1
00:00:00,000 --> 00:00:21,840
It was a beautiful day, the sun beat down, I hit the radio while I was driving.

2
00:00:21,840 --> 00:00:25,600
Trees went back

3
00:00:25,600 --> 00:00:28,400
Me and Del were singing

4
00:00:28,400 --> 00:00:30,620
Little runaway

5
00:00:30,620 --> 00:00:33,160
I was flying

6
00:00:33,160 --> 00:00:37,240
Yeah, running down a dream

7
00:00:37,240 --> 00:00:40,100
That never would come to me

8
00:00:40,100 --> 00:00:42,740
Working on a mystery

9
00:00:42,740 --> 00:00:45,760
Going wherever you leave

10
00:00:45,760 --> 00:00:48,520
Running down a dream

11
00:00:51,840 --> 00:01:03,260
I felt so good, like anything was possible, hit cruise control and rubbed my eyes.

12
00:01:04,340 --> 00:01:14,120
The last three days, the rain was unstoppable, it was always cold, no sunshine.

13
00:01:14,120 --> 00:01:18,220
Yeah, running down a tree

14
00:01:18,220 --> 00:01:21,060
That never would come to me

15
00:01:21,060 --> 00:01:23,680
Working on a mystery

16
00:01:23,680 --> 00:01:26,720
Going wherever you need

17
00:01:26,720 --> 00:01:29,500
Running down a tree

18
00:01:29,500 --> 00:01:39,540
Woo! Welcome back.

19
00:01:39,540 --> 00:01:42,360
True North, episode 39.

20
00:01:42,360 --> 00:01:47,900
chapter two, full sail ahead. We are going to get after it. We're going to have some fun.

21
00:01:48,180 --> 00:01:55,880
We are back. It's been a while. Let's get the crew out on stage. Let's put the price away.

22
00:01:56,980 --> 00:02:02,080
Welcome back, everybody. True North, the investment grade Bitcoin podcast.

23
00:02:02,780 --> 00:02:07,400
Appreciate everybody that's joined today. We've got just a couple hundred people up on the screen

24
00:02:07,400 --> 00:02:12,020
here so far, which is great. Thanks for being here. And we've got a lot to get through. Some

25
00:02:12,020 --> 00:02:18,260
exciting times. It's been 34 days since our last stream. A lot has happened. A lot has

26
00:02:18,260 --> 00:02:23,180
gone down in the markets. We've seen changes in interest rates. A lot of political things

27
00:02:23,180 --> 00:02:30,440
have happened. Prices of BTC is just chopping around. There's just been so much going on,

28
00:02:30,460 --> 00:02:34,880
and we're here to get through it. And obviously, we have new ownership. So

29
00:02:34,880 --> 00:02:42,500
True North has gotten acquired and we are here to walk through it and we're going to be okay.

30
00:02:43,060 --> 00:02:48,760
We're definitely going to be okay, guys. I can confirm that. So without further ado,

31
00:02:48,880 --> 00:02:53,460
before we get into our general statistics and information and start talking about what's going

32
00:02:53,460 --> 00:02:58,860
on in the scene here, I've got the crew here today. We've got Soleil, Adrian, Mason, Dan,

33
00:02:58,860 --> 00:03:04,200
and Ben. And we're going to talk about this strategic acquisition because I think it is

34
00:03:04,200 --> 00:03:12,780
a lot more bullish than a lot of people have really indicated or identified. So a little bit

35
00:03:12,780 --> 00:03:19,060
of background. Obviously, I took a role at Strive here within the last couple of months.

36
00:03:20,240 --> 00:03:24,300
And so within that role, it was very clear that I was wearing two different hats. I was wearing a

37
00:03:24,300 --> 00:03:30,260
Strive hat and I was wearing a True North hat. And additionally, over time, we had started to

38
00:03:30,260 --> 00:03:34,640
noticed that if we wanted to take TrueNorth to the next level, we were going to need a little bit

39
00:03:34,640 --> 00:03:39,280
more resource. So we were kind of thinking about, okay, do we get sponsorships? What does this look

40
00:03:39,280 --> 00:03:47,180
like? How do we get the additional help that we need to slice up clips and push out content into

41
00:03:47,180 --> 00:03:53,560
different spheres and different locations? So this was a great opportunity to take multiple hats,

42
00:03:53,560 --> 00:04:01,320
turn it into one hat and provide a bit more resource to help us grow this ecosystem and grow

43
00:04:01,320 --> 00:04:07,660
this story. So me personally, I think this is the biggest story in all of finance, and I will

44
00:04:07,660 --> 00:04:12,900
continue to hang my hat on that. That's why I've got a job in this space. When thinking about

45
00:04:12,900 --> 00:04:20,300
monetizing True North or kind of what we are doing here, my ultimate goal was to get a job

46
00:04:20,300 --> 00:04:26,300
in the Bitcoin world. And many of the people on the screen here have also gotten jobs or gotten

47
00:04:26,300 --> 00:04:30,560
things that they're doing in the Bitcoin world that they feel good about, that they're excited

48
00:04:30,560 --> 00:04:38,920
about. And because of that, I sold True North for a dollar, a single dollar. This wasn't a huge

49
00:04:38,920 --> 00:04:46,380
exit strategy for me to go make a ton of money. This wasn't a money grab. It just goes against

50
00:04:46,380 --> 00:04:49,800
the ethos. It goes against True North. It goes against everything that we're trying to do here.

51
00:04:50,300 --> 00:04:55,060
which is educate the community, bring people up to speed on corporate finance,

52
00:04:55,760 --> 00:04:58,540
give some perspective of what's happening behind the scenes.

53
00:04:59,200 --> 00:05:03,580
And every single one of the people on the screen now are now players in the game.

54
00:05:04,000 --> 00:05:07,600
So would you rather have perspective from people that are playing in the game,

55
00:05:07,820 --> 00:05:11,320
in the arena, or commentators that are commentating from the outside?

56
00:05:11,780 --> 00:05:15,100
And I would say likely the former in most scenarios.

57
00:05:16,600 --> 00:05:19,880
So in terms of what's next, like what does this look like?

58
00:05:20,300 --> 00:05:44,120
I'm an employee of Strive. Everybody else is independent contractors. Everybody can say whatever they want. Like nothing is going to change. And that is by design. Like the goal is to not really change anything. It's really to elevate the quality of content that we're putting out and the ability to grow and bring up the entire ecosystem so we can get more people Bitcoin jobs.

59
00:05:44,120 --> 00:05:58,600
We want to expand True North into a network and continue to elevate the entire ecosystem so people can grow into this space and continue to talk about the benefits of the future.

60
00:05:58,600 --> 00:06:06,740
a little bit of perspective like I grew up lower middle in like lower middle class I've always been

61
00:06:06,740 --> 00:06:12,900
really focused on understanding the world and like trying to share that because I grew up with a lot

62
00:06:12,900 --> 00:06:19,660
of like pain and pressure when like monetarily when I was growing up so to the extent that I

63
00:06:19,660 --> 00:06:27,160
can share that information such that people can not have those things that I felt growing up is

64
00:06:27,160 --> 00:06:34,560
is a really big goal of mine. So this is truly a benevolent movement, despite what some of the

65
00:06:34,560 --> 00:06:41,600
Twitter bots and everybody else seems to think. So I'm excited about the future. And the other

66
00:06:41,600 --> 00:06:45,620
thing I'd like to bring up, and this is just a small little cherry on top, the company that

67
00:06:45,620 --> 00:06:55,300
Strive reversed merged into was a digital finance media company that controlled Instagram, TikTok,

68
00:06:55,300 --> 00:07:03,720
and Discord media. And there's an entire crew of people that will have to be able to clip up content

69
00:07:03,720 --> 00:07:08,380
and push it out into different distribution channels that we didn't have previously. And

70
00:07:08,380 --> 00:07:16,800
that's just kind of fits within the whole thing. So if anything, I would say I am 100% all in

71
00:07:16,800 --> 00:07:25,800
on this entire space. And that's the way this is going forward. So I think it's a really exciting

72
00:07:25,800 --> 00:07:31,780
time to be talking about this stuff. And yeah, we're going to go higher. I think everybody's

73
00:07:31,780 --> 00:07:35,700
going to go higher. We're going to try to lift the entire space. Hopefully everybody that wants

74
00:07:35,700 --> 00:07:41,520
a Bitcoin job can get a Bitcoin job and we'll see where this thing goes. I think you got to

75
00:07:41,520 --> 00:07:45,700
answer the important question though, Jeff, that everybody wants to know, which is,

76
00:07:45,700 --> 00:07:47,500
What are you going to spend that dollar on?

77
00:07:48,380 --> 00:07:53,440
Please, please bother Matt about this dollar because he still hasn't paid me the dollar.

78
00:07:53,700 --> 00:07:55,680
And I want a physical dollar.

79
00:07:55,820 --> 00:07:57,200
I want like a crispy one.

80
00:07:57,400 --> 00:08:01,000
I can put it up on my wall behind me and say like, this is the true north dollar.

81
00:08:01,560 --> 00:08:02,500
You got to frame it.

82
00:08:02,660 --> 00:08:03,480
I got to frame it.

83
00:08:03,560 --> 00:08:04,780
I want to do a whole thing with it.

84
00:08:05,120 --> 00:08:06,740
So yeah.

85
00:08:07,160 --> 00:08:08,660
Do you mind if I jump in there, Jeff?

86
00:08:08,880 --> 00:08:10,200
I do want to be very clear.

87
00:08:10,200 --> 00:08:18,480
Like I think Jeff's been pretty good to me and to all of us saying like we can still share our personal investment opinions about the entire system.

88
00:08:18,480 --> 00:08:30,440
And I wouldn't have agreed to do this had it not been for kind of full autonomy and freedom with regards to my opinions in the space and, you know, my trading activities and surveyor and the like.

89
00:08:30,540 --> 00:08:37,860
So I just want to be very clear to the listeners that things won't change or won't be censored with regards to our views on the market.

90
00:08:37,860 --> 00:08:40,140
We'll keep it respectful, but not censored whatsoever.

91
00:08:40,200 --> 00:08:45,840
so rest assured 100% if grain was I got his Ferraris for 10 minutes I mean I

92
00:08:45,840 --> 00:08:50,940
guess we might have to moderate that a little bit but the only 10 minutes at a

93
00:08:50,940 --> 00:08:54,720
time 10 minutes maybe five maybe grain gets five minutes on his Ferraris but

94
00:08:54,720 --> 00:08:59,040
yeah go ahead so I agree nothing nothing really changes and I've got a statement

95
00:08:59,040 --> 00:09:05,680
from our new overlords that I've been instructed to read and it goes I sole a

96
00:09:05,680 --> 00:09:12,680
of sound mind and free will have fully ported from strategy to strive this is financial advice

97
00:09:12,680 --> 00:09:22,720
we have one anarchist in our group I'll leave it up to you guys to figure out who it is but

98
00:09:22,720 --> 00:09:26,800
he's necessary you need the anarchist the anarchist I don't know what you mean

99
00:09:26,800 --> 00:09:35,660
yeah absolutely and look and we got Mason Mason's working for a Brazilian company he got a he got a

100
00:09:35,660 --> 00:09:40,900
got a place he's living in New York. I mean, living in a finance hub, finance capital.

101
00:09:40,900 --> 00:09:52,100
I have a job. I have that. I'm a no, I'm an adult now. It's a job. Unlike college graduates.

102
00:09:52,100 --> 00:09:58,040
I call Mason like I call him sometimes. It's like noon. You may see you just waking up.

103
00:09:58,040 --> 00:10:02,340
He's like, yeah.

104
00:10:04,400 --> 00:10:06,080
He's got no more, no other words.

105
00:10:06,240 --> 00:10:09,220
You get a, you got a case of the stupids, uh, you know, going out,

106
00:10:09,340 --> 00:10:12,120
being in New York out till two o'clock in the morning. I know how that goes.

107
00:10:12,440 --> 00:10:12,700
Yeah.

108
00:10:13,780 --> 00:10:18,300
You had some, uh, you had some late nights recently, right?

109
00:10:19,780 --> 00:10:24,500
Yeah. Out in New York. Yeah. Oh my God. The last couple of the last, yeah.

110
00:10:24,500 --> 00:10:30,980
my jesus the last seven days in a row have just been absolutely insane uh i've been up till you

111
00:10:30,980 --> 00:10:35,940
know midnight 2 a.m in the morning getting these uh getting these deals that deals done that we've

112
00:10:35,940 --> 00:10:41,300
been working on and uh what an incredible time having a having a peek behind the curtain is just

113
00:10:41,300 --> 00:10:46,420
incredible we've got a like a whole huge team working on this stuff and everybody's doing things

114
00:10:47,300 --> 00:10:56,340
but yeah hopefully i can get some sleep here this weekend but uh who knows dbd dbd and we've got

115
00:10:56,340 --> 00:11:00,740
adrian i know adrian you're you're working in the space too it's just it's crazy how far everybody's

116
00:11:00,740 --> 00:11:05,300
come in the last 12 months right 12 months ago who would have thought like we were all just doing

117
00:11:05,300 --> 00:11:09,140
our own things talking to each other on the internet and we started talking about the same

118
00:11:09,140 --> 00:11:14,260
thing and we're like wow this story is big this is like really this is this is interesting and

119
00:11:14,260 --> 00:11:25,440
And now here we are all trying to move this entire movement forward in our own separate ways and different perspectives, which is just so cool.

120
00:11:25,600 --> 00:11:28,740
Right. And that's that's really a call to action to everybody else.

121
00:11:28,740 --> 00:11:32,360
Like you need to go to these events.

122
00:11:32,360 --> 00:11:37,400
You need to start talking to people and you never know where one conversation may lead.

123
00:11:37,400 --> 00:11:45,080
I think one row I met with Rohan last week in New York and I messaged him like 24 hours before the conference.

124
00:11:45,080 --> 00:11:49,600
And I said, hey, are you coming to this event? And he's like, oh, you know, I wasn't planning on it.

125
00:11:49,600 --> 00:11:52,700
And then he messages me an hour later and he's like, OK, I'll be there.

126
00:11:53,060 --> 00:11:56,760
And now we're talking about like building these models.

127
00:11:56,960 --> 00:12:05,400
He got a sailor retweet a little bit ago. And it's just that type of stuff can happen and you can do anything in this entire market.

128
00:12:05,400 --> 00:12:11,880
So like go to the events, talk to people and get out, get out there.

129
00:12:11,880 --> 00:12:15,680
Like there's no, even if you get things wrong, like that's okay.

130
00:12:15,680 --> 00:12:19,860
Like that's the only way to learn is by getting out there and doing things.

131
00:12:20,920 --> 00:12:25,000
Well, so the thing about this is that Jeff, you and I talked, what was it?

132
00:12:25,060 --> 00:12:26,460
February 24th.

133
00:12:26,460 --> 00:12:30,120
It was like that, we had that weekend call when we first started talking about strategy

134
00:12:30,120 --> 00:12:31,960
and like putting out more content and like that.

135
00:12:32,180 --> 00:12:32,380
Yeah.

136
00:12:32,640 --> 00:12:35,300
And we were all wondering why the hell people kept yelling at us online.

137
00:12:35,400 --> 00:12:39,240
where we're just trying to put out content and make them aware of this opportunity.

138
00:12:40,020 --> 00:12:45,540
So the reason why I say that is Jeff would not have actually had me involved in this

139
00:12:45,540 --> 00:12:51,460
if I was the type to not speak my mind and actually put out what I actually thought was the case.

140
00:12:51,740 --> 00:12:56,440
So for anyone that's concerned about us selling out, we have not sold out, at least not yet.

141
00:12:57,140 --> 00:13:03,780
So we're still doing this for the right reasons, and we're still trying to put out content.

142
00:13:03,780 --> 00:13:08,540
and we're trying to help everyone elevate and make themselves more financially independent and wealthy.

143
00:13:08,820 --> 00:13:14,540
So I wouldn't have any worries about us being bought out and sold out

144
00:13:14,540 --> 00:13:17,620
and selling our souls to the corporate overlords yet.

145
00:13:17,740 --> 00:13:19,500
Wait till we start our meme coin.

146
00:13:22,140 --> 00:13:23,200
That's going to be the signal.

147
00:13:23,980 --> 00:13:26,400
That right there is going to be the signal.

148
00:13:26,640 --> 00:13:30,200
Somebody, please do not start a True North meme coin because that will not be us.

149
00:13:30,680 --> 00:13:33,020
My money's on Soleil. He's going to front run it.

150
00:13:33,020 --> 00:13:40,320
put his own out. I think one of the biggest things that came out of this while we're kind of doing all

151
00:13:40,320 --> 00:13:45,920
the reflecting, right, is this has all been a really long journey for everybody here. I mean,

152
00:13:45,920 --> 00:13:52,380
the amount of time that we've all spent talking now, one of the biggest things out there that

153
00:13:52,380 --> 00:13:57,720
tells people who you are is the amount of consistency you put in over a long period of time,

154
00:13:57,720 --> 00:14:04,220
no matter what market conditions are. There's been plenty of times where the markets were good

155
00:14:04,220 --> 00:14:08,640
and everyone's having fun, and that's great, but we've all gotten kicked in the teeth a lot too.

156
00:14:09,680 --> 00:14:15,440
And a big part of this is just everybody kept showing up. And I think that's why you're seeing

157
00:14:15,440 --> 00:14:19,920
the results from everybody who's finding themselves in roles or doing their own thing

158
00:14:19,920 --> 00:14:26,840
or working as advisors for other companies. There's a massive, massive value to surrounding

159
00:14:26,840 --> 00:14:31,980
yourself with people who always show up. And, you know, I would say with this group, that's one of

160
00:14:31,980 --> 00:14:36,280
the most unique things I found here. You know, quite frankly, I'll be honest, when we started this,

161
00:14:37,000 --> 00:14:40,020
you know, I kind of thought it was going to be like a six month thing. And then we'd all end up

162
00:14:40,020 --> 00:14:43,340
kind of drifting off into our own things, you know, but it was fun for the time. And I thought

163
00:14:43,340 --> 00:14:49,580
it would be great. But everyone kept showing up over and over and over week after week.

164
00:14:50,280 --> 00:14:55,580
And I think that that's the reason why, you know, so many people are doing so many cool things. I

165
00:14:55,580 --> 00:14:58,360
I mean, Dan's out here running a hedge fund,

166
00:14:58,360 --> 00:15:01,540
Mason's king of Brazil, Adrian's advisor at all these places,

167
00:15:01,540 --> 00:15:12,956
Soleil out here cranking like it just it just been fun And it been fun to watch everybody else journeys materialize here too because we know we just at the start for everybody

168
00:15:13,916 --> 00:15:14,036
Right.

169
00:15:14,156 --> 00:15:15,976
There's, there's this period of time.

170
00:15:15,976 --> 00:15:20,876
And when things are bad, this always happens where if you go out and you just

171
00:15:20,876 --> 00:15:26,016
listen to, you know, everybody online or just the markets in general, right?

172
00:15:26,316 --> 00:15:29,276
People want to drag your conviction down with theirs.

173
00:15:29,936 --> 00:15:32,116
And they want you to meet them at the bottom.

174
00:15:32,596 --> 00:15:40,756
And that's one of the things I've really admired about most of the people in this group is to us, this is a years long thing.

175
00:15:41,356 --> 00:15:53,056
So when we see periods where, you know, things go sideways for a while or price action doesn't do what we want it to do, like days and weeks and months, you know, don't dictate success.

176
00:15:53,376 --> 00:15:55,076
It's the same thing with everybody on here.

177
00:15:55,136 --> 00:15:57,136
It wasn't days or weeks or months that caused it.

178
00:15:57,176 --> 00:15:58,456
It was years, right?

179
00:15:58,476 --> 00:15:59,656
It was years of putting in the work.

180
00:15:59,716 --> 00:16:00,976
It was years of showing up.

181
00:16:00,976 --> 00:16:03,516
And it's the same thing when you have a thesis like this.

182
00:16:03,516 --> 00:16:05,916
So, you know, it's been really cool.

183
00:16:05,916 --> 00:16:10,036
And Jeff, I give you all the credit in the world for, you know, keeping this group together

184
00:16:10,036 --> 00:16:14,136
for so long, because that is not an easy task to do.

185
00:16:14,336 --> 00:16:15,256
So kudos to you.

186
00:16:15,776 --> 00:16:15,936
Yeah.

187
00:16:16,356 --> 00:16:16,976
Thank you.

188
00:16:17,316 --> 00:16:17,456
Yeah.

189
00:16:17,516 --> 00:16:18,376
Wrangling everybody.

190
00:16:18,716 --> 00:16:19,536
And right.

191
00:16:19,576 --> 00:16:23,236
We're in year one of this digital credit world, right?

192
00:16:23,576 --> 00:16:25,096
This is year one.

193
00:16:25,436 --> 00:16:28,656
This will evolve so much over the next decade.

194
00:16:28,656 --> 00:16:31,956
and it's big enough to continue talking about this, right?

195
00:16:32,016 --> 00:16:37,916
This is a $150, $200, $300 trillion idea

196
00:16:37,916 --> 00:16:42,776
that we're literally sitting on in the very first year

197
00:16:42,776 --> 00:16:44,156
and we're the only ones talking about it.

198
00:16:44,196 --> 00:16:45,696
If you're here, kudos to you.

199
00:16:46,176 --> 00:16:52,716
There's going to be only 497 companies in the S&P 500 right now

200
00:16:52,716 --> 00:16:54,436
do not hold Bitcoin on their balance sheet.

