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Thank you.

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I've been too long, I'm glad to be back.

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Yes, I heard that news from the news.

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That's kept me hanging out loud.

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I can't remember the stars, because they're giving me high.

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I got the hurts, because I never died.

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I got night lines, cat signs,

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abusing everyone and having a party while I'm going to find me.

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Yes, I'm going.

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Yes, I'm going.

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Yes, I'm going.

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Oh, here we go.

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We are back, True North, episode 57, the investment grade Bitcoin podcast.

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We are here with the crew today.

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We've got five of us, myself, Mason, Dan, Mike, and Soleil.

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We are going to rip it.

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We've got a lot to talk about, strategy world, or as we should probably call it, just stretch

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world at this point, digital credit world.

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We've got a lot to talk about on that front.

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We had the True North event, had some great conversations there.

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We can walk through that a little bit.

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And we will talk about liquidity profiles of preferred equity instruments.

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Maybe we'll dive into a couple, talk about some of the conversations that the team had with Saylor and the strategy folks.

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And really, we'll just keep the party rolling.

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MSTR at the iBit is up.

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We are seeing some positive movements there.

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A great day in the markets.

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I think the first day Bitcoin has been up 7 plus percent in quite a while.

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So great to see that.

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Some of the equities are ripping, but job's not finished. We got a lot of work to do.

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The world is waking up to digital credit. It's very apparent. You could see it everywhere on X.

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It is impossible to scroll on X for a minute without seeing STRC labeled somewhere.

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This is the most liquid perpetual preferred equity that's ever existed.

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Yesterday, STRC traded about $200 million. Today, it traded about $150 million.

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This is 150x the daily liquidity of other perpetual preferred instruments.

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And we are truly experiencing something that has never happened before.

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And we are on the verge of an explosion of innovation.

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And it's just an incredibly exciting time to be working here.

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So first, before I keep going forward, let's jump in with Tim for some not financial advice.

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

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it's for informational and educational purposes only jeff

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we are back okay so for if this is your first time listening to true north we are here we talk

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about uh bitcoin we talk about bitcoin securities we talk about credit instruments we talk about how

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these things are permeating throughout the global financial markets. I think this is a

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massive advancement in the plumbing of the entire Bitcoin ecosystem that we

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haven't seen previously in past bear market cycles. And we are now seeing

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these products being created that are pulling in different pools of capital

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that are getting Bitcoin exposure that are just a different investor profile.

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So maybe I'll just kick it over to you guys.

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I mean, how are we feeling?

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What are we thinking about?

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Mason, I'll start with you.

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Maybe just a quick feeling on the day.

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Yeah, I mean, first off, our event was incredible.

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Just the support that we received.

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We had people come out from Ecuador, right?

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Switzerland.

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Any other places I'm forgetting?

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There are some more.

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Yeah.

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Yeah, Singapore, Germany.

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There was somebody from the Federal Reserve in the room.

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One of the largest institutional investors of MSTR, aside from Vanguard, was in the room.

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We had Bulge Bracket Bank Barclays in the room.

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We had people from Citibank that were in the room.

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Bitwise was in attendance.

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We had a CEO of a recent publicly traded custody company that went on stage and talked.

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Somebody that operates at Anchorage that talks about trading and custody.

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I mean, these are operators that not only have the people come from all over the place, like the people that were in the room were people that are operating and at the forefront of what's happening in this entire ecosystem.

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I also had people that had never even really heard of Bitcoin.

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They just love these perpetual preferred securities and they love them so much.

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They'll get up in your face and punch you about it and talk you through it.

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Jeff, there was one guy I met who never heard of True North.

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he was like i don't i don't know how i got here i was like dude what are you doing

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i was wondering if that was the fed guy that just didn't even know why he was there

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yeah so it was uh yeah i i was i was blown away by the by the attendees and the people

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that that were there um came from all walks of life very interesting people um mason if it was

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the same guy i'm thinking about he he came up to me in the back of the room and it was in between

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our first panel and when I had to go up and do the interviews and he's like oh so what are you

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doing here and I'm like oh I'm in it I'm in the thing and he's like what I'm thinking to myself

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like do you have a wristband dude like how did you get in here like if you don't know what you

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bought a ticket for like what what is happening here event guys it's the new idea guys you just

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go to events. Yeah. He was looking for ideas. Yeah. I mean, what a, what a great event to stumble

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into. Uh, yeah, it just felt, it felt lively. I, Jeff, I think we were talking about this in our

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internal, it didn't feel like a bear market, like vibes were, were incredibly high considering the,

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the, uh, the price swings that we've seen. And, you know, this is a room of like pretty hardcore

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MSTR heads who majority of them have a lot of their net worth in it. But I think more than

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anything, they see the vision and they see the fundamentals. And you could just feel the excitement

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in the air. This is a very forward-looking crowd who's in it for the duration. And it was exciting

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to see and exciting to be around those types of deep-thinking investors.

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Yeah, 100%. I think Eve had the best quote of the week for me from One Chair Podcast. He said,

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The best part about attending, you know, True North and Strategy World during a bear market is there's no tourists.

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Like everybody was hardcore.

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Everybody was dialed in.

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Everybody wanted to have, you know, elevated conversations.

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It was kind of electric.

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I was loving it.

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And I think this is our first event where obviously the prefs have been out, right?

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The last time we did an event, prefs weren't in existence.

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And so I think the amount of-

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They were brand new.

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They were. Okay. And the amount of, I think, excitement around a product that has product

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market fit like STRC has evidenced by its trading volume and by its peg has shown people that like

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Sailor has actually, in fact, in the team at Strategy, created something that's using Bitcoin

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as high powered money to bring what ultimately has the biggest use in the entire world. And that's

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high yield, durable high yield to the market. So people are super excited about the product.

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There were also several conversations I had at the evening event about people that are,

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they're creating their own flywheel with these instruments, which was totally fascinating.

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I had guys come up to me like, hey, I've got this dentist practice and I'm holding STRC on my

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balance sheet with my cash position and I'm taking a margin loan out on it so I can get a leveraged

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position and any income that I get on the yield, I'm buying Bitcoin with it.

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And and it's like this this whole cycle that was kind of perpetuating.

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And then there was another guy that came up to me, self repaying student loans and self

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repaying mortgages, had some conversations on that front.

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Lots of people fascinated with levered stretch.

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Like it's so funny, like the people love this product so much.

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They're like, how can I get leverage?

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You know, Sailor spent a lot of his time talking about digital money and like a low volatility, you know, 10% product.

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But there's a tremendous amount of interest in the levered type product of STRC just from the diehards, right?

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Like that want even more exposure to it.

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Mike, what was your takeaway?

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You know, so my takeaway.

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was for the True North event on Monday,

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we sold, what, about 125, 130 tickets.

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I want to call out and thank our sponsors.

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So BitGo, BitWise, Medici Roasting.

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Am I missing some other ones?

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Yeah, Anchorage.

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Anchorage.

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So look, the people that show up,

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I mean, I got to,

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my interview was with Matt Hogan,

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the chief investment officer of BitWise.

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And Hunter Horsley was there from BitWise.

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and you had Matt from Barclays.

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I remember his last name.

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And yeah, and you know, the questions

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and the answers that they gave,

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there was a summary that was written also.

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James Lavash, right?

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Wow.

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Right, James Lavash, the four doors

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when he explained that.

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And I just think that the speakers that we had

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were very comfortable

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and they were comfortable

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because they knew that we were hardcore people,

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but it wasn't they were comfortable

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because they were easy questions.

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they're explaining what they think is going to happen.

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So that event I think was right.

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We didn't have a stage

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and we just had, you know,

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just handheld microphones

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and it was really a really great event.

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There was probably about a total of 100,

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what, 150, 160 people in the room.

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And it was pretty impressive.

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People came up to me and they're like,

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wow, you guys are,

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you're growing your event

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and your speakers that you have here

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are no longer just us.

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So I thought that that was,

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I thought it was a really great event,

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you know, to kick it off on Monday. And, and,

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and the amount of information that the people were willing to share,

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I thought was something that you do not get on,

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on a, what do you call it? On X.

