility metrics, different standard
deviations and different means and different directions based on underlying assumptions.
And over the weekend, I was able to crank through some of this analysis just by using Grok. And
then just today, I was able to use Grok to develop Python code to run this manually myself,
and be able to iterate on it multiple times over and over.
So I in the process of developing that and building out a perspective on a portfolio basically modern portfolio theory just using Bitcoin correlated equities And I mean the evolution of this is going to skyrocket And I wanted to talk
a little bit about mortgage-backed securities and the historical timeline here because...
So, Jeff, before you go on...
Jump in.
What you just said there is really important. The maturity or the maturation
of the market where we were even from Q3, Q4 last year to where we are today with having even
the YieldMax MSTY product and then the Bitwise IMST products that got launched. Just that overall
space has fundamentally changed. And like you said, also with Strike and Strife and so forth.
So a lot of these products were not available in Q4. And now you have what I would call trading
pairs where you can go from the more volatile assets and then drop back to the less volatile
assets. So I think that that's a huge fundamental shift that's happened over the past five months.
And then the other part that I would say, I want to give a call out to Dan. Dan wrote a great write
up today on the differences. And actually, you know what, Dan, you should just say what you wrote
today because that goes to the differences between those. So that was a great analysis on Strike and
and SDRF and MSTY, if you wanted to just do a quick shout out about that.
Appreciate it, Grant. Yeah. Jeff, should we get into that later?
Yeah. Hop in right now. Honestly, jump in. And we can talk about mortgage-backed securities next.
Like I've got some history we can walk through. But yeah, please jump in.
Sure. And I imagine...
You there?
Yeah, we can hear you.
Sorry, something was weird there.
Okay.
You're good.
You're all set?
All good.
Yeah.
So Ben and Jeff, you guys are probably, Adrian, Tim, and Salil, you'll probably have kind of critiques on the way I'm going to describe this.
But for me, at least, the strike thing kind of clicked today.
And I know it's clicked for different people at different points in time.
But I want to share that revelation with everyone who's having a little bit of trouble understanding it.
And so I think the first point that I didn't fully understand was I understood there was some upside with STRK, but I didn't understand how the conversion worked or how the call option part worked.
And I was thinking about it from a traditional call option on an equity.
And I've started to think about it a different way.
So you've got that 10 to 1 conversion from the STRK to the MSTR, right?
And you also have the liquidation preference.
And I'm starting to think of those two things as being different.
So the conversion gives you kind of how much claim over MSTR Class A shares you have.
But that claim is actually superior to the MSTR Class A shares themselves because you're
senior in the capital structure.
So that's kind of an interesting critique.
And so right now with MSTR trading at $317 a share and strike trading at around $85 a
share, you could argue that $31.7 of the value of STRK of that $85 is technically class A MSTR
shares, but a bit superior because they're not actually class A shares. You're senior in the
capital structure. Then you've got the rest of that, about $52 worth of value. And that's some
function of the yield created. It's a preferred fixed income product. So the yield creates that
other sort of value. Or you could look at it as in its entirety being the yield is represented by
the entire price of SDRK. But I think it's interesting and neat to think of it as part
class A MSTR shares and part of bond, just a straight fixed income bond. And if you were to
price, the coupon payment based on the part of STRK that's not represented by the class A
conversion rate, then you get a 15% yield on just that part alone. So that's another way to think
about it. If you're going to be long MSTR class A shares and you want that fixed income coupon
payment, owning STRK actually gives you a higher dividend yield than just allocating to strife
and Class A shares themselves.
You get like a super discounted option,
call option on the equity.
Yeah.
Exactly, yeah.
And Strategy Tracker,
the thing from Lizard Wizard Radu,
he's put together this MSTR versus strike price,
which just shows right here in the red.
This is the MSTR price.
And then the strike price is blue here,
which is pretty flat.
But you can see 10 shares of strike
convert into one share of MSTR.
So you now got this like strike to MSTR ratio.
So you can see this kind of richness or cheapness relative to that option premium, which is an interesting component, you know, to add into the mix.
Right. There's there's so much chaos here and all of these different products that move differently depending on different things.
And I think an interesting thing here is I know I think, Jeff, you'd you'd explain it as like different products based on Bitcoin.
And the way I think about it are different bets you're making on Bitcoin itself.
That's the way as kind of a trader or investor, I look at it.
But so I think STRF is a really interesting example of the product MicroStrategy has created in terms of betting on the continuation of Bitcoin.
So one way you can use it and the bet you could make is that let's say you believe that Bitcoin is a $2 trillion asset class and no $2 trillion asset has ever gone to zero.
Okay, you believe MicroStrategy is a very over collateralized and financially strong company.
You sit senior in the capital structure to strike and an MSTR, but you don't know where Bitcoin is going to go in the short term.
So in my post, I mentioned it's kind of a short position on Bitcoin itself, but you're still long the survival of the network.
You may be short the price action over a period of time and you may be holding STRF and getting that dividend payment.
but you're still long in the sense that you believe Bitcoin will continue to exist and that MicroStrategy is a financially strong company.
That's a bet I would want to make at times, right?
If let's say the price goes crazy, the multiple gets out of hand and you want to take some off the table because you as an investor can't stomach a certain amount of volatility or don't want to stomach a certain amount of volatility.
And this is only amplified by, you know, say a family office or some other investment vehicle.
they can't stomach all kinds of crazy multiple expansion and contraction plus Bitcoin volatility.
So they're making a bet on Bitcoin, not price directionally, but in terms of network strength.
Directly. Exactly. And more products of that are going to come up. And I think we could argue,
MSTY is a similar bet there, but you're betting specifically on the volatility and all these
other things. So there's just so many bets you can make with these products.
And we're talking about one company, right? With MSDR. Wait until the hundred companies that are
Bitcoin treasury companies start offering all of the same things. And now you're like, oh my God,
I've got all of these products that I could potentially add to a portfolio. And they're
a function of so many different things, right? Like underlying business models, growth, yield,
they're all going to have the different risk return metrics. I mean, Adrian, I'd be curious
how you see these products. I mean, you've been in crypto, Bitcoin for a long time. I know there's
some skepticism generally of like yield, right? I mean, we've seen everything with FTX and Celsius
and BlockFi, all that stuff. And so there's this historical skepticism with yield. But now
these yield products are a function of volatility in the underlying equity.
and you don't have to put trust in a third party like FTX to manage their own individual
leverage ratio. So I'd be curious to get your perspective on that.
Yeah. So in the case of strategy, this yield experiment is entirely different. With BlockFi,
with FTX, with Celsius, with all those other ones, they were attempting to generate yield by
rehypublicating Bitcoin. And Bitcoin is not suited to that. It is a finite asset. It has a fixed
issuing cycle, its very nature does not sit well with rehypothecation. So that instance where the
blow-offs happened, that caused all of the skepticism with regards to the yield, as you
mentioned. So the reason why I initially was skeptical about MicroStrategy back in 2020,
back in 2021, was because of that. I was thinking to myself that, is this a company that's just
going to be buying bitcoin and then trying to re-hypothecate it but as his as his um strategy
no pun intended got fleshed out you saw that what he's done is i and this is why i call it like the
strategy economy he has the on the bitcoin underlying he has the equity right he's turned
that volatility into a product and he's essentially issuing shares to buy more bitcoin so that's one
layer now and then before we had strike and strife we had mst we had mstx we had msty right those are
the leverage plays those are the dividend plays now we have strike as a dividend play now we have
strife as a preferred preferred perpetual preferred stock that pays a dividend we also have own b
that has the um passive exposure to strategy because that's the etf that has
all of the companies which are over a thousand bitcoin you also have b max which is the etf
that's giving direct exposure to the convertible bonds. Now you have IMIS, right? That's very much
an economy. And the reason why for me, I'm not skeptical or worried about the yield aspect of it
now is because he is not using the Bitcoin to generate the yield. He is using all these equities
and different offerings to generate the yield. That's a fundamentally different structure than
rehab advocating bitcoin so for me i have had to take off my bitcoiner hat put back on my financial
analyst hat from early in my career and start looking at things very very differently the
volatility hurting that's hurting a lot of people's brains yeah to take off their bitcoiner hat
you're like oh damn it you know okay your anti-establishment bitcoiner hat you gotta you
kind of got to take it off and look at the whole environment very much so and it's an entirely
different way of thinking about bitcoin the underlying asset of bitcoin and the equity of
strategy and all of these different offerings on top of it what people and i don't let me be very
specific what i say here what i think what many don't want to accept or understand is that that
is making everyone a passive bitcoin buyer it is making everyone getting it gives exposure to bitcoin
to all of these players in the market right and the that is only a good for bitcoin and he and
sailor is doing this without rehypopulating the bitcoin they're just buying more and more bitcoin
they're putting it on the balance sheet and it's the equity and all the different offerings that
that are generating the yield.
So these equities, let's say,
and this is not me calling anything out,
this is not me giving financial advice.
If MSTU, MSTX, MSTY, if one of these things blows up,
that doesn't hurt Bitcoin, right?
So that just hurts that particular instrument.
So it's not as if sailors then gonna have to go to market
and start dumping all of this Bitcoin.