201
00:16:54,996 --> 00:16:57,516
Anybody that's here in the chat or hanging out watching,

202
00:16:57,516 --> 00:17:04,936
there's so much opportunity out there to go get integrated and and start doing these things in

203
00:17:04,936 --> 00:17:11,096
different places so again just want to encourage everybody uh keep keep doing that stuff uh one

204
00:17:11,096 --> 00:17:18,776
last word on strive um like they strive has this like very american core built on meritocracy and

205
00:17:18,776 --> 00:17:24,156
like american values so this freedom of speech concept is incredibly important and there was

206
00:17:24,156 --> 00:17:32,256
That was critical in terms of moving this forward and providing opportunity for everybody to speak their mind.

207
00:17:33,576 --> 00:17:35,336
So that's the last thing I got to say there.

208
00:17:36,056 --> 00:17:37,436
And it's going to be a lot of fun.

209
00:17:37,736 --> 00:17:39,016
We're going to get some more people.

210
00:17:39,376 --> 00:17:40,416
We're going to get some more guests.

211
00:17:40,776 --> 00:17:42,396
I think the guests will be elevated.

212
00:17:42,656 --> 00:17:45,396
I think we'll get more shows going on underneath this.

213
00:17:45,896 --> 00:17:50,256
If you're interested in continuing to build out content underneath this, let's have a conversation.

214
00:17:50,256 --> 00:17:53,996
and we want to build this whole economy

215
00:17:53,996 --> 00:17:55,116
and bring the whole system up.

216
00:17:55,436 --> 00:17:57,776
And to the extent that there's other episodes

217
00:17:57,776 --> 00:18:00,256
of other people talking about this stuff,

218
00:18:00,576 --> 00:18:02,796
absolutely go for it, like right on.

219
00:18:04,016 --> 00:18:06,336
Well, for me, the thing that's really cool about this

220
00:18:06,336 --> 00:18:08,216
is I didn't know what Ben even looked like

221
00:18:08,216 --> 00:18:09,476
or sounded like for six months.

222
00:18:09,916 --> 00:18:12,316
And we were messaging each other on a daily basis

223
00:18:12,316 --> 00:18:14,836
about analysis, about all kinds of stuff, right?

224
00:18:14,896 --> 00:18:18,076
So this has been a really cool experience

225
00:18:18,076 --> 00:18:19,016
and a really cool journey.

226
00:18:19,016 --> 00:18:24,936
the fact that we've all kind of eventually come together we've met in person a few different times

227
00:18:24,936 --> 00:18:31,176
we've been doing this and it's just a really um refreshing kind of grassroots thing people think

228
00:18:31,176 --> 00:18:34,216
that we've sold out but they don't realize that we were just a bunch of dudes talking to each other

229
00:18:34,216 --> 00:18:41,096
online for like months at a time before this all happened so you know i i think it's just i think

230
00:18:41,096 --> 00:18:46,536
it's fantastic quite frankly yeah let's take it higher okay shall we shall we all right we're 18

231
00:18:46,536 --> 00:18:51,336
minutes in i feel like that's enough uh i think we hit it over the head everybody's everybody's

232
00:18:51,336 --> 00:18:57,096
pumped we we got the fud behind us and shall we get back into what we normally do and talk about

233
00:18:57,096 --> 00:19:01,816
everything that's going on yeah the chat is clamoring for the disclaimer i guess they love

234
00:19:01,816 --> 00:19:05,736
the disclaimer here we go i was just kidding when i said it was financial advice ladies and gentlemen

235
00:19:06,696 --> 00:19:12,616
what you're about to hear may be amazing but it is not financial advice it's for informational

236
00:19:12,616 --> 00:19:14,656
and educational purposes only.

237
00:19:14,656 --> 00:19:17,856
Jeff, back to you.

238
00:19:17,856 --> 00:19:18,616
There we go. Sorry.

239
00:19:18,616 --> 00:19:19,916
That's what we were missing.

240
00:19:19,916 --> 00:19:20,996
Interrupt. So I.

241
00:19:20,996 --> 00:19:22,856
Shout out to him, by the way.

242
00:19:22,856 --> 00:19:24,196
Like the. Oh, yeah.

243
00:19:24,196 --> 00:19:24,956
Shout out to Tim.

244
00:19:24,956 --> 00:19:25,256
Yeah.

245
00:19:25,256 --> 00:19:25,596
Shout out to Tim.

246
00:19:25,596 --> 00:19:27,556
Dominating everything right now.

247
00:19:27,556 --> 00:19:28,296
Yeah.

248
00:19:28,296 --> 00:19:30,896
Well, he just decided to go all in on Bitcoin, guys.

249
00:19:30,896 --> 00:19:32,936
So yeah, I know.

250
00:19:32,936 --> 00:19:34,636
Yeah, he wasn't all in before.

251
00:19:34,636 --> 00:19:36,716
He's going to be all in now.

252
00:19:36,716 --> 00:19:38,816
So before it was all Diet Coke and vibes.

253
00:19:38,816 --> 00:19:41,176
I don't know what the hell's going to happen now.

254
00:19:41,176 --> 00:19:42,376
Diet Coke and vibes.

255
00:19:42,376 --> 00:19:47,616
Yeah, I mean, like that unconference was one of the reasons that we had this M&A

256
00:19:47,616 --> 00:19:51,556
transaction over the last seven days, which is insane.

257
00:19:51,556 --> 00:19:53,416
Like that's that's how business gets done.

258
00:19:53,416 --> 00:19:56,056
And it was an electric event.

259
00:19:56,056 --> 00:19:58,216
And I encourage everybody to go to the next one.

260
00:19:58,216 --> 00:20:00,416
But it was so focused on Bitcoin treasuries, right?

261
00:20:00,416 --> 00:20:01,936
There was no meme coinery.

262
00:20:01,936 --> 00:20:06,336
There was no it was just so laser focused on running a Bitcoin treasury.

263
00:20:06,536 --> 00:20:09,736
Sailor was quite literally a co-host.

264
00:20:09,736 --> 00:20:12,596
I think it was on stage three or four times.

265
00:20:13,836 --> 00:20:18,896
I think I might put this in my Twitter bio, but Michael Saylor has now asked me a question,

266
00:20:19,476 --> 00:20:22,176
which I feel pretty good about.

267
00:20:23,816 --> 00:20:26,376
And yeah, what an electric event.

268
00:20:27,036 --> 00:20:29,556
I think it was the right size of an event too.

269
00:20:30,196 --> 00:20:33,396
You know, sometimes you show up at a lot of these events and they're massive, right?

270
00:20:33,396 --> 00:20:38,796
If you went to Bitcoin 2025 and you've got 30,000 plus people that are there in attendance

271
00:20:38,796 --> 00:20:43,236
And then, yeah, you've got all the shit coinery going on and all the exhibition halls and everything.

272
00:20:43,816 --> 00:20:46,716
This one, what I liked about it was it was it was so focused.

273
00:20:46,856 --> 00:20:53,596
And everybody who was there has some type of a role in this industry or they're enthusiast investors or whatever.

274
00:20:53,596 --> 00:20:55,336
But everybody there was engaged.

275
00:20:55,716 --> 00:20:59,196
So all of the conversation was really, really focused.

276
00:20:59,196 --> 00:21:08,796
And I think you get a lot of opportunity to meet and spend time with people that you probably recognize, but you don't get a lot of chances to interact with.

277
00:21:08,856 --> 00:21:14,456
And it was kind of that perfect size event to be able to go and connect with all the people that you wanted to.

278
00:21:14,676 --> 00:21:17,036
So, you know, I don't know how many it ended up being.

279
00:21:17,196 --> 00:21:21,536
I think they had tickets for like 425 or something like that.

280
00:21:21,536 --> 00:21:24,596
But it felt like the right size for that type of an event.

281
00:21:25,676 --> 00:21:27,236
Yeah, and you just get access to people.

282
00:21:27,236 --> 00:21:33,536
I think I met at like probably 120 people had some really good conversations with you know 20%

283
00:21:33,536 --> 00:21:43,936
of them and yeah just incredible incredible vibes and um yeah go to the next one yeah it was so cool

284
00:21:43,936 --> 00:21:48,556
because people would like introduce themselves but their first name and then to be like oh yeah

285
00:21:48,556 --> 00:21:52,736
I'm such and such handle on x and then you're like oh shit that's you and then you like really

286
00:21:52,736 --> 00:21:58,496
know the person so it's this it was just really cool and there's been a couple conferences since

287
00:21:58,496 --> 00:22:04,336
then all right so there's we we missed a few there was the unconference uh the hc wainwright conference

288
00:22:04,336 --> 00:22:12,816
there was uh btc uh hong kong bitcoin asia which was also pretty crazy uh so quite a few things

289
00:22:12,816 --> 00:22:17,216
somebody was asking what what happened there bitcoin asia there are about 20 000 people there

290
00:22:17,216 --> 00:22:22,976
the prior year there are about 4 000 people there so it increased like 5x year over year

291
00:22:23,536 --> 00:22:28,576
which was pretty crazy uh eric trump ended up making it out and it was nuts when he got on

292
00:22:28,576 --> 00:22:32,976
stage like everybody in that crowd like took pictures it was like a rock star got on stage

293
00:22:32,976 --> 00:22:40,496
which i found very interesting hong kong's a crazy city uh but the uh there were a lot of people

294
00:22:40,496 --> 00:22:44,816
really focused on just Bitcoin kind of as a medium of exchange.

295
00:22:44,816 --> 00:22:51,696
It really felt like the Asian markets were a couple of years behind on the Bitcoin treasury space.

296
00:22:51,696 --> 00:22:58,016
So there was a little bit less focus on that. And I think that that was growing, it seems like.

297
00:22:58,576 --> 00:23:01,856
So that was just kind of my general takeaway from Bitcoin Asia.

298
00:23:02,896 --> 00:23:07,296
And then the H.C. Wainwright conference. Ben, did you go to that? The the sailor presentation there?

299
00:23:07,296 --> 00:23:07,856
Yep.

300
00:23:07,856 --> 00:23:12,656
What was that like? Investment bankers, just a bunch of investment bankers sitting there watching

301
00:23:13,536 --> 00:23:15,536
Saylor just go on an absolute heater or what?

302
00:23:15,536 --> 00:23:21,616
Yeah, it was. And I mean, the conference really didn't revolve around the treasury space,

303
00:23:21,616 --> 00:23:26,656
but ultimately that became the keynote. There was a lot more of the health and biotech stuff going on

304
00:23:26,656 --> 00:23:32,096
at that conference. But it was interesting to have the contrast because right before Saylor went up,

305
00:23:32,096 --> 00:23:37,696
it was an entire panel of the digital asset treasury companies, all the ETH treasuries,

306
00:23:37,696 --> 00:23:39,696
and all the ones that are getting into all the other coins.

307
00:23:40,756 --> 00:23:43,816
And I found it interesting because one of the executives up there

308
00:23:43,816 --> 00:23:47,156
kept kind of taking shots at Saylor, right?

309
00:23:47,236 --> 00:23:49,216
Saying that Saylor told him not to do this.

310
00:23:49,256 --> 00:23:50,176
It was a bad idea.

311
00:23:50,656 --> 00:23:53,976
And then Saylor came in and he made a comment to him.

312
00:23:54,996 --> 00:23:57,856
And then Saylor got up there and just went on an absolute heater.

313
00:23:57,856 --> 00:24:02,596
And it showed the disconnect in the level of understanding

314
00:24:02,596 --> 00:24:07,416
of broad markets, of finance and economics,

315
00:24:07,696 --> 00:24:10,816
and he just did exactly what he always does.

316
00:24:11,056 --> 00:24:12,636
I mean, it was an hour of him

317
00:24:12,636 --> 00:24:15,496
just really educating the market on the opportunity here,

318
00:24:15,796 --> 00:24:18,716
how they spotted it, how they're going to capitalize on it.

319
00:24:19,156 --> 00:24:21,456
And it was night and day between the panels.

320
00:24:21,916 --> 00:24:26,576
So yeah, everyone, that was when the room filled up.

321
00:24:26,676 --> 00:24:27,756
It was standing room only.

322
00:24:27,876 --> 00:24:28,996
People were all over the place.

323
00:24:29,136 --> 00:24:30,396
It was a great presentation.

324
00:24:30,576 --> 00:24:33,156
It wasn't dissimilar to what he does

325
00:24:33,156 --> 00:24:35,736
on a lot of the earnings calls, right?

326
00:24:35,736 --> 00:24:40,216
he just kind of modifies it for the current time and then any developments in the market but

327
00:24:40,216 --> 00:24:46,776
yeah he went on an absolute heater for about an hour in that one too awesome right on go watch

328
00:24:46,776 --> 00:24:55,016
those they're worth one interesting slide in that presentation was he he showed the breakup of

329
00:24:55,016 --> 00:25:04,616
institutional ownership uh within you know common uh the common share class and i think i think i

330
00:25:04,616 --> 00:25:11,896
I have the numbers, right? I think it's 26% of common shares are owned by passive flows.

331
00:25:13,576 --> 00:25:13,896
26%?

332
00:25:14,216 --> 00:25:14,776
Yeah, 26%.

333
00:25:14,776 --> 00:25:16,896
Of the market, of the entire market?

334
00:25:16,896 --> 00:25:19,196
Of the entire flow.

335
00:25:19,696 --> 00:25:26,436
Yeah, that makes sense. That makes sense. Which is crazy. If you look at some of the larger,

336
00:25:26,536 --> 00:25:30,796
I've done this analysis on some mag seven stocks, which is pretty interesting. The S&P 500

337
00:25:30,796 --> 00:25:40,396
holds like 6% of Apple stock. It's like just the S&P 500 alone, let alone all of the other

338
00:25:40,396 --> 00:25:47,516
passive index funds on the planet. So it's super helpful to have that context of the architecture

339
00:25:47,516 --> 00:25:52,376
of the market and how this stuff works, because that is really that underpins this entire movement

340
00:25:52,376 --> 00:25:59,256
is that there are pools of capital that are just buying things if you put it in the right wrapper

341
00:25:59,256 --> 00:26:05,416
and you put it in front of them, they're going to buy it. And that's this Trojan horse of

342
00:26:05,416 --> 00:26:12,276
slamming Bitcoin into the equity and debt world is by doing it in this perspective. And it's a

343
00:26:12,276 --> 00:26:18,436
self-fulfilling, like reflexive flywheel in and of itself. So great point, Mason.

344
00:26:19,336 --> 00:26:22,796
Okay. We're going to switch over to leverage. We're going to talk leverage here for a minute.

345
00:26:24,056 --> 00:26:26,996
Classic leverage update. Hold on. Let me put the guys over on the right.

346
00:26:26,996 --> 00:26:33,036
Okay, we show this every week. Why do we show this? Because this entire, the Bitcoin treasury

347
00:26:33,036 --> 00:26:38,236
model is a function of the assets that these companies hold on the balance sheet, the relative

348
00:26:38,236 --> 00:26:41,756
leverage that they have on their balance sheet. And that gives you an understanding of the risk

349
00:26:41,756 --> 00:26:48,836
profile of these corporations, how they're designed. And it's something that we are

350
00:26:48,836 --> 00:26:55,856
continuously watching to understand, you know, what, like, where, where are we with, with the

351
00:26:55,856 --> 00:27:02,936
size and scale of these companies. So as of today, so this is strategy 639,000 Bitcoin held,

352
00:27:02,936 --> 00:27:09,696
Bitcoin price of 113,250. I think it's falling on us. Let's do a 112,500. I know I can automate

353
00:27:09,696 --> 00:27:18,436
this, but that is not the purpose. Bitcoin assets. So they've got about $72 billion of BTC assets held

354
00:27:18,436 --> 00:27:24,336
on balance sheet. Look back to where we were in January of this year, it was $41 billion of assets

355
00:27:24,336 --> 00:27:28,876
held on balance sheet. So there's been a significant amount of additional value that's

356
00:27:28,876 --> 00:27:37,136
added to the balance sheet, which is pretty huge, pretty huge. They've got $8.2 billion of debt. This

357
00:27:37,136 --> 00:27:41,156
is all convertible debt. Some of that is trading in the money, about $3 billion of that is trading

358
00:27:41,156 --> 00:27:47,716
in the money and 5 billion is not. They've got about $6.5 billion of preferred stock. So if you

359
00:27:47,716 --> 00:27:52,756
look at the net capital held on balance sheet, just taking the Bitcoin assets, less the debt,

360
00:27:52,756 --> 00:27:56,736
not including the preferred because the preferred that do not have maturities.

361
00:27:57,296 --> 00:28:02,516
There's no maturity on the preferred equity. So when you're thinking about assets, less debt,

362
00:28:02,976 --> 00:28:09,036
I'm only pulling out the convertible debt. So that gets us to $63 billion of net capital.

363
00:28:09,436 --> 00:28:14,656
And if you back out four years of the preferred dividends, it's roughly around

364
00:28:14,656 --> 00:28:21,736
$60.8 billion. So looking at a leverage ratio, including the preferred stock,

365
00:28:21,736 --> 00:28:25,936
So nominal leverage ratio, including the preferred stock and the bonds, it's roughly around 20%

366
00:28:25,936 --> 00:28:30,756
and a debt coverage multiple around 8.7. These numbers are slightly different than the strategy

367
00:28:30,756 --> 00:28:35,376
website, but please look to the strategy website, strategy.com for up-to-date information. I just

368
00:28:35,376 --> 00:28:40,356
like to track how this has changed over time historically. And that's also because my

369
00:28:40,356 --> 00:28:47,036
spreadsheet is like 65 pages long and I just want to keep track of it. And so when you think about

370
00:28:47,036 --> 00:28:53,496
the risk of this balance sheet and the profile here, the price needed for the assets on the

371
00:28:53,496 --> 00:28:58,636
balance sheet to be worth less than the debt plus four years of dividends is roughly 23,000. The

372
00:28:58,636 --> 00:29:05,236
price of Bitcoin needs to go down to $23,158, about 80%, and stay there for an extended period

373
00:29:05,236 --> 00:29:13,756
of time for strategy to not be able to pay their liabilities into the future. So when you're

374
00:29:13,756 --> 00:29:20,476
thinking about the relative risk profile, you can run probabilistic frameworks and scenarios,

375
00:29:20,596 --> 00:29:24,416
which is available on the strategy website. You could go to the strategy website. There's a column

376
00:29:24,416 --> 00:29:32,976
that's titled BTC risk, and it calculates the probability of the cumulative probability

377
00:29:32,976 --> 00:29:40,676
that the assets will be worth less than the liabilities at the duration of each one of those

378
00:29:40,676 --> 00:29:45,816
instruments. So it gives you a really good probabilistic framework for these things moving

379
00:29:45,816 --> 00:29:51,696
forward. We're going to build this out quite a bit here. We're working a lot on this framework

380
00:29:51,696 --> 00:30:00,636
and this information because as more entities run into the preferred equity market and this fixed

381
00:30:00,636 --> 00:30:07,276
income market using Bitcoin backed credit, this communication, this story, this framework needs to

382
00:30:07,276 --> 00:30:17,932
be absolutely nails and it needs to be really sharp And we want to hit this from all ends and all perspectives So we going to continue to build on that on that framework Anybody else have anything to add

383
00:30:20,452 --> 00:30:24,632
Yeah, I mean, I would jump in and I'd say, Jeff, I like this frame.

384
00:30:24,752 --> 00:30:28,872
I think it's interesting to look at the perpetuities as liability.

385
00:30:29,112 --> 00:30:31,672
I mean, they aren't, you know, gap accounted liabilities.

386
00:30:32,032 --> 00:30:32,432
Absolutely.

387
00:30:32,792 --> 00:30:36,812
And you can think of just the dividend payment as being outstanding liability.

388
00:30:36,812 --> 00:30:45,372
I personally like the PREF plus convertible leverage ratio that they use.

389
00:30:45,452 --> 00:30:51,292
I think it's a super reflective metric because ultimately perpetuities do bear risk, especially in low interest rate environments.

390
00:30:51,952 --> 00:30:54,992
So I really like looking at the liquidation preference and looking at that leverage in total.

391
00:30:54,992 --> 00:31:03,272
And I think we're getting up to a more fair value or closer to a target leverage ratio, which is something we've been kind of looking to do over time.

392
00:31:03,332 --> 00:31:07,192
And it's been happening week by week with the slow trickle ATM of the PREF stocks.

393
00:31:09,392 --> 00:31:16,772
I think that's probably their biggest struggle at this point is how quickly can they get some scale in those PREF offerings?

394
00:31:16,772 --> 00:31:23,492
I mean, one of the big ones that clearly had a massive amount of demand just because of the size of the IPO was Stretch.

395
00:31:23,492 --> 00:31:27,752
and so far they've not been able to get that thing up to par yet.

396
00:31:28,612 --> 00:31:30,932
And I think that's going to be one of the bigger challenges

397
00:31:30,932 --> 00:31:32,712
is getting that one jump-started.

398
00:31:33,132 --> 00:31:35,832
And it's interesting because it's one of the products

399
00:31:35,832 --> 00:31:38,192
that when you look out in the market

400
00:31:38,192 --> 00:31:41,392
and you look at the addressable market of any individual product,

401
00:31:41,972 --> 00:31:45,372
particularly a product that is applicable broadly,

402
00:31:45,932 --> 00:31:48,452
both for institutions as well as individuals,

403
00:31:49,532 --> 00:31:51,492
stretches that product, right?

404
00:31:51,492 --> 00:31:53,492
I mean, it's that high yield savings account.

405
00:31:53,632 --> 00:31:55,032
It's that money market replacement.

406
00:31:55,612 --> 00:31:59,732
And I think that they really want to be able to get that one going.

407
00:31:59,892 --> 00:32:06,052
But right now they're kind of handcuffed because they're not going to issue with the ATM at these levels.

408
00:32:06,232 --> 00:32:11,092
But they're going on to two months now trying to get that thing up to the $100 par value.

