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We'll be right back.

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um

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welcome back true north episode 51 we are back and we've got the crew here we've got a whole squad

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Let me turn off my screen.

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All right.

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How's everybody?

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Good?

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What's up?

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True North.

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Welcome back.

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True North, the investment grade Bitcoin podcast.

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Your place for everything finance, everything Bitcoin, every Wednesday night.

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Your signal within the noise.

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We touch on Bitcoin treasuries, macro analysis, securitization and tokenization of Bitcoin

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products and general humanity trends.

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We've got a awesome agenda for you tonight.

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We're going to get through a ton of great information.

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The agenda today is we're going to talk about MSTR and STRC, that entire balance sheet, how

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it's changed over time, volume and capital raising status, how that's going and what

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we think is happening this week, because I think it's one of the most exciting weeks

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in the history of these securities.

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We will get into STRC versus real estate.

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I think a lot of people are making some buzz about that.

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It's a great topic at the moment.

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projected MSTR Bitcoin holdings over time, thinking about what does this look like? If we see this

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trend into the future, what does the next two, three, four, five, six, seven, eight years look

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like? And how do we start to think about it? We'll talk about the What Bitcoin Did interview

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chatter. I mean, the name of this episode is Bitcoin Did This. So here we are. And then if

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there's any time left over, we will talk about recent acquisitions in the market. We've been

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incredibly busy. If I look a little tired and frazzled, it's not only because I've been coding

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up until the middle of the night, but also because we had a huge acquisition that went through here

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just recently this week. So a lot of things going on. We may hit on the Fed. We'll talk about credit

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cards, real estate, Fannie and Freddie Mac, liquidity, chaos, war, everything that goes around

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and hits on all of these different assets. So very unique place, very unique time.

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And without further ado, I'm going to pass it over to Tim for a very important announcement.

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Ladies and gentlemen, what you're about to hear may be amazing, but it is not financial advice.

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It's for informational and educational purposes only.

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All right, we're back. Okay. So yeah, this is going to be exciting. We've got a lot to cover

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here and we've got a short amount of time but Ben is back it's been a while since you've been on

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great to have you here and yeah how are you feeling what's what are people's thoughts what's

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top of mind I know STRC is big huge volumes today where do we want to start what are people thinking

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about you believe it's only been 14 days so far this year feels like a heck of a lot has happened

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in the first 14 days of the year.

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This has been crazy.

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Yeah, even less trading days.

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Dan told me not to sell covered calls

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after the 6th of January.

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So anyone who's on the inside is winning right now.

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I'm glad to hear you listen, Dan.

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I got smoked.

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I was counter trading you, Ben.

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Oh, were you?

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Oh, all right.

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Don't counter trade.

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I guess I'm up 1-0, though.

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Do not ever counter trade.

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There's a few times in my past where it would have worked out great.

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So, you know, we all take our knocks here once in a while.

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Yeah.

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Yeah.

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So, you know, I'm going to jump right into it.

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I think strategy had an absolutely enormous day.

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And I think this is the perfect topic to start with.

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And let's start with the common equity, because I think this is something that's kind of flown under the radar because STRC has been the biggest topic, at least on X today.

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So MSTR traded $7.1 billion worth of equity today.

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It was the ninth largest publicly traded equity in the entire market.

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And it jumped up seven companies within the US publicly traded rankings.

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So some big movement on that front.

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But the magnitude here is crazy.

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I think the, so over the last, you know, several months, strategy has kind of been top 20.

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And it's kind of been bouncing around between 15th and 25th largest publicly traded equity,

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which is, it's a really interesting statistic.

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And we continue to bring this up because you got to ask why, like, why has this stock been

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so liquid?

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And, you know, what is going on here?

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I know we hit on this a bit last week, but there's, because there's a significant amount

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of Bitcoin on the balance sheet and you can calculate or have some understanding of a

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valuation in real time connected to the value of the Bitcoin held on balance sheet, it makes

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it a really interesting stock for a lot of people to trade.

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There's significant numbers of pair trades that can happen in many different directions,

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but it's also incredibly liquid.

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And so people can go in and out of it, but relatively easily.

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And the options market is incredibly deep.

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So when you see a change in volume day like today, going from top 20th publicly traded equity down to 9th, top 9 publicly traded equity, I would suspect that strategy was probably on the ATM on the common stock today, and there was probably a pretty massive day.

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generally when we when we've seen the really large days of volume in the past strategy has

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has raised their most capital i think there was a period of time in november of 2024 when the stock

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was moving incredibly quickly and it was the top one two or three publicly traded company

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on the planet and that was when they raised you know two billion dollars in a day and they were

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raising billion dollars a day because of how much volume was coming into the equity so i think

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really important to keep an eye on not just the what's happening with the prefs and the volume

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there but just the common stock i mean obviously the common stock from a price perspective has got

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absolutely hammered but there's still signal within within the noise if you kind of peel back the onion

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and do you mind if i jump in there jeff because the most interesting and i was in the office today

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i couldn't help but tweet about it because you're seeing sailor raise all his money at book value

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right which theoretically isn't accretive to the shareholder theoretically if you raise bitcoin at

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exactly one m nav or you raise equity common equity at exactly one m nav and then turn around

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and buy bitcoin it's probably slightly unaccretive because you have to pay fees to the brokers right

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the people actually issuing the deal okay but is that um but if you expand the collateral base

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you essentially can issue more preps so that was the thing we were talking about last kind of

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spring last summer it's like okay so if the m nav collapses or goes down to one and strategy can't

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issue equity was what we were assuming then there's an upper bound on the amount of digital credit or

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or preferred equity that strategy could issue they can't really go beyond like a 40 or 50

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leverage ratio as it stands right now what we're seeing now is the expansion of both the common

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equity, the common equity and the preferred equity at the same time, keeping pace with each other,

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right? They're both going like this. So the common equity, the collateral base is expanding

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exponentially while the preferred equity is expanding exponentially. And what this is creating

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is a bid on Bitcoin. And so long as stretch stays at 100 and there's liquidity and volume in the

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common equity, this flywheel can continue. So I've never been more bullish on, I think this is what

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traders are seeing in Bitcoin, quite frankly, because they're marching along lockstep. And

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then what can Saylor do to keep this wheel going? What if next month he jacks the stretch interest

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rate up to 11, right? Or sorry, it's at 11, jacks it up to 11.25. Like it's going to be at 100 every

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day, right? And so then he can continue doing this. Like, so I don't know. I think there's

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really crazy scenarios where we get a massive bid on Bitcoin, billions, billions, billions of dollars.

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you you issue you issue stretch and that instantly makes your common stock more exciting because you

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put on amplification but what do you do when you get those stretch proceeds you instantly go and

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buy bitcoin so when you instantly go and buy bitcoin that actually improves the collateral

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base so the common again looks more attractive because you got to push the common higher in order

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to maintain parity of what your you know theoretical valuation is for the company

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which gives you more potential liquidity and ability to raise in the common which gives you

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more capacity to raise uh on the on the preferred stretch which pushes bitcoin higher and you've got

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this reflexive flywheel uh loop which we'll get into a bit later but i built a whole model like

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thinking through this because it is like as one pushes higher it makes the other more valuable

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which pushes pushes the other higher which makes the other more valuable which you know it's like

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just a whole circle and i'd argue i'd argue book value common atm in so far as it actually puts a

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bid or a floor on bitcoin is in fact creative to the common atm shareholders so yeah i wanted to

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chime in on this so look james van stratt and i'll call him out and he did a great thing you know one

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of the things that we hear is there's no buyer of last resort for bitcoin and he proposed this theory

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online and and and i agree with him and i reposted him i think that strategy is the buyer of last

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resort for bitcoin he buys it all the time and if he's buying a billion dollars a week here's your

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buyer he he buys it at the top he buys it when it's low people are critical when he buys it at

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the top and then he buys it at the bottom it's like well he should just only buy at the bottom i mean

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he he's yeah if you buy a billion dollars in a week you know and i by the way i calculated my

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number for the year of what i think he'll acquire that's where we are so i think stretch by itself

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is is doing incredibly well and i think that's where we are today i mean we you guys what do

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you think about that as an idea well this is what everyone used to look for right this was the

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constant criticism in the past it was he can only buy it when bitcoin's flying right he's only going

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to buy the top forever he's never going to be able to buy anything else and then he added a couple of

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of additional weapons out there.

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And it completely changed the way

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that I look at this sector, right?

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I look at it from two perspectives now.

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One, when I look at the common, I look at the volumes.

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There is such a massive discrepancy

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across the treasury sector in terms of volumes trading.

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And I don't think people really understand

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how important trading volume is

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to being able to raise capital, right?

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Like you can have a good premium.

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If I've got a 1.6 or a 1.7 times NAV premium, but I only trade one, two, $3 million a day,

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I can't actually raise that much capital.

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I can't move that fast.

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There's a big difference between the stocks that are incredibly liquid and the ones that

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are illiquid in terms of the velocity that they'll achieve.

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The second thing is having a non-equity correlated product in your arsenal.

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You need something that derives its value from something else, not Bitcoin.

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The value that comes in these preferreds is in the yields.

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These are yield products.

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People want the cash flow.

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That's what these are getting valued on.

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And we're starting to see now that rotation that happens when a new product comes to market.

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So if you think about the prefs when they get launched, what happens at inception?

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Right away, it's going into all these institutions.

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It's going into all these large buyers who are looking to purchase it because it's at a discount.

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And something like a stretch is incredibly appealing because what the company is telling you is you're going to be able to get this at a discount.

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We're going to work on your behalf to drive it up to par.

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So you're picking it up at a 10, 15, 20% discount, whatever it's offered.

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You're going to float it until you take that gain.

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You'll get that capital back.

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You'll move on to the next transaction.

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But the next layer of buyers are buying it because they want the tax advantage and the

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dividends, right?

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These are fixed income purchasers.

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So as you rotate shares out of those initial hands and you get them into the hands of the

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people that are looking for the yield that want those dividends, particularly if they're

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sophisticated and they understand the tax advantages here. Now you've got a new holder

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base and that holder base doesn't have the same capital appreciation component of this that they're

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concerned with where they're looking for it to go up. You know, if you bought it at 99.50 and it goes

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to 100, are you going to sell it to capture the 50 cents? Probably not, right? You want that

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constant dividend that's coming in. So now what happens is you've got all these people that don't

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have an incentive to sell this thing anymore. They want the dividend, they want the tax advantage,

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They want the cash flow that comes with that product.

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So what happens?

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Sellers leave the market.

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You've now rotated those.

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You don't have the same incentive you have with like a normal equity to go and sell when

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the price moves up because the price isn't going to move up.

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So what happens?

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You have to create that supply.

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So once all that supply dries up, the price can only go up, right?

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The price needs to move up until it finds the seller.

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The seller for strategies case is strategy.

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You get above 100, they will sell you the shares. You can get supply above 100 and everybody knows that now. And so that's a very different type of product. So one product is going to allow them to buy not just the top forever, not just the bottom forever. It's just going to let them buy forever. And they're going to continue to accumulate and it's going to scale and it's going to become more liquid. And that's going to create this massive, massive bid on Bitcoin.

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And then you couple that with what he's doing in the common equity.

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And I'm not surprised at all that they're willing to sell common equity, you know, at

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one times NAV or even maybe a little below that, because they've got a massive belief

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in the expansion of the digital credit market.

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And what they want is as much capacity to issue that as possible.

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What they don't want is the massive bid to come on to stretch and they push it up above

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100 and they don't have the balance sheet capacity to be able to absorb that.

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They have to be able to absorb that.

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And so that's incredibly important.

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So if they sold a little below nav, you've got to look at the entirety of that transaction

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for whether it's going to be accretive or not.

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And in the end, it will be.

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It'll be very accretive.

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So the model has changed.

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I mean, this is a massive, massive shift.

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And I didn't really understand it until I was in it and just spending all day staring

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at this stuff now but it's fundamentally changed the way i look at investing in the space because

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it's pretty rare to be able to create that and allow yourself the ability to operate no matter

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what market cycle you're in that's unique to just a couple players at this point

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yeah i wanted to chime in yeah i wanted to chime in on a couple something that that ben said and

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something dan said so dan you were saying what happens if stretch gets cranked up and i was like

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I thought if it traded above $100 in the last week of the month, that they would do a rate decrease.

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But I now just rechecked the slide, and I was incorrect.

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It's above $101.

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So if the stock, let's say it's trading at $100.50, they could pump this up to $11.25, to $11.50.

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And that's when bewilderment, oh my God, he keeps on raising the annual rate.

219
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But he wrote that in the slide that he would do that to continue to drive to drive stress.

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Sorry, stretch.

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So this can go on for the next four or five months.

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And then if it goes up to 12 percent, right, then he would ratchet it back down.

223
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If it stays above one on one, then he would bring he'd bring it back down again.

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So I had to check your number.

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And Dan Hillary is correct.

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I want to talk about what Ben said real quickly.

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Ben, what Ben said was a symmetry test.

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And what a symmetry test is, hey, Saylor can only raise money through the common stock ATM if it's accretive, if it trades at a positive MNav, right?

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Or if it's at 1.5 or 2.0 or 3.0.

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So he's saying people like he can only raise money when it's at a positive MNav.

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What he has now shown here, whether the MNav is at, let's just say it's at 1.0.

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That's Ceteris Paribus, all things being equal.

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he's raising a billion dollars at one MNAV so that's the symmetry test it

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passes both sides of it and you're like well that that's got to be true because

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we've now seen this so that's where we are today do I think that the price of

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Bitcoin going up helps yeah but what I'm seeing as an investor it's like you know

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what MSDR is not going up it's going down I have other money in other places

238
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is if I want to put that in some park it for three months,

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I like the prefs.

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Why? I like what strategy is doing

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and it pays the best yield return.

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And then when the price of Bitcoin goes back up,

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I use the word that Ben said,

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I rotate that back into MSTR,

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some other stock that I think will beat the pref return.

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So Ben, does that make sense?

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What I just said?

248
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It does.

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But the other mindset shift

250
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that I think a lot of people are lagging on at the moment

251
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is they're looking at the model

252
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when there weren't multiple tools.

253
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Right. So the saying used to be true, right? You wouldn't want to use the common ATM at or below one times nav, because if your only tool is common, then you are truly just resulting in a dilutive transaction.

254
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If you have nothing on the other side, that's the more high octane rocket fuel version of creating yield.

255
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but because they have that it changes the way you have to think about that you can allow for

256
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some more flexibility in that execution as long as what you believe over time is that they'll

257
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offset anything they're issuing in the common with what they're going to issue on the digital

258
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credit side of the house and that's clearly the path that they're going down here now they've got

259
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you know tools in place you mentioned the 101 that's an important tool but what they're really

260
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looking for in the product, I think, is equilibrium. I think they probably want to get to the spot

261
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where you find the balance, where they can absorb, call it 40, 50% of the daily volume,

262
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a little bit above 100. But what they have to do as soon as they get into the territory where

263
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they've got the right amplification on, where they're comfortable at that amplification is now

264
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for every dollar they issue in digital credit, they got to be over there issuing three in common.

265
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to keep balance right so you have to keep balance in your amplification ratio out there

266
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and right now the moving of the rates is seek it's searching for that equilibrium point where

267
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you find that constant sustainable bid in the market that you can just consistently absorb

268
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and they've got room right now right it can run hot at the moment because they've still got the

269
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ability to put on more amplification and there a significant amount of capital that would still need to come in for them to get to a 35 or a 40 amplification ratio So they can absorb a lot today But when they get to that point then I think they step back and they wait to see if they reached equilibrium in that product where they can continue to absorb that demand and offset it with the issuance in the common

270
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And it's a little more complex for them because it's not just managing stretch versus common.

271
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And it's managing stretch and strife and stride and strike and all of the demand that comes out of the digital credit products relative to what they're issuing in the common, right?

272
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So you're always most likely going to see more common issuance than anything.

273
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But if they get moving here and if they keep on pushing the common equity issuance, you might find them getting under amplified.

274
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where you might see some weeks where while they've got this type of a bid coming into digital credit,

275
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they don't lay on the common equity and they just let the digital credit products ride

276
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to try to put that amplification on or at least close the gap again.

277
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So it's going to be fascinating to watch because we're just seeing the emergence that's happening

278
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in the demand for digital credit, right?

279
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This is what everyone was looking for, where you have these consistent days strung together

280
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where you're seeing demand in a product like Stretch that's keeping it pegged up there around

281
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100. And obviously you get some of that when you come around the record dates and the ex-div dates

282
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and the market starts to heat up there. We were starting to see the demand before that. So now

283
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the test will be, you know, after you get past that, you know, ex-div date, what type of reaction

284
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does that product have? I agree. And I think you're going to keep getting shallower and shallower

285
00:22:28,798 --> 00:22:32,958
sell-offs on the other side of that where it might only take a couple days for it to rebound and then

286
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the bid comes back so it's it's going to be a really exciting year i think to watch this stuff

287
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evolve because now we're seeing the bid come in that means there are real dollars at the door here

288
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that are going to start to scale this thing and you're seeing it in the bitcoin price and the bid

289
00:22:49,758 --> 00:22:54,798
that's being put on bitcoin it's almost terrifying how much bitcoin they buy a week right like look

290
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look at what we had to do.

291
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We've been in the public markets for four months

292
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and we've been burning in at both ends.

293
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We did the pipe raise, we issued Seda,

294
00:23:05,338 --> 00:23:07,618
we did the acquisition with Semler

295
00:23:07,618 --> 00:23:12,618
and we just got to 12,798 Bitcoin

296
00:23:12,818 --> 00:23:15,118
and Saylor bought that last week.

297
00:23:15,118 --> 00:23:18,498
Like that is, we're so numb to the amount

298
00:23:18,498 --> 00:23:20,898
that their purchases are like for how hard,

299
00:23:20,898 --> 00:23:22,258
we've been working to get close

300
00:23:22,258 --> 00:23:23,698
to what they just acquired in that week.

301
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It's the scale is incredible.

302
00:23:25,758 --> 00:23:27,798
And I don't even think we appreciate it yet.

303
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Yeah.

304
00:23:29,198 --> 00:23:29,438
Yeah.

305
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Go ahead, Dan.

306
00:23:31,358 --> 00:23:31,558
Yeah.

307
00:23:31,598 --> 00:23:33,258
I was just going to say, I think you said something interesting there,

308
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talking about where the leverage ratio, the amplification ratio will land.

309
00:23:38,178 --> 00:23:39,218
And that's ultimately the question.

310
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Obviously, right now they're expanding the balance sheet with common equity

311
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issuance.

312
00:23:42,998 --> 00:23:46,658
But if we see a week where there's no common equity issuance, which I don't,

313
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I think this week they'll issue common equity.

314
00:23:48,878 --> 00:23:51,258
You know, where is this leverage, this amplification ratio going to go?

315
00:23:51,258 --> 00:23:57,798
And I think now with the USD Cash Reserve in particular, they can take this amplification ratio extremely high.

316
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And in that case, the price targets, the price, the value of MSTR relative to Bitcoin, if Bitcoin continues to compound at an aggressive rate, are quite astronomical over a 10, 20 year time horizon.

317
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And so that's what I'm really excited about is how high can they pull this amplification ratio and take their sort of issuance of credit more similar to that of a bank or an insurance company lender or something of the sort.

318
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Well, let's take a moment to Ben's point and think about how crazy this is.

319
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Strategy is a B-minus issuer credit rating.

320
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They have unrated perpetual preferred securities.

321
00:24:35,198 --> 00:24:40,978
stretch alone has 545 million dollars volume in three days this week

322
00:24:40,978 --> 00:24:48,798
an unrated perpetual preferred equity that's six months old has 545 million dollars of volume in

323
00:24:48,798 --> 00:24:55,818
three days like go look at any other bond in the market go look at the 40th tranche of ford 2069

324
00:24:55,818 --> 00:25:02,518
six percent interest rate bonds like they're not trading 545 million dollars of volume in three

325
00:25:02,518 --> 00:25:08,458
days like this is incredible this product is literally in these terms at the pace they just

326
00:25:08,458 --> 00:25:15,118
raised last week they will acquire the same amount of bitcoin as the next closest public company in

327
00:25:15,118 --> 00:25:24,178
one month totally one crazy yeah this is digital credit they're plugging digital credit into

328
00:25:24,178 --> 00:25:29,418
the traditional financial markets and you're seeing how it interacts you could say they're

329
00:25:29,418 --> 00:25:31,078
using a SATA cable, Ben.

