You get a shiver in the dark, it's raining in the park, but meantime
Sound of the river, you're stopping, you hold everything
A band that's blowing, Dixie, double fall time
You feel alright when you hear the music ring
Now you step inside but you don't see too many faces
Coming in out of the rain to hear the jazz go down
Competition in other places
We are back. Episode 41, the investment grade Bitcoin podcast, True North. Here we go. Let's
bring everybody on. We're going to have some fun tonight. We're going to do a crash course
in corporate finance. We're going to talk about credit. We're going to talk about risk.
We're going to dive through a ton of topics. We have got special guests here tonight. We've got
the Bitcoin wizard, Adam Livingston. We've got Tim Kotzman in the flesh going to come say hi.
Grain of salt just hopped on. We got Ben Workman as usual. And Soleil is going to hit us with
a little bit of history tonight. So we're going to have a really good conversation.
We're going to talk about quite a few things on the agenda. We'll just go through it.
it. Actually, we'll start with an intro. The intro being this is True North, the investment
grade Bitcoin podcast. If this is your first time listening to this, we talk about everything
under the sun, Bitcoin related, Bitcoin finance related, securities. We talk about investments.
We talk about capital, collateral, insurance, different marketplaces, and just the everything
finance that sits behind the scenes of Bitcoin here and the combination of the two.
So it has been evolving quite a bit and we just take it as it goes every day. We talk about what's
happened in the last week and thanks for being here. Appreciate the time. So the agenda for today,
typically we are going to walk through the STR micro strategy and the strategy preferred equities
and an update on all of the statistics. We're going to get into what is money, what is credit,
What is risk? Bitcoin treasury companies can multiple exist.
This is a common thread. This is a really hot topic at the moment.
And just thinking about who's going to succeed here in this marketplace.
Dominant empires. What does the dominant empire look like?
The debasement trade and the dollar abroad.
Grain of salt was just in South America.
So we're going to get some unique perspectives on that.
We have a new segment that we're starting every week called the bad bond of the week.
I think this will be extended. It'll be good.
we'll talk about risk and think about different frameworks of who's holding some of these things
and how that might change over time. And then AI and Cisco getting an update on the Silicon
Valley business model. I think we'll also hit on energy. I think energy is a really huge topic at
the moment and we'll kind of weaves through this entire thing. So yeah, there's so much going on
here. We are frequently talking about a marketplace that is really operating in dog years, about seven
years of typical life is happening in one year and everything is moving so quickly and uh yeah we're
excited to talk about it and get through it so without further ado i will pop over to actually
we've got tim kotzman hey hey i'm still alive you're still alive you're not you're not digital
i mean we could play you if you want uh and just you know get into it or we could get it in in the
flesh in real life ladies and gentlemen still got it we don't know so we're gonna test him out again
today i don't even know i don't even know ladies and gentlemen what you're about to hear may be
amazing but it is not financial advice it's for entertainment and informational and entertainment
purposes only back to jeff adam livingston soleil ben and grain of salt thank you i gotta ask him
And when you're out in the streets of New York City harassing people about Bitcoin on your show, do you have to give them the disclaimer before you get rolling there or are you just diving right in?
I'm diving right in, but, you know, it usually comes up at some point or maybe they should be telling me that.
I mean, I don't know if you saw episode two, but, you know, there's there's guys in Times Square that are taking options trading courses.
I mean, New York is, you know, a bunch of hustlers out here.
you gotta do taxis too just hop in a bunch of different taxis and talk to them see what they're
you'll get a lot of xrp most of the taxis i'm in the guys are talking about xrp it just kind of
goes to show you okay yeah i think adrian and i are going to do a few uh uh try to shoot some
stuff while we're in santa monica uh later next week so that could be interesting the options
traders are uh they're uh shadier than the chess players you gotta watch out
Also, a warm welcome to Adam Livingston, the Bitcoin wizard. You have officially surpassed
everybody and follower count on this entire stream. And congratulations. The flipping has occurred
and it is well-deserved because the amount of content you're putting out is absolutely absurd.
Your AI conversations are incredibly refined. And yeah, great, great, great work. So excited
to have you here today. Really appreciate that. This is a full circle moment for me
because you guys radicalized me. So thank you so much. I couldn't have done it without you.
Thank you. Absolutely. Absolutely. Okay. Let's get into it. Let's, let's jump into statistics,
which we talk about every week. And we just take a look at the health of MSTR, which is the,
whatever you want to call them, a thousand pound gorilla in the scene. We are going to share my
screen here. The 1080 pound gorilla. 1080 pound gorilla. Exactly. Long 1080s. Okay. MSDR financial
leverage. So we show this every week. We've got a few columns here. This is different timelines in
each different column. So focus your attention on what is now column BN, which is Bitcoin held
strategy holds 640,000 Bitcoin and 31 Bitcoin. Bitcoin price as of today, 122,000 ish. MSDR
price is about $331. Bitcoin assets, they've got $78.3 billion of assets on balance sheet,
$8.2 billion of debt, $6.5 billion of preferred stock. So your net capital sitting on balance
sheet, if you just take assets minus the debt is $70 billion, which is an absolute ton of money.
And you've also got another figure here, which is the net capital, which is the $70 billion number
minus four years of the preferred dividend outstanding. So you've got $67 billion in net
capital when you factor in at least four years of dividends on the balance sheet.
Then we've got this liability to asset ratio, which is just showing the liabilities, assuming
a pure notional value of the debt plus the preferred. You've got an 18.9% leverage ratio
and a debt coverage multiple or a BTC rating of 5.3. I think this will be pretty close to what
is on strategy's website. So when you think about, you know, what would, what kind of event would take
a company like this down that has leverage of this size and scale, it sounds like a lot on
a nominal basis, but on a percentage basis, it's really not that much. The price of Bitcoin would
need to be below $23,166 for the assets held on balance sheet to be worth less than the debt,
the notional debt outstanding. That is, I think, incredibly unlikely at this point.
and many people on the screen would be selling everything in their entire world to buy Bitcoin
at those prices or something else drastic maybe breaks Bitcoin. I think that's a very low tail
probability. So the price of Bitcoin, we need to go down about 81% and stay there for an extended
period of time for this to even start to become an issue. The next thing, I mean, obviously,
Yeah, hop in there, right?
Yeah, I just want to chime in real fast.
So I've talked about this before, but you said it's 18.9% is the current debt?
Leverage.
Yeah, right there.
That's the leverage.
That means they have the reverse.
That means they have approximately 81% left in assets.
And what I said previously before, about a month ago, is that when anybody goes to buy
a house, if you put down 20%, it doesn't matter whether the house is 100 grand or a million
dollars, you put down $200,000 and you're five to one leveraged. It's the exact opposite of what
people are comfortable doing. This is a volatile asset. We all know that, but this is very low
leverage. So when you hear in mainstream media, hey, Saylor's leveraged up to the gills or he's
got huge amounts of leverage, it's not. The notional amount is billions of dollars, like Jeff
just said, but the actual leverage ratio is the exact opposite of what you do when you buy your
house. And that's the interesting part. Bingo. Exactly. The other column I've got here is just
if you were to take out the $3 billion of convertible debt that's outstanding, that's
currently trading really deep in the money effectively as equity. So that actually drops
the leverage ratio even more. So on an as-if pro forma leverage basis, the liability ratio is around
15%, so even less. So the price of Bitcoin would need to go down even further. And obviously,
the price of mstr has been down in the last couple of weeks you know we've gotten a lot of crap
saying that we don't talk about it so obviously uh the price is down i can't control the stock you
know the stock does whatever whatever it does and uh you know that's just the way it goes
so um but like the reason we do this every week is to talk about the fundamentals like what this
it just because the stock goes down doesn't mean that they're not making money like the company
makes money. Like if the price of the equity goes down, it almost doesn't matter if the price of
Bitcoin is going higher, the company is getting stronger, like regardless of what the equity does.
So there's a lot of, you know, craziness, obviously short reports and a lot of energy being
like thrown around saying these things are dead. But the company is like getting like
incrementally stronger as the price of Bitcoin goes up, which makes the short thesis even
just more insane as you start to play this out and think about the game theory down the road,
like the long term. Sure. Are there shiny things in the market that people are chasing right now?
Absolutely. We just saw an energy stock with iron go from $5 to $60 in like three weeks or four
weeks or something like that. Yeah. There's a lot of shiny, shiny things in the market that people
are chasing. And if people make money on those, awesome. We talk about this because like, this is,
this is the big story. This is the huge story. This company has an order of magnitude greater
than the next closest company of the best capital on the planet. What does that look like down the
road? We're here to unpack that. That's what we're here to talk about today. So the fundamentals,
when you look at the fundamentals, the Bitcoin per share or the Bitcoin exposure per share is
increasing drastically year over year. Why do you buy this over IBIT? Your Bitcoin per share,
your Bitcoin exposure per share is increasing drastically over time, right? Just from 2023,
you've got increase of 74% and then increase of 26%. That is more Bitcoin. That's as simple as
that. You're yielding Bitcoin by operating and financing different operations. Anybody else have
anything to add there? Well, maybe I'm jumping ahead because I'm sure you've got this graphic
somewhere but aren't they closing in on really jumping up the treasury list oh yeah aren't they
in striking distance of being the number two the second largest treasury in yeah i thought you did
somebody somebody did a post on that yeah i did what was the number 100 140 000 uh 150 152 000
and they have the second largest corporate treasury in the world behind Berkshire Hathaway.
Now, I did a post about a month ago, which Saylor liked.
It was a big day for me.
So I'll congratulate myself.
And what I said is, is that if you adjust the balance sheet based upon the market cap
of the company, they have the largest treasury, the largest balance sheet in relationship to
the market cap, even including Berkshire Hathaway.
So that's the number one on the list.
So if you reframe it that way as a percentage of the market cap, they're way ahead of Berkshire Hathaway already.
And so with this, getting into second place is just is unprecedented.
Yeah, this is massive.
I think one thing to point out that kind of stood out to me a little bit when thinking through this is if you go look at these companies, their assets held, the number is very different.
So if you go on macro trends or anywhere where you scrape any of the public data, the assets held is actually maybe significantly larger for some of these companies.
but they show cash and short-term investments. Why? Because Bitcoin is effectively a cash
slash short-term investment. It's liquid. 24-7, 365, you can sell Bitcoin at any point in time.
It's the most liquid market in the world. Whereas these other companies that are carrying these
assets on their balance sheet might be a billion-dollar campus in Silicon Valley
that is illiquid. Who's going to buy that on the other side of the trade? It's an asset sitting
there, but it's very illiquid. So I think that's helpful when you think about the context of these
corporate treasuries. Like what's the value of this? Well, the value of having liquid assets is
you can protect your company against risk, any risk that happens at any point in time because
you have a liquid asset. So good point, Ben. Well, it's just such a massive jump, right?
What started as this darling of the dot-com bubble, and now all of a sudden they're shooting
up the list with companies that are perceived for the value that they're holding, these
large value organizations.
And now one's within striking distance of being in the top two, only behind Berkshire,
who is the poster child for holding capital.
And this is all made possible by Bitcoin and the power of corporate balance sheets.
Now, you know, people are going to argue this, you know, and it's going to happen forever.
There's never going to be a consensus on this where sentiment changes when the price goes down like this, particularly when it grinds down like this.
When you get into the bull market everyone completely hyper focused on getting as much Bitcoin exposure behind those shares as they possibly can increasing that exposure that they have to the asset that they believe is perpetually going up and to the right right The ultimate carry trade it the debasement
trade here. But then when it grinds to the side, you know, then the focus is only on the price
of the equity, the common stock. Now, reality is there's both there. And everybody who is investing
in these, ultimately, the focus is on the price of the common equity, right? I think everyone here
would agree with that. But what you're trying to focus on, and I think this is something that a lot
of people miss, is when you're putting a management team in place and making them responsible for
executing a long-term strategy, the KPIs that you put in place, the reason for the KPIs is those are
what are going to guide all of the action along the way. So if their strategy has been, we're going
to focus on implementing methods where we can increase the Bitcoin exposure to each of our
shares, they're going to hyper focus on that metric and execute whether the markets are good
or the markets are bad because it's about years and decades. It's not about weeks and months.
And what they're looking at is that they're building up this asset backing in the one asset
that's meant to combat one of the only certainties you can almost look at out there in the world,
which is the debasement of fiat currencies. That isn't stopping. If you look at the state of the
world and go, man, these currencies are about to get stable. I'd love to see the charts you're
seeing because that is just not a reality. You saw the notes that came out from the Fed. You got
more rate cuts that seem to be on the way, but they're worried about the injection of inflation
that's going to come along with that. The macro picture is pointing towards additional liquidity
coming in and they're going to try to grow their way out of this and they're going to have to fuel
that somehow. And so if you don't see them being able to put the lid on that in the next one year,
two year, three year, five year time frame, this is a long game and you want as much exposure to
the one asset with a truly fixed supply that you can get. And that means you've got years of this
company taking the opportunity to build that value under your shares for you. And when you take the
long-term approach to this, you can feel pretty comfortable, but it doesn't mean, and I want to be
clear about this, it doesn't mean that there are no bad entry points into these investments, right?