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Dana Mason's president. You guys take, tell us about your presentation.

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You guys presented, give us, give us a quick one minute snapshot.

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Well, I think we're going to record it and release it,

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put on the YouTube channel. So if you weren't there,

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I think you're actually going to get the chance to, to release it.

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But we, you know, Dan and I talk a lot on the phone privately, right?

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We're just, we're trying to figure all this out.

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And I knew it.

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It was kind of, yeah, we're mostly talking shit.

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Just kidding.

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But, you know, we're trying to figure out what's going on in the market.

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And this was kind of our macro view to some respect at a very high level view of what

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we think is going to happen with traditional assets or the traditional 60-40 portfolio,

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and how kind of the gravity of the capital is towards Bitcoin. The presentation was called

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the gravity trade. And really, it was, you know, a layer beneath that was looking at how MSTR is

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benefiting and also facilitating that gravitational force into Bitcoin.

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yeah i when you when you guys did the gravity trade it took me back to i had a flashback from

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one of sailors old interviews where he was talking about the physics of it and you just can't escape

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physics and it was kind of like the uh i don't know there was some billionaire or whatever that

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wasn't paying attention and backed off of the great wall of china and it's like you can be the

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richest person on earth but if you don't pay attention to physics then you get wrecked and

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people who are not paying attention to what bitcoin is doing it's it's it's like the center of gravity

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and it's just sucking up everything totally i've got i've got some conversations next week with

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some capital managers uh in new york thinking about like part of the conversation i'm having

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with them is just informing them what's going on hey fyi there's a company out here that's got 50

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billion dollars worth of bitcoin and they've got a perpetual preferred equity instrument and they've

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sold you know eight billion dollars of these pref instruments and they're selling the liquidity on

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them is a hundred million dollars plus a week they're better than every other credit instrument

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that's ever been created they're more liquid higher yield it's a digital credit form and

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just kind of walking through it like put them on notice hey fyi if you're not paying attention to

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this you're going to get left behind this entire industry is going to get left behind and there's

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so many things we can do with this. So it's, uh, yeah, it's going to be some fun conversations,

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but the gravity is definitely there. And it was so, it's funny. There's, you know, some of this,

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um, there's been some attention recently on the Strait of Hormes, uh, like lockdown,

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like the insurance companies in Lloyd's of London are not ensuring the transport of these

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oil tankers that are going through the Strait of Hormez. And the US response was the US government

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is going to basically be a backstop of risk for any of these vessels that are going through the

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straits so that energy can kind of pass through. Now, the reality here is that strategy has more

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capital than Lloyd's of London. It's a big deal. It's a big deal. We need the energy.

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And Lloyds of London is important.

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They're systemically important in the insurance industry.

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But their stranglehold on the capital world is diminishing.

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It's diminishing relatively rapidly, especially if you can see the size and scale of capital

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and where it's moving globally and how it's changing and shifting.

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So I think it's like it's one of those moments of, yeah, this is a big deal.

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Like we need energy to be transported safely, securely, and we need oil to be able to move.

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But the scale of capital at play is a little bit smaller than I think it would have been considered to be in the past.

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Yeah, I think an interesting critique that I've been seeing, and I think it's actually a bull case from our perspective, is that, especially on Twitter, it's kind of a dichotomy.

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At the event, we're all very, very excited about the future because we're seeing what the volume is doing on stretch.

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It's progressively increasing and they're able to issue more and more volume above $100.

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That's a professional bid on Bitcoin.

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And they're also matching that kind of two to one or three to one with MSTR common equity issuance,

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which is totally accretive right now considering we're trading at a 1.2 times MNAP.

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Online, on X, people say that can't exist.

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And you ask why, like, why can't that exist?

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They just say, well, they can't do that forever.

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There's not always buyers.

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I'm like, well, there's buyers beneath one MNav and there's an infinite demand for STRC.

228
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And if there's an infinite demand for STRC, then obviously there's an infinite bid on Bitcoin.

229
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If there's an infinite bid on Bitcoin and leverage Bitcoin, all MSCR, there's kind of an infinite

230
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demand there. So everyone, I think the big talking point now is like, there is like,

231
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this has to break somehow. But I don't think people are thinking about the implications.

232
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Like if STRC actually works, this isn't just about STRC, this is about the Bitcoin market.

233
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The Bitcoin market fundamentally changes if it's the backbone for the best credit in the entire market.

234
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Finite supply.

235
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Infinitely scalable.

236
00:16:53,480 --> 00:17:00,360
This thing is infinitely scalable and can grow to be...

237
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They could issue $10, $20, $30 trillion worth of this stuff.

238
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And if they're issuing $10, $20, $30 trillion of this stuff, what does the price of Bitcoin do?

239
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Exactly.

240
00:17:11,580 --> 00:17:13,220
No, it's like at some point the price budges.

241
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At some point, the price goes nuclear.

242
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Dan and I had multiple moments where we're sitting at the conference and we go like,

243
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when it finally kind of sinks in, you're like, holy shit,

244
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Stretch is going to drive Bitcoin to a million dollars.

245
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Exactly.

246
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Stretch alone is going to drive Bitcoin to a million dollars,

247
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not to mention all the other chaos and disruption and everything else that goes in Bitcoin's favor.

248
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Just Stretch alone.

249
00:17:41,900 --> 00:17:50,260
And we talked to that. And I referenced, Graeme, a little bit there because you know how, Graeme, you always mention the stock buybacks, right?

250
00:17:50,260 --> 00:17:55,120
Like Apple generates $100 billion in free cash flow per year and uses it to buy back their stock.

251
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So that's why, and we've heard these anecdotes of people who are like, oh, I just put my money in Apple because they're always buying back stock and the flow is always being lower.

252
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What is Stretch? It's the Bitcoin buyback, literally.

253
00:18:06,960 --> 00:18:08,240
Yeah, it's the Bitcoin buyback.

254
00:18:08,820 --> 00:18:10,200
The fiat capital into Bitcoin.

255
00:18:10,200 --> 00:18:19,960
So if stretch continues to work, which I believe it will, there will be a potential buyback or bid or sequestration of Bitcoin into MSTR that won't move.

256
00:18:21,340 --> 00:18:31,300
You know, the other part related to now that you bring that up, the prefs are not counted for the assumed diluted shares outstanding on strategy and not for the basic shares outstanding.

257
00:18:31,300 --> 00:18:40,960
It's issued as shares, but it's not included those two metrics because legally it's considered, even though Sarah calls it digital credit, it's considered to be debt.

258
00:18:41,640 --> 00:18:44,760
So equity, right?

259
00:18:45,120 --> 00:18:48,220
But the reality of it is it's not counted in those shares.

260
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So it does function like a stock buyback because it's acquiring more Bitcoin without increasing the denominator.

261
00:18:55,520 --> 00:18:56,080
Right?

262
00:18:56,560 --> 00:18:56,760
Yeah.

263
00:18:57,220 --> 00:18:57,440
Right.

264
00:18:57,500 --> 00:18:58,320
Bitcoin per share.

265
00:18:58,320 --> 00:18:59,720
So shares are on the bottom.

266
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Bitcoin's on the top.

267
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It acquires more Bitcoin, but those shares aren't outstanding.

268
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Now, there is a drag on that.

269
00:19:04,600 --> 00:19:06,360
We did get a bunch of questions from people.

270
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How do you model the prefs going forward?

271
00:19:10,040 --> 00:19:11,860
I don't have a good number for that.

272
00:19:12,400 --> 00:19:15,040
And I think that what's a good amplification rate?

273
00:19:15,120 --> 00:19:18,600
I think right now we're in a phase where we figure that out.

274
00:19:19,100 --> 00:19:21,240
And I did ask that question to Saylor.

275
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And he said, look, it's going to be right now, I believe it's 33% on their website.

276
00:19:25,740 --> 00:19:27,740
And he said, look, sometimes it's going to be higher.

277
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Sometimes it's going to be lower.

278
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but I think the average for the year

279
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will be about where it is today.

280
00:19:32,500 --> 00:19:34,420
And I think we don't know what the amplification,

281
00:19:34,880 --> 00:19:37,500
you know, Jeff, I talked to you the other night.

