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episode 36 true north we are here with adrian dan and the hardest working man in bitcoin

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tim kopsman uh we're celebrating all-time highs we got fire in cyberspace and uh

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let's let's get it on uh congratulations to everybody who's been hodling

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through all the chop and celebrating all-time highs with us.

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So, I mean, we'll see what the market for strategy

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and for all the Bitcoin treasury companies,

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we'll see how the market reacts to all-time highs tomorrow.

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But, you know, I'm getting tagged in screenshots of here's IBIT's price

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and here's strategy's price.

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And I think Adrian's about to crash out if he sees any more of this

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common ATM drivel. So I know he's anxious to talk about it. So why don't you get us started,

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Adrian? What do you want to talk about with price action?

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All right. So price action right now is not ideal. I understand. There are a lot of people

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that are disappointed. I understand. But this is what I was talking about with all the ATM

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conversations. Whenever the price went down, it was the ATM. Whenever we chopped, it was the ATM.

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Whenever we started going up and then went down again, it was the ATM. So if the ATM was

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instantaneously impacting price like that, and people thought it was, now that it's been off for

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a little bit, and the price action is still doing what it's doing, I hope people can maybe open up

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their minds to understand that there's broader market dynamics at play that's driving price

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action and stop blaming sailor stop you know blaming us perhaps when the price doesn't do

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what they want it to do stop looking for um causes that are you know outside of um

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perhaps more logical conclusions i guess i would say there's a lot of stuff that's impacting price

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right now and i think what we're seeing is that it is not as if sailor's going to push a buttons

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or stop pushing a button and then the price is going to just rip, right? So I think people either

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are going to start being patient or they're going to start maybe rotating out. But I think for me

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personally, what kind of helped me read the tea leaves a little bit was what people were saying

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about earnings. The fact that we saw so many people in the market saying that EPS was still

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going to be negative, even though with FASB, we had that $35 share blowout, that tells me that

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there's a wide disconnect between what the investor base on X thinks and what the actual

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market thinks. And I think the market is telling us what the market told us what it thought

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with those negative EPS ratings is that the market is discounting the Bitcoin altogether.

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And I think it's being priced accordingly with some of that in mind, but that doesn't mean it's

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going to be that way forever. I'm still long-term bullish, but the key part of that is I'm long-term

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bullish price performance is not going to be linear it's going to outperform over time and

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what we're seeing right now what i've been seeing and i know what a lot of you've been seeing

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is that people are losing their a little bit because the price hasn't just ripped out right

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now with bitcoin at all-time highs so they can't i don't know if they're still gonna blame sailor

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some some still are i just think that people need to like step back a little bit and just

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wait and see what happens if they can yeah i mean tim why don't you know resident bear here

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real quick what what you're hearing right now from adrian morris

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may be amazing but it's not financial advice so like we got the live version today appreciate it

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to oh and happy bitcoin all-time high day you know yeah all the bears all the noise it's like people

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aren't even grateful for a bitcoin all-time high what is is the world falling apart bitcoin is hope

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back to over to you dan no i mean i agree i think what's it what adrian's saying is right i don't

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know how much atm is like a really tough question because the facility of the atm maybe the common

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share dilution doesn't matter because it's accreted to shareholders 100 totally get it

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the atm facility in itself and like hearing kind of the inner workings of it from a couple of the

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people that do in fact broker those deals it can be quite predatory towards shareholders right like

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if you're a convert holder where do you get your if you're a convert holder you short the stock

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and the price falls where do you get your exit or where do you close your short to realize that gain

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in your gamma hedge right in your gamma trade well you get it from the atm so that facility i think

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to a lot of people has been a little bit predatory and i think it's a combination of the atm with

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the converts and obviously we're moving away from the convert so that's a great thing uh so that's

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great but i think um the forward guidance from the earnings call of no atm below 2.5 is a great great

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metric because what when you issue shares what do you what is the issuing organization saying

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to the market that essentially the business whatever the business is is overvalued right

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like you look at birkshire what do they do when they believe their business to be overvalued

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they'll issue shares they'll sell shares and capture that spread that arb so now now strategy

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has placed kind of an internal benchmark on the value of their treasury operations which they

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believe to be 2.5 m nav plus right so that's what they think their treasury operations that's their

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their total value of their treasury operations which i think is cool if they're doing that

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i personally have no delta exposure to mscr so i can't say that anymore um but it still i think is

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a really good guidance moving forward and into the near kind of long term especially with the

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volume of the press ramping up with stretch being such a really game changer in my opinion

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Well, I think that the guidance was a bit of investor relations. So I would agree that it could be, in theory, good to put out there. But the thing about the shorting, I think that what people are doing when they say that about the ATM is that they're blaming the road for the direction of the traffic.

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the the reason why strategy is getting shorted i think would occur with or without the atm

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because the market is telling us that they do not value the bitcoin as a legitimate business

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or as legitimate earnings and they're shorting the stock as a result so the share the shares

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being issued yes you can say that mechanically all things being equal that can be predatory towards

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the shareholders however all things are not equal there are a lot of things that are pushing this

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this um this i hate to use the term trade but there are a lot of things that are pushing this

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trade and the direction of traffic is still market wants to short so whether there are more shares

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or not the shorting is still going to take place that's a great point what do you think about do

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you believe the principle or capital appreciation of bitcoin should be considered earnings i feel

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very strongly that BTC gain should be the mechanism or the earnings on which there should

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be placed a multiple. So for anyone watching, BTC gain is effectively the new net dollar value of the

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Bitcoin per share accrued to shareholders over a certain period of time. That's BTC gain. So it's

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like earnings. But I don't believe right now the full gap or FASB earnings is like an earnings

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that garners a 30 to 50 to 60 X multiple.

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I think the BTC dollar gain could garner a 30, 40, 50 X multiple, but that's it.

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Not the capital appreciation of the Bitcoin.

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I feel very strongly about that.

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Yeah, I think that's exactly what the market is telling us.

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So the reason why I've been pushing sentiment and market dynamics so much when I talk about

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this is because to your point, Dan, if we take a look at the FASB gain, that's a one

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time hit, right?

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We got that earnings blowout.

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Now in terms of long-term earnings, what we're saying each quarter is that the repricing,

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whether that's going to be negative or positive, those are the earnings, right?

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I think what we're seeing in the market is that the market is saying, no, we don't think

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that's earnings.

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And they're trying to-

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That is absolutely right.

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And that does-

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It does.

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It does.

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It does.

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And they're valuing the equity appropriately.

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Now, here's the flip side of that.

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The reason why I did the post in Community Today that I said I focus on NAV, not on the

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ATM, not on the MNAV, is because the ATM is, in my view, and I've talked to so many people

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about this and I've researched it for so long, all things being equal, can it tick the stock

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price down?

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In theory, yes, mechanistically.

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However, there's too much going on in this trade right now with regards to the options

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market with regards to Misty and iMist and the leverage plays and the convertible ARB and all

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of those things to say that the ATM is having any measurable impact on the price. It's the smallest

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factor. So that said, I then don't look at MNAV because MNAV is going to oscillate. That's market

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sentiment. So NAV, I think, is a long-term what's going to make strategy earnest multiple when they

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get credit ratings, when Bitcoin appreciates in price, when they can bring more offerings

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to the market and perhaps even leverage their Bitcoin in different ways that Saylor and

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team are probably reluctant to do right now.

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So that is where the multiple is going to come.

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But the problem with it is that we saw the run-up last cycle between 2020, 2021, and

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the middle of 2021, and then we saw the long-term run-up in strategy overall, everyone's assuming

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that's going to rip that way with the same kind of multiples. But that was in a market where they

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were the only player in the game. There were not as many Bitcoin treasury companies right now.

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There wasn't as much mind share in the sense of, you now don't just have strategy. You have

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strategy, you have similar, you have MetaPlanet, you have SmarterWeb, you have Capital, you have

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all of the other Bitcoin treasury companies that are taking away retail interest that in my view

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would be going straight to strategy because if they weren't here, what other leveraged Bitcoin

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player are they going to invest in? What do you think, what is your expectation of

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NAV over 10 years plus expectation of Bitcoin yield? And what do those expectations result in,

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in terms of outperformance? You mean MNAV? What kind of multiple they'll see?

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Yeah, I guess that's my question. Because like when I have my models, like I sound like

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gladiator over here. I have my models for how much I'll share them. But I have my prefs

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they can issue based on like a consistent leverage ratio, a sort of, you know, 40 to

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30% decaying category in Bitcoin, and then maximizing leverage ratio of how much actual

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prefs they can issue and what kind of Bitcoin yield that will generate for the common equity.

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So I have my models, but then the question becomes, will they do something crazy that boosts the MNAV?

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Because I know we don't like to talk about MNAV, but ultimately, if you're trying to price this thing,

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the MNAV is a monster portion of deciding how you're going to allocate to Bitcoin versus MSTR.

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So, Adrian, I guess.

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The whole thing is driving it.

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Yeah.

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Right.

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So my question to you is, what is your expectation of MNAV expansion?

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and what are your biggest sort of catalysts?

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Do you think their Bitcoin yield will be disproportionately high over the next five years?

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And thus, if the multiple compresses, it will still outperform Bitcoin significantly?

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Or do you believe the business itself will potentially change and thus the MNAB will

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expand despite whatever Bitcoin yield does and that will be the generator of outperformance?

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I think that's my question to you.

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I'll answer from two angles.

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Bitcoin yield is inevitably going to trend down because as Bitcoin's price goes up, you're going

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to generate less yields based on the amount of Bitcoin you can purchase. So that's always a

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metric that's going to be trending down. Same thing with Bitcoin per share. Now, my view is that the

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business is going to have to evolve and that's going to generate the multiple. And I think that

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what we're seeing right now is growing pains. They had the first leg of their evolution with

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adopting the bitcoin treasury strategy then they had the second leg with the preferreds

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so the preferreds are going to scale but i don't think that they're going to scale like 10 15 20x

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in the next 18 months i think it's going to be a gradual progression stopping in there well i'm i

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i don't want to sound bearish but i'm trying to be realistic right so are the preferreds going to

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scale yes but on the flip side before i get to my longer my my final answer the preferreds

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ironically enough could be taking away interest from the common because people that would otherwise

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be invested in the common might be now invested in the preferreds i know a lot of guys that say

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i don't own strategy i own strike i don't know you can talk about yeah because i think i know i

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know i've been posting a lot but it's just been a it's just been this ongoing thought in my head

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that i can't seem to figure out maybe we could talk about it on live stream and i know people

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are saying i so i have very little exposure to strife and very little exposure mstr right now

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but i think there's a weird case edge case where strife becomes the mstr and we can talk about that

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and you might be like dan you're absolutely nuts off your rocker and i'm a little bit but i want to

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yeah so that and that's what i'm saying the preferreds have created a new investor base

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but ironically enough that investor base may have been in strategy instead so yeah by the

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reputation of capital is what you're saying yeah so so that we have a few things going on with

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equity we have all the other mind share going on with all the other treasury companies that's

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attracting interest we have the preferreds that are scaling the amount of bitcoin that they can

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buy but also siphoning away capital from the from the common from from msdr and to your point dan

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And to answer your question, I think that in my view, because Bitcoin's price is going to appreciate, yield is inevitably going to only trend downwards.

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Bitcoin per share is only going to trend downwards.

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Therefore, the business itself needs to evolve.

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And I think that's where the multiple comes from.

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And I think that they're going to have to look at different ways in both acquiring Bitcoin and leveraging Bitcoin in order to justify a multiple.

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Completely 100%.

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Yeah, coming back to my point.

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The market is always...

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They indicated that prefs are that vehicle by which they will do that, right?

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Part of it, yes.

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I think we have to speak in the face value.

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And they said, we will not acquire other businesses.

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We will not lend out our Bitcoin for any sort of yield.

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We are issuing these prefs, and that's the way we'll generate Bitcoin yield.

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So I think we have to take them at face value and say for the time being, one to four years, the press will be the way by which they yield Bitcoin.

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And that's the most important thing.

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There's people in the comments saying, you know, the press don't.

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Why is Dan talking about press?

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Why are you not talking about the press?

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The only reason your comment is worth more than one MNAP is based on the success of the preferred stocks.

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Literally.

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That's a big portion of it.

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Your comment is fucked, buddy.

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Like, I don't know how to say it.

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So I think all the focus should be on the press.

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I mean, look, the way that they can justify multiples that those press get a credit rating,

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that's going to justify multiple by itself, right? And when they scale, because I mean,

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they've already been successful to your point, but they're going to be more successful. But I think

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that this needs to be a delicate balance. And that's what I mean by they're going through

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garring pains Me personally I know they saying that they not going to lend out their Bitcoin for yields I don think that practical I think when Bitcoin hits 250 500 or a million the kind of capital they can bring in by doing that for them to say no we not going to I don know if that going to work long

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That's just my view. And I'm talking like three, five, seven years down the line. I'm not talking

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like 18 months. So, to your point, are going to be a very, very powerful vehicle for them.

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but if I'm being fair, I have to give the flip side to that. As a preferred scale,

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so does the dividend payout, right? So that's going to have to be something that needs to be

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watched if the common stock doesn't at least maintain or appreciate somewhat in order to

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handle that growth. So this is a seesaw that they're going to have to balance through.

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And I think that's what we're seeing right now. To get from 1 billion to 100 billion was a huge

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move i think from getting from 100 to 200 or 100 to 250 is going to be much harder than people think

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and it's not because of anything that they're doing wrong it's just because of the nature of

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what they're trying to create they've built out an entirely new model that's why i call it an

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economy they've built on an economy around their common stock and they've built out an adjacent

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economy to bitcoin this is going to take time that's a good one right he's built the l3 on

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bitcoin the layer three on bitcoin essentially yes that's essentially what he's done because

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everyone and everyone in the prefers of the common is a passive investor in bitcoin whether

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whether they know it or not so he he has created an entire secondary economy around bitcoin

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through the common stock and through the preferreds but this is going to take time to scale and i'm

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just saying that if bitcoin is at a million dollars and they have a million bitcoin and they

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have a one trillion market cap they're really going to say no to generating yield on a portion

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of that of their holdings i i don't know i i don't i don't know if that's a tenable position

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because want to know why because someone else in the market is going to do it

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either meta planet or someone else is going to do it and then they're going to start bringing in

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tens of millions of dollars and everyone's going to pivot looking at strategy like what are you

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doing you have the largest holdings you can be bringing in hundreds of millions why aren't you

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doing this shareholders are probably demanded at that point yeah i think that's probably the biggest

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risk is because i think that's probably the biggest risk in that whoever is competing to

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to to give out the most uh you know like returns someone's going to overextend themselves and

225
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they're going to be the first ones to get wrecked so i mean hopefully the intelligent leverage

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turns into intelligent lending, I suppose.

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I would say that it would, because I'm not saying that they're going to lend out their

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whole stack, but if they have a million Bitcoin, using even a percentage of that would bring

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in tens of millions of dollars.

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And they can do it in an intelligent fashion.

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I think there's big banks that will let them do that all day, every day.

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So I am not a rehypothecation guy, because I saw it happen last cycle.

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But rehypothecation was always going to be par for the course as we hit hyper-bitcoinization,

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unless we collapse the entire capitalistic model that we have right now.

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So assuming that it still goes forward and assuming that Bitcoin is going to be a part

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of that, a very, very large part of that, I think they're going to have to adapt their

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model and they're going to have to be open to doing things that they have not currently

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considered.

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That's just how business evolves.

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So will the market like it?

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I think that the market will.

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and I think that once they get steady state with these preferreds and they scale, I think that's

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the next evolution. They're going to have to monetize their Bitcoin in different ways.

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It can't just be to back the preferreds because what are they going to do, have 15 preferreds and

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siphon away all the possible capital from their common stock? I don't think that's practical.

246
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They're going to have to have different levers and they're going to have to have different

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verticals. But Nithu, your point is very, very well taken. If they fudge that up, the one way

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strategy can get blown up is with that but on the flip side of that if they have a small portion of

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their holdings being used to generate yield what's the risk if they have a million bitcoin and they're

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only using thousands you know so like an easy way you would make a non-material different like impact

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to their overall cash flow or value right if they're making five depends on how much they use

252
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and depends on what bitcoin's price is but if they're making five percent on one percent of

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bitcoin like i mean they're still dominated by their book value right but i mean it's a good

254
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thought exercise i don't mean to i think uh i just remember sailor and maybe i'm misremembering

255
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just talking about counterparty risk a lot so what happens when your counter counter

256
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party risk is jp morgan or the u.s government is that different maybe that's different it's

257
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an interesting experiment i think that's functionally different it's not it's not like

258
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three arrows capital or alameda or ftx or blockfi yeah um if if the u.s government is your counterparty

259
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i mean that i don't know if that's necessarily the same kind of level of tail risk that we're

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discussing in terms of getting blown up um if they're if they even leverage thousands of their

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bitcoin out of the millions that they have and bitcoin's at millions of dollars

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and they do that perpetually, that's a revenue stream that they can now add to the books.

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But they're also probably going to have to reclassify themselves as a business if they

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do that because of the kind of earnings they can bring in and how it's going to hit the

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balance sheet.

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So there's so many different things that they have to consider in terms of how they grow.

267
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Another way that I know I've been talking about and people think I'm crazy for talking

268
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about it, their core business has room to scale.

269
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They don't need to become Microsoft or Palantir or NVIDIA.

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They just need to scale it appreciably. And if it can get to a size that allows them to expand their client base, that can demand a multiple as well. There's all kinds of things that they can do that I think that they're going to have to consider as this grows and as this becomes more mature.

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because I think the 3,000% was a benefit of being a first mover.

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So they've already got that first mover advantage.

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Now they need to look into maintaining that lead,

274
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which obviously they're going to,

275
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and they need to look into different ways to justify

276
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more long-term and broader market multiples.