330
00:25:33,818 --> 00:25:36,618
But yeah, I mean, these are crazy numbers

331
00:25:36,618 --> 00:25:39,858
and you got to think that the overhang

332
00:25:39,858 --> 00:25:42,658
from the IPO is probably gone.

333
00:25:42,658 --> 00:25:45,238
They've raised the interest rates now a couple of times

334
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and they've got balance sheet

335
00:25:47,658 --> 00:25:50,038
to crank the amplification higher,

336
00:25:50,038 --> 00:25:52,778
but they're also have got significant demand

337
00:25:52,778 --> 00:25:53,658
on the common stock.

338
00:25:53,658 --> 00:25:56,378
Like if you're a top nine publicly traded company

339
00:25:56,378 --> 00:26:05,258
you're ranked 195th you monetize that you give yourself more balance sheet to go issue the best

340
00:26:05,258 --> 00:26:09,498
product that's trading 545 million dollars in three days as an unrated instrument that's six

341
00:26:09,498 --> 00:26:16,458
months old like that's what you do yeah it's incredible jeff i want to comment on a word you

342
00:26:16,458 --> 00:26:21,898
said there because i don't know if people caught this you said the overhang from the ipo is probably

343
00:26:21,898 --> 00:26:26,218
over and what that means is this is what i think it means you could tell me if it means what you

344
00:26:26,218 --> 00:26:35,258
mean is that um sailor decided to strc as an ipo he goes to the the book runners the investment

345
00:26:35,258 --> 00:26:39,978
banks that this is the new product does his road show and it's it's got a peg it's got a variable

346
00:26:39,978 --> 00:26:47,578
rate what's your appetite for it comes back and he realizes it can do this amount so um they make

347
00:26:47,578 --> 00:26:53,178
a commitment to buy a certain amount of it he gets the cash he goes and buys the bitcoin what they

348
00:26:53,178 --> 00:26:58,458
don't do and this is where the overhang work word comes out is that once they announce this and they

349
00:26:58,458 --> 00:27:05,018
go live on some day they don't then dump all of the shares in one day in a market order because

350
00:27:05,018 --> 00:27:10,138
they they can't do it it'll drop the price down so the overhang is the amount of time from the ipo

351
00:27:10,138 --> 00:27:15,578
date to when they can slowly release those shares into the market and so given you have enough

352
00:27:15,578 --> 00:27:21,498
volume now to absorb all the net new shares that were done i'm not saying the market makers or the

353
00:27:21,498 --> 00:27:27,098
the book runners or the investment bankers don't retain some of those shares for themselves

354
00:27:27,098 --> 00:27:32,138
because they might like the message right but they're probably done opportunistically selling

355
00:27:32,138 --> 00:27:37,338
or whatever they could sell and you can call it an unlock but they that is that your idea of the

356
00:27:37,338 --> 00:27:43,098
word overhang being done yeah yeah and also like you gotta wonder i mean the people that are buying

357
00:27:43,098 --> 00:27:47,098
this how many actually bought it because it was priced at a discount and how many are continuing

358
00:27:47,098 --> 00:27:51,098
to hold it because they're like holy they're paying the interest rate you know that's two

359
00:27:51,098 --> 00:27:56,218
You're paying 11, you know? Like, oh my God. It's coming in. It's real.

360
00:27:57,038 --> 00:27:58,658
I'm getting yield on Bitcoin exposure.

361
00:27:58,878 --> 00:28:00,698
I'll buy it at 90 and then sell it at 100.

362
00:28:01,578 --> 00:28:04,578
Yeah. Yeah. That's crazy.

363
00:28:04,778 --> 00:28:10,458
Also, I've been reading Taleb's... Can you guys hear me better? Is this mic all good?

364
00:28:10,898 --> 00:28:11,558
That's much better.

365
00:28:11,558 --> 00:28:14,818
Okay. I've been reading Taleb's Black Swan again.

366
00:28:15,418 --> 00:28:17,838
And what's really interesting is just kind of historic bias.

367
00:28:17,838 --> 00:28:31,658
And I think a lot of this, and I've definitely been seeing it in what I've been doing at Buck, but like, oh, there's so much fatigue and so much PTSD from the Terra Luna Celsius block by yield, all this stuff.

368
00:28:31,898 --> 00:28:36,818
Right. And so I think there's a large cohort who really believe this is the next thing to blow.

369
00:28:36,818 --> 00:28:44,598
But obviously, this is a public this is a public company audited by big accounting firms.

370
00:28:44,598 --> 00:28:50,658
the management team is liable for the actions taken at the corporation.

371
00:28:50,838 --> 00:28:53,918
So there's just a lot of things different here than in the past,

372
00:28:53,958 --> 00:28:55,538
but I think people still can't get over that.

373
00:28:55,538 --> 00:28:59,858
And then furthermore, to really understand how the preferreds work

374
00:28:59,858 --> 00:29:01,818
and what the investment protection is written into them,

375
00:29:02,098 --> 00:29:05,818
going to the website is one thing, and there's nice, helpful numbers

376
00:29:05,818 --> 00:29:10,378
for Bitcoin credit, Bitcoin, you know, days to cover,

377
00:29:10,578 --> 00:29:13,238
or not days to cover, excuse me, years of dividend payments, et cetera.

378
00:29:13,238 --> 00:29:28,398
But until you actually look into the prospectus and understand how the product protects the investors, right, what terms are written in there, such as if the yield doesn't get paid, what do investors have, what protections do they have to rectify that?

379
00:29:28,738 --> 00:29:30,278
It's hard to get comfortable with these products.

380
00:29:30,418 --> 00:29:34,918
So I think over time, there's only two ways you get comfortable with them.

381
00:29:35,058 --> 00:29:37,518
Either you're like us, you read the prospectus, you got comfortable with them.

382
00:29:37,658 --> 00:29:42,118
Or you see that they've been getting paid for like three years, and then you're comfortable with them.

383
00:29:42,118 --> 00:29:44,518
So I think we're getting to that point slowly but surely.

384
00:29:45,218 --> 00:29:46,918
Yeah, track record is huge, right?

385
00:29:46,938 --> 00:29:48,498
And for a lot of the large institutions,

386
00:29:48,718 --> 00:29:50,778
Matt's talked about this quite a bit,

387
00:29:51,158 --> 00:29:55,938
where a lot of them will require a three-year track record

388
00:29:55,938 --> 00:29:57,538
before they'll be able to allocate.

389
00:29:58,598 --> 00:30:02,218
So there's still huge amounts of capital that have years

390
00:30:02,218 --> 00:30:04,198
before they're going to be able to allocate to these.

391
00:30:04,798 --> 00:30:07,738
The other thing I think I've learned along the way is

392
00:30:07,738 --> 00:30:12,978
we assume everybody takes a sophisticated view around all these products.

393
00:30:13,718 --> 00:30:19,358
And I don't think that's the case. I think these products start showing up on stock screeners,

394
00:30:19,358 --> 00:30:23,378
where you've got a lot of people that'll just go and sort dividends high to low,

395
00:30:23,478 --> 00:30:29,038
and they'll do like a cursory glance. Like it's very rare for investors, even

396
00:30:29,038 --> 00:30:33,438
pretty seasoned investors to go into all these prospectuses and everything all the time. It's

397
00:30:33,438 --> 00:30:36,998
It's just not as common as we think it is.

398
00:30:36,998 --> 00:30:41,398
But we've just analyzed it, which is why it's so confusing to us

399
00:30:41,398 --> 00:30:45,678
that people aren't just crawling all over each other

400
00:30:45,678 --> 00:30:47,678
trying to get these products because they're

401
00:30:47,678 --> 00:30:49,678
such good products.

402
00:30:49,678 --> 00:30:51,138
They've got the right protections.

403
00:30:51,138 --> 00:30:53,118
They've got the right mechanisms in place

404
00:30:53,118 --> 00:30:54,238
to make them successful.

405
00:30:54,238 --> 00:30:57,978
They've got the collateral backing for decades today.

406
00:30:57,978 --> 00:31:00,358
No requirement that the business continues

407
00:31:00,358 --> 00:31:03,798
to be able to go operate and scale

408
00:31:03,798 --> 00:31:06,478
and do better manufacturing and have their sales team

409
00:31:06,478 --> 00:31:08,018
be out there being more effective

410
00:31:08,018 --> 00:31:09,638
and raise their bottom line by 10%,

411
00:31:09,638 --> 00:31:11,898
like the assets are there now, right?

412
00:31:11,898 --> 00:31:13,038
They've got them.

413
00:31:13,038 --> 00:31:16,418
And now they've got several years in cash to pay the,

414
00:31:16,418 --> 00:31:19,338
like these are such secure products

415
00:31:19,338 --> 00:31:21,098
that we have a hard time seeing

416
00:31:21,098 --> 00:31:23,478
why people wouldn't be rushing into these.

417
00:31:23,478 --> 00:31:24,738
I just think we're at the phase

418
00:31:24,738 --> 00:31:27,858
where it's still at the point where nobody's heard of them.

419
00:31:27,858 --> 00:31:32,298
We live in this echo chamber where this is all we talk about all the time.

420
00:31:32,298 --> 00:31:35,798
We think the whole world's talking about these things because it feels like that in our little

421
00:31:35,798 --> 00:31:38,038
worlds, but nobody's heard of them yet.

422
00:31:38,038 --> 00:31:45,338
Even people that you would expect to understand because of how transformative and how much

423
00:31:45,338 --> 00:31:50,698
capital has been going into these and how successful the IPOs have been, you'd expect

424
00:31:50,698 --> 00:31:52,158
them to catch headlines quicker.

425
00:31:52,158 --> 00:31:56,618
But I think they're easy to dismiss in the early days when people just go, ah, it's a

426
00:31:56,618 --> 00:32:00,658
Bitcoin thing. And if they haven't already had their head around Bitcoin, it doesn't move them

427
00:32:00,658 --> 00:32:06,878
down that path yet. But that's not going to last for long, right? Bitcoin's becoming too ingrained

428
00:32:06,878 --> 00:32:12,158
at this point for most people to ignore it. That's why we do this show, by the way. That's why we do

429
00:32:12,158 --> 00:32:16,938
this show, by the way. That's why we talk about it every week. But go ahead, Adrian, get in there,

430
00:32:17,038 --> 00:32:21,118
hop in there. Yeah, no, these products, these products are still very, very niche. I had to

431
00:32:21,118 --> 00:32:25,038
have a whole conversation with my financial advisor last week about him, because he had no idea

432
00:32:25,038 --> 00:32:30,718
about any of them. And I had to sit down with him. I actually sent him to the strategy website.

433
00:32:31,218 --> 00:32:35,798
I sent him to a few different clips that we have and I had to walk him through it. He still didn't

434
00:32:35,798 --> 00:32:42,058
get it, but he's slowly coming around to the idea. But I think Ben's right. These products are still

435
00:32:42,058 --> 00:32:47,718
very niche. They're still very, well, perhaps niche isn't, niche is the right word, but I don't

436
00:32:47,718 --> 00:32:54,298
want to give the impression that they are fringe products, right? When it comes to Bitcoin, when

437
00:32:54,298 --> 00:32:58,058
comes to digital credit when it comes to the whole notion of preferred offerings preferred offerings

438
00:32:58,058 --> 00:33:02,938
by themselves aren't a huge market so now you have something that's not a huge market in something

439
00:33:02,938 --> 00:33:06,698
that's very niche and big still very very niche and so very very new in bitcoin even though it's

440
00:33:06,698 --> 00:33:11,338
17 years in so it's very very hard for people to bridge that chasm because they have to take two

441
00:33:11,338 --> 00:33:17,578
steps instead of one and i think that that's a lot of the um another challenge but there's a lot of

442
00:33:17,578 --> 00:33:23,898
the the the road that we still have to go on for these products to get um more notoriety but to

443
00:33:23,898 --> 00:33:27,618
But to your point about volume, Jeff, I think based on what I've been doing in my analysis,

444
00:33:27,618 --> 00:33:29,178
I've been running a biweekly.

445
00:33:29,178 --> 00:33:32,998
What the market's doing from what I can tell in the data is that they're pricing in a move

446
00:33:32,998 --> 00:33:36,198
in Bitcoin and they're using strategies of proxy for that.

447
00:33:36,198 --> 00:33:40,558
So the options impact and the impact of Bitcoin on the price has been kind of running in tandem

448
00:33:40,558 --> 00:33:42,058
now for about a month.

449
00:33:42,058 --> 00:33:48,838
And if my guess is that the swell and volume in MSDR is because people are pricing in a

450
00:33:48,838 --> 00:33:53,138
move in Bitcoin and they're using the options market, they're using MSDR to express that

451
00:33:53,138 --> 00:33:58,178
the market that's the best kind of guess that i have as to why the volume has been spiking so much

452
00:33:58,178 --> 00:34:04,738
in recent weeks so i think that we are in for some interesting times i think on top of it it's got to

453
00:34:04,738 --> 00:34:08,658
be a little bit of stretch as well right i mean you've got people that have shorted stock for a

454
00:34:08,658 --> 00:34:13,778
very long time and they've been very adamant about you know being against mstr they've shorted the

455
00:34:13,778 --> 00:34:18,978
stock i have no idea under haven't understood what's going on and then all of a sudden you're

456
00:34:18,978 --> 00:34:24,578
like okay um you know still selling common stock like if you have jim chanus's view like you're

457
00:34:24,578 --> 00:34:28,338
selling you're like i'm making the same trade as sailor i'm selling the shares and buying bitcoin

458
00:34:28,338 --> 00:34:33,618
it's like well guess what jim you don't have a preferred equity and you have this defensive

459
00:34:33,618 --> 00:34:42,098
mechanism where you can issue non-dilutive equity pay the dividend and it increases the balance sheet

460
00:34:42,098 --> 00:34:48,578
of your common stock and the technical valuation of the common stock and anybody that was shorting

461
00:34:48,578 --> 00:34:56,578
the equity when the dividends get paid they have to pay the dividends or i think i think when they're

462
00:34:56,578 --> 00:35:01,458
if they if they were to short strc for example or any of the other preferreds they would have

463
00:35:01,458 --> 00:35:04,818
they would short those equities and then they have to pay the dividends when the dividends get paid

464
00:35:04,818 --> 00:35:09,138
so they've got this like two pieces that are working against them they've got the balance

465
00:35:09,138 --> 00:35:16,418
sheet is floating higher because they're issuing the perpetual preferred equity and it's it's making

466
00:35:16,418 --> 00:35:23,458
the valuation framework much higher for the entire combined entity you got like a couple

467
00:35:23,458 --> 00:35:32,658
of moving pieces here yeah i've stopped spending a lot of time deciding to argue you know with guys

468
00:35:32,658 --> 00:35:40,578
like channels because what i realized over time is we are fully misaligned on the time frames of

469
00:35:40,578 --> 00:35:45,378
how we approach this right like there's going to be traders in and out of this thing all the time

470
00:35:45,378 --> 00:35:49,138
that are going to have successful long successful short successful everything and they're going to

471
00:35:49,138 --> 00:35:55,618
do it on time frames one month time frame six months time frames and the reason why i hear all

472
00:35:55,618 --> 00:36:00,418
the negative things coming from them and i used to react so viscerally to it is because i'm looking

473
00:36:00,418 --> 00:36:05,378
at five years and ten years and going you're out of your mind like you're going to get blown out of

474
00:36:05,378 --> 00:36:09,378
the water but in your mind you're conditioning yourself to say well he's holding this position

475
00:36:09,378 --> 00:36:14,978
as long as i think i'm holding a position and it's just not the case right everyone's talking

476
00:36:14,978 --> 00:36:19,618
their own wallet all the time. If you've got a short position on, you want everyone on earth to

477
00:36:19,618 --> 00:36:25,098
be scared of this thing. You want them to think Bitcoin's a scam, sailors a snake oil salesman,

478
00:36:25,178 --> 00:36:29,018
these companies are Ponzi schemes, they're all going to implode. That's what you want people

479
00:36:29,018 --> 00:36:32,578
to believe because that's the way you're aligned. And then if you flip the other way, well,

480
00:36:32,678 --> 00:36:41,358
Bitcoin's doing well, maybe it's got some legs and it flips. And so to me, the most value that

481
00:36:41,358 --> 00:36:47,918
think groups you know like ours can bring is you continue to hammer on the five-year the 10-year

482
00:36:47,918 --> 00:36:53,758
the 20-year outlook on these things most people when you hear about them making an investment

483
00:36:53,758 --> 00:36:59,998
making huge amounts of money it's decades that they're sitting on it right they place a concentrated

484
00:36:59,998 --> 00:37:05,838
bet early before anyone understands anything and they just sit on it because they have conviction

485
00:37:05,838 --> 00:37:11,198
in the direction that it's going and when you look at an investment like this like the reason

486
00:37:11,198 --> 00:37:16,298
why I've calmed down from having to go and argue on the internet with all these guys taking short

487
00:37:16,298 --> 00:37:23,398
positions is because now that, you know, we've spent so much time looking at the impact of the

488
00:37:23,398 --> 00:37:28,098
compounding that happens here, right? Like everyone's looking in one month and two month

489
00:37:28,098 --> 00:37:32,438
timeframes in terms of whether the yield's impactful or not. You're missing the biggest

490
00:37:32,438 --> 00:37:38,798
impact, which comes year five, six, seven, eight, right? The compounding doesn't even really start

491
00:37:38,798 --> 00:37:44,858
until later, right? The massive impact of it. And so for me, I get to the position where I go,

492
00:37:44,958 --> 00:37:50,358
if I believe in Bitcoin as an asset, and I think it's as transformative to both the financial

493
00:37:50,358 --> 00:37:57,718
markets, maybe as a money one day, but just a transformational asset, I'm building a leveraged

494
00:37:57,718 --> 00:38:03,138
exposure portfolio to that where I put myself in a position of no liquidation risk, and I'm going to

495
00:38:03,138 --> 00:38:10,738
sit on my freaking hands and i'm gonna let it compound right let it do the work and i get very

496
00:38:10,738 --> 00:38:15,998
comfortable that way because you've seen it and it's you're investing in something you believe and

497
00:38:15,998 --> 00:38:21,998
you can stop staring at the day-to-day movements in the charts we overanalyze everything and i've

498
00:38:21,998 --> 00:38:27,898
started seeing it more because obviously i'm in a company now and so i see the chatter that goes on

499
00:38:27,898 --> 00:38:33,658
about our own company and what I realized is people are speculating and it's almost always

500
00:38:33,658 --> 00:38:39,938
wrong. Almost always. I've seen very few things that's been correct out there. And there's

501
00:38:39,938 --> 00:38:44,458
a lot of narratives that come up and these companies admittedly are confusing to the

502
00:38:44,458 --> 00:38:49,338
market because we took all the ways that companies used to operate and we threw it out the window.

503
00:38:50,158 --> 00:38:54,858
So things that people were traditionally scared of, like a preferred equity was like an issuance

504
00:38:54,858 --> 00:38:56,518
of last resort back in the day.

505
00:38:56,598 --> 00:38:57,218
It's like a bad thing.

506
00:38:57,218 --> 00:38:58,618
You saw it coming out of all these companies

507
00:38:58,618 --> 00:38:59,658
that were going defunct.

508
00:38:59,738 --> 00:39:02,078
The latest one is going to be these things

509
00:39:02,078 --> 00:39:04,038
like reverse splits, right?

510
00:39:04,058 --> 00:39:05,178
Like what used to happen?

511
00:39:05,298 --> 00:39:07,238
Well, it used to be that a company, you know,

512
00:39:07,258 --> 00:39:09,818
was starting to fail and the stock price was going down

513
00:39:09,818 --> 00:39:11,378
and they'd continuously reverse split.

514
00:39:11,478 --> 00:39:13,798
Well, we've got this brand new sector

515
00:39:13,798 --> 00:39:16,538
of all these new companies that came into the public markets

516
00:39:16,538 --> 00:39:17,678
with a reverse merger.

517
00:39:18,598 --> 00:39:20,558
And what a lot of people don't understand

518
00:39:20,558 --> 00:39:24,078
is that your capital structure is inherited

519
00:39:24,078 --> 00:39:26,138
from the company you reverse merge into.

520
00:39:26,318 --> 00:39:28,118
So if you end up with a ton of shares out there,

521
00:39:28,158 --> 00:39:30,158
that's a function of the company you merged into.