282
00:19:38,120 --> 00:19:39,700
You know, if you have a lot of amplification

283
00:19:39,700 --> 00:19:42,600
during a down market, when it's bearish,

284
00:19:42,840 --> 00:19:45,500
when things get bullish, that amplification rate drops

285
00:19:45,500 --> 00:19:47,860
because the price went up, right?

286
00:19:48,100 --> 00:19:49,780
And so that's when you're like,

287
00:19:49,820 --> 00:19:51,480
oh, I guess I should have levered up more.

288
00:19:51,640 --> 00:19:52,580
But you don't want to do it

289
00:19:52,580 --> 00:19:54,460
because you have to be responsible,

290
00:19:55,120 --> 00:19:56,260
you know, running a company.

291
00:19:57,040 --> 00:19:58,400
Yeah, you've got to be responsible

292
00:19:58,400 --> 00:20:03,600
running a company you've got to well the market may not give it to you as well i mean we're in

293
00:20:03,600 --> 00:20:10,800
this like stretch is eight months old like the the thing is trading 200 150 million 200 million

294
00:20:10,800 --> 00:20:16,640
dollars a day it's eight months old and this thing has a two three year four year track record

295
00:20:17,520 --> 00:20:20,880
i mean the amount of capital that's gonna be coming in the door with interest in this type

296
00:20:20,880 --> 00:20:26,800
of thing is going to be incredibly high the the really fascinating part about this is that

297
00:20:26,800 --> 00:20:28,960
Both of these products are so symbiotic.

298
00:20:29,860 --> 00:20:42,100
And so as the demand for the credit rises, their ability to issue more equity will also increase because the technical valuation, that excess volatility is flowing to the common stock.

299
00:20:43,060 --> 00:20:56,678
So that drives more interest in the common stock that drives more open interest in the derivatives market that drives more trading and people that are disagreeing or agreeing with the valuation right They going to short it they going to long it they going to do all of those things And that increases the

300
00:20:56,678 --> 00:21:01,798
relative volume in the common equity, which is increasing their ability to raise capital in the

301
00:21:01,798 --> 00:21:08,118
common equity. So it's like, if one moves up, the other gets more liquid and more interesting,

302
00:21:08,678 --> 00:21:13,238
which gives them more access to the equity capital market. So it's like leverage,

303
00:21:13,238 --> 00:21:18,238
D leverage, leverage, D leverage. They're like climbing a ladder to the top of the publicly

304
00:21:18,238 --> 00:21:25,218
traded markets via these instruments. And like we're in like the first inning.

305
00:21:26,258 --> 00:21:32,118
Yeah. Mason, to your point about, you know, stretch getting Bitcoin to a million. So I asked

306
00:21:32,118 --> 00:21:39,498
Grok, I'm like, okay, if strategy sells like 1% of the $300 trillion, you know, fixed income market

307
00:21:39,498 --> 00:21:46,758
over 10 years and maintains amplification ratio, you know, selling common, you know,

308
00:21:46,818 --> 00:21:49,818
how many Bitcoin do they end up with and what's the price at 1x MNAV?

309
00:21:50,358 --> 00:21:54,798
And it thought longer than it has ever, you know, Grok thought longer than it's ever thought on any

310
00:21:54,798 --> 00:21:58,758
question I ever asked it and then told me they were going to get 26 million Bitcoin. I'm like,

311
00:21:58,758 --> 00:22:04,818
okay, well, maybe not, maybe not quite 26 million. And then I had to try to like rationalize with it

312
00:22:04,818 --> 00:22:07,878
and do some sanity checks, but I got to work on my prompting.

313
00:22:07,878 --> 00:22:09,918
But Grok is pretty bullish.

314
00:22:10,918 --> 00:22:14,198
Yeah, I think that's a really good, and it illustrates a point, right?

315
00:22:14,198 --> 00:22:18,058
Like, so we think these products over the next three,

316
00:22:18,058 --> 00:22:22,138
like the first three years need to execution has to be flawless.

317
00:22:22,438 --> 00:22:25,598
Then after three years, the big money, the big capital can start entering.

318
00:22:26,298 --> 00:22:30,618
But what matters is that the products are set up correctly from the get go.

319
00:22:30,618 --> 00:22:41,918
Like if they had a misstep or the preps weren't constructed with all the proper covenants, if the capital structure wasn't pristine, X, Y, and Z, then the instruments are no longer durable.

320
00:22:42,138 --> 00:22:45,958
They can't remain strong instruments for three years.

321
00:22:46,158 --> 00:22:47,798
And they can't really be changed.

322
00:22:47,998 --> 00:22:49,398
They can't be changed after issuance.

323
00:22:49,778 --> 00:22:59,698
So I think that's what's so amazing about strategies capital structure, obviously strives as well here, is the capital structures have been gotten right via the preferred model right off the rip.

324
00:22:59,698 --> 00:23:01,758
no converts, no secure debt above it.

325
00:23:02,378 --> 00:23:05,138
Therefore, once these things are seasoned after two, three years,

326
00:23:05,578 --> 00:23:07,698
there won't be any problems in the capital structure.

327
00:23:07,978 --> 00:23:12,618
It'll be pristine and they'll be durable and able to last in the next 10, 20 years.

328
00:23:12,678 --> 00:23:13,458
They don't need to be changed.

329
00:23:14,498 --> 00:23:18,058
Yeah, Dan, I told it to follow the power law model too.

330
00:23:18,778 --> 00:23:22,618
And what I thought after it gave me the insane calculations is like,

331
00:23:22,678 --> 00:23:25,918
maybe stretch breaks power law to the upside.

332
00:23:26,618 --> 00:23:28,698
I think Bitcoin could turn into an exponential at some point.

333
00:23:28,698 --> 00:23:29,698
Yeah.

334
00:23:29,698 --> 00:23:34,518
Then you bring up the capital structure and that design.

335
00:23:34,518 --> 00:23:35,878
It's a Sailor's presentation.

336
00:23:35,878 --> 00:23:41,298
He talked about the different types of debt and like how that changes your capital structure.

337
00:23:41,298 --> 00:23:46,818
It's senior or you could go get margin margin leverage on an exchange.

338
00:23:46,818 --> 00:23:47,818
That's the shortest term.

339
00:23:47,818 --> 00:23:48,818
It's like a day.

340
00:23:48,818 --> 00:23:52,558
Then you could go get senior secured debt and that might be a year.

341
00:23:52,558 --> 00:23:55,438
They'll tell you it's a seven year term, but it's actually more like seven months.

342
00:23:55,438 --> 00:23:58,718
like a year because they know you need to refinance in between that time.

343
00:23:59,098 --> 00:24:03,778
And then you can go junior secured and that's a higher interest rate and it may be a longer

344
00:24:03,778 --> 00:24:05,258
term. And then they found the prefs.

345
00:24:05,258 --> 00:24:10,798
So basically like they kept running away from the type of leverage and covenants and then

346
00:24:10,798 --> 00:24:15,598
they found the prefs and then they were running until they found the perfect instrument where

347
00:24:15,598 --> 00:24:19,358
they had the largest demand right off the bat and they're seeing the scale with massive

348
00:24:19,358 --> 00:24:24,898
liquidity. And now they're leaning into that particular instrument.

349
00:24:24,898 --> 00:24:31,498
I think the other instruments will have material demand in the future once there's a multi-year track record.

350
00:24:31,698 --> 00:24:35,558
But Stretch has become the clear winner on how to scale this instrument.

351
00:24:35,758 --> 00:24:40,698
And it's the main reason why we at Strive made a very similar product.

352
00:24:40,898 --> 00:24:42,558
We saw the success of this product.

353
00:24:42,738 --> 00:24:44,018
We watched all of it.

354
00:24:44,578 --> 00:24:48,218
I've been watching and talking about all of these things for quite a while now.

355
00:24:48,218 --> 00:24:50,138
And we saw the demand there.

356
00:24:50,138 --> 00:24:56,498
And it became very apparent that there's going to be significant opportunity for multiple issuers of this into the future.