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I think you're totally right, Adrian.

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And just to illustrate that point,

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I want to bring up a sheet of max issuance of prefs before we get deeper.

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So, I mean, just to recap what we've been talking about is the difference from forms of business models to demand a premium,

281
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because ultimately price is determined by underlying Bitcoin in the multiple place on top of it,

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which could be a function of future expectation of yield or, you know, a forward looking PD multiple on whatever revenue they generate by a Bitcoin.

283
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But the prefs right now are their main source of Bitcoin yield.

284
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We know that they're not going to issue any more prefs in the future.

285
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So when you're looking at MSTR, you're looking at essentially a future claim on the assets of the corporation, the assets being the Bitcoin.

286
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So you need to have expectations and assumptions over future Bitcoin yield.

287
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The only way to model or price that out is to figure out how many Bitcoin they could essentially acquire per share on a fully diluted basis.

288
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And that's to look at how much prefs they can issue based on Bitcoin prices and their leverage ratio.

289
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I think one of the key things in the latest earnings call that people don't talk enough about,

290
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it was the mention during the Q&A that the leverage ratio could be up to 40 or even 50%.

291
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And that makes a massive, massive, massive difference in terms of the amount of Bitcoin

292
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they can yield per share, and especially in a falling volatility environment,

293
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which is exactly what's going on here, right? Bitcoin's volatility will continue to fall.

294
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A higher leverage ratio means you're essentially getting more yield on your Bitcoin

295
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because the press are technically yield on the Bitcoin. So what I've modeled out is a Bitcoin

296
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price at the end of 2030 of 430 000 i mean that's a bit conservative in my opinion but

297
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with a pref ratio of 30 percent and atm usage just to cover the dividend obligations roughly so

298
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that's about that's about a hundred million dollars a month that's a little bit exaggerated but um

299
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bear with me if you again 30 debt target based on bitcoin prices up to 430 000 bitcoin in 2030

300
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you could see that strategy just via PREF issuance and ATM to manage the dividend payments

301
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should have around 1.5 million Bitcoin. So that's a huge number, absolutely massive number.

302
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And that would put the outstanding, this is the real key and something people will have to get

303
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comfortable with or understand. They'll have to make their own assumptions about it. I don't mean

304
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understand, but if these assumptions prove to be true and they have 1.5 million Bitcoin,

305
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They have a market cap of $770 billion with a 1.7 multiple.

306
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I've held multiple constant.

307
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There'll be $180 billion of preps outstanding.

308
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So the bet you're making by holding MSTR common is essentially a bet that the preps will be a key player or a key part of the entire global bond market.

309
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And I think that's interesting and super relevant.

310
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And I believe actually that the preps and Bitcoin back equity will be a huge, huge part of the future of finance.

311
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We can look at a stretch.

312
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I think we want to go through maybe a little bit of stretch volumes.

313
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So stride volumes are low, 15.9 million.

314
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That's a great.

315
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If you want to hop in there, get the I think this is a really good trade.

316
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Buy stride, collect the dividend, wait till it bumps up a little bit percent.

317
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You're positive on it and sell it.

318
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But the stride dividends, you know, insanely high.

319
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That's a cool trade.

320
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Strike trading too low, in my opinion.

321
00:26:25,272 --> 00:26:28,312
Strike should be trading a lot higher because, you know,

322
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the effective yield when you take out the call option on the equities is almost 13%.

323
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Stretch, extremely high trading volumes, and they continue to be.

324
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This is a really good sign, and I think this will likely trade up to par soon.

325
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It's going to take a little bit of time.

326
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That's right.

327
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the the crown jewel which i think is kind of the uh the wild card capital structure and it

328
00:26:49,532 --> 00:26:53,292
isn't talked about enough you can talk about that later so i just want to go over those things um

329
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the volatility just to set the playing field for the next conversation

330
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i'll take another two minutes and then we'll get get rolling so this is uh this is ibit volatility

331
00:27:04,092 --> 00:27:11,212
here or btc volatility and you can see that we've been trending down uh over a period of time but

332
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we've been stabilized around 30 percent um mstr's volatility has compressed from what was 200

333
00:27:17,532 --> 00:27:24,652
during the peak to about 50 52 um so just shy of 2x out of ibid and you see the implied

334
00:27:24,652 --> 00:27:29,772
volatilities right around there so those are the volatility stand and kind of the market

335
00:27:30,412 --> 00:27:35,052
as a whole now maybe we can keep talking on that guys sorry to interrupt but well yeah

336
00:27:35,692 --> 00:27:38,972
there no you didn't interrupt at all i think that's all valid um i actually did a post on

337
00:27:38,972 --> 00:27:44,972
that recently comparing um bitcoin msgr and the mnav and that's another factor bitcoin's volatility

338
00:27:44,972 --> 00:27:50,012
has been decreasing so that's obviously going to have a you know an impact on strategy as well so

339
00:27:50,012 --> 00:27:53,532
there's just so many there's just so many factors that are going on into price action right now

340
00:27:53,532 --> 00:27:58,812
but to your point dan i again i'm not bearish on the preferreds i think that that is going to be

341
00:27:58,812 --> 00:28:07,052
their brett their bread and butter in the future however we have to also take into account that

342
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there's all kinds of ways that it can play out and be aware that it may take longer to scale than

343
00:28:13,532 --> 00:28:19,932
we realize and people saying that they only need the preferreds i think that's being somewhat

344
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short-sighted it will take a lot longer to siphon away from 300 trillion dollars of potential

345
00:28:27,292 --> 00:28:33,932
capital than people realize and i i just want to i just want to make sure that everyone is aware that

346
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this is a long-term investment that you're making you're not looking to see what happens in the next

347
00:28:39,772 --> 00:28:44,492
six to 12 months with the prefers and then you know get shaken out because they're not at tens

348
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of billions and hundreds of billions of dollars each so you know it i think dan is right the

349
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preferreds are going to be huge absolutely huge it will take time yeah i was thinking about it

350
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But like I mentioned it on my interview with Tim yesterday, and I kind of look at it as like, let's just say like a Tesla.

351
00:29:06,012 --> 00:29:17,332
You know, if they want to shut down their factory to upgrade it, which is then you're going to have, you know, more costs and you're going to have lower production for a brief period of time.

352
00:29:18,152 --> 00:29:22,232
And, you know, that's going to be reflected in the, you know, in your efficiency.

353
00:29:22,232 --> 00:29:38,572
And so the price may lag during that time. But when that upgrade happens, now you've got more product rolling off the shelves. And so I'm kind of looking at the preferreds as like Bitcoin conversion factories.

354
00:29:38,572 --> 00:29:44,852
and we're shutting down production on the convertible bond Bitcoin conversion factories

355
00:29:44,852 --> 00:29:48,572
and we're retooling and going over to this other thing.

356
00:29:49,452 --> 00:29:54,052
And I'm kind of just like, okay, like you said, it's going to take time for that to scale up

357
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and maybe some investors get bored waiting for that to happen.

358
00:29:58,952 --> 00:30:05,172
But if people panic sold Tesla at the bottom, then they didn't get the gains

359
00:30:05,172 --> 00:30:09,072
when they get record numbers coming out the door.

360
00:30:09,272 --> 00:30:12,832
So I don't even think that those four factories

361
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that they built for the preferreds

362
00:30:15,072 --> 00:30:16,172
is gonna be the end, right?

363
00:30:16,192 --> 00:30:17,052
There's gonna be more.

364
00:30:18,372 --> 00:30:20,292
That slide that they shared

365
00:30:20,292 --> 00:30:22,232
where they had the yield curve

366
00:30:22,232 --> 00:30:26,252
and there was a big black section in the middle

367
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where they could stick in at least two more preferreds.

368
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So they're gonna get more

369
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and the ones that are existing

370
00:30:33,792 --> 00:30:40,692
are going to continue to mature, but there's no telling if it's going to happen, you know,

371
00:30:40,732 --> 00:30:47,232
this month or even this year. So I think you're right, Adrian, there's going to be some patients

372
00:30:47,232 --> 00:30:53,952
waiting for these to mature, but long-term, you know, my thesis hasn't changed, but I think if

373
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people have married themselves to expiration dates on long calls, you know, those things may

374
00:30:59,612 --> 00:31:02,152
have gotten a little bit dicier.

375
00:31:05,072 --> 00:31:06,612
Well, I mean, yeah.

376
00:31:06,812 --> 00:31:09,372
The thing is, we also have potential bullish catalysts.

377
00:31:09,432 --> 00:31:11,532
You know, when interest rates come down,

378
00:31:12,012 --> 00:31:13,412
well, I think the market's actually front-running

379
00:31:13,412 --> 00:31:14,352
to interest rates right now.

380
00:31:14,612 --> 00:31:16,512
So I think everyone's anticipating interest rates in September.

381
00:31:18,172 --> 00:31:22,192
So we have that as a current macro tailwind.

382
00:31:23,192 --> 00:31:25,612
We have potential S&P inclusion.

383
00:31:26,492 --> 00:31:27,912
I have my own thoughts on that,

384
00:31:27,912 --> 00:31:35,672
but that's another potential catalyst in the near term. And of course, if Bitcoin keeps going the way

385
00:31:35,672 --> 00:31:39,792
it's going, because I think we're going to hit between 150 to 200 this year at that minimum,

386
00:31:40,152 --> 00:31:47,692
that's also going to have a potential impact on price as well. But I just think that we're really

387
00:31:47,692 --> 00:31:57,812
seeing right now the maturation of strategy. And I hate to just keep repeating myself and

388
00:31:57,812 --> 00:32:03,332
say patience but really patience is the is what's going to need be needed here and if you guys are

389
00:32:03,332 --> 00:32:10,932
options pretty heavy i got nothing for you good best of luck yeah i'm still in that boat and i'm

390
00:32:10,932 --> 00:32:18,512
looking for we can't say that for one more pump yeah we can't leverage like if we're mstr bulls i

391
00:32:18,512 --> 00:32:25,952
mean like and it's if you believe it's beta on bitcoin and well i don't know i just i don't think

392
00:32:25,952 --> 00:32:30,432
can say like best of luck to anyone in options like at one point i was in options and mstr and

393
00:32:30,432 --> 00:32:34,192
it's worked out for a lot of people over long periods of time but but it's a shame if you're

394
00:32:34,192 --> 00:32:38,512
you know i think that's a lot of the downward pressure on mstr is likely that people believe

395
00:32:39,312 --> 00:32:45,872
um they believe mstr is beta on bitcoin and if it's not behaving that way it's difficult to take

396
00:32:45,872 --> 00:32:56,784
certain trades and that was a lot of the messaging at the beginning so i think that kind of a lot of the disconcern right now Everyone who been in MSDR for a while has made crazy returns We all outperformed Bitcoin That absolutely great

397
00:32:57,204 --> 00:32:58,464
We can't disagree with that.

398
00:32:58,804 --> 00:32:59,124
Absolutely.

399
00:32:59,844 --> 00:33:05,404
But once the stock stops behaving like beta on Bitcoin, for traders specifically, and obviously

400
00:33:05,404 --> 00:33:10,664
I am a trader and a lot of people are traders here, you have to change your mental framework

401
00:33:10,664 --> 00:33:13,964
and how you are playing Bitcoin with leverage.

402
00:33:13,964 --> 00:33:20,284
and I think, I don't know, I'm just acknowledging that it's tough if you're an options purchaser

403
00:33:20,284 --> 00:33:25,464
for MSDR. Well, for sure. I'm in options too, but I've always gone far out of the money and I've

404
00:33:25,464 --> 00:33:33,204
never used it as a way to be a primary driver of what I'm doing. So the reason why I say best of

405
00:33:33,204 --> 00:33:40,364
luck is that if you are a trader, you are essentially taking on that risk by yourself

406
00:33:40,364 --> 00:33:45,724
and you're trying to play the stock the stock is not obligated to act in any way you're making an

407
00:33:45,724 --> 00:33:50,204
assumption and we are assuming that it's a bait on bitcoin which it is and we are assuming that

408
00:33:50,204 --> 00:33:55,484
it's going to continue which i think it will but the gyrations in that process i think people have

409
00:33:55,484 --> 00:34:04,204
to own so i understand their frustrations but at the same time if you are holding an equity and

410
00:34:04,204 --> 00:34:10,204
then you are also playing options you are adding on additional risk so you have to kind of take that

411
00:34:10,204 --> 00:34:15,024
in stride, both good and bad, is the reason why I said best of luck.

412
00:34:15,104 --> 00:34:17,504
So your point's taken, but I just want to make sure I'm not coming across

413
00:34:17,504 --> 00:34:18,364
entirely unfair.

414
00:34:18,804 --> 00:34:24,344
I'm just trying to be more measured in the way that I kind of am looking at it.

415
00:34:24,944 --> 00:34:28,344
They should take it in stride, like by stride?

416
00:34:31,744 --> 00:34:32,684
Yeah, that was fun.

417
00:34:33,864 --> 00:34:37,344
I mean, yeah, that can be an angle of it, yes.

418
00:34:37,344 --> 00:34:41,624
But all I'm saying is strategy is volatile by itself.

419
00:34:41,904 --> 00:34:48,164
Options, playing the options and trying to get additional yields is a valid strategy.

420
00:34:48,304 --> 00:34:49,084
I've done it myself.

421
00:34:49,524 --> 00:34:55,864
But I also understand that I can't really control what's happening in the market.

422
00:34:56,064 --> 00:35:00,084
And I have to take those market gyrations on the chin when they don't play out my way.

423
00:35:00,084 --> 00:35:09,544
and so i i posted it was a little tongue-in-cheek but i i said plot twist what if the the the mnav

424
00:35:09,544 --> 00:35:14,104
guidance and on the atm that they put out was the same thing that they had been using all along

425
00:35:14,104 --> 00:35:19,764
but everybody was so happy to see the guidance like it was something new i mean do you guys think

426
00:35:19,764 --> 00:35:24,144
that that the guidance that they put out is too terribly different than what they had been doing

427
00:35:24,144 --> 00:35:28,924
all along i'm sure they had a framework internally they just didn't post it to everybody

428
00:35:28,924 --> 00:35:39,884
that's a good point i mean they probably did um the the thing the thing about it is is that you

429
00:35:39,884 --> 00:35:43,724
know if we if you're correct and they just had an internal metric that they just decided to share

430
00:35:43,724 --> 00:35:53,324
with everyone um how like what was it see this is why i think it's investor relations i think what

431
00:35:53,324 --> 00:35:58,604
they're doing is investor relations they're trying to um assuage a lot of the noise that was going on

432
00:35:58,604 --> 00:36:06,984
online. But flip side, did they now back themselves into a corner if MNAV doesn't go above 2.5

433
00:36:06,984 --> 00:36:14,644
for a prolonged period of time? Is the way that I kind of think about it. I do think that they

434
00:36:14,644 --> 00:36:19,624
had internal metrics. I really do. I think you're right. Do I think that they were these? I'm not

435
00:36:19,624 --> 00:36:27,584
sure. Because if they, you know, so did they have an internal meeting and say, okay, these are the

436
00:36:27,584 --> 00:36:32,324
metrics you've been going with, we have to kind of, we have to change them and we have to kind of

437
00:36:32,324 --> 00:36:38,364
surface them to the investor base or part of the investor base so that they know that what we've

438
00:36:38,364 --> 00:36:42,564
been doing was some guiding our decisions to give them more like line of sight to internal

439
00:36:42,564 --> 00:36:51,264
decision making. I think that's possible. Yeah. Yeah. Anything more about this or did we beat

440
00:36:51,264 --> 00:36:57,144
it absolutely to death? We may have beaten it to death, I think. Well, people in the comments

441
00:36:57,144 --> 00:37:01,304
must have actually been reading the agenda because somebody asked what's a digital empire

442
00:37:01,304 --> 00:37:06,144
so this one's coming over to you tim you're the one that's building the damn digital empire

443
00:37:06,144 --> 00:37:15,864
you got two marathons and uh under your belt so far and congratulations oh he's leaving he doesn't

444
00:37:15,864 --> 00:37:23,944
want to talk about it he's uh he's shy but um you know there was like tens of thousands i mean at

445
00:37:23,944 --> 00:37:30,944
one point I saw 80, 90,000 people, right, Tim, that were, had eyes on your, on your marathon

446
00:37:30,944 --> 00:37:38,784
digital conference yesterday? Yeah, I mean, we were down from last month when it was 168,000

447
00:37:38,784 --> 00:37:44,424
toward the end of it, but, you know, you gotta, you know, the markets go up, the markets go down,

448
00:37:44,424 --> 00:37:51,224
the views go up, the views go down. So yeah, I don't know that there's been

449
00:37:51,224 --> 00:37:57,344
any digital conferences kind of in the Bitcoin space, specifically Bitcoin treasuries.

450
00:37:59,684 --> 00:38:06,124
So yeah, we're kind of like pioneering this, testing the waters. July 8th was the first one.