409
00:32:12,012 --> 00:32:18,112
So for strategy, I think the biggest challenge at this moment is they've just got to find ways to get more leverage on here.

410
00:32:18,112 --> 00:32:24,772
and obviously the goal of this is to get it done through the prefs and I think you know sailor going

411
00:32:24,772 --> 00:32:29,272
to these conferences and getting all those clips going around and getting people to understand

412
00:32:29,272 --> 00:32:34,872
just how powerful these products are and how broadly applicable they are will help but we

413
00:32:34,872 --> 00:32:38,932
need to see that translate into what they can issue into the market every week so that we can

414
00:32:38,932 --> 00:32:44,372
start to see that leverage start to climb because if they have to continue using the common stock

415
00:32:44,372 --> 00:32:49,692
ATM for the acquisitions right now. That's a continuous de-levering tool. And eventually,

416
00:32:49,692 --> 00:32:55,592
they need that leverage to go the other way. So I think that's the primary thing that the market's

417
00:32:55,592 --> 00:33:01,512
kind of sitting on now. He made some interesting comments at Tim's conference in terms of what he

418
00:33:01,512 --> 00:33:06,132
would be willing to do. And I think that was good for the market to hear. He went all the way to,

419
00:33:06,372 --> 00:33:12,812
what is your absolute worst case scenario here if you needed to meet these dividend liabilities?

420
00:33:12,812 --> 00:33:20,372
and he went as far as to say, look, as your last resort, you have Bitcoin and you can sell Bitcoin.

421
00:33:20,372 --> 00:33:24,312
And if they absolutely had to, they'd be willing to. But he also made comments about

422
00:33:24,312 --> 00:33:29,032
a willingness to use different types of derivatives in order to not have to use the

423
00:33:29,032 --> 00:33:33,412
common ATM to raise that capital to pay out those dividends. So I think that was a big,

424
00:33:33,412 --> 00:33:38,112
big moment in terms of messaging out to the market just to show that they're willing to

425
00:33:38,112 --> 00:33:41,632
remain flexible. It doesn't mean they're going to deploy them all right away. I think

426
00:33:41,632 --> 00:33:45,372
people are going to be looking for, you know, things like warrants and other things to be

427
00:33:45,372 --> 00:33:49,372
issued into the market right away. But I think it's going to be some time before they would

428
00:33:49,372 --> 00:33:55,432
actually go down that route. But the messaging said that, you know, he's at least he's hearing

429
00:33:55,432 --> 00:33:59,792
people, right? There's been a ton of concern around that. And people want to hear those

430
00:33:59,792 --> 00:34:04,332
worst case scenarios. And it gets highlighted in these market conditions, right? In these market

431
00:34:04,332 --> 00:34:08,872
conditions, everyone's always focusing on worst case scenario, even though they're so over

432
00:34:08,872 --> 00:34:15,192
collateralized here. But leverage is going to got to remain number one. He said the value

433
00:34:15,192 --> 00:34:21,032
proposition of this is effectively being a levered long play against Bitcoin. And now for strategy,

434
00:34:21,032 --> 00:34:26,152
they've got to start scaling that back up. They've gotten 2D levered and that's where they got to

435
00:34:26,152 --> 00:34:30,792
focus. But that's up to the market partially. Yeah. I wonder what you guys think about that.

436
00:34:30,792 --> 00:34:38,552
I mean, that statement about the derivatives to pay the PREF coupon payments was quite insane,

437
00:34:38,552 --> 00:34:44,812
And quite frankly, that's probably the last thing I would have ever expected to come out of the mouth of someone like Saylor,

438
00:34:44,872 --> 00:34:50,232
which I find extremely interesting that he'd be willing to enter into that sort of agreement,

439
00:34:50,232 --> 00:34:59,372
which I think is not necessarily a bad thing, but it represents a massive shift in kind of the sentiment and the positioning from him and the strategy team moving forward.

440
00:34:59,532 --> 00:35:01,392
I think it's interesting and it kind of plays into this.

441
00:35:01,812 --> 00:35:06,752
I know a lot of us don't like it, but this idea that, you know, they are becoming kind of a trading firm

442
00:35:06,752 --> 00:35:13,392
or they could in theory somehow use the Bitcoin in a manner to pay the PREF dividends. And I'm not

443
00:35:13,392 --> 00:35:17,152
actually, I don't really subscribe to that. I personally think they should set aside a year's

444
00:35:17,152 --> 00:35:22,352
worth of PREF dividends in cash and just use that to pay the PREF dividends. But the fact that they're

445
00:35:22,352 --> 00:35:27,952
willing to go into the derivatives market around Bitcoin is pretty insane. Well, like the best part

446
00:35:27,952 --> 00:35:32,672
is they've got everything at their disposal. And he said the quiet part out loud, obviously you can

447
00:35:32,672 --> 00:35:37,792
sell your bitcoin but effectively what sailor said is like come pry it from my dead hands

448
00:35:38,352 --> 00:35:43,952
like that's literally the absolute last thing i'm going to do and you know what i probably want you

449
00:35:43,952 --> 00:35:48,832
to take me to court in order to do it and in that moment of time if the bitcoin starts ripping and

450
00:35:48,832 --> 00:35:54,032
goes the other way he's like okay like i'm back you know uh so to the extent that you could delay

451
00:35:54,032 --> 00:35:59,152
or if that's a tactic that's that's always a possibility the derivatives market that's probably

452
00:35:59,152 --> 00:36:05,832
slightly above selling your Bitcoin. That's probably the absolute last thing you want to do

453
00:36:05,832 --> 00:36:11,732
right before selling your Bitcoin because it is volatility dampening. And when you're thinking

454
00:36:11,732 --> 00:36:16,652
about the volatility enhancement, if you're selling amplified Bitcoin, the last thing you

455
00:36:16,652 --> 00:36:23,652
want to do is cap the volatility or do something on that front. But that being said, if that's what

456
00:36:23,652 --> 00:36:28,732
they need to do, then that's what they can do. And it's been really surprising seeing the

457
00:36:28,732 --> 00:36:38,132
the market's frustration with the concept of using the ATM to pay off the dividends.

458
00:36:38,372 --> 00:36:44,312
There's so much liquidity in this stock. It's like the 18th largest publicly traded equity

459
00:36:44,312 --> 00:36:52,632
in the market and oftentimes higher. And yet they've raised $500 million in a week. They've

460
00:36:52,632 --> 00:36:58,632
raised $2 billion in a week before. And people are concerned about them having

461
00:36:58,632 --> 00:37:03,352
ability to raise 600 million dollars over the course of a year and if you were to spread that

462
00:37:03,352 --> 00:37:10,392
over every single trading day it's just like an absolutely negligible uh quantity of the average

463
00:37:10,392 --> 00:37:19,432
daily trading volume so it could be you know it could be spread out over time but the the real

464
00:37:19,432 --> 00:37:28,392
novelty here that i think is often very very much overlooked is they by having an atm on each one of

465
00:37:28,392 --> 00:37:35,272
these perpetual preferred instruments it effectively allows them to refinance any transaction

466
00:37:35,912 --> 00:37:44,312
at any point in time like 20 like whenever they want which is just a fascinating um advancement

467
00:37:44,312 --> 00:37:49,912
here because historically if you wanted to go refinance uh a loan or something that you had

468
00:37:49,912 --> 00:37:54,152
you've got to go like remarket it to everybody else in the market right you go package up your

469
00:37:54,152 --> 00:37:58,672
your financials. You do the financial colonoscopy. You put a presentation together. You go carry it

470
00:37:58,672 --> 00:38:03,932
around the market. You go to different marketplaces and you try to find the best terms. And now,

471
00:38:04,112 --> 00:38:11,452
if you like the terms, you can take them. You can issue more equity at that point. And that is just

472
00:38:11,452 --> 00:38:18,332
a really, really novel thing here. I think another really fun takeaway from the Unconference was

473
00:38:18,332 --> 00:38:27,292
this uh sailor did a a poll a hand raising poll of everybody in the audience and he said okay who

474
00:38:27,292 --> 00:38:30,532
here has a savings account and it's like okay everybody raises their hand who here's got an

475
00:38:30,532 --> 00:38:36,432
equity account it's like okay everybody raises their hand and um who here holds corporate debt

476
00:38:36,432 --> 00:38:44,892
one person raised their hand in the entire audience he's like okay um who has a savings

477
00:38:44,892 --> 00:38:52,172
account above 4%. And a couple of people raised their hand. And so what he was trying to emphasize

478
00:38:52,172 --> 00:38:57,672
is like, okay, everybody holds equity. What if I take a high yield savings account and make it

479
00:38:57,672 --> 00:39:03,272
equity? So this trading account that you look at every single day when you wake up and you're like,

480
00:39:03,352 --> 00:39:08,672
well, what are the markets doing today? And you can hold your savings in that type of vehicle with

481
00:39:08,672 --> 00:39:13,792
a dollar sign in front of it. It's a dollar sign ticker, STR, name your preferred instrument.

482
00:39:13,792 --> 00:39:22,572
and that is rethinking the world that we live in that is novel it's not uh it's hard to

483
00:39:22,572 --> 00:39:27,372
conceptualize that's why we're here talking about this stuff it is it is creating new instruments

484
00:39:27,372 --> 00:39:31,952
and so people can live their world live their life in a different way than they have in the past and

485
00:39:31,952 --> 00:39:36,592
and be in a more prosperous position and be able to store their energy in a better way so

486
00:39:36,592 --> 00:39:42,612
that was a on top of explaining you know the ability to pay their dividends in different ways

487
00:39:42,612 --> 00:39:49,212
but it really clicked. It's like, oh yeah, again, you're wrapping these things in an instrument or

488
00:39:49,212 --> 00:39:56,672
product that everybody can potentially buy all across the globe without borders. And that's a

489
00:39:56,672 --> 00:40:03,772
lot easier to consume than trying to tell somebody, okay, go to an exchange, link your bank account,

490
00:40:04,192 --> 00:40:11,052
go buy some Bitcoin on the exchange, go get this USB drive, go buy the Bitcoin on the exchange,

491
00:40:11,052 --> 00:40:15,932
send it to this usb drive oh make sure to double check the usb drive that you don't

492
00:40:16,652 --> 00:40:22,332
you run the code a couple times so you get your wallet right and then when you have these 24 words

493
00:40:22,332 --> 00:40:26,252
that get spit out make sure you put them on metal but don't store them at the same place

494
00:40:26,252 --> 00:40:32,412
store them geographically separated you know it's like holding holding bitcoin the commodity

495
00:40:32,412 --> 00:40:39,212
i recommend it i recommend everybody go through that process it is not super simple it like should

496
00:40:39,212 --> 00:40:44,652
everybody be able to figure it out yes but think about like the average intelligence of society

497
00:40:44,652 --> 00:40:50,172
think about the average person on the planet and their intelligence and then just know that 50

498
00:40:50,172 --> 00:40:58,652
of the people are dumber than that like that's like that's that's what we're working with so um

499
00:40:59,692 --> 00:41:07,052
it's helpful to ladies and gentlemen oh what you're about sorry tim tim amazing

500
00:41:09,212 --> 00:41:10,712
I don't know how that happened.

501
00:41:10,972 --> 00:41:11,352
I don't know.

502
00:41:12,352 --> 00:41:17,672
But anyway, yeah, all this is all brand new.

503
00:41:18,672 --> 00:41:23,172
Yeah, I think that poll was insightful.

504
00:41:23,172 --> 00:41:31,532
I think the point is that the modern day person has a banking account and probably has a brokerage account.

505
00:41:31,532 --> 00:41:41,792
And I think this is in line with the broader trend of the democratization of finance that we're seeing from the likes of Robinhood.

506
00:41:42,492 --> 00:41:52,552
And it kind of made me start to think about access to these securities, to the preferreds.

507
00:41:52,552 --> 00:41:55,452
I think Robinhood is like number one.

508
00:41:55,452 --> 00:42:01,952
like they should they should be knocking on their door saying hey how will how will you

509
00:42:01,952 --> 00:42:08,992
guys put preferreds on your platform this is you know your your your clientele your audience here

510
00:42:08,992 --> 00:42:17,092
would love this yeah and uh so on robin on robin hood there's that there's no preferred equity

511
00:42:17,092 --> 00:42:22,772
instruments there's zero which it makes sense because who else on the planet has held preferred

512
00:42:22,772 --> 00:42:28,532
preferred equities before this like nobody nobody's out running around saying oh yeah give

513
00:42:28,532 --> 00:42:34,292
me the preferred equity like that you know who's doing that is probably the most boring bond people

514
00:42:34,292 --> 00:42:39,172
that you've ever met in your life that are running a pension fund and are just like there for their

515
00:42:39,172 --> 00:42:48,292
job you know they don't want to lose their job so uh yeah it's this whole this world can get so big

516
00:42:48,292 --> 00:42:59,052
through just these instruments. If you're talking about how do I infiltrate Bitcoin into the

517
00:42:59,052 --> 00:43:06,092
financial world, you can disrupt literally the biggest market being the fixed income market.

518
00:43:06,852 --> 00:43:11,572
Bitcoin disrupted the money market. It fixed the money. And this is another thing Saylor said,

519
00:43:11,572 --> 00:43:17,392
which is dead on. You got to fix the capital markets. You got to fix the interest rates.

520
00:43:17,392 --> 00:43:19,592
You got to fix the debt markets.

521
00:43:20,052 --> 00:43:22,992
You've got to go fix every component of the financial world.

522
00:43:23,352 --> 00:43:28,712
Like you can't just sit back on your Twitter profile and tweet about things and get mad and just post memes.

523
00:43:29,072 --> 00:43:34,952
Like you actually got to go out there and do things and infiltrate in different areas.

524
00:43:34,952 --> 00:43:37,412
And that's that's like that's why I wanted to take a job.

525
00:43:37,532 --> 00:43:46,372
Like that's why I wanted to work in this area and do this stuff is because this should be pervasive because the instruments that you can create are better than anything else.

526
00:43:47,392 --> 00:43:54,552
that exists out there. Like the fixed income instruments, you could go look at every other

527
00:43:54,552 --> 00:44:00,792
physical risk instrument in the entire market. This has better yield, better risk profile,

528
00:44:01,412 --> 00:44:06,692
lower risk, more liquidity, and every single component of it looks more attractive.

529
00:44:07,252 --> 00:44:15,552
It's over collateralized. And there's room, there's so much room here for all of these

530
00:44:15,552 --> 00:44:23,112
advancements because you think about there's 4,800 banks, there's 4,800 credit unions,

531
00:44:23,492 --> 00:44:30,112
there's 5,800 insurance companies all providing the same thing. Is there room for multiple Bitcoin

532
00:44:30,112 --> 00:44:34,132
treasury companies doing this stuff? Absolutely. And they're all going to do it a little bit

533
00:44:34,132 --> 00:44:41,752
differently. And that's where we are. We're at year one. Is strategy going to be the biggest

534
00:44:41,752 --> 00:44:47,592
for the rest of time, probably because they've got literally an order of magnitude moat over

535
00:44:47,592 --> 00:44:49,252
and above everybody else.

536
00:44:49,472 --> 00:44:55,812
But that moat is also lifting everybody else up to provide securities in the space too.

537
00:44:59,352 --> 00:45:00,452
There's a lot going on.

538
00:45:01,372 --> 00:45:06,592
Yeah, I think there's this notion, you know, and we're in a very small echo chamber out

539
00:45:06,592 --> 00:45:10,812
here on X, right, where everybody thinks that everybody else in the world is just going

540
00:45:10,812 --> 00:45:11,572
to go buy Bitcoin.

541
00:45:11,752 --> 00:45:15,772
And most people have no understanding of Bitcoin, right?

542
00:45:15,932 --> 00:45:29,028
I mean but there a range out there And what I always say is I think that being able to get access to it through either equities like Preferreds or these treasury companies or the ETFs I think that serves as a

543
00:45:29,028 --> 00:45:33,288
really good on-ramp to start that educational journey for most people, because it's simple.

544
00:45:34,068 --> 00:45:38,428
So you get the exposure to the performance of Bitcoin, but you don't have to understand all

545
00:45:38,428 --> 00:45:42,568
the technical details behind it yet. But as soon as you have an asset like that, that starts

546
00:45:42,568 --> 00:45:47,228
performing for you, that's when your interest starts to climb. That's when you're willing to

547
00:45:47,228 --> 00:45:52,268
actually go do that diligence and learn what it is that you're holding so i don't necessarily

548
00:45:52,268 --> 00:45:57,628
discourage people when they want the on-ramp to be an ibid or any of the other ones and i think

549
00:45:58,108 --> 00:46:02,748
products that are coming out through the preferreds effectively being able to replace

550
00:46:03,708 --> 00:46:08,508
some of the you know largest pools of capital for normal people right which is going to be

551
00:46:08,508 --> 00:46:14,988
savings accounts and maybe money market accounts you know that provides a service that's made

552
00:46:14,988 --> 00:46:20,668
possible by Bitcoin. And just that alone, if all you were doing was trying to move somewhere where

553
00:46:20,668 --> 00:46:25,068
you're getting a better interest rate, right? If all I wanted was to get away from a 3% interest

554
00:46:25,068 --> 00:46:32,028
rate bank account, and I could go to a 9% interest rate through a product like Stretch, that can be a

555
00:46:32,028 --> 00:46:37,388
massive difference to people. And eventually you start asking the question, why does this work?

556
00:46:37,948 --> 00:46:44,908
Right? What is it that's making this possible? Why can this company pay me 9%, 10% while the banks

557
00:46:44,908 --> 00:46:50,828
can only pay me three. And that's just scratching the very surface of the journey of Bitcoin,

558
00:46:50,828 --> 00:46:54,628
where you finally go out and figure out exactly how broken everything is.

559
00:46:55,528 --> 00:47:00,868
So I think that the products are going to be what helps Bitcoin penetrate into the masses.

560
00:47:01,668 --> 00:47:07,048
And over time, you're going to see that adoption and people are going to see that Bitcoin itself

561
00:47:07,048 --> 00:47:13,388
does have a, I've heard it said as the sovereignty multiple, holding Bitcoin itself on your own,

562
00:47:13,388 --> 00:47:17,828
And when you really understand how powerful that is to have a bearer instrument like that,

563
00:47:18,148 --> 00:47:21,688
you know, that's, you know, that's when you've really turned the corner and you understand

564
00:47:21,688 --> 00:47:25,008
the value of what it is that you're holding and what's making everything else possible.

565
00:47:26,708 --> 00:47:27,148
Yeah.

566
00:47:27,368 --> 00:47:30,688
Dan, I'm curious your perspective now that you're a Mr. Hedge Fund guy.

567
00:47:31,608 --> 00:47:37,368
How are you thinking about balance of these things in a, in a portfolio

568
00:47:37,368 --> 00:47:43,328
in terms of like risk mitigation and like efficient frontier.

569
00:47:43,548 --> 00:47:44,948
Is that a consideration?

570
00:47:46,008 --> 00:47:48,048
Are you YOLOing strike options?

571
00:47:48,148 --> 00:47:51,388
Oh, wait, there's not strike options, but there's strife options.

572
00:47:51,488 --> 00:47:55,848
There's options on these things now, which is also a very fascinating development.

573
00:47:56,428 --> 00:47:59,708
But like how are you thinking about them as a capital manager?

574
00:48:02,148 --> 00:48:04,108
Thanks for, yeah, thanks for the segue.

575
00:48:04,108 --> 00:48:08,568
Anyway, I mean, I think people underestimate looking at these things.

576
00:48:08,608 --> 00:48:12,128
Well, you've got this collateral base, which is Bitcoin for all Bitcoin treasury companies, right?

577
00:48:12,188 --> 00:48:17,228
And you have this, so you have the static collateral base and largely it's unsecured in all these corporate structures.

578
00:48:17,228 --> 00:48:21,488
And then you figure out, and then you issue securities on top of this collateral base.

579
00:48:21,748 --> 00:48:25,248
And that's largely been the Bitcoin treasury model for the past six months.

580
00:48:25,708 --> 00:48:29,508
So then you think, okay, where do I, how am I positioned in the capital structure?

581
00:48:29,508 --> 00:48:38,688
And I think for us, I know for me as like a retail investor prior, it's I didn't think enough about the converts in my position in the capital structure.

582
00:48:38,968 --> 00:48:41,868
But it's always been something that's like, oh, the converts are super, super valuable.

583
00:48:42,008 --> 00:48:49,748
We've seen all the charts of how well the converts have performed, how low the volatility has been and how you get that common stock upside with that debt like downside.

584
00:48:49,988 --> 00:48:53,608
And so I think moving forward, the press is something that people should really seriously consider.

585
00:48:54,088 --> 00:48:58,688
But it's different because of the equity issuance and the ATM issuance on the preferred.