357
00:24:57,578 --> 00:25:06,538
So, yeah, a lot of learnings and a lot of scaling potential now that the capital structure is in place, they've got the PREF model and ready to go.

358
00:25:08,658 --> 00:25:13,178
I agree. And I think the underrated instrument is Strike.

359
00:25:13,358 --> 00:25:15,518
I know Strike doesn't have product market fit right now.

360
00:25:16,178 --> 00:25:18,178
It's actually had some of the worst product market fit.

361
00:25:18,178 --> 00:25:25,798
once mstr gets to 500 600 700 800 that thing is going to be humming ripping people are going to

362
00:25:25,798 --> 00:25:30,138
want the downside cushion they're going to want the especially in a zurp environment or something

363
00:25:30,138 --> 00:25:34,978
it is going to be humming because like what if you want to enter it three times mnav

364
00:25:34,978 --> 00:25:42,338
but you're nervous about mnav compression to one strike solves a problem right like that bond floor

365
00:25:42,338 --> 00:25:47,918
is massively valuable i think to people wanting to participate in the equity without risking the

366
00:25:47,918 --> 00:25:54,018
volatility the equity obviously well if we're playing favorites i still like have a soft spot

367
00:25:54,018 --> 00:26:00,598
for strd and i made that post when i was sitting at the airport because when strd came out i was

368
00:26:00,598 --> 00:26:06,278
sitting at the terminal and when we were coming back from vegas i was sitting at the exact same

369
00:26:06,278 --> 00:26:12,458
terminal you know waiting to fly out and i'm just it just brought back those memories um because as

370
00:26:12,458 --> 00:26:15,518
soon as they announced stride it was like okay well now we have to figure this out because we

371
00:26:15,518 --> 00:26:18,938
have to cover it on the very next episode. So like I have to like know and understand this thing

372
00:26:18,938 --> 00:26:26,198
immediately. And the way that it's trading now, you know, well below par and with the possibility

373
00:26:26,198 --> 00:26:32,638
of interest rates coming down, STRD just seems like an insane bargain right now. And I thought

374
00:26:32,638 --> 00:26:37,918
it would just fly off the shelves. Like I thought it would be doing what STRC is doing, but you know,

375
00:26:37,978 --> 00:26:43,958
obviously I was wrong with that. But eventually, you know, once it's seasoned, you know, maybe they

376
00:26:43,958 --> 00:26:49,718
all start selling like hotcakes but i i still kind of like strd with the uh the benefit with

377
00:26:49,718 --> 00:26:55,078
the interest rates maybe coming down yeah it's an interesting like because they've got multiple it's

378
00:26:55,078 --> 00:27:00,478
an interesting model right because any capital that's issued at strc would theoretically be

379
00:27:00,478 --> 00:27:07,938
senior to stride too so like the risk profile of it might stay like depends if the price of bitcoin

380
00:27:07,938 --> 00:27:13,258
goes higher and they're able to continuously issue strc at the same time that uh the relative risk

381
00:27:13,258 --> 00:27:18,098
position might stay constant. Whereas the credit profile of all the other instruments is getting

382
00:27:18,098 --> 00:27:24,058
better. However, the biggest question here is does the market recognize the risk profile of

383
00:27:24,058 --> 00:27:28,058
these things as appropriate or not? Yeah, because I'm assigning almost zero risk.

384
00:27:28,538 --> 00:27:34,098
I would agree with you. You're a Bitcoin bull. We're all Bitcoin bulls here. You would say the

385
00:27:34,098 --> 00:27:39,818
entire capital stack is investment grade. They could probably crank the interest rate up to

386
00:27:39,818 --> 00:27:42,758
15, 16 is still probably investment grade.

387
00:27:43,078 --> 00:27:45,078
That presentation that Saylor put together, right?

388
00:27:45,098 --> 00:27:48,438
You could see the curves of like, where would be investment grade and high yield based on

389
00:27:48,438 --> 00:27:49,698
that risk model and risk portfolio.

390
00:27:49,938 --> 00:27:52,958
But like, I think that's the concept, right?

391
00:27:53,058 --> 00:27:57,058
Is the market doesn't get these things yet.

392
00:27:57,078 --> 00:27:58,518
And there's alpha within that.

393
00:27:59,938 --> 00:28:00,378
Yeah.

394
00:28:00,438 --> 00:28:02,718
And full disclosure, I don't actually own any STRD.

395
00:28:02,718 --> 00:28:06,718
I'm still a, you know, a leveraged long junkie.

396
00:28:06,718 --> 00:28:11,398
So I can't bring myself to peel off any strategy shares.

397
00:28:12,438 --> 00:28:16,298
One interesting thing is how poorly Stride's been performing relative to Bitcoin.

398
00:28:16,438 --> 00:28:19,098
It used to be almost like one-to-one Bitcoin correlation.

399
00:28:19,738 --> 00:28:21,338
But right now, it's performing just terrible.

400
00:28:21,798 --> 00:28:24,118
Not terrible, but it's not going up at the same rate of Bitcoin.

401
00:28:24,278 --> 00:28:29,938
I think it's because the market's starting to price in the kind of domination of STRC relative to all the other prefs.

402
00:28:29,938 --> 00:28:34,658
so people are like on they're thinking like okay stride is going to kind of be pushed down in the

403
00:28:34,658 --> 00:28:40,518
capital stack because of the massive stretch issuance and i talked to a guy yesterday who

404
00:28:40,518 --> 00:28:44,578
talked about right now he's saying he runs a little hedge fund he's like the only people

405
00:28:44,578 --> 00:28:48,218
trading these things are the hedge funds and this is kind of how they're thinking so i think it's

406
00:28:48,218 --> 00:28:54,418
part of why stride isn't catching the bid the same way we might have expected so that meme where the

407
00:28:54,418 --> 00:28:58,638
uh the mom is like paying attention to one kid in the swimming pool and the other one's like drowning

408
00:28:58,638 --> 00:29:05,318
like that's strd yeah i think i think they have simpleton models of the bitcoin credit

409
00:29:05,318 --> 00:29:11,218
and they use like if it's 3x over collateralized or 5x even though like pretty much stride is as

410
00:29:11,218 --> 00:29:16,298
credit worthy as the rest of them like barring all that mathematically like like mathematically

411
00:29:16,298 --> 00:29:20,558
if you if you take bitcoin going to probability of bitcoin going to zero off the table

412
00:29:20,558 --> 00:29:25,018
then mathematically the credit quality of all of the instruments are pretty pretty similar

413
00:29:25,018 --> 00:29:26,698
Exactly. Yeah, exactly.

414
00:29:26,698 --> 00:29:29,578
Like it's so high. They're all so high.

415
00:29:31,098 --> 00:29:37,418
No, yeah. The world, I mean, this thing's going to chug. I would say the world's not going to know

416
00:29:37,418 --> 00:29:40,058
what hit them, but nothing's going to hit them. It's just these things are going to keep chugging

417
00:29:40,058 --> 00:29:44,298
along. Bitcoin is going to keep getting purchased. It's going to go up. People look back in 20 years

418
00:29:44,298 --> 00:29:46,778
and be like, strategy is on the Bitcoin and the price of Bitcoin is higher.

419
00:29:46,778 --> 00:29:51,018
I was thinking about that earlier today. Like nobody knows this is happening.