451
00:38:07,324 --> 00:38:13,624
Yesterday was the second one. Really appreciate everybody, including you guys, especially,

452
00:38:13,624 --> 00:38:26,104
right taking time out of your day to to come on and speak but um yeah it uh to get 42 people up

453
00:38:26,104 --> 00:38:32,584
on stage i mean people are not going to sit in their seats in a venue for 21 hours straight so

454
00:38:33,224 --> 00:38:41,224
i i do think it has legs from that uh point of view um but you know how much will the market bear

455
00:38:41,224 --> 00:38:47,384
as far as uh you know we probably don't need a monthly conference you know i mean maybe if bitcoin

456
00:38:47,384 --> 00:38:53,224
goes uh you know doubles or triples or goes to a million dollars maybe we need monthly conferences

457
00:38:53,224 --> 00:39:00,424
to keep up with with everything but um yeah kind of trial and and trying different things so um

458
00:39:01,544 --> 00:39:08,104
i will say the kind of diving into the first in-person conference that i'm doing and thank

459
00:39:08,104 --> 00:39:14,584
goodness i have guys like uh ed and adrian to to kind of try to fill in everything that needs to be

460
00:39:14,584 --> 00:39:20,824
done 34 days from now literally five weeks from now the conference will already be over so that's

461
00:39:20,824 --> 00:39:30,344
nuts um but for those who have been to the venue in in uh midtown manhattan we only have 500 seats

462
00:39:30,344 --> 00:39:38,984
if you go to the lumen link there's already 200 and some tickets sold so um the reason i say that

463
00:39:38,984 --> 00:39:44,424
i've been doing a lot of research and i don't know the numbers but just hypothetically for those that

464
00:39:44,424 --> 00:39:53,384
were in vegas there were 35 000 people there statistically they probably sold 10 000 tickets

465
00:39:53,384 --> 00:40:02,344
or 12 000 tickets in the year leading up to that and they sold probably 20 000 or 25 000 tickets

466
00:40:02,344 --> 00:40:08,504
in the week before so like if you look at the luma link and you see the pricing just goes from like

467
00:40:08,504 --> 00:40:13,384
a couple hundred dollars a ticket to like five thousand dollars a ticket like there's a reason

468
00:40:13,384 --> 00:40:20,024
for that um it is going to be a premium event i've seen a few comments you're like these tickets are

469
00:40:20,024 --> 00:40:28,424
expensive like yes that's why we're here like why do we have 100 000 people on some of the true north

470
00:40:28,424 --> 00:40:36,504
live streams because people have made a lot of money on mstr i mean it's not a secret so um you

471
00:40:36,504 --> 00:40:42,424
know not only do you have sailor kicking it off at 10 a.m but then you literally have him coming back

472
00:40:43,064 --> 00:40:49,064
for premium sessions where he's hosting the session like he's going to ask the questions

473
00:40:49,624 --> 00:40:56,904
so i think that's something that to my knowledge i've never seen before and um so yeah hats off to

474
00:40:56,904 --> 00:41:03,064
guys like sailor that are are being helpful and are working the willing to work their butts off

475
00:41:03,864 --> 00:41:14,104
because i think that's what we need um what else i mean there are other like 99 certainty that other

476
00:41:14,104 --> 00:41:17,624
some other names that you would recognize are going to be there we just can't announce it yet

477
00:41:17,624 --> 00:41:24,024
because of uh scheduling and confirmations but um i think the cool thing is we're going to live

478
00:41:24,024 --> 00:41:30,264
stream it right so it's it's an unconference meaning it's not just one guy up on stage it's

479
00:41:30,264 --> 00:41:37,224
not just panel after panel visually it will kind of look like maybe a fireside or a panel but the

480
00:41:37,224 --> 00:41:44,344
difference is audience participation mics out in the crowd like think more like during even though

481
00:41:44,344 --> 00:41:49,704
we don't really probably want to talk about this like election season right when you have this

482
00:41:49,704 --> 00:41:55,864
town hall and people are there saying whatever they want whatever they want to say we're literally

483
00:41:55,864 --> 00:42:02,424
compiling and we're going to have this out for a vote to all of the attendees what topics like

484
00:42:02,424 --> 00:42:08,584
right right there adrian morris like whether it's quantum computing whether it's proof of reserves

485
00:42:08,584 --> 00:42:13,704
whether it's something else by that point right i mean five weeks from now is like five years from

486
00:42:13,704 --> 00:42:21,384
now in bitcoin terms right so whatever those topics are um like imagine jeff walton on stage

487
00:42:21,384 --> 00:42:29,144
with pete rizzo and radu and somebody else talking about how the wall street metrics are not working

488
00:42:29,144 --> 00:42:35,464
anymore right uh these these new metrics are needed and all of this is kind of like whether

489
00:42:35,464 --> 00:42:40,504
you're in bitcoin or you're in trad fi it's like breaking all of these quants brains like

490
00:42:41,144 --> 00:42:49,384
very topical things that people actually care about and my like personal goal for the conference is

491
00:42:49,384 --> 00:42:55,704
i want everyone that's in that studio audience to literally feel like at any time because they can

492
00:42:55,704 --> 00:43:00,984
they can stand up they can go to a microphone or someone's roaming around with a microphone and they

493
00:43:00,984 --> 00:43:09,144
can participate in this conversation with all of us with true north with michael sailor with eric

494
00:43:09,144 --> 00:43:16,584
semler with everyone in the room and you're part of this conversation that's being not just live

495
00:43:16,584 --> 00:43:23,064
stream but memorialized for you know what will obviously be hundreds of thousands and millions

496
00:43:23,064 --> 00:43:28,744
of people so uh i think it's gonna be a really unique opportunity i know i'm a little biased

497
00:43:28,744 --> 00:43:34,984
since i'm kind of working on it but i'm uh i'm really excited about it and i we really appreciate

498
00:43:34,984 --> 00:43:42,104
all the support if you go to the luma link and you use true north 15 you get 15 off your ticket

499
00:43:42,104 --> 00:43:54,664
what's better than that so true north 15 obviously uh i i'm very humbled to be a member of true north

500
00:43:54,664 --> 00:44:00,424
so yeah just trying to right we're all kind of going doing our doing our things during the day

501
00:44:00,424 --> 00:44:05,384
doing this at night so i think it'll be a really cool way to get everybody back together in

502
00:44:05,384 --> 00:44:12,584
literally prime time season of the historical bull market and yesterday was interesting right

503
00:44:12,584 --> 00:44:17,784
some people were like no 150 to 200 000 180 000 by the end of the year and then that's it

504
00:44:18,744 --> 00:44:24,104
and grain of salt really kind of wrapped up the whole conference literally with me and he said

505
00:44:24,104 --> 00:44:30,904
we will know in 2026 whether this time is different it's gonna be very simple if we get to

506
00:44:30,904 --> 00:44:34,184
to a new all-time high in 2026, this time is different.

507
00:44:34,364 --> 00:44:37,904
So I thought that was insightful.

508
00:44:38,684 --> 00:44:43,904
It sounds simple, but I was like, oh, that makes sense to me.

509
00:44:44,144 --> 00:44:45,804
So, yeah, that's YUN Conference.

510
00:44:46,144 --> 00:44:49,324
Thanks for the time letting me show this as hard as humanly possible

511
00:44:49,324 --> 00:44:50,284
without being ridiculous.

512
00:44:51,284 --> 00:44:51,724
Oh, yeah, man.

513
00:44:52,064 --> 00:44:55,084
And just so everybody knows, every dollar that True North gets

514
00:44:55,084 --> 00:44:57,904
from that affiliate link, we're going to smash by 1080s.

515
00:44:57,904 --> 00:44:59,584
So there you go.

516
00:44:59,584 --> 00:45:01,564
I was going to hammer it right back into the market.

517
00:45:02,764 --> 00:45:07,944
No, I got a comment again because, you know, how long would it take?

518
00:45:08,244 --> 00:45:09,744
How many people did you say you had on?

519
00:45:09,964 --> 00:45:11,344
42 or something like that?

520
00:45:12,364 --> 00:45:17,164
Yeah, we added Brian Brookshire, BTC, Bitcoin Overflow.

521
00:45:17,324 --> 00:45:19,364
We added, I think we just added one.

522
00:45:19,484 --> 00:45:23,264
So I think if you don't include me as the host, I think we had 42 speakers.

523
00:45:23,804 --> 00:45:23,944
Yeah.

524
00:45:23,944 --> 00:45:41,664
But imagine how long it would take for 42 people to meet 100,000 people one at a time. And that's why I put dematerialization in this part of the agenda because, you know, Sailor's always talking about how iPhone basically dematerialized half of the physical world and put it on your iPhone.

525
00:45:41,664 --> 00:45:48,944
and, you know, Netflix dematerialized, you know, physical entertainment, you know, renting,

526
00:45:48,944 --> 00:45:57,024
renting movies. And you basically dematerialized like hundreds of thousands of individual

527
00:45:57,024 --> 00:46:03,184
interactions that would have, that would have taken, I don't know, a hundred years to take place.

528
00:46:03,364 --> 00:46:10,284
And you, you made all of that happen in a single day. So I just think it's amazing. And I mean,

529
00:46:10,284 --> 00:46:16,824
you got more flowers to announce too, right? I mean, you're an advisor now. And do you want to

530
00:46:16,824 --> 00:46:23,184
talk about that at all? Not really. Okay. Well, people were congratulating you. And I said, well,

531
00:46:23,184 --> 00:46:30,484
you know what? Congratulations to them for landing Tim. I think that was very lucky of them to do.

532
00:46:30,644 --> 00:46:40,024
So you're clearly the hardest working man in Bitcoin. And I think it's just obvious that

533
00:46:40,024 --> 00:46:46,764
people gravitate towards you. And, you know, the way that you talk to everyone is completely

534
00:46:46,764 --> 00:46:53,524
genuine. And I think you just deserve all the success that you're getting.

535
00:46:54,524 --> 00:47:00,044
Thank you. And I do want to apologize for clowning around during the beginning of the

536
00:47:00,044 --> 00:47:06,684
live stream tonight. That was unprofessional, and I will blame it on lack of sleep. So I saw

537
00:47:06,684 --> 00:47:08,444
the comments. I apologize

538
00:47:08,444 --> 00:47:10,004
to Soleil.

539
00:47:10,744 --> 00:47:11,464
I hope you

540
00:47:11,464 --> 00:47:14,684
can join me in making money great

541
00:47:14,684 --> 00:47:15,804
again, but I hope you can

542
00:47:15,804 --> 00:47:18,604
appreciate a little bit of lack

543
00:47:18,604 --> 00:47:20,484
of sleep and accept my apology.

544
00:47:22,784 --> 00:47:24,584
That's ridiculous. No need to apologize.

545
00:47:25,484 --> 00:47:28,544
Every man only gets

546
00:47:28,544 --> 00:47:30,484
two apologies in their life, so don't waste

547
00:47:30,484 --> 00:47:31,124
one on that.

548
00:47:33,204 --> 00:47:33,984
Oh, man.

549
00:47:34,184 --> 00:47:36,664
I just got the best compliment ever in the comments.

550
00:47:36,684 --> 00:47:42,684
Ben Workman. Tim is everywhere all the time grinding. All right. Thank you, Ben. It's very

551
00:47:42,684 --> 00:47:49,304
there. It is. It's very kind. I did. I did go grab some food and I got a text and it said,

552
00:47:49,364 --> 00:47:55,044
what are you doing? I said, I'm at the office getting ready for True North. I'm going to shill

553
00:47:55,044 --> 00:48:02,704
the unconference hard AF. They just said, you are wild, right? It's like, why are you not sleeping?

554
00:48:02,704 --> 00:48:05,464
So we can sleep tomorrow, right?

555
00:48:05,764 --> 00:48:07,164
True North is once a week.

556
00:48:07,264 --> 00:48:08,024
We're all here.

557
00:48:08,564 --> 00:48:10,704
And obviously, we appreciate everybody tuning in.

558
00:48:12,084 --> 00:48:12,804
Heck yeah.

559
00:48:14,104 --> 00:48:16,604
So next topic we got on the agenda.

560
00:48:17,324 --> 00:48:21,224
So Bitcoin treasury companies, network obligations, if any.

561
00:48:21,424 --> 00:48:23,644
So this is something that I've been thinking about lately.

562
00:48:23,884 --> 00:48:29,664
And it was actually somewhat inspired by Julie Millard's interview from your first conference

563
00:48:29,664 --> 00:48:36,784
because she was talking about authenticity. And, you know, strategy has been number one,

564
00:48:36,844 --> 00:48:40,364
you know, they're true to ideal, true to self, all of these things, all of these metrics.

565
00:48:41,324 --> 00:48:46,244
And there's a couple of, you know, kind of Bitcoin dramas that have been

566
00:48:46,244 --> 00:48:50,684
around my X feed lately, you know, we've got spam, and we've got the,

567
00:48:51,244 --> 00:48:57,664
you know, people, people running knots in order to, to try to, you know, filter out some of this

568
00:48:57,664 --> 00:49:08,944
spam. And then we've got, you know, Bitcoin events that may, you know, you attend and you're

569
00:49:08,944 --> 00:49:12,604
looking around and you're like, wait a minute, why are there so many shit coiners here? You know,

570
00:49:12,604 --> 00:49:23,636
like why are people up on stage talking about things that are not Bitcoin And so do these Bitcoin treasury companies have any kind of ethical or moral obligation

571
00:49:23,636 --> 00:49:32,576
to try to ensure the survival of Bitcoin or weigh in on some of these topics?

572
00:49:32,976 --> 00:49:40,436
Or is it just you're a treasury company, your job is just to stack sats and Bitcoin takes care of itself?

573
00:49:42,796 --> 00:49:49,116
Well, I think their first responsibility as a company is through their shareholders and

574
00:49:49,116 --> 00:49:54,796
any kind of stewardship they choose to take part in, whether it be the Bitcoin network,

575
00:49:54,796 --> 00:50:01,156
running, whether it be running nodes, proof of reserves, whatever other things that they

576
00:50:01,156 --> 00:50:08,736
decide to take on should be, I would say, voluntary rather than mandatory.

577
00:50:08,736 --> 00:50:16,696
So to your point, I don't know if they are required to, but certain investor bases may

578
00:50:16,696 --> 00:50:20,636
say that they expect them to, and that would be something that they would have to take

579
00:50:20,636 --> 00:50:22,096
on.

580
00:50:22,096 --> 00:50:28,356
But primarily, the responsibility of a company is to their shareholders.

581
00:50:28,356 --> 00:50:32,096
So I think that is their first responsibility.

582
00:50:32,096 --> 00:50:38,676
And whether we like it or not, anything Bitcoin, purely Bitcoin related, in terms of whether

583
00:50:38,676 --> 00:50:45,396
to be core versus not so what have you i think that will be secondary to it now that said i think

584
00:50:45,396 --> 00:50:50,116
some of the companies are going to have to take a stance on that in the coming years because as the

585
00:50:50,116 --> 00:50:55,956
network grows and as bitcoin adoption grows they can't just say uh we have no opinion on it right

586
00:50:55,956 --> 00:50:59,316
they're going to have to take a stand but i do think that's going to have to be something that

587
00:50:59,316 --> 00:51:05,796
they navigate very diligently yeah and i was kind of thinking of it like um you know let's just let's

588
00:51:05,796 --> 00:51:12,036
just say corn as a commodity right since we got the bitcoin angle so if your if your mandate was

589
00:51:12,036 --> 00:51:19,316
to acquire as much corn as possible you would also want to keep it safe right you can't let it get

590
00:51:20,196 --> 00:51:28,196
ruined by you know a fungus or something right so i think i think you have to automatically assume

591
00:51:28,196 --> 00:51:34,836
that bitcoin treasury companies want to stack as many saps as possible but then also you can't

592
00:51:34,836 --> 00:51:41,916
can't just remain silent if there's a threat to that product itself. Because if the sats become

593
00:51:41,916 --> 00:51:49,156
worthless, then what's the point of Bitcoin yield? You know what I mean? So I think that

594
00:51:49,156 --> 00:51:55,016
it's going to be more and more important, especially for the strategies of the world

595
00:51:55,016 --> 00:52:02,676
that are, they have a way stronger voice in the network than anyone else.

596
00:52:02,676 --> 00:52:04,876
probably MetaPlanet

597
00:52:04,876 --> 00:52:07,656
may need to weigh in on some of these things too

598
00:52:07,656 --> 00:52:08,576
but

599
00:52:08,576 --> 00:52:12,436
I don't know

600
00:52:12,436 --> 00:52:14,016
I think it's a little bit

601
00:52:14,016 --> 00:52:15,416
I don't want to let them off the hook

602
00:52:15,416 --> 00:52:18,356
I know people criticize Elon Musk

603
00:52:18,356 --> 00:52:20,816
for voicing things about being political

604
00:52:20,816 --> 00:52:21,676
and whatnot like that

605
00:52:21,676 --> 00:52:23,316
I'm not really going there

606
00:52:23,316 --> 00:52:27,076
but some people really do think

607
00:52:27,076 --> 00:52:30,356
that the spam could be an existential threat to Bitcoin

608
00:52:30,356 --> 00:52:40,716
So it's been weighing on my mind quite a bit. And to the point where I got motivated to actually run my own node.

609
00:52:41,056 --> 00:52:46,236
You know what I mean? And I just thought, whatever, let other people run nodes. I don't need to do that.

610
00:52:46,336 --> 00:52:50,956
But it's got me super motivated. And I can't even think of any company.

611
00:52:51,356 --> 00:52:55,156
We're always making these announcements like, oh, we bought Bitcoin and this company bought Bitcoin.

612
00:52:55,156 --> 00:52:57,696
but I've never seen anybody saying, you know,

613
00:52:57,716 --> 00:53:01,516
we're going to be a steward of the network and we're also running a node.

614
00:53:01,516 --> 00:53:03,856
Right. Has anybody ever seen an announcement like that?

615
00:53:06,836 --> 00:53:11,936
I don't think so. Right. Yeah. I hope, I hope it happens.

616
00:53:12,996 --> 00:53:14,856
Taylor, you know, I don't want to put words in his mouth,

617
00:53:14,896 --> 00:53:17,316
but he seems like an ossify guy. Like, you know,

618
00:53:17,316 --> 00:53:21,056
he's always talking about the granite or, you know,

619
00:53:21,076 --> 00:53:22,956
the bedrock is the foundation.