522
00:39:30,258 --> 00:39:31,938
It's a byproduct of that transaction.

523
00:39:32,538 --> 00:39:34,998
So you might be trading at a low dollar value,

524
00:39:34,998 --> 00:39:38,098
but that's a function of that merger activity

525
00:39:38,098 --> 00:39:40,338
because you have to take on the capital structure

526
00:39:40,338 --> 00:39:41,958
of the company that was public.

527
00:39:43,138 --> 00:39:43,538
So-

528
00:39:43,538 --> 00:39:45,658
Quite literally just paperwork, just paperwork.

529
00:39:45,658 --> 00:39:45,938
Just paperwork.

530
00:39:46,398 --> 00:39:48,478
But so now you get all this fear that happens

531
00:39:48,478 --> 00:39:50,578
because people used to hear the word reverse split

532
00:39:50,578 --> 00:39:52,978
and think, well, that's a company that's on its last leg.

533
00:39:52,978 --> 00:40:01,198
And, you know, that's obviously happening with us right now that I'm just sitting here going, we've got after this, more than a billion dollars on the balance sheet.

534
00:40:01,558 --> 00:40:03,678
We've been in the public markets for four months.

535
00:40:03,898 --> 00:40:07,618
Like this is a cleanup activity that opens the doors.

536
00:40:07,618 --> 00:40:15,478
Because what you learn when you talk to all these institutions is by policy, they have limits that stop them from being able to invest in equities.

537
00:40:16,098 --> 00:40:20,178
And some of them will have cutoffs that are $2, $3, $4, $5, right?

538
00:40:20,178 --> 00:40:21,258
The limits are all different.

539
00:40:21,258 --> 00:40:25,178
but you want to make sure that you open the doors.

540
00:40:25,178 --> 00:40:29,298
I don't want artificial gates in front of my equity

541
00:40:29,298 --> 00:40:32,678
that stop people who want exposure from getting it.

542
00:40:32,678 --> 00:40:35,638
And so if there's a administrative activity

543
00:40:35,638 --> 00:40:39,058
you can undertake to clear that barrier, you do that.

544
00:40:39,058 --> 00:40:41,238
But it's new, right?

545
00:40:41,238 --> 00:40:42,878
Every other company that you've heard of

546
00:40:42,878 --> 00:40:44,258
that does these types of things,

547
00:40:44,258 --> 00:40:47,418
it used to be these old legacy companies that were failing.

548
00:40:47,418 --> 00:40:49,678
And this is a totally different thing.

549
00:40:49,678 --> 00:40:59,858
And so we're going to have years of all this rewiring, the way we think about corporate governance, about traditional finance, about financial markets, capital markets.

550
00:40:59,858 --> 00:41:02,158
Like there's a whole rewiring that's happening.

551
00:41:02,698 --> 00:41:12,078
And the people that watch this and this group that's been in it forever, like we're leagues ahead of where most of the investing public is today.

552
00:41:12,078 --> 00:41:18,598
they'd come in they'd hear these terms and they'd run away because they're hardwired to think this

553
00:41:18,598 --> 00:41:22,538
whole sector has got to be a disaster because they're issuing preferred equities and doing

554
00:41:22,538 --> 00:41:28,238
reverse splits and you know like all these things like it's got to just blow their minds so it's a

555
00:41:28,238 --> 00:41:34,278
it's a weird area we're operating in and i think that it's still going to take quite a bit of time

556
00:41:34,278 --> 00:41:48,916
for a lot of investors to get comfortable with what happening here because it uncomfortable in the beginning to have to challenge everything you hardwired into yourself about investing yeah it reminds me of that uh that podcast that sailor like you know shaking his friends that

557
00:41:48,916 --> 00:41:57,396
are uh you know trading facebook between 14 50 and 15 dollars like facebook ipoed at 38 it went down

558
00:41:57,396 --> 00:42:04,836
to 15. It's currently today trading at $615. It's up 15x in 10 years. It's like, you know,

559
00:42:04,836 --> 00:42:09,956
what are you doing? Like, this is a monopoly. Stop trading this thing. Like, just sit on your

560
00:42:09,956 --> 00:42:15,316
hands. Like you, if you just look at what's happening, like you don't have to do anything,

561
00:42:15,316 --> 00:42:20,756
but there, you know, everybody gets, you know, gets all up in their head about, you know,

562
00:42:20,756 --> 00:42:25,076
short term narratives or whatever, whatever is happening in the news.

563
00:42:25,076 --> 00:42:28,996
it's great well you have to learn it too there's cycles right we all went through them

564
00:42:28,996 --> 00:42:33,956
like that's why i say in 2025 the only thing that had a cycle was the treasury sector

565
00:42:33,956 --> 00:42:39,636
like that had a full bitcoin cycle in there right the treasury bitcoin didn't have its cycle but

566
00:42:39,636 --> 00:42:47,076
the treasury sector did and in the early days you gotta go through that to really reset and figure

567
00:42:47,076 --> 00:42:53,016
out okay now that we've gone through the excitement phase of all of this right in the mania phase of

568
00:42:53,016 --> 00:42:56,756
all of this and we've seen all the different companies come into the public markets and how

569
00:42:56,756 --> 00:43:03,816
they're approaching it now you get that opportunity to reassess and figure out when i sit back now and

570
00:43:03,816 --> 00:43:07,696
i look at everything that's out there in all the different models that are being deployed

571
00:43:07,696 --> 00:43:13,696
which one do i think is going to give me the best amplification and the best long-term

572
00:43:13,696 --> 00:43:18,136
compounding effect and then that's where i'm going to allocate my money right and every individual

573
00:43:18,136 --> 00:43:23,816
investor gets to pick that. You heard Saylor say it on the podcast that he did with Danny,

574
00:43:24,776 --> 00:43:29,656
where he said there's a thousand different flavors of what these are going to look like,

575
00:43:29,716 --> 00:43:33,956
even just in the digital credit space. There's hundreds of different ways you could structure

576
00:43:33,956 --> 00:43:37,636
these digital credit products. And so you're going to see all these different approaches to it.

577
00:43:38,176 --> 00:43:42,776
And that's going to open up avenues for each individual investor to pick their flavor of

578
00:43:42,776 --> 00:43:46,736
amplification that they like if they're trying to get amplified exposure to Bitcoin.

579
00:43:48,136 --> 00:43:51,276
Yep. Mike, you were going to jump in there.

580
00:43:53,036 --> 00:43:58,096
Yeah, I was going to call out to what, um, to what Ben was talking about. And Adam Livingston,

581
00:43:58,276 --> 00:44:06,076
he put, he did a screenshot of all the comments on Reddit and, you know, and look, and you got

582
00:44:06,076 --> 00:44:14,016
people writing stretch can't make it because it's, it's 11% a month or 10% per month. If somebody

583
00:44:14,016 --> 00:44:18,816
doesn't have the reading comprehension to know it's an annual percentage rate that's paid out

584
00:44:18,816 --> 00:44:26,176
monthly, we have the choice and what Ben was saying here is I just don't engage with that person.

585
00:44:27,296 --> 00:44:35,056
It's not even worth it for me to say I can't do a FUD busting with somebody that doesn't have

586
00:44:35,056 --> 00:44:40,896
basic reading comprehension. And so from that perspective, I just don't have the conversation

587
00:44:40,896 --> 00:44:47,136
with that and i was on a space earlier today and this guy gets on and he he's he was saying all

588
00:44:47,136 --> 00:44:52,256
these things about strategy he did not know who i was and i said and they were going to cut him off

589
00:44:52,256 --> 00:44:58,016
and i said no no i think i could take this one guys and i went through and i said tell me everything

590
00:44:58,016 --> 00:45:01,856
you want to say and he went through all the tired tropes doesn't like strategies business model

591
00:45:01,856 --> 00:45:06,176
doesn't like them so i go through each one and there's 500 people on the phone call

592
00:45:06,176 --> 00:45:09,516
and I dismantle them all by one, one by one.

593
00:45:09,596 --> 00:45:14,676
And the guy's like, oh, that's correct.

594
00:45:14,936 --> 00:45:17,076
I agree with all your math that you said, grain.

595
00:45:17,716 --> 00:45:18,536
My name is Mike.

596
00:45:19,016 --> 00:45:19,736
I go, great.

597
00:45:19,836 --> 00:45:22,076
You agree with all my math and everything I just told you.

598
00:45:22,336 --> 00:45:23,816
Did you change your mind about strategy?

599
00:45:24,216 --> 00:45:25,636
No, I just don't like it at all.

600
00:45:26,036 --> 00:45:27,576
And I want to tell you the reason why.

601
00:45:27,576 --> 00:45:31,176
He goes, Saylor can't guarantee that the price of Bitcoin

602
00:45:31,176 --> 00:45:34,616
is going to go up at any rate at all.

603
00:45:34,716 --> 00:45:36,096
It can go down.

604
00:45:36,176 --> 00:45:41,216
And I said, well, that happened. I said, by the way, can you guarantee that any other company can

605
00:45:41,216 --> 00:45:45,536
make a guarantee that their stock is going to go up or the, and he goes, no. And then I said,

606
00:45:45,536 --> 00:45:50,376
then what happened in March of 2020? And he goes, oh, why'd you bring that up? Because this guy

607
00:45:50,376 --> 00:45:55,496
sounded very sharp. He was an older guy. I said, what happened with oil? And he goes,

608
00:45:56,276 --> 00:46:04,636
oh, I go, as we all know, it went from $50 a barrel, it dropped down and it went negative,

609
00:46:04,636 --> 00:46:09,876
a negative number and he goes well i wait it's nine dollars and i bought in and then it traded

610
00:46:09,876 --> 00:46:15,356
negative on the futures market and i said don't i go but prior to that happening did you ever think

611
00:46:15,356 --> 00:46:20,636
that oil can trade at a negative number could you guarantee that he's like i never thought of that

612
00:46:20,636 --> 00:46:27,296
and i was like why are you then again the symmetry test why are you requiring sailor to guarantee

613
00:46:27,296 --> 00:46:32,236
that the price of bitcoin is going to always go up and we're showing here that he can acquire bitcoin

614
00:46:32,236 --> 00:46:39,276
at one M nav, but yet you don't say to require all the other companies to guarantee the future

615
00:46:39,276 --> 00:46:45,876
gains. And I was like, dude, yeah. Yeah. We talked about the Danny Knowles interview.

616
00:46:46,096 --> 00:46:50,896
Yeah. Hold on. But before we go there, but before we go there, I've got to jump into,

617
00:46:50,896 --> 00:46:57,076
um, I got to jump to my screen. I'm gonna share my screen here. And first of all, I want to shout

618
00:46:57,076 --> 00:47:01,476
out to the builders out there because there was a new dashboard that was built just, I think in the

619
00:47:01,476 --> 00:47:09,256
last day, strc.live. And it's looking at the price of strc, the Bitcoin price. And you can look at,

620
00:47:09,576 --> 00:47:13,556
you can estimate different ATM thresholds and you can see how the volume is traded every five

621
00:47:13,556 --> 00:47:18,156
minutes. And then there's an estimate of how much has been traded over the week. So you can start to

622
00:47:18,156 --> 00:47:22,996
calculate how much you think, how much capital you think strategy may have raised

623
00:47:22,996 --> 00:47:29,976
on an individual week based on the volume metrics that are happening on this particular equity.

624
00:47:29,976 --> 00:47:36,496
and and this is great i mean everybody should be building like this is awesome if this came to your

625
00:47:36,496 --> 00:47:42,856
mind like cool like build on this and please people give him feedback and him or her whoever

626
00:47:42,856 --> 00:47:48,536
built this give them feedback and like these things are helpful when you're going to try to

627
00:47:48,536 --> 00:47:54,216
explain these to the market and the the really cool thing here is you could build uh you could

628
00:47:54,216 --> 00:47:59,856
build instruments and dashboards incredibly quickly now um and maybe we'll get to mine here

629
00:47:59,856 --> 00:48:04,696
in a second, but also shout out to Bitcoin Quant. I think Rohan's working on this as well.

630
00:48:05,396 --> 00:48:09,616
STRC weekly breakdown, seeing total traded volume on each one of the individual days,

631
00:48:10,156 --> 00:48:14,836
percentage of the Bitcoin mine supply, and continuing to work on that stuff. So big shout

632
00:48:14,836 --> 00:48:19,156
out there. And everybody should be building because you can build easier than ever now.

633
00:48:20,856 --> 00:48:26,576
I'm going to jump over to this here real quick. And this is a amplification treasury simulator

634
00:48:26,576 --> 00:48:32,416
later that I created in six hours. So I've done this in six hours. I've had zero past coding

635
00:48:32,416 --> 00:48:40,296
experience outside of, uh, you know, coding in Excel and basic Python script stuff that I've

636
00:48:40,296 --> 00:48:45,536
moved incredibly slowly on. So I'm pretty proud of myself with what I came up with here. And I

637
00:48:45,536 --> 00:48:50,036
haven't had this much fun playing on a computer since I was playing with roller coaster tycoon

638
00:48:50,036 --> 00:48:55,656
in like the early two thousands. So like, this is the most fun game on the computer right now is

639
00:48:55,656 --> 00:49:02,116
like cursor AI building dashboards. So it's a little small, but we're going to run through this

640
00:49:02,116 --> 00:49:06,796
anyway. And I came up with this because I was curious, you know, thinking about our company,

641
00:49:06,876 --> 00:49:12,896
like trying to forecast, you know, some of these metrics and instruments. And then I just asked

642
00:49:12,896 --> 00:49:18,896
myself the question, at what point would strategy have a trillion dollar balance sheet? And I'm like,

643
00:49:18,976 --> 00:49:23,936
wow. And then I immediately went to Excel and I started calculating this out. And I said,

644
00:49:23,936 --> 00:49:25,196
there's gotta be an easier way to do this.

645
00:49:25,196 --> 00:49:26,676
I jumped into cursor and I said, okay,

646
00:49:26,676 --> 00:49:29,036
I'm gonna build a dashboard and kind of work through it.

647
00:49:29,036 --> 00:49:31,076
But there's so many different variables

648
00:49:31,076 --> 00:49:33,176
because when we're like what we're talking about here

649
00:49:33,176 --> 00:49:37,116
with STRC, as STRC comes in the door,

650
00:49:37,116 --> 00:49:39,616
they go and instantly buy more Bitcoin,

651
00:49:39,616 --> 00:49:41,936
which gives them additional capacity.

652
00:49:41,936 --> 00:49:43,676
And if they raise common stock equity,

653
00:49:43,676 --> 00:49:46,576
that gives them additional capacity to go buy more Bitcoin.

654
00:49:46,576 --> 00:49:47,816
And as the price of Bitcoin goes up,

655
00:49:47,816 --> 00:49:49,296
that also gives them additional capacity

656
00:49:49,296 --> 00:49:51,676
and the whole thing is kind of reflexive.

657
00:49:51,676 --> 00:49:53,536
So I built a simulator tool

658
00:49:53,936 --> 00:50:00,556
to look at these different parameters. And so what I've got over here and guys, please jump in at

659
00:50:00,556 --> 00:50:05,956
any time. So I've got strategy starting Bitcoin on the left-hand side. The Bitcoin price when I

660
00:50:05,956 --> 00:50:13,096
built this was $95,000. We'll just keep it there. A price CAGR assumption of 45%. So assuming a 45%

661
00:50:13,096 --> 00:50:20,776
compound annual growth rate. However, that 45% decays at 7.5% annually. So diminishing return

662
00:50:20,776 --> 00:50:23,236
of the compound annual growth rate into the future.

663
00:50:24,156 --> 00:50:26,316
Bitcoin holdings CAGR from the common ATM.

664
00:50:26,556 --> 00:50:28,736
So how much additional Bitcoin are you going to add

665
00:50:28,736 --> 00:50:32,976
on the balance sheet from the common stock ATM every year?

666
00:50:33,596 --> 00:50:36,976
And then a holdings CAGR decay as well.

667
00:50:37,076 --> 00:50:39,256
So understanding that there's economies of scale

668
00:50:39,256 --> 00:50:41,676
and you can't add 10% more of your balance sheet

669
00:50:41,676 --> 00:50:43,056
from the common stock ATM every year.

670
00:50:43,056 --> 00:50:45,776
So you got multiple, all these different moving pieces.

671
00:50:46,316 --> 00:50:49,596
And then you assume a 30% amplification ratio

672
00:50:49,596 --> 00:50:53,096
based on if that balance sheet is able to grow into the future.

673
00:50:53,456 --> 00:50:56,016
Can I keep the amplification ratio the same?

674
00:50:56,436 --> 00:51:00,936
I'd argue probably yes, because as these instruments get rated,

675
00:51:01,036 --> 00:51:01,896
people understand them.

676
00:51:01,956 --> 00:51:03,476
The capital doors are going to blow open.

677
00:51:03,976 --> 00:51:05,496
There's going to be a bunch more interest in this.

678
00:51:05,496 --> 00:51:09,376
So I kept the amplification ratio at 30%, but you could change it.

679
00:51:10,056 --> 00:51:13,196
Preferred interest rate, I'll keep it at 10%.

680
00:51:13,196 --> 00:51:16,416
We know stretches at 11, but on a combined basis, it's roughly 10.

681
00:51:17,056 --> 00:51:19,176
And then the projected horizon being 10 years.

682
00:51:19,596 --> 00:51:24,316
So all of these different variables, and it comes into play here in this graph.

683
00:51:24,416 --> 00:51:28,616
So you can see, and the summary statistics are up here at the top.

684
00:51:28,956 --> 00:51:40,636
So based on these summary statistics, the strategy is estimated to have a trillion dollars in BTC notional value on the balance sheet by June of 2031.

685
00:51:41,636 --> 00:51:42,756
That kind of blew me away.

686
00:51:42,796 --> 00:51:43,836
And I was thinking about it.

687
00:51:43,836 --> 00:51:44,036
Okay.

688
00:51:44,156 --> 00:51:45,436
June of 2031.

689
00:51:46,236 --> 00:51:47,076
Oh my God.

690
00:51:47,076 --> 00:51:48,336
That's five years from now.

691
00:51:48,336 --> 00:51:54,236
Yeah. And by the way, Dan Hillary will not even be 30 years old yet.

692
00:51:54,976 --> 00:51:57,036
That's right, Grant. Watch out.

693
00:51:57,636 --> 00:52:05,036
June of 2031, strategy would have a trillion dollars of notional USD Bitcoin value on the balance sheet.

694
00:52:05,176 --> 00:52:09,896
And then thinking, okay, there's not a single other company on the planet with a trillion dollar balance sheet.

695
00:52:10,896 --> 00:52:11,796
Well, that's interesting.

696
00:52:12,636 --> 00:52:17,716
Okay, if you can reasonably project that by 2031 that they're going to have a trillion dollar balance sheet.

697
00:52:17,716 --> 00:52:19,476
I mean, what's that company worth?

698
00:52:21,936 --> 00:52:28,336
What is that company worth if you think that the product is going to sell that much into the future

699
00:52:28,336 --> 00:52:30,296
and then have a trillion dollar balance sheet in 2031?

700
00:52:30,496 --> 00:52:32,256
And then what can the company do with it from there?

701
00:52:32,736 --> 00:52:34,156
I mean, if you have a trillion dollar balance sheet,

702
00:52:34,156 --> 00:52:38,196
you're talking about issuing $300 billion of perpetual preferred equity

703
00:52:38,196 --> 00:52:40,816
or having $300 billion of perpetual preferred equity outstanding.

704
00:52:40,976 --> 00:52:43,276
I mean, this thing gets really big.

705
00:52:43,516 --> 00:52:45,836
Like, Sailor said the word monster.

706
00:52:45,996 --> 00:52:47,076
Like, I want to build a monster.