MicroStrategy as a company,
because of the corporate structure
and because of how companies exist,
he can issue the ATM in perpetuity
on a rolling basis as he needs to keep afloat. He can issue convertible bonds to keep afloat,
or if the market is beneficial, it is swallowing the market cap of the company. There's all kinds
of different ways that this can play out to the upside, that there's very, very little risk in my
mind in terms of these yield products existing on top of Bitcoin. And I think that is Bitcoin's ideal
state as a base layer for money and as a base layer for the financial system and all these
yield products that exist on top of it that i i think it just matches bitcoin perfectly i think
sailor is using bitcoin as a base layer for this entire strategy economy bingo i think you hit the
nail on the head and every single one of these products brings more capital into uh the derivatives
market the options market so you have more liquidity in those markets and that liquidity
requires market makers to go out and make the market which requires them to buy the underlying
shares to make the market, which gives MSDR more kind of chaos and volatility, allows them to use
the ATM more to add more Bitcoin on balance sheet. And this flywheel kind of gets continuously
perpetuated. Yeah. And I didn't mention the options market. The options market is huge. At
times it's been rivaling Nvidia. I mean, like think about that. Strategy is a fraction of Nvidia's
market cap, but yet still the options market had more had as much or approaching as much open
interest as Nvidia did. That is insane. And it's only going to get more and more ridiculous as this
thing scales and as Bitcoin goes up in price. So for all these people that are saying that,
oh, well, how's he going to pay the dividend? How's he going to do this? And Dan's talked about this.
You've talked about this. The dividend payment is a fraction of the average ATM that he's issued,
right? He's done some smaller issuance in recent months, but that's because I think he sees the
market for what it is and he's being more cautious. If we look at the history of it and all of these
different ATM offerings he's issued, paying the dividends on these things is not going to be a
problem because of the very nature of equities and how they're structured. So I think a lot of the
calls for doom and gloom are much to do about nothing initially. Granted, if we hit a Great
Depression right now, everything's fucked. And that is the outlier event that you have to take
account for, right? Or if the tariff situation turns into a full-blown trade war and we see
a prolonged market downturn. But even in that instance, he can still issue the ATM. He would
just have to be far more strategic about how he does it. So I just don't think there's any issue
in paying out the dividends, which is why I personally don't have as much concern about
the yield products that exist on top of Bitcoin. Bingo. The ATM that was used this last week was
$285 million used on the ATM.
I think the current interest expense on Strike and Strife
is around 160 million.
So we're talking about 75% greater
than the interest expense for the entire year
was acquired using the ATM
in one of the most chaotic market weeks
for markets ever, right?
In the history of markets.
And-
Everyone's been conditioned to the point where 285 didn't even show up on anybody's radar.
There was no streaming in the streets about the ATM.
They were like, why do you do more?
Yeah.
Like there was a lot of volatility.
Yeah.
It's some more.
Yeah.
People were like, why do you strike?
Why do you strike?
Like it's funny how things change once people start to really accept and acknowledge what's
going on here.
And what's funny about this is this is all without strategy issuing, getting direct yield
on their Bitcoin holdings.
Right.
when they start doing that oh yeah well I think I think they're technically getting yield right now
because they're leveraging the collateral the collateral of their balance sheet so I mean the
Bitcoin yield is I'm utilizing it as a uh as a product in to you know get additional yield but
they are using it as collateral right now effectively by you know securitizing it on
balance sheet. I think one thing we really need to acknowledge with strategy is what they're doing
is the Trojan horse to bring people into Bitcoin. I bet there's a significant portion of the
investors that are picking up these new products that don't really have any clue what's going on
here but they driven in they yield hunters right They the fixed income hunters where they just looking for the best product Dividend bros Yeah Yeah And so they move capital into these products just because they offering attractive yields
And once they get in, you start asking yourself the question, well, why can they offer these
types of yields?
What is it that makes this possible?
And that is the quickest on-ramp to starting to understand some of the unique characteristics
that Bitcoin brings, right?
That volatility profile that when you couple that volatility profile with a corporate balance
sheet, it creates this really unique ecosystem of products. And some of what you were talking about
this past week, Jeff, when you're looking at constructing different types of portfolios and
really tailoring those portfolios to what stage you're at in your career or in your investing
life or where you're at along the retirement track. I mean, he just created the entire suite
of products that you need if you're a believer in Bitcoin to customize your own portfolio.
And I think that is going very underappreciated because the scale they achieved is allowing all this capital and all these new eyeballs to come into this ecosystem.
And you don't start seeing this type of success without wanting to scratch beneath the surface a little further to see what is the asset that's making all of this possible.
And a lot of the people that will pick up these high dividend yields are people that are historically very conservative investors.
You're probably getting a lot of people that are in the gold camp that would come in and pick up these dividend yields.
And I think that because people who have been in gold for so long understand a lot of the same problems that Bitcoiners do, this becomes a really safe way for them to enter the ecosystem.
And I think we've done ourselves a disservice in the Bitcoin community with how hard we went
at gold as being the shiny pet rock and all this, because the reality is those investors
understand the same issues with the financial system that we do.
They just haven't yet identified the benefit to having the digital form of that solution.
And that's really powerful when you finally get that switch to flip in your mind.
But I think that those types of investors are exactly the ones we want to come into this ecosystem because they're just one revelation away from also understanding the utility and the strength in purchasing Bitcoin, the asset itself directly.
So what Saylor and that team have been doing in proving out these markets and achieving such scale that you can bring this type of attention and this type of capital into the ecosystem, that has been just a massive, massive benefit to Bitcoin as a whole.
Well, also with that said, people have been asking why, talking about the US government
printing money to buy Bitcoin.
That's what Saylor's doing.
He's printing shares to buy Bitcoin, right?
He's doing exactly what people have been clamoring the US government to do for years now.
So I don't, I still don't understand the skepticism.
I think, and this is your point, Jeff, that you've made a lot.
People have a very, very hard time reconciling capital markets and understanding their place
in this and understanding how Bitcoin can be leveraged in that kind of an environment.
And I think that's where a lot of the disconnect comes from, especially with Bitcoiners, because
they're very, very anti-establishment. But if you're pro the US government printing
dollars to buy Bitcoin, you should be pro-sailor printing shares to buy Bitcoin.
It's the same thing. It's just by a different mechanism. So he's really doing what you've
been wanting the government to do now for years. You should be cheering this on and hoping that
he can continue it ad nauseum because it's only going to make bitcoin become what i like to think
of as systemically important in the financial system because eventually the market cap is going
to grow to such a point within strategy and the exposure points are going to get so much larger
that you're going to have more and more players in the market and more and more players are going to
start taking this playbook and really scaling it up look at gme gme is a perfect candidate once they
make that first buy and once they start doing that first atm specifically to buy bitcoin
there's no reason why leverage plays and different offerings can exist on top of gme on top of
similar i mean the list goes on and on and on what happens when 5 10 15 20 companies start taking this
economy of scale model that sailor's running and they start doing it bitcoin becomes systemically
important or at least systemically relevant in in the in the near and and long term so it really is
a win-win for all parties involved. And when I say all parties, I'm talking about Bitcoiners,
I'm talking about the TradFi people, I'm talking about strategy, I'm talking about all of us. That's
why I like to call it an economy. We're all adversarial and cooperative players in this
market that Stator's created. And all of this is a function of Bitcoin's volatility, right?
You got a $1.6 trillion asset that should probably be a $20 plus trillion asset, and it's on its way
to become a 20 plus trillion dollar asset. And that's why I looked at the creation of mortgage
backed securities in 1960, 1970, which is a really interesting parallel to look at here.
Mortgage backed securities in the 70s, there was significant deregulation in the market,
and there was significant capital that was coming in and wanted to access exposure to homes. So it
allowed these investors from different locations to get access to pooled houses, which brought more
capital into the housing ecosystem. If you would have bought a house in the 70s and you sat on it
till today, you did incredibly well. And the creation of those securities also came with
different forms of yield that didn't exist before. And so now when you're managing a portfolio of
assets and pensions or whatever that may be, it was a drug that everybody needed.
Right. Everybody needed mortgage-backed securities in their portfolio. They needed
that hit of that yield. And that market went from just very, very small, like, I don't know,
less than a billion dollars to like $60 billion in 10 years. And inflation adjusted is over $250
billion, $250 billion in that market just for mortgage-backed securities from 1970 to 1979.
And so massive increase in value in just a short time horizon from 70 to 79. And then we all know
what's happened from 79 on, right? Like exposure to homes and mortgage-backed securities just
absolutely ripped in the 80s, 90s, 2000s, and obviously led to the crash in 2008.
So we're in this golden era at the beginning of Bitcoin securitization. And everybody's looking
at these products like oh my god it's too good to be true it's trending to zero or you know whatever
that may be but really this is this is the golden era of bitcoin securitization and everybody everybody
here like the the objective is make as much money as humanly possible in the next 10 years while
everybody doesn't know what's going on because of the bitcoin securitization in the market
creating a portfolio that makes sense to you and that that's where i think we're just in this like
monumental period of the creation of these securities that nobody really understands
yet, or they don't understand how big and how important these can be yet. And anybody that's
been studying Bitcoin and following along Bitcoin for the last 12, 24, 36, five years, whatever that
may be, you understand the power of Bitcoin. Now you throw in this traditional financial ecosystem
and the power of being able to structure finance and we're going higher. This thing is going way
higher look at the education this has given people i mean when when this all started i don't think any
of the retail investing community could have imagined that they would get an education in
all the different pools of capital that are out there and all the different types of institutional
level players that are out there talking about the gamma traders figuring out the duration and
yield components for insurers and endowments and pensions and understanding all of these concepts
I mean, this has just been one of the most unique case studies to be a part of.
And it just keeps evolving as they keep moving here.
And it's getting to the point where it becomes so attractive for everyone to get into.
You know, what Dan was saying with STRK, I think one of the coolest things about that product is, to me, it's one of the safest plays that you can take when you want to be directionally long micro strategy, but own a self-healing product.
right so when you look at strk because it's got that call option embedded your net long micro
strategy the common stock but if that price drives down that yield climbs up you find more buyers and
it starts to self-heal on the price so your downside is so limited so if you buy that at the
right time and you've seen what happens when it bounces around 80 and it starts to climb back up
because the yield gets really attractive plus you're holding a call option so you can still be
long the equity, but you can do it with much lower downside risk and much lower volatility.
For a lot of people, that creates the perfect entry product to start to get familiar without
having yourself shaken out two weeks in when you're down 40% for the first time.
We've all been there.
It's really opening the doors for all these new investors to come in.