620
00:53:25,156 --> 00:53:32,116
but he's in a bit of a spot too because people will you know if he tries to voice his opinion

621
00:53:32,116 --> 00:53:37,636
people will say that oh he's just trying to manipulate the code you know people the devs to

622
00:53:38,196 --> 00:53:45,236
to make some you know uh changes in his favor so some of these companies might be in a in a kind of

623
00:53:45,236 --> 00:53:52,196
like a lose-lose situation in that sense but um you know ensuring bitcoin survival i think people

624
00:53:52,196 --> 00:53:59,956
just assume that it's automatic but it's really up to us it's up to everyone um and and i don't i

625
00:53:59,956 --> 00:54:03,716
don't want to let bitcoin treasury companies off the hook and just say you know your only job is to

626
00:54:04,596 --> 00:54:08,036
borrow money and buy bitcoin i don't i personally don't think that that's enough

627
00:54:10,436 --> 00:54:14,756
yeah no i think you have you have a point the reason why i mentioned the um primary

628
00:54:16,036 --> 00:54:19,396
responsibilities to the shareholders is because you know they are a company

629
00:54:19,396 --> 00:54:25,376
But with everything you're saying, the way I see it is that these companies are peers in the network, but they're just peers of a different scale.

630
00:54:26,016 --> 00:54:29,596
So how they operate in the network is going to be very much voluntary.

631
00:54:30,316 --> 00:54:34,836
And, you know, what you just said about like Saylor and strategy, it is true.

632
00:54:34,836 --> 00:54:46,756
He may be in a damned if you don't, damned if you do situation where anything he says, there's going to be a loud outcry on the opposite side just because of his position, just because of the size of strategy has appeared in the network.

633
00:54:46,756 --> 00:54:54,176
but that said you know maintaining the safety of bitcoin the sec the function of the network making

634
00:54:54,176 --> 00:54:59,756
sure that bitcoin stays viable is something that's in their vested interest as a company that's

635
00:54:59,756 --> 00:55:04,136
acquiring bitcoin so yeah you're right at some point they're going to have to take a stand

636
00:55:04,136 --> 00:55:10,316
it's just a matter of how that's you know brought to the market in terms of communication in terms

637
00:55:10,316 --> 00:55:15,956
of what exactly are they going to do is it just going to be running nodes is it going to be through

638
00:55:15,956 --> 00:55:18,016
taking a more active role?

639
00:55:18,456 --> 00:55:19,716
How is it going to look?

640
00:55:20,136 --> 00:55:21,616
I really think that

641
00:55:21,616 --> 00:55:24,196
that's something that's going to have to be thought through.

642
00:55:24,756 --> 00:55:26,236
But strategy, anything that they

643
00:55:26,236 --> 00:55:27,896
do is going to have a huge footprint.

644
00:55:29,296 --> 00:55:30,216
I think

645
00:55:30,216 --> 00:55:32,356
that they're going to have to be very careful

646
00:55:32,356 --> 00:55:34,396
with what they go to the market with in terms of

647
00:55:34,396 --> 00:55:36,516
how they want to be stewards in the network

648
00:55:36,516 --> 00:55:38,476
as one of the

649
00:55:38,476 --> 00:55:39,496
largest peers in the network.

650
00:55:41,756 --> 00:55:42,196
Yeah.

651
00:55:42,376 --> 00:55:43,376
That does make sense.

652
00:55:43,376 --> 00:55:53,096
we don't have to beat that one to death but so Jesse actually had a suggestion and of course he

653
00:55:53,096 --> 00:55:58,816
didn't show up to defend his position but he was talking about some of these companies that are

654
00:55:58,816 --> 00:56:06,256
like investing in each other's offerings and is that is that fair play or is that

655
00:56:06,256 --> 00:56:13,456
um you know should all of your own company's money just be plowed into your own your own

656
00:56:13,456 --> 00:56:17,856
offerings like should should bitcoin treasury companies be participating in each other's

657
00:56:17,856 --> 00:56:21,216
capital raises or or is that uh that a no-no

658
00:56:25,776 --> 00:56:31,776
i don't think it's like insider trading um obviously goes to show you there's value in

659
00:56:31,776 --> 00:56:37,536
networking and being connected but yeah that's all i have to say on that

660
00:56:40,016 --> 00:56:44,176
yeah i mean you know every time we get off zero we're joining the bitcoin network and every time

661
00:56:44,176 --> 00:56:48,656
a bitcoin treasury company gets off zero they're joining like a you know kind of like a

662
00:56:50,336 --> 00:56:54,016
uh we're all in it together kind of thing and you know sailors always tweeting

663
00:56:54,816 --> 00:57:00,096
hey this company bought bitcoin this other company bought bitcoin but is that like uh

664
00:57:00,096 --> 00:57:10,596
I don't know, is that not quite a vote of confidence in your own company if you're giving other companies capital instead of buying Bitcoin with your own capital?

665
00:57:10,916 --> 00:57:13,556
Or am I not understanding how these capital raises work?

666
00:57:14,776 --> 00:57:16,176
No, I don't think that's what it is.

667
00:57:16,176 --> 00:57:23,816
I think that we are so used to an adversarial model that we have a hard time adopting or accepting, rather, a cooperative model.

668
00:57:23,816 --> 00:57:30,536
if if if these companies adopt bitcoin and more and more companies adopt bitcoin that's

669
00:57:30,536 --> 00:57:36,816
that's good for bitcoin so in a way they all have a vested interest in their mutual survival

670
00:57:36,816 --> 00:57:43,196
so i think that it's it's creating different dynamics in the market as to why you're seeing

671
00:57:43,196 --> 00:57:49,776
that more companies are willing to invest in each other and um push them towards success like with

672
00:57:49,776 --> 00:57:54,316
sailor retweeting all these companies when they buy bitcoin and whatnot he's being an advocate for

673
00:57:54,316 --> 00:58:00,696
these companies because their success and bitcoin success is in his best interest so i think it

674
00:58:00,696 --> 00:58:05,956
creates a self-interested cooperative model that we're having um that we're going through the

675
00:58:05,956 --> 00:58:11,596
reconciliation process with and coming to terms with in a true adversarial purely capitalistic

676
00:58:11,596 --> 00:58:16,336
model no that that's not what they should be doing but in a in a more cooperative model where

677
00:58:16,336 --> 00:58:21,216
bitcoin is a network and you know they say bitcoin is a movement and bitcoin is this and this and

678
00:58:21,216 --> 00:58:26,496
that it does create more of a cooperative model perhaps with regards to the sharing of capital

679
00:58:26,496 --> 00:58:34,736
and how capital is allocated and we may be just seeing that yeah i if i was um if i was in charge

680
00:58:34,736 --> 00:58:38,656
i'd be tempted to sell cash secured puts against strategy and then buy bitcoin with that that might

681
00:58:38,656 --> 00:58:46,976
work out i mean you could you could do that that that there's nothing against it to say that same

682
00:58:46,976 --> 00:58:51,536
with you doing that but i'm just saying that i think we're seeing more of a cooperative model

683
00:58:52,176 --> 00:58:58,096
where your success is my success taking place and and we're seeing the natural output of that

684
00:58:58,096 --> 00:59:03,536
um whether that's good or bad i don't know man i'm just saying what what i think could be um

685
00:59:03,536 --> 00:59:10,496
playing into it yeah so i mean that's all i've got on the agenda this might be a quick one unless

686
00:59:10,496 --> 00:59:14,256
you guys got other things that you want to talk about dan did you bring anything for the press or

687
00:59:14,256 --> 00:59:20,336
did you get all all of that off your chest um let's just talk about whatever else we need to

688
00:59:20,336 --> 00:59:26,576
talk about and i can talk about the press for a second you said and you can talk about what yeah

689
00:59:26,576 --> 00:59:31,456
i can mention the prefs um i don't have much more besides volume and some theoretical ideas

690
00:59:31,456 --> 00:59:38,536
okay yeah go ahead and share them the um the only thing that I put in section five is we have feds

691
00:59:38,536 --> 00:59:45,256
on the streets so this this may be your your Bitcoin use case get your seed phrase ready in

692
00:59:45,256 --> 00:59:50,836
case you got a dip out of the country and or get out of your little communist hellhole of a city

693
00:59:50,836 --> 01:00:00,436
that you got that you're living in and get your shit hits the fan plan ready does it get any more

694
01:00:00,436 --> 01:00:09,656
bearish than that i'm bullish on bitcoin but i'm bearish on uh i'm bullish i'm bearish on the fourth

695
01:00:09,656 --> 01:00:18,916
turning i guess so get your preps ready get your press ready i like that so long you ready to share

696
01:00:18,916 --> 01:00:25,356
dan um i think i covered most of it i think the preps are the yeah i think the preps are the full

697
01:00:25,356 --> 01:00:29,416
story i don't i know people don't want to talk about them but that's the future right now that's

698
01:00:29,416 --> 01:00:35,256
business model i mean before the prefs it was kind of managing the leverage ratio what is a convert

699
01:00:35,256 --> 01:00:40,456
what is btc yield what is that what's the development been over the past few years right

700
01:00:40,456 --> 01:00:45,976
first it was okay are they over leveraged can they cover their liabilities with their cash flows

701
01:00:45,976 --> 01:00:51,496
are the converts a form of leverage are they senior capital structure what does that leverage garnish

702
01:00:51,496 --> 01:00:56,056
garner like what kind of multiple is a fair assumption there then we moved into this okay

703
01:00:56,056 --> 01:01:01,896
what is equity issuance and is it a sort of accretive mechanism for shareholders? We figured

704
01:01:01,896 --> 01:01:07,016
that out. So I think it's cool. We've gone through this learning journey. And then we saw the first

705
01:01:07,016 --> 01:01:10,976
issuances of the PREF over this winter and we started figuring out, okay, what is a PREF? What

706
01:01:10,976 --> 01:01:16,976
is a liability that never comes due? Now we're trying to figure out what is BTC per share if a

707
01:01:16,976 --> 01:01:21,856
liquidation preference exists? Is the liquidation preference a claim over, superior claim over the

708
01:01:21,856 --> 01:01:26,576
assets or is that not even really leveraged considering that you know all of these prefs

709
01:01:26,576 --> 01:01:31,096
never come due what is the liability is the liability the total market cap of all the prefs

710
01:01:31,096 --> 01:01:37,376
or is the liability the annual dividend payments on the actual pref and i don't know how to quantify

711
01:01:37,376 --> 01:01:43,416
that in terms of btc per share necessarily but it has a huge impact on mnav right if if the

712
01:01:43,416 --> 01:01:50,516
outstanding prefs represent 30 or 40 percent of the total value nav of strategies bitcoin

713
01:01:50,516 --> 01:01:59,336
then the BTC per share will be calculated, one, based on the total NAV of the Bitcoin divided by the total outstanding shares,

714
01:02:00,416 --> 01:02:06,896
or total outstanding shares divided by the NAV, or it will be calculated, two, by taking the total NAV,

715
01:02:07,096 --> 01:02:11,176
subtracting out the total market cap of all the prefs, which represent a liquidation preference,

716
01:02:11,436 --> 01:02:16,756
and then having that be the representative BTC per share, per fully diluted common stock.

717
01:02:16,896 --> 01:02:19,976
So I don't know how they're going to value that BTC per share moving forward.

718
01:02:19,976 --> 01:02:33,596
And I think that's a really tough or interesting next step for figuring out how these things are valued, because that's ultimately what we've been trying to do at MSDRX for North the past year is understand how to value MSDR, how to value a Bitcoin equity, how to value these sorts of things.

719
01:02:33,696 --> 01:02:36,896
And the pieces are moving and shaking as we go.

720
01:02:38,096 --> 01:02:40,296
Yeah. And some of the things don't fit in a spreadsheet.

721
01:02:40,596 --> 01:02:42,976
Right. I mean, I'm going back to the authenticity thing.

722
01:02:43,396 --> 01:02:46,096
But how do you measure like authenticity per share?

723
01:02:46,096 --> 01:02:49,896
you know what i mean because you've got you've got companies that have been doing it longer

724
01:02:49,896 --> 01:02:55,456
right strategies been doing it the longest they've got the um the longest track record you've got

725
01:02:55,456 --> 01:03:01,316
meta planet that's been executing well but you've got some of these other companies that you know

726
01:03:01,316 --> 01:03:07,756
might even be just like hyping their own stock and uh potentially over leveraging encumbering

727
01:03:07,756 --> 01:03:14,076
their bitcoin uh maybe desperate to raise capital and doing some things that that they shouldn't be

728
01:03:14,076 --> 01:03:21,056
doing. So I agree with you, though. We have to figure out a way to measure those things.

729
01:03:21,716 --> 01:03:28,976
And I think that the market really figured out that the EPS doesn't matter for strategies

730
01:03:28,976 --> 01:03:37,596
earnings because Q1, we had a huge miss, right? It was because Bitcoin was down and it was like

731
01:03:37,596 --> 01:03:44,056
billions of below expectations and the market didn't care. Strategies price didn't

732
01:03:44,056 --> 01:03:50,476
really go down. And then Q2, we had that massive gain, which should qualify them to at least be

733
01:03:50,476 --> 01:03:58,276
considered for S&P 500 inclusion. But again, the market just didn't give a damn. So I think that

734
01:03:58,276 --> 01:04:04,756
the market is probably calculating in the same things that you're calculating, Dan, and saying

735
01:04:04,756 --> 01:04:10,976
here's what they did this quarter. Because we know we're not going to give them credit for all

736
01:04:10,976 --> 01:04:15,936
of bitcoin that they put on their balance sheet last year like we we want to know okay what was

737
01:04:15,936 --> 01:04:23,376
your bitcoin accumulation this quarter or what was your btc and dollar gain this quarter so um i don't

738
01:04:23,376 --> 01:04:27,936
i don't you know maybe we were wondering if the market was going to be fooled and they weren't

739
01:04:27,936 --> 01:04:32,496
i think it was just all kind of uh expected really

740
01:04:32,496 --> 01:04:45,256
hey dan or anyone i got something for you if uh i'm not interrupting so late no no good work um

741
01:04:45,256 --> 01:04:54,976
i posted maybe an hour ago there was a clip and then a whole thing with uh joe burnett and the

742
01:04:54,976 --> 01:05:02,736
takeaway was basically he was saying that this intelligent leverage like the leverage ratio

743
01:05:03,376 --> 01:05:09,696
right 20 to 30 percent or if it's all preps maybe 30 to 50 percent could create massive tailwinds

744
01:05:09,696 --> 01:05:17,856
for the price of bitcoin as it kind of ratchets up and uh i didn't know if you had a view on that

745
01:05:17,856 --> 01:05:23,776
or even like the mechanics of it right like the flywheel of like the price goes up your leverage

746
01:05:23,776 --> 01:05:30,016
ratio goes down. So then you got to like it just like how much merit do you put to that

747
01:05:30,016 --> 01:05:31,016
statement or?

748
01:05:31,016 --> 01:05:34,936
I mean, it's a great point, right, is the price of Bitcoin goes up significantly to maintain

749
01:05:34,936 --> 01:05:38,896
a consistent leverage ratio. There has to be consistent bid on Bitcoin. They have to

750
01:05:38,896 --> 01:05:43,676
be buying more Bitcoin through issuing more securities or debt.

751
01:05:43,728 --> 01:05:49,248
right like if you have a 10 leverage ratio bitcoin goes up double you have now a 5 leverage ratio

752
01:05:49,248 --> 01:05:53,968
you need to issue five percent of your bitcoin stack you need to buy five percent of your bitcoin

753
01:05:53,968 --> 01:05:59,648
stack debt that debt is through fixed income issue issuance across the board whether that

754
01:05:59,648 --> 01:06:05,488
be press or convertible notes or just straight debt in the case of planet right so yeah it holds

755
01:06:05,488 --> 01:06:12,528
merit but there comes a point where bitcoin gets high enough and yeah that holds merit there comes

756
01:06:12,528 --> 01:06:20,848
the point you if bitcoin's at 300 or 400 000 in six months you can't be holding a 30 leverage ratio

757
01:06:20,848 --> 01:06:29,568
you just can't do that the vol ticks up to 30 40 50 on bdc you can't hold a 30 40 leverage ratio

758
01:06:31,408 --> 01:06:37,648
you just can't do that in good faith so i i don't think i think theoretically and over a really long

759
01:06:37,648 --> 01:06:42,208
period of time everything you're saying tim 100 correct i think in the short term you can't

760
01:06:42,208 --> 01:06:49,888
lever up crazy during a rally got it yeah i mean his points well taken over five years

761
01:06:54,128 --> 01:06:58,928
well i i think we made it all the way through the agenda um you guys want to go around and do

762
01:06:58,928 --> 01:07:02,928
final thoughts you want to start with you adrian anything you want to close that close us out with

763
01:07:04,688 --> 01:07:08,288
uh sure i think that bitcoin just hit on you all-time high today over one

764
01:07:08,288 --> 01:07:15,488
124 what was it whatever it was oh 100 just here so i can drop off but um yeah bitcoin's gonna rip

765
01:07:17,408 --> 01:07:23,968
we're gonna be fine everything's gonna be calling just zoom out and relax we're cooking

766
01:07:25,008 --> 01:07:28,848
okay only only bull posting from now on just on thanks adrian appreciate you

767
01:07:29,968 --> 01:07:35,328
jeff shows up and adrian's like that's it i'm out that's it i mean i can stay but i don't i got

768
01:07:35,328 --> 01:07:39,888
nothing else to say so yeah for sure i'm jeff's here i'll bounce out and um everyone just needs

769
01:07:39,888 --> 01:07:47,408
to chill peace just in time jeff i'm gonna close it out early you're gonna close it early 8 14.