707
00:52:47,076 --> 00:52:52,996
that's what this thing is and you start running some of these like kind of reasonable projections

708
00:52:52,996 --> 00:53:00,136
and the numbers get just stupidly big incredibly quickly hold on a second jeff i want to make sure

709
00:53:00,136 --> 00:53:05,416
i understood you because i listened to you i thought i understand what you said and then you

710
00:53:05,416 --> 00:53:11,196
said it'll be the biggest balance sheet in my brain i proceeded i process what you had said

711
00:53:11,196 --> 00:53:18,296
even though you said balance sheet, I processed it as trillion dollar market cap. That's not what

712
00:53:18,296 --> 00:53:24,096
you said. You said a trillion dollar balance sheet. A trillion dollar balance sheet. I now

713
00:53:24,096 --> 00:53:30,956
understand. It took me literally 15 seconds for that to imprint in my brain. So now what somebody

714
00:53:30,956 --> 00:53:35,336
would say is if they have a trillion dollars on a balance sheet, which is the largest balance sheet

715
00:53:35,336 --> 00:53:41,376
in the world. That's according to your analysis, right? Yeah. Okay. Now what multiple would that

716
00:53:41,376 --> 00:53:46,156
trade at? Cause it's not going to, you could say, well, it just trades at one-to-one. You could say

717
00:53:46,156 --> 00:53:53,016
that, but then you said the second order of fact that they could issue. If, if let's assume there's

718
00:53:53,016 --> 00:54:00,736
a decay, like you said, and last year it was 23%. Let's just assume it drops down to 10% in 20,

719
00:54:00,736 --> 00:54:07,136
in 2031, that would still be a hundred billion dollars that they're issuing in digital credit.

720
00:54:07,776 --> 00:54:14,636
Yeah. That's your decay from 30% down to 10%. That's the second order effect. So I didn't think

721
00:54:14,636 --> 00:54:17,676
about that. I thought in my head, and this is important for everybody listening. I was thinking

722
00:54:17,676 --> 00:54:23,476
market cap. Jeff said balance sheet. A trillion dollar balance sheet. Right. And if they only

723
00:54:23,476 --> 00:54:29,456
issued 10% a year, that's a hundred billion dollars. Last year, they only did, not only,

724
00:54:29,456 --> 00:54:34,736
I mean, they did 25 billion. I mean, it's still awesome, right? And Saylor just posted that

725
00:54:34,736 --> 00:54:42,096
literally earlier today. So Jeff, kudos to you for coding this. Congratulations. And you did this

726
00:54:42,096 --> 00:54:46,576
in cursor. I think this is awesome. I did this in cursor. Yeah, it's incredible. And I will share

727
00:54:46,576 --> 00:54:51,056
this. I think we're planning to post this on the TrueNorth website. I mean, there's going to be a

728
00:54:51,056 --> 00:54:56,176
ton of disclaimers on everything. None of this is financial advice. This is just for fun and

729
00:54:56,176 --> 00:55:01,056
information versus only but i think some really really interesting components here like obviously

730
00:55:01,056 --> 00:55:06,176
so many variables right if there's nation state adoption or bit like what do we know about bitcoin

731
00:55:06,176 --> 00:55:10,416
it's incredibly volatile if it just rips everybody's face off here and it goes to a million

732
00:55:11,536 --> 00:55:15,616
i mean all this model is broken everything's broken right this is assuming like a static

733
00:55:15,616 --> 00:55:19,856
average over time and you can create some assumptions around it to have an understanding

734
00:55:19,856 --> 00:55:26,816
of what you think it means. But a couple of crazy things here. June, 2031, having a trillion dollar

735
00:55:26,816 --> 00:55:34,176
balance sheet, this assumes a Bitcoin price of 512,000. And this assumes strategy has about $2

736
00:55:34,176 --> 00:55:41,616
million of Bitcoin or 2 million Bitcoin, not $2 million, but 2 million Bitcoin in June of 2031.

737
00:55:42,096 --> 00:55:47,296
And that's just, again, using the math and the reflexivity of keeping amplification on

738
00:55:47,296 --> 00:55:53,916
at 30% as the price of the Bitcoin goes higher and pushes the balance sheet even higher. So you're

739
00:55:53,916 --> 00:55:58,596
adding from issuing credit, which pushes the balance sheet higher. You're adding,

740
00:55:59,056 --> 00:56:05,776
and then I've also included a common stock ATM capital raising metric in here as well. So

741
00:56:05,776 --> 00:56:09,056
I could throw that in here, advanced analytics.

742
00:56:09,056 --> 00:56:19,356
the yeah so i assumed uh an average oh yeah i backed into an estimated stock price so we could

743
00:56:19,356 --> 00:56:24,096
think about moon math here i backed into an average m nav of capital raised and i put it at a modest

744
00:56:24,096 --> 00:56:27,716
1.6 and we can crank this number higher and we can have some fun with it and see what it looks like

745
00:56:27,716 --> 00:56:37,616
but i was uh i was backing into some numbers here of like june 2031 an mstr share price of

746
00:56:37,616 --> 00:56:47,216
$2,100 and a nav per share of $1,300, assuming a 1.6 M nav, assuming that the capital that they

747
00:56:47,216 --> 00:56:54,996
raised throughout the time horizon was at a 1.6 M nav in composite. I would argue there's probably

748
00:56:54,996 --> 00:56:59,156
a reason to push that number a bit higher, given that historically it's gone up to two,

749
00:56:59,596 --> 00:57:06,376
three, four, and almost a five. So there's a few different variables here that make it

750
00:57:06,376 --> 00:57:16,236
really interesting. So, um, yeah, so I had a lot of fun with this and then, you know, Dan,

751
00:57:16,336 --> 00:57:21,336
you bring up power law a lot. So I plugged in a power law model in here as well. And like,

752
00:57:21,536 --> 00:57:26,616
it actually doesn't change the numbers drastically. If you look at, you know,

753
00:57:26,616 --> 00:57:32,496
just going from the base case to over the power law, hitting a trillion dollar BTC notional balance

754
00:57:32,496 --> 00:57:38,876
sheet would occur in December of 2032 instead of June of 2031. Yeah, exactly. Power law is like

755
00:57:38,876 --> 00:57:44,776
right now, like 30K over the next 10 years. Yeah. And it assumes a decay as well. So there's kind

756
00:57:44,776 --> 00:57:49,416
of, there's a decay component in there as well. So it's like, I've kind of taken the power law

757
00:57:49,416 --> 00:57:53,036
model and I've just kind of bumped it up a little bit and I've taken the power law model and bumped

758
00:57:53,036 --> 00:57:56,936
it down a little bit on the bear in the bull case scenario. So you've kind of got a little bit of a

759
00:57:56,936 --> 00:58:01,836
window there. And that's what Saylor's model is too. It's exactly that. It's just a decaying,

760
00:58:01,836 --> 00:58:04,336
Like all the power law is a decaying exponential over time.

761
00:58:04,636 --> 00:58:04,836
Yeah.

762
00:58:04,976 --> 00:58:07,836
And he just has a terminal exponential, which like I think yours as well.

763
00:58:07,956 --> 00:58:10,156
And that's something we should talk about later on a different episode.

764
00:58:11,016 --> 00:58:16,336
So just for funsies, moon math, I'm going to click into moon math.

765
00:58:16,556 --> 00:58:18,516
I'm aware this is not financial advice.

766
00:58:18,576 --> 00:58:19,896
So I got to click this button as well.

767
00:58:20,276 --> 00:58:25,136
And then I've also got to click in advanced analytics and go to an average MNAV of three.

768
00:58:25,996 --> 00:58:29,396
And what would the price of strategy be by 2036?

769
00:58:29,396 --> 00:58:37,996
None of this is financial advice, but in taking this moon math scenario, a $313,863 share price.

770
00:58:38,296 --> 00:58:40,016
And that's assuming common stock dilution.

771
00:58:40,156 --> 00:58:41,456
That's assuming capital raise.

772
00:58:41,676 --> 00:58:46,696
That's assuming the perpetual preferred amplification stays at 30.

773
00:58:47,336 --> 00:58:49,356
Obviously, we're talking about a 10-year horizon.

774
00:58:49,496 --> 00:58:50,296
A ton can happen.

775
00:58:50,296 --> 00:59:03,656
But anything with a remote probability with this type of excitement on the horizon is worth having exposure to.

776
00:59:04,876 --> 00:59:10,396
A couple of things in looking at the moon math, which was hard for me to kind of wrap my heads around.

777
00:59:10,656 --> 00:59:16,136
But you can see a number here, final Bitcoin hodl in 2036.

778
00:59:16,316 --> 00:59:19,096
It's got 26.9 million Bitcoin.

779
00:59:19,096 --> 00:59:23,236
and you say, Jeff, that's more than the Bitcoin, all of the Bitcoin. Like that's more than all of

780
00:59:23,236 --> 00:59:29,756
the Bitcoin. Yeah, I get that. It's more than all the Bitcoin. However, once this balance sheet is

781
00:59:29,756 --> 00:59:36,876
so big, they're going to start eating everything else of value. There's going to be more than 21

782
00:59:36,876 --> 00:59:40,116
million of Bitcoin of value in the entire world, right? If Bitcoin's your unit of account,

783
00:59:40,496 --> 00:59:44,136
you got to go look at, all right, there's 21 million of Bitcoin, but every, you got to think

784
00:59:44,136 --> 00:59:47,776
about the rest of the world priced in Bitcoin. Like how many Bitcoin worth of value is out in the

785
00:59:47,776 --> 00:59:55,316
world. Like, I don't know, um, a hundred and 150 million, I don't know, 200 million. Like

786
00:59:55,316 --> 01:00:01,496
we can speculate on what that number would be, but like they would effectively have the ability

787
01:00:01,496 --> 01:00:06,396
to go eat up the rest of the balance sheets of the rest of the world in different places,

788
01:00:06,396 --> 01:00:12,036
whether that's, you know, who knows what that means, whether that's insurance or buying,

789
01:00:12,216 --> 01:00:16,936
you know, all of these different equities or real estates or, you know, whatever that may be. But

790
01:00:16,936 --> 01:00:24,616
uh yeah i think it's going higher a trillion dollars on the balance sheet is more than the

791
01:00:24,616 --> 01:00:31,836
entire market cap of jp morgan or walmart so it's a good amount of capital it's a good amount of

792
01:00:31,836 --> 01:00:37,756
capital a trillion dollar balance sheet is a good amount of capital and like you know by the way you

793
01:00:37,756 --> 01:00:41,876
know that you're gonna have a fudge to be like well you know bitcoin can go to zero tomorrow

794
01:00:41,876 --> 01:00:46,776
and it'll be worth nothing you just know somebody's gonna say that a trillion just because it did

795
01:00:46,776 --> 01:00:53,176
this for for if they started in 2020 and this is in 2030 they've been doing it for 11 years it could

796
01:00:53,176 --> 01:00:57,416
just go to zero tomorrow everybody knows that i mean we just know we're going to hear that in five

797
01:00:57,416 --> 01:01:03,176
years from now well i just say the dollar has a head start right it's moving faster right by the

798
01:01:03,176 --> 01:01:08,856
way i did an analysis and i said i put all the numbers for the u.s government you know two trillion

799
01:01:08,856 --> 01:01:15,096
dollar a yearly shortfall on the budget 38 trillion dollars in debt i said if this was to be evaluated

800
01:01:15,096 --> 01:01:20,056
as a company and i didn't say what it was it would be like this company's completely insolvent and

801
01:01:20,056 --> 01:01:25,016
then chat gpt just said you're talking about the u.s government though it can print money i go sure

802
01:01:25,016 --> 01:01:30,216
would it be investable though as a company the answer that is no if you guys don't believe me

803
01:01:30,216 --> 01:01:35,496
it would be kind of funny if you just plug in if you keep the exact same site and plug in the u.s

804
01:01:35,496 --> 01:01:43,416
dollar into this and it'll it'll look horrible it would keep everything the same but just do start

805
01:01:43,416 --> 01:01:49,496
off with you know how much the dollar is is being debased per year just change all the metrics leave

806
01:01:49,496 --> 01:01:55,736
everything the same just change all the names on it same format and have it because as bitcoin goes

807
01:01:55,736 --> 01:02:02,296
up right it's not really going up it's the amount of dollars it takes to buy each bitcoin which is

808
01:02:02,296 --> 01:02:10,456
what you calculated here and so but if you plug the government into this instead it wouldn't um

809
01:02:10,456 --> 01:02:12,796
wouldn't look so big.

810
01:02:12,796 --> 01:02:17,036
Yeah, I mean, all this stuff is so dynamic.

811
01:02:17,036 --> 01:02:20,216
And I think it seems so asymmetric.

812
01:02:20,216 --> 01:02:22,756
It seems like there's an information disparity,

813
01:02:22,756 --> 01:02:24,556
like people that are using AI

814
01:02:24,556 --> 01:02:40,274
and understanding what going on in financial markets and seeing these trends that are very clearly changing over time right Like what fixed income product is trading million of volume in three days Like the whole world as to use your word Ben is like completely being

815
01:02:40,274 --> 01:02:47,074
rewired. And we're, we're literally doing it. Like we are doing it. Everybody that's working in the

816
01:02:47,074 --> 01:02:51,234
space is doing it. Dan, you're doing it. Ben, you're doing it. Adrian, like we're all doing it.

817
01:02:51,234 --> 01:02:56,074
That's all part of what we're doing here is rewiring everybody's brains to like see what's

818
01:02:56,074 --> 01:02:56,374
happening.

819
01:02:57,794 --> 01:02:59,194
Really fascinating stuff.

820
01:02:59,334 --> 01:03:02,334
Anyway, good time to plug what's happening down in Vegas.

821
01:03:02,554 --> 01:03:06,534
So in Vegas, there will be Bitcoin for Corporations 2026.

822
01:03:06,694 --> 01:03:08,614
This is February 24th through 25th.

823
01:03:09,174 --> 01:03:13,934
We have a True North event on Monday, February 23rd at Strategy World.

824
01:03:14,234 --> 01:03:20,154
I have seen the draft schedule for Bitcoin for Corporations 2026.

825
01:03:20,154 --> 01:03:21,794
and I think this is,

826
01:03:21,954 --> 01:03:23,554
this is like,

827
01:03:23,614 --> 01:03:25,254
you're not going to want to miss this event.

828
01:03:25,674 --> 01:03:27,334
I think it is going to be pretty epic,

829
01:03:27,474 --> 01:03:29,314
especially seeing everything that's happening now,

830
01:03:29,474 --> 01:03:31,014
going on with the securitization,

831
01:03:31,254 --> 01:03:31,994
what's going on with Stretch,

832
01:03:32,034 --> 01:03:32,994
what's going on with Preferreds,

833
01:03:33,014 --> 01:03:35,114
what's going on with like everything globally.

834
01:03:35,734 --> 01:03:37,394
I think it will be an event

835
01:03:37,394 --> 01:03:39,414
that you will kick yourself for missing.

836
01:03:40,394 --> 01:03:44,054
We are going to have a event on Monday, February 23rd.

837
01:03:44,054 --> 01:03:45,474
If you're interested in attending,

838
01:03:45,814 --> 01:03:48,194
there are 70 tickets left.

839
01:03:48,194 --> 01:03:54,414
uh we so we've sold 53 of the tickets there are 70 tickets left uh it's a chance to chat with

840
01:03:54,414 --> 01:03:58,694
everybody in the true north team we will have some special guests kind of swinging by we will

841
01:03:58,694 --> 01:04:05,594
have giveaways we're going to have a great uh event in the evening drinks and food and networking

842
01:04:05,594 --> 01:04:11,914
and everybody can chat and we want it to be a very special in-person event we're not going to

843
01:04:11,914 --> 01:04:15,094
live stream it. We want it to be, you know,

844
01:04:15,134 --> 01:04:18,534
hands-on and interacting with people within the community.

845
01:04:18,674 --> 01:04:19,934
So I think it's going to be a great event.

846
01:04:20,534 --> 01:04:23,634
We're really looking forward to it. If you're interested,

847
01:04:23,794 --> 01:04:24,714
you can check out our website.

848
01:04:24,714 --> 01:04:30,194
It's got true North tickets here as well. And yeah,

849
01:04:30,854 --> 01:04:35,594
it's the site is on Luma. You can check it out here and yeah,

850
01:04:35,734 --> 01:04:38,354
your tickets. I think they're going fast. Actually,

851
01:04:38,514 --> 01:04:41,814
I was supposed to say we, we do want to give away one ticket.

852
01:04:41,914 --> 01:04:43,374
to True North World.

853
01:04:43,714 --> 01:04:45,154
We're going to give away one ticket tonight.

854
01:04:45,354 --> 01:04:50,134
Anybody that's retweeted our stream,

855
01:04:50,394 --> 01:04:51,874
we will be giving away one ticket

856
01:04:51,874 --> 01:04:53,634
and we'll pick at random

857
01:04:53,634 --> 01:04:55,094
and hopefully we'll do that at the end,

858
01:04:55,534 --> 01:04:57,094
at the end of the show tonight.

859
01:04:57,334 --> 01:04:58,414
So if you're watching,

860
01:04:58,574 --> 01:05:00,634
please retweet it and pass it around

861
01:05:00,634 --> 01:05:02,374
and we'll go from there.

862
01:05:02,414 --> 01:05:03,214
Even if you bought a ticket,

863
01:05:03,294 --> 01:05:03,894
we'll figure it out.

864
01:05:05,334 --> 01:05:05,734
Cool.

865
01:05:05,934 --> 01:05:06,914
Last year was amazing.

866
01:05:06,914 --> 01:05:08,334
So I'm looking forward to this next one.

867
01:05:09,074 --> 01:05:11,394
Oh, we're going to crank up the volume a little bit.

868
01:05:11,394 --> 01:05:14,514
It's going to be good. We've got some resources. Uh,

869
01:05:14,714 --> 01:05:15,914
I think it'll be a really good time.

870
01:05:16,674 --> 01:05:18,474
We're not going to throw it together in a week like last time.

871
01:05:20,394 --> 01:05:24,834
Yeah, exactly. Yeah. And we've, we've had some more time to plan this. Uh,

872
01:05:25,074 --> 01:05:27,354
we've got some power behind us with, uh,

873
01:05:27,354 --> 01:05:29,874
with strive and the team working here at true North. Uh,

874
01:05:29,874 --> 01:05:32,274
there's just a significant group of people working behind the scenes to make

875
01:05:32,274 --> 01:05:33,274
this a great event.

876
01:05:34,834 --> 01:05:37,394
Hey Jeff, while you were talking, um, I just,

877
01:05:37,394 --> 01:05:44,154
I just hit perplexity real fast, you know, to talk about what strategy is done versus stretch.

878
01:05:44,894 --> 01:05:53,794
So, sorry, to compare, give a comparison. TLT, which is long-term treasuries, has a 46 to $47

879
01:05:53,794 --> 01:06:03,074
billion market cap. You guys want to guess what the trading volume is per day? TLT,

880
01:06:03,074 --> 01:06:08,914
46 billion dollar market cap long-term treasuries trading volume what's the 30-day trailing what's

881
01:06:08,914 --> 01:06:14,434
the average daily volume uh um it's probably 200 million or something like that 300 million i don't

882
01:06:14,434 --> 01:06:21,794
know it's it's like 30 million dollars in a day it's 34 million shares per day so it's it's um

883
01:06:22,354 --> 01:06:28,114
the dollar amount we'll multiply this out it's like a really low number given it's 46 billion

884
01:06:28,114 --> 01:06:33,474
dollars in terms of liquidity so if we do that quick comparison you know as a percentage of the

885
01:06:33,474 --> 01:06:38,034
of the market cap of it's a really low number and and that's the part where bonds that's the

886
01:06:38,034 --> 01:06:45,634
whole part it's off by a factor of 10x versus uh versus mstr that's all these preferred equities

887
01:06:45,634 --> 01:06:51,074
are novel right because they're actually equities they trade in value there's no repayment period

888
01:06:51,074 --> 01:06:55,314
they fluctuate based on the credit quality but also speculative behaviors you've got the first

889
01:06:55,314 --> 01:06:58,914
preferred with an ATM on it that completely changes the price dynamics.

890
01:06:58,914 --> 01:07:02,634
There's a lot going on and they are unlike other instruments in the market.

891
01:07:02,634 --> 01:07:08,754
Like bonds are quite boring, especially private placement bonds.

892
01:07:08,754 --> 01:07:09,754
Yeah.

893
01:07:09,754 --> 01:07:10,754
So.

894
01:07:10,754 --> 01:07:11,754
Bonds are boring.

895
01:07:11,754 --> 01:07:15,554
I mean, that's a crazy, that's a crazy statistics.

896
01:07:15,554 --> 01:07:17,274
And Dan, you bring up a really good point.

897
01:07:17,274 --> 01:07:21,594
Like a lot of people just really throw this piece to the side, but the fact that there's

898
01:07:21,594 --> 01:07:28,934
an ATM on these instruments is just so fascinating because you can get that capital in the door

899
01:07:28,934 --> 01:07:33,254
at any point in time that you want it with effectively like a click of a button or a

900
01:07:33,254 --> 01:07:34,074
quick message.