That includes institutional capital. It includes the retail investing public,
which I think is hugely important to these types of companies. I think that when you have something
this new and this complex, you need an engaged retail community that can do that education effort.
It kind of becomes the marketing around what the strategy looks like and why all these products are
going to be so important broader into the ecosystem, not just for retail investors,
but why these are systemically important products that are getting launched and the different markets
that they're proving out for all the other companies that are going to come next.
This is a huge and steep learning curve.
And you've never been able to get up to speed faster than you can now,
which is just amazing.
Oh, yeah.
I mean, all of the AI stuff is just absolutely incredible.
It's blowing me away, honestly.
I just saw Adrian perk up.
He needs to put Adrian AI Morris handle there instead.
But yeah, AI has been incredible because it's going to disrupt so many what you used to think would kind of be like you thought there were a lot of companies with moats.
You used to look at all the high tech companies and go, wow, the technology stack that they have has created such an amazing moat.
But AI entering the system with really nimble entrepreneurs that can really scale quickly and light without all the overhead means a lot of these tech forward companies can get disrupted by people that can build the same functionality with half the overhead or an eighth of the overhead because they've got these accelerator tools that can get them moving faster.
So like what we saw with Strive when they wrote their letter out to Intuit, talking about TurboTax and the potential for disruption there.
You know, AI is going to come for companies you wouldn't expect them to come for.
And I think we're just learning that now.
It was always that automation and the machines were going to come and wipe out all the blue collar jobs.
And now I'm looking at this going, you might want to pick up a skill because a lot of these tech jobs and a lot of the white collar jobs, you're seeing a much bigger impact there.
I can't remember who it was. There was one executive, maybe it was even Sailor.
No, it wasn't Sailor. I can't remember who, but there was one executive that said that before he'll
even talk to his own legal counsel, they'll just go to ChatGPT and do a deep search. And it gets,
you know, 99% of the way there on the answer. So you save yourself thousands and thousands of
dollars of legal fees and research from these lawyers and you can get much closer and use your
in-house counsel from there. Like that is a powerful tool. So all these professional services
jobs that are charging five, six, seven, $800 an hour. Those are in trouble. I used to be a
management consultant. I see why this is devastating for that industry. I mean, the days of delivering
value through PowerPoints are over, right? If that's your business model, you better start
rethinking that because AI is here. So pick up some Bitcoin. Well, along those lines, and I'm
seeing the comments that people are like, to your point, Ben, about moats, strategy has the biggest
mode for Bitcoin, right? That is their mode. And on the AI side, it's NVIDIA. And people like to say
that, oh, someone could come for NVIDIA, but many of them don't understand about NVIDIA's mode and
what CUDA is and on all of the different architecture plays that go into NVIDIA, it's
not just GPUs. The reason why I bring that up is this. I'm still one of the people that thinks that
strategy can scale their BI business for that very, very reason. AI is going to disrupt a lot.
And in my day-to-day job, I use AI every single day for multiple hours a day.
And I've used it to quadruple my output.
First, I doubled it.
Then I tripled it.
Then I quadrupled it.
I am coming into companies.
I'm doing data work.
I'm doing integrations work.
I'm doing automation work.
And I'm doing the work of like five or six people by myself because of all the tools that I've built.
And I've built them out systematically, right?
When GPT first came out, it sucked at coding.
Then it got a little better.
And now between GPT, between Claude, between Gemini, and there's all kinds of other tools.
You have dedicated tools like Cursor.
I've been able to weave in all kinds of automations into my workflow.
That is why I think strategy has growth potential that's being underestimated on the BI side.
because most of the work that exists right now in AI that still needs human ingenuity involves data,
involves analytics, and involves integrating all of these together into actionable data,
which is why Palantir blew up so quickly. It takes all of this disparate data, puts it together,
and creates actionable data on top of it. Strategy has an opportunity to become, I think,
business intelligence relevant if they really push this AI narrative and if they really,
really scale it up. I think NVIDIA also is going to be a powerhouse. And I really want people to
stop thinking about things in terms of an either or. If we look at the Bitcoin ecosystem,
and if we think about Bitcoin as the base layer for a new equities market, it is not about strategy
or similar or GME or whatever.
The fact of the matter is Bitcoin's volatility
is going to have these stocks ripping
for different reasons at different times.
And the idea is to get diversified
without being diversified.
Getting into these stocks at this point right now
means you're exposed to Bitcoin.
Everything else on top is cream.
And you want exposure to as much of that cream as possible
with all these different opportunities.
So really stop thinking about things in terms of either or
and start piecing it out and saying,
what are your goals? If you want a dividend play and you don't want to play the options market
yourself, you have iMist, you have Misty, you have other options. You can do strike. There's so many
different ways you can play this thing. But just remember that the net thesis is exposure to Bitcoin
and how can you play that volatility and how these different offerings allow you to play that
volatility. Stop being so tribal about things. If you don't like Misty, don't buy it. If you don't
like similar, don't buy it. If you don't want to be in GME, don't buy it. But don't be tribal about
it don't take the bitcoin view and bring it to equity plays yeah yeah it's getting tribal right
now we got the bitcoin only bears and like you know the no true bitcoin or fallacy if you know
you're not bitcoin only you're not a true maxi um but there's a there's a good quote i like it says
every time you spend money it's a vote for how you want the world to be and that's kind of the way
way that I look at strategy. And in the future, you know, when everything is priced in Bitcoin,
you're still going to have companies. And it was like Adrian said, you know, you, what are your
goals What do you want the world to look like You want to invest in strategy which for me is a catalyst for you know turning the financial market into a Bitcoin based market And that the world that I want to live
in. So that's why I invest in strategy. If you know, if your thing is, you know, the medical
devices, you can go with similar, if your thing is like the mining industry, you can go with
miners, you know, you can align your goals to what you think your money is worth spending on.
And if they're based on Bitcoin, you can get, as Jeff Booth puts it, venture type returns on a venture type asset.
Yeah.
And Adrian, I think to your point, when you look at the BI business now, it used to be that a lot of the companies that they competed against that achieved such massive scale, they viewed that as an advantage.
But I actually think of this new era we're in, it's going to be a disadvantage.
You've got all this overhead and all this weight on your organization, where if you can take a company like MicroStrategy that just did a reinvention of themselves, clearly along the path of Bitcoin, if they get themselves back into that startup mindset that got them to the dance in the first place on the first round of building out the BI business, and they lean into AI and they really start hammering the BI business like a startup, they've got the right scale now where they're big enough to be wildly effective.
effective, but they're small enough to still be scrappy and do it lean. And nimble. And nimble.
And I think that's a massive advantage that people are overlooking. Now, is that their plan? I don't
know. Right. I mean, obviously, Bitcoin is the primary focus of this business today. I don't
think anyone thinks any differently, but it doesn't take away from the opportunity. And I don't think
you abandon that type of business because you just got handed the perfect chance to reinvent.
And if you reinvent effectively, watch out, right?
Because there's a lot of markets now that are primed for disruption.
Data and analytics has never been a bigger topic out there in the market.
And you've never had the tools, if you've got an effective workforce that knows how to harness them, to allow you to ship faster than you can today.
So, yeah, I'm with you.
I'm not ruling that out as a possibility that we actually do see some excitement come back into the BI business here over the next 12 months.
Totally.
Go ahead.
just on the bi component and working in reinsurance i used to have a fleet of people
that worked on monte carlo simulations that's why i was so excited about these things i used to have
to go to an actuary and say hey can you run this simulation for me like i need you to do you know
xyz and he'd be like yeah cool i'll get it to you tomorrow and i'm like all right cool i'll wait and
like actuaries get paid really well they just did monte carlo simulations and ran with numbers did
all that stuff and boom here on a weekend i created my own monte carlo simulation did it in grok
then i ran into grok and and had it create a whole python code for me to run my own monte
carlo simulations customized did the whole thing did it in an hour i'm like oh my god this is this
is just accelerating incredibly quickly so if you if you just have the people that understand how to
communicate the code like communicate with the ai like that's where a lot of this value is going to
be continuously kind of running uh running into well yeah the prompting is important but your
are illustrating the one of the biggest points that I run into daily so everyone is focused on
large language models but I think the modular models and the and the smaller application
specific models are going to be where the rate the really big boom comes so just imagine in a future
where someone is working with the system whether it's in the HR world are you doing something with
Oracle or whether it's in the finance world are you doing something EBS or whatever system you're
using and instead of them querying data, they're communicating with the system and they're
asking it for specific instances where these specific criteria are met and the system is
just giving them the data back without the need to query.
To do that, to get to that point, you need to be able to work with the raw data on the
backend in the system and clean it, structure it, and provide it with the right tokens and
so on and so on and so forth to communicate with the AI system that's going to exist on
top of it.
That's where I think strategy can make hay.
Most of the clients that I work with right now, they're making quantum leaps in systems.
They're still on green screen on the back end.
They're still on a lot of different systems that are very, very antiquated on the back end.
And they need to be able to clean and manipulate the data to get it to a point where it's in these new systems.
That's where business intelligence can live.
And that's where strategy can make hay.
And that's where I think a lot of the growth that we're going to see will come from.
So I really think that people are underestimating the potential for strategies of business intelligence vertical.
I think they have the opportunity to scale it here. I really, really do. I think it's going to take time. I definitely think Bitcoin is their focus. But for people calling for the death of their BI vertical in the next two years, I think that's premature. I really do.
Bitcoin is the focus of like 10 people, right?
Exactly.