770
01:07:47,408 --> 01:07:52,688
you got dan coming in talking just a bunch of bearish stuff about uh strf and liquidation

771
01:07:52,688 --> 01:08:02,048
preferences i said nothing bearish on the stream it's just it's only the tweets dan yeah but the

772
01:08:02,048 --> 01:08:08,208
tweets are meant to be they're literally a stream of just a stream of stream of yeah yeah i appreciate

773
01:08:08,208 --> 01:08:14,768
it i'm not i'm not i i appreciate it i i like your i like your arb perspective you're like okay hold

774
01:08:14,768 --> 01:08:20,048
on there's uh there's uh credits i like how you're putting it all together you're like you're thinking

775
01:08:20,048 --> 01:08:26,128
like an algo uh where you're identifying these different like opportunities to move in between

776
01:08:26,128 --> 01:08:30,048
all of these different assets based on how are they're going to move in any one direction that

777
01:08:30,048 --> 01:08:35,888
it was kind of that like pentagon thing that put together right where where you can like you can

778
01:08:35,888 --> 01:08:42,208
like arb all of them because each each is going to have its own individual like risk relativity

779
01:08:43,168 --> 01:08:47,968
relative to like the premium of msdr or all of these different components intertwined moving

780
01:08:47,968 --> 01:08:54,208
together and they all lay claim they all technically are some form of claim or the underlying asset

781
01:08:54,208 --> 01:08:58,208
and it's a homogeneous underlying asset

782
01:09:00,528 --> 01:09:05,408
yeah which is a really interesting concept like when you look at like like when you look at a

783
01:09:05,408 --> 01:09:10,688
traditional equity right a common a common share represents a claim over future cash flows or

784
01:09:10,688 --> 01:09:15,248
current cash flows or in the case of liquidation the actual liabilities of the company what's left

785
01:09:15,248 --> 01:09:20,848
after the common debtors after the debtors have been in the case of mstr the common represents a

786
01:09:20,848 --> 01:09:27,008
future claim over the assets at some point in the future because there isn't the cash flow per se

787
01:09:27,568 --> 01:09:32,608
for the common equity right like it's a future expectation of yield or accretion or generative

788
01:09:32,608 --> 01:09:40,448
capabilities from the bitcoin so that is actually very similar to what strife claim may be a strife

789
01:09:40,448 --> 01:09:47,408
claim effectively a fixed claim over the bitcoin but with no expectation of future yield on the

790
01:09:47,408 --> 01:09:53,728
bitcoin right so that's different yeah fixed fixed claim on the bitcoin it's uh in the event

791
01:09:53,728 --> 01:09:59,328
of liquidation though exactly but it's a fixed usd value of the bitcoin that's what it is right

792
01:09:59,328 --> 01:10:06,128
senior claim yeah the assets of corporation period full stop in the case of liquidation right yeah

793
01:10:06,128 --> 01:10:10,848
and this is the question i posed to you a little bit earlier and i just i'm curious how if you've

794
01:10:10,848 --> 01:10:16,368
mulled on it a little bit it's like what's the probability that strategy gets liquidated or

795
01:10:16,368 --> 01:10:25,408
bankrupt and the bitcoin's worth anything and the strife holders get anything right and that's

796
01:10:26,288 --> 01:10:31,408
but would you would you would you say like so i think the real question is when you calculate btc

797
01:10:31,408 --> 01:10:38,928
per share would you divide all of the shares by the total nav of the bitcoin or the total nav of

798
01:10:38,928 --> 01:10:42,688
the bitcoin minus the liquidation preference of all the prefs

799
01:10:46,368 --> 01:10:51,828
for what you're trying to when you're trying to calculate the bitcoin per share

800
01:10:51,828 --> 01:10:59,548
i'm trying to calculate the bitcoin per share of the con uh yeah yeah yeah that is the only

801
01:10:59,548 --> 01:11:04,488
fucking metric we use to to value the stock or not the only measure but that's a key factor right

802
01:11:04,488 --> 01:11:09,828
like i think it's a big deal personally but maybe i'm overthinking it so your bitcoin per share

803
01:11:09,828 --> 01:11:16,568
They're backing out the relative claim of the liquidation value at issuance for each

804
01:11:16,568 --> 01:11:21,648
of the preferred equities and its component of that?

805
01:11:21,648 --> 01:11:24,588
No, it's just I'm doing a terrible job explaining.

806
01:11:24,588 --> 01:11:25,588
I'm sorry.

807
01:11:25,588 --> 01:11:27,188
But like prior in prior.

808
01:11:27,188 --> 01:11:28,188
I need math.

809
01:11:28,188 --> 01:11:29,188
I need math.

810
01:11:29,188 --> 01:11:30,188
You put it on the screen.

811
01:11:30,188 --> 01:11:31,188
Let's just say preps don't exist.

812
01:11:31,188 --> 01:11:32,188
There's converts.

813
01:11:32,188 --> 01:11:38,368
When we calculated Bitcoin per share, we took total outstanding fully diluted market cap

814
01:11:38,368 --> 01:11:45,808
we divided it by the USD value or we divided it by the number of Bitcoins held minus the liabilities, right?

815
01:11:48,228 --> 01:11:56,108
Yeah, we looked at it a few different ways because there's, I mean, the converts can convert into different tranches of equity, right?

816
01:11:56,408 --> 01:12:02,408
It's convertible to equity into different, and that equity can change over time depending on what the underlying is and all of that.

817
01:12:02,508 --> 01:12:06,328
So we looked at it fully diluted and non-fully diluted.

818
01:12:06,328 --> 01:12:13,768
okay okay so in the case of the prep so that that's totally okay but in the case of the

819
01:12:14,408 --> 01:12:19,608
the prefs i guess you wouldn't subtract out the perpetual limitation preference that wouldn't be

820
01:12:19,608 --> 01:12:27,048
considered so you divide the total fully diluted market cap by the total number of bitcoins not

821
01:12:27,048 --> 01:12:31,288
subtracting out the portion that is represented by the location preference that would be how you

822
01:12:31,288 --> 01:12:35,928
calculate for fair value bitcoin per share because the professionals never come due that would be

823
01:12:36,328 --> 01:12:46,988
And the reason you would do that is because that gives you some better underlying risk metric of the PREF?

824
01:12:48,328 --> 01:12:53,128
I'm just curious. I'm just curious what the PREF, like is the PREF liquidation?

825
01:12:54,248 --> 01:13:02,688
People say, according to, you know, GAP accounting measures, the liquidation preference, the total market cap of the PREF isn't a liability.

826
01:13:02,688 --> 01:13:09,088
So that increase is not a theoretical Bitcoin per share for the common stockholder.

827
01:13:10,148 --> 01:13:14,468
But if you consider the liquidation, the total market capital liquidation preference as a

828
01:13:14,468 --> 01:13:17,988
liability, there's a lower Bitcoin per share for common holders.

829
01:13:18,328 --> 01:13:19,908
So that's something I've been trying to figure out in my head.

830
01:13:20,788 --> 01:13:22,928
How do you consider that?

831
01:13:23,348 --> 01:13:25,348
But it kind of comes back to the original question.

832
01:13:25,428 --> 01:13:27,768
It's only a liability if there's a liquidation.

833
01:13:27,768 --> 01:13:31,708
And if there's liquidation, then the stock is probably worthless.

834
01:13:31,708 --> 01:13:35,148
I don't know. I just see this whole thing as binary.

835
01:13:35,668 --> 01:13:41,128
No, I think that's a great point, but then you could use that argument for 100% leverage ratio.

836
01:13:43,088 --> 01:13:47,868
Right. I think that's the question. It's like, how high can you crank this thing?

837
01:13:50,848 --> 01:13:52,468
I think that's a really good question.

838
01:13:53,168 --> 01:13:55,008
I don't think we'd get to have 100% leverage ratio.

839
01:13:55,008 --> 01:14:07,888
Well, the leverage, really your leverage ratio should be a function of the dividend payment

840
01:14:07,888 --> 01:14:11,568
of the preferred, not necessarily the...

841
01:14:11,568 --> 01:14:18,768
Right. Because even if you levered it to 100%, let's go crazy here. Even if you levered this

842
01:14:18,768 --> 01:14:22,288
puppy to 100% technically, how we've been calculating leverage in the past and you got

843
01:14:22,288 --> 01:14:28,048
77 billion dollars of capital yeah uh 77 billion dollars capital 77 billion dollars of debt and

844
01:14:28,048 --> 01:14:33,488
let's just say at seven per at 10 percent interest to make the number simple then you then you've got

845
01:14:34,368 --> 01:14:39,728
seven billion dollars of dividend liability annually right which comes out of the common

846
01:14:40,288 --> 01:14:49,008
but it's essentially a 20 kager arb right and that so so you'd you'd have your your real liability is

847
01:14:49,008 --> 01:14:54,288
your annual liability and your arbing it's funny you bring up this kegger arb because i did a little

848
01:14:54,288 --> 01:15:02,288
bit of math maybe i'll share my screen so if you'll let me here i'm trying to wrap my head around this

849
01:15:02,288 --> 01:15:11,168
a little bit further as well um oh shoot i gotta make it bigger and i disregard this over here i'm

850
01:15:11,168 --> 01:15:15,808
just trying to like think of how to how to put this in perspective because i i feel like a lot

851
01:15:15,808 --> 01:15:22,128
of people aren't really understanding uh how like they're not seeing the arb and they're not seeing

852
01:15:22,128 --> 01:15:29,328
the arb from the math i think so i just wanted to put this into perspective here the strf price 117

853
01:15:29,328 --> 01:15:35,808
dividend per share eight dollars uh is it eight it's ten let's just say it's ten make it equal

854
01:15:35,808 --> 01:15:40,288
uh quarterly dividend per share is two dollars and fifty cents the initial rate paid on this is eight

855
01:15:40,288 --> 01:15:42,448
eight and a half percent relative to $117.

856
01:15:43,048 --> 01:15:48,288
So I used an incredibly conservative BTC CAGR assumption here, 25%.

857
01:15:48,288 --> 01:15:51,788
So it brings us to a quarterly CAGR assumption of 6%.

858
01:15:51,788 --> 01:15:53,908
That's right.

859
01:15:54,328 --> 01:15:57,248
So your CAGR ARB is 16%.

860
01:15:57,248 --> 01:15:59,428
So I just walked through the math, put this in the perspective.

861
01:16:00,268 --> 01:16:05,448
So let's say the issue in a share of STRF at $117.

862
01:16:05,448 --> 01:16:11,548
You're going to go buy $117. Strategy is going to go buy $117 worth of Bitcoin. Maybe less fees,

863
01:16:11,648 --> 01:16:18,748
maybe it's $116. We can argue over this. The dividend that they're going to pay, and I'll

864
01:16:18,748 --> 01:16:25,068
make this so you can see it. The dividend they're going to pay is $2.50. The net Bitcoin that they

865
01:16:25,068 --> 01:16:33,748
would have, let's just say, forget additional capital raise. Forget additional capital raise

866
01:16:33,748 --> 01:16:39,268
completely. And let's just say, what if they just sold the Bitcoin to pay this off?

867
01:16:40,968 --> 01:16:47,068
Okay. Which I think is a good, it's helpful to wrap your head around the math here is if they

868
01:16:47,068 --> 01:16:53,468
just sold the Bitcoin to pay this off. Okay. So Bitcoin price, $117. You've got a quarterly

869
01:16:53,468 --> 01:16:57,588
dividend paid of $2 and 50 cents. The net Bitcoin you'd have after that would be $115.

870
01:16:57,588 --> 01:17:03,988
dollars. Now that $115 is going to compound at 6% quarterly. So next quarter it's going to be worth

871
01:17:03,988 --> 01:17:10,448
122, but you got to pay out another $2.50 dividend. And then that Bitcoin you'd have at that point is

872
01:17:10,448 --> 01:17:19,608
$119. Now from that issuance, $117 at the end of this period, these two quarters, you'd actually

873
01:17:19,608 --> 01:17:27,148
have $119 worth of Bitcoin. You paid out $5. So you technically would have made $2 in these two

874
01:17:27,148 --> 01:17:35,848
quarters on that individual single transaction. So that's being counted as like this net income.

875
01:17:35,848 --> 01:17:43,988
I guess the argument is, is this net income? And I think it should be calculated as net income. How

876
01:17:43,988 --> 01:17:51,068
does that factor into revenue? Can you discount this to, can you discount what the ARB is over

877
01:17:51,068 --> 01:17:58,348
time back to a certain point in time like today and get to a like proxy revenue figure calculating

878
01:17:58,348 --> 01:18:05,028
the benefit of this arb in day one and i think that might be an interesting concept to just walk

879
01:18:05,028 --> 01:18:09,848
through but then wouldn't that mstr pop to a multiple and then trade flat into perpetuity

880
01:18:09,848 --> 01:18:16,208
see i i kind of caught you catching this or talking about this in the earlier say that one

881
01:18:16,208 --> 01:18:23,728
time dan if you believe mstr's price should reflect the future leverage income based on a

882
01:18:23,728 --> 01:18:32,048
kegger orb then the premium should pop price it all in and then mstr should trade flat until bitcoin

883
01:18:32,048 --> 01:18:39,888
reaches its terminal kegger i think that i think that is a an argument that you can make it's like

884
01:18:39,888 --> 01:18:47,008
you like what what is bitcoin's terminal kegger it didn't tell fiat goes to zero like what like

885
01:18:47,008 --> 01:18:51,808
how forward looking does the market look right is the market is the market is the market capturing

886
01:18:51,808 --> 01:18:57,728
this and like how do you value a company are you going to value a company at less than the value of

887
01:18:57,728 --> 01:19:02,608
the assets on this balance sheet no and how do you value a company that's increasing in financial

888
01:19:02,608 --> 01:19:11,008
strength so quickly like this company started with 500 million dollars five years ago and they're

889
01:19:11,008 --> 01:19:20,048
holding 77 billion dollars like that is insane that is insane and as to use soleil's word

890
01:19:20,928 --> 01:19:24,368
this is as least efficient as they will ever be

891
01:19:24,368 --> 01:19:32,128
like so what is that worth bitcoin yield but in terms of actual capital

892
01:19:34,608 --> 01:19:40,528
well in bitcoin yield relative to every other company trying to do the same thing yeah i agree

893
01:19:40,528 --> 01:20:01,798
with that point so yeah i mean as as bitcoin gets so expensive that it hard for everyone to just scrape two sats together that somewhat true but strategy has the most effective tools to be able to do it better than anyone totally totally but effectively so do you have your mic

894
01:20:02,758 --> 01:20:09,958
it's it's it's a show over here okay but effectively what it comes down to is leverage

895
01:20:09,958 --> 01:20:14,118
on the balance sheet like that's where all boils down to because we can talk about the actual keger

896
01:20:14,118 --> 01:20:21,398
are there but what it is is leverage right like the idea of paying nine percent to buy bitcoin

897
01:20:21,398 --> 01:20:27,158
and hold it which is compounding 30 is leveraged so it all comes back down to this idea of average

898
01:20:27,158 --> 01:20:31,558
on the back what premium are you willing to pay because of how forward looking do you think the

899
01:20:31,558 --> 01:20:37,638
bitcoin price or the market is yes and i i agree with that i agree with that it comes down to

900
01:20:37,638 --> 01:20:41,238
leverage you got to leverage the balance sheet there's got to be future operations which which

901
01:20:41,238 --> 01:20:42,438
which we know that they're doing, right?

902
01:20:42,438 --> 01:20:44,578
They've just launched four new perpetual preferred products

903
01:20:44,578 --> 01:20:48,138
in the last six months, which is crazy.

904
01:20:48,138 --> 01:20:52,038
And now they have the ability to tap debt capital

905
01:20:52,038 --> 01:20:54,898
at a click of a button and a phone call.

906
01:20:54,898 --> 01:20:57,098
Like they've never been able to do that before.

907
01:20:57,098 --> 01:20:58,298
Like we don't even,

908
01:20:58,298 --> 01:21:01,858
we don't know what this is gonna work like down the road

909
01:21:01,858 --> 01:21:04,558
because we've never seen anything like this before.

910
01:21:04,558 --> 01:21:06,178
Name another time in history where somebody was able

911
01:21:06,178 --> 01:21:08,578
to tap debt capital at the click of a button.

912
01:21:08,578 --> 01:21:12,098
infinite perpetual debt capital. I'll click a button.

913
01:21:13,298 --> 01:21:14,618
No, it's super interesting.

914
01:21:15,818 --> 01:21:19,978
It hasn't happened before. It hasn't happened before. So the...

915
01:21:23,578 --> 01:21:28,298
I really like the framework that you're working through here, Dan. I think it's really valuable,

916
01:21:28,298 --> 01:21:32,598
and I love the stream of consciousness that you've got comparing the prefs and bouncing

917
01:21:32,598 --> 01:21:37,758
between these. Keep it going. Your headspace is in the right direction, and I think it's really good.

918
01:21:37,758 --> 01:21:43,638
But where this whole thing, this valuation concept, in my opinion, where it breaks down

919
01:21:43,638 --> 01:21:50,978
a little bit, is when you put it next to its peers, not Bitcoin peers, its other trading

920
01:21:50,978 --> 01:21:51,558
peers.

921
01:21:51,898 --> 01:21:52,178
I agree.

922
01:21:52,238 --> 01:21:52,898
I agree with that.

923
01:21:53,018 --> 01:21:56,098
I don't think the market will do it like that in the short term, but I think you're totally

924
01:21:56,098 --> 01:21:56,998
spot on.

925
01:21:57,758 --> 01:22:01,698
All the other companies are heinously overvalued relative to Bitcoin and MSTR, absolutely.

926
01:22:01,698 --> 01:22:13,818
And that's the, that's why I hold this stock because I, I think there's an information asymmetry and I question why, like, why do you hold like what?

927
01:22:13,938 --> 01:22:17,078
And I, I say this all the time and I think it's a really good question.

928
01:22:17,078 --> 01:22:18,638
I encourage people to think about it.

929
01:22:18,638 --> 01:22:20,378
Like, why does anybody hold any stock?

930
01:22:21,778 --> 01:22:23,918
Like what, like what's the purpose of this whole thing?

931
01:22:23,938 --> 01:22:24,698
Why are we here?