901
01:07:34,734 --> 01:07:36,914
And I was talking to Mason about this the other night.

902
01:07:37,414 --> 01:07:41,134
The only, I was like, we were reflecting on stretch and it's like, it's so novel because

903
01:07:41,134 --> 01:07:44,074
you couldn't have created that product without an ATM on the preferred.

904
01:07:44,594 --> 01:07:49,134
If there were no ATMs on stretch, the price would just blow out right now, right?

905
01:07:49,134 --> 01:07:51,514
and then they could adjust the interest rate.

906
01:07:51,614 --> 01:07:53,654
It would come down, but there's only one mechanism

907
01:07:53,654 --> 01:07:57,594
and the interest rate is such a kind of large adjustment mechanism

908
01:07:57,594 --> 01:08:00,094
on a course adjustment mechanism on a monthly basis.

909
01:08:00,294 --> 01:08:01,914
They need the ATM to cap that price.

910
01:08:02,074 --> 01:08:04,094
So if it wasn't for the ATM, they can never create a stable,

911
01:08:04,554 --> 01:08:06,414
perpetual preferred product like Stretch.

912
01:08:06,414 --> 01:08:08,954
So everything, it really was lightning in a bottle,

913
01:08:09,534 --> 01:08:12,114
all these different mechanisms that they were able to pull together

914
01:08:12,114 --> 01:08:12,754
into one product.

915
01:08:12,934 --> 01:08:13,954
You can't do this with a bond.

916
01:08:14,374 --> 01:08:19,034
I mean, the bond can be illiquid, so there's less mark-to-market ability

917
01:08:19,034 --> 01:08:24,074
and so therefore it could be a little more stable. But you don't get that sort of liquidity

918
01:08:24,074 --> 01:08:28,554
in the bond that's necessary to issue large amounts of it. So in terms of public security,

919
01:08:28,554 --> 01:08:34,794
this is the way it had to be. So Leigh, what's up, dog? How are you?

920
01:08:34,794 --> 01:08:38,954
Great. I love chopping it up in the comments. I get to just fanboy.

921
01:08:38,954 --> 01:08:45,274
You get to hang out for a while. Yeah. Adrian had a pop off. We're an hour in and we're cranking

922
01:08:45,274 --> 01:08:49,514
through here um i mean what what's your thoughts what are you thinking about sole what's the uh

923
01:08:49,514 --> 01:08:55,594
big takeaway from you right away oh right away um i don't know we're going to talk about jerome

924
01:08:55,594 --> 01:09:01,514
powell's hostage video you know he's like over there blinking in morse code trying to like help

925
01:09:01,514 --> 01:09:07,194
me yeah yeah we could start there we could go there we could go what bitcoin did interview

926
01:09:07,194 --> 01:09:11,754
we'll talk about the we'll talk about the fed yeah that's good yeah i was worried you guys were gonna

927
01:09:11,754 --> 01:09:15,354
to talk about what Bitcoin did too much and I was going to miss out on it.

928
01:09:17,054 --> 01:09:25,314
Let's jump in. Let's talk about it. And okay. So what happened? What Bitcoin did? Danny Knowles.

929
01:09:25,314 --> 01:09:32,634
I like Danny a lot. He's a good guy. We've had some great conversations. I've enjoyed trying to

930
01:09:32,634 --> 01:09:36,354
teach him about like what we're doing in this space and what's going on. And he's picked up

931
01:09:36,354 --> 01:09:42,234
this podcast from Peter McCormick and he's just really kind of run with it. It's had a very like

932
01:09:42,234 --> 01:09:50,494
strong Bitcoin OG ethos. It's, you know, a lot of it's focused on folks that have been in the space

933
01:09:50,494 --> 01:09:55,034
for quite a long time and they're building like the, in the developer community, like what are

934
01:09:55,034 --> 01:10:00,694
you building on top of Bitcoin? Whether that be like medium of exchange apps or custody solutions

935
01:10:00,694 --> 01:10:06,854
And a lot of it, a lot of the bigger conversations have happened with some of those folks.

936
01:10:06,854 --> 01:10:17,774
And it's been really fascinating to see this evolution because like finance showed up and finance showed up quick and they got a lot of Bitcoin very fast.

937
01:10:17,974 --> 01:10:19,874
And a lot of people didn't like it.

938
01:10:20,134 --> 01:10:27,594
And it was very confusing because capital markets are inherently in the past have been incredibly opaque and people are confused.

939
01:10:27,714 --> 01:10:28,634
These are different structures.

940
01:10:28,634 --> 01:10:29,374
Well, it's equity.

941
01:10:29,494 --> 01:10:30,094
It's not Bitcoin.

942
01:10:30,094 --> 01:10:36,194
people hate that it's like not your keys not your coins uh blow up in the past these other you know

943
01:10:36,194 --> 01:10:41,674
exchanges and things and now it's hard to differentiate between for some people between

944
01:10:41,674 --> 01:10:46,334
like what's what's happening here and like opportunity cost and thinking about portfolio

945
01:10:46,334 --> 01:10:53,494
development and you know efficient frontier and all of these different things and i think that

946
01:10:53,494 --> 01:10:58,934
really just came through like you could see that in the entire podcast it's very clear that

947
01:10:58,934 --> 01:11:02,514
Michael studied his host.

948
01:11:03,634 --> 01:11:08,094
Like, okay, hey, I'm going to welcome you to my house and we're going to do a podcast

949
01:11:08,094 --> 01:11:08,614
together.

950
01:11:09,074 --> 01:11:17,034
And I'm sure he went back in and looked at every single podcast where Danny had talked

951
01:11:17,034 --> 01:11:22,434
about MSTR and got to the point of what are these guys missing?

952
01:11:23,554 --> 01:11:27,554
Like they literally, what Bitcoin did literally had an episode like, is MSTR a Ponzi?

953
01:11:27,554 --> 01:11:33,474
I've talked with Danny twice in the last six months and almost exclusively talked about MSTR

954
01:11:33,474 --> 01:11:38,454
and like all the perpetual preferred securities, how they're working, why they're working,

955
01:11:38,854 --> 01:11:43,994
who they work for, how the capital markets are interacting here. And I'm not surprised

956
01:11:43,994 --> 01:11:52,334
that his response was exactly the way it was because what's happening over there is like that

957
01:11:52,334 --> 01:11:57,274
it's just a little tired. Like this argument is a little tired of what these Bitcoin

958
01:11:57,274 --> 01:12:03,974
treasury companies can do because bitcoin is capital and having a having a vehicle where you

959
01:12:03,974 --> 01:12:11,674
can hold this capital and do things with it that's the point like we're doing like a human is

960
01:12:11,674 --> 01:12:17,054
effectively a business right like you like my family i see my family as a business i buy bitcoin

961
01:12:17,054 --> 01:12:21,434
for my family and i do things with it i buy bitcoin exposure for my family i do things with it

962
01:12:21,434 --> 01:12:24,574
and a business is no different, right?

963
01:12:24,614 --> 01:12:26,494
You've got like a group of people,

964
01:12:26,494 --> 01:12:30,614
but that group of people has access to different types of capital markets.

965
01:12:30,614 --> 01:12:32,354
They've got debt structures that they can access.

966
01:12:32,454 --> 01:12:33,714
There's things that you could do.

967
01:12:33,874 --> 01:12:37,034
You could utilize that capital in different ways to build X, Y, Z.

968
01:12:37,894 --> 01:12:39,414
Now, what are those things?

969
01:12:39,934 --> 01:12:41,914
They're literally being built right now,

970
01:12:42,214 --> 01:12:45,194
whether or not you want to participate in the things that those companies are

971
01:12:45,194 --> 01:12:49,134
building, that's your prerogative. Like that, that's completely up to you.

972
01:12:49,174 --> 01:12:51,394
You could take that risk decision if you want, but like,

973
01:12:51,434 --> 01:12:55,114
you're not going to stop any of these companies from putting Bitcoin on your

974
01:12:55,114 --> 01:12:59,794
balance sheet because it's good for them. If it's good for you,

975
01:12:59,814 --> 01:13:04,074
it's good for the company and whether or not like the price is volatile and

976
01:13:04,074 --> 01:13:06,754
people, people get wrecked because, you know,

977
01:13:06,754 --> 01:13:09,554
the price moves up and down and they don't have the long-term view.

978
01:13:09,554 --> 01:13:14,194
Like we've talked about like this entire podcast, like that's like,

979
01:13:14,294 --> 01:13:17,354
that's what it was. And I'd be curious to get your guys' take.

980
01:13:19,754 --> 01:13:20,154
Yeah.

981
01:13:20,154 --> 01:13:22,754
Go ahead, Sol. No, you first.

982
01:13:23,574 --> 01:13:34,654
Yeah, I think he actually could have even went farther because he took a little bit of offense because he said, well, what about these bad companies and companies that don't have positive cash flow?

983
01:13:35,574 --> 01:13:41,654
And I think Saylor, he kind of caught himself a little bit because he was like, well, don't invest in bad companies.

984
01:13:41,654 --> 01:13:47,674
Like, what are we talking about? At least the ones that own Bitcoin, own Bitcoin and everyone else is still on zero. Right.

985
01:13:47,674 --> 01:13:53,674
But I think he could have even taken that one step farther and said, well, are negative cash flow companies even bad?

986
01:13:54,194 --> 01:13:57,934
Or are they just victims of monetary debasement like the rest of us?

987
01:13:58,374 --> 01:14:04,594
Like you could have a good business, but if you can't keep up with the manipulated inflation, you're going to be cash flow negative.

988
01:14:05,094 --> 01:14:10,394
But if you're on a Bitcoin standard, you might be cash flow positive when you're actually stacking real cash.

989
01:14:10,434 --> 01:14:11,574
That's not a melting ice cube.

990
01:14:11,574 --> 01:14:17,834
so um i i think yeah i mean was he a little harsh on the guy but i think he could have even taken it

991
01:14:17,834 --> 01:14:22,914
one step for uh one step further and said like these companies that you're calling bad may not

992
01:14:22,914 --> 01:14:28,214
even just be bad they're they're out there busting their ass and they might be cash flow positive on a

993
01:14:28,214 --> 01:14:33,954
on a you know a bitcoin standard well that yeah that was exactly it well if your bitcoin is

994
01:14:33,954 --> 01:14:38,134
cagering if you have 100 million dollars of bitcoin is making 30 million dollars a year at

995
01:14:38,134 --> 01:14:42,774
30% interest and you burn 10 million, you still just made $20 million a year.

996
01:14:43,494 --> 01:14:43,714
Yeah.

997
01:14:44,134 --> 01:14:44,394
Okay.

998
01:14:44,394 --> 01:14:46,714
Like, are you going to be mad at those companies?

999
01:14:48,994 --> 01:14:49,794
Do you support them?

1000
01:14:49,794 --> 01:14:51,574
Like, you don't have, you don't have to buy the equity.

1001
01:14:51,574 --> 01:14:55,934
Nobody like, does it help if you get out in the market and talk about your equity?

1002
01:14:56,094 --> 01:14:56,534
Yes.

1003
01:14:56,674 --> 01:14:59,954
Go look at every, every financial podcast on the fucking planet.

1004
01:14:59,974 --> 01:15:03,214
Like everybody's like talking about everything.

1005
01:15:03,514 --> 01:15:07,094
Like, do you want interest in, in the stuff that you're working on?

1006
01:15:07,194 --> 01:15:07,774
Yes.

1007
01:15:08,134 --> 01:15:10,514
Like, what is finance?

1008
01:15:10,654 --> 01:15:12,234
Finance is all about storytelling.

1009
01:15:12,574 --> 01:15:17,494
Like, and to me, capital flows to the best story.

1010
01:15:17,854 --> 01:15:19,314
Like, what is the best story?

1011
01:15:19,714 --> 01:15:21,574
And you've seen that in the market right now.

1012
01:15:21,614 --> 01:15:22,954
A lot of capital flowing to AI.

1013
01:15:23,154 --> 01:15:24,174
Like, AI is a great story.

1014
01:15:24,274 --> 01:15:26,054
Like, it's going to eviscerate people's jobs.

1015
01:15:26,134 --> 01:15:28,874
These companies that are running AI, like, they're going to make a ton of money.

1016
01:15:29,694 --> 01:15:35,614
And I think what's happening here in Bitcoin is a really fascinating story.

1017
01:15:35,614 --> 01:15:40,634
I'd argue even more interesting than a lot of the AI stories that are happening at the moment

1018
01:15:40,634 --> 01:15:46,514
because of, you know, hardware multiples, PE, all of that stuff. But, um, my, and that's what

1019
01:15:46,514 --> 01:15:56,634
I'm here talking about it. Right on. The, there's a flaw in human nature, I'll say, where

1020
01:15:56,634 --> 01:16:03,174
people want things to stay the way they understand them. And I think that's the difference we're

1021
01:16:03,174 --> 01:16:11,294
seeing between the OG Bitcoiners and guys like us. And they want it to be the original movement

1022
01:16:11,294 --> 01:16:15,814
where it's just individuals that are buying Bitcoin. They're moving it into cold storage.

1023
01:16:15,814 --> 01:16:21,114
They're creating these micro economies amongst themselves. And they're transacting amongst

1024
01:16:21,114 --> 01:16:25,534
themselves in Bitcoin for goods and services. And they're fully cutting out the financial system.

1025
01:16:26,234 --> 01:16:32,234
Okay, great. That's one view. The problem is if you really want Bitcoin to succeed,

1026
01:16:32,234 --> 01:16:40,174
like really succeed. What you have to do is build ways for it to take over the scaffolding that

1027
01:16:40,174 --> 01:16:47,094
holds up the entire financial world. And to me, that's what's happening now. That's what these

1028
01:16:47,094 --> 01:16:52,394
treasury companies are all about. That's what digital credit is all about. We are embedding

1029
01:16:52,394 --> 01:16:59,234
Bitcoin at the foundation of the capital markets and scaling it and eating it alive. And if you

1030
01:16:59,234 --> 01:17:04,234
want to see Bitcoin succeed, if you want to see what makes it interesting to other people,

1031
01:17:04,974 --> 01:17:11,434
it's going to be success, right? That number go up is going to attract more and more of the

1032
01:17:11,434 --> 01:17:15,954
builders that will build that functionality that they talk about that they deem as valuable.

1033
01:17:16,774 --> 01:17:23,054
But I see it entirely differently. I want Bitcoin to be so systemically important

1034
01:17:23,054 --> 01:17:29,974
that you can't ignore. And the only way to do that is to intertwine it in the fabric of the

1035
01:17:29,974 --> 01:17:37,334
financial markets, right? Make it undeniable. Get rid of every attack vector because the cost is too

1036
01:17:37,334 --> 01:17:44,294
high to attack it. And that success is going to breed all these builders coming and pushing Bitcoin

1037
01:17:44,294 --> 01:17:50,034
forward in the way most people want to see it. You want to be able to transact with Bitcoin one day

1038
01:17:50,034 --> 01:17:55,494
and buy your goods and services in the grocery store with Bitcoin or whatever, like get it.

1039
01:17:55,874 --> 01:17:58,214
So powerful banks can't stop it.

1040
01:17:58,694 --> 01:18:00,794
Or politicians or politicians.

1041
01:18:01,314 --> 01:18:03,834
Yeah. You're building the industries right now.

1042
01:18:04,214 --> 01:18:09,334
Like this is, you know, you've said it before with the digital credit side, Jeff, like this is year zero.

1043
01:18:09,794 --> 01:18:11,954
I view that for a lot of things, right?

1044
01:18:11,974 --> 01:18:17,094
If you don't like the way that banks have you transact money, well, someone needs to go out there and build a better bank.

1045
01:18:17,094 --> 01:18:20,754
and you need to build that with Bitcoin, if that's what you believe in.

1046
01:18:21,314 --> 01:18:26,454
You can start rebuilding today what's going to be the powerhouses of tomorrow

1047
01:18:26,454 --> 01:18:29,394
that are driven and enabled by Bitcoin, right?

1048
01:18:29,514 --> 01:18:30,394
Sound capital.

1049
01:18:31,614 --> 01:18:38,274
And so spending time as Bitcoiners attacking whether Satoshi wanted just individuals to have it

1050
01:18:38,274 --> 01:18:42,454
or wanted corporations involved or wanted countries involved, everything's built by people.

1051
01:18:42,454 --> 01:18:49,174
So if people are starting to believe in Bitcoin, they're going to start building it into everything that they do.

1052
01:18:49,534 --> 01:18:51,474
And that's what you're starting to see.

1053
01:18:51,594 --> 01:19:02,354
You can't take a gift like Bitcoin, create it, release the code out to the world, let everyone mine it and run nodes, and then decide how it's going to be used.

1054
01:19:02,494 --> 01:19:03,414
That's not real.

1055
01:19:04,134 --> 01:19:08,094
Bitcoin's a gift to the world, and the world now gets to decide how it's going to be used.

1056
01:19:08,154 --> 01:19:11,554
And we've all got different ideas for what that looks like.

1057
01:19:11,554 --> 01:19:22,474
So, you know, when we get into these arguments, like I'm not going to be apologizing for what we're doing, because I think what we're doing is incredibly important to the next phase of Bitcoin success.

1058
01:19:22,914 --> 01:19:26,894
And I don't want those OGs to stop building what they believe in.

1059
01:19:27,214 --> 01:19:28,574
Yeah, we need them to.

1060
01:19:28,774 --> 01:19:29,294
We need them to.

1061
01:19:29,594 --> 01:19:32,454
Functionality. This isn't going to happen by one small group.

1062
01:19:32,994 --> 01:19:38,074
This is an open source project for the world to push forward together.

1063
01:19:38,074 --> 01:19:43,314
And as individuals, if you're concerned with the way things are going, start building the

1064
01:19:43,314 --> 01:19:43,994
next chapter.

1065
01:19:44,214 --> 01:19:47,314
If you don't start building it today, you're going to get run over by what's happening

1066
01:19:47,314 --> 01:19:47,694
now.

1067
01:19:47,834 --> 01:19:49,334
And you can't complain about that.

1068
01:19:50,194 --> 01:19:52,254
Yeah, Ben, look, I get what you're saying.

1069
01:19:52,774 --> 01:19:56,614
But what Saylor did was an open source project.

1070
01:19:57,254 --> 01:19:58,574
And they don't realize that.

1071
01:19:59,014 --> 01:19:59,674
It completely was.

1072
01:19:59,674 --> 01:20:02,674
Not only, and if you're like, what do you mean, Grandis all is open?

1073
01:20:02,674 --> 01:20:12,754
in 2021 or 2022 sailor published a playbook how to put bitcoin on your balance sheet and convince

1074
01:20:12,754 --> 01:20:18,174
your board members how to do it he ran that you can guys you can google this and go find it

1075
01:20:18,174 --> 01:20:25,034
he did three pdfs they were 50 pages each and explain how to he open sourced the manual of what

1076
01:20:25,034 --> 01:20:31,294
they did and so the og bitcoin was like oh well i don't like the fact this is comical another

1077
01:20:31,294 --> 01:20:37,934
symmetry test is I don't like the fact that Saylor is equitizing Bitcoin. They're putting

1078
01:20:37,934 --> 01:20:43,694
Bitcoin in an equity wrapper. And I'm like, yeah, bro. Then why do you like the fact that we can

1079
01:20:43,694 --> 01:20:49,214
tokenize a real world asset, an RWA? You're like, oh, would you just say? I'm like, you want me to

1080
01:20:49,214 --> 01:20:55,134
go slower for you? You think it's a great idea to tokenize everything, but when then Saylor

1081
01:20:55,134 --> 01:21:00,634
equitizes, notice how I shift words. You're like, oh, we don't like that. And I'm like, really?

1082
01:21:00,634 --> 01:21:07,394
Really, bro? Maybe you don't talk to anybody that doesn't have an incentive to be nice to you.

1083
01:21:07,894 --> 01:21:12,054
Or you haven't gotten anybody that had enough balls to challenge you.

1084
01:21:12,494 --> 01:21:14,534
And that's what happened exactly with Danny.

1085
01:21:14,974 --> 01:21:19,414
He showed up for a knife fight with a guy that had a gun.

1086
01:21:19,614 --> 01:21:22,234
And what that means is, I'm dating myself.