That's a reality of all investments that you make. You can be directionally correct and you can time
it incredibly wrong. That's real, right? And I know we're all mega bulls and we're looking at this
strategy for what it means for five years and 10 years, and we're nothing but bullish on that.
But you do have to find the right entry points, and you're looking for the best risk reward that
you can possibly get. Now, most people right now are fleeing out of the treasury space.
You're seeing sentiment getting absolutely clobbered. It's coming down. And this is happening
right at the moment where most of these plays are so de-risked that it's hard to see that much more
downside to them. So even companies, when they're trading below their net asset value,
everyone else thinks that that's a death blow. I don't think that it is because the incentive
structures shift over time. And what I think a lot of people are going to figure out is that
if you've got the ability to enter one of these plays where you've got a corporation and a
corporate balance sheet that can do these things that are going to help to accrete that Bitcoin
exposure, and now you're able to pick it up for 80 cents on the dollar from the Bitcoin they all
already hold. Imagine what you were going to do is go buy IBIT.
Right. You were going to go get just Bitcoin exposure.
You just want Bitcoin beta exposure, which people that don't know what beta
exposure means, it just means it should move like Bitcoin.
Right. It should track Bitcoin if that was all you were looking for.
But now you can go into an investment where you've got a discount of, you know,
20 or even 25 percent on some of these to Bitcoin.
If your only thesis in that is that if the bull market takes off in Q4,
right say we rip for the next three months which historically has been the case if the only outcome
you think could be achieved on that is that maybe it'll trade for just the base value of its assets
at some point during that time you'll have greatly outperformed bitcoin during that time period
so there's going to be a point where people start to see these opportunities and start
changing their allocations because now you've got the ability to outperform and you're completely
de-risked and if you don't believe that the business is going to be completely insolvent
and die off or they're not completely burning cash constantly and you're worried about that drain
you're in an incredibly strong position to now benefit into the future of all accretion that
comes into those shares yep there's a because you do have to be able to pick those equities and you
have to find them and that's not easy that's the diligence part of investing right there's no edge
without diligence. If you're not out doing due diligence, if you're not out reading SEC filings
and getting the details most people aren't willing to get, you're going to miss the opportunities.
And that's why, you know, for us, it's such a fun journey because you get so deep down that rabbit
hole that you start to spot what opportunity looks like in this space. Because it's hard for a lot of
people because it's so new. This doesn't have a decade-long track record yet. We've got six months
of a lot of companies in the space. Ben, you've fast forwarded into part three of the agenda here.
I'm going to have to put you on pause here for a minute. Go ahead. I'll jump in there.
Go ahead. I got to disagree with you, Jeff, with what you said about MSTR's price being down.
And people can say that this is copium or whatever, but when should you enter into a position,
right? If you think Bitcoin's going up on a four-year cycle, then you're going to want to
jump into that position, what, beginning of January before the halving. And so I think a
fair measurement starts there, January 1st of 2024. And if you take a look at Bitcoin,
it's up like 3x from that point. And strategy is up currently 5x from that point. And, you know,
people are measuring it from the blow off top in November, but that was like a 9x return compared
to Bitcoin. That was completely unreasonable. That is, you can't expect strategy to trade
9x to Bitcoin in perpetuity. So you can't be mad that a stock that has a meteoric rise
has a correction like every other stock that ever has a meteoric rise. It happens every time.
So if your starting point is an unrealistic blow off top, you're going to be real disappointed.
Yeah, yeah, 100%.
And on top of that, they raised like $42 billion in like, I don't know, 60 days, 90 days, something like that.
It's just an incredible amount of capital raise.
And they raised the floor.
They raised the floor.
They helped bring the price of Bitcoin up.
They raised the floor of the 1XMNav price, which I posted about this previously.
And Adam, please jump in there at any point.
Yeah, absolutely.
But I posted about this just comparing very similarly.
So late, right?
123023, the Bitcoin price, 42,000.
The 10725 price is 121,000.
So Bitcoin price got up 190%.
The 1XMNAV.
So if you were to compare the 1XMNAV price, let's call this the floor.
If you believe 1XMNAV was the floor.
The 1XMNAV price went from $52 to $271.
So it's up 422%.
And that's like really simple math, right?
The actual price has gone from $69 to $329.
But really, this is the whole thesis.
Like this line right here is the entire thesis.
This is why we're here.
They're raising the floor forever
because Bitcoin is the best capital ever.
That's it.
Go ahead, Adam.
Come in.
Hop in.
Yeah, I agree that the floor is being raised.
That is why we're all here.
And, you know, I was just going to make a quick comment on what Ben was saying is that right now you're seeing some of these companies, they're trading at a 0.7, 0.8, 0.9 MNAB.
And the reality is, is that some of those have a lot of debt on the balance sheet where they're capitalized with a lot of debt.
So they're incredibly well positioned to really perform well in the next three months when we could see a significant Bitcoin bull rally.
And, you know, it's the sentiment is so bad right now when you simply point out the mathematical reality of how well some of these companies are positioned to benefit from a Bitcoin rally.
You know, you get accused of getting paid.
You get accused of getting paid by David Bailey.
And the sentiment is just really awful out there.
So, yeah, I don't know.
I don't I think it's totally unfounded.
I think Soleil makes a great point.
You know, the floor is getting raised, guys.
And I think that a lot of the sentiment just really is irrational.
And we get to take advantage of that.
Yeah. And I think when you're looking at these companies, one thing people really do need to look at is the leverage. If you think we're going into a Bitcoin bull run here for Q4, you want a company that's got leverage. You want them to be levered long Bitcoin during that time period. If you're about to go into the most explosive time in the Bitcoin cycle, you want the companies that have leverage.
And I think that there's been this shift where most of the capital that's been raised in the space probably over the last month or two has really been equity capital.
And that's going to need to change here.
And I think that for a lot of these companies, they're going to have to start positioning themselves and putting some leverage on to make sure that when you get this run, that you're getting that benefit from it.
What if we do go up into a super cycle?
right and this just grinds up into the right that might actually be max pain for a lot of people
and uh if that were to happen you know that could be really painful if you didn't get leverage on
before the most explosive part of that bull run happened so i would just you know when people are
looking at these companies that is one of the differentiating factors and i think it's one of
the things that strategy is really focusing on at the moment they've gotten so big that putting on
enough leverage is very difficult. And that's what they're trying to work on. They're trying
to scale these prefs. And now that stretch has been bumping up against par again, and it's getting
into the range where they can actually go and use the ATM on that. We'll see if they raised any
capital when they launched it on Robinhood and it actually hit the $100 peg briefly there and stayed
above 99 for a while. But their key focus right now is got to be getting leverage on because they
want to be that levered long Bitcoin proxy in the market. And with the speed at which they've been
able to grow with equity capital, it's kind of left them a little imbalanced, particularly with
a lot of the converts in the money. So I'm expecting them to have a real focus on hitting
those prefs as hard as they can. So if that demand and that liquidity is starting to show up in those
products, I'm expecting to see them accelerate the pace at which they're collecting that capital now
and probably laying off the delevering tools.
I mean, the common ATM is a delevering tool, right?
It builds that balance sheet capacity
to allow you to put more leverage on.
But at this point in time, I think for strategy,
that pivot towards becoming more levered
than they are today.
I mean, was it 15% or something around there, Jeff,
that you said if you accounted for the converts
that are deep in the money already?
Yep, 15%.
I think that they probably want that up around 30%.
So, you know, I think that's good.
And that kind of gets into this whole conversation of credit.
Also, real quick, if you were racist in the comments, you were getting kicked out.
You're gone.
Like immediately.
Like there's zero tolerance for that.
So just FYI.
Back to leverage.
100% agree.
Like these companies, they can just wait.
And a lot of these companies that have come out through these pipe deals have already taken on leverage before they even went public.
So they literally, this is like strategy in 2020, if they were a private company and did a deal,
and then they put on the leverage as a private company and then came to the market. And it just,
it takes a while, like that's got to go through. And then eventually, these companies that have
taken on leverage have more capacity to take on additional leverage. What does that look like?
It's tough to say if it's convertible debt, then all of that capital is cleared.
and now you could have 100% capacity to go take on new forms of leverage. So it's really just a
like, it's a time thing. It's these companies have time.
And I saw a few questions about why is Sailor waiting to put leverage on,
you know, let me assure you, he's not right there. They're trying to put leverage on right now. But
what you got to realize with these products is these products are still so new. You know,
we've all been digesting them now for months and figuring out what they are and the value proposition.
and what it means for Bitcoin to have this high compound annual growth rate and gives the company
the ability to pay a high coupon. But you have to go and source that demand. And these are pretty
large products relative to the exposure that they're getting, right? So when you've got billions
of dollars, if you're sourcing that through retail channels, that's going to be pretty difficult
to ramp up. And a lot of the institutional capital will really truly be unlocked when they've got the
capability to get ratings. So part of it is just an education game in the market.
We should talk credit. We should talk credit. We should talk credit. This is what we're here for.
We're here to talk credit. Okay. So actually real quick, we hit the update. We hit a little bit on
Bitcoin treasury companies and maybe we come back to it. But I wanted to start with this.
What is money? What is credit? What is risk? And I think thinking about all of these three things
in concert are very important, right? There's been this huge push to figure out like, what is money,
right? Safety and wrote a book about it, the Bitcoin Standard, Sailor Series, What is Money
podcast with Robert Breedlove. It's been a lot of focus on this and people had to learn about what
is money, right? Step one, once you have the money, what do you do with the money? Step two, credit.
And then part of that is credit and risk.
So that's where we're at in this evolution.
And that's where this thing needs to go.
That's where that's the natural evolution of this entire space.
So I asked the guys on the screen today to think about, uh, the, the word credit, like
what does credit mean to you?
Like, what is, what, how does it impact your day-to-day life today?
And what, what does it look like?
because this entire landscape is likely going to get changed and shift up a little bit.
So Adam, I know you've talked a lot about this.
You've done a lot of digging into the space.
I'm going to start with you and maybe we'll pass it over to Mike and start to think about it.
Yeah, it's an interesting question.
The philosophical aspect of money and valuation itself, right?
And right now, I just think that we're watching the credit market slowly realize that trust
itself is a counterparty risk but the thermodynamics of Bitcoin is not And I think that the fact of the matter is is that Bitcoin is the apex collateral because everything else is literally just a claim on
entropy. So if you really think of the implications of this, any industry that relies on trust-based
collateral will be consumed by truth-based collateral. And you just think of all the
industries that really run on collateral, whether it's bonds, credit, banking, insurance, energy,
sovereign finance, real estate, whatever it is, you realize that Bitcoin is just going to start
to slowly touch everything and then just take over because it is the least risky asset. And
the classic debate is that Bitcoin is competing against gold, against the dollar. But I think
really on a bigger picture, what Bitcoin treasury companies and maybe more specifically strategy
have really illuminated is that Bitcoin is competing against kind of what the default
architecture of trust is within our civilization. And this is why everyone's brains are being so
broken. And understanding Bitcoin's relationship to markets is tough because there's so much of
that unraveling to do. It's just a lot of deprogramming on a very fundamental level.
So if money equals like crystallized time and energy, your effort, your labor,
then credit is something like belief in future productivity. And risk is entropy that just
leaks through that trust. So I think on a broad scale, I think everyone should think of credit as
being civilization's shared hallucination that tomorrow will exist. And I don't know, I just
think that this is proven because we all know that that fiat credit literally created the illusion of
growth through debt expansion. That's the position that we're in. So it's literally proven.
Every single debt-based empire that has been built on borrowed time, you know, and Bitcoin is where
time finally collects and whoever has the most Bitcoin collects the most.
So I think it's a very interesting philosophical discussion.
Totally.
In a nutshell, that's kind of what I think about Bitcoin.
Credit, money, in a nutshell.
Massolution is an Instaclip.
Make it happen.
Instaclip.
The clipping team is watching this.
Please clip that one.
There you go.
Please.
The, it really all comes down to trust, right?
And so when I think of credit, I think of just seeing credit throughout my life.
I go to the restaurant and I use a credit card.
I have a mortgage.
You get somebody gets an auto loan or you've got these other different types of credit
systems that are just really pervasive and in everyday life.
Why does that structure exist?
that structure exists as a trust system to provide, you know, the ability to interact
within society based on like how time, energy, like in money is flowing throughout a society.
So really this concept of credit and money is like so incredibly intertwined with like
the entire ledger system.