932
01:22:25,458 --> 01:22:27,078
Why is anybody buying any of these stocks?

933
01:22:27,978 --> 01:22:28,778
To make money.

934
01:22:29,118 --> 01:22:29,818
You want to make money.

935
01:22:29,858 --> 01:22:30,818
Like everybody wants to make money.

936
01:22:30,818 --> 01:22:39,298
right well like make money or for for how long like is it is it to make money and reduce risk

937
01:22:41,538 --> 01:22:42,098
i feel like

938
01:22:44,818 --> 01:22:49,698
yeah i think it's i think it's a similar argument for mstr is like okay what's better a strong

939
01:22:49,698 --> 01:22:56,018
balance sheet or some expectation of future cash flows i think it's i think it's a similar concept

940
01:22:56,018 --> 01:23:02,978
right it's uh d like if we talk about bitcoin being an insurance policy against fiat currency

941
01:23:02,978 --> 01:23:12,178
debasement then strategy that holds more insurance against fiat debasement than any other company on

942
01:23:12,178 --> 01:23:22,658
the planet what's that worth a lot i i i think so um is that able to withstand like market pressures

943
01:23:22,658 --> 01:23:29,298
that other companies aren't able to withstand i think so so i i don't that that's just how i'm

944
01:23:29,298 --> 01:23:35,938
starting to like think through this um and i i think the market has missed it and they're they're

945
01:23:35,938 --> 01:23:42,498
wildly misunderstanding it and thinking this is a one-time like i think the going back to the

946
01:23:42,498 --> 01:23:46,898
conversations that i'm having currently with capital providers and then i've had over the

947
01:23:46,898 --> 01:23:53,238
the last 24 months with people in very high financial positions that run, you know, billion

948
01:23:53,238 --> 01:23:59,798
dollar companies, 500 million dollar companies, they are blind to this stuff. And I think there's

949
01:23:59,798 --> 01:24:04,398
a point in time where you can't be blind to it anymore. Do I think that's now? No, I think that's

950
01:24:04,398 --> 01:24:10,998
probably within the next four years as Bitcoin rises to different thresholds, right? I think we

951
01:24:10,998 --> 01:24:13,998
we breached, Bitcoin is now worth more than a car.

952
01:24:15,338 --> 01:24:16,518
At a future point in time,

953
01:24:16,578 --> 01:24:17,918
Bitcoin is going to be worth more than a house.

954
01:24:19,398 --> 01:24:22,178
And I think that's a, that between now and then,

955
01:24:22,918 --> 01:24:25,398
I don't think people are really going to get it.

956
01:24:26,718 --> 01:24:27,978
Until it's worth more than a house,

957
01:24:28,038 --> 01:24:28,838
then they'll be like, holy shit,

958
01:24:28,918 --> 01:24:30,598
this is worth more than, more than like the median,

959
01:24:30,938 --> 01:24:35,258
the median house price in the US is $420,000.

960
01:24:37,098 --> 01:24:39,238
And I think at that point, it's like,

961
01:24:39,378 --> 01:24:40,898
okay, wait, hold on, this is real?

962
01:24:40,998 --> 01:24:45,078
they're not even forget nominal bias they don't like most of the world doesn't even get market

963
01:24:45,078 --> 01:24:52,438
caps like they don't even they don't even get it but they see just a number and i i think even a lot

964
01:24:52,438 --> 01:24:56,678
of the financial world is just entrenched in that they don't even they don't even know why they work

965
01:24:57,798 --> 01:25:01,158
i'm gonna be honest they don't know why they work they don't know why they're doing what they're

966
01:25:01,158 --> 01:25:06,518
doing i think everybody's in cruise control doing things that they've done forever because that's

967
01:25:06,518 --> 01:25:10,918
the way things have been done and their bosses have told them things have been done and they've

968
01:25:10,918 --> 01:25:17,638
got to do things like that so that's it that's all i got

969
01:25:21,158 --> 01:25:26,518
then yeah go ahead tim um it's just a repeat from earlier but

970
01:25:28,758 --> 01:25:35,958
dan had a take on it so i'm intrigued your take so lays take anybody else who might randomly join

971
01:25:35,958 --> 01:25:44,758
the calls take um there was a clip today from joe burnett he was uh being interviewed and he basically

972
01:25:44,758 --> 01:25:50,438
said intelligent leverage could create massive tailwinds for the price of bitcoin he was kind

973
01:25:50,438 --> 01:25:56,998
of talking like as the price runs up right if your leverage ratio is 20 to 30 or with prefs 30 to 50

974
01:25:57,958 --> 01:26:03,078
it's like this flywheel where right if you want to keep that leverage ratio even not right up

975
01:26:03,078 --> 01:26:12,418
up against 30% or 50%, don't you by definition have to or want to with the business model keep

976
01:26:12,418 --> 01:26:17,918
buying Bitcoin? And maybe that doesn't send Bitcoin to the moon, but isn't that a flywheel

977
01:26:17,918 --> 01:26:23,998
in and of itself or any thoughts on that? Yeah, I think there is huge tailwinds with

978
01:26:23,998 --> 01:26:28,698
these companies doing this and multiple companies doing this. And once you have multiple companies

979
01:26:28,698 --> 01:26:37,058
at scale. I mean, MetaPlanet, what started with, what, like $5 million hotel? And now

980
01:26:37,058 --> 01:26:40,798
they hold a billion and a half of Bitcoin. Well, they're going to double it. And then

981
01:26:40,798 --> 01:26:43,198
they're going to double it again. And then they're going to double it again. And then

982
01:26:43,198 --> 01:26:46,038
all of a sudden they're going to have scale and they're going to keep doing this. And

983
01:26:46,038 --> 01:26:51,858
they're going to be one of the strongest financial companies in the entire Japanese market. And

984
01:26:51,858 --> 01:26:58,238
that's happening all over the globe. We are at the beginning of a super mega trend here.

985
01:26:58,238 --> 01:27:06,238
is this is a complete mega trend that i think a large portion of the world just hasn't conceptualized

986
01:27:06,238 --> 01:27:13,598
like this is uh this is internet right this this is adopting digital capital is as big as the internet

987
01:27:15,998 --> 01:27:22,478
and all of these companies buying bitcoin with their excess cash flows and leveraging

988
01:27:22,478 --> 01:27:30,718
the capital markets to buy bitcoin is huge like that's it is it is tailwind in and of itself so i

989
01:27:30,718 --> 01:27:38,878
i agree with joe there once you once you're in a position like i've been recently to see things

990
01:27:38,878 --> 01:27:47,118
from behind the curtain as joe has probably at this point now too uh you start to realize the

991
01:27:47,118 --> 01:27:55,598
gravitas of the situation like this is a really big deal like i know a lot of people are just

992
01:27:55,598 --> 01:28:03,038
wheeling dealing and posting and doing memes and um everything but this is a really big deal

993
01:28:03,038 --> 01:28:07,678
like the companies that are managing billions of dollars of capital and doing this like for real

994
01:28:08,638 --> 01:28:13,758
you got to be a really serious person like like sailor and the entire capital team over there

995
01:28:13,758 --> 01:28:19,998
incredibly serious incredibly dialed in absolute nails same with meta planet simon is a stone cold

996
01:28:19,998 --> 01:28:24,718
killer dylan is one of the brightest people i've ever met and the people that are that are operating

997
01:28:24,718 --> 01:28:30,558
in this space are dead serious we're going to take over the world like this is where we're putting

998
01:28:30,558 --> 01:28:37,278
our energy towards and how we're trying to move the move the world forward so yeah it's uh i think

999
01:28:37,278 --> 01:28:43,358
tailwinds is a great great word for it but uh it becomes really real really quick

1000
01:28:46,318 --> 01:28:50,958
you're just giving me a great a great tweet it's like digital capital is as big as the internet

1001
01:28:51,758 --> 01:28:57,118
and it's riding on the internet yeah yeah it's it's huge and this note this whole thing is huge

1002
01:29:00,638 --> 01:29:07,038
dan dan i oh go ahead so i was just gonna say you missed uh 90 of the agenda but

1003
01:29:07,278 --> 01:29:22,018
But if you want to talk about Tim's building a digital empire over here with his marathons and his unconferences and all of that stuff, or just whatever you want to talk about, it's your show anyway.

1004
01:29:22,638 --> 01:29:22,878
Yeah.

1005
01:29:23,838 --> 01:29:25,418
So thanks for jumping in.

1006
01:29:25,698 --> 01:29:27,518
I've had a crazy Fiat week.

1007
01:29:27,518 --> 01:29:34,898
yesterday I did I was in a car 10 hours yesterday because my house was broken into

1008
01:29:34,898 --> 01:29:41,718
and they had stole an air conditioner and there was a whole like it was a whole ordeal so I'm like

1009
01:29:41,718 --> 01:29:46,218
super anti-real estate at the moment and just like you know there's so many problems in this

1010
01:29:46,218 --> 01:29:50,238
world that need to be solved and I just can like see Bitcoin solving a lot of things in the future

1011
01:29:50,238 --> 01:29:54,778
so I'm pretty bullish on that so thank you for taking the taking the reins here at the beginning

1012
01:29:54,778 --> 01:29:57,078
and just so I could get a couple of things on.

1013
01:29:58,278 --> 01:30:01,398
And yeah, Tim, you're doing it.

1014
01:30:01,518 --> 01:30:02,518
I look forward to seeing everybody

1015
01:30:02,518 --> 01:30:05,038
at the Unconference in September,

1016
01:30:05,418 --> 01:30:06,758
almost about a month out now.

1017
01:30:07,278 --> 01:30:10,478
True North 15, coupon code, True North 15.

1018
01:30:10,618 --> 01:30:12,358
True North 15 for the coupon code.

1019
01:30:13,078 --> 01:30:13,538
Yeah, it'll be great.

1020
01:30:13,598 --> 01:30:14,238
It'll be a great time.

1021
01:30:14,578 --> 01:30:15,518
Midtown Manhattan's cool.

1022
01:30:15,758 --> 01:30:17,158
It's a great time of year to be in New York.

1023
01:30:17,458 --> 01:30:18,758
It's going to be super buzzy.

1024
01:30:19,178 --> 01:30:21,238
I think the market's going to be ramping back up

1025
01:30:21,238 --> 01:30:22,798
just in general.

1026
01:30:22,798 --> 01:30:28,198
if you look at just liquidity like volume and liquidity a lot of people are making a ton of

1027
01:30:28,198 --> 01:30:33,298
noise and complaining about mstr right now which i think is justified if you think it's a hundred

1028
01:30:33,298 --> 01:30:39,458
percent correlated to bitcoin which is not it hasn't been historically uh and if you look at

1029
01:30:39,458 --> 01:30:44,198
just historical trends in the equity market like all the money managers are out in out touching

1030
01:30:44,198 --> 01:30:49,058
grass and doing things just like josh mandel was posting pictures on a on a boat the other day like

1031
01:30:49,058 --> 01:30:54,198
everybody's out doing that. August is historically the lowest month of trading volume across all

1032
01:30:54,198 --> 01:31:02,898
indices and NYSE, NASDAQ, et cetera. And like that data is very apparent. And the biggest month

1033
01:31:02,898 --> 01:31:09,898
historically for all trading volume is October. And we're going into September and October,

1034
01:31:09,898 --> 01:31:18,678
which are really big, really big trading months. So yeah, I'm just, I'm bulled up. I'm excited here.

1035
01:31:19,058 --> 01:31:24,398
Would I prefer that MSTR was trading at all time highs when Bitcoin was trading at all time highs?

1036
01:31:24,638 --> 01:31:25,098
Absolutely.

1037
01:31:26,838 --> 01:31:30,438
But at the end of the day, like nothing in the thesis has changed.

1038
01:31:30,978 --> 01:31:32,798
We're sitting on, what is this?

1039
01:31:32,898 --> 01:31:34,798
I actually just updated this right before this.

1040
01:31:35,578 --> 01:31:43,038
The Bitcoin gain through Q3, 45 days through Q3 at 123,500.

1041
01:31:43,038 --> 01:31:48,378
The strategy is sitting on a $9.6 billion Bitcoin gain through Q3.

1042
01:31:48,378 --> 01:31:52,218
So these are just insane numbers.

1043
01:31:52,558 --> 01:32:01,138
And if we see Bitcoin go even higher, right, another $25,000, a lot of people are calling for $150K, right?

1044
01:32:01,298 --> 01:32:14,298
If Bitcoin goes to $150K, strategy is going to make $26.2 billion on the Bitcoin gain on the balance sheet, which is just astronomical numbers.

1045
01:32:14,298 --> 01:32:22,218
If they make $26 billion, at that point, they're holding over $100 billion of this asset and their ability to continue to leverage that.

1046
01:32:22,718 --> 01:32:31,218
The story just gets better and better and better the stronger that strategy gets here because they're able to raise more capital, put on more leverage.

1047
01:32:31,398 --> 01:32:33,098
The credit quality of the instruments get better.

1048
01:32:33,178 --> 01:32:34,558
They're probably going to issue more press.

1049
01:32:34,658 --> 01:32:36,438
They're going to have more of these products out to the market.

1050
01:32:36,938 --> 01:32:40,858
They're going to be talking to all the credit rating agencies.

1051
01:32:40,858 --> 01:32:44,178
you've got a plethora of these other companies coming out and offering

1052
01:32:44,178 --> 01:32:48,378
perpetual preferred securities that the credit rating agencies will be able to

1053
01:32:48,378 --> 01:32:52,018
rate against. Stretch is a use case.

1054
01:32:52,258 --> 01:32:55,998
We haven't seen it yet. It's approaching 100, but it's getting close.

1055
01:32:56,938 --> 01:32:59,818
And there's so many things to be

1056
01:32:59,818 --> 01:33:04,358
bullish about right now. It's just crazy how bearish the community is.

1057
01:33:04,798 --> 01:33:08,278
And I'm also just surprised that people bash the stock. And I think there's a ton

1058
01:33:08,278 --> 01:33:13,558
more bots out there than people realize um a ton of people are bashing the stock and it's like well

1059
01:33:13,558 --> 01:33:20,998
if you hold the stock what are you doing like sentiment bots are out there uh scraping all

1060
01:33:20,998 --> 01:33:27,638
this data and information i love that post from you today i was like that makes a lot of sense like

1061
01:33:29,798 --> 01:33:34,518
like yeah i mean if if you if you had if you had listening about this if you had a billion

1062
01:33:34,518 --> 01:33:41,478
dollars short position on strategy 500 million how much would you be willing to pay for bots to

1063
01:33:41,478 --> 01:33:50,918
fud your position like how much like how much does a million get you in in bots

1064
01:33:53,238 --> 01:34:09,688
short bots bear bots maybe that a new bear we need a bear bots um quite a bit and as the company gets larger and larger I mean you saw it with this freaking interview

1065
01:34:09,688 --> 01:34:12,248
from Lynn Alden and Andy Constan.

1066
01:34:13,388 --> 01:34:14,788
Oh my God.

1067
01:34:15,048 --> 01:34:18,068
Like these are the people that are trading against the stock.

1068
01:34:19,068 --> 01:34:20,448
They're like, they're short selling.

1069
01:34:20,448 --> 01:34:24,008
They have the people in power with money

1070
01:34:24,008 --> 01:34:25,008
that have the stock,

1071
01:34:25,128 --> 01:34:27,628
that have the same perspective as Andy Constan.

1072
01:34:27,988 --> 01:34:29,608
are shorting the stock.

1073
01:34:31,888 --> 01:34:34,148
So just keep that in mind.

1074
01:34:34,408 --> 01:34:40,668
These people, they have no incentive to be long.

1075
01:34:42,488 --> 01:34:43,208
I don't know.

1076
01:34:44,928 --> 01:34:45,768
That's all I got.

1077
01:34:46,128 --> 01:34:48,348
Quick housekeeping note for people in the comments.

1078
01:34:48,528 --> 01:34:50,548
They keep thinking that I'm raising my hand

1079
01:34:50,548 --> 01:34:51,548
because I want to say something,

1080
01:34:51,748 --> 01:34:52,748
but I'm just saying higher.

1081
01:34:53,228 --> 01:34:54,048
It's just going higher.

1082
01:34:54,268 --> 01:34:56,228
That's all I'm trying to say.

1083
01:34:56,228 --> 01:35:01,988
it's like yeah i mean think about how powerful this company is this company has 77 billion dollars

1084
01:35:01,988 --> 01:35:10,148
what is that uh is that 7 700 million dollar homes so think about like a neighborhood that's got seven

1085
01:35:10,148 --> 01:35:17,428
a neighborhood of 7 700 homes and they're all million dollar homes that's that's like i think

1086
01:35:17,428 --> 01:35:23,748
you try to think of how big that is and that's how much money that strategy holds digitally

1087
01:35:23,748 --> 01:35:31,748
in their wallets. That's just so much money to try to put it in scale. It's just

1088
01:35:32,308 --> 01:35:35,828
hard to fathom. And the world's waking up to that.