1087
01:21:22,554 --> 01:21:24,054
The guy watched the videos.

1088
01:21:24,554 --> 01:21:25,014
That's Taylor.

1089
01:21:25,594 --> 01:21:27,514
Danny was completely unprepared.

1090
01:21:27,674 --> 01:21:28,754
He did not do his homework.

1091
01:21:28,754 --> 01:21:35,194
He shows up against a $20 billion guy that's a legitimate rocket scientist.

1092
01:21:35,494 --> 01:21:36,854
I mean, let's just think about this.

1093
01:21:37,114 --> 01:21:44,794
That graduated from MIT and wrote a master's thesis on the geopolitical structures of the world.

1094
01:21:45,294 --> 01:21:46,034
That's Saylor.

1095
01:21:46,314 --> 01:21:47,714
Saylor's read all these books.

1096
01:21:48,194 --> 01:21:49,034
Danny shows up.

1097
01:21:49,374 --> 01:21:52,874
Oh, well, don't you think all these Bitcoin treasury, some of them are scams?

1098
01:21:53,334 --> 01:21:54,514
I'm like, bro.

1099
01:21:54,854 --> 01:21:56,274
There's a reason he's a billionaire.

1100
01:21:56,554 --> 01:21:58,654
There's a reason he's a billionaire because he's sharp as shit.

1101
01:21:58,654 --> 01:22:00,174
You just poked a gorilla.

1102
01:22:00,854 --> 01:22:04,634
And I'm not going to pretend if we all showed up that he wouldn't drive over us and back over us.

1103
01:22:04,634 --> 01:22:05,094
Oh, yeah.

1104
01:22:05,634 --> 01:22:07,534
This guy's on a different plane.

1105
01:22:08,054 --> 01:22:15,154
But he's giving us, he's accelerating all of our journeys by sharing what he's learned through all of that.

1106
01:22:15,254 --> 01:22:20,014
We're getting the Cliff Notes version of decades of learning that he's had.

1107
01:22:20,254 --> 01:22:20,754
Sure.

1108
01:22:20,814 --> 01:22:21,454
And that's huge.

1109
01:22:22,194 --> 01:22:26,314
In the class in corporate finance we're all getting right now is equally as huge.

1110
01:22:26,754 --> 01:22:27,474
It's equally as huge.

1111
01:22:27,474 --> 01:22:34,334
The craziest part of the whole video is after Danny and Danny's watching this, dude, I will say this.

1112
01:22:34,954 --> 01:22:36,154
I will date myself.

1113
01:22:36,854 --> 01:22:41,614
You had poise and temerity to sit through that the beating.

1114
01:22:42,094 --> 01:22:43,454
Congratulations to you.

1115
01:22:43,774 --> 01:22:45,654
Many people would have just walked out.

1116
01:22:46,094 --> 01:22:47,674
That is great that you have done that.

1117
01:22:47,754 --> 01:22:49,874
And from that perspective, I respect you.

1118
01:22:50,234 --> 01:22:53,234
Now, the fact that you showed up unprepared is a different issue.

1119
01:22:53,854 --> 01:22:55,234
OK, so that's one part of it.

1120
01:22:55,234 --> 01:23:00,594
But something that came out in that video was crazy that I had never heard before.

1121
01:23:00,594 --> 01:23:04,694
Saylor said that there were, that strategy is a $40 billion company.

1122
01:23:04,694 --> 01:23:10,654
They could not get insurance and he had to personally underwrite it himself for years.

1123
01:23:10,654 --> 01:23:11,474
I never heard that.

1124
01:23:11,474 --> 01:23:12,474
You guys ever hear that before?

1125
01:23:12,474 --> 01:23:13,474
Yeah.

1126
01:23:13,474 --> 01:23:14,474
I heard that story.

1127
01:23:14,474 --> 01:23:15,474
Yeah.

1128
01:23:15,474 --> 01:23:16,474
I heard it as well.

1129
01:23:16,474 --> 01:23:17,474
Publicly?

1130
01:23:17,474 --> 01:23:18,474
Privately.

1131
01:23:18,474 --> 01:23:19,954
Oh, you heard it privately?

1132
01:23:19,992 --> 01:23:24,392
I had never heard that publicly. So I never heard that. So when I heard that,

1133
01:23:24,392 --> 01:23:28,152
it's like somebody's like, Oh, I see sailor. He didn't do it. I'm sure that's whatever.

1134
01:23:28,152 --> 01:23:34,552
It's like an iceberg we're here. We're seeing the top of the iceberg with sailor and sailor knows

1135
01:23:34,552 --> 01:23:38,152
there's a hundred things that we don't know. I just going to be clear with you guys. It

1136
01:23:38,152 --> 01:23:42,392
doesn't matter how smart we are. Sailor knows a hundred X more than we know. And my number might

1137
01:23:42,392 --> 01:23:51,912
be low and when i heard that i was like wow and you you're poking that guy look i mean a little

1138
01:23:51,912 --> 01:23:57,832
bit more a little more i'm a little bit more careful ton of ton of respect for insuring your

1139
01:23:57,832 --> 01:24:03,512
directors and officers like i i will personally that was wild i will personally insure you not

1140
01:24:03,512 --> 01:24:07,592
only did he give the investors an out like i'll give you an out i'll buy your stock if you don't

1141
01:24:07,592 --> 01:24:12,232
agree with his bitcoin strategy i'm going to buy your stock this back in 2020 and so he went through

1142
01:24:12,232 --> 01:24:17,272
that and then the insurance industry dropped him and we don't want you buying bitcoin they dropped

1143
01:24:17,272 --> 01:24:22,732
him and i think he was insuring like 40 to 70 million dollars of dno coverage like if we have

1144
01:24:22,732 --> 01:24:29,872
a loss like i got you which like they could come after your personal assets like if something

1145
01:24:29,872 --> 01:24:34,512
happened they could come after your personal assets and you know that's that's a very tricky

1146
01:24:34,512 --> 01:24:39,692
place to be when you have a 500 million dollar balance sheet now today like that that equation

1147
01:24:39,692 --> 01:24:47,292
is a bit different and like they could easily assume uh assume that insurance limit now and

1148
01:24:47,292 --> 01:24:51,152
maybe they buy it because it's cheap i don't know maybe maybe the market likes them now i have no

1149
01:24:51,152 --> 01:24:54,412
idea well jeff i think you should stop talking about insurance because you don't know anything

1150
01:24:54,412 --> 01:25:02,332
about insurance okay it's uh i mean that that world is just when you're in sailor's seat

1151
01:25:02,332 --> 01:25:11,372
you've got a ton of pressure to continue providing people the air cover to think differently than

1152
01:25:11,372 --> 01:25:17,612
everyone else does. And I think that's what you saw him reacting to, right? He was seeing this

1153
01:25:17,612 --> 01:25:23,532
idea, which fundamentally, if you're a believer in Bitcoin, should seem like a good idea, right?

1154
01:25:23,772 --> 01:25:28,692
Bitcoin on the balance sheet is better than not Bitcoin on the balance sheet, right? Just if

1155
01:25:28,692 --> 01:25:30,272
That's as simple as it ever is.

1156
01:25:30,892 --> 01:25:36,752
That's the idea is Bitcoin is transformative capital for companies to hold, for individuals to hold.

1157
01:25:37,772 --> 01:25:44,192
And so I think when you're in his chair and you've got all the arrows in the back that he has, right?

1158
01:25:44,192 --> 01:25:47,352
People have been coming after him for years saying all kinds of things.

1159
01:25:48,292 --> 01:25:55,772
I think you do hit a point where you need to show how deeply you believe in all of this.

1160
01:25:55,892 --> 01:25:58,072
And I think that's what he was doing, right?

1161
01:25:58,072 --> 01:26:00,052
He challenged the idea head on.

1162
01:26:00,692 --> 01:26:04,632
And a lot of people will say things like, oh, well, these treasury companies, they don't

1163
01:26:04,632 --> 01:26:05,192
do anything.

1164
01:26:05,472 --> 01:26:10,072
And all I saw him really doing, and it was in an uncomfortable manner, right?

1165
01:26:10,072 --> 01:26:14,012
I was not envious of Danny's seat over there because he was the guy in the room that asked

1166
01:26:14,012 --> 01:26:14,532
the question.

1167
01:26:15,292 --> 01:26:20,612
But he pushed back on that idea and made you think critically about it.

1168
01:26:20,952 --> 01:26:23,412
You're going, you know, yeah, it is a little strange.

1169
01:26:23,412 --> 01:26:38,272
If I am a believer in Bitcoin and I do believe this asset's going to succeed over time, and here I am throwing mud at all these companies that are putting tons of capital on their balance sheet that I think is going to be worth an absolute ton here over the next five or 10 years, that seems a little silly, right?

1170
01:26:38,732 --> 01:26:40,312
And you're seeing him push.

1171
01:26:40,872 --> 01:26:45,572
And then he's also pushing on the notion of, you know, what is a pure play treasury company?

1172
01:26:45,652 --> 01:26:47,132
And we've even used the term a lot.

1173
01:26:47,212 --> 01:26:48,132
I've used it a lot.

1174
01:26:48,132 --> 01:26:53,532
and it really doesn't follow through.

1175
01:26:53,672 --> 01:26:55,272
Like if you look at what all these companies do,

1176
01:26:55,332 --> 01:26:59,152
they all have some type of core business under them, right?

1177
01:26:59,192 --> 01:27:00,532
Like we're an asset manager.

1178
01:27:00,752 --> 01:27:02,772
We've got ETF products out there in the market.

1179
01:27:02,772 --> 01:27:04,352
Like we have an operating business.

1180
01:27:05,012 --> 01:27:08,612
Strategy has a half a billion dollar software business that's out there.

1181
01:27:09,292 --> 01:27:11,892
SmarterWeb has a web development business out there.

1182
01:27:12,072 --> 01:27:13,292
KindlyMD had their business.

1183
01:27:13,372 --> 01:27:16,312
Like there's all these businesses underneath all of this.

1184
01:27:16,312 --> 01:27:31,652
Now, you can argue whether those businesses are material when you look at a Bitcoin strategy, but pure play, the way people use it doesn't mean no operating company, right? These are operating companies.

1185
01:27:32,172 --> 01:27:40,932
But the Bitcoin side of the house starts to dwarf the operating company if you're even remotely successful with it on any timeframe. And so I think you were seeing...

1186
01:27:40,932 --> 01:27:41,372
That's the biggest point.

1187
01:27:41,372 --> 01:27:42,372
That's the biggest point.

1188
01:27:43,092 --> 01:27:51,812
Yeah, but you see, guys, I'm protecting the notion around, or challenging the notion around

1189
01:27:51,812 --> 01:27:53,012
Bitcoin, right?

1190
01:27:53,072 --> 01:28:00,032
Are you really willing to criticize Bitcoin as an improvement in how every one of these

1191
01:28:00,032 --> 01:28:01,892
companies is operating, right?

1192
01:28:01,932 --> 01:28:06,312
Is integrating that into your balance sheet a bad idea or not?

1193
01:28:06,312 --> 01:28:21,732
And if Danny could have defended that he thought it was a bad idea, you'd get a different conversation. But in that room, there was not going to be any way where you could say having Bitcoin on your balance sheet is worse than having dollars on your balance sheet over the long term.

1194
01:28:21,732 --> 01:28:42,232
Right. But Ben, there was two things that happened. What you just said was exactly correct. You're saying, Danny said, I believe this. And let me back it up. Why? Now, Saylor, tell me this. What went viral for two days after this was Saylor's demeanor and that he attacked him.

1195
01:28:42,232 --> 01:28:47,972
right and so i am discussing the meta message and you're discussing the message so you're saying the

1196
01:28:47,972 --> 01:28:53,552
message is structurally sailor's refuting what he is saying what what happened with sailor is like

1197
01:28:53,552 --> 01:28:59,572
oh he was grumpy oh he got agitated oh he got irritated it's think about it and people and

1198
01:28:59,572 --> 01:29:04,752
the reason why people were so mad is because they were like sailor should answer the question he did

1199
01:29:04,752 --> 01:29:10,512
he did he totally did and he did not hold back and he applied the symmetry test you're you're

1200
01:29:10,512 --> 01:29:16,192
getting mad at 200 companies or 400, 200 companies that have Bitcoin in the balance sheet. Why don't

1201
01:29:16,192 --> 01:29:21,512
you make the same argument about 400 million companies that only have, you know, fiat or don't

1202
01:29:21,512 --> 01:29:27,272
have any Bitcoin. And that, that froze Danny right there. That is a classic symmetry test.

1203
01:29:27,512 --> 01:29:33,472
And he never came across, Danny never came across anybody that could do that to him. And that's

1204
01:29:33,472 --> 01:29:38,612
people like, oh, well, he attacked him. And what happened is the reason why people get upset is

1205
01:29:38,612 --> 01:29:44,032
that, and I talked about this on Spaces with 500 people on it. If you attach your identity to your

1206
01:29:44,032 --> 01:29:50,112
position, that is subjective. If you have a position, you have a belief, Bitcoin treasuries

1207
01:29:50,112 --> 01:29:56,592
are this, and you could argue about it and you don't get upset, that's objective. Subjective,

1208
01:29:56,672 --> 01:30:02,192
your identity is tied to it. The reason why people get triggered is, oh, he's being mean to Danny.

1209
01:30:02,192 --> 01:30:07,972
He would be mean to me because I believe in that question. They're attaching their identity to that.

1210
01:30:07,972 --> 01:30:18,672
And with this is when you think objectively, which is the way we talk here is, well, objectively, you just said, Ben, if you think about this, for these reasons, this holds true.

1211
01:30:19,012 --> 01:30:20,392
That's an objective conversation.

1212
01:30:20,512 --> 01:30:28,912
But what happened with Danny and why it went viral was because the meta message, the way that it was delivered, and people are like, oh, I don't like Saylor's tone.

1213
01:30:28,912 --> 01:30:35,032
Now, the other point here, and I'll wrap up on this, is that if Saylor is on mainstream media,

1214
01:30:35,292 --> 01:30:41,072
CNBC, MSNBC, whatever, Fox News, or so forth, he has to operate a certain level,

1215
01:30:41,492 --> 01:30:50,612
because he's on mainstream media. When he's on a podcast, he will function as executive chairman

1216
01:30:50,612 --> 01:30:54,252
and his ex-CEO of strategy, right?

1217
01:30:54,532 --> 01:30:58,172
But the way that he can go full bore against a podcaster

1218
01:30:58,172 --> 01:31:01,772
is different than the way that he would talk to a newscaster

1219
01:31:01,772 --> 01:31:04,152
or a host on mainstream media.

1220
01:31:04,472 --> 01:31:05,852
And Danny missed that.

1221
01:31:05,972 --> 01:31:07,172
He watches him on TV.

1222
01:31:07,492 --> 01:31:09,572
Oh, this guy is going to be so-called civil.

1223
01:31:09,572 --> 01:31:14,432
But in a podcasting format, that level of decorum is different.

1224
01:31:14,932 --> 01:31:17,592
And if people don't understand what I'm saying, that's cool.

1225
01:31:17,592 --> 01:31:24,372
but it will sink in that there's a difference between a podcast and being on television and

1226
01:31:24,372 --> 01:31:31,092
danny just did not get any of that it's kind of like like if you're getting so say you're out with

1227
01:31:31,092 --> 01:31:34,912
your family and you're scolding someone there's a difference between how you do it out in public

1228
01:31:34,912 --> 01:31:41,472
versus how you would do it behind closed doors and because this is a bitcoin podcast this is a

1229
01:31:41,472 --> 01:31:46,552
he's talking to bitcoiners and i'd say he did two distinct things he answered the question

1230
01:31:46,552 --> 01:31:48,332
and he sent a message.

1231
01:31:48,712 --> 01:31:49,272
He sent a message.

1232
01:31:49,272 --> 01:31:50,352
That's what it was.

1233
01:31:50,852 --> 01:31:51,392
He did.

1234
01:31:52,112 --> 01:31:55,052
And I think that Danny was legitimately confused.

1235
01:31:55,332 --> 01:31:57,812
He's like, no, I'm not trying to be insulting or whatever,

1236
01:31:57,892 --> 01:32:01,232
but we didn't really understand is that when you say,

1237
01:32:01,352 --> 01:32:03,272
well, I'm not criticizing the strategy,

1238
01:32:03,772 --> 01:32:05,832
but I'm going to ask this loaded question,

1239
01:32:06,012 --> 01:32:07,432
why would anybody buy these companies?

1240
01:32:08,052 --> 01:32:10,612
You're kind of criticizing the strategy

1241
01:32:10,612 --> 01:32:12,632
the way that you phrased the question.

1242
01:32:13,232 --> 01:32:16,432
So he shouldn't have really been that confused

1243
01:32:16,432 --> 01:32:20,192
but you know he kept trying to backtrack off of it and it's like i'm not criticizing the strategy but

1244
01:32:20,192 --> 01:32:23,792
like i like what you've done with the press you know yeah like what about the other companies it's

1245
01:32:23,792 --> 01:32:31,232
like yeah they're doing stuff exactly also yeah and also just like i don't see why when we talk

1246
01:32:31,232 --> 01:32:34,992
about like the evolution of capital markets and bitcoin in the balance sheet everyone has to focus

1247
01:32:34,992 --> 01:32:40,352
on knocking down 99 like that's what they mean when they say like all the other companies they

1248
01:32:40,352 --> 01:32:53,906
mean every other stock down 99 i like are we serious here like why do we have to why does anything good have to be watered down by like the few scenarios in which the strategy it was a it was a like

1249
01:32:53,906 --> 01:33:01,206
would you say this about the.com bubble in 2001, right? Would you say, so this internet thing,

1250
01:33:01,726 --> 01:33:06,666
sure, but like, look at, you know, X, Y, and Z company. And like, that's pretty much where we're

1251
01:33:06,666 --> 01:33:09,666
at in the whole thing. And like, investors are going to burn. And that's the other thing I don't

1252
01:33:09,666 --> 01:33:14,346
think Bitcoiners get is like, and Saylor was really keen on this in the interview. Like equity

1253
01:33:14,346 --> 01:33:17,846
investing is a lot different than Bitcoin. He's like, I've been telling you for the past five

1254
01:33:17,846 --> 01:33:22,166
years to invest in Bitcoin because it's risk-free. There's no counterparty risk. And you decide to go

1255
01:33:22,166 --> 01:33:27,766
out and invest in equities without cashflow or for whatever you decide to invest in. You decide

1256
01:33:27,766 --> 01:33:32,526
to invest in equities and you take on management risk and no executive controls the price of their

1257
01:33:32,526 --> 01:33:37,906
stock furthermore. So like that's the risk. Those are the risks you take on. Like you can't just

1258
01:33:37,906 --> 01:33:40,406
blame the universe for equity.

1259
01:33:40,406 --> 01:33:42,666
There's no discussion of nuance in any of that.

1260
01:33:42,666 --> 01:33:46,246
There is a lot of complexity in equity investing.

1261
01:33:46,246 --> 01:33:48,886
So for instance, when you look at when all these companies

1262
01:33:48,886 --> 01:33:52,606
were emerging and you were seeing all these high prices,

1263
01:33:52,606 --> 01:33:56,326
half the time, the companies hadn't even merged yet.

1264
01:33:56,326 --> 01:33:58,966
So what was happening was people were rushing in and buying

1265
01:33:58,966 --> 01:34:01,786
the equities of the target company, the company that

1266
01:34:01,786 --> 01:34:04,946
was public, which had incredibly low float.

1267
01:34:04,946 --> 01:34:07,786
And it takes very little capital to spike those things.

1268
01:34:07,906 --> 01:34:12,246
right like that's what was happening that's why you were seeing such visceral movements and a lot

1269
01:34:12,246 --> 01:34:17,886
of these equities out there and it's all a part of that equities learning curve right like there

1270
01:34:17,886 --> 01:34:24,086
was a ton of things that we all learned in this past year a ton and now you go through another

1271
01:34:24,086 --> 01:34:28,026
cycle you would look at the market entirely differently as these companies are coming out

1272
01:34:28,026 --> 01:34:31,586
you know what to look for you know what terms to look for you understand the different types of

1273
01:34:31,586 --> 01:34:35,766
financings that they can use and the nuance with how those play out in the markets right like there

1274
01:34:35,766 --> 01:34:41,446
was a ton that happened there was an absolute crash course in investing but when you get into

1275
01:34:41,446 --> 01:34:48,046
social media there's no room in short numbers of characters for nuance and so it's you know scam

1276
01:34:48,046 --> 01:34:54,026
pump and dump whatever people want to say like it gets distilled down to emotions right not

1277
01:34:54,026 --> 01:35:00,766
intellect it's emotions and that's you know you you can't really communicate in that style and get

1278
01:35:00,766 --> 01:35:01,566
to any type of outcome.