They've got another, you know, what, 1,300, 1,400 people to focus on the other stuff. So, yeah.
that's a crazy statistic too just in and of itself right they raised they made 12 billion
dollars last year on their bitcoin business and they've got a team of five or six people that are
that are running it which is just totally incredible and it's it's going to be like that for
you know the next four to eight years while companies are adopting this strategy and there
are other entrants into the space and it gets a little bit more difficult but until then it's like
you know foot on the gas and keep running the strategy until it doesn't make any sense anymore
uh so late how's the uh speaking of competing against ai and bots and everything how's the uh
msty now imst battle going yeah we got a uh a three-way battle going on now i went ahead and
and took half the um half the assets and put put that into imst and um you know i got lucky versus
them because the price went up 10 bucks a share right after that so i'm barely beating them like
500 bucks but of course i'm still getting my booty kicked by uh msty because that's down 20
percent since january so that's been a problem yeah so really it's wise down and you've got some
leverage on your account right oh yeah yeah exactly and that's kind of the point so it's it's not
necessarily that um the the covered calls that i sold had a problem it's what i've done with the
premium that i collected with the covered calls because i've plowed it all into leverage and so
So, you know, all of the Junes expired, you know, expired like 90% losses.
All of the July's 90% losses.
So now I'm holding my all my hopes lie in the September.
So I'm keeping my fingers crossed for those.
And I did a the title of my show the other day was number go up is coming, but it's right after your long calls expire worthless.
and uh i think that's kind of a good point that that people need to um be ready for is that when
you see people posting screenshots of all of their in the money calls that they bought you know a year
and a half ago uh that's that that isn't necessarily going to be something that you can recreate in six
months so you know just be you know have have reasonable expectations when you're buying something
six months out, it isn't necessarily going to work out the same way when someone bought at the bottom
of the bear market and they had a year and a half on their options. Yeah. Right. Yeah. It's a
different environment. And it's interesting. I mean, you're doing the exact same thing that we're
talking about with this orchestra, right? We're trying to create financial harmony for your
portfolio, for your life. You've got some income products, you're going into leverage because that's
make more money levered long and you've got a thesis on what that looks like. And,
you know, that's not, everybody's going to be able to do that. Not everybody's going to be able to
watch the charts, you know, sell covered calls all day. So it's a, now with the establishment
of these products, like MSTY or IMST, you are employing Yieldmax or Jeff Park at Bitwise and
the Bitwise team to, to do all of that work for you. Like that's what the expense ratio is for.
It's like, they're sitting there sniping these trades or not. I think Yieldmax is a little bit
more algorithmic. But it's interesting. And it'll be fascinating to see how those two products
compare and contrast over time because YieldMax is much more close. They're at the money selling
weeklies. Whereas I think iMist is a little bit, they're selling biweeklies or monthlies
and further out of the money. And I think based on my understanding, it's the design of IMST is more
towards protection of capital being long MSTR, whereas the design of Yieldmax is more
income oriented, not necessarily as long MSTR. So everybody thinks they're the same. They're
definitely not the same. They employ different strategies. They are different products.
Fundamentally, they have different risk return metrics. We just don't know what they are and
we can't compare them because the product is brand new. Yeah, exactly. And I think covered
calls are all the rage, I guess, because everybody's like, man, I should have sold covered
calls at 500. I should have sold covered calls at 450. You should have sold them at 400. You should
have sold them at three. And it just sounds, it seems kind of like a, I don't know. It sounds
like a bottom signal because that's like, if the market wants to cause max pain, it's like, okay,
everybody gets driven into these covered calls. And then, you know, you start selling them right
as the market goes up and then you, you know, you get your face ripped off. So yeah, know what
you're getting yourself into when you're limiting upside, because if you saw what happened last
March and in November, there's like, there's not a strike available in the entire options chain.
That's going to save you from the price going up four X in, you know, eight weeks. So, right.
Right. You know, you're going to get your face ripped off to some extent, regardless.
us exactly yeah and I think I think it's a really good point and something I remember but like
obviously it's the boy who cried wolf until it's not right I remember saying like we were talking
about this in February I was big on it it's like oh everyone's short you know upside and it's gonna
unwind you know we're sitting here April and like covered calls were would have still been a great
trade but I think part of it is like I know sailor has that saying that markets make 80 of
gains and 10 trading days out of the year.
So that's kind of an interesting part is if you can time the other night, the
other 350 days of the year and sell covered calls during those periods of time,
you would be golden, but you have to look, you have to continue thinking very
long-term and not get too confident covering all your shares and limiting
all your upside because you don't, you can't time the market perfectly.
So it's just something I think about a lot.
And I think the covered call income generating is extremely, extremely
useful and beneficial for a portion, right? But you're always going to want to leave some uncapped.
And I know that's something, Ben, you've done historically is like you have to leave some
upside for yourself as well. So it's a balance and a combination. And that's to Jeff's point
is you have to create a portfolio that you're comfortable holding and meets your own needs.
And the other thing on covered calls, I'd say is if, so there've been times where I've sold
covered calls on too large a portion of my portfolio, you know, 70%, 80%, and I'll see
them move against me and they can move against you very very quickly these short dated cover calls
and if you're over exposed or over allocated to these covered calls you'll make a bad decision
and so i've closed out covered calls for a loss when i shouldn't have and had just instead should
have held them to expiration and it's cost me money because i had too many covered calls on so
it's something to think about if you're if you're going out and harvesting absolutely go ahead jeff
i i've absolutely done that as well i've been guilty of it and that's that's one of the reasons
that some of these other products seem a little bit more appealing to me because the i don't want
to handle the stress of having to watch it and make that decision right i mean so late you're
400 episodes into your running your cover call strategy and doing the videos and i mean some of
the best episodes are where you're you're scrambling you're like okay something's underwater
gotta roll it gotta do something i gotta make a decision and you know i'm not a pro at that
I'm not spending all of my time doing that because my time is better spent doing other things.
Exactly. And it's tricky. Not everybody's going to be able to do that. So yeah, that's kind of
where we're at in the evolution of this stuff. But it's definitely a good. A lot of people in the
community and probably piss people off by saying this, I think there's guessing when it comes to
playing cover calls and doing options. Because a lot of people are betting, they're essentially,
i call it betting if you're if you're using all of your shares and cover calls week to week month
to month you're essentially betting right you're hoping that you don't get called which you know
you can be you can make money that way but you're you're not just limiting your upside in that
instance you're severely limiting your upside if you only have a few hundred shares you should not
be putting all of them into into an options contract rolling them week to week you should
be taking 100 shares and seeing what you can get with that you should be taking your cost basis
into account. You should be looking at all these different aspects of it. And I don't really see a
lot of that going on in the community. I see a lot of people just thinking they're going to collect
premium and they're just kind of gambling week to week to week. And a lot of people get blown up.
And then you see them posting tweets saying that, oh, cover calls are the best strategy.
You should be doing this X, Y, or Z, blah, blah, blah, blah, blah. So to Dan's point, you know,
he's giving people very, very good advice here where he's gotten into situations where he lost
money playing covered calls by being too cautious when he should have been more aggressive. And in
other instances, he should have been more, he was too aggressive and he should have been more cautious.
There's no way to call it, which is why you shouldn't put your whole stack up
for grabs, week to week, contract to contract. That's just my view. And that's what I do with
all of the different shares that I own. Yeah. It takes some finesse to be able to
pull off covered calls. I think people jump into it too early and they just go pick the contracts
that have, you know, what looks like a high premium to them where they feel good about
collecting it, not realizing the amount of upside that they're giving up. You have to be a little
tactical about it. And if you're not willing to be out there monitoring the IV and finding the
right times where it actually makes sense to sell the covered calls, like the beauty of the
volatility on micro strategy is that it's so unique in this equity that you don't have to
be selling covered calls all the time. So I'll maybe sell covered calls 30% of the year, maybe,
because I'll only do it during periods where that IV is already elevated. And that allows me to sell
them much deeper out of the money, where if I do want to sell against a bigger portion of my holdings,
at least I know I have a massive gain ahead of me before I potentially lose those shares.
And if I lose those shares during a massively elevated volatility event, there's a good chance I'm getting them back at some point.
Right. So you do have to, if you're going to run your own book and you're going to run your own covered call strategy, you do have to pay attention and know the mechanics behind what makes it a good time to sell them and when it isn't.
Because if you try to force it and you start selling it during, you know, low volatility
time periods and you start bringing it closer to the strike because you still want to get
a high level of premium and you start, you know, taunting the world, right, with your
shares and seeing if they'll come get them.
One of those weeks, they're going to come get them and you're going to have no way of
knowing when that's coming, right?
Because it's going to be a Trump tweet or something that sends that market flying again.
And all of a sudden you're out of your shares and it's,
30% beyond where you lost them.
And, you know, now you're upset about that.
So you have to be really, really methodical
about how you do this.
And if you're not going to, then you outsource
it to somebody else. I don't think that there's any real shame in going and picking up the products
and letting the people that are getting paid the fees to manage this for you take over that role
because you don't have the stress. You're not losing your shares as a part of that process.
For most people, that probably makes sense. For those of us that like to stay engaged in the
markets and really spend the time to learn, covered calls on MicroStrategy are an amazing
product. It's the beautiful way to create income. So you just have to be tactical about it.
Oh, and to that point, then it's just amazing how much money you can lose with one click.
So it's just very important to take that into consideration. I've been like poof.
And I've been like, and it's gone.
And it's gone.