1089
01:35:37,508 --> 01:35:45,928
Yeah. I forget who was saying it within the last week. It's like, maybe it was yesterday,

1090
01:35:46,208 --> 01:35:53,668
right? Kind of a blur at this point, but someone was like, when we're buying $10 million worth of

1091
01:35:53,668 --> 01:36:00,008
Bitcoin, $20 million worth of Bitcoin. It's like, and you're actually seeing wires move. It's like,

1092
01:36:00,088 --> 01:36:04,588
wow, that's a lot of money. But then you have a sailor. He's like, we bought two and a half

1093
01:36:04,588 --> 01:36:10,328
billion dollars worth of Bitcoin. Like that's actual cash that yeah, digitally, but like it's

1094
01:36:10,328 --> 01:36:17,468
moving around. That's nuts. Like I think about, right. For a lot of people, they buy a hundred

1095
01:36:17,468 --> 01:36:22,988
dollars worth of Bitcoin. My friends are like, what the heck are you doing? Why are you buying

1096
01:36:22,988 --> 01:36:28,028
so much bitcoin yeah just the fact that somebody can go raise two and a half billion dollars in

1097
01:36:28,028 --> 01:36:34,428
like a week like that's all the signal you need right people are people are bearish on this and

1098
01:36:34,428 --> 01:36:41,388
they just raised two and a half billion dollars like a couple weeks ago like that is that that's

1099
01:36:41,388 --> 01:36:49,868
so enormous what is that two is that that's a hundred million dollars 250 times do you know

1100
01:36:49,868 --> 01:36:55,628
do you know how hard it is to raise a hundred million dollars it's so incredibly hard and they

1101
01:36:55,628 --> 01:37:06,668
just did it 250 times a couple weeks ago and it took like five days like that that is that signal

1102
01:37:06,668 --> 01:37:12,748
that is signal people that are concerned about you know decoupling for you know the last four

1103
01:37:12,748 --> 01:37:18,668
trading hours or you know whatever it may be i don't know what to tell you you probably don't

1104
01:37:18,668 --> 01:37:23,628
have enough bitcoin if that's the case like if if you're like if you're if you're complaining

1105
01:37:23,628 --> 01:37:28,908
about this you probably don't have enough bitcoin and if that's the case you should probably

1106
01:37:30,268 --> 01:37:40,508
not hold mstr i don't know how i view my life i see uh bitcoin is like my pure pure savings

1107
01:37:40,508 --> 01:37:49,848
I'm continuous continuously adding to it constantly and but I also hold a very large

1108
01:37:49,848 --> 01:37:59,648
MSTR position that I'm just I'm long I'm not like I hold I hold I'm long both of them

1109
01:37:59,648 --> 01:38:03,248
and they both like help each other so

1110
01:38:03,248 --> 01:38:09,468
it's not an either or for me I think a lot of people think it's either or

1111
01:38:09,468 --> 01:38:15,708
yeah you think i don't know dan how do you feel how do you feel about this like

1112
01:38:15,708 --> 01:38:23,428
you spot bitcoin for you like i'm curious your take do you hold spot bitcoin yeah i hold

1113
01:38:23,428 --> 01:38:30,668
right now 80 of the port and spot bitcoin ibit or spot bitcoin uh 50 50.

1114
01:38:32,768 --> 01:38:38,368
50 50 okay 80 of the port what happened to the december 380s

1115
01:38:38,368 --> 01:38:41,028
I dumped them all three weeks ago.

1116
01:38:43,168 --> 01:38:44,988
You dumped them all three weeks ago?

1117
01:38:45,288 --> 01:38:45,528
Yeah.

1118
01:38:45,668 --> 01:38:45,928
All right.

1119
01:38:45,948 --> 01:38:47,508
So we can blame Dan for the decoupling.

1120
01:38:47,968 --> 01:38:49,388
He dumped all his 380s.

1121
01:38:49,468 --> 01:38:49,948
I'm not a whale.

1122
01:38:49,948 --> 01:38:50,828
Removed all that.

1123
01:38:51,088 --> 01:38:51,668
I'm not a whale.

1124
01:38:53,808 --> 01:38:56,748
But no, I think I bet serves a...

1125
01:38:56,748 --> 01:38:57,488
Back to the day.

1126
01:38:57,648 --> 01:38:58,888
There's different...

1127
01:38:58,888 --> 01:39:00,188
People are looking for different things.

1128
01:39:00,348 --> 01:39:03,388
Obviously, if you're looking for beta on Bitcoin,

1129
01:39:04,048 --> 01:39:05,728
then a levered Ibit, you know,

1130
01:39:05,968 --> 01:39:07,288
answers that question for you.

1131
01:39:07,288 --> 01:39:16,368
If you're looking for a long-term accretive stock that derives value from Bitcoin as pristine collateral, then MSTR is for you.

1132
01:39:17,508 --> 01:39:19,008
So there are two different things.

1133
01:39:19,048 --> 01:39:20,388
And I think people are getting that confused in your head.

1134
01:39:20,468 --> 01:39:25,148
And I had to allocate myself to my levered beta on Bitcoin.

1135
01:39:25,388 --> 01:39:25,848
I needed that.

1136
01:39:26,068 --> 01:39:26,528
Everyone needs it.

1137
01:39:26,608 --> 01:39:27,168
Well, not everyone.

1138
01:39:27,448 --> 01:39:28,228
I needed that.

1139
01:39:28,668 --> 01:39:29,468
So I have that.

1140
01:39:30,048 --> 01:39:31,128
I also have my MSTR.

1141
01:39:31,488 --> 01:39:32,468
That's a different play.

1142
01:39:32,728 --> 01:39:34,088
The MSTR is a different play.

1143
01:39:34,088 --> 01:39:40,508
And as long as you don't think in your head that the MSTR has to be levered BTC beta, then you can hold it for a long term.

1144
01:39:41,748 --> 01:39:44,648
And in the past, it has traded like beta, right?

1145
01:39:44,708 --> 01:39:47,528
Beta is just levered performance on BTC.

1146
01:39:47,708 --> 01:39:49,328
And I think that's something people are having trouble with.

1147
01:39:49,608 --> 01:39:50,028
I get that.

1148
01:39:50,108 --> 01:39:50,788
I mean, I totally get that.

1149
01:39:50,808 --> 01:39:55,048
As a trader in the fall last year, all that thing, all the time.

1150
01:39:55,248 --> 01:40:00,308
I mean, MSTR was in lockstep with BTC on the way up, way down, right?

1151
01:40:00,308 --> 01:40:04,288
you were getting 2x outperformance on the upside, 2x outperformance on the downside over a few

1152
01:40:04,288 --> 01:40:09,908
periods, over like, you know, whatever, short time frames. Probably like 4x and even higher.

1153
01:40:10,888 --> 01:40:15,848
Exactly. Yeah. I mean, it went up and it was pretty guaranteed that there was someone in the

1154
01:40:15,848 --> 01:40:20,928
market arbing that difference. Obviously that's decoupled a bit over the past few months. And I

1155
01:40:20,928 --> 01:40:24,948
think so that's why people are getting a little nervous. I mean, I get that. Like a lot of people

1156
01:40:24,948 --> 01:40:29,628
were buying MSDR for that levered data. And, you know, if it doesn't perform like that, you need

1157
01:40:29,628 --> 01:40:31,688
to find an alternative vehicle.

1158
01:40:32,588 --> 01:40:33,248
Yeah. Yeah.

1159
01:40:33,368 --> 01:40:36,288
And there's, I mean, there's so much opportunity cost in the market right now too.

1160
01:40:36,368 --> 01:40:39,248
And there's alternative Bitcoin treasury companies are popping up left and right.

1161
01:40:39,248 --> 01:40:45,628
I know for a fact that people are YOLOing ETH treasury companies now at this point as well.

1162
01:40:45,988 --> 01:40:50,748
And the market structure has changed a bit, which I think is what you're getting to.

1163
01:40:52,568 --> 01:40:57,948
And you think about where, like, what does a future market cycle look like as well?

1164
01:40:57,948 --> 01:41:03,808
And this is like this kind of gets down to different perspectives of like, why do you hold an equity?

1165
01:41:03,808 --> 01:41:06,688
You hold an equity for different reasons and I hold an equity.

1166
01:41:09,408 --> 01:41:16,008
And I like I hold an equity for different reasons than Soleil holds an equity and different reasons and Tim holds an equity.

1167
01:41:16,488 --> 01:41:18,108
And that's OK.

1168
01:41:18,948 --> 01:41:22,188
But you have to know why you hold your equity.

1169
01:41:22,488 --> 01:41:23,988
And what's like, what's the point?

1170
01:41:24,508 --> 01:41:26,588
What's the point? What's the point of this whole thing?

1171
01:41:27,948 --> 01:41:40,168
Dan, I got a question because after the euphoria in November, I finally like went hardcore and convinced some family and friends to like get some strategy exposure.

1172
01:41:40,708 --> 01:41:44,188
And so then, you know, so they're like in at like 400 shares.

1173
01:41:44,348 --> 01:41:47,528
So I'm just like desperate for the price to just put them in profit.

1174
01:41:47,668 --> 01:41:48,048
You know what I mean?

1175
01:41:48,068 --> 01:41:48,988
Because I feel like an asshole.

1176
01:41:49,428 --> 01:41:49,548
Yeah.

1177
01:41:49,548 --> 01:41:57,428
But like now that you're managing people's money, Dan, like has that informed your outlook at all?

1178
01:41:57,428 --> 01:42:01,488
Has it changed risk? Yeah. Has it, has it changed your,

1179
01:42:01,588 --> 01:42:05,188
your outlook in general? Because, you know, for me,

1180
01:42:05,188 --> 01:42:08,488
even just feeling like I was a little bit responsible for other people taking

1181
01:42:08,488 --> 01:42:10,728
this position, like it,

1182
01:42:10,848 --> 01:42:16,808
it gave me a way more vested interest in like seeing that number go up.

1183
01:42:16,808 --> 01:42:20,048
So I wasn't sure what it's been like for you now,

1184
01:42:20,108 --> 01:42:21,908
now that you're managing money yourself.

1185
01:42:21,908 --> 01:42:30,468
uh i mean yeah it heightens your i mean if your mandate is to outperform bitcoin you can't

1186
01:42:31,188 --> 01:42:37,508
underperform it over a really a week two weeks three weeks four weeks especially you can't

1187
01:42:37,508 --> 01:42:43,508
underperform it like that's not going to fly so um yeah i think it definitely changed my outlook

1188
01:42:44,468 --> 01:42:53,348
quite significantly if you get bitcoin right but you get mstr wrong how do you turn to the people's

1189
01:42:53,348 --> 01:42:59,268
whom money you're managing and explain that to them you can't do that i couldn't do that yeah

1190
01:42:59,268 --> 01:43:03,348
because they could have just plowed into bitcoin right because they're expecting they're they're

1191
01:43:03,348 --> 01:43:10,308
expecting a bitcoin is the hurdle rate so they're expecting extra right right i mean it's obviously

1192
01:43:10,308 --> 01:43:17,188
that's a tough question with the position like in the in the fund i mean we hold a spot mstr position

1193
01:43:17,988 --> 01:43:24,948
of the outside money we're managing yeah 100 like but it's not you know a crazy portion of it and

1194
01:43:24,948 --> 01:43:31,108
it's sure as hell not all our beta exposure on btc it can't be if it's not going to perform like that

1195
01:43:31,108 --> 01:43:35,988
right there was a time when it could be the majority of your beta exposure to btc but it can't be

1196
01:43:35,988 --> 01:43:43,508
anymore why can't it be anymore because it doesn't behave like beta on btc on what horizon just the

1197
01:43:43,508 --> 01:43:49,988
recent horizon like uh seven months seven months okay so since capital plan do you think that

1198
01:43:49,988 --> 01:43:56,628
changes do you think recent mnav guidance changes that and that's obviously my job and anyone who's

1199
01:43:56,628 --> 01:44:02,148
trying to allocate in a portfolio it's their job to figure out if it turns into beta or if we get

1200
01:44:02,148 --> 01:44:07,508
do we get a free mnav expansion to 2.5 from here that that would be sweet and if that was the case

1201
01:44:07,508 --> 01:44:13,108
you'd love rob one msdr did guidance did the management's guidance on mnav just give us a free

1202
01:44:13,828 --> 01:44:22,708
60 yeah yeah right it's a good question i i yeah i i don't think it did yeah

1203
01:44:24,788 --> 01:44:30,068
we'll see i mean like time will tell right i mean this is like you're right to say that the company

1204
01:44:30,068 --> 01:44:37,588
is in a completely different position than it was 12 months ago. 12 months ago, strategy held

1205
01:44:37,588 --> 01:44:43,668
150,000 Bitcoin. Now they hold 600,000 Bitcoin. It's a different game, different game in size and

1206
01:44:43,668 --> 01:44:47,828
scale, different capitals coming in the door. In order to keep that capital coming in the door,

1207
01:44:48,708 --> 01:44:54,628
you've got to do things to continue that capital coming in the door. And I think they're doing that

1208
01:44:54,628 --> 01:44:57,828
with the prefs. Prefs are huge. I mean, they're huge.

1209
01:44:57,828 --> 01:44:59,828
I'm the first to say.

1210
01:44:59,828 --> 01:45:10,828
They're huge. So like time will tell, right? I'm not, personally, I'm long both, right? I'm long Bitcoin, I'm long MSDR, but I...

1211
01:45:10,828 --> 01:45:13,828
Same here.

1212
01:45:13,828 --> 01:45:25,828
Just structurally, I don't see how it wouldn't get that beta back. Just structurally, like long term, just structurally,

1213
01:45:25,828 --> 01:45:29,128
structurally looking at just how the equity market's designed.

1214
01:45:30,228 --> 01:45:35,228
And even if like, just,

1215
01:45:35,728 --> 01:45:39,628
just because that concept of like the, as the market cap rises,

1216
01:45:39,628 --> 01:45:42,388
like that doesn't matter, like what any, anything else happens,

1217
01:45:42,388 --> 01:45:46,828
like as the market cap rises, you're getting this increased,

1218
01:45:47,668 --> 01:45:51,868
increasing, increasing. It's not, it's not even like linear increasing.

1219
01:45:51,868 --> 01:45:55,808
It's the, it's the increasing at an increasing rate, passive flows.

1220
01:45:55,828 --> 01:45:56,948
You're totally right. You're totally right.

1221
01:45:57,228 --> 01:46:02,348
And that's like, to me, it's like, I don't, you look at, um,

1222
01:46:02,808 --> 01:46:06,068
one thing that's interesting. If you look at, uh,

1223
01:46:07,148 --> 01:46:10,148
I did this analysis, uh, like a week or two ago.

1224
01:46:10,968 --> 01:46:15,808
If you look at the price to book value of like the 493 S and P 500 stocks,

1225
01:46:15,868 --> 01:46:18,928
non-mag seven price to book ratios are like two.

1226
01:46:21,008 --> 01:46:23,668
But if you look at the price to book ratios of maybe it was like,

1227
01:46:23,668 --> 01:46:35,088
maybe it's top 15 stocks price to book ratios are egregious like 60 30 40 50 60 and the they lack

1228
01:46:35,088 --> 01:46:45,148
rationality and i think strategy is going to approach that uh what's that you're saying 30

1229
01:46:45,148 --> 01:46:52,248
i'm not i'm not saying it's going to go to 30 it could it could i mean if if it if that happens

1230
01:46:52,248 --> 01:46:55,508
We're talking about strategy is going to be like pulling in tons of capital in the door.

1231
01:46:55,908 --> 01:46:58,688
And, you know, this thing speeds up, goes faster.

1232
01:46:58,928 --> 01:47:01,868
But I'm now Bitcoin's at a million in like four seconds.

1233
01:47:02,528 --> 01:47:03,228
Yeah, it's fast.

1234
01:47:03,828 --> 01:47:05,988
It goes because they're going to raise so much capital.

1235
01:47:06,208 --> 01:47:09,668
And like it's Tim is yelling, but he's on mute.

1236
01:47:12,548 --> 01:47:14,268
J64, that's the clip right there.

1237
01:47:15,048 --> 01:47:15,948
I agree.

1238
01:47:16,028 --> 01:47:19,008
But I like to compare the MNAP to traditional commodity stocks.

1239
01:47:19,348 --> 01:47:21,388
Plus a little plus some digital premium.

1240
01:47:21,388 --> 01:47:26,828
especially yield premium like if you look historically you know commodity stocks oil

1241
01:47:26,828 --> 01:47:34,708
stocks um particularly trade at a one to two nav but they have single digit annual yields depending

1242
01:47:34,708 --> 01:47:39,988
on where you kind of are in the commodity cycle and the commodities aren't necessarily on an upward

1243
01:47:39,988 --> 01:47:46,108
30 kager trajectory so that would mean you'd place a much higher price to book value on something

1244
01:47:46,108 --> 01:47:50,908
like mstr than a commodity stock yeah that's all that's all fair and well and a good way to kind

1245
01:47:50,908 --> 01:47:55,868
mentally frame it yeah and i think back to like uh and i haven't done this research but this might

1246
01:47:55,868 --> 01:48:03,788
be a good uh research report for somebody is to look at um the how the stock market has changed

1247
01:48:03,788 --> 01:48:19,518
over time like with uh the creation of like exxon and chevron and shell like all the oil companies oil used to be the most valuable commodity on the planet Now it digital intelligence right It was oil then it was data and information

1248
01:48:19,518 --> 01:48:21,118
Now it's digital intelligence.

1249
01:48:21,118 --> 01:48:23,438
And in my opinion, I think it's going digital capital

1250
01:48:23,438 --> 01:48:24,838
or digital capital is gonna be right up there

1251
01:48:24,838 --> 01:48:27,618
next to digital intelligence.

1252
01:48:27,618 --> 01:48:30,738
Like those are, these are the most valuable commodities

1253
01:48:30,738 --> 01:48:33,418
on the planet and they've changed, right?

1254
01:48:33,418 --> 01:48:37,798
Like over time, oil used to be like the top,

1255
01:48:37,798 --> 01:48:39,858
the five companies in the stock market

1256
01:48:39,858 --> 01:48:41,738
used to be oil companies.

1257
01:48:41,738 --> 01:48:44,938
And then it shifted tech and AI.

1258
01:48:44,938 --> 01:48:47,738
And then it was like oil, oil, tech, oil, tech.

1259
01:48:47,738 --> 01:48:49,198
And now it's like all tech.

1260
01:48:49,198 --> 01:48:51,118
And Exxon is number like 15 or 16.

1261
01:48:51,118 --> 01:48:52,318
Still a really valuable company,

1262
01:48:52,318 --> 01:48:57,318
but it's lost all of the excess value multiple

1263
01:49:00,298 --> 01:49:02,978
that it used to have relative to the other companies.