586
00:48:58,688 --> 00:49:04,048
so that's the way i'm trying to look at them so i think the preferreds so like for example i think

587
00:49:04,048 --> 00:49:08,768
strike is extremely undervalued right i think a strike is criminally undervalued relative to the

588
00:49:08,768 --> 00:49:15,328
common the problem is you do have this kind of ramp up period for the uh for the prep products

589
00:49:15,328 --> 00:49:19,408
so it's something to consider and think about but i think strategy is actually doing a great job

590
00:49:19,408 --> 00:49:23,728
managing the prices and the volatility and you've seen the volatility come down and the correlation

591
00:49:23,728 --> 00:49:29,248
to bitcoin come down across all the prep products so like for example if you look at the correlation

592
00:49:29,248 --> 00:49:35,888
of stretch strategies product to btc it's zero percent look at mstr correlation it's minus 22

593
00:49:36,528 --> 00:49:42,128
so while it's not at 100 yet it's not pegged 100 it is a stable product so there there has been some

594
00:49:42,128 --> 00:49:45,808
really good developments i think in strategies capital structure and so that's how i'm looking

595
00:49:45,808 --> 00:49:52,608
to position i do think stretch will in fact stretch and strife will be a safe haven uh in a bear market

596
00:49:52,608 --> 00:49:59,328
and i'm starting to really believe that we're we're like so close every day i look at the

597
00:49:59,328 --> 00:50:04,608
stretch performance and i'm like when when is it going to happen when are we going to when are we

598
00:50:04,608 --> 00:50:11,008
going to get the pig we're so close but i swear it's been trading at 97 like 97 and change for

599
00:50:11,968 --> 00:50:19,328
a month straight i think it's going to be 98 and 100 um into i just think it's going to trade there

600
00:50:19,968 --> 00:50:23,648
you just don't you don't think there's they're going to get a peg regardless of interest rates

601
00:50:23,648 --> 00:50:30,448
coming down or uh the the capital structure shifting even higher the volume i think the

602
00:50:30,448 --> 00:50:36,288
volume has to pick up really really high because would you buy it at 100 if you know it would be

603
00:50:36,288 --> 00:50:41,248
called at 101 so you would never buy it at 101 so you could buy it at 100 but the only reason you

604
00:50:41,248 --> 00:50:44,928
probably bought it as 100 if they're selling it at 100 because they can't sell it at 101

605
00:50:45,728 --> 00:50:52,048
because no one will buy it at 101 so that means you probably buy it below 100 but as long as it's

606
00:50:52,048 --> 00:50:56,928
below 100 you can expect an interest rate increase for the next month so i expect it to settle

607
00:50:56,928 --> 00:51:03,248
somewhere around 99. but people will buy it at 101 because of the yield i think that's the whole point

608
00:51:04,768 --> 00:51:11,328
yeah but they won't i don't think there'll be new participants at 101. just depends it just

609
00:51:11,328 --> 00:51:17,328
depends, right? Like this, this is where I think the, this general framework of like, I truly think

610
00:51:17,328 --> 00:51:22,208
risk is mispriced globally. If there's a landslide of capital, let's just say you've got a bunch of

611
00:51:22,208 --> 00:51:27,168
people are in the equity market right now, chasing AI, PE ratios, PE ratios across the market are at

612
00:51:27,168 --> 00:51:34,928
all time highs. They're I think higher than like.com bubble times. If there is any blow off top type

613
00:51:34,928 --> 00:51:39,168
event. I'm not saying that there will be markets can stay irrational for very long.

614
00:51:40,928 --> 00:51:42,128
Where does that capital flow?

615
00:51:42,128 --> 00:51:47,888
No, I think you're totally right, Jeff. I'm just saying, if they can call it at 101,

616
00:51:47,888 --> 00:51:50,608
you're not a new buyer at 101. That's my own point.

617
00:51:50,608 --> 00:51:55,248
If they can call it at 101, well, they're selling shares at 101 to bring it back down to 100.

618
00:51:56,448 --> 00:52:02,848
It's callable at 101. So they can convert you at 101. They can give you cash at 101.

619
00:52:03,408 --> 00:52:12,448
they can give you cash at 101 yeah they call it right interesting yeah huh okay we're gonna have

620
00:52:12,448 --> 00:52:15,728
to we're gonna have to click it we're gonna have to click into that framework a little bit um

621
00:52:16,688 --> 00:52:23,088
interesting 100 yacht party yeah they can actually the interesting thing is they can actually sell

622
00:52:23,088 --> 00:52:30,048
at any price so yeah yeah yeah they're legally able to sell they could issue stretch today at 97

623
00:52:30,048 --> 00:52:34,528
if they wanted to yeah that would probably be a pretty bad signal to the market and doing that

624
00:52:34,528 --> 00:52:40,368
i would assume uh yeah even that their intention is to bring it up to this hundred dollar peg

625
00:52:41,168 --> 00:52:45,648
um it was interesting to see that i mean interest games that interest rates came down 25 basis

626
00:52:45,648 --> 00:52:52,768
points stretch didn't really move much um really stayed kind of flat it's just i'm wondering how

627
00:52:52,768 --> 00:52:56,928
long it'll take for the market to like wrap their head around this risk profile again this instrument

628
00:52:56,928 --> 00:53:04,848
is what like three months old not even and like it just takes time for this stuff to get around to

629
00:53:04,848 --> 00:53:10,528
the market like anybody that's willing to underwrite bitcoin risk here has got an incredible

630
00:53:10,528 --> 00:53:16,448
opportunity and i've been talking with matt about this quite a bit a lot of uh institutional money

631
00:53:16,448 --> 00:53:21,488
managers need a track record before that they they can invest in things and that track record might

632
00:53:21,488 --> 00:53:27,168
be like three to five years so like as a as an asset manager you know selling funds um

633
00:53:28,608 --> 00:53:34,768
it if you have a track record then the number of people that can buy your instruments increases

634
00:53:34,768 --> 00:53:40,448
drastically so like there's this window of time here where like there isn't really a track record

635
00:53:40,448 --> 00:53:45,488
but you understand the product and you understand the instrument where you have alpha over and above

636
00:53:45,488 --> 00:53:49,488
the rest of the market because you can conceptualize the product and where it's going to go

637
00:53:50,048 --> 00:53:54,448
there is uncertainty obviously but the people that are interested in these products will be

638
00:53:54,448 --> 00:54:00,368
rewarded for taking on that uncertainty in the form of excess yield over and above everything

639
00:54:00,368 --> 00:54:08,128
else like you think about again the what is the downside risk the downs like i think strc like

640
00:54:09,008 --> 00:54:14,048
the entire capital stack i think they could pay over like a hundred years of dividends just based

641
00:54:14,048 --> 00:54:20,048
on the bitcoin collateral that they have on their balance sheet like like that's that's not junk bond

642
00:54:20,048 --> 00:54:25,728
status that's that's triple a investment grade and they're trading as if they're distressed debt

643
00:54:25,728 --> 00:54:33,408
like junk bond status so they're like the spread against everything else is so vast uh that that

644
00:54:33,408 --> 00:54:39,888
will in my opinion it should close it might just take forever but that's a opportunity for everybody

645
00:54:39,888 --> 00:54:47,248
yeah i think i think what we're kind of seeing or what we have saw is retail has essentially boot

646
00:54:47,248 --> 00:54:54,528
strapped these these preferred products and i think it will just be a matter of time before

647
00:54:55,328 --> 00:55:02,928
the broader market the institutions accept this as kind of a a new paradigm within their world

648
00:55:02,928 --> 00:55:09,088
because it is the new paradigm as sailor says it's the it's the nuclear powered flying hover

649
00:55:09,088 --> 00:55:17,348
car and everyone else is in, you know, horse and buggy. Yep, absolutely. That's a great post from

650
00:55:17,348 --> 00:55:24,128
young sailor. Sailor posted, we are now pursuing credit ratings four days ago. And that's a whole

651
00:55:24,128 --> 00:55:30,308
another ball game if they're able to get credit ratings on these things because that, again,

652
00:55:30,408 --> 00:55:35,368
as more capital can come in the door, these money managers have mandates where they can't

653
00:55:35,368 --> 00:55:42,088
um you know they can't buy things if they're underrated like again thinking about like insurance

654
00:55:42,088 --> 00:55:48,808
companies my background perspective there the if you have these instruments that are really liquid

655
00:55:48,808 --> 00:55:53,128
and they're rated and they're bitcoin backed your whole financial structure of all these companies

656
00:55:53,128 --> 00:56:00,568
can literally fundamentally change and i i said this on stage at the unconference but one of the

657
00:56:00,568 --> 00:56:07,528
reasons that the entire insurance industry buys reinsurance is because they are protecting it's

658
00:56:07,528 --> 00:56:11,128
the volatility in their balance sheet if they have a catastrophe that comes in the door

659
00:56:11,128 --> 00:56:16,808
they don't want to liquidate all of their assets all of their illiquid assets and take a loss on

660
00:56:16,808 --> 00:56:22,328
all those illiquid assets so that's why they buy reinsurance and now with the creation of these

661
00:56:22,328 --> 00:56:29,208
new fixed income at these fixed income instruments they're more liquid more more they're safe they're

662
00:56:29,208 --> 00:56:34,328
better yield they're more liquid and if they get raided that turns the insurance industry model

663
00:56:34,328 --> 00:56:41,288
like upside down like the balance sheet capital management literally upside down and the need for

664
00:56:41,288 --> 00:56:46,248
reinsurance starts to become less and less that should improve the price of insurance for anybody

665
00:56:46,248 --> 00:56:51,688
that's buying insurance from any of these you know companies that are leaning into bitcoin

666
00:56:51,688 --> 00:56:57,608
that there's like the amount of opportunity in every in every sector of the financial world is so big

667
00:56:57,608 --> 00:57:08,408
big. It's just hard to fathom. Okay. Prefs. What else should we talk about? Jesus. There

668
00:57:08,408 --> 00:57:11,868
was so many things that happened. Should we just go through the list of things that happened

669
00:57:11,868 --> 00:57:20,428
in the last 35 days? Start at the top. Because that was pretty insane. Just going to go through

670
00:57:20,428 --> 00:57:25,488
it. Interest rates went down. Options on the prefs. Pipe unlocks. Bitcoin treasury company

671
00:57:25,488 --> 00:57:33,728
nav compression, bots expanding, risk and leverage developments, AI just going through the roof and

672
00:57:33,728 --> 00:57:38,528
energy going through the roof. BTC relative to gold. Gold is just on an absolute tear.

673
00:57:39,408 --> 00:57:46,048
Strategy didn't get included in the S&P 500. The Bitcoin unconference, core versus not. The

674
00:57:46,048 --> 00:57:52,128
intense debate is heating up. There's been M&A in the market. People are working in Bitcoin.

675
00:57:52,128 --> 00:57:55,508
Bitcoin is a unit of account and then gap earnings.

676
00:57:55,688 --> 00:57:58,988
Maybe I'll start with earnings because I just posted about this and I did the math.

677
00:57:58,988 --> 00:57:59,968
So I might as well share it.

678
00:58:02,928 --> 00:58:07,588
Q3 closes in six days and maybe I'll make this a little bit bigger.

679
00:58:10,028 --> 00:58:12,228
So Bitcoin price has it right now.

680
00:58:12,328 --> 00:58:12,748
What is it?

681
00:58:12,788 --> 00:58:14,108
About 113,000.

682
00:58:14,508 --> 00:58:15,248
That's fine.

683
00:58:15,588 --> 00:58:16,548
113,000.

684
00:58:17,088 --> 00:58:20,648
So the Bitcoin price at the close of Q2 was 107,700.

685
00:58:20,648 --> 00:58:25,488
The gain on the Bitcoin held from Q2 on strategies balance is about $3.2 billion.

686
00:58:25,968 --> 00:58:31,048
The gain on Q2 Bitcoin accumulated is a loss of $114 million.

687
00:58:31,748 --> 00:58:38,588
So the net income estimate for the quarter is about $2.3 billion, which equates to around $8 earnings per share.

688
00:58:39,388 --> 00:58:46,528
Overall, just taking the actual reported earnings over the last four quarters, the EPS estimate is around 20.

689
00:58:46,528 --> 00:58:51,108
So strategy is technically trading at like a 15.5 PE ratio.

690
00:58:51,628 --> 00:58:52,848
But what do we know?

691
00:58:53,008 --> 00:58:56,808
There's been a new accounting method that's been adopted, FASB Fair Value Accounting.

692
00:58:57,548 --> 00:59:01,548
And so since FASB Fair Value Accounting, if you were to take that methodology and apply

693
00:59:01,548 --> 00:59:07,368
it back the last four quarters, the true PE ratio is more like 6.7 and the trailing 12

694
00:59:07,368 --> 00:59:09,388
month earning per share estimate is around $49.

695
00:59:10,068 --> 00:59:15,608
So a material difference between what's actually been reported and the actual gain that's

696
00:59:15,608 --> 00:59:23,048
been effectively maybe not that's unrealized still sitting on the balance sheet so again

697
00:59:23,048 --> 00:59:28,428
significant that's it's just a c this is just an enormous balance sheet and i think many people

698
00:59:28,428 --> 00:59:37,688
don't like fail to recognize how large this thing is and how large it can continue to get because of

699
00:59:37,688 --> 00:59:44,168
the plumbing that they have in place uh and the lack of leverage on their balance sheet right now

700
00:59:44,168 --> 00:59:45,748
moving forward into the future.

701
00:59:46,588 --> 00:59:47,588
So I'm going to pause there.

702
00:59:47,728 --> 00:59:48,648
What are we talking about?

703
00:59:48,708 --> 00:59:49,228
What's next?

704
00:59:53,248 --> 00:59:54,148
Win inclusion.

705
00:59:56,488 --> 00:59:57,308
What do we think?

706
00:59:57,948 --> 00:59:58,788
They obviously were,

707
00:59:59,028 --> 01:00:01,008
they obviously did not make

708
01:00:01,008 --> 01:00:03,908
the inclusion here this last quarter, Q3.

709
01:00:04,388 --> 01:00:06,428
I'm not incredibly surprised.

710
01:00:07,108 --> 01:00:08,348
It seemed like a lot of people were.

711
01:00:08,348 --> 01:00:11,028
Maybe some people had some tail options

712
01:00:11,028 --> 01:00:13,968
expiring within the time horizon.

713
01:00:14,168 --> 01:00:20,008
talking about it like we were talking i think josh was clearly quite bullish on first go around

714
01:00:20,008 --> 01:00:25,528
inclusion we've been talking about this event for the past nine months so i totally get why people

715
01:00:25,528 --> 01:00:30,328
you know are a little upset that it didn't go through and i totally get that and it wasn't the

716
01:00:30,384 --> 01:00:33,984
people have been expecting the front running didn't happen i think you know there's big boys

717
01:00:33,984 --> 01:00:38,944
in the market that know how these things behave and so i think for me at least when the front

718
01:00:38,944 --> 01:00:43,264
running wasn't occurring i got a little nervous and expected it not to happen because unfortunately

719
01:00:43,264 --> 01:00:47,184
the reality of the matter is big institutions position prior to these things and whether or not

720
01:00:47,184 --> 01:00:52,304
you like it you know the front running we saw qqq i think is quite indicative like looking back

721
01:00:52,304 --> 01:00:55,584
like it's so funny looking at price action historically and being like oh that was obvious

722
01:00:55,584 --> 01:01:00,144
right but if you had just looked at that prior run-up you saw mnav expansion real buy pressure

723
01:01:00,144 --> 01:01:04,624
on the stock without even Bitcoin running yet. Like that was clearly institutional front running

724
01:01:04,624 --> 01:01:10,704
of QQQ. We didn't see that happen with S&P. So I don't think now looking back, it's not necessarily

725
01:01:10,704 --> 01:01:14,784
a surprise they didn't get an S&P. Will they eventually in the future? Yeah, I think it's

726
01:01:14,784 --> 01:01:19,184
likely. But I think you got to look at the price action and maybe that will kind of show us when

727
01:01:19,184 --> 01:01:27,424
that's going to happen. My guess is I'm thinking third go around is kind of the first time that

728
01:01:27,424 --> 01:01:33,024
I'm feeling really up that I'd start to feel optimistic about it. I think that, you know,

729
01:01:33,084 --> 01:01:39,404
for this one, it's too new of a type of company for a committee, I think, to really wrap their

730
01:01:39,404 --> 01:01:42,904
head around. Cause you know, while we all think everyone sits around and thinks about these all

731
01:01:42,904 --> 01:01:47,684
day long, I think they just got something totally new thrown at them. And it's a committee of people

732
01:01:47,684 --> 01:01:52,824
that nobody knows who they are, a little weird, but you know, nobody knows who's on the committee

733
01:01:52,824 --> 01:01:55,964
and they're sitting in the room, making a decision on whether these companies get in.

734
01:01:55,964 --> 01:02:14,764
And, you know, when you've got really the first opportunity for entry coming from this change in FASB fair value accounting, I think that was enough of a one off for them to be able to hit pause and say, we need to wait and see how this plays out.

735
01:02:14,764 --> 01:02:23,204
I think if you get two in a row where now they're profitable and they're hitting all the metrics, I think then they can start analyzing it.

736
01:02:23,364 --> 01:02:32,524
And then I think on the third, if you get three consecutive periods where they've got the opportunity to get in, my guess is it's on that third one where they finally break through.

737
01:02:32,684 --> 01:02:34,244
Total guess, obviously, I don't know.

738
01:02:34,784 --> 01:02:37,024
But that's the logic I've been playing with in my head.

739
01:02:37,104 --> 01:02:41,364
But to your point, Dan, I think a lot of it is going to be watching those capital flows ahead of time.

740
01:02:41,884 --> 01:02:42,004
Right.

741
01:02:42,004 --> 01:02:43,084
Somebody always knows something.

742
01:02:44,124 --> 01:02:47,484
And it's why before a lot of announcements ever get made to the market,

743
01:02:47,804 --> 01:02:49,724
you start to see these equities moves.

744
01:02:49,804 --> 01:02:51,544
You start to see those volumes climb.

745
01:02:51,764 --> 01:02:55,024
So, you know, it's something we're going to have to watch for and see what happens.

746
01:02:55,124 --> 01:02:55,664
I hope I'm wrong.

747
01:02:55,724 --> 01:02:59,704
I'd love for it to be the second, but I'm tempering my expectations

748
01:02:59,704 --> 01:03:01,764
and thinking that it's probably the third go around.

749
01:03:02,824 --> 01:03:05,164
Is that what happened with Tesla, Jeff?

750
01:03:05,644 --> 01:03:05,904
Two.

751
01:03:06,304 --> 01:03:07,284
They got in on the second.

752
01:03:07,624 --> 01:03:08,484
So they, yeah.

753
01:03:08,484 --> 01:03:11,504
So they reported Q2 earnings in July.

754
01:03:12,004 --> 01:03:18,324
of 20 and they missed the september inclusion and then they got in december that was announced in

755
01:03:18,324 --> 01:03:27,364
like late november and they they can be added uh at any at any other time too like randomly

756
01:03:28,084 --> 01:03:32,964
um companies get included because you know they want to get rid of a company like walgreens or

757
01:03:32,964 --> 01:03:38,644
something you know uh and so there there is possibility for that but to your point ben like

758
01:03:38,644 --> 01:03:45,244
like showing some stability in this new gap FASB earnings is pretty big.

759
01:03:46,504 --> 01:03:49,804
Just some context.

760
01:03:49,804 --> 01:03:56,224
I mean, I've had some conversations with people that have been surprised

761
01:03:56,224 --> 01:04:05,604
that strategy reported the gain as unrealized net income,

762
01:04:05,824 --> 01:04:07,184
the net income on the balance sheet.

763
01:04:07,184 --> 01:04:14,404
and they even said i was surprised that sailor had the balls to report net income like the bitcoin

764
01:04:14,404 --> 01:04:21,504
gain is net income on the balance sheet and then my initial reaction was like like hatred it's like

765
01:04:21,504 --> 01:04:27,004
these are these are the rules like this is this is the accounting rule like this isn't even it would

766
01:04:27,004 --> 01:04:34,344
be weirder if he didn't you know and it was like i was a little deceptive maybe i was just like

767
01:04:34,344 --> 01:04:43,144
totally astonished um that that was the that was a commentary and that that commentary exists in many

768
01:04:43,144 --> 01:04:52,184
places in like large capital uh markets so just for the context of like how the rest of like the

769
01:04:52,184 --> 01:04:59,304
world in new york views this thing they still think that it's a surprise that they're able to do this

770
01:04:59,304 --> 01:05:05,864
so like what we've known for over a year now about this change in accounting rule and we've

771
01:05:05,864 --> 01:05:12,904
been talking about for over a year there are people with corner offices that like don't

772
01:05:13,784 --> 01:05:21,544
don't get it so just keep that in mind that's how early that's how early we are yeah i wasn't

773
01:05:21,544 --> 01:05:25,944
surprised they weren't included for a few reasons i think when um the previous earnings prints we

774
01:05:25,944 --> 01:05:30,504
had a lot of market analysts calling for negative eps that said to me that a lot of people were

775
01:05:30,504 --> 01:05:36,584
still um there's still a broad disconnect in how the market was perceiving the equity in terms of

776
01:05:36,584 --> 01:05:41,224
um the the the business itself they were discounting the the bitcoin business entirely

777
01:05:41,784 --> 01:05:47,864
um furthermore i think s p inclusion would we have to think about what it says to the market it

778
01:05:47,864 --> 01:05:53,224
legitimizes bitcoin based earnings right so once strategy gets in i think that opens the door for a

779
01:05:53,224 --> 01:05:57,824
a lot more broad adoption of Bitcoin,

780
01:05:57,824 --> 01:06:02,044
because we think that Bitcoin has been legitimized.

781
01:06:02,044 --> 01:06:04,084
We think that this model has been legitimized,

782
01:06:04,084 --> 01:06:06,084
but I think that there's still a disconnect in the market

783
01:06:06,084 --> 01:06:07,644
where the market doesn't think that.

784
01:06:07,644 --> 01:06:10,584
So if the S&P were to include strategy,

785
01:06:10,584 --> 01:06:12,364
that would say a few things.

786
01:06:12,364 --> 01:06:15,964
I would say one, Bitcoin-based earnings are legitimate.

787
01:06:15,964 --> 01:06:18,244
Two, this is a legitimized model.

788
01:06:18,244 --> 01:06:20,544
And three, it opens the door for a lot more companies

789
01:06:20,544 --> 01:06:22,284
to have broad-based adoption.

790
01:06:22,284 --> 01:06:24,044
And I don't know if they were ready for that.