What makes me laugh is you get so used to selling like covered calls on MicroStrategy,
and then you go look at normal equities and like someone's holding 100 shares of amazon and they go
look at selling covered call contracts and then go like three dollars out of the money
you just become so desensitized to just how unique these leveraged bitcoin equities are for
selling covered calls against them that uh you forget and sometimes you got to go look at these
other stocks because they don't have that same volatility profile that is pretty unique to the
the bitcoin equities and uh it resets your expectations it's tough to carve yourself away
from that and even get excited about looking at any of those other equities because you know they're
just not going to move yeah well strategy actually got me back into options because i got blown up in
options back in back several years and i said to myself i'll never touch them again because i got
back in i got lit on fire like with options years ago so um when when i started looking at the
options with um strategy and i actually have to credit ben for this because he started whispering
in my ear about certain things and i started looking at things a little bit differently
now that's what that's what pulled me back in because um you know one the premium is just too
good to pass up and two if you actually go into it with a plan you stick to that plan you don't
deviate from that plan like my plan is very very boring i go out of the money with a certain stack
of my shares i have my cost basis so i know that no matter what happens i'm going to get profit
right but a lot of people just they just go in and gamble like i used to essentially and it's just
there's just so many ways you can get burned um in this market especially with these bitcoin equities
so um to the people watching i just say don't have an ego if if misty works for you if imis works for
you just do that and be less stressed out for it there's nothing wrong with that yeah i had to make
I had to get my hand off the mouse, right? Because otherwise, you log in and I used to be on the
Soleil train for a long time doing it myself on doing all the weeklies all the time. And
if you're selling them in like the first 30 minutes of the day, you don't have any idea
what direction that market's going. That thing is going to whipsaw you and you might think you sold
them at a great time. And then all of a sudden the market turns and goes the other direction on you.
And now you're losing your mind wondering if you should just close these out right away and roll
up like i had to get really mechanical and i run it with programs so i'm not doing it anymore but
that's just because now i've got a very defined set of rules for when i will and won't sell covered
calls and i don't have to worry about breaking that rule because it's not my hand on the mouse
now clicking these trades it's all just automated and i've got a process that i follow and if there's
no trade to be had there's no trade to be had so be it you know then you sit on the sidelines i
I don't need to sell them every week. The premiums are too good. So I can just sit and wait.
And then when it's really advantageous and when that IV is high and those premiums are really high, then you go collect some of it.
So, yeah, it's a good point on the IV routine in a process and being able to watch it because a lot of people like to say, well, you can't time the market.
Right. So just buy Bitcoin and hold it because you can't time the market. Just buy your strategy and can't time the market.
that's completely fine if you're stacking stats or you're buying shares because you can go into a
for 10 years and check your portfolio when you wake up right but if you're buying a call you are
putting yourself on the clock you're basically admitting i'm about to try to time the market
because you have until the expiration date of that contract you know to find an exit point
And if you can't find one, like if you bought long calls anywhere between January and today, there wasn't a single exit point that you could have taken as the price was dropping 20, 30, 40 percent where you could have made money.
So you had to have had a long enough expiration time and you have to be watching, you know, IV to see if you can find that that exit position.
And, you know, oddly enough, the same high IV environment that is advantageous for selling to open a covered call, you know, everything in options is opposites.
So it's also the same environment that you might, you know, not financial advice, but you might find that your window of opportunity to sell to close the long calls that you purchased.
so um yeah if you're not gonna if you can't watch then then long calls are probably not
going to be for you because you have to admit that you're going to have to time the market
and um i don't think you have to necessarily treat you treat it like a day trading thing but
you know you got to be checking it every day but i do think if you're going to do anything with
options it's completely worthwhile to trade on both sides for a while right you should be
selling covered calls because it teaches you when you find that they're overvalued right when those
premiums are really high it starts to teach you that which gives you a better sense for when you
look at the long calls that you're holding when's the right time to close because people forget that
it's not always price that has to move to make those contracts more valuable sometimes you just
get a spike in volatility and that's enough to really drive up the premiums on those and sometimes
those are good times to get out of them because you can buy them back cheaper just if the volatility
goes back down so understanding both sides of that and then it goes the other way right like if you're
holding long options and you bought them in a high volatility environment and then you move into a
low volatility environment you learn real fast how those premiums work and you realize why you would
rather buy them during that really low volatility environment because they're so much cheaper so it
It teaches you those little items that give you, I'm not necessarily going to say it gives
you an edge, but it gives you an understanding of the mechanics behind these contracts.
And if you really do start to understand that at a deep level and you can execute around
that and not force yourself into trades and fear and that you're going to miss out on
something.
I mean, the whole design of this thing is that it's going to move like crazy.
The volatility is going to pick up.
It's going to slam down.
but it teaches you the right times where you should even consider those types of trades
because every day of the week is not the time for all those types of trades i mean
options are one of those things that you can buy when the conditions are perfect right if you just
get an iv crush the price has started consolidating down low you might look at going long on options
but when that iv is really high it's probably time to stop buying those options you might want to be
selling options, right? You might want to get out of the long ones and start selling them to somebody
else who's buying them during the high volatility period. So those cycles and those mechanics behind
that pricing is invaluable to learn if you're going to participate in that, because otherwise
you're just guessing and you're going to be upset when you're wrong. And like we all did early on,
that's when you get smashed. I mean, I'm not immune to it. I bought into a bunch of these
stocks that were hyped up and I bought options thinking they were going to keep going another
thousand percent you know nothing could stop them but i'm buying options when the volatility was
really high and i was paying a fortune for them and then the price went down a little bit people
got scared the volatility crushed and i just you know lost my ass right like that's that's how it
happens you learn that lesson so if you could take the time to learn that up front you can save
yourself a lot of pain and a lot of capital along the way it's a lot harder to get it back than it
is to lose it yeah and one of the one of the really hard parts is there's so much data right like
Like, IV is a great metric, implied volatility, but you have all of the different strike prices
at all of the different horizons, and you have to have an understanding of probabilistic
scenarios, delta, and you have to be able to conceptualize some of the mathematical framework
with how it works as well in that entire model and function.
And, you know, Dan, I know at the very beginning you were really interested in Black Shoals model, but I think it kind of breaks with some of the stuff. And there have been instances where some of the prices on the options market just didn't make any sense in either direction, which is tricky as well.
so yeah i mean josh talks about that right he's like how do you how do you price a bitcoin option
how do you price a three-year out option on bitcoin or bitcoin related equity it's like well
you have this assumed kegger if you're a bitcoiner i mean the option can't be more expensive than the
underlying itself like that that that was the whole point which is like the option can't be
more expensive than actually buying the thing. So in that sense, you can't price a Bitcoin option,
a long-term Bitcoin option properly. And that's kind of the arbitrage that I think a lot of us
are trying to capture for long leaps. And something that Jeff and Ben have been successful at is
those leaps are where you get the alpha. In the short term, a lot of algorithms are quite good
at pricing the probability of a short-term move. But long-term, you're betting on something else.
You're betting on a drift, not a historical volatility.
And it's funny, too, because a lot of people will say, you know, strategy is the worst stock to do covered calls against because you don't want to limit your upside.
And while that, you know, that could actually be true.
It is true.
It was true in March and it was true in November.
But I think there's actually like an even more important use case for covered calls, which makes strategy less suitable is more so selling covered calls or selling cash secured puts reduces your cost basis.
and when you suck at picking stocks, reducing your cost basis can turn you from a shitty trader
to a decent trader or from a decent trader to an above average trader, right?
And so you're basically trading the unlimited upside for a greater chance of success.
And that's important for people who are maybe a little bit, not necessarily expert traders.
But when you're dealing with something like Bitcoin, which is going up forever, Laura, then you're not really, you know, you don't need to lower your cost basis for a greater chance of success because you know what it's going to do.
You know, it might not happen in six months, but, you know, in four years, no one has ever lost money in Bitcoin.
So if Bitcoin is going up, then that means strategy is going up.
and so the kind of the greatest use case for selling covered calls is to reduce that cost
basis and give yourself a greater chance of success but you kind of don't need it
you kind of don't need it with strategy so i i know it's kind of all the rage uh lately and even
matthew cratter of bitcoin university he had he did covered calls today when i was on his day
so it was like um you know i followed him back when he was trader university you know before he
was orange-pilled. And so he had all of the TradFi stock market trading strategies. That was his
thing before he moved over to Bitcoin only. And even he covered it because I guess it's just
everybody's talking about it. But strategy really just doesn't need it. But if you can be a sniper,
like Ben was talking about, you find those once or twice a year, you find the high IV environment,
and you can do it like a sniper maybe,
I think that's probably most people's best case
to enter into some of those positions.
It's hard to even identify that.
I mean, you know it when you see it
after you've been watching this stock for a long time,
but there's always that voice in the back of your head going,
but what if?
What if it's different?
You just throw it up into the right, you know?
What if IV goes to 400?
Yeah, yeah.
like what you were saying where you know a lot of people would say that mstr might be you know one
of the worst things to sell covered calls on i probably would have been in that camp for a while
until i watched enough cycles play out where you understand that the design of this is we're going
to get wild runs up and we're going to get wild drawdowns and that is that volatility in action
so at this point you know as long as i wasn't selling them you know really close to the money
in this long downtrend, right?
As long as I wasn't doing that,
I would be at peace if I was selling these at you know 15 Delta 10 Delta something like that and they got taken from me and I had to sit on the sidelines for a while because I watched
the design play out long enough now that I would feel there was a pretty decent chance that I'd
get another good entry point. If you look at last year, there were about five of these cycles
where you got these massive run-ups and then these massive drawdowns, right? It's the design.
Nothing's going to go up and to the right, particularly not something that's thriving on volatility and sentiment.
I mean, you look at that MNAV expansion, that's a sentiment indicator.
If people are feeling real bulled up about Bitcoin, that thing expands really fast.
And when they start getting nervous again, it contracts really fast.
And you just see that at play on this stock like you haven't seen on any other stock.
So I think it would bother me less at this point than it would have before.
because while I understand the long-term opportunity
and I think that you're just going to see
this constant growth,
it's not going to be a straight line.
The whole design would prevent this
from being a straight line up into the right.
You're going to have these cycles.
So, you know, all is not lost
in the event that you did take a swing
and you lost some shares,
but you got to be disciplined enough
to think there's a chance I got to sit on the side
and maybe one of these times
that little voice in the back of your head will be right
and it will just keep going straight up
and stovepipe into the sky.
But yeah, I don't know.
It doesn't bother me as much as it used to.
I used to have major FOMO
every time I would sell an options contract
thinking that I just totally gave up on the trade
until it settled worthless.
Then I'd feel better again.
But now I don't feel quite that way.