You can see how there's a natural transition here into the credit landscape and Bitcoin
going to work its way in there. Go ahead. Anybody else, other thoughts? I've got some
data information. Green, hop in there. Sure. So I think all of us know there's basically
three forms of credit that most people are used to. One form of credit is, I mean, you could use
a debit card for things or you can use a credit card. And so you go make a bunch of purchases,
you get paid twice a month or once a month or weekly, whatever it is, you make your purchases.
If you're responsible, then you pay off the bill in total at the end of a month. That's one month
credit. You need a way to get to work. Well, what can you do? You could walk to work for five years,
save $500 a month, and then go buy a car for cash. Or you could buy a reasonable car,
put down a reasonable down payment, only walk to work for two years, and then buy the car on credit,
and then you pay it off while you're driving it for the next three or five years. That's a midterm
credit. And then the longer term credit that Jeff just talked about is a house. You can go live in a
tent and you could do that, save up your money or live at home until you have enough money to go buy
a house for cash. Or you could buy the house on credit and the collateral is the house itself.
And I was thinking about what I said about Saylor. If he only has 15% debt and the rest is equity,
he bought a house with 85% down. So he has very little leverage. Most people do the reverse. You
put down 20% or less than 20% to go buy the house. So we're all used to this, but sometimes his
numbers are just bigger. So I think we all use this every day. I posted a video from Ray Dalio.
Yeah. How the economic machine works. That if you were to go to any Ivy, I pick an Ivy League
all the time, econ professor professors, none of the econ professors could explain how the economy
works in 30 minutes, like Ray Dalio's video does. It's got almost 500 million views. It's whatever,
11 years old. Watch the video. It explains credit. And the benefit for this is that it makes the
economy, because you're buying more cars, because you could buy them on credit, that allows more
people to work in the factories and your economy grows. And so in America, we have the FICO,
you know, credit reports. Literally, they're called credit reports. And if you have good credit,
they let you borrow more money and then you can get a better car. Now, if you take this the wrong
way and you buy things that you cannot afford, then you have problems. And so that becomes a
personal responsibility piece. So credit is the bedrock. And in the US, we have these, like I said,
credit reports, which allow you to borrow money. And the people that hate credit reports are the
people with bad credit. Yeah. And the amount of credit that you can go get is actually pretty
insane. I don't know. I think I've got like, I used to game the credit card system, right? So you get
one, you sign up, you get the points, you do all the things. And like, that was just a thing in
traditional finance. It's like what you did. And at one point, I think I had like $500,000 of credit
credit limit. I'm like, this is insane. And I can't believe I was able to like rack all of this up.
And it's just a mathematical number of trust based on, you know, the way I've interacted in society.
So it's like this construct that exists everywhere.
And Mike, to your point, you've got revolving credit, installment credit, open credit, different
designs of different credit systems.
And there are people that are taking the risk on the other side of that trade, right?
So anytime you like open a bank account or a credit card, like you're the JP Morgan,
you know, when I go put in my application, they're taking the credit risk behind the
scenes, but they've got all these assets that sit behind it.
So if I default, they're like, all right, they're taking that risk that's built into their entire calculation.
And that's why the interest rates change are associated with it.
But by the way, anybody that goes to buy a house gets to play econ professor.
What do I mean?
You could buy a house with a 30-year fixed mortgage or what they'll make you an offer and say, you know what?
We'll give you an arm, an adjustable rate with a five-year lot, a five and two.
The first five years, you have a lower rate, but after five years, it resets.
So you're making a bet and thinking, I'm going to take it with a lower interest rate,
betting that interest rates will be lower in five years.
Otherwise, if it's a five and two or five and one, it will reset every year or every
two years after that.
And so you have to think about where that can you refinance?
Did you pay down more debt on that house?
And so, excuse me.
So you have these choices that you can make.
And this is all common.
This has all been available for 30 years.
And so you have to be responsible with it.
Yeah.
And there's a couple other things here.
And when we get into the bad bond section, we'll talk through why this is important.
But secured credit, right?
So secured credit is a loan that's backed by the collateral that's put up against it.
So when you go get a house, like if you don't pay, if you default on your house, on your mortgage, they take your house.
Then you have unsecured credit, which is no collateral, which is more typical, like a credit card or something, which is more risk for the lender.
If you default, like they can't really do anything.
So different forms of risk.
And that's all like a mathematical construct in a mathematical calculation.
And I wanted to bring this up because this is a website.
This is called, what is this called?
Uh, this is household debt center for microeconomic data.
You've got non-housing debt balance, total debt balance, and then the percent of, uh,
balance that's 90 days delinquent.
And this is a really interesting website just to see like how, how corporate or how personal
credit household credit is changing over time.
So you could kind of get a glimpse into like the, the health of the system, uh, based on
how like the credit profile of the world is kind of shifting and changing. So I thought this one
was pretty fascinating percent of balance, 90 days delinquent. And, you know, the reason I'm
showing this is like, we're all trying to put this together in real time of like all these other
things that are happening in the marketplace, trying to see through the mud, really. But
one thing I found that was interesting here is that household mortgage balances, percent of
balance that's 90 days more delinquent is actually really near an all-time low
compared to like going back to 2004. But the other forms of credit, like credit card credit is kind
of nearing 2008-ish all-time highs. You've got other credit is nearing 2009 all-time highs,
2010, all time highs, auto loans taking up student rates or student loans, obviously,
you know, rocketing here as well after the Biden era, after the Biden era there. So it's just an
interesting perspective how these forms of credit are kind of shifting and changing
and the health of these different systems. Just seems like the incentive structures are
really warped in society when you see those graphs going up into the right in the last few years.
It's almost like we're living with broken money and people can't plan for tomorrow.
Really sad image, but yeah, you make a great point, Jeff.
Yeah. So, you know, the first thing I thought about too, it was a sad image. I even wrote that
here in my Excel. My gut reaction was I felt bad about society and like looking at every single one
of these, like the total debt balance of non-housing debt is rising. The spread between
the two between housing debt and non-housing debt is actually rising pretty drastically,
which is an interesting perspective. Non-housing debt balance, again,
as the money supply increases, these debt balances are ballooning and inflating these
credit balances, which is again, another interesting perspective. But my secondary reaction I had is
that, holy shit, somebody else is on the other side of this trade. And what does that look like?
what does that look like? And what is the, um, what's the downside? And, uh, if, if you're
really interested in credit, actually, I'm going to do a little plug for this. There's this, uh,
like one, an hour and a half video here, debt, the first 5,000 years by David Graeber talks
about the history of debt. Uh, it's like a quick hour and a half on this, like 400 page book he put
together. Totally worth the time. But the interesting thing I was thinking about here
is this loss of access to credit. So what happens if people aren't able to access this credit
anymore? If this problem exacerbates and there's no break in the system, what is the break in the
system? Is it that people can't get mortgages? Is it that people can't get credit cards? Is it that
these finance companies that used to be able to provide all this credit, like have no capacity
to provide credit anymore. What is, what does that look like? And how does this whole system begin to
like reshape itself and change? And one thing I looked at was these mortgage rates and I wanted
to see how they moved in concert with interest rates. And one thing I noticed here is going over
the right-hand side. So on the left-hand side, this is the 30-year mortgages in the green, the
15-year mortgages in the blue. And on the right-hand side, I did a little transparent image
here and I overlaid the Fed funds rate. And you can see some correlation to the Fed funds rate.
But one thing that was most interesting is when the Fed funds rate came down in September,
there was this blip down in mortgage rates, but then it ripped higher after rates went down.
It ripped right back higher to, I don't know, where was that? Something around 6%.
percent and rates have come down again and the price the mortgage rates have come down but the
real question is like is what what happens is there a disconnect there between like interest
rates dropping and like the risk of these things actually staying high like the credit risk of
these things staying high uh and the market changing that's what i'm trying to think through
and kind of react on a bit so so i'll make a comment about this so so look i think what people
that are listening to this that are smart enough to understand what's going on is that you assume
that you're you you own a house and it's not paid off you have a choice let's assume your house is
going up in value pick and pick an amount let's say it's four or five percent a year but if bitcoin
has a kegger of 30 or let's say the cake is only 20 on bitcoin but your house is only going up by
5%, it would make sense for you to buy more of the faster appreciating asset than to build up
more credit by paying off your house, building equity faster than that, because this other asset
is going up faster than by paying it down over here. And that's your choice. And if you have a
low interest rate, and I'm well aware that mortgages are declining balances and most of
the money goes to interest in the beginning, but you have to think about where do you see yourself
in five years? Or if a Bitcoin halving is every four years, where do you see yourself in eight
years? And from that perspective, do you want to buy things that go up faster? It's not an all or
nothing. Split it up and do that. If you have a great job and this is not financial advice,
but you could think of it like it's risk-free, just pay off your house. If your house payment's
$3,000 a month and you pay off your house, you don't have that expense anymore. But your house
is only going to go up at whatever percent, 5%.
And if that's what makes you happy, do that.
Yeah.
What we're doing here, I'll wrap up one second.
What we're doing here with Bitcoin treasury companies, specifically with strategy, is
we're saying, look, it could take on leverage in order to buy Bitcoin to get a better return
over a set number of years And so either you buy Bitcoin you buy some of strategy and then it makes more money over time
I think the true distinction
that I'm really trying to point out here
is that there's a bunch of really bad credit
out in the market.
And if you hold the best form of collateral,
you will have the best credit in the market.
That's it.
And so that's the,
That's the way I'm thinking about this.
So if you're like, all right, well, there's...
I wanted to lay out the personal debt landscape
so people can see this is the personal credit landscape.
But that same construct exists in the corporate bond landscape,
in the corporate credit landscape.
And now you've got a company that's got some of the best collateral on the planet
and they've got an order of magnitude more than everybody else.
And all these other companies that are holding this really, really,
really good collateral, you have a really good credit quality. The market just hasn't
recognized it yet. Everybody here agrees, your credit quality is insanely good,
but the market just doesn't believe it yet. And so my campaign that I've kind of been on recently
is this risk is completely mispriced globally, everywhere. And it's so mispriced, it doesn't
feel mispriced because it's so mispriced. And that's this kind of recognized risk landscape
that I'm trying to unpack and dive into different places here.
Yeah. If you hold Bitcoin, your FICO score should be a perfect 850, period.
It should be because a Bitcoin is a Bitcoin.
Imagine you go to buy a house and you put up some Bitcoin as collateral,
and the collateral is going up in value faster than what you're borrowing to buy.
Like you should be able to put like zero down and they just like, sure, no problem.
Yeah.
Here's the money.
Exactly.
And it's just crazy.
Like all these, all these loans that have come out where you can post your Bitcoin as collateral.
Like the terms are so horrible.
Yeah, they're terrible.
They're just so insanely horrible.
I can't even believe they exist because you could just pull the collateral.
Like they've got 25% liquidation.
Like the risk on the other side of those transactions is pretty much zero.
If you see one Bitcoin is one Bitcoin, which is just crazy that those are the terms.
Like that's where the market's at.
But I want to get Adam in here because the people want to rant.
You've got some, like some excited fans in the audience.
Yeah, I can go on a quick rant.
I totally agree with the thesis that risk is mispriced.
When you just look at the universe of comparable assets,
like you look at investment grade bonds that are 2X collateralized
and you have strife at an 8X, it just begs the question,
how over collateralized does this thing have to be
before the market starts to really notice these things?
And they are obviously when you're raising billions of dollars,
you're raising billions of dollars.
But it just feels that like the market is still totally not understanding
how incredible these products are.
and you just look at the analog
between like a stride and a stretch too
versus like the normal collateralization of those buckets.
It's just, it's night and day difference
and you just wonder how long
is that risk gotta be mispriced?
It starts to get frustrating a little bit,
but like you guys said, these are so new, we're so early.
It's really tough to just, to even predict
when they're really gonna start to catch on
even though they already are.
It's an interesting question.
Yeah. By the time they catch on, the price is going to be much, much higher. I mean, what a lot of people overlook with, and so banking was the first industry that I worked in. One of the things people overlook when it comes to Bitcoin is from the underwriter perspective, you're no longer underwriting the individual at all. You're only underwriting the asset, right? It's asset-backed lending is effectively what Bitcoin is.
So even when you get a house, you would think that's effectively asset-backed lending as
well, right?
You've got one asset and you've got one liability against it and they're securing it based on
the value of the house, but they're not.
Because in that instance, they're also underwriting your own personal cash flows and they want
to know what else they can come and take in the event that you default and you've got
a shortfall on it.
So they're underwriting the individual and there's also a lot of cost and time that goes
into underwriting the individual.
That's the complex part.
So for people right now, and I think that this is a part of the value for people holding spot Bitcoin themselves and actually having access to this is your cost capital for you personally in the future is going to be very low.
And while they're still high, you know, they're not quite, you know, I used to always say they were in the loan shark range.
Basically, if you wanted to borrow against your Bitcoin, it was 16 to 18 percent, not that long ago.