420
00:29:51,018 --> 00:29:57,338
like outside of this world and like uh you know everybody's x profiles and whoever's working in

421
00:29:57,338 --> 00:30:03,138
the industry like not many people know that this is happening right they probably just saw the price

422
00:30:03,138 --> 00:30:06,898
of bitcoin go down 40 50 percent and they're not going to look at it for another couple months

423
00:30:06,898 --> 00:30:13,098
they're like oh scam died again you know and uh that's i think the reality of where we're at and

424
00:30:13,098 --> 00:30:17,258
then you know if this thing starts if bitcoin starts ripping again maybe people pay attention

425
00:30:17,258 --> 00:30:27,138
and filter in here maybe uh so i i being the the older gentleman in the room um look when i got into

426
00:30:27,138 --> 00:30:31,878
bitcoin i knew about bitcoin in 2014 didn't buy any and then i went all in in may of 2017

427
00:30:31,878 --> 00:30:40,138
at that point i thought i was six years late right or seven years late because i should i should have

428
00:30:40,138 --> 00:30:45,038
bought earlier i remember what the price was in 2014 but what i'm saying now is that i'm going to

429
00:30:45,038 --> 00:30:52,198
coming up in my ninth year in may and you guys were all in this before any of the press were

430
00:30:52,198 --> 00:30:56,698
launched and i know exactly what's going to happen three years from now you're going to be like

431
00:30:56,698 --> 00:31:01,118
remember when we were talking about this and we didn't talk about in the first true north and it's

432
00:31:01,118 --> 00:31:09,018
now three four years from now strategy stock mstr is whatever two thousand dollars a share and we'll

433
00:31:09,018 --> 00:31:13,738
be like remember in the old days three four years ago it's going to go by really fast i know you the

434
00:31:13,738 --> 00:31:18,798
young guys, you don't see it. It's going to go by really fast. This is our second true north that

435
00:31:18,798 --> 00:31:23,758
we had at Strategy World. I think we'll have a whole bunch of them. And I think we're going to

436
00:31:23,758 --> 00:31:28,138
look back and be like, wow, that went really fast. And we had no idea how we knew it. We knew it was

437
00:31:28,138 --> 00:31:33,538
big, just not now how big it was. Right. And I think that's what we're going to see unfold.

438
00:31:33,798 --> 00:31:38,798
You know, if we get the bull market continuation. And I want to chime in on something else.

439
00:31:38,798 --> 00:31:46,138
When I heard that we bombed Iran, I woke up, I'm on the West Coast, and I'm like, oh, God, I don't want to look at the price of Bitcoin.

440
00:31:46,298 --> 00:31:47,538
It's going to be in the 50s.

441
00:31:47,898 --> 00:31:49,118
It's going to be a five handle.

442
00:31:49,538 --> 00:31:56,958
And I looked at it, and this was like a few hours after it happened, and it had already recovered back to $66,000.

443
00:31:57,358 --> 00:32:01,998
And I'm like, oh, I guess it wasn't as bad as I thought it would be.

444
00:32:01,998 --> 00:32:12,618
Now, if you would have said to me whatever day that was, Sunday morning or something, if you would have said that we would be at $72,000 a few days later, no, I didn't think that at all.

445
00:32:13,198 --> 00:32:16,298
And so everything seemed to change really, really fast.

446
00:32:17,038 --> 00:32:19,058
So that's what I'm trying to say.

447
00:32:19,138 --> 00:32:19,858
There's two things.

448
00:32:21,118 --> 00:32:23,738
The long term seems to go faster.

449
00:32:24,018 --> 00:32:28,638
It seems far away, but it seems to happen a lot faster than you think.

450
00:32:28,698 --> 00:32:30,658
And I think the price can catch people off guard.

451
00:32:30,658 --> 00:32:43,198
I was kind of actually expecting a little bit of a pump because if the market doesn't like uncertainty, it was kind of like, OK, you can see that the forces are building up and like we're expecting this to pop off.

452
00:32:43,298 --> 00:32:55,498
But you don't know until it does. So if we had, you know, reached an agreement and like, OK, we reached an agreement, then uncertainty is gone or we just start dropping bombs, uncertainty is gone.

453
00:32:55,498 --> 00:33:02,218
And so the market's kind of like responding positively to something happening instead of just what's going to happen.

454
00:33:03,838 --> 00:33:11,638
And, you know, this is it sucks that that that things like war pump our bags.

455
00:33:12,058 --> 00:33:16,318
But like the drones that Iran has cost 50 grand a pop.

456
00:33:16,598 --> 00:33:19,838
We shoot them down and it costs us a million dollars a pop.

457
00:33:19,838 --> 00:33:27,858
so if they have a hundred thousand drones and we shoot them all down one for one which sometimes

458
00:33:27,858 --> 00:33:34,838
it takes 10 to shoot down one like even at one for one that's a hundred thousand million dollars

459
00:33:34,838 --> 00:33:39,858
we have to print so you know larry leppard was like okay we're gonna get the big print and then

460
00:33:39,858 --> 00:33:45,118
lynn was like well maybe we get the gradual print no we're getting the big print it's it's printing

461
00:33:45,118 --> 00:33:52,778
yeah every every bullet every missile every time there's one of those is shot another one's getting

462
00:33:52,778 --> 00:34:00,638
made that's the that's the crazy part is it's all it's all still going right like uh it's not like

463
00:34:00,638 --> 00:34:05,318
you deplete reserves and you don't build up more reserves of all these instruments i mean that

464
00:34:05,318 --> 00:34:12,238
stuff is infinite um capital deployment at the moment yeah and i'll give a comparison you know

465
00:34:12,238 --> 00:34:18,398
last week at strategy world we talked about mostly about strc we had our event on monday then we had

466
00:34:18,398 --> 00:34:23,918
bitcoin for corporations so i think that that went really really well but i don't think anybody had

467
00:34:23,918 --> 00:34:30,078
predicted this week that kevin wash should be nominated in the morning that kraken i didn't

468
00:34:30,078 --> 00:34:36,878
even know kraken applied for a fed master uh license right and then it was granted right nobody

469
00:34:36,878 --> 00:34:43,058
brought that up. And so I think, you know, last week we were all there thinking about how these

470
00:34:43,058 --> 00:34:48,778
companies are going to build out Bitcoin on the balance sheet. And we've got a whole bunch of

471
00:34:48,778 --> 00:34:53,058
really good information just even today coming out. And I thought that that was, you know,

472
00:34:53,058 --> 00:34:57,778
pretty interesting that nobody last week was even talking about that. Rule number four,

473
00:34:57,898 --> 00:35:05,178
Bitcoin is powered by chaos. 100%. Yeah. Yeah. This definitely feels like one of those weeks that

474
00:35:05,178 --> 00:35:07,038
And I think Dana mentioned this, right?

475
00:35:07,038 --> 00:35:09,178
Like decades are happening in a week.

476
00:35:09,178 --> 00:35:14,598
There are decades where nothing happens and there's weeks where decades happens.

477
00:35:14,598 --> 00:35:16,418
And this is definitely one of those weeks.

478
00:35:16,418 --> 00:35:19,178
It's just like news, news, news, news, news, news.

479
00:35:19,678 --> 00:35:23,298
And I think this is like a five year period of like a century.

480
00:35:23,598 --> 00:35:25,758
Oh, my God. Yeah, it's incredible.

481
00:35:26,258 --> 00:35:30,018
Mike, you brought up an interesting thing about the price of Bitcoin and markets

482
00:35:30,018 --> 00:35:32,098
and thinking about strategically like.

483
00:35:32,098 --> 00:35:39,838
Donald Trump is very clearly a markets guy. Like he came out and said, we're going to war with Iran

484
00:35:39,838 --> 00:35:47,038
midnight Eastern time on Friday. Markets are closed. And you gave us gave the whole weekend.

485
00:35:47,318 --> 00:35:51,298
And so you saw the price of Bitcoin go down and pop back up. You gave the whole weekend for that

486
00:35:51,298 --> 00:35:56,638
uncertainty to kind of like work its way out while the markets were closed. And then that way on

487
00:35:56,638 --> 00:36:02,278
Monday, the markets opened and like, it wasn't too terrible, right? There wasn't like a huge,

488
00:36:02,498 --> 00:36:07,218
like VIX spiked a little bit, but it wasn't too much. The price of Bitcoin kind of went back to

489
00:36:07,218 --> 00:36:11,678
where it was pre the announcement of all of these things. And it's just, it's fascinating to see

490
00:36:11,678 --> 00:36:15,698
the decision-making process that went around it too. It's like, that's definitely a markets first

491
00:36:15,698 --> 00:36:22,998
guy. Yeah. You know, something that I started doing, I don't know, about three, four months ago

492
00:36:22,998 --> 00:36:27,378
is that starting on Friday night at about seven o'clock,

493
00:36:27,558 --> 00:36:29,078
I try not to look at anything,

494
00:36:29,678 --> 00:36:33,738
no Bitcoin charts, X.