791
01:06:24,044 --> 01:06:28,464
So I think that there is an aspect of the adoption

792
01:06:28,464 --> 01:06:32,244
or the acceptance of the FASB rule changes were a factor.

793
01:06:32,244 --> 01:06:34,544
But I also think the market isn't ready

794
01:06:34,544 --> 01:06:35,684
for what that would signal.

795
01:06:35,684 --> 01:06:37,864
If strategy gets in, I think the floodgates open

796
01:06:37,864 --> 01:06:40,724
in terms of other companies wanting to adopt this model.

797
01:06:40,724 --> 01:06:45,724
So we, well rather I have tempered my expectations

798
01:06:47,344 --> 01:06:48,704
and I kind of align with Ben

799
01:06:48,704 --> 01:06:52,104
and thinking that they may get in on the third go round,

800
01:06:52,104 --> 01:06:55,964
just because this says a lot more to the market than just strategy gets in.

801
01:06:56,044 --> 01:06:59,564
I think this legitimizes Bitcoin in an entirely different way if they do get in.

802
01:06:59,744 --> 01:07:01,884
And I don't know if the S&P community was ready to take that leap.

803
01:07:03,684 --> 01:07:06,084
Also, guess who the rating agencies are for the press?

804
01:07:07,184 --> 01:07:09,124
Have you heard of the S&P Global?

805
01:07:11,364 --> 01:07:15,104
They're one of the primary rating agencies for these types of instruments.

806
01:07:15,104 --> 01:07:20,024
So to the extent that they're having communication and conversation about these instruments,

807
01:07:20,024 --> 01:07:27,904
I would suspect that that information gets sent around the S&P, the company S&P.

808
01:07:28,904 --> 01:07:29,864
Well, think about it.

809
01:07:29,884 --> 01:07:32,644
If they get included, credit ratings would perhaps have to be around the corner.

810
01:07:33,104 --> 01:07:36,104
I don't really see how that, one doesn't follow the other.

811
01:07:36,104 --> 01:07:37,724
Instantly increases the credit quality.

812
01:07:37,864 --> 01:07:39,324
They're going to include in the S&P 500.

813
01:07:39,564 --> 01:07:41,324
Their credit quality is instantly increased.

814
01:07:41,424 --> 01:07:44,264
They've got more trading volume that's going to be on their stock constantly

815
01:07:44,264 --> 01:07:45,724
because you've got the passive bid.

816
01:07:46,044 --> 01:07:49,164
You understand how the instruments are designed.

817
01:07:49,164 --> 01:07:53,884
the market cap should technically like theoretically increase which provides more

818
01:07:53,884 --> 01:07:57,964
bitcoin in the balance sheet for over collateralization it's just the whole thing is reflexive

819
01:07:58,604 --> 01:08:05,484
um i'm sure this i'm sure this scares people like this thing is so big and so

820
01:08:06,124 --> 01:08:12,684
this is a such a monumental decision right if you think about its impact on like humanity

821
01:08:12,684 --> 01:08:21,924
pretty big so thinking that you have control over that that's pretty big also just crazy that the

822
01:08:21,924 --> 01:08:27,764
s&p 500 has a human committee that makes rules about this stuff like the largest passive index

823
01:08:27,764 --> 01:08:36,984
on the planet is actually an active index that's behind the times on technology and stuff it's

824
01:08:36,984 --> 01:08:41,224
interesting well well also think about it this way too in terms of the floodgates opening if you

825
01:08:41,224 --> 01:08:46,264
are a company on the cusp of inclusion or if you're a company that wants inclusion and strategy gets

826
01:08:46,264 --> 01:08:52,504
in i think you now have to look at bitcoin as a legitimate way to swell your the the value of your

827
01:08:52,504 --> 01:08:56,344
company so the market cap of the company and sell the interest around the company right because it

828
01:08:56,344 --> 01:09:02,024
shows that there's a legitimized model that the the s p committee has already signed off on once

829
01:09:02,584 --> 01:09:06,984
if you follow the same strategy that they would have a hard time saying no to you wouldn't they

830
01:09:06,984 --> 01:09:20,204
So I think that this, the community, to your point about them being scared, I think it could be that, but I really do think it's about the message it sends and about market perception.

831
01:09:21,184 --> 01:09:29,064
Bitcoin being in the S&P 500 in a company the size of strategy sends a very, very different message than corporate adoption.

832
01:09:29,604 --> 01:09:34,044
There's corporate adoption, then there's it being legitimized on a global scale for all corporations.

833
01:09:34,044 --> 01:09:39,804
in one fell swoop. I think that's something fundamentally different. So when that happens,

834
01:09:40,044 --> 01:09:45,064
I anticipate their market reaction being very, very powerful. And I just don't know if they

835
01:09:45,064 --> 01:09:49,744
were there yet. Also, there's an aspect of they want to see what happens after over a few quarters

836
01:09:49,744 --> 01:09:54,884
as well. Is Bitcoin going to drop? Are they going to go negative EPS again? Are they going to be

837
01:09:54,884 --> 01:09:59,704
able to maintain this momentum? I think there are a lot of things that still need to be ironed out

838
01:09:59,704 --> 01:10:01,944
before strategy gets into the S&P 500.

839
01:10:02,424 --> 01:10:03,424
So I'm with Ben.

840
01:10:03,464 --> 01:10:04,464
I think the third go around.

841
01:10:04,464 --> 01:10:08,004
If Bitcoin cooperates, if the price cooperates,

842
01:10:08,084 --> 01:10:10,424
if growth cooperates, if the markets cooperate,

843
01:10:10,884 --> 01:10:15,584
I can see us in 2026 talking about strategies inclusion

844
01:10:15,584 --> 01:10:16,504
into the S&P 500.

845
01:10:17,524 --> 01:10:21,304
I've also got to imagine that there's some level of conversation,

846
01:10:21,464 --> 01:10:24,644
and maybe there isn't, around the business model

847
01:10:24,644 --> 01:10:29,124
and the capability for the business model to swell the market cap,

848
01:10:29,124 --> 01:10:32,104
which would absorb the flows from the index.

849
01:10:32,844 --> 01:10:35,084
It's like a company like Strategy getting in there

850
01:10:35,084 --> 01:10:37,444
becomes the black hole of all the capital flows

851
01:10:37,444 --> 01:10:40,684
from the S&P as they continue to scale and scale and scale.

852
01:10:40,824 --> 01:10:43,344
And as Bitcoin goes on runs and the dollar devalues,

853
01:10:43,664 --> 01:10:45,364
that balance sheet gets more valuable.

854
01:10:46,004 --> 01:10:47,564
The market cap starts to swell

855
01:10:47,564 --> 01:10:50,604
and they start drawing in all these passive funds.

856
01:10:51,224 --> 01:10:55,024
I do wonder if they spend time on that aspect of it

857
01:10:55,024 --> 01:10:56,904
and if that concerns them going,

858
01:10:56,904 --> 01:10:58,284
wait a second, this whole model,

859
01:10:58,284 --> 01:11:01,584
is going to result in massive market cap over time.

860
01:11:01,884 --> 01:11:02,204
Yes.

861
01:11:02,444 --> 01:11:03,904
Right, Jeff, you've said it a lot of times.

862
01:11:03,904 --> 01:11:08,224
It's probably going to become the biggest company in the world by market cap over time.

863
01:11:08,704 --> 01:11:12,504
If you're an index and you're going, well, this company can get into my index

864
01:11:12,504 --> 01:11:15,364
and it's going to siphon off all the passive flows

865
01:11:15,364 --> 01:11:18,704
because it's just going to draw the capital out of everything else,

866
01:11:18,704 --> 01:11:20,144
does that start to concern you?

867
01:11:20,224 --> 01:11:23,324
And do you then have reason to hold them out?

868
01:11:23,684 --> 01:11:27,104
I don't know if they do or not, but it's certainly a consideration you have to think of.

869
01:11:27,104 --> 01:11:30,944
Yeah. It's like, it's a pretty irreversible decision.

870
01:11:31,904 --> 01:11:32,464
Like,

871
01:11:33,264 --> 01:11:34,944
you're approving an industry now.

872
01:11:34,944 --> 01:11:41,744
Yeah. Like once it's in, it's going to be harder to put the toothpaste back in the tube, you know?

873
01:11:42,864 --> 01:11:48,624
It's funny. It's funny to think about like the S and P, like, you know, they're at the gate and they're looking at the horse and they're like,

874
01:11:52,224 --> 01:11:52,624
I don't know.

875
01:11:52,624 --> 01:11:54,144
This is a pretty big horse.

876
01:11:54,144 --> 01:11:54,624
Yeah.

877
01:11:54,624 --> 01:11:55,904
It's pretty big.

878
01:11:55,904 --> 01:12:00,944
it would look good in here it would look good i mean it would look good in here

879
01:12:02,784 --> 01:12:07,424
yeah i also think that something needs to happen though um and i know it keeps talking about it i

880
01:12:07,424 --> 01:12:12,224
probably saw the broken record i think they need to pay a little bit more attention to their legacy

881
01:12:12,224 --> 01:12:19,344
business and try to scale it i think that all of those factors play in to them being included in

882
01:12:19,344 --> 01:12:23,584
the s p 500 because if they can scale their operating business and have a greater operating

883
01:12:23,584 --> 01:12:31,224
cash flow, that signals to S&P that they have a sustainable model versus just being, I don't

884
01:12:31,224 --> 01:12:39,144
know, maybe some people view it as, is this Bitcoin model something that's sustainable

885
01:12:39,144 --> 01:12:39,984
long term?

886
01:12:40,424 --> 01:12:43,504
Like what happens in a bear market, things like that.

887
01:12:43,844 --> 01:12:47,364
So I do think that they have roads to inclusion.

888
01:12:47,544 --> 01:12:51,364
I think they have roads to higher multiples, but they're going to have to diversify their

889
01:12:51,364 --> 01:12:52,244
approach a little bit.

890
01:12:52,244 --> 01:13:01,384
And I really think that once that happens, there will be a fundamental shift in how the market perceives the equity.

891
01:13:02,724 --> 01:13:04,484
And the AI is the flavor of the month.

892
01:13:05,444 --> 01:13:06,144
Go ahead, Dan.

893
01:13:06,704 --> 01:13:09,264
Yeah, I just have to hop off the next five minutes, guys.

894
01:13:09,504 --> 01:13:10,384
I just want to say thanks.

895
01:13:10,864 --> 01:13:11,104
All right.

896
01:13:11,124 --> 01:13:12,184
Any final thoughts, Dan?

897
01:13:13,204 --> 01:13:15,764
No, I love that we're back in action.

898
01:13:15,884 --> 01:13:16,344
Super excited.

899
01:13:16,544 --> 01:13:16,784
We're back.

900
01:13:19,784 --> 01:13:21,904
The sun is going down earlier.

901
01:13:22,244 --> 01:13:24,244
The weather's getting a little bit colder.

902
01:13:24,664 --> 01:13:25,784
We're getting close to fall.

903
01:13:26,124 --> 01:13:30,264
And there are less things to do outside over the next six months.

904
01:13:30,444 --> 01:13:32,024
So we're going to be back in action.

905
01:13:32,144 --> 01:13:33,024
We're going to be hitting it hard.

906
01:13:33,724 --> 01:13:35,004
And yeah, absolutely.

907
01:13:35,604 --> 01:13:36,424
Thanks for being here, Dan.

908
01:13:36,764 --> 01:13:37,104
All right.

909
01:13:37,204 --> 01:13:37,564
Bye, guys.

910
01:13:38,044 --> 01:13:38,504
Catch you later.

911
01:13:38,844 --> 01:13:39,024
See you.

912
01:13:41,584 --> 01:13:42,104
All right.

913
01:13:42,124 --> 01:13:42,544
What else?

914
01:13:45,264 --> 01:13:48,864
I'd be curious to get everyone's opinion just on the industry in general.

915
01:13:49,524 --> 01:13:50,264
Treasury companies?

916
01:13:50,264 --> 01:13:56,104
know we've typically covered a lot of mstr but there's a ton going on out there and there's so

917
01:13:56,104 --> 01:14:01,624
many more companies now and we're seeing things that we haven't really seen before so i would be

918
01:14:01,624 --> 01:14:06,744
curious just to get everyone's view on you know the state that the industry is in broadly but

919
01:14:06,744 --> 01:14:11,384
then also the segmentation that's happening out there amongst all the different treasury companies

920
01:14:13,704 --> 01:14:19,384
yeah so i think there was an announcement today that now the uh you need to have a hundred bitcoin

921
01:14:19,384 --> 01:14:27,244
on your balance sheet to be in the top 100, which is a monumental change, which used to be just like,

922
01:14:27,444 --> 01:14:33,084
you know, 15. If you had 15 Bitcoin, you'd be in the top 100. And I think pretty soon that will be,

923
01:14:33,204 --> 01:14:38,704
you need to have a thousand Bitcoin to be in the top 100. That might be another year. I bet within

924
01:14:38,704 --> 01:14:45,244
another year that you need to have a thousand Bitcoin to be in the top 100 publicly traded

925
01:14:45,244 --> 01:14:51,764
Bitcoin companies. So to your point, Ben, this industry is changing, things are moving and

926
01:14:51,764 --> 01:15:01,844
shaking. And I mean, we did an M&A transaction this last weekend, and that's now providing a

927
01:15:01,844 --> 01:15:09,584
proof of concept for other things that can happen in the industry for everybody. Any company can go

928
01:15:09,584 --> 01:15:13,824
out and perform a similar type transaction. You could do it private company to public company,

929
01:15:13,824 --> 01:15:15,824
company, private company, private to private.

930
01:15:15,824 --> 01:15:18,324
It could be two small companies.

931
01:15:18,324 --> 01:15:20,324
Let's just say you operate in similar jurisdictions.

932
01:15:20,324 --> 01:15:21,824
You got similar business models.

933
01:15:22,824 --> 01:15:25,824
Maybe you want to combine forces and push it together.

934
01:15:25,824 --> 01:15:27,324
Maybe that makes sense.

935
01:15:27,324 --> 01:15:45,534
And seeing things through a Bitcoin lens allows those conversations to happen and flourish which I was fascinated about This transaction that we did this last weekend most of the communication and the thought process was about using Bitcoin as a

936
01:15:45,534 --> 01:15:54,654
unit of account. So like while we had to price things in fiat, like we thought about it in Bitcoin.

937
01:15:56,034 --> 01:16:00,994
So like it was just this whole weekend, I'm like, oh my God, I can't believe I'm doing this right

938
01:16:00,994 --> 01:16:09,654
Like this is and like the communication was very, very positive and it was directionally very favorable.

939
01:16:10,434 --> 01:16:30,814
And ultimately, like if this this never would have happened the other direction, like a fiat company trying to do M&A with a Bitcoin company is likely not going to happen, in my opinion, because like the company that holds the Bitcoin can just say like, no.

940
01:16:30,994 --> 01:16:32,414
I'll just sit on my Bitcoin.

941
01:16:33,894 --> 01:16:35,394
I don't, I could just wait.

942
01:16:35,534 --> 01:16:38,114
I could just sit here and wait and like focus on my business.

943
01:16:38,254 --> 01:16:40,334
Maybe I need like just weather the storm.

944
01:16:41,314 --> 01:16:41,614
Whereas.

945
01:16:42,294 --> 01:16:47,854
Jeff, what if the, what if the fiat company is willing to pay a premium for the Bitcoin?

946
01:16:47,974 --> 01:16:52,534
Let's say sometime in the future, there's a mad rush to get your hands on some Bitcoin.

947
01:16:52,534 --> 01:17:02,234
and there's one of these micro companies right now who has the Bitcoin and is potentially trading

948
01:17:02,234 --> 01:17:11,534
below 1MNAV, it could be a great way for a larger fiat company to acquire a massive or potentially

949
01:17:11,534 --> 01:17:18,134
a massive amount of Bitcoin in one fair swoop. I think you just said why every single company

950
01:17:18,134 --> 01:17:24,574
should trade at a premium. That exact reason is why every single one of these Bitcoin treasury

951
01:17:24,574 --> 01:17:31,014
companies should trade at a premium. Because eventually, there's not going to be any supply

952
01:17:31,014 --> 01:17:40,334
left. And if you're a company like, I don't know, pick random, like Sherwin-Williams, and you're

953
01:17:40,334 --> 01:17:47,534
like, okay, I need to go buy like Bitcoin and I've got this net income and I need to go buy

954
01:17:47,534 --> 01:17:54,614
10,000. Like let's think five, 10 years from now that just 10,000 aren't going to be available.

955
01:17:54,614 --> 01:18:03,254
So how do you do that? You go buy the mom and pop painting supply company that has accumulated

956
01:18:03,254 --> 01:18:10,054
6,000 Bitcoin over the last 10 years. And then you go figure out how to get the other four.

957
01:18:10,334 --> 01:18:16,094
Yeah, like, I think that's truly how some of this stuff may evolve.

958
01:18:16,094 --> 01:18:18,334
Yeah, that's a great point.

959
01:18:18,334 --> 01:18:25,954
I mean, at what point I see a hypothetical scenario where strategies in the S&P, they're

960
01:18:25,954 --> 01:18:27,834
climbing up there.

961
01:18:27,834 --> 01:18:36,674
At some point to every other company, it becomes obvious how effective this strategy is, and

962
01:18:36,674 --> 01:18:42,914
it's built off bitcoin and that you need to get your hands on bitcoin and i think at some point

963
01:18:42,914 --> 01:18:51,154
there's a a real sentiment shift where this doesn't become some kind of quirky strategy that

964
01:18:52,274 --> 01:18:59,634
is you know seems absurd it becomes a necessity and and then what lengths do do companies at that

965
01:18:59,634 --> 01:19:08,194
point uh what what do they do to get the bitcoin yeah and i i think will simultaneously happen with

966
01:19:08,194 --> 01:19:15,954
individuals as well yeah it's this oh sorry no no no no just yeah individuals want bitcoin

967
01:19:15,954 --> 01:19:21,554
individuals will want to own companies that have bitcoin um this is going to happen

968
01:19:23,554 --> 01:19:28,434
it's the same character arc that you take as a as a person like i found i found bitcoin because i

969
01:19:28,434 --> 01:19:30,554
I saw the world is like, there's no way out.

970
01:19:31,854 --> 01:19:33,034
I'm running this rat race.

971
01:19:33,074 --> 01:19:34,234
I'm running faster and faster.

972
01:19:34,414 --> 01:19:35,474
My life isn't getting better.

973
01:19:35,614 --> 01:19:37,094
There's no way I'm going to be able to have kids.

974
01:19:37,094 --> 01:19:37,874
Like, what am I doing?

975
01:19:37,974 --> 01:19:39,474
Like, what's, what is going on?

976
01:19:40,054 --> 01:19:44,534
Um, and that, that was really what like steered me here.

977
01:19:44,614 --> 01:19:49,154
Now companies, companies are inherently behind that because they're like

978
01:19:49,154 --> 01:19:51,534
amalgamation of a lot of humans.

979
01:19:52,154 --> 01:19:55,494
Um, so I think you're, I think you're spot on.

980
01:19:55,494 --> 01:20:03,334
and shane brings up a great point like convincing a board and a management and stakeholders to hold

981
01:20:03,334 --> 01:20:08,214
bitcoin yeah it's very hard people still think it's very risky a hundred percent and i think

982
01:20:08,214 --> 01:20:12,734
that's where there's so much opportunity for some of these smaller companies like anybody that's got

983
01:20:12,734 --> 01:20:17,914
a couple hundred bitcoin on their balance sheet right now like you're gonna be good like you're

984
01:20:17,914 --> 01:20:24,434
probably gonna be okay and be able to weather the storm for a very long time

985
01:20:24,434 --> 01:20:29,294
when the rest of the world figures out that they need to hold some of that stuff.

986
01:20:29,794 --> 01:20:33,494
Also very interesting that the expansion of these DATs.

987
01:20:33,734 --> 01:20:37,154
Now the industry has created this new term, DAT, digital asset treasury,

988
01:20:37,574 --> 01:20:42,794
and you're seeing companies that are capitalizing on Ethereum and Solana

989
01:20:42,794 --> 01:20:43,774
and all these other things.

990
01:20:43,894 --> 01:20:50,314
I think some of the M&A opportunity may be in the digital asset treasury space

991
01:20:50,314 --> 01:20:53,514
in the future with forced conversion into Bitcoin.

992
01:20:53,514 --> 01:20:59,674
something to keep an eye on explain that one to me jeff because i as soon as you said digital asset

993
01:20:59,674 --> 01:21:04,874
i just thought not gonna make it that's all i'm gonna make it well yeah we all agree right everybody

994
01:21:04,874 --> 01:21:11,594
on everybody on the screen agrees so let's think about a bear market scenario where uh fart coin

995
01:21:11,594 --> 01:21:19,674
sells off by 95 and let's just say bitcoin's down like 40 uh who's in strength anybody that

996
01:21:19,674 --> 01:21:20,934
that holds Bitcoin on their balance sheet.

997
01:21:21,934 --> 01:21:25,354
And so you may be able to convince said Fartcoin treasury

998
01:21:25,354 --> 01:21:28,594
to merge with you or you acquire them

999
01:21:28,594 --> 01:21:31,574
because they're dead in the water and there's no way out.

1000
01:21:32,294 --> 01:21:36,494
And you tell them like, in order to do this,

1001
01:21:36,534 --> 01:21:38,854
you have to convert 100% of your treasury into Bitcoin.

1002
01:21:40,194 --> 01:21:42,974
They're trading some like a super compressed MNAV

1003
01:21:42,974 --> 01:21:44,454
or whatever that may be.

1004
01:21:44,834 --> 01:21:47,574
And as part of it, that's part of the agreement.