You're starting to see that come down pretty quickly.
And I think a part of that was you needed to build up the bid underneath the asset. They needed to know that there truly was deep liquidity out there for this asset in the event they had to liquidate so that there was no liquidation cascade risk out there that they couldn't figure out how to price.
And now you're seeing it come down where even on, I think, Coinbase as their borrowing platform, and it's weird because it goes into a stable coin and all this.
But I think that lending right now is like seven and a half at the moment.
And so obviously in that arrangement, you're giving up your custody and doing a lot of those things.
But when you're stockpiling one asset, I can't think of an asset that in the future is going to be more valuable to borrow against because this is the cleanest transaction you can possibly hope for.
as an underwriter 100 you know to be fair to the the bitcoin loan sharks um i mean if they
understand bitcoin and they can just get a 30 return every year they kind of have to charge
a boatload to even make it worth their while because like they should just buy bitcoin with it
so you know eventually maybe those those those numbers will come down as bitcoin's
Kagger comes down and it'll all get easier to do.
So what you're saying is we need lenders that don't believe in Bitcoin as much.
Yeah. Yeah.
If you can.
Problem.
That's the problem with this entire industry.
When I.
Find a sucker.
When I left.
Weep in belief.
When I left reinsurance and I started working in this area full time, like the first thing
I noticed is like, oh my God, there's nobody dumb enough here to lend fiat dollars and
doesn't believe in Bitcoin is willing to give me like a good rate for the risk.
So it's almost like almost a lost cause because it's so much better to take the other side of the trade all the time, 100% of the time.
And so I understand why that market is not incredibly deep.
So it's like you got to think about, okay, let's think about the other side of it, which is what Saylor has done in terms of equitizing it.
Like this is equity credit, not debt credit.
It's like flip the script upside down.
and gone the other way. Like, I'll give you credit instead of I'll take credit. I'll give
you credit. And that's like really blown people's brains here. Like the, you know,
they've got to work on business plans and revenue and all this stuff. It's like, well,
this is a business plan. Like strategy is a credit company. They're, they issue credit,
very similar to how an insurance company issues insurance, very similar. And, you know, I want to
walk through this because a lot of people don't understand like how insurance works. And I didn't
until I like worked in it for a long time, but there's this concept of a gross written premium
and gross earned premium for insurance companies. It's an accounting mechanism. So when they write
a policy, like when you issue a policy and you get paid the premium in the door on day one,
you actually earn out that premium over time, over the life of the policy. So you can't account for
actually having to gain on that entire premium that you bring in the door until the policy is
over. So you earn out over a period of time and it's accounting mechanism. And I think
the world could start looking at strategy very similar from an opposite perspective,
because you are taking an investment in the door and you have a liability over time,
but it's declining over time. So that like, there is a life of, of the policy and like an
effective duration such that, you know, you can take that into consideration, like a gross written
investment and a gross earned investment, which can be thought of as revenue. And I think this
is kind of where this industry is like going in a different direction. What do you guys think?
It's a little, it's a little weird. It's a strategy is a credit company, not an insurance
company, they're a credit company. I'm going to take a little bit different of a view of it. I
think that sometimes people conflate with what Saylor did. What Saylor did was made a bunch of
preps that pay either 10% or 8% a coupon that comes out either on a yearly and stretch on a
monthly. That was not designed for Bitcoiners. It was designed for the bond market. It was designed
for people that are risk averse, don't want the volatility, just want to get this. So he created
that. Now where it becomes interesting to someone like me, a Bitcoiner, is that when you can buy
enough of it to get paid in perpetuity, an amount that you never have to sell, for me that becomes
compelling for me to sell MSTR shares, pay taxes on that, then buy enough of the prefs in order to
give me an income that I can live on in perpetuity. So that for Bitcoiner becomes exciting, but I
I wouldn't sell all, I would sell some.
Excuse me.
Because the credit quality is so good.
Right, because like we've been saying nonstop,
he's only 15% levered or he bought a house with 85% down.
So for that perspective, he can always pay that.
I'm not going to live in perpetuity.
So it's an easy math to do.
So with that, Adam, jump in.
Give us your rant.
I have the rants later on in the show during the solo section.
Adam, we just need you on call at all times.
Just like rant on call, please.
We need to record a rant.
We can just play it every time we're on an episode.
I have no shortage of those, man.
Record a rant.
If we think Bitcoin is going to gold parity, right?
20 plus trillion, which I think it's like 27 and a half trillion as of today.
You're right.
Bitcoin goes to $1.2 million.
dollars strategies balance sheet goes from 80 billion dollars to 800 900 billion dollars
incredibly quickly there's literally not another company on the planet that has that much cash or
capital so there again credit quality is going like literally through the roof we're talking
about 850 credit scores sole it's like 1080 credit scores we're going we're going like the credit
scores are going higher uh everything's going higher and that uh that concept is just vastly
misunderstood. There's no frame of reference for it. It's just total uncharted territory.
You can't expect anybody to have a proper understanding of it. That's just the difficult
part. That's why you're called True North. Right. Yeah. It's like we keep coming back to it. It's
like this is hard to conceive because it has never existed before that a company has this much money
and is issuing an investment instrument, a credit investment instrument. It's never existed before.
What if Bitcoin goes to a million dollars and you see the value of that Bitcoin nav on strategies
balance sheet and you get so ridiculously over collateralized and you hit a ceiling
where you can't issue everything. It starts to boggle the mind a little bit like how over
collateralized, how good of yields do we have to pay before people catch on? And we're just going
to have these questions answered in due time, but it's a fascinating thought experiment.
And this is where it all connects to risk too, because you have to look at the entire
risk landscape because like this, everything is risk. Every investment on the planet is risk.
Equity is risk. Bond is risk. Credit cards are risk. Mortgage is a risk. Real estate's a risk.
It's all like, that's why, uh, Saylor says Bitcoin is money. Everything else is credit. JP Morgan said
gold is money. Everything else is credit. That's like literally because everything is credit and
risk. They're like completely intertwined. So you've got to look at the entire risk landscape
and compare the risk everywhere. And like, that's, that's one of the reasons I left the
reinsurance world. I was like, the risk here, the amount of money people are getting paid to
take on this risk is just so stupidly small. It's not like, I'm never going to make a ton of money
here ever. So like I needed to go somewhere else and it was very clear. Bitcoin made the most sense.
Little did I know it was going to be so frigging correlated to like insurance and like risk and
credit landscape. I had literally no idea.
I was like, I just want to work in Bitcoin.
But now I'm making these realizations that like this is why, because this is why I was
gravitated to it naturally, because this entire risk landscape is just completely off.
When you when you look at things through a Bitcoin lens, it's off.
So I think we need to go into the bad bond segment.
We could just keep chatting as we're chatting, but I've got a new intro jingle into bad bonds
here.
Oh, come on. Maybe I don't. Maybe the jingle comes on at some point, but it's not right now.
Okay. Bad bonds. We'll get into it. So while I share my screen here,
no, I'm pretty bummed about that. We'll get the jingle. The jingle will come up. We'll get it.
okay us corporate bond market evolution so this is this is how bonds have shifted over time just
from a ratings perspective so this is going like worst on the top and this is kind of hard to see
this is in perplexity and i wish the lines could be a little bit better but what you're what this
is showing is that triple a bonds are going down so the amount of like very high investment grade
bonds are going down over time down into the right number of unrated and high yield bonds
is increasing. So basically this is indicating that since 2015, more risk has been shifted into
the U S corporate bond market. And that entire landscape is, is changing. Um, Oh man, go ahead.
You guys have anything else to say here? And I'm going to try to pull this.
I think that when we talk about bad bonds, I think the, the, you know, the interesting part
is there's something called junk bonds. I mean, literally, they're called junk bonds.
And the quick one-minute history lesson is-
Ladies and gentlemen, what you're about to hear may be amazing, but it is not-
Sorry.
It's amazing every time.
Ladies and gentlemen,
No, that doesn't work either.
Let's see if this works.
That doesn't work either.
Okay.
Sorry.
Yeah.
So Jeff, just a quick 30-second history lesson.
So the reason why the mafia found was building out Las Vegas because you had to use cash because the banks wouldn't loan money.
And so then if you watch the movie Casino at the very end, you then realize what happened is, how's this related to bonds?
I'm going on some stupid rant.
Well, when Michael Milliken came out with junk bonds,
I'm going to build a casino that's going to have a volcano in the front of it that explodes.
And people are going to come here and gamble and lose money.
And it's going to take whatever amount, hundreds of millions of dollars to build it.
It'll take three years to build it.
Then we have to convince people to fly to Las Vegas.
That was the start of the junk bond business with Steve Wynn.
Maybe you heard of him, to quote Ryan McGinnis, right?
Maybe you heard of Steve Wynn.
And so what happened was they used junk bonds to build out Las Vegas.
And so how are you going to borrow money in order to build something that's going to take
three years before somebody ever comes in there to lose money at the casino?
And think about how do you figure out how much you're going to make?
And so they're called junk bonds.
And then we have credit rate bonds, which are decaying all the time.
Why are they decaying?
I think you're talking about Ford Motor Company.
You build a factory, it's 50, 60 years later.
It's on the Superfund site.
They can't clean it up because it's so expensive.
So what do you do?
You put GM into bankruptcy, wipe out the shareholders, and you start over again.
Bingo.
And so then you have GM number two.
Yep.
Because they could not pay to figure out that they polluted all the plants.
Look it up.
Yep.
So you don't want to hold a bond on something, on a factory, even if it was good for 80 years,
if they're polluting the ground.
So Bitcoin, what does it cost to store it?
You put in the cold storage, the storage is pretty much zero.
It never needs a new roof, never needs capital upgrades, never needs OSHA of checks.
You don't have to worry about people getting run over by a robot.
It's so much easier.
Why don't I like Amazon stock?
Because they have a million employees.
That's right.
I have a company that has a lot less employees because they're less likely to get hurt.
My rant's over.
I'm not as good as Adam Livingston.
It's all good.
I'm going to try to do my jingle one more time.
And if it's Tim, then it's Tim.
And if not, hopefully it works.
But anyway, we're going to give it a run.
Bad bonds, bad bonds, what you're going to do?
What you're going to do when Bitcoin comes to you?
Bad bonds, bad bonds, yields falling through.
Stretch, strike, strike and strike coming.
digital credit don't miss raise coupons legit
who did that all right as well as my edit that's what i want to know the production is just taking
a step up guys yes it's we're uh the team the crew is working hard real quick shout out to the team
the team is working incredibly hard behind the scenes uh we got somebody that made a jingle
somebody that made the video and we're just going to keep playing it through uh every time we do the
new segment so so i i have a question how long did it take you to do that from time of conception to
getting it done justin sent it over this morning in like i don't know how long it took him uh
somebody tweeted about it and he had it done within an hour and then our team made a video
and they had it done within an hour okay so any right so anybody working in a corporate job you'd
have to go get a budget then you'd have to do a wireframe and then you'd have to do storyboards
and then you'd have to have a committee to see if it makes sense and then basically about three
months later after you go through 50 permutations and every you missed the whole opportunity you'd
spend a hundred grand to make a 30 second clip so this is the new world guys congratulations i loved
it we've got a justin somebody made the jingle then we got a team that made the video and i was
incredibly impressed i was showing my wife like look at this they made this today we just do
things up in here we just do things and ai is incredible uh yeah maybe we'll talk about that
a little bit more with energy later but uh okay thank you for uh the rant uh the detour rant
grain to to get me to the segment and that got the technical difficulties fixed but yes
i wanted to talk about ford motor uh because i i think this is an interesting uh this is an
interesting story um maybe i'll try to put everybody down below i'm hidden but that is okay
and please anybody jump in at any point so i've just got a bunch of research that i pulled together
here um on one excel sheet but i'm going to start with um one thing that i found pretty interesting
which is why the strategy credit instruments are so appealing is if you look at corporate bond
liquidity versus their credit spreads. Let me just throw you guys on the side so people can see this
here. So if you look at corporate bond liquidity versus their credit spreads, this is mapped into
different buckets. So you've got a high credit quality over here in the green, over on the left
hand side, you can see they're significantly more liquid. You've got this line here that's showing
you the average. The medium credit quality instruments are significantly less liquid,
and the lowest credit quality instruments are the least liquid. So in the event of, you know,
anything remotely bad happening, if you needed to offload any of these things, there's just not
a ton of buyers on the other side of it that want to take on that specific risk. So if you get locked
into like a 30-year bond somewhere or 20-year bond or somewhere, you may have a really hard time.
You might lose your principal, one, but you might have a really hard time of just unloading it. It
might just literally go to zero. And I think that relative risk that you're taking for
that duration is really curious. And I think it's worth looking into everywhere. So that's the,
that's the point of starting to look into some of these, some of these instruments.