495
00:36:33,918 --> 00:36:35,158
I try and refrain from it

496
00:36:35,158 --> 00:36:36,958
and then just have a normal,

497
00:36:37,598 --> 00:36:39,638
like, you know, just do my weekend thing.

498
00:36:39,978 --> 00:36:40,738
So I didn't really,

499
00:36:40,898 --> 00:36:42,598
I didn't know that that had happened.

500
00:36:43,018 --> 00:36:45,078
So that's why when I woke up on Saturday morning,

501
00:36:45,138 --> 00:36:45,818
like what the heck is,

502
00:36:45,898 --> 00:36:46,898
and then I realized,

503
00:36:47,018 --> 00:36:47,758
oh, I think this,

504
00:36:48,198 --> 00:36:50,218
I think the price recovery will happen by Monday.

505
00:36:50,218 --> 00:36:57,678
and you know it was surprising so the other thing is that um would you just said there are you know

506
00:36:57,678 --> 00:37:02,898
weeks where years happening years where weeks happen and i think that's true what i was trying

507
00:37:02,898 --> 00:37:07,378
to say is that the days are long and the years are short so as we're living this it's like well

508
00:37:07,378 --> 00:37:12,278
you know it seems to take a long time during the day for something to happen and then when you look

509
00:37:12,278 --> 00:37:17,118
back in retrospect how did two years go by very quickly or three years or four years and i think

510
00:37:17,118 --> 00:37:22,058
that's where we are with this. I think it's, you know, I'm not a fan of Trump. I didn't vote for

511
00:37:22,058 --> 00:37:27,718
the guy. And anybody that's critical of him from the Bitcoin perspective, I point out he pretty

512
00:37:27,718 --> 00:37:32,898
much delivered everything he said he would do, right? Big, beautiful bill, not Bitcoin related,

513
00:37:33,218 --> 00:37:40,518
got the Genius Act, has a strategic Bitcoin reserve executive order, SAB 121 repealed,

514
00:37:40,518 --> 00:37:49,878
freed ross ulbrich um ended operation choke point you know 2.0 and a whole slew of of politicians

515
00:37:49,878 --> 00:37:56,938
that are that are bitcoin friendly so if from a political standpoint again don't like the guy

516
00:37:56,938 --> 00:38:02,418
didn't vote for him but from a bitcoin perspective he he put these people into place and so if you

517
00:38:02,418 --> 00:38:08,438
don't like the price action it's probably not due to the politics yeah yeah and these products are

518
00:38:08,438 --> 00:38:11,758
going to change politics too. So I don't know if you guys saw that the Netherlands

519
00:38:11,758 --> 00:38:20,538
is trying to get an unrealized capital gains tax. And if they do this, at first I thought, okay,

520
00:38:20,538 --> 00:38:25,138
well, you know, maybe that doesn't even affect stretch because it's not going to go up in value.

521
00:38:25,138 --> 00:38:29,278
It's just going to stay pegged, but no, they're going to, they're going to tax the dividends too

522
00:38:29,278 --> 00:38:34,938
at like 36%. And I thought, okay, that's just going to drive all the wealth out of the country.

523
00:38:34,938 --> 00:38:39,518
and even the people who are stuck are not going to have access to something like stretch

524
00:38:39,518 --> 00:38:44,178
and be able to appreciate these fixed income products.

525
00:38:44,698 --> 00:38:47,278
And so it's literally just going to hurt everyone in these countries.

526
00:38:47,958 --> 00:38:50,558
And other countries are going to have to take note of that

527
00:38:50,558 --> 00:38:54,738
and be more friendly, I think, to these type of products.

528
00:38:55,958 --> 00:38:56,398
Agreed.

529
00:38:56,638 --> 00:38:59,138
And by the way, I just thought about this recently.

530
00:38:59,138 --> 00:39:01,638
I think there's two hurdle rates now.

531
00:39:02,278 --> 00:39:04,798
Previously, the hurdle rate was Bitcoin's CAGR.

532
00:39:04,938 --> 00:39:08,298
And so over the rolling past five years, it's about 26%.

533
00:39:08,298 --> 00:39:10,958
And so people will be like, well, what's your Bitcoin CAGR?

534
00:39:11,078 --> 00:39:13,918
Pick a number between 20% and 30%, right?

535
00:39:13,998 --> 00:39:16,358
And there could be diminishing returns coming in.

536
00:39:16,838 --> 00:39:17,818
That's one CAGR.

537
00:39:18,078 --> 00:39:22,398
But now the new floor CAGR is STRC.

538
00:39:22,938 --> 00:39:24,918
It's 11 and 1.5%.

539
00:39:24,918 --> 00:39:26,538
Let's say it drops to 11%.

540
00:39:27,058 --> 00:39:29,158
The new CAGR, right?

541
00:39:29,198 --> 00:39:32,818
If you could just put money into STRC and it pays monthly,

542
00:39:33,478 --> 00:39:35,478
That's the new floor for your CAGR.

543
00:39:35,798 --> 00:39:39,658
The high floor is going to be whatever you layer on top of it, right?

544
00:39:39,658 --> 00:39:44,078
Buying straight Bitcoin, putting in cold storage, or buying IBIT or MSDR stock.

545
00:39:44,738 --> 00:39:46,638
That's your upside.

546
00:39:47,838 --> 00:39:55,218
And so if somebody is like, oh, I'm only getting 3% on CDs or government bonds, that's a choice

547
00:39:55,218 --> 00:39:55,958
on your side.

548
00:39:57,298 --> 00:39:58,838
I had a tweet about this.

549
00:39:58,998 --> 00:40:02,798
So there's the concept of UBI, universal basic income, right?

550
00:40:02,818 --> 00:40:06,198
Now we have UBR, universal basic returns.

551
00:40:06,858 --> 00:40:08,138
And that's what stretches.

552
00:40:08,518 --> 00:40:17,838
It's like if you're a Bitcoin maximalist or you have belief in Bitcoin, it's the base floor for your short-term money.

553
00:40:18,698 --> 00:40:18,798
Yeah.

554
00:40:18,958 --> 00:40:19,638
And you know what, Mason?

555
00:40:19,738 --> 00:40:20,478
I think you're right.

556
00:40:20,758 --> 00:40:25,198
And the other thing is I think we have a new trading pair with strategy.

557
00:40:25,198 --> 00:40:34,538
And the trading pair is, hey, I'm super bullish on MSTR stock, but I think that this downturn could last a little while.

558
00:40:34,778 --> 00:40:36,558
Well, I think the bottom is in.

559
00:40:37,078 --> 00:40:44,178
But it's like, well, maybe I'll sell some MSTR, buy some STRC, get some monthly gains or buy some STRK.

560
00:40:44,578 --> 00:40:47,138
And then I'll use that in the bear market.

561
00:40:47,138 --> 00:40:48,858
And then, oh, I feel more bullish.

562
00:40:48,858 --> 00:40:54,578
Then I'll allocate, I'll rotate in from STRC back into MSTR.