1005
01:21:49,674 --> 01:21:56,074
i i and they have some kind of business as well maybe they're not just like stacking part coin

1006
01:21:56,074 --> 01:22:02,154
maybe yeah so i i went to i went to anthony copliano's event uh a few weeks ago and i would

1007
01:22:02,154 --> 01:22:10,474
say it was a little bit more uh and you know it wasn't it wasn't the maximalist uh bitcoin treasury

1008
01:22:10,474 --> 01:22:17,274
company conference that that tim put on but it was a little bit more wide-ranging and accepting and

1009
01:22:17,274 --> 01:22:23,154
And what I kind of took away from it, and there was talks of DATS,

1010
01:22:23,294 --> 01:22:30,054
and there was talks of DATS that own DATS, multiple layers of DAT securitization.

1011
01:22:31,174 --> 01:22:37,994
But I think the Wall Street perspective is you take X crypto token,

1012
01:22:38,594 --> 01:22:44,394
you put it on a balance sheet, you securitize it, and it's a money printer.

1013
01:22:44,394 --> 01:22:53,454
and and they you know there's a fundamental misconception there uh which is an understanding

1014
01:22:53,454 --> 01:23:05,214
of bitcoin and and why this why this actually functions scarcity risk risk the the the longevity

1015
01:23:05,214 --> 01:23:11,914
and status of the network as as being the the oldest here the most decentralized the most

1016
01:23:11,914 --> 01:23:24,574
trusted, the most powerful. And yeah, I think we'll look back at this time and

1017
01:23:24,574 --> 01:23:32,614
I think it will look ridiculous in a very hyper Bitcoinized world.

1018
01:23:33,514 --> 01:23:38,034
It'd be like, what were these people doing? It was right in front of them. All they had to do

1019
01:23:38,034 --> 01:23:41,394
it was a dot Bitcoin as a treasury reserve asset,

1020
01:23:41,394 --> 01:23:43,334
go on to a Bitcoin standard.

1021
01:23:43,334 --> 01:23:46,534
And there was a limited opportunity for them.

1022
01:23:46,534 --> 01:23:50,694
Instead, they went for the seemingly quick buck.

1023
01:23:52,294 --> 01:23:54,734
People see opportunity everywhere, right?

1024
01:23:54,734 --> 01:23:58,514
And when you've got these smaller coins

1025
01:23:58,514 --> 01:24:00,074
that are less liquid, right?

1026
01:24:00,074 --> 01:24:01,974
It's not gonna take as much capital

1027
01:24:01,974 --> 01:24:04,814
to really move that coin's price.

1028
01:24:04,814 --> 01:24:06,834
The problem is, is the liquidity there

1029
01:24:06,834 --> 01:24:12,274
the other side of it so i think right now what you're probably getting most over there is you're

1030
01:24:12,274 --> 01:24:18,034
you're getting a lot of vc capital that's coming in and capitalizing on the equity market side of

1031
01:24:18,034 --> 01:24:23,794
that so you get a digital asset treasury that comes in raise raises hundreds of millions or

1032
01:24:23,794 --> 01:24:29,794
billions of dollars they go put it into a token that doesn't trade overly liquid so it drives the

1033
01:24:29,794 --> 01:24:34,914
price up which in turn you know in theory drives the value of the equity up because of the holdings

1034
01:24:34,914 --> 01:24:40,294
on the balance sheet and then those VCs get to cash out into the equity markets on that.

1035
01:24:40,614 --> 01:24:44,434
The problem is, could that company ever unwind that position if they needed to?

1036
01:24:45,334 --> 01:24:51,594
I was talking to one banker who's done a few of these DAT deals and he said there was one

1037
01:24:51,594 --> 01:24:56,814
company that had a concern because they were raising too much money and they didn't want

1038
01:24:56,814 --> 01:24:59,294
to immediately own 10% of the token.

1039
01:24:59,294 --> 01:25:06,494
And that was a real potential outcome, which shows you how far down the curve these companies

1040
01:25:06,494 --> 01:25:09,534
are looking at these coins because of the impact that they can have.

1041
01:25:09,954 --> 01:25:12,354
And it's just not the same value proposition.

1042
01:25:12,894 --> 01:25:17,834
When you look at any of those other tokens that are out there, you've got to ask yourself,

1043
01:25:17,934 --> 01:25:19,694
what market are they competing for?

1044
01:25:20,014 --> 01:25:21,674
And what value are they bringing?

1045
01:25:22,214 --> 01:25:27,374
And even if they're bringing a value today, you have to ask, is this going to be a low

1046
01:25:27,374 --> 01:25:32,094
cost based competition for them right our fee is going to have to be a race to the bottom so if

1047
01:25:32,094 --> 01:25:38,414
you're going to go and be the token that is part of secure taking securities and putting them on the

1048
01:25:38,414 --> 01:25:44,174
blockchain and trading on them you know are people going to want to trade securities that have high

1049
01:25:44,174 --> 01:25:49,854
fees because of that particular blockchain or are they going to migrate that to the lowest cost chain

1050
01:25:49,854 --> 01:25:53,134
that's out there and that's going to take a lot of the value proposition away right it's more like

1051
01:25:53,134 --> 01:25:59,134
being a tech company and you're competing and you're ripe to be disrupted along your journey.

1052
01:25:59,134 --> 01:26:05,614
And I think that's the hard part. What Bitcoin's competing with is value storage. It's capital.

1053
01:26:06,254 --> 01:26:14,814
And so that's a very usable use case for anybody. We're looking at the devaluation of the dollar

1054
01:26:15,374 --> 01:26:20,414
and your bet is that that's not going to stop. And because of that, you want an asset with a

1055
01:26:20,414 --> 01:26:26,114
a completely fixed supply, right? At the most basic, that's all you need to think about in this

1056
01:26:26,114 --> 01:26:33,134
type of a trade, which is why over a long period of time, you can be very confident that Bitcoin's

1057
01:26:33,134 --> 01:26:37,894
going to perform quite well in dollar terms, right? If those dollars are always going to devalue,

1058
01:26:38,134 --> 01:26:42,814
you can be very confident over a long time frame. It doesn't mean everything is going to go great

1059
01:26:42,814 --> 01:26:47,714
this week, this month, this quarter, right? That's not what it means. But over a long enough time

1060
01:26:47,714 --> 01:26:52,714
period. It's why everyone talks about Bitcoin in four year timeframes. And I think when you think

1061
01:26:52,714 --> 01:26:57,434
about treasury companies, you have to do something similar as well. You know, most of these companies

1062
01:26:57,434 --> 01:27:02,514
really emerged and call it the last six months. There were a few before that, but call it really

1063
01:27:02,514 --> 01:27:09,494
the last six months. And if you go out and you just take a sentiment pulse on it, you know,

1064
01:27:09,494 --> 01:27:14,174
the market's basically declaring that they're all dead now, right? In six months, half of them have

1065
01:27:14,174 --> 01:27:17,894
hardly gotten past their initial capital raise and then the market's deciding that they're dead.

1066
01:27:18,734 --> 01:27:23,114
And a lot of that is we're being lulled with Bitcoin's performance. It's just not moving yet.

1067
01:27:23,834 --> 01:27:28,434
Right. It's doing one of these. It's chopping sideways. There's not a lot of activity. It seems

1068
01:27:28,434 --> 01:27:33,254
like broadly across the sector, there was probably some pretty big capital allocators that pulled out

1069
01:27:33,254 --> 01:27:38,674
because when you look at a sector like these treasury companies and pretty much every chart

1070
01:27:38,674 --> 01:27:44,894
is identical. And it's just been a slow grind down over the last several months, which will

1071
01:27:44,894 --> 01:27:49,654
break conviction very easily, right? It's not fun. It's not fun for anybody. I don't love it.

1072
01:27:50,014 --> 01:27:54,754
I like this a lot more when these things are, you know, rocket shipping on us around. You know,

1073
01:27:54,814 --> 01:27:59,414
that's way more fun than what's happening now. But it's also the period in time that's going

1074
01:27:59,414 --> 01:28:04,854
to create opportunities, right? These are times where you allocate. You go do a lot of research,

1075
01:28:04,854 --> 01:28:08,334
you pick the ones that you think give you the best risk reward at this point in time,

1076
01:28:08,334 --> 01:28:12,294
given the market conditions. And I think there's going to be a lot of companies that people are

1077
01:28:12,294 --> 01:28:17,754
overlooking that are probably going to be some of the big winners. There's a lot of nuance that's

1078
01:28:17,754 --> 01:28:21,654
happening out there. And I know people hate these capital raises right now because there's nuance

1079
01:28:21,654 --> 01:28:26,274
with pipes and when those shares get registered to the investors and what those investors do with

1080
01:28:26,274 --> 01:28:30,834
those shares. And that's understandable, right? These are very complex transactions.

1081
01:28:30,834 --> 01:28:44,614
But those, I think, are also going to be once people learn more about the capital raises and the mechanics about how everything works, it's going to also present a lot of opportunities.

1082
01:28:45,114 --> 01:28:52,394
So people looking at the companies, and I've been associated with one with Sequence that's been trading below the net asset value.

1083
01:28:52,954 --> 01:28:59,314
And at one level, you look at it and you think, if all I wanted was Bitcoin exposure at this point in time.

1084
01:28:59,314 --> 01:29:05,554
but I wanted a way to potentially outperform. Could I go look at these companies that are

1085
01:29:05,554 --> 01:29:11,374
trading deeply below one times NAV? Once you get through all the settlement periods of

1086
01:29:11,374 --> 01:29:18,354
shares clearing through the market and the pipe investors selling them and that price stabilizes

1087
01:29:18,354 --> 01:29:21,814
and you start seeing volume fall off. Now, if I just wanted Bitcoin exposure,

1088
01:29:22,334 --> 01:29:27,834
you could largely expect, and I don't know, this is untested because we're kind of going through

1089
01:29:27,834 --> 01:29:32,154
this cycle for the first time, but you could kind of expect that because that balance sheet is filled

1090
01:29:32,154 --> 01:29:38,634
with Bitcoin, it would start to act as Bitcoin beta, right? It should, in theory, start to move

1091
01:29:38,634 --> 01:29:44,074
that equity alongside Bitcoin. But what you've got during these periods where you've got companies

1092
01:29:44,074 --> 01:29:48,854
trading less than the value of the assets is you've got the opportunity to potentially outperform,

1093
01:29:48,994 --> 01:29:55,774
if your only thesis is, at some point, if Bitcoin runs, then there's a mania that I think it might

1094
01:29:55,774 --> 01:30:00,334
get valued at the value of its assets. If that was your only thesis, you never thought it was

1095
01:30:00,334 --> 01:30:06,694
going to get a premium again, but you buy something at, I've seen some that have gotten as low as 0.75,

1096
01:30:06,814 --> 01:30:10,874
0.74, like some of them have gotten pretty low down there. There's several of them right now.

1097
01:30:11,654 --> 01:30:17,914
If that comes back and gets back to only one times nav when Bitcoin really rips and whether it's

1098
01:30:17,914 --> 01:30:21,354
new all-time highs or it's just price action is good and people are starting to get bulled up

1099
01:30:21,354 --> 01:30:25,494
again, if you close that gap, you outperform Bitcoin in a pretty serious way.

1100
01:30:26,194 --> 01:30:29,794
So I think there's opportunities for people to scan these markets now, but

1101
01:30:29,794 --> 01:30:32,874
you've got to think about it differently than we have in the past, because we've

1102
01:30:32,874 --> 01:30:36,694
got a completely different market than we had a year ago.

1103
01:30:37,814 --> 01:30:38,914
Companies are different.

1104
01:30:38,914 --> 01:30:40,174
The setups are different.

1105
01:30:40,174 --> 01:30:53,764
The way capital is being raised is different because the other side of this that you see you know we look at strategy and they got one of the more complex models out there It simplifying now but they used more tools than a lot of the other companies have

1106
01:30:54,244 --> 01:31:00,564
You know, you've got two very different schools of thought, like raising capital via equity with ATMs.

1107
01:31:01,264 --> 01:31:08,944
A lot of the companies that people are really pumped about and that have been doing great now for a really long time are almost exclusively raising equity capital.

1108
01:31:08,944 --> 01:31:12,604
It's the equivalent of just using an ATM and they don't really have leverage on.

1109
01:31:13,604 --> 01:31:16,204
And I think that shows the disconnect.

1110
01:31:16,724 --> 01:31:21,564
And maybe it's more a part of the journey, like trying to figure out what is the right

1111
01:31:21,564 --> 01:31:25,464
scale where you need to focus on efficiency, right?

1112
01:31:25,464 --> 01:31:28,604
There's a certain level where you need to build the nav on the balance sheet so that

1113
01:31:28,604 --> 01:31:32,444
you can actually go and deploy these other tools and be interesting to institutional

1114
01:31:32,444 --> 01:31:34,624
level capital if you want to go the preferred routes.

1115
01:31:34,624 --> 01:31:39,624
But at a certain point, like where strategy's at now, and obviously nobody's close to them,

1116
01:31:40,284 --> 01:31:43,204
but you start looking at the efficiency of the capital raising.

1117
01:31:44,304 --> 01:31:48,984
And you have to try to maximize the impact of every dollar you're bringing in so that

1118
01:31:48,984 --> 01:31:51,884
you can continue to provide that Bitcoin yield out into the market.

1119
01:31:52,564 --> 01:31:58,024
And I think now that we finally have all these companies at various levels of deploying this

1120
01:31:58,024 --> 01:32:03,324
strategy and various levels of size out there in the market, now people are getting the chance to

1121
01:32:03,324 --> 01:32:08,604
go digest and figure out how do you segment this market, right? What buckets do you put these

1122
01:32:08,604 --> 01:32:14,964
companies into and what phase of their growth is it that I personally want to be investing in,

1123
01:32:15,224 --> 01:32:19,044
right? Do I want the mature companies that are already in the institutional capital

1124
01:32:19,044 --> 01:32:24,724
markets and they're raising money via these, you know, preferred products? Or am I somebody that's

1125
01:32:24,724 --> 01:32:30,304
seeking that growth curve? Am I just looking for a company that's scaling all the time, right?

1126
01:32:30,304 --> 01:32:35,104
raising capital putting it on the balance sheet am i looking for that kind of run up i think that

1127
01:32:35,104 --> 01:32:39,344
a lot of people started looking for that after meta planet had that really sharp run up and they

1128
01:32:39,344 --> 01:32:44,544
were just stacking bitcoin like crazy and you know dylan and simon are animals over there so they're

1129
01:32:44,544 --> 01:32:49,744
constantly you know buying bitcoin but i think that that refocused people and you start looking

1130
01:32:49,744 --> 01:32:56,304
at well maybe there's a huge amount of value in that initial growth curve and now i think that

1131
01:32:56,304 --> 01:33:01,424
everything's kind of come back out all the premiums have been drawn out i think you had some

1132
01:33:01,424 --> 01:33:06,144
some large capital that exited the market and that kind of compressed the premiums while bitcoin's not

1133
01:33:06,144 --> 01:33:12,464
doing anything or grinding down you know this is that reset reevaluate period on the investing

1134
01:33:12,464 --> 01:33:17,264
journey here and it's a good opportunity if you got people that are just getting into it right

1135
01:33:17,264 --> 01:33:21,584
you get to reach all these companies and you've got international companies that have completely

1136
01:33:21,584 --> 01:33:26,704
different ways of raising capital. I think it's going to be an exciting time. It certainly isn't

1137
01:33:26,704 --> 01:33:31,024
going to feel like it right now for most people, just because equities in this space haven't been

1138
01:33:31,024 --> 01:33:36,664
performing hardly at all across the board. But these are the times, right? I've said it before,

1139
01:33:36,744 --> 01:33:41,844
nobody wants to be a buyer when it's time to buy. And that's the hard part in this, right?

1140
01:33:41,844 --> 01:33:49,004
The best time to get in is basically when you've taken the emotional hit, but it's hard, hard to do.

1141
01:33:49,004 --> 01:33:55,324
A lot of people think that these deals that have raised pipe capital are dead.

1142
01:33:57,484 --> 01:34:00,964
And the reality is they hold Bitcoin.

1143
01:34:01,444 --> 01:34:03,304
So they're certainly not dead.

1144
01:34:04,484 --> 01:34:09,984
To your point, there's ways to value these things and see them in the marketplace.

1145
01:34:10,124 --> 01:34:16,184
These are institutionally complex products around like you're talking small market cap type Bitcoin treasury companies.

1146
01:34:16,184 --> 01:34:24,544
One of the reasons that we haven't really focused on them too much is because they are so small relative to strategy.

1147
01:34:24,824 --> 01:34:30,084
And the amount of risk associated with any one of these individual instruments is just so much different.

1148
01:34:31,024 --> 01:34:43,384
And it requires due diligence, analysis, thinking broadly around the whole landscape of the market, thinking of who's invested in these things, incentives, the whole kit and caboodle.

1149
01:34:43,384 --> 01:34:49,424
um so it makes them just inherently very complex but to your point ben

1150
01:34:49,424 --> 01:34:55,564
um these are the hard times are when you want to be thinking a little bit

1151
01:34:55,564 --> 01:35:03,704
more strongly about being aggressive well and mna changes things too yeah because that sends a

1152
01:35:03,704 --> 01:35:09,024
signal out to the market that you know other companies can become targets for this i think

1153
01:35:09,024 --> 01:35:11,144
there's going to be a lot of consolidation in here.

1154
01:35:11,944 --> 01:35:15,964
You know, I don't think the top 100 is going to look a lot like the top 100 in 12 months.

1155
01:35:16,144 --> 01:35:17,024
No, no way.

1156
01:35:17,084 --> 01:35:19,584
Because of that benefit of achieving scale.

1157
01:35:19,584 --> 01:35:23,464
You know, I think that that is really going to change things.

1158
01:35:23,784 --> 01:35:25,764
And that's, you know, it's both exciting.

1159
01:35:25,764 --> 01:35:28,724
And I think for a lot of people, it's going to make them nervous in this space as well,

1160
01:35:28,724 --> 01:35:31,744
because everything's changing quickly.

1161
01:35:32,324 --> 01:35:32,744
Yeah.

1162
01:35:32,964 --> 01:35:37,384
I mean, if we rewound this back to, you know, True North episode one,

1163
01:35:37,384 --> 01:35:39,644
or when you were doing Quapro back in the day.

1164
01:35:40,384 --> 01:35:45,724
This is an incredibly different market, and it's far more complex.

1165
01:35:46,984 --> 01:35:47,424
Yeah.

1166
01:35:47,804 --> 01:35:48,924
Less than it used to be.

1167
01:35:49,124 --> 01:35:49,224
Right.

1168
01:35:49,304 --> 01:35:54,224
The peers that have entered this market now are sophisticated from the institutional side.

1169
01:35:54,684 --> 01:35:57,304
And the way that capital is getting raised is different.

1170
01:35:57,464 --> 01:35:59,764
And, you know, for better or worse, that does change things.

1171
01:36:00,204 --> 01:36:00,344
Yeah.

1172
01:36:00,484 --> 01:36:04,104
And the grift is also shifted towards altcoin treasury companies.

1173
01:36:04,104 --> 01:36:09,384
I mean, what's Tom Lee sitting on now, like $9 billion of ETH?

1174
01:36:10,724 --> 01:36:15,904
So I could be off by a couple billion there, but I think that's around what it's at.

1175
01:36:16,024 --> 01:36:17,244
But go ahead, Mason, you were going to say something.

1176
01:36:18,384 --> 01:36:26,344
Yeah, I think a lot of Bitcoiners have forgot that a company that holds Bitcoin, let's say

1177
01:36:26,344 --> 01:36:34,164
they purely hold Bitcoin and they accrete, let's be conservative, a few percentages of yield a year,

1178
01:36:34,164 --> 01:36:44,324
they're going to outperform 99% of fiat companies just simply by their exposure to Bitcoin.

1179
01:36:45,144 --> 01:36:55,144
So I think the cyclicality that we're experiencing right now is not new.

1180
01:36:55,144 --> 01:37:17,344
You see it in miners. And actually, miners right now have been going absolutely wild. But they were down the most in April, in the spring, compared to a lot of the Bitcoin treasury companies. And now it's completely inverse, right? The miners are up, MNAPs are down.

1181
01:37:17,344 --> 01:37:28,164
So I think it's really fascinating to watch kind of the capital rotation within Bitcoin proxies moving forward.

1182
01:37:28,344 --> 01:37:36,284
And I think the two industries will be counter related, it seems.

1183
01:37:38,324 --> 01:37:44,524
100%. Adrian messaged us in the chat and he's going to head off, but I will kick it over to Adrian for final thoughts.

1184
01:37:44,584 --> 01:37:45,044
What are you thinking?

1185
01:37:45,044 --> 01:37:52,344
Oh, yeah. No, I think Ben and Mason hit on a few important points. So with regards to MNF

1186
01:37:52,344 --> 01:37:56,064
compression, I actually hate that term. I think sentiment shift is a more accurate descriptor,

1187
01:37:56,124 --> 01:38:01,244
but that's just my opinion. And the reason why I'm bringing that up is because if you take a look at

1188
01:38:01,244 --> 01:38:05,844
everything we just discussed, right? So we have BitMine. That took a lot of the mind share and

1189
01:38:05,844 --> 01:38:10,544
attention in the market away from Bitcoin treasuries, right? Bitcoin treasuries across

1190
01:38:10,544 --> 01:38:18,784
the board have been underperforming. Iron, Cypher, Marathon, those Bitcoin miners have been

1191
01:38:18,784 --> 01:38:24,184
outperforming in the last two to three months. And one, their seasonality kind of aligned with

1192
01:38:24,184 --> 01:38:30,004
it rather nicely. And two, the AI narrative is not going away anytime soon. So I don't know if

1193
01:38:30,004 --> 01:38:35,744
any of you have... I know, Ben, you've had positions in iron. I know I have. Those finally

1194
01:38:35,744 --> 01:38:41,744
started performing after a long while. And it's been very, very interesting to watch the shift

1195
01:38:41,744 --> 01:38:48,744
in sentiment around all these different equities. And it's almost like the air has been sucking out

1196
01:38:48,744 --> 01:38:53,724
a balloon a little bit in terms of the Bitcoin treasury companies, but that's going to shift

1197
01:38:53,724 --> 01:38:58,084
right back to where it was, right? So I think that October, November, end of the year,

1198
01:38:58,304 --> 01:39:02,264
we're going to see a broader sentiment shift towards the Bitcoin treasury companies again.