1264
01:49:02,978 --> 01:49:04,478
So that's why I'm here.

1265
01:49:06,238 --> 01:49:07,098
Because of oil.

1266
01:49:07,338 --> 01:49:08,858
Oh, yeah, that is why you're here, Tim.

1267
01:49:09,038 --> 01:49:12,618
I'm here in Bitcoin because oil is no longer what it what it was.

1268
01:49:12,918 --> 01:49:13,038
Yeah.

1269
01:49:13,738 --> 01:49:14,018
Right.

1270
01:49:15,858 --> 01:49:26,218
So there was probably a point in time like in the old stock market before oil started becoming a very crucial commodity on the planet.

1271
01:49:26,218 --> 01:49:33,258
where people probably said the same thing about Exxon and Chevron and BP and

1272
01:49:33,258 --> 01:49:39,838
all those before they became conglomerates. And then people are like, well, I'm just going to buy

1273
01:49:39,838 --> 01:49:44,938
the company that has the most oil because this is the most valuable commodity on the planet.

1274
01:49:45,498 --> 01:49:54,178
Right now, people are buying the company that has the corner on AI or artificial intelligence,

1275
01:49:54,178 --> 01:50:00,018
like nvidia like everybody everybody says i even see it in the comments like oh these people sell

1276
01:50:00,018 --> 01:50:05,458
stuff it's like well i guarantee everybody in the comments like probably maybe unless they have their

1277
01:50:05,458 --> 01:50:10,098
own individual like nvidia like under the table computers you're probably not interfacing with

1278
01:50:10,098 --> 01:50:15,938
nvidia really at all it's like mostly corporations and companies that are interfacing with nvidia

1279
01:50:15,938 --> 01:50:22,578
and you're interfacing with the product that uh chat gpt and uh you know all these other companies

1280
01:50:22,578 --> 01:50:30,098
create so i don't know it's just how i view the world i think it's changing

1281
01:50:30,098 --> 01:50:33,618
it could be wrong i don't think so though

1282
01:50:33,618 --> 01:50:44,898
it's changing we'll see rearranging rearranging yeah um i'm white it's time to be there yeah

1283
01:50:44,898 --> 01:50:50,198
i don't think you're embarrassed dan keep keep speaking your keep speaking your mind but um

1284
01:50:50,198 --> 01:50:53,098
I'm going to challenge you on some stuff for sure.

1285
01:50:53,958 --> 01:50:55,438
Next time we get into Strife more.

1286
01:50:56,638 --> 01:51:01,238
Dan, I look forward to sharing a couple of beers in New York in a couple of weeks.

1287
01:51:01,938 --> 01:51:06,378
And maybe we can battle live in front of people or something.

1288
01:51:07,758 --> 01:51:09,358
Jeff, I think you'll take the cake.

1289
01:51:09,358 --> 01:51:11,498
I love it.

1290
01:51:11,678 --> 01:51:13,798
Talk to me and I'll tweet in response.

1291
01:51:15,038 --> 01:51:18,798
I'll tweet in response while we're talking.

1292
01:51:18,918 --> 01:51:20,178
Hunter Jeff doesn't know he's talking.

1293
01:51:20,198 --> 01:51:24,278
Tim will sell a pay-per-view to that live.

1294
01:51:24,838 --> 01:51:28,818
Yeah. I was just going to say, I'll let Ed know we need Jeff and Dan up one stage.

1295
01:51:30,418 --> 01:51:35,018
Well, he bailed on me on the Portland thing. So Mason and I had to do it live.

1296
01:51:35,618 --> 01:51:36,958
All right. That's something important to do.

1297
01:51:37,938 --> 01:51:38,298
Sure.

1298
01:51:40,318 --> 01:51:43,318
All right. Yeah. Metaplanet Prefs too. Glad we got that in there.

1299
01:51:43,638 --> 01:51:47,278
That's going to be cool, man. It is going to be cool. These things are going to be everywhere.

1300
01:51:47,558 --> 01:51:49,578
Do you think they're going to do moving liquidation preference?

1301
01:51:50,198 --> 01:51:55,478
Yeah, because I think and we've talked about this, I think it's a it's a function of.

1302
01:51:57,278 --> 01:52:12,558
Issuing ATM, maybe it's different, it's probably different in Japan, but like in the US, the moving liquidation preference is a it was a it was a solution to a technical problem that is a function of like how taxes are issued relative to when they issue new shares of the stuff.

1303
01:52:13,238 --> 01:52:19,398
So I think it's like it's got to float as a function of some tax rule.

1304
01:52:19,398 --> 01:52:22,678
i can get more information oh i didn't know that's cool yeah let's talk about that later

1305
01:52:22,678 --> 01:52:28,678
off screen yeah and so the floating the moving location preference is a technical solution to

1306
01:52:28,678 --> 01:52:34,358
a technical problem and that because if you yeah which is why i i float that idea by you

1307
01:52:34,358 --> 01:52:44,838
it was like what's the value of strf if mstr is liquidated and the answer is if strf starts

1308
01:52:44,838 --> 01:52:49,478
getting bit up why would it get bit up if the value of the bitcoin goes down

1309
01:52:51,478 --> 01:52:55,478
because you have a higher claim over the bitcoin what is it what you know what is

1310
01:52:55,478 --> 01:53:01,478
the difference between mstr common and strife what is the difference between mstr common and strife

1311
01:53:01,478 --> 01:53:07,798
mstr common has got the the junior claim on assets and strife has a senior claim on assets

1312
01:53:07,798 --> 01:53:14,118
no voting rights and an eight dollar or ten dollar per share dividend annually and they both are a

1313
01:53:14,998 --> 01:53:22,198
moving technically a moving liquidation preference security i guess technically both of them so which

1314
01:53:22,198 --> 01:53:32,998
one would you own i want the one that's got more upside right but like if you didn't think this

1315
01:53:32,998 --> 01:53:37,078
thing is this thing's binary to me that this no that's the thing keeps me up tonight that's all

1316
01:53:37,078 --> 01:53:43,318
i'm saying i'm just posting it i don't think it's i own mstr or mcr i don't know but i'm just saying

1317
01:53:43,318 --> 01:53:47,078
you have two equities that represent a claim over the assets do you take the senior one with

1318
01:53:47,078 --> 01:53:52,678
the moving liquidation that like this is all crazy theory this is all crazy yeah it's completely

1319
01:53:52,678 --> 01:53:58,518
nonsense but i'm just using it as like a a sort of like i just think it's i just think it's binary

1320
01:53:59,318 --> 01:54:05,478
is what i'm saying i just think it's binary if if if bitcoin is valuable mstr doesn't get liquided

1321
01:54:05,478 --> 01:54:11,958
it all goes in all moons if bitcoin is not valuable let's just say let's just say yeah

1322
01:54:11,958 --> 01:54:17,958
no you're right you're right it's zero it's it's zero so if bitcoin is worth zero strife is where

1323
01:54:17,958 --> 01:54:22,918
zero liquidation preference goes to goes to 100 which is the floor if i buy all the strife tomorrow

1324
01:54:24,758 --> 01:54:27,798
if what if you buy all the strife tomorrow yeah what happens

1325
01:54:30,118 --> 01:54:35,158
i'm okay why let's where are you going with this so i buy all the stripes tomorrow it's

1326
01:54:35,158 --> 01:54:43,958
five x's in value i now own i now have a senior claim to 30 of strategies bitcoin and the bitcoin

1327
01:54:43,958 --> 01:54:50,038
per share has effectively been reduced for the common equity holder if you bought all the strife

1328
01:54:50,038 --> 01:54:54,358
tomorrow and pump the liquidation preference let's say a 5x liquidation preference and they would

1329
01:54:54,358 --> 01:54:59,718
just they would issue they would issue more right and i buy it and i buy it and i buy it and keep

1330
01:54:59,718 --> 01:55:06,838
so it's a question do you have do you have i don't know five billion dollars ten billion dollars

1331
01:55:07,638 --> 01:55:13,158
is there anybody that has ten billion dollars no again this is all weirdly theoretical like

1332
01:55:13,158 --> 01:55:17,078
i'm not saying this is going to happen by any means but i'm just saying if you bid up strife

1333
01:55:17,078 --> 01:55:22,758
enough it seems to be counterproductive to the car that's not the point i'm trying to make the

1334
01:55:22,758 --> 01:55:27,318
point i'm trying to make is what's the difference between a senior moving equity and a junior moving

1335
01:55:27,318 --> 01:55:39,478
equity. What's okay. So say it one more time. So like a common equity is valuable because you can

1336
01:55:39,478 --> 01:55:45,718
get a return on the future cash flows in the form of traditionally in the form of dividend, dividend

1337
01:55:45,718 --> 01:55:51,318
payments or stock buybacks. And then in the case of liquidation, you have a junior claim over the

1338
01:55:51,318 --> 01:55:56,038
assets upon liquidation. That's why a common equity is valuable. Plus you have shareholder voting

1339
01:55:56,038 --> 01:55:59,798
rights those are the four reasons why a common equity is valuable right yeah you're able to be

1340
01:55:59,798 --> 01:56:04,998
returned cash in the form of future cash flow buybacks dividends for the those reasons then

1341
01:56:04,998 --> 01:56:10,838
why is debt why is that valuable in a capital structure the debt's valuable such that uh yeah

1342
01:56:10,838 --> 01:56:15,078
i think i think i have that i think i have the answer to your question is the increasing bitcoin

1343
01:56:15,078 --> 01:56:22,998
per share for msdr what if it's what if there's a bitcoin dividend in the future that would

1344
01:56:22,998 --> 01:56:29,558
completely change everything i'm saying so you can view completely did that would invalidate every

1345
01:56:29,558 --> 01:56:34,918
point i've made in all my strife tweets so so there is a bitcoin dividend on every msdr share

1346
01:56:34,918 --> 01:56:39,958
it's just automatically reinvested it would have to be paid out to shareholders i think to

1347
01:56:39,958 --> 01:56:44,518
invalidate what or to quell the the problem i'm having with it

1348
01:56:46,998 --> 01:56:51,078
because if strife goes up if the price of the right goes up you technically get a

1349
01:56:51,078 --> 01:56:54,278
the same bitcoin dividend you now have more claim over bitcoin

1350
01:56:58,278 --> 01:57:03,878
no voting rights no voting rights so yeah that that maybe the voting rights are valuable enough

1351
01:57:03,878 --> 01:57:09,158
that mstr commission but if my price if the price of my strife goes up strife is one m now all day

1352
01:57:09,158 --> 01:57:13,958
long period yeah yeah yeah yeah and if the price of my strife goes up i own more bitcoin that's

1353
01:57:13,958 --> 01:57:19,798
more bitcoin per share if the price of your if the price of strife goes up

1354
01:57:21,078 --> 01:57:25,478
it's more because of the floating liquidation preference that's that's what you're arguing is

1355
01:57:25,478 --> 01:57:30,198
that because of the floating liquidation preference is going up you technically you're you're saying

1356
01:57:30,198 --> 01:57:37,238
that you own more bitcoin but you don't since you can't have bitcoin returned via common by

1357
01:57:37,238 --> 01:57:42,518
a bitcoin straight bitcoin dividend then all we're talking about are the claim on the bitcoin via

1358
01:57:42,518 --> 01:57:50,198
these different assets yeah so theoretically the senior moving claim could in a weird world

1359
01:57:51,078 --> 01:57:59,638
be um you know senior to a moving junior claim i don't know i just just thoughts i spitballing

1360
01:58:00,118 --> 01:58:05,798
yeah but even if even if you even if you owned all of it even if you owned all of it and the

1361
01:58:05,798 --> 01:58:10,838
and the price of it like rockets strategy is not getting liquidated so how long are you going to

1362
01:58:10,838 --> 01:58:16,838
hold it you're just going to get atm to weigh and they're going to raise capital and make some even

1363
01:58:16,838 --> 01:58:25,238
stronger totally i mean you know what i mean it's like then they're going to raise capital at a

1364
01:58:25,238 --> 01:58:30,038
lower interest rate and they're going to get even stronger yeah i think it's only a problem in a

1365
01:58:30,038 --> 01:58:36,438
falling btc environment uh but in a rising btc environment shouldn't matter i think you're right

1366
01:58:36,438 --> 01:58:42,678
so so in it so in a falling btc environment even then if you if you owned all of it there would

1367
01:58:42,678 --> 01:58:49,318
have to be a situation where if the it's just i think the thing is if the market saw this happening

1368
01:58:49,318 --> 01:58:57,078
and btc was falling strategy mstr could trade it at a serious discount it could but but but strife

1369
01:58:57,078 --> 01:59:03,398
but strife would be a higher credit risk yeah exactly i don't know so so strife would fall too

1370
01:59:05,398 --> 01:59:08,358
that's what you would expect that's what strategy expects that's what everyone

1371
01:59:08,358 --> 01:59:13,318
who created the security would expect that's what traditional wisdom would say i'm just saying

1372
01:59:13,318 --> 01:59:19,158
there's a weird tail scenario which maybe that's yeah i get you i get you i think i mean put me in

1373
01:59:19,158 --> 01:59:25,078
the loony bin and i'm just saying i can't get it i got it you're like sleeping on your pillow and

1374
01:59:25,078 --> 01:59:29,238
you're just like you're seeing numbers well i the thing that keeps me up is just what's the difference

1375
01:59:29,238 --> 01:59:34,278
between msdr and um that's right that's the question i keep having to ask myself voting rights

1376
01:59:34,278 --> 01:59:44,758
and how they're structured but anyway let's let's let's do this another time i i like i like uh

1377
01:59:45,398 --> 01:59:52,678
where we're at it's too late let's go to bed i gotta do a bunch of other stuff too uh i was

1378
01:59:52,678 --> 01:59:57,638
gonna get to go to bed early jeff but you know what i'm saying sorry you had to jump on and run

1379
01:59:57,638 --> 02:00:03,878
your mouth for an hour i i just i i have all these thoughts and i need an outlet you say

1380
02:00:03,878 --> 02:00:12,398
save this ring but it was good thanks by the punter bowl yeah okay thank you uh well it's been fun

1381
02:00:12,398 --> 02:00:16,758
appreciate the time thank you for running this so late i think i might have you occasionally

1382
02:00:16,758 --> 02:00:23,198
pop on and do this um it was it was uh it's great to be here good stuff yeah i thought i had the mic

1383
02:00:23,198 --> 02:00:29,438
stuff worked out but i think i don't know like as people joined i think it started to tax the system

1384
02:00:29,438 --> 02:00:35,038
or something and like i had no mic problems and then right before we went to live it was like

1385
02:00:35,038 --> 02:00:41,278
the gremlins came out of the system so kind of your mic sounds good now yeah i plugged it back

1386
02:00:41,278 --> 02:00:46,098
in but i if i don't if i don't mute as soon as i stop talking you'll get echo and feedback so

1387
02:00:46,098 --> 02:00:53,998
i've been playing that game the last 10 minutes lovely all right fun stuff all right yeah well

1388
02:00:53,998 --> 02:00:54,938
Oh, good. Final thoughts.

1389
02:00:54,938 --> 02:00:55,938
You want to do final thoughts?

1390
02:00:56,438 --> 02:00:58,758
Yeah. Final thoughts. I'm bullish here.

1391
02:00:58,758 --> 02:01:01,438
I'm really excited about the future.

1392
02:01:01,698 --> 02:01:06,798
And I'm telling you from behind the curtain, there's a lot to be excited about.

1393
02:01:07,098 --> 02:01:11,018
And I think that the next eight months are just going to be electric.

1394
02:01:11,498 --> 02:01:13,018
So I'm excited to be here.

1395
02:01:13,218 --> 02:01:15,158
I think digital capital is the way of the future.

1396
02:01:15,518 --> 02:01:18,098
And yeah, I'm going to be working in space for a long time.

1397
02:01:18,558 --> 02:01:20,558
Come to Tim's thing in September.

1398
02:01:20,558 --> 02:01:23,338
and I'm also going to Bitcoin Asia

1399
02:01:23,338 --> 02:01:25,118
and I'll be at a lot of these events coming up.

1400
02:01:25,258 --> 02:01:27,258
So I look forward to seeing everybody,

1401
02:01:27,358 --> 02:01:28,198
meeting everybody in person.

1402
02:01:28,698 --> 02:01:31,718
And yeah, it's a good time to be along.

1403
02:01:32,638 --> 02:01:33,638
Hell yeah, I've never been to Asia.

1404
02:01:35,558 --> 02:01:36,418
That sounds fun.

1405
02:01:37,198 --> 02:01:38,378
It'll be a good time, Hong Kong.

1406
02:01:39,238 --> 02:01:39,838
Awesome, guys.

1407
02:01:39,878 --> 02:01:40,638
It's been a good talk.

1408
02:01:42,658 --> 02:01:43,278
Thanks, Dan.

1409
02:01:43,278 --> 02:01:45,918
You want to give out the coupon code again, Tim?

1410
02:01:46,118 --> 02:01:46,878
Your final thoughts?

1411
02:01:46,878 --> 02:01:56,738
true north 15 for 15 off the unconference and uh i mean you get to see jeff and his dog right now

1412
02:01:56,738 --> 02:02:03,258
what's better than that it's just right right yeah my dog's tired we gotta go to bed all right

1413
02:02:03,258 --> 02:02:09,218
my final thoughts you know uh the the gains that that strategy's gotten over the last five years

1414
02:02:09,218 --> 02:02:14,018
it's the least efficient that they will ever be and me subbing for jeff tonight this was the least

1415
02:02:14,018 --> 02:02:19,938
efficient that true north will ever be i'm bullish on future true north you're the best thanks

1416
02:02:19,938 --> 02:02:21,458
everybody guys thanks everyone