563
00:40:55,198 --> 00:41:00,158
and i think that's what we're going to see now so do i think that in bull markets st i think

564
00:41:00,158 --> 00:41:05,278
scrc still goes up in the bull markets without a doubt but i think people will trade between the two

565
00:41:06,958 --> 00:41:12,798
yeah strc if it's if it's pegged it has to be an uncorrelated trading pair this is not going

566
00:41:12,798 --> 00:41:16,478
anywhere and whatever else you're trading is going to go up or down it's good it's going somewhere

567
00:41:17,198 --> 00:41:21,118
this is this is why i created the pentagon the bitcoin defense department because it's infinite

568
00:41:21,118 --> 00:41:25,438
trading pairs like you're going to be trading in and out of all of these different things and you

569
00:41:25,438 --> 00:41:30,798
could set it up with a computer a computer can run it you could set up calculations such that when

570
00:41:30,798 --> 00:41:45,356
this is this and this and this is then if then statements and it just bouncing along you could have an ai figure out what the trading pair should be and you could run it you give it 250 grand and just run it and have it go back and forth and earn your yield and make

571
00:41:45,356 --> 00:41:51,776
consider return of capital treatment and like that's where the stuff is going those computers

572
00:41:51,776 --> 00:41:56,756
are going to be in and out of these things in in different points in time for different reasons

573
00:41:56,756 --> 00:42:00,516
and everybody's going to build their own different reasons of as to why they're going in and out of

574
00:42:00,516 --> 00:42:06,496
these things and that's yeah future i want to bring up so there was a presenter the gentleman

575
00:42:06,496 --> 00:42:13,596
from prevail on energy yeah and and he he said yeah i'm just going to put whatever an eight

576
00:42:13,596 --> 00:42:19,256
figure so more than 10 million dollars into strc and basically he goes i'm going to buy and sell it

577
00:42:19,256 --> 00:42:24,696
basically use it as a checking account yeah and and he said this on stage and and the guy was

578
00:42:24,696 --> 00:42:30,256
he's like oh i'm a big bitcoin believer and i think was he the cfo is he a cfo or the controller

579
00:42:30,256 --> 00:42:35,856
for the company. I don't know what role. Yeah. Yeah. And then he just said, I'm going to basically

580
00:42:35,856 --> 00:42:42,076
use it as the check. Cause if I have money that sits there, I might as well get paid. And I was

581
00:42:42,076 --> 00:42:48,336
like, wow. I mean, that's what we wanted to hear. Now, is he building the whole company on this

582
00:42:48,336 --> 00:42:53,776
to, you know, to build some other product? No, but it's, if I can get paid 11%, why wouldn't I

583
00:42:53,776 --> 00:42:58,096
take it? 11 and a half. And then he said he wants to push that holding to nine figures.

584
00:42:58,096 --> 00:43:03,436
yeah yeah so i think that that was one of the great one of the really good presentations that

585
00:43:03,436 --> 00:43:08,376
happened last week um what about for you guys that you sat through this there's by the way

586
00:43:08,376 --> 00:43:15,536
there's this guy dan hillary and he presented on some some you know stable coin built on strc but

587
00:43:15,536 --> 00:43:21,136
besides that i was there yeah you were there i was there also i had a presentation too grain

588
00:43:21,136 --> 00:43:23,376
Well, tell us about your presentation.

589
00:43:24,736 --> 00:43:33,716
No, the most fascinating thing, Mike, and you hit the nail on the head, is that companies are thinking about this as treasury capital.

590
00:43:34,776 --> 00:43:40,096
And this is one of the conversations I had with a sailor afterwards at drinks.

591
00:43:42,956 --> 00:43:47,696
If you're a corporation and you're thinking about short-term capital, you've got one month, two month, three month capital.

592
00:43:47,696 --> 00:43:54,176
historical. Historically, you'd have two options. You can have a liquid low yield instrument in

593
00:43:54,176 --> 00:44:00,036
money markets, or you can have a illiquid higher yield instrument like in the bond market. You go

594
00:44:00,036 --> 00:44:04,856
get like five or 6% and you've got to take on just a little bit more credit risk in the investment

595
00:44:04,856 --> 00:44:11,116
grade market, but just incredibly illiquid. So your time horizon is much longer. And so now

596
00:44:11,116 --> 00:44:15,876
the entire capital world is being flipped upside down because you have a digital credit instrument,

597
00:44:15,876 --> 00:44:21,296
which is high yield and high liquidity. You got both. Historically, you had to pick,

598
00:44:21,556 --> 00:44:25,256
like, which do you want? Do you want liquidity or do you want yield? Now you got both. That's

599
00:44:25,256 --> 00:44:31,376
fascinating. That completely flips capital management upside down. Now, how much do you

600
00:44:31,376 --> 00:44:35,576
deploy? Like what's the kind of a rule of thumb? And Saylor was talking to me about rule of thumb,

601
00:44:35,676 --> 00:44:40,116
like thinking about capital management, because I asked him, would there be a situation where

602
00:44:40,116 --> 00:44:43,776
strategy would put digital credit on their balance sheet? Thinking we've got a digital

603
00:44:43,776 --> 00:44:50,636
credit instrument, what would it take? And the concept became, or what he talked about was

604
00:44:50,636 --> 00:44:57,496
effectively, you don't want to have a position that's greater than the average daily trading

605
00:44:57,496 --> 00:45:03,836
volume if you've got one month money. Because you need to know that I can scale in and out of this

606
00:45:03,836 --> 00:45:09,656
without having a drastic impact on the price. So my mind instantly starts to go, okay, what's the

607
00:45:09,656 --> 00:45:13,356
average trading volume? Thinking about stretch, it's about $100 million. Okay, that's interesting.

608
00:45:13,776 --> 00:45:17,776
And so you hear the guy at Prevalon Energy,

609
00:45:17,776 --> 00:45:20,776
so if they've got an eight figure position in SDRC,

610
00:45:20,776 --> 00:45:22,776
let's just say it's $20 million,

611
00:45:22,776 --> 00:45:26,776
they can feel pretty confident that over the course of a month,

612
00:45:26,776 --> 00:45:30,776
they're likely going to be able to pull their principal out and still earn the yield on it.

613
00:45:31,776 --> 00:45:36,776
That completely changes capital management, like capital allocation globally,

614
00:45:36,776 --> 00:45:40,776
everywhere, every company on the planet, private company, public company.

615
00:45:40,776 --> 00:45:46,416
public company, your hurdle rate is now SDRC or digital credit instruments because of

616
00:45:46,416 --> 00:45:54,876
the liquidity profile and the yield. And that is like transformational in how people are going to

617
00:45:54,876 --> 00:45:58,476
manage capital. I mean, you've seen it, right? Anchorage added it to their balance sheet.

618
00:45:59,096 --> 00:46:02,656
Orange BTC added to their balance sheet. Prevalon Energy added to their balance sheet.

619
00:46:03,256 --> 00:46:09,016
I can bet you over the next two to three months, we're going to see several companies

620
00:46:09,016 --> 00:46:12,896
add this to their balance sheet and think about it as a treasury reserve asset

621
00:46:12,896 --> 00:46:18,576
for short, short, moderate term capital. Nothing has really existed like it before.

622
00:46:18,976 --> 00:46:25,216
Jeff, what's, what's crazy to think about is that it's, it's probably, you know, it's too small

623
00:46:25,216 --> 00:46:32,776
still for, for major capital to come into it. Right. So in some sense it has to be bootstrapped,

624
00:46:32,776 --> 00:46:42,696
right like it it needs it needs uh it needs you know whether it's retail or smaller companies it

625
00:46:42,696 --> 00:46:47,956
needs like the the initial capital to come in and and create that liquidity and boot bootstrap it

626
00:46:47,956 --> 00:46:54,096
in order for the huge institutional capital to feel comfortable to come in right it's it's like a

627
00:46:54,096 --> 00:47:00,996
it's a process this whole thing's a process that there's yeah there's alpha opportunities for those

628
00:47:00,996 --> 00:47:02,636
that are at the forefront, right?

629
00:47:02,636 --> 00:47:04,896
Like you're helping build the liquidity profile.

630
00:47:04,896 --> 00:47:11,176
The most fascinating thing, and we also talked about this, is I asked the moment, who's selling

631
00:47:11,176 --> 00:47:12,916
stretch at 99.98?

632
00:47:14,576 --> 00:47:16,576
Like that's that's more interesting to me.

633
00:47:16,576 --> 00:47:22,216
Like forget who's buying it, who's selling it, why are they selling it and what does that

634
00:47:22,216 --> 00:47:26,856
look like? And so he taught he gave an anecdote like he watched.

635
00:47:26,856 --> 00:47:39,276
So if you ever go to a Bitcoin event and you see Saylor sitting at a desk, he's always got his computer open and he's watching the tape trade every single day and every trade that's happening.

636
00:47:40,036 --> 00:47:41,036
It's like a movie.

637
00:47:41,156 --> 00:47:43,636
You can see how it's moving.

638
00:47:44,276 --> 00:47:53,296
Anyway, he mentioned this trade where it was a $40 million market sale of STRC and it dropped the price from $99.98 down to like $99.40.

639
00:47:53,296 --> 00:48:00,196
And then the price ripped right back up to like 99.98 or 98, 99.96, something like that.