1199
01:39:02,264 --> 01:39:13,744
And I think it's because a lot of them are beta plays. Well, not a lot of them, all of them are beta plays to Bitcoin and Bitcoin seasonality and Bitcoin's price action is going to determine a lot of the price action that we see.

1200
01:39:13,904 --> 01:39:29,964
And with strategy, I think people need to accept the fact that it's much larger now. Therefore, it's going to take a lot more money to move it. And it's going to be perhaps more sensitive to broader market dynamics than it was in the past.

1201
01:39:29,964 --> 01:39:36,704
that's not a knock. I think that's just a signal of growth. So I've been relatively patient in the

1202
01:39:36,704 --> 01:39:41,544
last few months as everyone has been screaming online, talking about strategy and talking about

1203
01:39:41,544 --> 01:39:48,624
how everything is underperforming, just anticipating Q4. And I think Q4 is going to tell us a lot of

1204
01:39:48,624 --> 01:39:54,544
what is to come. If for some reason we underperform in Q4, then I'll start reassessing.

1205
01:39:54,764 --> 01:39:57,124
And when I say underperform, I'm talking about Bitcoin, I'm talking about strategy,

1206
01:39:57,124 --> 01:40:02,164
talking about all the bitcoin treacheries if those underperform in q4 i'll get a little bit

1207
01:40:03,044 --> 01:40:08,484
i wouldn't say concerned but i'll have to reassess um but we've we've literally seen

1208
01:40:09,604 --> 01:40:14,804
nvidia go to four trillion dollars in market cap we saw what happened oracle recently right

1209
01:40:14,804 --> 01:40:20,324
the mind share in the market has been sucked into ai related plays and we've seen that with iron

1210
01:40:20,324 --> 01:40:24,484
we've seen those cipher those are ai related bitcoin miners and then we also have my share

1211
01:40:24,484 --> 01:40:30,084
going towards the ETH treasury companies like with BitMine. So it stands to reason that we would have

1212
01:40:30,084 --> 01:40:36,484
seen the multiple on these equities drop in the last three months. But I anticipate that's going

1213
01:40:36,484 --> 01:40:42,724
to shift right back for Q4 when Bitcoin's seasonality and price action and price history

1214
01:40:42,724 --> 01:40:47,284
is the strongest. So I think everyone just needs to be patient. Let's see what Q4 brings before

1215
01:40:47,284 --> 01:40:53,364
the doom and gloom conversations take over too much. That news on the AI was like, you know,

1216
01:40:53,364 --> 01:40:58,564
taking a power strip and plugging plugging the plug into your own power strip it's like a 100

1217
01:40:58,564 --> 01:41:02,564
billion here and 100 billion there and it's all getting recycled to the 100 billion dollars of

1218
01:41:02,564 --> 01:41:06,804
this money that's made out of thin air and yeah it'd be interesting to see how this plays out

1219
01:41:06,804 --> 01:41:10,964
right nvidia is a company with 55 billion dollars of capital in their balance sheet protecting a

1220
01:41:10,964 --> 01:41:17,204
five trillion four and a half trillion dollar market cap um leveraged on future cash flows

1221
01:41:17,204 --> 01:41:22,964
that are uncertain with a whole host of risks and i wonder if there's a point in time where people

1222
01:41:22,964 --> 01:41:32,084
say what what am i doing holding this stuff like what's the point so maybe yeah but the thing with

1223
01:41:32,084 --> 01:41:37,764
it is though um i think people need to be very mindful when they're talking about the the ai

1224
01:41:37,764 --> 01:41:43,824
situation because i think it's more of a paradigm shift and a and a model shift more than it's a

1225
01:41:43,824 --> 01:41:48,644
bubble but that's just my two cents on the matter and in the chat someone is saying that i said the

1226
01:41:48,644 --> 01:41:52,324
fundamentals reflect sentiment and sentiment reflects fundamentals that's not what i said

1227
01:41:52,324 --> 01:41:58,804
so you may want to pay attention a little bit closer but um besides besides that um you know

1228
01:41:58,804 --> 01:42:03,524
it's been a great conversation as always um the chat's always entertaining with people just

1229
01:42:04,244 --> 01:42:08,964
saying stuff but there's a lot of great comments in there so i appreciate a lot of the comments

1230
01:42:08,964 --> 01:42:13,524
that we see um looking forward to doing this again next week um and the week after that the

1231
01:42:13,524 --> 01:42:17,924
week after that it's great to be back so guys it's been great but i got a dog to walk and i got stuff

1232
01:42:17,924 --> 01:42:24,484
to take care of all right later adrian thanks for hanging what was interesting with the uh the

1233
01:42:24,484 --> 01:42:30,764
bitcoin miners was you know they were all declared dead not too long ago as well right they were the

1234
01:42:30,764 --> 01:42:36,424
dogs of investing for about a year right i mean that was those were some of the first companies

1235
01:42:36,424 --> 01:42:42,104
that was how adrian and i actually got connected about two years ago now was we were covering the

1236
01:42:42,104 --> 01:42:46,884
bitcoin mining space and you know over there everyone was viewing them all as bitcoin miners

1237
01:42:46,884 --> 01:42:53,104
and the thesis that we ultimately landed on was I'm trying to pick the ones I don't believe are

1238
01:42:53,104 --> 01:42:58,644
Bitcoin miners. Bitcoin mining was great because it gave you the ability to turn on revenue without

1239
01:42:58,644 --> 01:43:04,044
having to go find a customer. You plug in, but you're effectively building data center infrastructure

1240
01:43:04,044 --> 01:43:08,664
and I think you could get a similar type of effect with these treasury companies.

1241
01:43:09,264 --> 01:43:14,344
Everyone's focusing right now on just the accumulation phase and comparing them as if

1242
01:43:14,344 --> 01:43:17,844
just these accumulation tools is the only thing they're ever going to be able to do.

1243
01:43:18,444 --> 01:43:23,184
But I think that the companies that are building these war chests are going to have the opportunity

1244
01:43:23,184 --> 01:43:27,804
to evolve and they're going to go all different directions. There's not going to be one right

1245
01:43:27,804 --> 01:43:32,144
answer at the end of this, but I think a lot of people will be surprised a few years from now

1246
01:43:32,144 --> 01:43:38,224
when they find out what benefit having a massive stack of capital actually provides to a company

1247
01:43:38,224 --> 01:43:44,184
because it provides all the optionality you could ever hope for. 100%. So,

1248
01:43:44,344 --> 01:43:45,884
So what do you think in this matter?

1249
01:43:46,304 --> 01:43:48,104
Where's your head out on all this stuff?

1250
01:43:48,204 --> 01:43:50,864
AI, infrastructure, treasury companies,

1251
01:43:51,224 --> 01:43:54,124
DATs, volatility, covered calls.

1252
01:43:54,804 --> 01:43:55,104
What do you think?

1253
01:43:55,104 --> 01:43:57,484
Well, I'd rather own a fiat company

1254
01:43:57,484 --> 01:43:59,904
that stacked cash than a DAT

1255
01:43:59,904 --> 01:44:01,084
that stacked fucking Ethereum.

1256
01:44:03,444 --> 01:44:05,284
I'd rather just have a melting ice cube.

1257
01:44:05,324 --> 01:44:07,384
You'd rather have a fiat treasury company?

1258
01:44:08,004 --> 01:44:08,444
Exactly.

1259
01:44:08,784 --> 01:44:11,104
Than a free-falling freaking...

1260
01:44:11,104 --> 01:44:13,304
Be honest, though.

1261
01:44:13,304 --> 01:44:21,224
you're trading options on them yeah yeah i might be uh i might be extremely short

1262
01:44:21,944 --> 01:44:27,464
but um yeah the um the the pref options caught me a little off guard

1263
01:44:28,184 --> 01:44:36,184
um strife and stride makes a little bit of sense but i still don't understand options on stretch

1264
01:44:37,224 --> 01:44:42,584
but um i haven't looked at the options chain on them really at all so i'm really curious to see

1265
01:44:42,584 --> 01:44:48,484
see like what the pricing like what the pricing kind of reflects because there there might there

1266
01:44:48,484 --> 01:44:54,344
might be something there um you could scalp a little bit but it's it's still pretty immature

1267
01:44:54,344 --> 01:45:01,284
too so the liquidity is not there yeah but i think the cool part is that they they're they exist

1268
01:45:01,284 --> 01:45:08,004
like what other preferred equities have options markets on them like that just makes the liquidity

1269
01:45:08,004 --> 01:45:13,444
even higher and deeper for the preferred instruments for the underlying underlying yeah

1270
01:45:14,084 --> 01:45:19,844
and it creates more instruments that you can hold in a diversified portfolio of all these different

1271
01:45:19,844 --> 01:45:27,204
things right you can like hedge your downside and you even even take more less risky positions and

1272
01:45:27,204 --> 01:45:34,964
scalp uh you know yield off of these things so like we don't even know to the the extent of

1273
01:45:34,964 --> 01:45:40,904
of like what kind of creativity can be built with different combinations, which I mean,

1274
01:45:40,904 --> 01:45:42,644
somebody is going to do it.

1275
01:45:42,824 --> 01:45:46,664
It's probably not going to be me, but somebody is going to do it.

1276
01:45:48,044 --> 01:46:01,994
One other thing I wanted to bring up is these digital asset treasury companies thinking about like this idea of just the design of this marketplace And I go back to this a lot from Jesse Myers here just outlining the size and scope of the marketplace

1277
01:46:02,734 --> 01:46:08,574
So this fixed income market, this bond market being $318 trillion, strategies set up plumbing

1278
01:46:08,574 --> 01:46:16,694
to harness this capital in this marketplace. Now, the plumbing is anybody that's buying these

1279
01:46:16,694 --> 01:46:22,274
instruments needs to underwrite the riskiness of Bitcoin and Bitcoin into the future.

1280
01:46:23,214 --> 01:46:29,014
So anybody that's, you know, got an ETH treasury company or Solana treasury company, they're

1281
01:46:29,014 --> 01:46:31,394
harnessing this equity bucket.

1282
01:46:32,354 --> 01:46:38,034
And the underlying coin itself is somewhere in this money bucket, but they're not even

1283
01:46:38,034 --> 01:46:40,314
tapping into this bond bucket at all.

1284
01:46:40,314 --> 01:46:53,074
Now, if they were to start tapping into this bond bucket, and let's say Tom Lee wants to issue perpetual preferred securities, you now have to underwrite ETH and the strength of ETH.

1285
01:46:53,974 --> 01:46:57,694
So would you rather have this guy?

1286
01:46:58,594 --> 01:47:00,154
You got to underwrite this guy.

1287
01:47:00,834 --> 01:47:03,494
Or you got to underwrite these.

1288
01:47:04,914 --> 01:47:06,274
Which would you rather do?

1289
01:47:06,354 --> 01:47:07,314
Which is less risky?

1290
01:47:07,414 --> 01:47:08,214
Which is more risky?

1291
01:47:08,214 --> 01:47:13,574
and which is going to have significantly more institutional capital than the other.

1292
01:47:14,774 --> 01:47:21,394
And you play this game out far enough. What are you going to do? Are you going to underwrite XRP?

1293
01:47:21,394 --> 01:47:26,214
You really think XRP is going to be less risky than a Bitcoin-backed fixed income security?

1294
01:47:26,634 --> 01:47:37,534
No way. No way. Zero. Zero percent chance. So the end game here is Bitcoin runs all of this stuff.

1295
01:47:38,214 --> 01:47:42,514
Because the risk profile is profoundly different.

1296
01:47:43,954 --> 01:47:46,614
And like, that's, that's what I'm super excited about.

1297
01:47:46,674 --> 01:47:48,834
It's like, I don't need to underwrite this guy.

1298
01:47:49,434 --> 01:47:51,194
I need to underwrite the protocol.

1299
01:47:52,574 --> 01:47:53,334
That's it.

1300
01:47:54,534 --> 01:48:01,394
So, um, I think the digital asset treasury space, what is there money to make there?

1301
01:48:01,494 --> 01:48:01,714
Sure.

1302
01:48:01,834 --> 01:48:04,034
Like there's a ton of equity capital that's flowing to it.

1303
01:48:04,394 --> 01:48:07,114
And it's very clear the sentiment.

1304
01:48:07,114 --> 01:48:09,334
But I mean, there's stupid people everywhere.

1305
01:48:09,494 --> 01:48:11,494
There's stupid people throwing money around everywhere.

1306
01:48:12,094 --> 01:48:13,394
And I think that's just going to.

1307
01:48:13,934 --> 01:48:15,834
Look at the XRP market cap, right?

1308
01:48:17,774 --> 01:48:19,934
What is the XRP market cap?

1309
01:48:19,994 --> 01:48:21,274
What is it like 250 billion?

1310
01:48:21,414 --> 01:48:22,174
Is it higher than that?

1311
01:48:22,214 --> 01:48:23,434
If it's higher than that, that's crazy.

1312
01:48:23,514 --> 01:48:25,274
It's higher than strategy.

1313
01:48:27,254 --> 01:48:30,174
Yeah, by like 150 billion, which is crazy.

1314
01:48:30,574 --> 01:48:33,574
Yeah, we live in a time where XRP is bigger than strategy.

1315
01:48:34,714 --> 01:48:35,414
171 billion.

1316
01:48:35,414 --> 01:48:43,414
so the market cap of xrp is about 80 billion dollars it's almost double the size of strategy

1317
01:48:45,654 --> 01:48:53,174
which which what is xrp that's insane i encourage i encourage somebody to tell me what it is

1318
01:48:53,174 --> 01:49:00,374
everyone's uncle has bought it yeah uncle yeah it's going to a thousand oh my god there's this

1319
01:49:00,374 --> 01:49:06,834
guy that literally he's he's talked on like cnbc and he's out in the he's out there and he's saying

1320
01:49:06,834 --> 01:49:12,454
like xrp is going to go to a thousand i'm like oh my god it's not going to 10 trillion right like

1321
01:49:12,454 --> 01:49:20,134
no way actually i think the math the math might have been a hundred trillion actually i think

1322
01:49:20,134 --> 01:49:24,854
i think if you run the math is like a hundred trillion i'm like just you're out of your mind

1323
01:49:24,854 --> 01:49:31,494
and like he's he's getting airtime on cnbc or like fast like one of these bloomberg shows i'm like

1324
01:49:31,494 --> 01:49:35,494
you got to be kidding me that's like but these people aren't doing any math i don't know how

1325
01:49:35,494 --> 01:49:41,334
much they paid uh just the incentives are are not aligned and the shit coiner is to be honest it's

1326
01:49:41,334 --> 01:49:46,374
been a brilliant business model though yeah i mean think about it you're basically witnessing the

1327
01:49:46,374 --> 01:49:51,574
power of marketing and you get to just self-fund the marketing with the token that you completely

1328
01:49:51,574 --> 01:49:59,254
pre-mined and then conveniently lost the first batch of blocks so that data magically disappeared

1329
01:49:59,254 --> 01:50:05,494
so no one can go review that and now you just get to sell those into the market and fund marketing

1330
01:50:06,294 --> 01:50:11,414
and take that capital and just go buy actual real businesses like they'll build a real business out

1331
01:50:11,414 --> 01:50:16,694
of this but the xrp token is going to have nothing to do with it that's where the delusion sets in

1332
01:50:16,694 --> 01:50:21,334
is people still think that there's a world where xrp is like running bank transactions and

1333
01:50:22,134 --> 01:50:32,534
you know that's that's not reality the ripple xrp disconnect yep yeah 100 okay what else we got

1334
01:50:34,214 --> 01:50:42,134
um man somebody was asking about um the video that's been circulating where sailor weighed in

1335
01:50:42,134 --> 01:50:44,394
on the Knotts versus Core

1336
01:50:44,394 --> 01:50:45,714
in a roundabout way.

1337
01:50:45,834 --> 01:50:46,834
He talked about Op return.

1338
01:50:48,154 --> 01:50:49,654
And I guess it was in Prague,

1339
01:50:50,194 --> 01:50:52,394
which makes me mad I didn't go.

1340
01:50:53,254 --> 01:50:57,234
But apparently he said

1341
01:50:57,234 --> 01:50:59,874
the best way to ruin Bitcoin

1342
01:50:59,874 --> 01:51:03,734
would be to find a well-meaning developer

1343
01:51:03,734 --> 01:51:05,054
and tell them to make it better.

1344
01:51:06,834 --> 01:51:10,854
The point is, we understand

1345
01:51:10,854 --> 01:51:12,074
that we have to fix the bugs.

1346
01:51:12,134 --> 01:51:20,834
sure but if you've got a contentious change maybe we pump the brakes on that so basically

1347
01:51:20,834 --> 01:51:26,534
you know the road to hell is paved with good intentions i think so it was it was good to hear

1348
01:51:26,534 --> 01:51:34,834
that and i think it would it would make sense for every single treasury company to do a review of

1349
01:51:34,834 --> 01:51:41,674
all of the upgrades that are that are coming up and and find out and i guess decide for yourself

1350
01:51:41,674 --> 01:51:47,754
if they're contentious and then make a recommendation to your custodian what code do you want us to run

1351
01:51:48,714 --> 01:51:57,674
do you want us to remain on core v29 because we don't like v30 do you want to run the alternative

1352
01:51:57,674 --> 01:52:03,594
knots something like that and maybe it's it it would be good for the custodians to do those

1353
01:52:03,594 --> 01:52:09,674
reviews too but somebody's got to be doing the the studies and then making recommendations to somebody

1354
01:52:10,634 --> 01:52:16,874
how's your node running been going i hear it buzzing down there yeah you got it down there

1355
01:52:18,474 --> 01:52:22,954
which one are you running how long did it take you to get set up uh yeah like the whole process

1356
01:52:23,754 --> 01:52:30,954
so it's embarrassing for me because i worked in it but my role was so niche it's like software

1357
01:52:30,954 --> 01:52:38,714
related and i don't know jack about hardware so i've got to start nine server um bitcoin not

1358
01:52:38,714 --> 01:52:46,554
crypto's channel has some really good tutorials there's also one from btc sessions and um if you

1359
01:52:46,554 --> 01:52:51,674
check out bitcoin.crypto's channel i think he's got like a discount code you can use for um a

1360
01:52:51,674 --> 01:52:56,714
start nine server as well but i think they're all in back order um the other one that's good is um

1361
01:52:57,754 --> 01:53:05,754
is it umbral i'm really correct yeah um but yeah i got the start nine and i spent like

1362
01:53:05,754 --> 01:53:14,714
a few hours on over two days doing it and i had like 17 youtube videos open trying to figure it

1363
01:53:14,714 --> 01:53:22,854
out um but it got done and um i really haven't had to make any transactions since so i'm kind

1364
01:53:22,854 --> 01:53:29,294
of excited to i don't know move some bitcoin around and use my own uh my own node to do it but

1365
01:53:29,294 --> 01:53:32,174
yeah it's just sitting there and

1366
01:53:32,174 --> 01:53:34,114
whirring every so often

1367
01:53:34,114 --> 01:53:36,074
you have a miner too? You're running some

1368
01:53:36,074 --> 01:53:38,234
bit axes over there? I'm excited

1369
01:53:38,234 --> 01:53:39,774
to do it actually I got my

1370
01:53:39,774 --> 01:53:41,254
son one

1371
01:53:41,254 --> 01:53:44,114
a bit axe and it was

1372
01:53:44,114 --> 01:53:45,854
fun to just go through the exercise

1373
01:53:45,854 --> 01:53:48,094
but now I'm kind of motivated I'm like

1374
01:53:48,094 --> 01:53:50,074
you know what I need to start mining with it

1375
01:53:50,074 --> 01:53:51,614
get that connected to it

1376
01:53:51,614 --> 01:53:53,994
get my own template I'd probably

1377
01:53:53,994 --> 01:53:55,974
roll with ocean that's more of a decentralized

1378
01:53:55,974 --> 01:53:59,014
platform

1379
01:53:59,014 --> 01:54:06,654
you know mining decentralization is kind of important too so you know now that I have a node

1380
01:54:06,654 --> 01:54:10,974
I can sit on my high horse and you know feel better than everyone else who's not running a

1381
01:54:10,974 --> 01:54:16,394
node you know that's the important part and it is the fun part of progressing through bitcoin is

1382
01:54:16,394 --> 01:54:20,734
when you get to this phase right you've been investing in it but now you're actually figuring

1383
01:54:20,734 --> 01:54:25,854
out how it all works and how it all connects together and some of the most fun I had was I

1384
01:54:25,854 --> 01:54:30,434
got a start line as well and tinkering around and configuring that and then getting a minor and

1385
01:54:30,434 --> 01:54:36,334
I just picked up a I think I've got a brains mini minor and mostly because I'm a sucker for a nice

1386
01:54:36,334 --> 01:54:42,494
screen that can you know show me data on it I don't know why I just love that it's way bigger

1387
01:54:42,494 --> 01:54:47,674
than a bit x I don't think it gets me any more hash power than a bit x does but it you know I got

1388
01:54:47,674 --> 01:54:51,654
suckered in by that but getting it all configured and actually playing around and starting to

1389
01:54:51,654 --> 01:54:58,294
understand how it all works and connects is massively valuable so i think for a lot of people

1390
01:54:58,294 --> 01:55:03,814
it's it's a matter of time before you get to that level but uh it's still one of those where you've

1391
01:55:03,814 --> 01:55:08,614
got to have the time because it does not go smoothly still there's still quite a bit of work

1392
01:55:08,614 --> 01:55:13,574
done to be able to have just normal everyday people be able to you know spin up a node and

1393
01:55:13,574 --> 01:55:18,054
get it running luckily there's a lot of people out there like i think i used btc sessions video and i

1394
01:55:18,054 --> 01:55:22,774
was setting mine up as well it was it was pretty good so luckily there's people out there doing

1395
01:55:22,774 --> 01:55:28,854
that work to to expedite it and help you troubleshoot it oh yeah for sure the and and uh if you

1396
01:55:28,854 --> 01:55:35,894
get a miner going you got to monetize the heat output right so then yeah powerful enough to have

1397
01:55:35,894 --> 01:55:42,374
much heat output you know yeah but there's the uh the bath house in new york that's uh oh yeah it's

1398
01:55:42,374 --> 01:55:47,814
powered by well the electricity that comes in the door and then they have miners that sit in between

1399
01:55:48,054 --> 01:55:52,934
And then all the heat output goes to all of their spas and their saunas.