Liquidity is huge, Jeff. Liquidity is massive. Like, I'm sorry, but I was just looking into
Hertz, the car rental company's bonds. And I was thinking like, if you see COVID on the cusp,
If you see a virus coming, that's going to just wreck havoc on the economy.
How do you get out of your position?
Liquidity is massive.
Yeah.
And Adam, I think you mentioned this previously in a message to me.
The Hertz had bonds that went bust before COVID or like right after COVID, right?
Two months after.
That's correct.
So they issued bonds right before COVID and then all of a sudden zero people rented cars.
So you're sitting there holding this like instrument that you think is just going to pay you steady stream of income.
And you're like, cool, I get my 6%.
Like my pension's fine.
And all of a sudden, nope, that isn't worth anything anymore, actually.
Like the company's bankrupt because they literally aren't bringing any revenue in the door because nobody's renting cars.
That's called a black swan event.
But it's physical risk.
That is risk.
Like that's so that's that's risk that.
is difficult, difficult to quantify. Um, and there's significantly more types of that risk
all over the place. But I think the other crazier part is that somebody doubled down,
like they issued more, they issued more, right? This is a, this is the 2029 bond that we talked
about last week. And I think this was issued in like 2024 or 2023. So somebody signed onto it and
it's still paying, you know, 10%. So you're thinking like, okay, well, what if robo taxis
take off here? Well, the age of disruption is going to change these products forever, right?
The pace at which these company business models get attacked now, you have to imagine that at some
point that's going to have to get priced into this. You can no longer take a 30-year outlook
on nearly any industry out there. They're all turning over, right? Technology's speeding up
so quickly. There's so many more tools at people's disposal. Companies are entering that are leaner,
that don't have decades of overhead built up in them.
I mean, you know, Mike has talked a few times
about being in the corporate world and all the employees
and why he wouldn't invest in Amazon.
If you've ever gone and worked
in one of these corporate environments,
you understand the bloat that builds up
over decades of operating a business.
There's so many roles in there.
You're walking around going,
what do you even do all day?
And now that these other companies are coming in,
you can be disrupted in a moment's notice.
It happens so fast. And one of the best examples of that was even when you had open AI kind of
emerging. And then what was it, DeepSeek that popped up all of a sudden? And all of a sudden,
it seemed like even the leading AI tool was about to be disrupted. Now, it wasn't, right? And there
was all kinds of shenanigans going on. But it shows you that even the companies that are doing
the disruption are not immune from this, because that is the pace at which technology is evolving.
so to go and take on the risk of 30 40 50 years with no liquidity to exit out of that position
and you're just tying yourself to this company i don't know that you can consider many of those
money good over the long period i really i'm pretty firm you can't yeah based on what we've
seen you know nokio was killing it they had the indestructible phone everyone loved playing snake
on that phone they didn't need to change anything they were just going to keep pumping those phones
out and then one day you started to be able to watch videos on your phone they were gone
right that's what it takes not much jen i don't want to hijack your section but i really want to
touch on something because you go ahead about this you posted recently about a target corporation
and i previously worked at target i was a director at target corporation don't come from a glamorous
industry where i spent a lot of time just operationalizing like crazy trying to squeeze
the last pennies out of every single dollar very low margin business and i was seeing tremendous
risk every single day you know the company we erased 100 billion dollars of market cap in two
years we were literally worth one third of what we were after two years of getting killed by walmart
and amazon and you know this is a company on the pr on the precipice of the ai revolution that we
just cannot pivot to find a way to survive and then you posted about their bonds i'm like exactly
this is why i was screaming from the inside of why we should just take our billions of dollars
and buy Bitcoin. And, you know, I'm just looked at like I have two heads, but sorry for the rant,
guys, but it's very relatable right now. There's tremendous risk in physical operating companies.
There are so many of them are zombies that have trouble surviving. And, you know, it's a new term
of a junk bond. It's a new kind of junk bond, I guess. Yeah, it would. Go ahead, Zoe. Yeah,
I was going to say, and where do you put disruption risk on your spreadsheet? Because,
going back to Ford, I mean, Tesla is dominating the EV space. They're the only ones that make
money. And even with the EV tax credit going away, the only risk for Tesla is that it eats
into their profit margins. But every single other EV maker loses money every time they sell an EV.
So now they're just losing more money. So it hurts Tesla's competition more than it hurts Tesla.
and you know ford is you know could be bankrupt in 10 years because of of disruption and what what
are their bonds worth at that point 100 100 you know i want to 100 i want to chime in here for a
second so so i'm so old that i've been through multiple black swan events right the internet
bubble crash y2k um you know we won't go back to the 90s then you have the 2008 2009 financial
crisis, then you have 2020 COVID. Everybody's like, oh, black swan events, they happen all the time.
Then a super tanker gets caught sideways in the Suez Canal or freaking, and then another one hits
a bridge two weeks later. And so when it comes to black swan events, what I could tell you this is
they're miserable when they happen. And the people that get hurt with that is absolutely horrible.
But with that, every time they're over, what do they do?
They do the same thing, lower interest rates, print money, and then the asset holders make
more money and it goes on.
So every time there's a black swan event and then Ben's chiming in, oh, what was it?
Deep Seek, the Chinese, all of a sudden make a software version that eliminates the need
for NVIDIA.
Well, that just happened in April.
But Nvidia now is a 4.13 or whatever the number is, trillion-dollar company.
And it adds a trillion dollars in value.
But I don't know, that was a black swan event that lasted, what, six weeks?
And people are like, oh, it's all over with Nvidia.
Maybe they should have bought Nvidia on the dip, buy low, sell high.
I mean, so I've been through this so many times.
The other thing I noticed that you saw on Ford was that they had a bond that goes out
to 2097.
Yeah.
Right.
Right. I want to tell you something. And I got to go back for something because this is how old I am.
So, before there was an iPhone, when you would rent a car, you'd have a paper map and you'd
fly to some city you've never been before, right? You get a rental car and then you drive around to
figure out where you're going. You print out your stupid maps on MapQuest, Alpha Yahoo,
and you can't figure out where you are. And then you got to get back to the airport,
fill the car up with gas so they don't charge you $7 a gallon because you're not getting
and reimbursed for that by the cheap person in accounting.
God forbid you miss your flight.
So then you drive all the way back to the airport.
Then a few years later, they come out with Garmin,
comes out with these GPSs.
And they charge you $12 a day to rent that.
Of course, you take that because you can't get lost, right?
So you're doing that.
Then they invent the iPhone and puts out Garmin.
But now when I go on a business trip, right?
I use Uber probably 30, 40% of the time.
I'm going to fly to Santa Monica for the event.
I have to get from LAX to Santa Monica for Fred's event, doing a plug for him, right? Bitcoin alpha.
I'm taking Uber. It's probably going to be some guy that's going to pick me up in a Tesla Model
3 or Model S, which is better than some crappy taxi I would have gotten, you know, whatever,
five years ago. So I'm driving in a better car and I'm using this app. And then I have an American
Express Platinum card. So I get 15 bucks free every month, right? And it's like, my life is
better because I have a built-in GPS on it. Everything has gotten better. Technology has
gotten better. And that's the way the world is. And so how does this relate? I don't want to be
in a company that's getting destroyed by... Soleil said it. Where do you put in technological risk
into the calculation on something that goes out 30 years?
When technology is accelerating at a pace literally never seen before It is And by the way on Uber I got five different choices right yeah yeah i it i i see the i see the videos of those tesla factories too and it like the the robots that are picking
up these like huge chunks of metal and like putting them together and it's like pretty insane uh how
far the head on how far ahead they are on robotics too but i'm just going to pull this up this ford
just to put it in perspective because a lot of people don't know this but um it's actually
incredibly difficult to identify the capital stack of companies. Like I've got a Bloomberg terminal
here. And even going through the Bloomberg terminal, I was like working on chat GPT for
hours, like trying to like wrap my head around who, who gets what in the event of liquidation and
the, like the capital stack, I think it's opaque on purpose. So when you actually look at all of
these companies that have these really opaque capital stacks and you look at strategy that
has got a website that shows like here's our exact capital stack and we're not hiding anything
from you like it's 100 right here it's so easy to appreciate now this is senior unsecured bonds
for ford there's 77.5 billion of outstanding bonds and i just started scrolling like you could
scroll here for a while you could see all these issuances right you got 4 million 1.8 million
well this is or that's uh yeah that's 4 million 1.8 million 1.5 billion 1.3 billion 16 million 16
million and you look at the maturity of some of these you think like 2046 like that makes me
scratch my head you look over at the yield 2046 paying 6.65 67 percent and you're like oh my god
that's 21 years out and it's only paying me 6.6 percent like what what can happen in 21 years
based on like with these cars like is ford going to be around and i
sold it one person that bought it and they both had the same reaction which was this isn't going
to be my problem yeah it's just like i want the ford probably sold it and they're like i can't
believe i'm selling this right now and the person that probably bought this was like i can't believe
i could get this but uh it's totally totally insane that somebody's holding that piece of paper
and then i started looking hey go ahead go ahead okay by the way everybody knows about the 20 20
38 unix time problem everybody knows this right what is this well well they had the problem with
the the size of the uh the dates that went into the older systems for the y2k problem
but the unix systems have the same problem in 2038 so there's existential risk that occurs in
systems in the future. And so when you look at something that's 10 years after this, what happens
to those systems if they can't be updated, whether it's cars or... It's not only these bonds or
producing the cars, it's the amount of employees, it's the capital purchases, it's the factories,
it's the pollution that goes into producing this versus something like Bitcoin, which is virtually
zero in order to store. That's the fundamental difference here. And can you go to the other one
that's 2097 you scroll it was in the screen oh yeah was it in the screenshot here yeah it was
yeah it was like in the lower left hand corner i just saw it it just said it was i think it's right
there yeah yeah this one yeah the 5 15 20 97 500 million it's 500 million with a 20. i mean when
something goes out basically a hundred years it's almost in perpetuity right i mean that's like
that's like a pretty long duration bond in my view yeah yeah and there's only 142 million of
of an outstanding. But that being said, what's the liquidity of this thing? How does that work?
Do they just buy it back in the open market or when they want to retire it? I don't know.
The whole thing was a bit strange. And it was a bit strange in just scrolling the capital stack.
And I was like, oh my God, look at all the debt. Look at all the paper here. There's just paper
everywhere. There's so much paper. And then people are like, nobody's going to buy the strategy
products and like Ford has $70 billion of paper outstanding with like a six like 5.6% interest
rate like are you kidding me like there's so much like appetite for this paper this credit it's this
is one company that we think has massive disruption on the horizon in the auto market and like a
challenging business model to be honest like you look at the so Ford has $37 billion of cash
$88 billion of debt. So their net assets, their assets minus their liabilities, about $45 billion.
So debt to equity is roughly 196%. Debt to liquid assets, about 238%.
Relative to MSTR, you look at their debt to equities, 23%. And debt to liquid assets, 19%.
So that's tricky. That's a bit strange. Now, one thing that, shout out FMT, he keeps me honest
here he i posted about this yesterday um sneak preview of this week's bad bond ford motor company
and fmt brought up a lot of that debt is non-recourse to the parents same for gm
so i'm like okay non-recourse what does that mean uh and like we reviewed earlier non-recourse
meaning it doesn't have a claim on any of the assets of the collateral of the parent company
and my first response was like okay cool so ford
Ford issued this paper and they're actually not taking on a ton of risk.
And I looked up about 60 or 70% of the debt is non-recourse, meaning they can't go chase
the assets, which at first makes me feel a little bit more comfortable that Ford might
exist for a little bit longer.
But the second order effect in thinking through that is that, oh my God, somebody's holding
60% of these $80 billion of debt
that has no recourse.
It has no recourse.
You can't even go chase the assets.
Like what?
So it's backed by air?
It's backed by air, dude.
It's backed by air.
Mike, you're out of here using hugs.
And so, yeah, I mean,
if Bitcoin is the disruptor,
then strategies preferreds
are backed by the assets
that is doing the disrupting,
not the one that can be disrupted.
And that's everything.
Yes.
I start to look at all these companies through the friction lens to the end consumer.
Because when you're seeing all this disruption happening out there in the market, and I found this with myself, there was a point in time where I actually started noticing this where smaller and smaller inconveniences would stop me from doing something.
right so for instance having to get my car drive to the store to go pick something up that i don't
really need right now well i can just order it it'll show up at my doorstep right same thing
with a company like ford you know they've got this whole dealer model out there where you've got to
go do one of the least favorite things on earth except for people like mike maybe because he's
made it an extreme sport which is going and buying a car and having to go through the headaches of
you know dealing with that whole dealership model and go out and test drive whereas tesla
you go online, you put $500 down, they tell you when you can come get your car.
You don't have to deal with any of the headaches feeling like you're getting screwed. None of that.