Yeah, and I should clarify,
I think Bitcoin University covered it
because he was probably getting a lot of questions about it.
But yeah, he was sour on it.
He was like, no, I don't think it's,
I think it's suboptimal,
selling covered calls against it.
So that was his official opinion on it.
All right.
So I want to shift gears.
You want to shift gears?
Yeah, shift gears here for a second.
So I happened to catch I was on a space right before this.
And so we just spent a lot of time talking about options and covered calls.
And what that does is is trying to play the volatility.
So I think what happened was the space I was just on, Grant Cardone was on.
And Grant Cardone was talking about real estate.
You know, like, what the hell does real estate have to do with Bitcoin?
What he was saying was, was that he started a new fund to buy buildings.
And one of the things that he did with it is that as their cash flow comes in, he buys Bitcoin with it.
I was completely unaware that he was doing this.
And what happened was three investors came to him.
And they never invested before at Grant Cardone.
They never invested in real estate. And they wrote a check of 25, 15 and 10 million.
So he picked up 50 million dollars in investors. And so he asked all three of these people, why are you investing in me?
And basically, the three people said to the effect that Grant, I will I will what he called center this a bit.
He said, basically, real estate is so boring as crap.
But he used some more adjectives that we would never invest in real estate.
But now because you have real estate and it's generating cash flow and you will reinvest that into Bitcoin, we think it's really interesting.
And they gave him money to go do this now.
And so then he has a checkbox and the investors have a choice.
They can either receive a yield monthly and they have two choices.
It will either be paid out in all cash or be paid in Bitcoin.
And if they don't actually want the yield, then they'll get more of it.
And so what happened is, is that a business that was boring is now attracting people to invest in it because there's Bitcoin, not necessarily on the balance sheet, but part of this fund that does it.
And so that completely changed the dynamics of it.
So what I'm going to say is this, is that there are people that look at fundamentals and then there are people look at technical analysis.
And what's happening here is that if there's a problem with you don't like the way politics are or tariffs are, what can you add to your company balance sheet that will give this potential upside?
And if you have that potential upside in your stock and it's publicly traded, then you may have a vibrant option market that's on it.
And then all of a sudden now there's volatility in your stock that you never had before just because you added Bitcoin to it.
So if you're looking for some form of good news and you're a publicly traded company, obviously, Saylor's been talking about this now for almost a half a decade.
But now we're starting to see this drift over into other areas in so-called boring real estate, which has a low cap rate.
Let's say it gets under 10%. Let's say if it's even great, it gets 15% a year.
Heck, we could just buy some of the products that we talked about that'll get close to that and we don't have to worry about anything related to real estate.
So that's the difference that we're seeing here. We talked about options now for 20 minutes,
but the reason why people are interested in options is because of the volatility
and attracting new investors to go into it. And I think that's something different to look at.
Yeah. And I bring up this screen here just to show it again. This is from Jesse Myers.
And we focused a lot this last 45 minutes on this equity market, right? And how we're seeing this
yield developing and evolving in the equity market and grain you hit on this real estate market
what the exact same thing that's happening in the uh public equity market where you're you know
monetizing the volatility and figuring out ways to like get yield off of bitcoin the whole world
is also trying to figure out how to do it on real estate and bonds and in different ways in different
formats in the private credit world as well and so we're seeing this on as you mentioned the
the development of these businesses that are restructuring, right? Like they're adding
structured finance connected to real estate that you've got a piece of Bitcoin connected to it,
whether it be Bitcoin attached to a mortgage or a Bitcoin plus home line of credit or,
you know, certain types of wrapped products as you've outlined here. So these are huge capital
pools that people are tapping. And it's the evolution that we're seeing in the equity market
is happening in all of these other private credit markets as well. And it's happening
like behind the scenes. Not a lot of people hear about it, but this is some of the feedback we've
heard at Bitcoin Investor Week. And if you're really plugged into some of the business that's
happening, like the Bitcoin Reserve Summit that happened yesterday, the Bitcoin Reserve Summit
that happened yesterday, there were many conversations of some of the stuff that's
happening behind the scenes in the private credit ecosystem related to Bitcoin as well.
I think that's the fundamental shift. And I think the niche area that we're in here at MSDR True North is companies that have Bitcoin on the balance sheet. And I think that's the part where we're seeing all the products that come up.
You know, single company ETFs, in essence, made no sense five years ago or seven years, whenever they started to come out. But now you have all these levered ETFs on strategy and other companies, Tesla, and so forth, that the marketplace has fundamentally changed. So we're seeing the financialization of the market to get greater and greater leverage on a few concentrated bets. And I think that's a really interesting place where we're going.
And so I think from my perspective, somebody mentioned GameStop.
It's just a matter of time before GameStop announces their purchase.
It's another lever in order to give additional volatility to that stock that has plenty of options on it already.
That's the original meme stock that people jump back into now because they're excited that there's this new lever that they bought Bitcoin.
And then they know in many cases what happened with strategy.
And I don't think that's a far leap to see that happening.
So I'm really excited about it, the option market.
And the other thing I'll say about the options is you can be short-term bearish, long-term bullish.
No reason why you can't have a short-term positions with shorter expirations.
And then you have leaps that go out where you're long-term bullish.
I don't know why many people think it's either everything or nothing.
You can have multiple positions.
And I think that's great.
That's Josh Mandel monetizing everything on all of these different horizons.
When he shows his portfolio and it's like, okay, I've got all of these different positions
and they're all in the green, but they're all going different directions.
That's one of those like, damn it, Josh, you're right again.
It's like short and long and they're both green and they're both on different horizons.
Yeah, I don't know.
All right, later guys, I got to drop.
All right, later, Adrian.
Catch you.
Yeah, Adrian.
Shall we use the word decoupling?
Should we talk about decoupling a little bit or are we going to get shunned by the community?
I think the decoupling sound, and heck, I've been waiting for that for seven years.
A lot of people, oh man, I wish I could make this bigger.
But what this is.
I like the word floor.
Yeah, I think Bitcoin's acting more as a floor instead of decoupling these days.
There seems to be a floor on the Bitcoin price relative to the equities market, but it doesn't seem to be performing in a decoupled manner.
Yeah, it's not going opposite. It's just got a floor.
Yeah, exactly. But that's just my two cents continue.
Well, this is the price of micro strategy or strategy over the last month.
So strategy over the last month is up 8.77%.
Meanwhile, S&P 500 is down 7.
QQQ is down 7.
Apple is down 9.
Amazon down 11.
And I think it's a fascinating perspective. Huge delta there, right? I mean, it's 15 point delta or greater on these assets. And if you were to tell people five years ago that this scenario would happen, they wouldn't believe you.
A company that's holding more Bitcoin on their balance sheet than anybody else is moving the opposite direction of the MAG-7 and the MAG-7 is down 7% in the last month.
People would just not believe with Trump as president.
People wouldn't believe you.
So I think it's a really interesting data point.
And this is starting to create and form this narrative that's being carried around the rest of the market.
right? You're starting to see this alternative movement that's creating a different risk return
reward that should be added to a portfolio. What's your guys' general thought on the broader market?
We could talk about tariffs a little bit. We could talk about
Powell and what's going on here, but I think we get into this space a little bit.
Yeah, I mean, I would talk COVID comparisons here. And I think like an interesting
statistic is the targeted federal funds rate going into COVID was like between 1.5 and 1.75%.
Whereas right now, we're at like a 4.2, 4.5 target federal funds rate. So the environments
are much different and there's almost more to unroll. There's more liquidity to inject
where we're sitting now versus what occurred during COVID.
And then, you know, you look at the stimulus packages that were offered throughout COVID.
I mean, you know, it started with a March 3rd emergency 50 basis point cut,
and then it further went into cutting to 0% over the course of the next three months.
And, you know, a $2 trillion stimulus package on March 27th during 2020.
So drastic measures were put in place very, very quickly. And I think I'm not saying that's going to happen necessarily now, but there's just a ton of runway here for this whole thing to unroll. And obviously, Bitcoin is just a vacuum for that sort of liquidity. And, you know, I was kind of a cycles power law guy until I see where we're sitting now.
And I mean, it would be very, very difficult to be bearish here. It's just like we've hit what I believe to be an adoption floor. We've decoupled during or we've hit a floor during a incredibly kind of bearish time and risk assets. And we're looking at liquidity just, you know, lining up right down the middle. So I think things look pretty good.
the best is my answer. Well, I'm going to run through my stats that we talked about on the
hurdle rate, Jeff, in periods of time. I found this to be really interesting. So last Wednesday,
the S&P was up nine and a half percent. That was the 10th biggest market day in history,
the one day. Before that, number one was 16% in 1933 during the Great Depression.
The second best day was 1929, also during the Great Depression.
Third best day, Great Depression.
Fourth best day was the first trading day after Germany invaded Poland, the start of World War II.
Fifth, Great Depression.
Sixth, Global Financial Crisis in 08.
Seventh, Global Financial Crisis in 08.
Eighth, Great Depression.
Ninth, Great Depression.
Then last Wednesday The next 20 best performing market days were during COVID the 1987 crash or they were in recession and depression periods
So I found it really interesting because we get these big rally days like we saw last Wednesday.
And it typically instinctually makes you think that we've turned and the market's automatically going to go up right away.
and that surprised me to see all of those events being during those types of periods
and i think the reason is because people go risk off pretty quickly and it drains all the liquidity
out of the market and the markets are looking for any type of good news and that market just moves
because there's not enough liquidity in it so any good news brings capital rushing in one direction
and particularly of interest because of what dan just said about the liquidity that's probably
going to enter the market was the 08 both of those were on news about government intervention
or central bank intervention was what made those days happen so it is interesting when you look
back in history what those time periods looked like and the other thing they all had in common
was the markets were about flat for the next three months and then it varies widely they go
all different directions after about three months. But during those time periods, particularly in the
top 10, the markets went flat for about 30 days. Now, I'm not saying that that's what's going to
happen here, but I just found it to be really interesting because our sentiment swings so
quickly all the time. We think it's coming right away and they're going to stimulate everything
and all the equities are going to rip and all the risk assets are going to rip.