1400
01:55:53,454 --> 01:55:58,834
And so it's like this underground Roman bathhouse, but in totally like techie New York fashion.

1401
01:55:59,094 --> 01:56:00,174
It's so sick.

1402
01:56:00,854 --> 01:56:04,914
And like it's pretty affordable, too, because they're mining Bitcoin.

1403
01:56:06,074 --> 01:56:06,194
Right.

1404
01:56:06,854 --> 01:56:07,774
Yeah, it was badass.

1405
01:56:08,034 --> 01:56:10,234
I went I went there the day before the unconference.

1406
01:56:10,734 --> 01:56:15,134
And I'm just going to have to make them make that mandatory every time I go to New York City now.

1407
01:56:16,654 --> 01:56:17,574
Steam room.

1408
01:56:18,054 --> 01:56:23,494
dry sauna was like 180 degrees so and then you can just you can walk out of there and go straight into

1409
01:56:23,494 --> 01:56:28,934
a 44 degree cold plunge and then you could just go right back into the steam room or whatever

1410
01:56:28,934 --> 01:56:33,414
they got like a salt water one that's like easier to float in you want to relax and there was like

1411
01:56:34,614 --> 01:56:39,174
that one was like more of a quiet room and there was a bunch of couches people just passed out

1412
01:56:39,174 --> 01:56:45,494
everywhere i guess they were i don't know relaxing or whatever but i'm not i'm not sleeping in public

1413
01:56:45,494 --> 01:56:50,854
it was kind of that was kind of weird but um yeah the freaking rooms were amazing and i only used

1414
01:56:50,854 --> 01:56:54,774
half of them there was like a couple of world pools that whirlpools that i never made it made

1415
01:56:54,774 --> 01:57:00,774
it to but um yeah i'm gonna go early one day and spend the entire day yeah there's a business model

1416
01:57:00,774 --> 01:57:06,614
for anybody out there that's a a spa or sauna freak is you know monetize the heat output there's

1417
01:57:06,614 --> 01:57:11,734
a guy in colorado that's even put a book together about like the heat output of ma of mine i think

1418
01:57:11,734 --> 01:57:16,054
I think it's called like Bitcoin heat or something around that.

1419
01:57:16,174 --> 01:57:18,894
But that's an industry.

1420
01:57:19,754 --> 01:57:22,734
That is an entire industry that somebody can get into.

1421
01:57:22,994 --> 01:57:25,994
Like these things are going to be on the top of everybody's homes

1422
01:57:25,994 --> 01:57:28,714
and be the furnace in the winter.

1423
01:57:29,514 --> 01:57:30,994
Because why not?

1424
01:57:32,214 --> 01:57:35,574
If you're able to recapture some of that value.

1425
01:57:35,754 --> 01:57:37,874
And there's a lot there.

1426
01:57:37,874 --> 01:57:44,734
that's what i really like when you go to like the local bitcoin meetups you know because yours may

1427
01:57:44,734 --> 01:57:50,074
be more polished over by where you guys are but you get kind of that anarchy edge that's out there

1428
01:57:50,074 --> 01:57:54,974
the people that are doing this on homesteads and like there's a guy i was talking to tonight and

1429
01:57:54,974 --> 01:58:00,894
he's heating everything with bitcoin miners he's got a water heater out on his homestead that's

1430
01:58:00,894 --> 01:58:04,774
just heating the water up with the bitcoin mining and obviously it only gets warm it's not like

1431
01:58:04,774 --> 01:58:09,574
you're going to boil that water or anything. But then he's also like circulating water underneath

1432
01:58:09,574 --> 01:58:13,994
the floors to heat it. And he's heating maple syrup with it. I guess that's part of the project.

1433
01:58:14,294 --> 01:58:18,234
Like he's just integrating it into everything. It's just Bitcoin miners all over the place.

1434
01:58:18,234 --> 01:58:23,014
It's really, really cool stuff. You have to have warm maple syrup. You know what I'm saying?

1435
01:58:25,214 --> 01:58:29,334
This is what you could do when you have like the time and energy and you work for yourself.

1436
01:58:29,474 --> 01:58:33,374
And on a Bitcoin standards, you could think about like all these other things. You have some free

1437
01:58:33,374 --> 01:58:41,054
capital and you go figure out what you want to do so cool oh yeah so cool all right we're right at

1438
01:58:41,054 --> 01:58:45,134
right at two hours maybe we'll pass around we'll do final thoughts um i'll kick it over to you

1439
01:58:45,134 --> 01:58:52,974
mason let's get you let's get you cooking yeah um well just my general takeaway from the conference

1440
01:58:52,974 --> 01:59:00,734
was this industry is so nascent we're we're just at the beginning everyone's still trying to figure

1441
01:59:00,734 --> 01:59:08,414
out you know whether it's companies what what their strategy is how how do they want to proceed

1442
01:59:08,414 --> 01:59:16,574
into the future how do they want to differentiate themselves amongst their peers um or or within

1443
01:59:16,574 --> 01:59:23,134
their region and i think there's just so much opportunity out there right now uh for both

1444
01:59:23,134 --> 01:59:30,334
companies and and for investors and i think to uh to survive this industry which is on top of

1445
01:59:30,334 --> 01:59:37,034
Bitcoin, which is highly cyclical, highly volatile, you're going to need to hold on pretty tight.

1446
01:59:37,374 --> 01:59:40,894
So if you're here tonight following us and if you've been following us for a while,

1447
01:59:41,194 --> 01:59:46,874
I think you're going to make it. But in the meantime, there will be a lot of tourists.

1448
01:59:46,874 --> 01:59:53,714
There will be a lot of noise. And make sure you're protecting yourself from it. Have conviction,

1449
01:59:53,714 --> 01:59:59,734
build it, focus, and stay the path.

1450
02:00:02,234 --> 02:00:05,674
Wise words. Wise words, Mason. Over to you, Soleil.

1451
02:00:06,794 --> 02:00:12,034
All right. So I will see you all in Montreal if you're going to be at the Canadian Bitcoin

1452
02:00:12,034 --> 02:00:15,274
Conference 2025. I'll be there too.

1453
02:00:15,274 --> 02:00:22,894
October 16th and 18th. So I'm just addicted to conferences now. I can't stop.

1454
02:00:22,894 --> 02:00:25,134
Ben, you have to go. We're all going.

1455
02:00:25,994 --> 02:00:26,954
That's what I'm hearing.

1456
02:00:27,514 --> 02:00:27,914
Yeah.

1457
02:00:30,214 --> 02:00:31,514
16th to the 18th.

1458
02:00:31,954 --> 02:00:32,394
Yeah.

1459
02:00:33,354 --> 02:00:34,114
We should go see hockey.

1460
02:00:35,714 --> 02:00:36,634
I know Mason is.

1461
02:00:36,874 --> 02:00:37,674
Yeah, I'm playing.

1462
02:00:37,794 --> 02:00:39,154
Are you really?

1463
02:00:39,994 --> 02:00:43,154
Yeah, I was a high school hockey player.

1464
02:00:43,674 --> 02:00:44,034
Okay.

1465
02:00:44,694 --> 02:00:44,894
Yeah.

1466
02:00:45,694 --> 02:00:47,974
Is it going to be a core versus hockey?

1467
02:00:49,314 --> 02:00:50,994
I can't skate, so you can just

1468
02:00:50,994 --> 02:00:52,674
make me the goalie, and I can just stay

1469
02:00:52,674 --> 02:00:53,674
Yeah.

1470
02:00:53,674 --> 02:00:57,814
And fall down or on the, on the, on the, skate, skate faster backwards than, than you can

1471
02:00:57,814 --> 02:01:00,714
fall over and do a little race.

1472
02:01:00,744 --> 02:01:03,264
All right, over to you, Ben.

1473
02:01:04,724 --> 02:01:11,864
Yeah, I just think that this is going to be an industry where you're going to have to stay engaged to try to stay ahead.

1474
02:01:12,844 --> 02:01:15,244
You know, there's going to be a lot of movements that are out there.

1475
02:01:15,324 --> 02:01:18,044
We've got a lot of new companies that are going to do things a different way.

1476
02:01:18,124 --> 02:01:22,904
You're going to see a lot of different flavors of transactions as these companies try to scale up.

1477
02:01:23,884 --> 02:01:28,024
And, you know, the research aspect of this is going to be massive.

1478
02:01:28,024 --> 02:01:41,784
You know, I know people hate to go and review SEC filings, but that's part of the reason why it creates edge is because most people won't do it where you go read the details and you understand the nuance and you understand the timelines.

1479
02:01:41,784 --> 02:01:46,764
And I think as more and more companies emerge into the space, that's going to become so critical.

1480
02:01:47,424 --> 02:01:49,664
But we're right on the front end of this.

1481
02:01:49,664 --> 02:02:00,964
And I'm hearing a lot of people talk like Bitcoin's dead now, even though we're coming into the most, historically, the most bullish quarter of Bitcoin in every cycle.

1482
02:02:01,764 --> 02:02:05,264
So right now, I feel like we're all getting lulled into frustration.

1483
02:02:06,744 --> 02:02:12,104
And, you know, it's understandable because nobody likes to be down money.

1484
02:02:12,264 --> 02:02:13,384
I don't like to be down money.

1485
02:02:13,444 --> 02:02:14,704
I'm sure nobody else does either.

1486
02:02:15,504 --> 02:02:21,664
But these are the time periods where you reevaluate what you're holding, why you're holding it,

1487
02:02:22,304 --> 02:02:28,064
if your thesis has changed, and then you review your thesis around Bitcoin. And if you don't

1488
02:02:28,064 --> 02:02:32,704
believe it's over for Bitcoin and you think Bitcoin is going to continue to move and that

1489
02:02:32,704 --> 02:02:38,464
we're going to come into this bullish period, then as long as you're positioned well and you focus on

1490
02:02:38,464 --> 02:02:45,264
finding good entries you can close your eyes and wake up in four years right this is a this is a

1491
02:02:45,264 --> 02:02:50,784
long-term game this isn't a monthly game or a quarterly game this is a several year game that's

1492
02:02:50,784 --> 02:02:56,784
out here and you want to allocate accordingly we all learned that with bitcoin it was the foundation

1493
02:02:56,784 --> 02:03:03,264
of all of our thesis it was the asset that brought everyone into these and we built up that resilience

1494
02:03:03,264 --> 02:03:11,964
in our investing to be able to ride that volatility in Bitcoin because we knew over a long enough time frame, we would be up money.

1495
02:03:11,964 --> 02:03:26,228
And it became a very easy way to invest But moving into the equities you shift into an equities mindset And that a different type of investing than I think a lot of people got accustomed to with Bitcoin So Bitcoin should always be the foundation

1496
02:03:26,548 --> 02:03:27,428
Always start there.

1497
02:03:27,548 --> 02:03:30,348
It's what makes all of this possible for all of these companies.

1498
02:03:30,348 --> 02:03:32,428
It's the asset that everybody's betting on.

1499
02:03:32,488 --> 02:03:33,468
Make that the foundation.

1500
02:03:34,208 --> 02:03:38,588
And then if you want to take swings to try to outperform, go for it.

1501
02:03:40,348 --> 02:03:41,848
You're only down money if you go.

1502
02:03:43,268 --> 02:03:43,708
Right?

1503
02:03:44,068 --> 02:03:52,068
And you can zoom in far enough to find a time period where strategy's underperforming,

1504
02:03:52,208 --> 02:03:56,188
but how come nobody ever says, why were we overperforming in November?

1505
02:03:56,948 --> 02:03:59,648
Like that was a completely unrealistic blow off top.

1506
02:04:00,388 --> 02:04:07,328
And the correction that we've had just brings strategies priced down to where it would have been

1507
02:04:07,328 --> 02:04:09,848
if we didn't get that ridiculous euphoria.

1508
02:04:09,848 --> 02:04:20,148
I think there's the reality out there that the emotional baseline on any investment gets struck at your cost.

1509
02:04:21,108 --> 02:04:21,268
Yeah.

1510
02:04:21,468 --> 02:04:24,008
So your emotions get set where you entered.

1511
02:04:24,868 --> 02:04:26,908
And that's how it is for everybody.

1512
02:04:27,008 --> 02:04:28,568
It's why nobody agrees.

1513
02:04:28,868 --> 02:04:34,128
There's never going to be consensus on any investment because everybody had different entry points.

1514
02:04:34,128 --> 02:04:40,148
right the reason why there was a lot of frustration when when we weren't you know getting upset about

1515
02:04:40,148 --> 02:04:45,488
the strategy price action you know part of that is is cost basis driven right all of us were in

1516
02:04:45,488 --> 02:04:52,308
early we saw this trend way ahead of it and so you know while you're down right in your brokerage

1517
02:04:52,308 --> 02:04:56,688
accounts you're still way up because you know you picked the right time to enter these trades

1518
02:04:56,688 --> 02:05:14,948
But I also look at most of these have been in existence for six months. So you got to give more than six months time to declare a strategy or a company strategy as dead and over and that the industry is over. Six months is not enough time for that.

1519
02:05:14,948 --> 02:05:17,568
So we got a lot of runway ahead of us here.

1520
02:05:17,568 --> 02:05:19,068
There's going to be a lot more innovation.

1521
02:05:19,068 --> 02:05:21,488
You're going to have a lot more scale coming to the market.

1522
02:05:21,948 --> 02:05:25,748
You've got a lot of big players that haven't even really been able to enter the market yet.

1523
02:05:25,748 --> 02:05:26,068
Right.

1524
02:05:26,068 --> 02:05:29,708
We've got all these SPACs that are still hanging out there that have massive amounts of Bitcoin.

1525
02:05:29,708 --> 02:05:31,068
We don't know what they're going to do yet.

1526
02:05:31,708 --> 02:05:44,732
So I think there a there a lot of excitement a lot of activity that going to come into this space And with that comes nuance And that going to be what going to kind of reignite the research into this again I think

1527
02:05:44,872 --> 02:05:46,312
I think we got lulled for a little bit.

1528
02:05:46,392 --> 02:05:49,172
We started to understand really well.

1529
02:05:49,712 --> 02:05:53,652
I kind of liked the days when all we had to break down was convertible bonds.

1530
02:05:54,032 --> 02:05:57,652
We got pretty good at convertible bonds, and now those are going by the wayside.

1531
02:05:57,652 --> 02:06:02,212
So we're going to have to pick up the next wave of all these and master those.

1532
02:06:02,392 --> 02:06:04,572
We need another prep to figure out.

1533
02:06:05,372 --> 02:06:07,892
I think we're still figuring out these preps, quite frankly.

1534
02:06:08,252 --> 02:06:08,912
Yeah, for sure.

1535
02:06:09,112 --> 02:06:12,572
Jeff just learned they could redeem the stretch shares at 101.

1536
02:06:14,412 --> 02:06:15,352
True, true.

1537
02:06:15,352 --> 02:06:16,112
Still learning those.

1538
02:06:17,552 --> 02:06:21,032
It always comes back to this.

1539
02:06:21,032 --> 02:06:25,912
I don't want to be that grandpa that said I could have bought Apple at 82 cents.

1540
02:06:26,732 --> 02:06:31,072
And then your grandson says, well, you didn't.

1541
02:06:32,392 --> 02:06:36,112
Well, you could have, but you didn't and you didn't hold on to it.

1542
02:06:36,112 --> 02:06:38,072
So cool story, bro.

1543
02:06:39,152 --> 02:06:40,652
Do you know what's worse than that?

1544
02:06:40,652 --> 02:06:50,992
What being the grandpa who bought the Apple stock and then started the podcast about the Apple stock and then sold out?

1545
02:06:53,992 --> 02:06:54,832
That would be worse.

1546
02:06:55,132 --> 02:06:55,712
Oh, yeah.

1547
02:06:56,272 --> 02:06:58,492
Your grandson pulling up receipts of you.

1548
02:06:58,492 --> 02:06:58,732
Yeah.

1549
02:06:58,732 --> 02:07:00,872
He's about how great the stock was.

1550
02:07:01,312 --> 02:07:01,732
Yeah.

1551
02:07:02,392 --> 02:07:08,392
you said it was going higher but then you sold yeah it's like i'm here this is com i've like

1552
02:07:08,392 --> 02:07:14,552
committed there's receipts uh yeah your plot committed now i i am definitely committed 100

1553
02:07:15,912 --> 02:07:23,992
um that's where we're going okay well uh my my final thought here is we are in year one of

1554
02:07:23,992 --> 02:07:31,192
digital credit this world is moving very fast bitcoin is money everything else is credit

1555
02:07:32,392 --> 02:07:38,472
that's all i've got i got one last thing go ahead i need people to guess what they think the name of

1556
02:07:38,472 --> 02:07:46,232
the next strategy prep will be we need this on record just in case one of us is right i can tell

1557
02:07:46,232 --> 02:07:58,876
you mine first if you guys need to think for a minute go ahead go go first so we can eliminate one i gonna say that that it going to be Stratus Stratus That is like the stratosphere

1558
02:08:00,916 --> 02:08:03,196
Okay. It also fills the U in there, you know,

1559
02:08:04,096 --> 02:08:05,416
yeah, that's building out there.

1560
02:08:06,196 --> 02:08:10,756
It's definitely STRU. There's a hundred percent chance.

1561
02:08:10,816 --> 02:08:12,856
Oh, oh, oh, on the F.

1562
02:08:14,596 --> 02:08:16,636
It's going to be senior to stretch.

1563
02:08:17,536 --> 02:08:18,616
I'll go with strut.

1564
02:08:18,616 --> 02:08:28,396
strut that's good stratus strut man okay and then there's uh there's got to be another one

1565
02:08:28,396 --> 02:08:36,976
an e1 right yep yeah let's see yeah that's your bet mason what you got i don't know

1566
02:08:36,976 --> 02:08:42,496
you want to copy soleil's homework double down on strut

1567
02:08:42,496 --> 02:08:50,896
I was playing to the sailor, you know, aerospace angle. That's why I went straight.

1568
02:08:50,896 --> 02:08:56,776
Yeah. You know, honestly, it's like midnight over here. And this feels like a New York

1569
02:08:56,776 --> 02:09:02,856
Times crossword. Yeah. Mason, you don't play Boggle?

1570
02:09:02,856 --> 02:09:03,976
I'm a working man.

1571
02:09:03,976 --> 02:09:10,976
And, you know, I put money into my 401k.

1572
02:09:11,956 --> 02:09:12,616
It's rough.

1573
02:09:13,056 --> 02:09:14,196
Trying to buy a couch.

1574
02:09:14,416 --> 02:09:15,956
You know, you're just trying to buy a couch.

1575
02:09:18,676 --> 02:09:19,656
It's hard times.

1576
02:09:20,036 --> 02:09:21,436
My money is crazy.

1577
02:09:21,656 --> 02:09:25,596
It's like I go from my bed over here to my desk.

1578
02:09:25,776 --> 02:09:26,256
Long commute.

1579
02:09:26,816 --> 02:09:27,456
Yeah, it's a lot.

1580
02:09:29,036 --> 02:09:29,516
All right.

1581
02:09:29,536 --> 02:09:30,696
Well, then we'll cut you a break.

1582
02:09:30,816 --> 02:09:31,916
But think about it.

1583
02:09:31,916 --> 02:09:32,416
Come back.

1584
02:09:32,416 --> 02:09:41,576
without without the acronym the potential you know fiat is blank uh i would say i would say

1585
02:09:41,576 --> 02:09:45,556
probably strong and a lot of people are saying this in the chat too my guess would be strong

1586
02:09:45,556 --> 02:09:53,856
um wait don't we need an e gotta go strength strength oh there you go s-t-r-e strength

1587
02:09:53,856 --> 02:10:00,936
there's a whole new world out there there you go all right guys well two hours and ten minutes in

1588
02:10:00,936 --> 02:10:03,056
Thank you everybody for joining. Thanks for hanging out.

1589
02:10:04,016 --> 02:10:06,476
Episode 39, the investment grade Bitcoin podcast.

1590
02:10:06,596 --> 02:10:08,936
We are signing off. Take it easy. Have a good one.

1591
02:10:09,196 --> 02:10:11,796
And we'll catch you next week. See ya.

1592
02:10:11,996 --> 02:10:12,296
See ya.