And so you can look at all of these products that same way. I think that's ultimately going to be
an issue for banks. When people start looking at Bitcoin as being the money, and now you look at
a different model where you're holding Bitcoin as effectively your savings. But if you want
something with a return that's still got the security and the liquidity behind it, you go to
the products like Stretch and Strife, where you've got the liquidity to get your capital back
immediately, but you're getting a higher rate than you're getting at the bank. Traditionally,
to go get a higher interest rate at a bank, you got to go tie up your capital in something like a
CD or something that's got a maturity where you can't actually access the principle of it,
but you're taking the friction out of that process now and still getting the yields that you want to
get. And I think that's a really powerful transformation that's happening because now
you have no friction with accessing your own capital. It's sitting in Bitcoin. You've got
total control over being able to access your own capital. If you need the cash reserves to be able
to live your life and generate some returns and generate some income out of it, you've now got
the securities and the equities that are out there that you can tap into at much higher rates,
more than double the rates that you're going to get at a bank. And there's just no friction in
that process anymore hardly. So it's come completely back to your control. I don't have
to go to the bank and ask them to give me my money, right? I want $20,000. Will you please
give it to me? Like, no, I'm just going to go take it. It's my money. I've already got a handle on it.
So when you view it through friction, you know, this is really going to start applying pressure
to the banking model over time. I don't want to hold anything long-term in US dollars. So my
savings account has completely converted to Bitcoin. I'm going to store it in the asset
that's not being devalued beyond the rate that I'm getting. And if I need an account that's like
a checking where I need the liquidity and I still want to be earning a higher yield than the rate
of inflation, and quite frankly, getting average returns of the S&P 500 along the way, pretty good,
I'm going to go to these preferred equities. And there's an education ramp here that is going to
need to take place, but it becomes a powerful combination once you finally reach that. Now,
it's not going to be reality for everybody, right? We all live in a world where you are saving and
you're not doing the paycheck to paycheck thing. And that's the reality a lot of people are seeing.
And I think that was illustrated in some of those earlier charts you showed, Jeff, with
that non-mortgage debt really ramping up, which is going to include things like credit cards and
personal loans and all that kind of stuff. So it is pretty dire out there, but what you need to
realize is for people that are early to this process or that are young or that are just starting
out their careers, if you start going up the education curve on how money actually works
and finding the right solutions to protect yourselves, the compounding of making that
change early and the impact it has later in your life is absolutely massive. Huge.
so i want to make a quick comment and you know again about ford so ford versus mstr can you go
back to the uh your yeah so one of the things that i said before um one of the metrics that
they do is like revenue per employee or we could do it as a balance sheet for net you know for
employee. Ford has 171,000 employees. Strategy has 1,300. There's an order of 100x for employees.
Two orders of magnitude.
Yeah. Oh my God.
Yeah. It's 100x difference. So if you do that, if you do the calculation right now
of the balance sheet per employee, and this was known back in the old days of the internet bubble,
Cisco, I remember, had revenue of $3 million per employee. That was a sales metric. And so
this metric is used in order to figure out which companies have more drag on them.
And now, it's manufacturing, but Soleil was talking about this, or Jeff was, if you have
automated the production of these facilities, you become much more efficient for a variety of reasons.
OSHA reasons, you don't have insurance. And so there's a back-end expense on the employees.
So you capitalize the production. So the numbers are kind of small. What's the difference?
Yeah. So strategy has $40.8 million of net assets per employee and Ford has 343,000
of net assets per employee. My work is done. I should get off the call right now.
Every strategy employee could lose a briefcase full of cash on their lunch break and still provide
more profit than Ford can. Absolutely. Looking at the Ford, I looked at the Ford net income too,
because I went full analyst mode on this because why not? Last year, so this is the last three
quarters in a row of net income. They went 4.1 billion, 3.8 billion. This is the last three
years in a row 4.1 billion 3.8 billion 3.1 billion of net income so like that's not a great story
uh i think it's pretty clear that these other like car companies are winning
i personally am never going to buy a ford
and uh you start to look at
the debt and their ability to repay the debt, their net income. So I took the net income average
is about 5.2 billion compared to strategy's net income average over the last five years,
I think is technically around 5 billion. If you factor in FASB fair value accounting,
which is pretty crazy, they're pretty similar. But the years of coverage over and above the
net
the debt
lasts the cash.
How much debt do you have less cash?
The years of coverage
is 9.7.
Basically, if they had their average
net income,
they would be able to cover
their debt after their cash for
nine years, basically.
Strategy is the inverse
because they have
more money than they do
debt. Like they have more net money on their balance sheet than they do debt.
So this is funny. Today, there was literally a news story that there was an aluminum plants
fire. So Ford's F-150 trucks are going to take a huge $1 billion production hit. That happened
today. No way. So yeah. So think of this, the bond buyer's thesis, the bond buyer of this,
Their thesis is, please let an indebted legacy automaker surviving on government incentives
magically out earn inflation for 10 straight years.
But like the stretch buyer's thesis is Bitcoin goes up, yield goes up,
sailor keeps stacking.
Bitcoin doesn't catch fire.
Yeah, Bitcoin, it's as simple as that.
Bitcoin doesn't catch fire.
There's just way less risk associated with the whole thing.
And then you think about, I sent this to Jeff Park, the companies that are offering this good credit are going to start being a lot more attractive to anybody buying bonds.
So people are going to sell the bad junk and buy the good stuff because it so much better on a risk adjusted basis everywhere And at that point it kind of cleanses the market Like these Bitcoin credit companies
like strategy and these other Bitcoin treasury companies that are offering good credit instruments
to the market are cleansing. They will cleanse the market by removing bad businesses ability to
access debt capital markets. And I think that's a really interesting concept to think about. It's
like Bitcoin fixed the money. Okay. How does Bitcoin fix the credit market? So it was like,
you need counterparties that are so incredibly trustworthy with so much collateral that they
create instruments that are so much better than the rest of the market that you can't not hold
them. But you've still got the liquidity problem. They got to be able to sell the bad stuff to get
to the kids. You got to be able to sell the bad stuff. Yeah. And some of these people might be
riding those bonds until 2097 when someone's going to have to collect on that. Damn, bag holding for
70 years. That's such a good point, Ben. And that's why this is going to take a decade. That's why
it's going to take 20 years because all this stuff, all the bad stuff has to turn over. And anybody
that's sitting on that 2097 bond,
like you're going to have to take Ford to court
to go get your assets.
Or like if it's secured,
if it's unsecured and backed by air,
as Soleil mentioned earlier,
you're kind of screwed.
But like there's going to be illegal proceedings.
Do you go through that whole process?
Do you just mark it at zero?
There's the next five to 10 years
and watching this disruption take place
in the market is going to be totally fascinating.
And this is just one place, right?
This is one company
and why I think we'll have a segment on this every week
because it's totally fascinating to think about the entire debt structure of the market
that was historically incredibly opaque.
I came for the Bitcoin and I stayed for the bonds.
And that's where I'm at.
That's where I'm at.
It would be really interesting to find the holders of those 2097 bonds
and see what types of holders they are.
So add that to the list for the future.
Yeah, the type of holders.
We've got the fancy terminals.
maybe we'll get you one i think you need one too um yeah it's this stuff is totally crazy
um shall we shall we shift gears what do we have we hit the dead have we killed the dead horse
yes poor ford well you gotta remember you've got to remember too that they were the only one of the
the big three automakers that skipped the tarp bailout in 2008. I don't know if you remember that.
And then the next year, they got $6 billion from the Department of Energy. So really,
those Ford bonds are betting that your government's going to be solvent in the first place.
It's just a total mess. It's ridiculous. And that's just a money printing solution.
Yeah. Wow. Yeah, I think the best thing I can say about Ford is that they're going to go bankrupt
blast. It's just so critical to the American world, the American economy. Yeah. The, uh,
the other thing we were talking about was, uh, these bailouts, which I think is Mike,
you hit on this a little bit earlier. Um, all of these bailouts, like these, uh,
what's, uh, Jeff Park called them and he calls them Scrabble tiles, right? The tarp and all
these different bailouts are just different forms of money printing in a different way.
You think of like Silicon Valley bank
and like Silicon Valley bank was a money printing moment.
There was a bank run on the bank in Silicon Valley.
All of the tech companies banked there.
That specific bank, Silicon Valley bank,
they may, if you wanted to get a line of credit
from Silicon Valley bank, they had the best rates.
You had to keep all of your money there.
You couldn't like split up your exposure
between other banks.
So they made all of these tech companies, put all of their money there.
And then when the tech companies went to actually go get the money, there was no money left.
It was like a huge issue.
What's the U.S. government going to do?
Are you going to let your best sector in the entire world just fall to pieces because of one bad bank in Silicon Valley that took on too much risk?
No.
They said all of your deposits will be insured.
which is just a super, super, super, super slippery slope of just we're going to money print no matter what.
Like it just it's the incentives are really not great for banks to not take on risk.
Like all of these banks are taking on risk because they know there's if there's just too systemically important,
they're going to print their way out of it.
Then that's why we buy Bitcoin.
That's why we hold Bitcoin, because these incentives are just totally skewed.
and the the way out of poor risk management is money printing
so it's crazy crazy world out there and maybe we'll uh maybe we'll hit on target too a little
bit because you brought that up adam um i kind of got i got a little bit roasted in the community
some people are like oh yeah it's a screw target it's the worst place ever some people are like
have you ever been to a target you should go walk on a target and then it became a moment of
contention with my wife she's like all right we're going to target we're going to go check this out
And it's it's difficult, right?
And in nice places, Target looks like it's doing fine.
But in bad places, like everything in the in the area is like locked up.
You can't go get shampoo or toothbrushes or like medicine.
It's like, why would I like why would I even go to Target?
The Target in Seattle was horrible.
We used to go to Target because it was kind of cool.
Like you get some stuff for your house and get all the toiletries
stuff that you need is like just a trip that you did every once in a while and then it's just like
why i why would i ever do this like i can't i have to ring a bell every time i wanted to go
like get anything from the shelves and then you've got a minimum wage employee that comes running
and or or or walking or doesn't come at all and you're like this shopping experience is
completely horrible but then you're like well what's the point of target existing
if like i could just go get all this stuff on amazon which is what i do now i subscribe and
save that's friction right yeah you go to those stores and it shuts you off immediately you go
why am i going to come here jump through all these hoops there's too much friction out there but also
if you're if you are target you have to look at a lot of those stores now and in those areas and
go do i even want to be open here that's exactly when you had all of the people that could just
come in and just walk out with as long as it was what less than a thousand dollars of goods or
whatever and they're clearing the shelves if you're a corporation that's trying to make money
in a world where that's getting harder and harder for some of these you've got a serious risk return
that you've got to look at on that and most of them start to vacate those areas so now those
areas have far less options to them and you basically get down to a well i guess amazon
will bring it hopefully unless people start raiding the trucks and stuff that's exactly what
it is like there's something called shortage percentage which is just a percentage of your
annual sales that you'd expect to lose due to theft in retail theft is horrible across the industry
and it was like very regular to see like a two percent three percent shortage rate where
like two to three million dollars of your product is missing every year which is crazy to think
about and then you know on top of it multiple years ago back in like 2019 before the pandemic
target kind of pivoted their strategy where they want to compete with amazon they fulfill
online orders through their stores and then obviously as e-commerce takes off the infrastructure
just isn't there the logistics aren't there to compete with amazon with walmart on that basis so
they're just in an identity crisis so much so much risk everywhere man i wish i could i could talk
about this for hours but yeah it's a tough spot to be in identity crisis yeah they don't want to know
they're trying to understand who they can be like do we compete with amazon or do we just downsize
like ben said we have all these stores that we probably need to close due to these operational
issues uh it's just a it's a tough spot you need to decide to win on one thing and then
it's really hard to compete it's a super tough industry yeah it's like identity risk i haven't
really thought about that before it's like you can't find your little niche anymore because it's
been taken by these large companies that can move faster quicker with less friction and
it kind of makes you wonder like what's the what's the future of the world look like if
if a company like target disappears and a few of these other like i i get they've got all the real
estate so you've got some assets there but then the question is like who wants the real estate
when's the last time any of you were at a mall right i've walked through an empty one you remember
when you were a kid and like that was the spot you were always there right you'd go there and
shop for everything all the stuff now they're empty right we have a massive one that they
put in here a couple of years ago and you walk in there now and i think there's probably six or
seven active stores in there and the rest of it's just completely vacant like like that model just
got decimated as soon as Amazon came and people could take the friction of going to the mall
out of their lives. They didn't need to anymore. You can ship it to your house. You don't like it.