1279
01:35:01,666 --> 01:35:03,946
I think it's why you need long form conversations

1280
01:35:03,946 --> 01:35:07,746
and you need to reflect on investments that were made.

1281
01:35:07,946 --> 01:35:09,466
I've had winners, I've had terrible,

1282
01:35:09,686 --> 01:35:11,206
I've had all kinds of stuff, right?

1283
01:35:11,266 --> 01:35:12,886
And you do learn way more

1284
01:35:12,886 --> 01:35:14,846
when you go through a cycle like we just did.

1285
01:35:14,906 --> 01:35:16,706
It's not fun, of course not.

1286
01:35:17,326 --> 01:35:21,206
But you learn what to look for the next time around.

1287
01:35:21,906 --> 01:35:23,906
And so now with things like reverse mergers,

1288
01:35:24,126 --> 01:35:26,566
you understand that during that period of time

1289
01:35:26,566 --> 01:35:28,086
before the companies even merge

1290
01:35:28,086 --> 01:35:30,306
and become the company you think you're investing in,

1291
01:35:30,306 --> 01:35:36,106
right there's probably very few shares out there you'll learn that with pipes there's timing periods

1292
01:35:36,106 --> 01:35:40,366
where those investors finally get control of their shares and they're able to sell them right you need

1293
01:35:40,366 --> 01:35:45,206
to pay attention to those like there's all kinds of things that you learn because equities are

1294
01:35:45,206 --> 01:35:51,946
incredibly complex and there's a million ways to do the financing sub them which is why to sailor's

1295
01:35:51,946 --> 01:35:59,306
point bitcoin is the easy investment if you don't want to have to go that deep and have to understand

1296
01:35:59,306 --> 01:36:02,046
and all of these different nuances with equities,

1297
01:36:02,046 --> 01:36:04,826
yeah, Bitcoin's the choice, right?

1298
01:36:04,826 --> 01:36:07,606
That's gonna behave the same way all the time.

1299
01:36:07,606 --> 01:36:08,646
Yeah, and to your earlier point

1300
01:36:08,646 --> 01:36:11,226
where you were talking about saying cashflow,

1301
01:36:12,766 --> 01:36:17,766
pure cash play is like a derogatory term.

1302
01:36:18,146 --> 01:36:21,146
Like I use it, but I don't mean it in a negative way.

1303
01:36:21,146 --> 01:36:22,526
But how many people,

1304
01:36:22,526 --> 01:36:24,806
how many real estate stories do you have

1305
01:36:24,806 --> 01:36:26,386
or do you see where people are like,

1306
01:36:26,386 --> 01:36:29,066
I sold all my properties and bought Bitcoin?

1307
01:36:29,066 --> 01:36:35,206
They're exiting cash flow positive positions, right, just to buy Bitcoin.

1308
01:36:35,426 --> 01:36:41,166
They'd rather just own Bitcoin than have cash flow positive because it can't compare with Bitcoin's returns.

1309
01:36:41,826 --> 01:36:53,606
So it's a weird thing to call pure plays as an insult when there's people out there just exiting cash flow positive businesses to stack SADS.

1310
01:36:54,066 --> 01:36:58,826
Yeah, I think when people say pure play, they just mean it's the primary focus, right?

1311
01:36:58,826 --> 01:37:01,286
Like when you look at a lot of these companies, that's what they're messaging.

1312
01:37:01,686 --> 01:37:03,446
Why would it not be your primary focus?

1313
01:37:03,786 --> 01:37:04,346
It's their vision.

1314
01:37:04,346 --> 01:37:06,266
It's making the most money everywhere.

1315
01:37:06,586 --> 01:37:09,366
Like what's making the most money?

1316
01:37:09,486 --> 01:37:11,846
Like doing that, doing what strategy is done.

1317
01:37:12,086 --> 01:37:13,166
Like why would you not do that?

1318
01:37:13,546 --> 01:37:15,426
Yeah, but I'm going to give a distinction here.

1319
01:37:15,426 --> 01:37:17,186
And I said this on spaces earlier.

1320
01:37:17,806 --> 01:37:19,446
So, and I can make this real simple.

1321
01:37:19,926 --> 01:37:24,886
So almost all companies except for Bitcoin treasury companies are income statement driven

1322
01:37:24,886 --> 01:37:25,466
companies.

1323
01:37:25,466 --> 01:37:31,046
by and large, 99% of what they do is income statement driven. They have too much income.

1324
01:37:31,206 --> 01:37:35,646
They can either buy back shares or do use dividends or build up their cash balance,

1325
01:37:35,686 --> 01:37:39,206
and then they can buy other companies. Bitcoin treasury comes, they're balance sheet based

1326
01:37:39,206 --> 01:37:43,406
companies. And due to the FASB fair value accounting that sailor pitched and went into

1327
01:37:43,406 --> 01:37:49,786
effect in January of 2025, they can show positive EPS, which does not trigger CAMT,

1328
01:37:50,466 --> 01:37:54,366
corporate alternative minimum tax. And that was a big win. Now people would be like, wow,

1329
01:37:54,366 --> 01:37:59,426
you did that really fast green can you simplify that yeah let's assume that somebody's 80 years

1330
01:37:59,426 --> 01:38:06,246
old they're retired they bought a house 40 years ago right so what's the and they make this statement

1331
01:38:06,246 --> 01:38:13,566
i'm house rich and cash poor the house rich is they're sitting on an unrealized game because

1332
01:38:13,566 --> 01:38:18,266
they've been in for 50 years the house has been paid off for 20 years that's their balance sheet

1333
01:38:18,266 --> 01:38:33,026
Oh, I'm cash poor. What does that mean? I am now surviving on social security and whatever meager pension I have or investments. And I have to continue paying property taxes. And of course, somebody goes, well, we should just eliminate all property taxes.

1334
01:38:33,026 --> 01:38:39,826
Now, that's the distinction between the balance sheet, the house, and the income statement,

1335
01:38:40,026 --> 01:38:41,706
which is how much money they have coming in.

1336
01:38:42,046 --> 01:38:43,306
Why do we like strategy?

1337
01:38:43,946 --> 01:38:47,106
Not only are they probably going to have the biggest balance sheet, as Jeff just said,

1338
01:38:47,306 --> 01:38:48,626
but they give us a choice.

1339
01:38:49,246 --> 01:38:50,386
You want to buy MSDR?

1340
01:38:50,646 --> 01:38:55,046
You get no dividends and you get no yield at all except for it going up.

1341
01:38:55,266 --> 01:38:58,706
If you want to realize a gain and take something out, you must trim a piece of it and sell

1342
01:38:58,706 --> 01:38:59,506
it and pay taxes.

1343
01:38:59,506 --> 01:39:04,886
or you could take some of your money and you could buy the press and there you'll get a yield.

1344
01:39:05,386 --> 01:39:12,366
So Soleil, I don't think anybody is really selling houses, cash flowing in order to buy Bitcoin.

1345
01:39:12,366 --> 01:39:17,406
I think that there are people that are selling houses to buy a prep like stretch because it's

1346
01:39:17,406 --> 01:39:22,946
paid monthly. I get 11% and a typical cap rate on real estate is maybe five to 8%.

1347
01:39:22,946 --> 01:39:29,506
percent and for them they're like oh i can get this cash flow from a prep without having to fix

1348
01:39:29,506 --> 01:39:35,586
the backed up toilet yeah that i think does happen but buying native bitcoin unlikely

1349
01:39:36,466 --> 01:39:39,906
because it does not pay what they used to get and so i'm not saying

1350
01:39:42,066 --> 01:39:47,666
buy all preps or buy all mstr buy all bitcoin maybe can't we all just get along and buy a little

1351
01:39:47,666 --> 01:39:53,926
little bit of each? Well, your example there, Green, is spot on for all of this. And that's

1352
01:39:53,926 --> 01:39:58,786
why people are going to understand these companies ultimately, because it's how you structure your

1353
01:39:58,786 --> 01:40:04,666
own personal financial life. There's the saying, nobody gets rich on a salary. You have to own

1354
01:40:04,666 --> 01:40:10,646
something. So people understand compounding. That's what you're doing with retirement accounts

1355
01:40:10,646 --> 01:40:17,646
and those types of things is you're buying assets that compound over time. And the earlier you

1356
01:40:17,646 --> 01:40:22,366
start the longer that compounding period is the more impactful it is the more wealth you end up

1357
01:40:22,366 --> 01:40:26,926
with on the back end it's the same thing that's happening with these companies we flipped it

1358
01:40:26,926 --> 01:40:31,006
all these other companies are going out of business slowly focusing on their income statements

1359
01:40:31,566 --> 01:40:36,366
and now you've got a whole cohort of businesses that are focusing on the compounding of the

1360
01:40:36,366 --> 01:40:44,286
balance sheet side and so people do understand the concept they just don't know it yet they're

1361
01:40:44,286 --> 01:40:48,926
still getting there it's confusing because businesses have always just been measured by

1362
01:40:48,926 --> 01:40:54,446
top line bottom line margins right that's what you're focusing on so they have to shift it going

1363
01:40:54,446 --> 01:41:00,926
well that's not how you run your life right if you're planning to retire one day you know what

1364
01:41:00,926 --> 01:41:06,846
you're doing you're buying assets somewhere you better be right because otherwise retirement's

1365
01:41:06,846 --> 01:41:12,686
gonna be tough but but you know what you know i'll tell all you guys and and dan dan was with me

1366
01:41:12,686 --> 01:41:18,846
many places we traveled around the world last year um i talked to a lot of people that are cfos

1367
01:41:18,846 --> 01:41:23,886
that aren't running bitcoin treasury companies or analysts or so forth and i had a lot of these

1368
01:41:23,886 --> 01:41:29,886
conversations and i'm like well can you know what's your opinion on fasby fair value accounting

1369
01:41:29,886 --> 01:41:39,566
what it's going to do with strategy and you know what i got what i'm like and i'm like cool you

1370
01:41:39,566 --> 01:41:42,426
I think the beverage counter is over there.

1371
01:41:42,526 --> 01:41:43,486
Let's go, I'm going to go grab a diet.

1372
01:41:43,826 --> 01:41:45,366
The fact that I could say it to somebody

1373
01:41:45,366 --> 01:41:46,566
that has an accounting degree,

1374
01:41:47,466 --> 01:41:49,446
and this is the biggest advance, I think,

1375
01:41:49,506 --> 01:41:52,766
in FASB and accounting in probably 10 or 20 years.

1376
01:41:52,846 --> 01:41:54,806
I say that with no hyperbole at all.

1377
01:41:55,286 --> 01:41:57,986
And they're like, they looked at me like, what?

1378
01:41:58,086 --> 01:41:59,686
I'm like, you just told me you're an accountant.

1379
01:41:59,786 --> 01:42:00,786
You just told me you're a CFO.

1380
01:42:00,926 --> 01:42:02,506
You just told me you're a controller in a company.

1381
01:42:02,786 --> 01:42:03,986
You just told me you're a CEO.

1382
01:42:04,366 --> 01:42:05,766
I'm not talking to Joe Retail,

1383
01:42:06,046 --> 01:42:18,180
but you don know how many times in different places around the world Orlando Las Vegas Prague New York City New York City multiple times

1384
01:42:18,180 --> 01:42:22,260
I would say this to hear what I want to hear what their opinion about this was.

1385
01:42:22,640 --> 01:42:23,480
And what I got was.

1386
01:42:24,900 --> 01:42:25,380
What?

1387
01:42:26,420 --> 01:42:27,700
That was very calm.

1388
01:42:27,840 --> 01:42:28,720
And Dan was with me.

1389
01:42:28,860 --> 01:42:31,660
And I know I'm not going to name any of these people or call them out.

1390
01:42:31,840 --> 01:42:36,240
They're probably not listening to that to an hour and 46 minutes as we talk about this.

1391
01:42:36,240 --> 01:42:40,020
But I'm just going to tell you guys, that was my takeaway for last year.

1392
01:42:40,460 --> 01:42:45,180
It tells you how few people are willing to allow themselves to think differently.

1393
01:42:45,880 --> 01:42:58,140
These guys are slowly dying because they're fighting this uphill battle against innovation constantly, while they're not reserving a war chest that's going to keep their companies alive if something shows up that competes with them.

1394
01:42:58,140 --> 01:43:02,760
right they're not even willing to make that change because if they suggested and they're not plowing

1395
01:43:02,760 --> 01:43:08,740
all of that cash flow that's coming in back into r d and more efficient facilities and more sales

1396
01:43:08,740 --> 01:43:13,200
people if they're not getting it out the door and showing growth growth growth they feel like

1397
01:43:13,200 --> 01:43:18,520
they're failing but you're one disruption away from being out of business if you have no fallback

1398
01:43:18,520 --> 01:43:25,680
if you have no balance sheet capital to rely on if you have to reinvent yourself yeah so so ben

1399
01:43:25,680 --> 01:43:26,220
I'm telling you what you're saying.

1400
01:43:26,400 --> 01:43:28,940
You know, this comment came up and this guy wrote,

1401
01:43:29,060 --> 01:43:30,880
hey, I know somebody that during COVID

1402
01:43:30,880 --> 01:43:32,460
sold all of his properties and bought Bitcoin.

1403
01:43:33,260 --> 01:43:33,580
Okay.

1404
01:43:34,500 --> 01:43:36,720
No matter what I say, there's always somebody,

1405
01:43:37,060 --> 01:43:38,840
hey, I typically don't see 80-year-old people

1406
01:43:38,840 --> 01:43:39,1000
running on buying a Tesla.

1407
01:43:40,440 --> 01:43:42,040
Oh yeah, my grandpa's got a Tesla.

1408
01:43:42,200 --> 01:43:43,300
And I don't see the same thing

1409
01:43:43,300 --> 01:43:45,440
with people buying Bitcoins being 80.

1410
01:43:45,520 --> 01:43:47,200
Oh yeah, my grandpa bought Bitcoin.

1411
01:43:47,740 --> 01:43:50,660
Like, okay, you taught me about the exceptions.

1412
01:43:50,880 --> 01:43:51,580
Let me tell you this.

1413
01:43:51,960 --> 01:43:53,880
In 2018, I bought a house

1414
01:43:53,880 --> 01:43:56,180
because I went all in in 2017 in Bitcoin.

1415
01:43:56,500 --> 01:43:58,840
It's sub $2,000, Grayscale Bitcoin Trust.

1416
01:43:59,840 --> 01:44:01,640
That real estate agent that helped me buy the house,

1417
01:44:01,700 --> 01:44:02,980
I'm still friends with him to this day.

1418
01:44:03,180 --> 01:44:05,560
And I said, in the intervening eight years,

1419
01:44:05,860 --> 01:44:09,220
how many people have purchased a house in Silicon Valley

1420
01:44:09,220 --> 01:44:11,600
with the most, typically the most technologically,

1421
01:44:12,080 --> 01:44:13,880
you know, focused people, right?

1422
01:44:13,960 --> 01:44:16,880
In Silicon Valley, from San Jose up to San Francisco.

1423
01:44:17,520 --> 01:44:20,780
How many people use profits from either Bitcoin or crypto

1424
01:44:20,780 --> 01:44:22,400
in the intervening eight years?

1425
01:44:22,400 --> 01:44:27,440
and his response to me was zero, absolutely zero.

1426
01:44:27,680 --> 01:44:29,360
I said to him, oh, okay.

1427
01:44:29,680 --> 01:44:32,140
How many times has the word Bitcoin or crypto

1428
01:44:32,140 --> 01:44:35,200
ever come up in a conversation at all in your whole life?

1429
01:44:35,220 --> 01:44:37,300
And this guy sells a hundred houses a year.

1430
01:44:37,760 --> 01:44:38,680
There's a whole thing.

1431
01:44:38,760 --> 01:44:40,500
This guy's a top performer in real estate.

1432
01:44:40,960 --> 01:44:43,080
And he's like, never once.

1433
01:44:43,080 --> 01:44:45,020
The only time I've ever heard of Bitcoin or crypto

1434
01:44:45,020 --> 01:44:46,680
with you is with you.

1435
01:44:47,040 --> 01:44:48,580
Never once has it come up.

1436
01:44:48,880 --> 01:44:50,180
This is eight years later,

1437
01:44:50,900 --> 01:44:55,060
typically with the most advanced people and young people, and none of them are using any of those

1438
01:44:55,060 --> 01:44:59,460
gains to buy or even mentioning it that they do it. And then I said to him like, well, how do they

1439
01:44:59,460 --> 01:45:05,380
buy all these houses? I'm like, what percentage of the people that buy houses are at Nvidia or

1440
01:45:06,980 --> 01:45:12,980
AWS specifically, even though they're at Amazon? He's like, oh, that's 70% of my business.

1441
01:45:12,980 --> 01:45:17,780
So these are all tech people, but they're not interested in Bitcoin or they don't even bring it

1442
01:45:17,780 --> 01:45:20,260
The world's going to move so fast around them.

1443
01:45:20,400 --> 01:45:25,340
I mean, if you're not paying attention to it, this stuff is going to get huge really quick.

1444
01:45:25,540 --> 01:45:27,680
And it's going to dwarf everything very fast.

1445
01:45:28,260 --> 01:45:28,800
Very fast.

1446
01:45:29,980 --> 01:45:34,720
I want to go back to the podcast for just a moment because I've got a fun sailor story.

1447
01:45:35,480 --> 01:45:41,700
And just thinking, watching this podcast with Danny brought back memories.

1448
01:45:41,700 --> 01:45:44,780
So a lot of people said sailor was very rude.

1449
01:45:44,780 --> 01:45:52,540
he was like out of line which i thought isn't was an interesting uh like comment for the for like

1450
01:45:53,100 --> 01:45:58,780
people on x to make but i also realized like oh a lot of these people probably haven't met him

1451
01:45:58,780 --> 01:46:03,260
in person probably haven't met what it's like to meet a billionaire like you don't waste a

1452
01:46:03,260 --> 01:46:10,060
billionaire's time like you come in and like if you got a 30-minute meeting like i've had a one-on-one

1453
01:46:10,060 --> 01:46:15,100
meeting with him last year at strategy world 30 minute meeting walked in he's like okay how do you

1454
01:46:15,100 --> 01:46:19,980
want to spend the time luckily i came prepared i had a few things i wanted to talk about i'm like

1455
01:46:19,980 --> 01:46:25,420
need your opinion on this like i'm curious about this and um you know i came and came to him with

1456
01:46:25,420 --> 01:46:35,180
an idea of like uh starting a credit rating agency for bitcoin companies and he's like well you could

1457
01:46:35,180 --> 01:46:39,580
do that but if you do that go raise 50 million dollars by 40 million dollars of bitcoin and when

1458
01:46:39,580 --> 01:46:43,740
the credit rating agency fails at least you have 40 million dollars of bitcoin it was like okay

1459
01:46:43,740 --> 01:46:51,180
what's next and i was like i was like holy you know like i thought it was gonna be like you know

1460
01:46:51,180 --> 01:46:56,140
at least you know 10 to 15 minutes part part of this conversation and i'm like okay it's just

1461
01:46:56,140 --> 01:47:03,020
like obliterated like the face like in 10 seconds and um i'm like okay next topic

1462
01:47:03,020 --> 01:47:09,220
and you and by the way you think what the guy's doing is great yeah right you were trying to be

1463
01:47:09,220 --> 01:47:15,300
helpful and and he right looking back are you mad at him because he said this to you looking back

1464
01:47:15,300 --> 01:47:20,380
like i mean i walked out the door i'm like damn wow like did that go bad you know like we talked

1465
01:47:20,380 --> 01:47:28,360
about a few other things i'm like did that go like what happened there but honestly i i was so

1466
01:47:28,360 --> 01:47:36,360
appreciative of his honesty because like look at where i'm at now i joined a company and i'm like

1467
01:47:36,360 --> 01:47:41,340
running a bitcoin treasury strategy and we've launched a perpetual preferred equity it's

1468
01:47:41,340 --> 01:47:47,120
trading in the market like that was some of the best advice i've ever had like don't waste your

1469
01:47:47,120 --> 01:47:54,340
time and do that like do the best idea like this is the best idea and it just it kind of it

1470
01:47:54,340 --> 01:47:59,600
continued to bring me there. So, um, I mean, it helped shape what this podcast is today,

1471
01:47:59,680 --> 01:48:04,380
the investment grade Bitcoin podcast. And, um, I was incredibly appreciative of it,

1472
01:48:04,520 --> 01:48:08,040
appreciative of it. I've had a few conversations with him since then. And it's like,

1473
01:48:08,040 --> 01:48:12,780
he's been very gracious with his time, very appreciative of it then. But the thing I,

1474
01:48:12,1000 --> 01:48:17,320
the thing I appreciate the most is it's, he's so honest and he's just, he's so true to himself.