And I don't know yet. I'm not totally sold that we're fully on the other side of this. I think
all the news is starting to come in good around the tariff discussions because I think they hit
us with worst case first, which I think was actually a pretty good move when they did all
the reciprocal tariffs and everyone was looking at these really massive tariffs broadly across the
board on products. And then they started pairing those back. So we kind of got hit with the worst
case scenario. And now it seems like everybody's working their way into settling the trade issues
with the US except China. And it's pretty clear that we've entered a trade war with China. And it
might actually be a currency war with China. We'll see how that all plays out here at the end. But
we're still in an interesting time. And I'm not quite sure that from a market's perspective,
we're out of the woods yet. But I do think that Bitcoin looks better than equities at the moment
because of what's on the horizon. So we'll see what happens ultimately. But I just found that
to be pretty interesting that all those best performing days were all during very bad economic
times. Totally agree with that, Ben. And I think before we heard the term, going back two years
ago, will Powell be able to get a soft landing? We heard that, oh, there's going to be a recession,
there's going to be a recession. The S&P 500, Bitcoin, everything rips over two years with
this constant narrative. And now all this, now the market dips due to tariffs, like, oh,
the market's now dumping and all the stats that you just said happened. Well, now a recession is
inevitable. And it's like, folks, if you wait four years to hit a, you know, to hit a recession
and you stay in cash, you didn't make any of the upside at all. So that doesn't make a lot of sense
from an investing perspective. But then you think about this and you look at it now, we have,
relatively good inflation numbers, sorry, not inflation, unemployment at 4.2%. 4% is typically
perfect employment. People always bring up the participation rate, whatever. Inflation is
sticky, but stable. And so from that perspective, I don't think inflation is going to drop.
You got Powell today that invents a new term, tariff inflation. I was watching whatever CNBC
while that was on. The price of Bitcoin drops 500 bucks on that new term. I think if I can name
where we are today, previously we had a term called with low interest rates was Goldilocks.
It was like, oh, interest rates are relatively low. They're going to stay stable. The market's
going to pump up. Hopefully inflation will come down and you have Goldilocks. I think right now
where we are is crappy locks. It's kind of just crappy. And from that perspective, we go back to
why am I bullish? It's like, well, I want a non-sovereign, non-correlated asset that's
probably not susceptible to tariffs with having a positive administration related to Bitcoin.
And I'm like, oh, so if these companies that are dependent upon supply chains, which come from
China, which we probably have a trade war with or a tariff war, I would want to own something
that's not affected by that.
Hence Bitcoin.
So if we're in this crappy locks state,
that's why I like these Bitcoin-based companies,
whether it's strategy or other ones,
potentially GameStop and Semler.
I think that that would be the path to go
because at least there we have volatility.
And the mindset is that Bitcoin's going to run up
in the future.
And it's not going to run up by 10, 20% a year.
So my view is I think it's the most positive asset
that you could buy in right now, given a crappy locks,
you know, market.
Guys could agree, disagree.
Yeah, everybody's constantly trying to value
the opportunity cost of capital, right?
And it seems like the market has largely overestimated
the risk of Bitcoin and underestimated the risk
of AI and innovation and tariff risk.
And it seems like they just quite haven't figured it out yet.
That's my current thesis is that everybody's
overestimated Bitcoin risk.
And you could see it, right?
Just go on LinkedIn for five minutes.
You could see everybody's overestimating Bitcoin risk.
They're overestimating.
And I think the horror show that we see is that
on my XV, these companies come up,
and this is horrible to see,
They're buying, they have a supply chain that goes through China or Vietnam.
They moved it from China to Vietnam in the last administration.
And what we're seeing happen here right now is they're like, hey, look, these tariffs go.
And they're like, well, just rehome your supply chain to the U.S.
Well, there's no vendors in the U.S. to do that within 15 days or 30 days.
So you have these companies that are, unfortunately, in a really, really rough spot.
I really feel bad for them.
I truly do.
And in that sense, it's like, well, and I don't want to ever say I told you so, but this particular area is, it's pretty rough that they're in that spot.
And I think doing that very quickly to have them move to US-based supply chain is very difficult.
And, you know, I mean, we've been talking about Bitcoin for years and we've been in this space talking about this for a couple of years with Bitcoin on the balance sheet.
But I think other companies, this caught them off guard with potentially, typically when Republicans come in, the market rips up.
And now the market has had these really crappy statistics that Ben just went through.
I don't think people would, they're self-inflicted.
And I've seen a lot of people try and rationalize that by saying, oh, but in the future, this will be good.
I'm like, well, if your company's out of business, I guess that's good.
Really?
That's right.
I mean, we're in this totally strange environment.
It seems like a lot of investors have the clutch pushed in still.
They're just waiting.
Ben, you had some statistics about Goldman Sachs got most people on the sidelines than
they've ever had before, which is a representation of people have the clutch pushed in.
They've exited the market.
They're like, I need to wait for this chaos to settle out.
figure out who to bet on in this future landscape of whatever this world is going to be two to three
months from now. And that's kind of what it seems like where we're at. But it also does seem like
something close to breaking, right? With equity market being down, pension funds are down,
interest rates are still high. With interest rates high, the bond market's in a really crappy
position. Everybody thought the 10-year treasury is going to come down. It seems like China is
dumping treasuries. You've got all of these things are happening at the same time. And
some of it's moving opposite of what everybody thought would happen. And so that's even caused
more uncertainty and chaos. And now where do you park your money in an uncertain and chaotic
environment. That's what people are up against. And Graeme, we talked a little bit before this,
the documentary you watched over the weekend, Panic, the 2008 documentary where it talks about
injecting liquidity into the markets. It's 10 years after 2008 financial crisis and it follows
Henry Paulson and Ben Bernanke and the trials and tribulations that they had to go through
and the stress and the environment that they were in to figure out how to prevent a Great
Depression. How do you prevent a financial collapse? And ultimately, they landed on,
we've got to bail out the banks. And they ended up injecting liquidity into the banks via the
Troubled Asset Relief Program, the TARP program. And it seems like we're getting close to something
like that. And this is what Jeff Park mentioned last week. You've got these Scrabble letter
programs that are the injection of liquidity. That's basically the money printer going burr
in a different way, right? It's under a Scrabble letter format. And it seems like we're getting
close to a situation like that, particularly with the political horizon. You know, midterms are,
people are going to start campaigning for midterms here in the fall. And, you know,
Trump doesn't want to be in a position to have a complete landslide, go the other way and like
lose the house and lose the congress uh so yeah it's a we're in a really interesting environment
but curious to know your guys thoughts yeah i could chime in on this and and and look so what
happened was in 2000 there was a credit monetization act of 2000 which basically allowed the banks in
order to take massive leverage for mortgage-backed securities to securitize them and do that and so
So what happened was Bill Clinton signed that into law under the guise of Alan Greenspan,
the age of turbulence.
He said that Wall Street would self-police.
He was completely fucking wrong.
They would not self-police.
And that blew up in 2008.
And yes, a Democratic president signed that into law.
And then Bush took the heat for it, which led to the actual event that you're talking
about in 2008, which that documentary was awesome.
So you watch that.
And so in a sense that that was kind of the naivete of Alan Greenspan, who is a very well-respected Fed chairman, made a massive fucking blunder.
And anyway, and I read his book and I was a big fan of him, but completely naive.
So you have the great financial crisis.
Then what happens, you follow that up with COVID, a naturally occurring worldwide epidemic, or if some people think about a global conspiracy, to screw the whole world.
OK, so that happens. And now you have where we are today, which the global financial crisis killed the real estate market.
COVID pretty much killed every restaurant that couldn't survive.
You finally rise up from the ashes now. And now we have a new administration that comes in, which is Bitcoin and crypto friendly, supposedly business friendly.
But they want to change the world order by tariffs. And then they cause another finance, they cause another stock crisis.
But the catch here is we have relatively high inflation, at least 50% higher than the 2%, whatever the current number is, sub 3%, but still 50% higher than 2%.
And you have full employment, so they don't want to cause a recession, and they can't cut interest rates.
That leads us to crappy locks.
So you have these three different events that we're now in, and this one, it's like, okay, what are you going to buy?
You're going to either leave money on the sidelines or you're going to invest in something.
And I'm a permable.
I always think at some point in the future, nine months, a year out, what decision do I make today if I want to buy LEAPS to take leverage in the future?
And I think about what would be the best stocks to buy.
Obviously, it's based upon what we talked about on the show.
So I think that's where I see we are.
It's where we are.
We've had these three crappy events that have now happened.
And I think that on this call, people should be aware of where we are.
I don't know.
I'm bullish because I see how the market's going to get better.
Other people are like, I'll just keep cash on the side.
That'll be like a year from now.
And I wish you bought those GameStop calls at $35 for January when it's trading at $60.
One of the biggest environment differences between 2008 is that there was a presidential race happening at the same time So you had all this frenzy and this chaos that started in like I don know July August And then you know Lehman failed
And that was like September, October.
And then there was like gridlock because there was a split Congress, House and the Senate were different parties.
And basically the Secretary of Treasury, Henry Paulson, had to go in front of Congress and get Congress's approval to go bail out the banks.
and it was wildly unpopular. And they were getting into this new presidential landscape.