You can ship it back. It's an easy transaction now. The world's getting lazy. We don't want to
leave and have to go chase things down. That's just a reality now. I don't know if it's a world
got lazy. I'll say it differently. We'll move on to the next topic. It's not lazy, but we've gotten
more efficient in our lives and we're exactly because of things yeah so when we talked about
the black swan events you could talk about things that happened due to there's a mistake in the
system but in silicon valley i've been here for 25 years what happens is there's a term that's been
here ever since i've been here called creative destruction so the company netflix put blockbuster
out of business the easiest one amazon put sears out of business right and so so with that um and
And then you have Google puts Yahoo out of business.
So it's really great for the creative company, not for the company that gets destroyed.
But now with Target, you know, with Amazon making it so easy to get this, the other black
swan event is a technological event that we talked about Ford and Tesla versus Ford.
So I think we see that also as black swan events, just technology putting you out of
at you have an inefficient business to compete against, you know, Amazon.
I mean, Adam, if you're a target, nobody there wants to talk about competing against Amazon.
That's probably the worst story to talk about, right?
Yeah, 100%.
Absolutely.
Yeah.
And think about if you're a target executive, every day you got to go to work, figure out,
oh, how do I compete with Amazon?
You know, they have prime delivery, a subscription.
I get free movies and they don't have a shrinkage problem and it delivers to my house and it
remembers what I, you know, as Jeff said, he has a subscription for toothpaste.
And like, what are you going to do? Like what's the incentive to work there to like the equity upside and target?
Exactly.
You know, like, like, is that, that's not cool. That's not sexy. Like good luck trying to hire people. Like, does anybody like grow up, man, I want to be.
Your RSUs and target stock are down, you know, 70% over the last three years. So think of all the people that have spent their career there.
their career there just banking on a million dollars of rsus that will go down to a quarter
million and you know a short time it's a really sad thing yeah and then um you know what's what's
wild is so before you had telephones in your house with a wire you know analog and then i was in
silicon valley so what happened was we were displacing with voice over ip cisco was displacing
all that with phones that did voice over IP. The problem that happened was that once the iPhone
came out and the cell phones went to unlimited pricing per minute, people were like, I don't
really ever use my desk phone because then they started with WebEx, which led to Zoom and Skype
and so forth. So from that perspective, the whole VoIP play became a non-starter, even though it was
better technology, because once your cell phone went to unlimited minutes, you didn't give a crap
with the technology was because the economics were better.
And so you're trying to pitch, you know,
and that's where you get back to,
I don't want to spend millions of dollars on a phone system
if nobody's going to use it.
I'll just use my laptop.
And so I've seen analog lines, you know,
and then I saw VoIP to get pitched,
and then it got displaced by the iPhone,
and that all happened.
And that's in a very short period of time.
Very short.
um maybe maybe we switch gears because we got i don't know 15 minutes left and i mean maybe we'll
go a little bit over because we're we're cruising here if we could talk about this stuff forever
and i'm sure we will talk about this more um but grain you were just in argentina and i think we
should give this i think we should give this some air because this is a really interesting story um
argentina obviously big monetary issue a new president came in javier melee it was a big
ordeal. He's getting rid of all these government enterprises afuera, afuera, afuera. And then
it's involved in some scams and now the country hates him and it's a bit crazy down there.
And everybody thought he was going to be the Bitcoin hero and put the country on a Bitcoin
standard like El Salvador. Ended up not really happening. Launched a meme coin, did the whole
thing. But anyway, Graeme, you were down there and you traveled and you experienced the money
and you went to like car dealerships and stuff. Tell us a story.
Sure. So, so, so first off in, in, um, in my first job in New York city in, in 2000,
I went to Venezuela. And so it was the Boulevard at that point, it's still the Boulevard.
And, and what I found out by asking people from Venezuela to this day,
they've run out of zeros three times. So the Boulevard there's been, maybe there's been more,
But since I was there, there's been three generations of the boulevard because they keep on printing zeros onto it.
The paper's not big enough.
That's Venezuela.
I was in Caracas and Maracaibo.
So that was the old days.
That was 19, let me think, 1992, 93.
So then on this trip, I went to go to Patagonia.
And so I was like, cool.
So I take a plane, SFO to Houston, Houston to Buenos Aires.
When I travel, I take 500 bucks in cash.
I have credit cards because you got to pay tips and stuff.
So I'm in the airport in Buenos Aires and you have to give them your passport.
It's Bank of Argentina in the airport.
And I figure I'll go there.
First, I tried taking out of the ATM machine and they only let you take out 60,000 pesos,
which is equal to about 48 bucks.
And I'm like, I think I need more money because there's a limit on it.
So I go to the desk and I give the guy $200.
He going to give me like 250 pesos And I like cool And I got a flight I going to go to Tierra del Fuego Excuse me Ushuaia
And then I'm going to go to Chile.
So I, because the guy knows I'm an American.
I said, can I have some Chilean money?
Whatever it's called.
And he's like, no.
I'm like, why not?
He goes, because we don't have any.
I'm like, you know, you got euros, you got francs, you got yen.
You don't have Chile money.
It's the next door neighbor.
He's like, no.
So I take my Argentine pesos, go to Yishwaya.
So then I drive over into Chile and I get there and I get to the hotel.
This is a very, very nice hotel.
It's about $200 American to stay at this hotel.
So I go to the front desk and I said, look, I don't have any Chilean money.
And the guy's like, okay.
I'm like, because sometimes they'll change it for you at the hotel.
And he's like, you got to go to the black market to go get it.
I'm like, what?
And so I said, what am I going to do?
And he's like, well, what do you need?
I go, look, I got like 100.
I got five.
I didn't tell my 500 bucks.
I have a hundred dollar bill.
He's like, that's no problem.
What do you want?
I go, I want singles and fives.
So he gives me back a hundred dollars in cash.
He had a wad of US dollars.
And he goes, everybody here prefers the blue dollars.
I'm like, what the fuck is a blue dollar?
And that's American money because they call it blue.
I don't know.
So I'm paying everybody.
The Chilean people don't even want the Chilean peso.
That's how bad it is.
Anyway, I get back to Buenos Aires.
People are beautiful.
They're dressed great.
All of the restaurants and cafes are packed.
They start at four o'clock at the cafes.
They have their cappuccino, their coffee, espresso, whatever it is.
Fabulous.
The restaurants, everybody goes to dinner at nine o'clock at night.
The restaurants are full.
The weirdest thing is all of the malls that I went to in Buenos Aires, right?
And I guess all the nice areas, whatever, I walked around, all the malls were completely full.
There was not a single empty storefront.
And all of the inventory was stacked up in every single store.
And I'm like, if they got bad currency and they're doing all kinds of renovations on the real estate, I don't get it.
So I went into the car dealership because I like cars.
if you want to buy a car, you got to buy it in American dollars. Can't buy an Argentine pesos.
So I learned that that was interesting. And then what happened was what it said was
that if you want to, I'm breaking out a little Coke here, real deal.
Glass bottles are the best.
Glass bottles. So with that said, to wrap up, the real estate was all being renovated. And I'm like,
why is it real estate being renovated if the money is so bad?
That's their store of value.
And once you own an apartment, you can live in it for whatever, 50 years.
So they have this really good renovation of real estate.
That's the store of value that goes up.
And then you don't have to worry about the debasement of the money
because you bought it for cash.
So, and the reason why the stores are all stocked with inventory
is because it's a hard asset.
It's inventory.
Excuse me.
yeah it's uh it's crazy that these other countries that have really bad currency
rely on us dollars as their stable currency when we're over here in the us and we don't
even want the currency and it's like that's just it's crazy final boss of currency
collapse. It's the final boss. Once all these other countries realized that our currency isn't
stable, then what... But it's better than theirs. So it's a game... It's better than theirs.
What's better than theirs? And what I could tell you is that I thought it was going to be...
I thought the... Caracas in 92 was... I mean, again, it's like the old days. I have not been
there since then. That city was pretty worn out at the time I was there. But Buenos Aires was
beautiful and modern and beautiful glass buildings and old architecture. It truly is the Paris of
South America. And it was awesome. They had a very efficient, the train station was gorgeous. That's
where I stayed right by it. And so I did not get the sense that anybody, and I asked ChatGPT,
I'm like, why aren't the people concerned about this? They're not because they've been living like
this for 40 years. Buy your house for cash. You don't have to worry about your biggest expense,
your rent. And then the reason why you can only take out 60,000 pesos at a time is to keep the
the velocity of money fast. But it doesn't matter. Most stores, I'd say 90% of people paid by credit
card anyway. So I just like to have cash because I tip bellhops or whatever people. So anyway, so
to me, it was a big eye opener going there because it was for a third world country.
It was awesome. The other thing I'm going to say is that WhatsApp for a telephone call
works better in Argentina on a free Wi-Fi at a coffee store than my phone works with AT&T in
Silicon Valley. And that just bugs the crap out. Or making a phone call through X or a phone call
through whatever app I had on free Wi-Fi worked better than a cell phone call in America. So that
just irks me to hell. And that's a great answer right there from Elliot. They save in the dollar
because the dollar is like Bitcoin to us. And so I only saw one place that advertised Bitcoin,
but it was an eye opener. And I thought it was going to be a lot worse. And I was really,
really surprised. I read this article on the Federal Reserve's website today.
It came out in July and it's called the International Role of the US Dollar 2025 Edition.
And I highly recommend it because it's from the Federal Reserve, the people with the biggest
incentive to make sure that the dollar looks good.
And it is filled with very easy to read graphs that not only show the death of our dollar,
but the world's eroding trust in it.
And it is just mind boggling that this is coming from the Federal Reserve trying to
dress it up the best that they can.
And you're just seeing like foreign exchange reserves of the dollar are down 20%, foreign
holdings of treasuries down 30%, and they're trying to put on a face.
So I think the rest of the world is going to catch on.
They're trying to pump their stock.
Yeah.
I'm going to pivot real fast.
J.P. Morgan put out this article or investment thesis called the debasement trade.
The fact that it has the correct name is awesome.
And basically, the core thesis is that gold and Bitcoin are complements to swelling government deficits.
We've all known this.
If you've been in Bitcoin, you've known this based upon the years you've been in it.
So that has been true, this debasement trade.
Now, one of the reasons why I like the term debasement is because there's two things going on with Bitcoin.
CPI, Consumer Price Index, which the price of something could go up because there's a supply chain problem.
That's not money printing.
Money printing is you have a fiscal deficit.
In the US, it's a trillion dollars a year, and it's about 6.5%.
So you add the debasement of the currency, that's M2, plus the CPI, and you get whatever,
6.5 plus 3, you got 9.5, round it to 10%.
That means every 7.2 years, your buying power gets cut in half.
You know, China's M2 is 10% a year.
I don't know if the CPI is there, but it's probably more than 2%.
So the takeaway for this is the debasement trade is JP Morgan said in order for Bitcoin,
they said gold leads Bitcoin.
And in order for it to catch up, it'd have to be 40% higher or 165,000.
So congratulations to JP Morgan.
You now know something that we've all known for anywhere from 1 to 10 to 15 years.
Here is the debasement trade visualized.
The blue line is the CPI consumer price index.
So the increasing cost of goods.
And then the red line is the M2 money supply index.
So it's how much the money supply is increased.
So the spread between the two is the debasement.
That's the debasement trade.
And it doesn't look like it's stopping.
This is from 2005 to 2025.
the compound annual growth rate of the M2 is like 6.5%,
and the compound annual growth rate of the CPI
is like 3.5%.
And within that, the CPI has also had changes
to the construction of the index itself,
whereas breakfast foods used to include eggs and bacon
and those types of normal breakfast foods.
And now I think breakfast food is just cereal.
Obviously, those are very different.
The price of those changing over time
is incredibly different.
So yeah, it's wild to see that the, like the Fed is posting this information.
And then so is JP Morgan, you know, like understanding what's going on.
One of the big things kind of bring this times back to like credit quality.
So what's the credit quality of the US government?
Just got downgraded by Moody's.
It did, but like, what's that mean?
Oh, damn.
You know, like who's like, who they pay the debt to?