1475
01:48:17,320 --> 01:48:22,420
And he's so true to his brain. He's just listening to like, whatever is coming to his mind. And he's

1476
01:48:22,420 --> 01:48:27,020
like giving it right to you and he's just like slamming it in your chest so and that's what

1477
01:48:27,020 --> 01:48:32,080
happened to danny it's like he walked into a bitcoiner's house like he walked into his house

1478
01:48:32,080 --> 01:48:38,680
like that that was gracious that was respectful like danny invited him in like and had it had a

1479
01:48:38,680 --> 01:48:43,340
conversation i'm sure like it was a respectful conversation but like when the lights are on like

1480
01:48:43,340 --> 01:48:47,640
i'm gonna give you my thoughts i'm gonna give you exactly what i'm thinking i'm gonna

1481
01:48:47,640 --> 01:48:49,740
like shove it in your face.

1482
01:48:50,360 --> 01:48:53,100
But I think he expects it in return too, right?

1483
01:48:53,100 --> 01:48:54,640
I don't think people understand

1484
01:48:54,640 --> 01:48:57,900
that this is truly how he's wired

1485
01:48:57,900 --> 01:48:59,640
and what he thinks about all the time.

1486
01:49:00,640 --> 01:49:03,760
I mean, I've never not seen him be focused on this.

1487
01:49:03,860 --> 01:49:05,980
I remember even once when I was at dinner

1488
01:49:05,980 --> 01:49:08,840
and I was at a table with him and, you know, he's eating.

1489
01:49:08,940 --> 01:49:10,140
And then all of a sudden he pops up

1490
01:49:10,140 --> 01:49:11,700
and he just looks across the table at somebody

1491
01:49:11,700 --> 01:49:13,040
and he goes, what aren't we doing well

1492
01:49:13,040 --> 01:49:13,820
and how do we do better?

1493
01:49:15,020 --> 01:49:16,800
And like, he really wanted answers.

1494
01:49:16,800 --> 01:49:20,020
He wanted to hear what he wasn't doing good at and how he could improve it.

1495
01:49:20,080 --> 01:49:22,140
You saw panic set there on the table.

1496
01:49:22,820 --> 01:49:24,700
I mean, but that's how he operates.

1497
01:49:24,940 --> 01:49:28,420
Like, he'll give you exactly what he thinks, just how he thinks it, unfiltered.

1498
01:49:28,760 --> 01:49:29,900
And he'll take the time.

1499
01:49:29,1000 --> 01:49:31,920
You always see him pause, right?

1500
01:49:31,940 --> 01:49:36,960
He always thinks about everything he says, but then he gives it to you, you know, blunt.

1501
01:49:37,180 --> 01:49:39,620
And that's pretty rare today, right?

1502
01:49:39,620 --> 01:49:41,700
There's a lot of pleasantries that are exchanged.

1503
01:49:41,700 --> 01:49:50,680
And to your point, Jeff, when you meet, you know, guys that are in his position and billionaires and guys who really value their time, that's how they interact.

1504
01:49:51,320 --> 01:49:56,620
Right. It is. It's straight to the point. They're not going to beat around the bush. He's not going to couch it. He's not going to make it OK for you.

1505
01:49:56,680 --> 01:49:59,700
This is what he thinks. And he's going to tell you exactly how he thinks it.

1506
01:50:00,620 --> 01:50:09,400
You know, I'm thinking about how like it probably took him more time to take a deep breath and sigh than it did to just obliterate your entire idea.

1507
01:50:09,400 --> 01:50:16,240
it was just that quick but by the way guys look we were at the bitwise event and we were in new

1508
01:50:16,240 --> 01:50:21,500
york city and the the event kind of had ended all the speaking and i we went over we were talking to

1509
01:50:21,500 --> 01:50:25,360
say there's a whole group of this so there's a group of people it's a public setting there are

1510
01:50:25,360 --> 01:50:30,560
many people everybody was asking all kinds of questions and so i had said to him and this was

1511
01:50:30,560 --> 01:50:37,420
in march of this year and i said to say i thought i thought this was a fabulous idea i said well i

1512
01:50:37,420 --> 01:50:41,980
said, I kind of have two ideas for you. I can run past. He's like, sure, Mike, what is it? And I said,

1513
01:50:42,100 --> 01:50:47,660
did you ever think about stable coins and how that could potentially help you? He goes,

1514
01:50:47,960 --> 01:50:53,560
why would I think about stable coins? I'm like, and then I'm like, well, would it make sense to

1515
01:50:53,560 --> 01:51:02,320
issue MSCR stock in different currencies? And he's like, no, I could raise MSCR stock up in any

1516
01:51:02,320 --> 01:51:08,080
dollar amount in us dollars and the conversion be done by somebody else and then he proceeds

1517
01:51:08,080 --> 01:51:13,200
to hand me my ass for the next five minutes you guys were some of you guys yeah and i'm like

1518
01:51:13,200 --> 01:51:17,920
i just thought this was and i'm like okay i i just stood there and took it

1519
01:51:19,200 --> 01:51:26,160
now i will say this well he then came out with a product called stre he's got he's got it right

1520
01:51:26,160 --> 01:51:32,320
in a different market grain of salt right sprinkling from salt on it in euros and then he talks about

1521
01:51:32,320 --> 01:51:44,014
canadian dollars so when i said that to him i was like i thought it was a good idea now nine months later when STR came out I like I guess the idea wasn that bad Right But you know

1522
01:51:45,874 --> 01:51:46,314
Yeah.

1523
01:51:46,694 --> 01:51:47,014
Yeah.

1524
01:51:47,474 --> 01:51:51,834
If you're in this space, it's just, it's a matter of time before it's your turn, right?

1525
01:51:51,834 --> 01:52:00,834
Like if you're vocal and you're sharing ideas and sharing your thoughts, it's a matter of time before you've got one that you let out that you didn't think through all the way.

1526
01:52:01,094 --> 01:52:03,574
But I'll tell you what, it sharpens you.

1527
01:52:03,634 --> 01:52:09,474
now you know you need to really think through what it is you want to discuss make sure you've

1528
01:52:09,474 --> 01:52:13,574
actually thought about it deeply oh totally before you just start throwing it around which you know

1529
01:52:13,574 --> 01:52:19,914
we're on podcasts we're throwing crap around all the time but it's a better way to operate right at

1530
01:52:19,914 --> 01:52:24,014
an event before that i was i was you know again you guys if you show up at an event and you're

1531
01:52:24,014 --> 01:52:30,094
respectful and you wait in line look i mean you know you could have a good chance of talking to

1532
01:52:30,094 --> 01:52:32,914
sailor and depending on how many people there you could talk to them for three minutes or five

1533
01:52:32,914 --> 01:52:36,874
minutes and i went to an event i said hey you know i was talking can i talk to you for a minute he's

1534
01:52:36,874 --> 01:52:42,454
like yes be fast i'm like okay i'm like i'm trying to figure this out he goes this is what you need

1535
01:52:42,454 --> 01:52:49,174
to do and he points at me i'm like oh what do i need to do he goes use chat gp yes make sure you're

1536
01:52:49,174 --> 01:52:53,654
going to deep research mode and then you have it really think and then you let it you let it you

1537
01:52:53,654 --> 01:52:58,314
let it sit there and they are using deep research i use deep research more are you using it i'm like

1538
01:52:58,314 --> 01:53:03,774
no, I'm not using deep research mode. I didn't know the deep. And I found out that deep research

1539
01:53:03,774 --> 01:53:08,274
mode came out like three weeks before he said this. I'm like, I don't know about deep research

1540
01:53:08,274 --> 01:53:12,474
mode. And he goes, okay, you got to ask these questions. I'm like, okay, thank you very much.

1541
01:53:12,494 --> 01:53:17,874
He's like, have a good day. And then he walks up and I'm like, I didn't know deep research mode

1542
01:53:17,874 --> 01:53:23,854
existed. So how would I know to use it? And because he knew about it. So again, it's just

1543
01:53:23,854 --> 01:53:29,254
the style sometimes and I didn't take and I continue to talk to the guy you know in public

1544
01:53:29,254 --> 01:53:34,874
settings so I that's what I'm saying folks yeah you you learn a lot from being around these things

1545
01:53:34,874 --> 01:53:39,514
and it's crazy going to an event like that because you see like a flock of people kind of like go

1546
01:53:39,514 --> 01:53:43,354
around them and just kind of like listening to what's going on especially those smaller events

1547
01:53:43,354 --> 01:53:48,174
but I mean he's he'll sit there and he's super gracious with his time because he'll sit there

1548
01:53:48,174 --> 01:53:51,594
and chat for 20, 30 minutes.

1549
01:53:51,754 --> 01:53:53,114
I've seen chat for like an hour

1550
01:53:53,114 --> 01:53:55,014
with like a group of people around just watching.

1551
01:53:55,554 --> 01:53:58,194
So it's a really cool experience

1552
01:53:58,194 --> 01:54:00,374
being a part of like these events in person.

1553
01:54:01,054 --> 01:54:02,074
Highly recommend it.

1554
01:54:02,174 --> 01:54:05,694
I mean, it definitely builds conviction

1555
01:54:05,694 --> 01:54:08,134
if you're on the fence on any of these things.

1556
01:54:08,134 --> 01:54:09,694
You could go meet these people in person

1557
01:54:09,694 --> 01:54:11,234
and talk to some of the people

1558
01:54:11,234 --> 01:54:12,334
that are operating in this space.

1559
01:54:12,554 --> 01:54:14,134
And it's pretty impressive.

1560
01:54:15,674 --> 01:54:17,634
Going to a Bitcoin conference for me,

1561
01:54:17,634 --> 01:54:24,434
like back in 2024 was kind of it was a whole new experience for me like totally changed my

1562
01:54:24,434 --> 01:54:29,234
perspective on like how much is actually being done behind the scenes and how many people are

1563
01:54:29,234 --> 01:54:33,314
working in the space because sometimes you know you just see numbers on a screen on a brokerage

1564
01:54:33,314 --> 01:54:40,594
account and it's hard to put into context cool all right we're out of hour 54 we've got uh we've

1565
01:54:40,594 --> 01:54:49,534
got a winner of the uh free ticket for the true north world it is uh i believe and i think kyle

1566
01:54:49,534 --> 01:54:55,034
if you don't mind putting it on the screen the winager the winner is voyager 21 m there you go

1567
01:54:55,034 --> 01:55:03,754
boom voyager you've been around he's been around since the dawn of time he deserves it for quite

1568
01:55:03,754 --> 01:55:09,074
a while he's an og uh we we will dm you and we'll reach out i appreciate you being here thanks for

1569
01:55:09,074 --> 01:55:15,234
retweet and uh yeah we'll we'll be in contact on that but um i mean maybe we'll pass it around

1570
01:55:15,234 --> 01:55:20,434
final thoughts so we could try to keep it within two hours and uh we'll go from there i mean we

1571
01:55:20,434 --> 01:55:26,754
didn't hit on so many things like uh like the fed uh what's going on the fanny and freddy real estate

1572
01:55:26,754 --> 01:55:33,954
uh through credit cards um points points getting obliterated i mean war and chaos everything going

1573
01:55:33,954 --> 01:55:39,634
on right now but uh maybe we'll have some little side shows talking about that but maybe i'll start

1574
01:55:39,634 --> 01:55:45,394
with uh i'll start with you dan your final thoughts on what you're thinking about sure

1575
01:55:45,394 --> 01:55:51,234
uh we didn't get to bring it up tonight but i have a slide deck on volatility on stretch

1576
01:55:51,234 --> 01:55:58,514
when bitcoin fell 33 from its all-time high of 126 down to whatever it was 80k or so the the

1577
01:55:58,514 --> 01:56:01,954
the volatility on stretch spike to about 18 or 19%.

1578
01:56:01,954 --> 01:56:04,314
Right after that volatility spike,

1579
01:56:04,674 --> 01:56:08,674
it's, you know, all the press really had some serious red on that day.

1580
01:56:08,674 --> 01:56:13,574
The USD cash reserve was announced by strategy.

1581
01:56:13,774 --> 01:56:17,354
Since then, all of the press have been trading extremely low volatility.

1582
01:56:18,174 --> 01:56:20,614
And in particular, stretch has been hitting the ATM

1583
01:56:20,614 --> 01:56:23,354
or has been hitting that $100 peg.

1584
01:56:23,514 --> 01:56:25,794
So I think strategy has been nimble

1585
01:56:25,794 --> 01:56:29,994
and they've updated their guidance with the USD cash reserve.

1586
01:56:30,334 --> 01:56:33,034
And finally, we're seeing some momentum with stretch.

1587
01:56:33,274 --> 01:56:34,874
So I think it's super exciting moving forward.

1588
01:56:35,814 --> 01:56:37,894
Yeah, all eyes on the next couple of days

1589
01:56:37,894 --> 01:56:39,174
because the ex-dividend date,

1590
01:56:39,374 --> 01:56:44,194
if you wanted to be a part of the dividend payment for January,

1591
01:56:44,534 --> 01:56:46,874
you needed to have, I think you needed to own the stock

1592
01:56:46,874 --> 01:56:48,854
at the beginning of trading today

1593
01:56:48,854 --> 01:56:50,534
or at some point throughout the day today.

1594
01:56:51,134 --> 01:56:52,494
And the ex-dividend date is tomorrow

1595
01:56:52,494 --> 01:56:54,814
and the record date I think is the day after that.

1596
01:56:54,814 --> 01:56:57,694
So it'll be really own it at the close of yesterday,

1597
01:56:57,814 --> 01:56:59,774
own it at the close of yesterday.

1598
01:56:59,774 --> 01:57:02,994
So it'll be really interesting to see how it trades Thursday, Friday,

1599
01:57:03,114 --> 01:57:06,114
because I think you have to hold it through that period, right?

1600
01:57:06,134 --> 01:57:07,814
You've got to hold it through the 15th.

1601
01:57:08,454 --> 01:57:11,074
So you've got to hold it through the close of tomorrow.

1602
01:57:11,774 --> 01:57:14,274
So we'll really find out just open Friday.

1603
01:57:14,474 --> 01:57:14,734
Just open.

1604
01:57:14,954 --> 01:57:18,614
It's they take the snapshot at the open of the market of all the holders,

1605
01:57:18,614 --> 01:57:21,214
which is why you got to have it at the close the day before.

1606
01:57:21,374 --> 01:57:21,694
Okay.

1607
01:57:22,294 --> 01:57:22,474
Yep.

1608
01:57:22,574 --> 01:57:23,914
So we'll see how it trades tomorrow.

1609
01:57:23,914 --> 01:57:24,174
Yeah.

1610
01:57:24,174 --> 01:57:29,134
if it's going to sell off it's going to sell off right after the open uh today at this point

1611
01:57:30,734 --> 01:57:35,854
but you probably expect it to come back in right like if people are rolling to different places

1612
01:57:35,854 --> 01:57:38,654
they're going to go out they're going to come back in they're going to go into other things

1613
01:57:38,654 --> 01:57:46,094
maybe other yield products absolutely rolling it back into other back into stretch so we'll

1614
01:57:46,094 --> 01:57:52,894
yeah we'll see how this goes cool pass it to mike hey i just thank you so i thought this was a

1615
01:57:52,894 --> 01:57:58,374
different uh msdr true north tonight so i thought this was great content i want to say congratulations

1616
01:57:58,374 --> 01:58:05,074
dan hillary launching buck uh which is a stable coin backed by stretch so i think that's awesome

1617
01:58:05,074 --> 01:58:10,514
congratulations on your new role there i think that's awesome thanks yeah you're welcome and

1618
01:58:10,514 --> 01:58:16,114
it's always about constantly reinventing yourself and so so with that you know just let's just keep

1619
01:58:16,114 --> 01:58:22,814
on doing it and i think that um by the way mason had a post today that was awesome mason ford who's

1620
01:58:22,814 --> 01:58:29,954
part of MSC Archery North. His post was buying Bitcoin sub $100,000 is like boomers buying

1621
01:58:29,954 --> 01:58:35,014
houses sub $100,000. I thought that was a great parallel that he said. So I'll end with that.

1622
01:58:35,534 --> 01:58:39,374
And then can't wait to see you guys next week. And in Las Vegas.

1623
01:58:40,274 --> 01:58:44,614
Excellent. Thanks, Mike. Congrats, Dan. Over to you, Soleil.

1624
01:58:45,614 --> 01:58:49,854
Yeah, I got another message for the 1XMNav bears. Let's say you're making a decent salary,

1625
01:58:49,854 --> 01:58:58,454
100k six figures good for you and you've got one bitcoin and you are getting your little three

1626
01:58:58,454 --> 01:59:04,214
percent raises every year when bitcoin hits a million do you know what your nav is trending

1627
01:59:04,214 --> 01:59:14,054
towards one x freaking m nav stupid head so get over yourself lol one x m nav ponzi bears yeah

1628
01:59:14,054 --> 01:59:17,194
Thanks, Soleil. Over to you, Ben.

1629
01:59:18,594 --> 01:59:19,934
Yeah, I'll just keep mine short.

1630
01:59:20,174 --> 01:59:24,934
And I'd say it's going to take a lot of us to continue to push Bitcoin forward.

1631
01:59:25,254 --> 01:59:30,234
So be willing to tune out the noise, keep building, keep pushing things forward.

1632
01:59:30,574 --> 01:59:31,674
We're going to win in the end.

1633
01:59:31,814 --> 01:59:35,014
We all know this, but it's going to take a lot of us building to make it happen.

1634
01:59:35,214 --> 01:59:37,314
So don't be afraid to keep pushing.

1635
01:59:38,634 --> 01:59:41,994
Bingo. That's in line with my final thoughts is always be building.

1636
01:59:41,994 --> 01:59:47,534
Yeah, it's going to take so many people to communicate this message and everything that's going on and everything that everybody's building here.

1637
01:59:47,974 --> 01:59:49,334
Don't be afraid to talk about this stuff.

1638
01:59:50,194 --> 01:59:51,734
And it's easy.

1639
01:59:52,074 --> 02:00:01,554
It's easier to communicate when you have rationality and numbers and graphs and charts and statistics and data.

1640
02:00:02,634 --> 02:00:05,774
And historically with Bitcoin, that was pretty difficult to do.

1641
02:00:05,774 --> 02:00:20,734
And now with some of these newer instruments that have hit the market with the perpetual preferred equity, you can create really compelling stories with data and graphs and analytics that are a lot easier to consume for people that are generally nervous about volatility.

1642
02:00:20,734 --> 02:00:29,214
so go build something keep operating in the community communicate with people and uh yeah

1643
02:00:29,214 --> 02:00:33,814
go to your local bitcoin meetups talk to other people and talk to local businesses about you know

1644
02:00:33,814 --> 02:00:38,014
how they're operating their treasury every business on the planet has a treasury

1645
02:00:38,014 --> 02:00:45,814
it's not just corporations like even your local carpenter or uh you know your teriyaki shop or

1646
02:00:45,814 --> 02:00:50,334
what you know whatever it may be they all have treasuries so it's good if it's good for a person

1647
02:00:50,334 --> 02:00:51,014
And it's good for everybody.

1648
02:00:51,134 --> 02:00:52,654
It's good for businesses, good for corporations.

1649
02:00:53,254 --> 02:00:54,794
So thank you, everybody.

1650
02:00:55,014 --> 02:00:55,834
Appreciate the time.

1651
02:00:56,194 --> 02:01:00,514
And that is it for episode 51 of True North, the investment-grade Bitcoin podcast.

1652
02:01:00,814 --> 02:01:01,374
Appreciate it.

1653
02:01:01,694 --> 02:01:01,934
See ya.