And it just, it took so long because there was no agreement on the political front either. So
they had to go convince all of the politicians and go through this process, which was an extended
period of time. And there was a lot of uncertainty with the presidential race going on at the same
time. So now you've got a red wave. You've got the Congress, the Congress is Republican. You've
got the Republican president that's market friendly, that is pro market, right? You had the
five of the mag seven CEOs were at the inauguration day, right? I'm sure those guys are on speed dial
and they've got lines into the president and the politician. So you think about the landscape and
the game theory of like where markets are going here. And it seems like things are going to tip
the scales eventually to, you know, help, help the markets. Markets always win. Yeah. And so
people should watch that documentary. So Bush was already in second term. He knew that he could not
be reelected. So there had to be a new president and it was McCain versus Obama. And then in that,
you know, the first thing when they went to Bush, he goes, I'm not bailing out Wall Street.
they made a wrong bet. And Paulson's like, if you don't bail it out, it will not only be a
depression in the U.S., but a worldwide one. And Bush is like, look, this doesn't play well.
Bailing out Wall Street does not play well in Midland, Texas. That's exactly what he said.
And so that's what McCain went with and Sarah, whatever.
Palin.
Palin went with and they lost the election. So what I'm saying here is Trump is,
if you believe in the constitution, Trump cannot get reelected. And so what's going to happen is,
is that the midterms are going to come up. They have to turn the market around. And so from that,
you know, I think it's going to be something's going to have to change and be bullish. I'm
bullish on the second half of this year. And if I want to make big returns, I have to make my
my plays right now on low volatility to buy low prices. If I wait until the volatility spikes,
then it reduces my returns on my options by 50% or 80%.
If I wait three months to buy, it could trade sideways.
But I know buying now to lock in that is really cool.
The other thing that people should think about
is that if you buy options and you sell half of them
and then you exercise the other half,
you get long-term capital gains on the remaining ones.
And a lot of people miss that
because it drops in my tax bracket.
it drops my taxes by 50%. And so if Goldman, if they're so fucking smart, sorry, I don't give a
fuck if I swear. If they're so smart, then they're sitting on the sideline. Now would be the time
that you buy. And then one year later, you peel off 20% of your gains with long-term capital gains
because you bought it when it was down low. What are they waiting for? The price to drop even lower?
It's like, okay, I didn't say throw all your money in it,
but the whole idea is to get long-term capital gains
and cut your taxable rate in half.
I mean, if you pay taxes and you had wins,
you see how much that costs you.
This is really simple.
So if I was going to talk to a Goldman Sachs guy,
I'd say, yeah, so why don't you tell me how that works?
I'm just tax loss harvesting since January 1st.
Yeah, we're in a different environment at the moment.
Tax loss harvest.
Hey, you know what?
I actually made a tweet on December 31st that I tax loss harvested for 2025.
So, sorry, for 2024.
But right now, I think that you have to think about where you think the market's going to be in a year.
And that's where you buy your position now.
If you think we're going into a depression, then do that accordingly.
If you think that the market's going to turn around after all this bad news, and it has the drop that happened today,
we're not going to get help from Powell.
Yeah.
So.
Yeah.
I mean,
it'll be interesting to see how it plays out.
A hundred percent.
All eyes on the fed and Scrabble tiles,
Scrabble tile programs.
And who's,
yeah.
Just what breaks,
right?
What we don't,
we don't know exactly what's,
what's going to break.
That's the other thing.
All that,
all that fraud,
waste and abuse has to be rerouted to pay for,
other things because, um,
like the system has to hide the deflation.
So they have to create inflation.
And so if you're going to think you're going to save a couple of hundred
billion or something with, with eliminating fraud, well, then what,
how do you, uh, how do you prop up the credit system? You got to go.
And I don't know if tariffs is that replacement, um,
or if they'll figure out something else to waste the money on, but, um,
Tariffs is kind of like any of the other taxes.
It's just a barrier to true price discovery.
But Bitcoin is imposing the free market.
So I guess if there's a silver lining, you own Bitcoin and you let everybody else get inflated and you just benefit from that.
All roads lead to Bitcoin.
Yeah, I got to drop off, guys.
But hey, I'll wrap up with this.
look uh bitcoin anybody that's been in bitcoin for a few years and i know for my followers a
large percentage of my followers have been in it for over four or five years so from that perspective
they have these massive gains and they walk around if you have massive you're sitting on massive
gains and you're you're a relatively happy person even with the dips if you're up three four five
six hundred percent because you've been in it for five years and you're walking around everybody's
miserable, you really can't smile. So maybe the Bitcoiners aren't talking. Or if you're in strategy
for me, the largest tranche I have was purchased in January of 23, right at basically the dead
bottom. So on some shares, I'm still up like a thousand percent. So in that perspective,
it's really hard to walk around and gloat with so many people that are under stress
and the price of eggs and inflation.
So from that, you know, on this call,
where we are with a lot of people that know about this,
that have been in this for years,
we feel we're like, we're positive
because we see the light at the end of the tunnel
to monetary debasement, deficits,
everything that we talked about,
and the CAGR that exists on cumulative average growth rate
on Bitcoin.
We could all guess at that.
And based upon that and a hurdle rate,
what are you going to invest in, right?
I was a huge bull.
I still own some shares of Nvidia,
but Nvidia has basically taken a huge drop because of the tariff wars.
So it's not that I don't think that what they're doing,
they don't have a moat and they don't have a great product.
It's just that that's where the current situation is.
So anyway, with that said, I think that, you know,
great discussion here.
Everybody should watch the 2008 documentary,
whatever that was called, Jeff, that we tweeted last week.
Watch that.
A superpower that I always talk about,
watch it on one and a quarter, one and a half speed.
It goes a lot faster.
And if you hear something interesting,
just back it up and knock it out very quickly.
Eric Schmidt talked about AI.
I think that's both interesting
and horrifying at the same time.
If people don't get AI,
then I don't know how they get Bitcoin.
And with that said, I'm bullish.
I can't wait to see you guys next week
in New York City and then in Orlando.
And thank everybody for joining.
yeah thanks green maybe we'll go around uh final final thoughts uh all around maybe uh maybe ben
yeah not much in terms of final thoughts just one thing that we didn't mention
that i'll just bring up is it looks like uh in the bitcoin treasury world similar's going to get
out from under this doj investigation sounds like they've agreed on their settlement there so
that was interesting because they quickly followed that up with a 500 million dollar
shelf offering and eric tweeting out which i thought was fake at the beginning luckily it got
confirmed that it was real real huh yeah it was real that uh you know they're back and he's excited
to go buy some bitcoin so that 500 shelf offering i think they're gonna start being active so it's
good to see him get out from under that it was costly no doubt about it probably cost him about
30 million bucks i think in total with legal fees you probably saw that they used the bitcoin
to secure a loan with coinbase to pay that off so um just interesting news out there but they
definitely opened up that shelf offering and it sounds like they're going to get back to the market
and start buying bitcoin again so that's good to see they were ready to celebrate huh yep over to
you dan uh yeah i think the macroeconomic stuff is interesting but it does miss the point of why we
we own Bitcoin. And so for me, at least I've had to kind of zoom out and, um, kind of take
and remember that I own Bitcoin in these related equities because I don't want to worry about
trading equities markets in different macroeconomic conditions. So sometimes if you need a break
from the doom and gloom, um, on Twitter, you gotta, you gotta step off. Yep. Absolutely. Tim.
can you hear me yep okay um not too much i i did have a question for ben uh ben you said that
uh you can't really uh make a living doing powerpoints anymore but grain told me i need
to do a couple slides for my keynote at true north world so like what should i do well the
beauty is we're not making a living from this tim so you're doing that pro bono like everyone
else is going to be here shortly so you're in good company awesome yeah no um i guess shout out real
quick to mike germano for hosting me here at pub key for uh tonight it's pretty cool i didn't
realize till we were i don't know 15 minutes in i had guitars on the wall behind me so pretty cool
look and obviously for everybody that's been here it's a pretty cool place to meet people and kind
of bring everything in Bitcoin into the culture and the reality and yeah just super cool.
Maybe we'll be able to do one of these live from that studio here sometime Tim that'd be cool.
Yeah I'm counting another right I got this blue microphone but there's one two at least three
other microphones here so yeah cool setup and they're inviting us in so.
Live from New York.
Lots of cool stuff to come.
Live from New York Tim.
Tim Cosman.
Tim, I appreciate you always hanging on and listening here.
It's really helpful.
You're a sponge of information,
and it really helps craft the conversations
that you've got with Bitcoin treasury companies.
So I appreciate it.
And as always, none of this is financial advice.
Well, it might be entertaining.
Pupti Lifehack, if you ask them for an extra pavvy
on your double smash burger,
you can get a triple smash burger.
Oh my gosh.
That smash burger is crazy good too.
It is like, I mean, you got to go wash your hands and your face afterwards, but damn, it is like crazy good.
Yeah, it was good.
Yeah.
So over to you.
Final thoughts.
Yeah.
Just back to the AI stuff.
You know, the credit-based fiat system has to hide inflation and AI is going to make deflation exponential.
So if you are holding an asset, I don't know, maybe Bitcoin, that is immune to that inflation, you might do well.
Bingo. You may do well. Absolutely.
And my final thoughts are we are in the golden age of Bitcoin securitization and there's a lot of opportunity everywhere.
and I encourage people to explore.
There's so many products that can help build a portfolio
so you can design your life
and live the way that you want to live.
And that's one of the beautiful things about Bitcoin.
I think it's going to continue to bring
and grow the entire ecosystem.
So I'm bullish Bitcoin securities
and excited for the future.
So right at two hours,
we've got 40,722 viewers across all platforms. Thank you, Sailor for the retweet. Boom. I love
it. Amazing. Helps us out. And yeah, I appreciate the time. Thanks, everyone. Thanks to all the
people in the chat. We will see you either next week at the Bitwise event. I think that is the
24th. That's Thursday, the 24th. And MSDR True North World is Monday, May 5th. And that is the
beginning of Strategy World, which goes that entire week from Monday through Thursday. I think
There, as of the end of here,
we've got seven tickets left and one sponsor ticket left.
And look forward to seeing everybody.
Yep. Thank you all for joining.
Really appreciate it.
Thanks, everyone.
Thanks, guys.
Good to see you.
As always.