Who they owe the debt to?
what is the debt like what happens if they don't pay the debt
it's the best of the worst right i mean you look across the world i guess your credit quality is
relative to everything else that's out there and if the rest of the world is spinning out of control
faster than the u.s you know the u.s is still still almost the best you got it's but man it's
getting dark out there when you start watching this because we're hitting this weird point in
time where everything's just accelerating and it's accelerating so fast and you start looking
you know i used to always be mesmerized watching that debt clock just climb and climb and climb and
you know it doesn't feel real and still until you start tracking the impacts with like those
charts that you just showed as well like that's a terrifying chart watching how fast that debasements
accelerating away from even CPI. Because I think what it tells you when you look at our economy is
that the economy is slowing down and they're trying to find a way to re-inject it. And now
all of a sudden you've got all this productivity that's coming out of the market when all these
people are aging out of the workforce and they got to find ways to replace that because you've
got all these systems and entitlements built up that you got to be able to fund. And so I think
what you're seeing right now is the last ditch effort to try to make an impact on that because
they don't have that long to turn it around. Yeah, absolutely. So this is, I took this picture
December 12th, 2023. So this is two years ago, 32.9 billion. I was in New York for work and I was
like really bullish on bitcoin at that point in time and then jim kramer posted this uh i don't
know like 10 days ago our national debt 37.6 trillion i'm like oh my god this is like i went
back we posted that i was like oh my god this is that's so much money right that's so much money
in such a short time period like it's it's greater than an nvidia it's one 1.2 nvidia
just out of thin air like well the worst the worst part about this is that the third line item in the
federal budget is the interest on the debt so that that makes things worse and so let's try and wrap
this up on on a positive note look for the for the 33 000 people watching this you're aware of now of
what's going on? And Tim, Justin, people that we both know, we were in New York City and he said,
can you orange pill my friend? And I said, sure. And this is at PubKey. And I went to go talk to
him. Very smart guy, works at a bank. And I said, what's inflation? He's like, 3%. I'm like, okay,
what's the M2 number? I said, 6.5. I just tell it to him over the past 25 years. I go, well,
add those two together. So 6.5 plus 3 is 9.5, just round it to 10% because the rule is 72.
That means every 7.2 years, your buying power gets cut in half. And he goes like this. He looks at
me, he goes, you add them together? I'm like, well, yeah, it's a yearly rate for both of them.
He goes, I never thought of adding them together, but he really didn't know what the M2 number was.
And so that's why, you know, when the younger generation, look, I'm the old guy here. I already
know that. So what does that mean for the young people? The reason why it's harder is because
you're getting paid, but the money buys half as much every seven years. So you're 21 years old
before you're 30, your buying power is cut in half. And then Jerome Powell said in front of
Congress, anybody can fact check me. He said, well, we don't look at M2 because it's obsolete.
We learned it in college. There's no reason to talk about it. And I'm like, what are you talking
about it's obsolete it's it's so crazy because that all of that extra money printing is going
in new assets that never existed before too so not only is it like all assets are printing you've got
actually new assets with crypto they're just absorbing all of a sudden and it's exacerbating
the issue you know but you know what made it worse one of the craziest things that happened during
covid was that was the biggest jump for robin hood so all of a sudden you're at home you can't
spend money you're wearing a mask right life sucks and you're sitting at home you're like well
I could bet on sports or I could buy freaking crypto stocks.
It was 2020.
The halving happened.
The price dropped down.
Every, right?
March of 2020 was the bottom.
So then you hit the halving.
You're like, well, Bitcoin got killed.
Let's just start buying stocks for free on Robinhood.
Robinhood runs all the way up, right?
Wasn't there a company called GameStop that had a gamma squeeze of January 21?
Yeah.
So then this happens.
everybody's sitting at home and Robin Hood goes bananas because everybody can't. So the government
prints money, but the problem was you couldn't spend it because your store was closed. So now
you're sitting at home waiting for the Amazon guy to show up. Hopefully he doesn't give you COVID.
Yeah. Yoloing assets. Yoloing assets because it's what makes sense. All right. We're two hours in.
I know we could probably take this five hours if we wanted to. I'm going to pass it around. We'll
We'll do final thoughts just to wrap it up.
And we'll go from there.
Adam, super appreciative of you joining.
Thanks for chiming in.
I really appreciate your perspective.
And yeah, hopefully we'll have you back and get on,
start doing a couple more offshoots of True North.
Of course.
Yeah, anytime.
I love talking about this stuff.
Like you said, I could go another five hours, man.
This is what I, you're the only
that i can talk to about this stuff my fiance is asleep in the other room she has no idea what's
going on to the magnitude that it is so by all means anytime yeah absolutely so maybe we'll uh
we'll pass it over to mike well mike will give you final thoughts and we'll go around
mike that's you grain of salt oh i called you i called you mike i guess yeah yeah i called you
by your name no sorry i have i have my name in there i like how you're like to my name over here
Like, anyway, hey, look, look, everybody, I think that, you know what, you have to think about where
you want to be in one year down the road, two year down the road, three year down, whatever it is,
and then you make your decisions and do that. And, you know, when I realized that Bitcoin in 2017,
it was like, oh, I think this is going to be the best thing ever. You know, I just, I jumped into
it full force. And now I, because I always thought in the future, why wouldn't I want to buy as much
of it as i could so that's where it happened and i know tim for a long time and you know what guys
this has been great and i could talk about this all the time but go out there and go talk to people
see how people are running their businesses see what's affecting them and you learn more by going
out there in the real world i think that's great yeah see see risk everywhere and then talk like go
experience in different places like your your experience in argentina and chile like
Like that story deserves air.
You know, you need to like, that's interesting to tell people everywhere.
Like this is real life things that are happening in the rest of the world.
A hundred percent.
Keep doing it.
I love the travels of grain of salt.
Great.
Over Soleil.
Yeah.
So my, uh, my final thoughts is actually a question for Adam.
So we'll call it final rants.
Um, you know, so with your following, which is well-deserved by the way, with the content
that you pump out. You could have just covered the knots versus core debate in a neutral way.
So it was not to, you know, anger followers or whatnot. But they say that Bitcoin is a courage
test, not an IQ test. And there's definitely some high IQ, you know, proponents out there for core.
But, you know, I just wanted to know what gave you the courage and conviction to take a side and
endorse knots? Yeah, well, I tried to give a neutral overview of it for Swan, actually,
And I got raked over the coals because I learned that you can't do a neutral overview of the debate.
Like you need to pick a side.
So I learned that the hard way.
But nothing too crazy, man.
I love Bitcoin and what it can do for humanity.
And I haven't successfully seen the case as to why we should change the 80 byte opportune limit, you know, that enables more flexible data embedding.
You know, I've seen the case that filters don't work in the sense that you can't ever completely prevent unwanted data from being included in the blockchain. But, you know, the entire thing is a game of incentives. I view it as just, you know, opening up some attack vector that totally is unnecessary. I like how you actually framed it as Pascal's wager on X. I thought that was brilliant.
And yeah, I love Bitcoin and I want to keep Bitcoin
the, how it has been since 2014.
You know I want to have Bitcoin the way I have grown up to like it Yeah man I love it I appreciate you you know trying to keep Bitcoin money And I guess my final final thoughts would be a message to the core developers
Game theory of cooperation says that the optimal strategy is to cooperate
until someone defects against you.
And then you defect, you know, back against them until they stop defecting
and they start cooperating again.
so I would say that the rise in the knots road node runners shows that the network recognizes
that you have defected against Bitcoin and if you want us to stop defecting against you all you got
to do is stop defecting against us and that's it that is that is deep game theory so so let you
just have game theory episodes just go through that that's awesome there we go 100% defect
All right. Over to you, Ben.
Yeah, no, I've really enjoyed this conversation. I think that these are going to be interesting ones to continue to have.
And I would just continue to challenge people to think through the concepts of money and credit and think about what this means in a future world where Bitcoin becomes viewed as money, effectively the final settlement.
right? If you just think about credit as the promise of money in the future,
think about what that means as Bitcoin grows and scales. And if there's a world in the future where
Bitcoin shifts from the store of value into being recognized globally as the money, what does that
mean for a currency like the US dollar? So just think on that for a little bit. It's an interesting
thought experiment. I've been going down that rabbit hole here for a little bit.
everything's being rewritten that's all new so it's okay if it's uncomfortable and it's okay to
be wrong and it's okay to be like think about what the future can be like all this is completely new
everything's novel so if you think you've got a weird thought or a stupid thought it's like
not a stupid thought because we're pioneering a new land and the last thing i would say is
when everyone's screaming, start looking for the risk returns.
The opportunities. Risk reward payoffs, right? Tune out
noise. Go out there and find the opportunities. If people are
screaming, it means those opportunities are available. So be
willing to do the due diligence. That's your edge, right? Don't
sit on your hands. Don't take the word of anybody else. Go do your due diligence.
Understand what you're buying into and search for those
opportunities that everyone else is going to overlook while they're scared.
Absolutely. Don't rent your conviction. Tim, over to you.
I mean, you guys are just nailing point after point after point tonight. I guess on the
everything is being rewritten part, I've had the opportunity recently to just kind of,
between Ed myself and some other guys just like really have a lot of conversations like meeting after meeting after meeting and the the guys on wall street that are actually willing to
have a genuine conversation with you they'll ask you like well how do we get our m nav back up for
this company like what's the strategy and it's like that's how early we are like it sounds
hyperbolic in the language when you're like we're birthing this new industry but like that's exactly
what's what's happening i mean i have the pleasure of talking to almost everybody and it's just like
holy crap we're really early and like just thinking about pristine collateral the best money
credit like all of these concepts are just going to evolve and whoever can kind of figure out
which is everybody in this community right now together like whoever can figure out like the next
best thing to do whether it's m a or whether it's structuring something a little bit differently
um i think we're just going to look back and be like oh wow you were in the bitcoin treasury
industry before the year 2030 like you were there at the beginning and it's like we're still like
internet yeah yeah in hindsight it's gonna be so obvious so obvious so super super cool times
mike it sounded like you wanted to say something i i just agree with you i i i agree wholeheartedly
you know you're you're gonna look back in four or five years and say why didn't i do more to learn
more about bitcoin treasuries if bitcoin's good for a person it's good for a company if it's good
good for a company. It's good for a sovereign nation. And so that, you know, I think you will
look back years later and see where it is. And, and you'll be like, wow, the whole industry turned
around. I'm dedicated to the space. I'm going to be in, this is my second career and I'll be in it
for the next, you know, I don't know, for as long as I work. As long as you're having fun. Yeah.
Yeah. Over to you, Adam. Yeah. It's tough to pick on something to end on. We've had such great
discussion tonight. So thanks guys. But I guess I'll say in the age of great uncertainty that we
live in with AI disrupting entire industries, our entire economy, and the money printer continuing to
go debasing our currency, just know that because the debt needs to be devalued, the asset owners
are going to be disproportionately affected to the upside. Therefore, you need to own assets in this
day and age. And thank God for Bitcoin, because it's going to shield you a lot from the destabilizing
effects of both the money printer and any ai disruption so don't want to end on a downer but
thank god for bitcoin because that is the positive note yeah absolutely thanks thanks for being here
adam appreciate the perspective as always keep doing you uh and you're you found a lane and it's
so awesome to see so thanks man yeah keep keep doing it um because it this uh lifts the education level for everybody Like we all communicate to different people We all have different audiences and cross collaborating and talking to different audiences is good for everybody
Like this is clearly a huge education gap.
And we've got to lift up the finance knowledge of like the rest of the world
in order to get to a relatively decent baseline.
And that's a complicated task and it takes different perspectives and
different communication styles.
And yeah, not everybody wants to listen to a two hour and 15 minute podcast of six dudes
talking on a Wednesday night at midnight Eastern, right?
Like you've figured out that.
They'll listen to a Cokehead rant at 6am though.
Yeah, exactly.
Exactly.
Yeah, it's just such an exciting time.
I encourage everybody to just talk about this stuff.
Again, communication is huge.
Education is huge.
We're going to try to continue to push this education kind of lens into the market just because there's like there's so much.
I'm learning continuously every day and I've worked in finance for 11 years.
And if I could fast track that learning to everybody else and like what I'm seeing, that's that's the ultimate goal.
This is really a benevolent journey and I want the world to be a better place.
So I'm really hopeful.
Tell the people you care about about Bitcoin.
You might be the conversation that saves their financial future.
Make it happen.
Okay.
One last second.
Maybe you buy more Bitcoin for your friends and family that don't.
Maybe be a little bit altruistic in the future.
If you can't convince them, buy enough for you.
Buy as much as you can.
And then in the future, you help somebody out.
You're like, look, I can help you.
How can you do that?
Well, I bought Bitcoin in the past.
How much?
I bought enough.
And then that's what you do.
Eight years in the future, you go help somebody.
So I loan it to them at a very attractive interest rate.
Bingo.
Be the be the one company that does that.
The every Christmas I'm in the age that all my friends are having kids
and every Christmas I buy each one of my friends kids $250 in Bitcoin
and I put it in a wallet for my custody for them, the whole thing.
and so now like you're some of them that are four years old and it's like looking pretty good i'm
like this is a this is a college fund here for uh for your kids and the same thing it's like they
weren't going to do it they have some like mstr exposure because they know i like talk about it
and they want to support me but that's like that's really it and uh it's just it is a nice feeling
to do that to do that for people so absolutely encourage that encourage that it's a it's cool to
to see. And my last thought is that I came for the Bitcoin and I stayed to disrupt the bond market
and I'm going to be working in this space for a long time. So you can yell at me all you want.
I don't really care. I'm going to be working here for a while. Cheers. Thanks everybody for joining
two hours and 15 in. I think we've got like 35,000 people. We will catch you next time,
maybe next week, maybe after that. We'll see you later. Peace.