640
00:48:01,216 --> 00:48:04,256
And so that's fascinating for multiple reasons.

641
00:48:04,516 --> 00:48:08,776
So that means there's an incentive structure for somebody to ARB that, bring it back up.

642
00:48:09,056 --> 00:48:11,616
So somebody was buying it after there was a big sell.

643
00:48:12,156 --> 00:48:17,076
There's a likelihood that that $40 million liquid was a liquidation in DeFi.

644
00:48:17,076 --> 00:48:23,656
Somebody was posting it as collateral in a DeFi leverage situation, got liquidated,

645
00:48:23,756 --> 00:48:25,036
and then it was market sold.

646
00:48:25,756 --> 00:48:29,776
Why would you market sell $40 million of this instrument when you can scale out of it in

647
00:48:29,776 --> 00:48:34,416
two hours and not have any change in the principle?

648
00:48:35,216 --> 00:48:41,036
So it's fascinating to start thinking about the incentive structure.

649
00:48:41,036 --> 00:48:48,116
and the incentive structure works because strategy and sailor have come out and said

650
00:48:48,116 --> 00:48:55,716
we are not selling stretch below 100 so he's leaving market opportunity for anybody else

651
00:48:55,716 --> 00:49:02,236
that wants to buy and sell and operate under and below 100 so there's arbitrage like recognizing

652
00:49:02,236 --> 00:49:06,616
that he's also told you i'm going to increase the interest rate if the price if the vwap

653
00:49:06,616 --> 00:49:15,636
the 30-day VWAP is under $99. So it's not only did they create a financial product that's

654
00:49:15,636 --> 00:49:21,236
brilliant and elegant, they created an incentive structure that incentivizes liquidity to be there.

655
00:49:22,756 --> 00:49:26,956
Like that's the unlock is the liquidity profile and the incentive structure.

656
00:49:27,736 --> 00:49:32,036
Like often overlooked, people don't even care. Like when you turn the lights on,

657
00:49:32,056 --> 00:49:34,916
you don't need to know how like the energy got to your house, kind of the same thing.

658
00:49:34,916 --> 00:49:36,736
But that's why it works.

659
00:49:37,636 --> 00:49:41,416
That's why the liquidity profile is building is because there's incentive structure to build on it.

660
00:49:44,616 --> 00:49:50,336
So I made this post and I want to share it again because it's totally fascinating.

661
00:49:51,256 --> 00:49:55,776
This is traditional credit for digital credit as a comparison.

662
00:49:55,776 --> 00:50:05,236
And I wanted to look at liquidity profiles of other perpetual preferred equities to put them on a level playing field.

663
00:50:06,036 --> 00:50:13,556
So I pulled bank perpetual preferred equities and KKR, which are some of the more commonly traded prefs.

664
00:50:14,336 --> 00:50:16,356
And so these are the tickers over here on the left hand side.

665
00:50:16,456 --> 00:50:17,456
They're all highlighted in blue.

666
00:50:17,896 --> 00:50:21,776
And the effective yields range from 5.5% to 7.27%.

667
00:50:21,776 --> 00:50:28,936
percent. Okay. Notional outstanding ranges anywhere from 850 million to 4 billion or to 6 billion.

668
00:50:28,936 --> 00:50:36,116
So decent size relative to STRC or SATA. And you look at the daily volume, average daily trading

669
00:50:36,116 --> 00:50:40,476
volume, the highest average daily trading volume is the JP Morgan pref at $4.2 million.

670
00:50:42,316 --> 00:50:49,996
STRC traded $150 million today. This is a bank instrument that pays six and a half percent.

671
00:50:49,996 --> 00:50:59,316
And you're like, okay, I can now have an 11.25% instrument with very high liquidity.

672
00:51:01,156 --> 00:51:02,456
Okay, that's interesting.

673
00:51:02,936 --> 00:51:06,896
And so you got to think about relative liquidity too, because these all have different notional

674
00:51:06,896 --> 00:51:07,676
size outstanding.

675
00:51:07,836 --> 00:51:14,916
So when you normalize the daily trading volume relative to the market cap of these instruments,

676
00:51:15,496 --> 00:51:18,096
the numbers are staggering, right?

677
00:51:18,096 --> 00:51:22,136
Like the average 30-day volume relative to notional outstanding.

678
00:51:22,336 --> 00:51:25,196
So this is the 30-day volume divided by notional.

679
00:51:25,376 --> 00:51:29,216
You get 0.23%, 0.08%.

680
00:51:29,216 --> 00:51:34,816
So if you wanted to scale out, if you had any scale in any of these instruments, let's just

681
00:51:34,816 --> 00:51:42,216
say you had $100 million, it could take you months to scale out $100 million based on

682
00:51:42,216 --> 00:51:43,256
the average daily trading volume.

683
00:51:43,256 --> 00:51:51,516
So historically, if you bought this instrument, you'd have to hold it through the duration of the instrument in order to get your yield out of it.

684
00:51:52,996 --> 00:51:56,456
Okay, that might be like 10, 12, 15 years.

685
00:51:57,456 --> 00:52:00,576
Okay, what can happen in the next 10, 12, 15 years?

686
00:52:00,676 --> 00:52:07,156
What's the risk of the next 10, 12, 15 years for banks or any company that's issuing a credit instrument?

687
00:52:08,216 --> 00:52:12,396
I think AI has just made the uncertainty umbrella significantly larger.

688
00:52:12,396 --> 00:52:19,396
The certainty of those cash flows in these business models, I think, has just drastically changed in the last year.

689
00:52:20,496 --> 00:52:24,496
So that's fascinating when you think about the ability to get liquid on any of these things.

690
00:52:25,696 --> 00:52:32,656
If I were holding these, this is not financial advice, but this is a crappy instrument.

691
00:52:34,336 --> 00:52:41,216
These traditional credits look crappy relative to the yield profile and the liquidity profile of these other instruments.

692
00:52:41,216 --> 00:52:47,196
it's just it's just math like it's just the data that we're seeing and like why does this exist

693
00:52:47,196 --> 00:52:54,296
it exists because it's transparent like you you can see the risk profile on strategies balance

694
00:52:54,296 --> 00:53:00,216
like on strategies website on strives website we have the data of the capital that sits on our

695
00:53:00,216 --> 00:53:06,896
balance sheet the relative risk profile you can go calculate it 24 7 365 and that's that's

696
00:53:06,896 --> 00:53:12,896
interesting and it facilitates a liquidity profile because they are, because it's incredibly

697
00:53:12,896 --> 00:53:16,876
transparent. Can we also talk about the novel architecture of a stable principle,

698
00:53:17,516 --> 00:53:22,476
perpetual preferred security, right? Like in these other perpetual preferred securities don't have

699
00:53:22,476 --> 00:53:28,596
stable principle and the stable principle was, is a direct result of strategies, prefs, and now

700
00:53:28,596 --> 00:53:33,576
SATA being the first perpetual preferred instruments with an active ATM shelf registration.

701
00:53:33,576 --> 00:53:38,656
registration. If that wasn't the case, you wouldn't be able to limit the upside on the price.

702
00:53:38,796 --> 00:53:44,016
And then plus you need the variable rate monthly dividend. But those two things combined allow for

703
00:53:44,016 --> 00:53:48,876
the management of stable principal. And so you don't have interest rate exposure, which is a

704
00:53:48,876 --> 00:53:54,056
completely new paradigm, something which you've only gotten exposed to via money markets, right?

705
00:53:54,096 --> 00:54:00,356
So this is a new category of fixed income security, completely new category. And I think that's one

706
00:54:00,356 --> 00:54:06,296
of the reasons it's having massive product market fit everything digital is better than everything

707
00:54:06,296 --> 00:54:13,636
analog ever i mean you could argue that like records are probably better than you know mp3 but

708
00:54:13,636 --> 00:54:21,456
let's not let's not go too far but like i mean the the digital like the digital world and the

709
00:54:21,456 --> 00:54:27,416
digital economy has always been better like there's there's advancements and things like

710
00:54:27,416 --> 00:54:34,616
this, like these are innovations that have led to materially better products. And I'm not surprised,

711
00:54:34,776 --> 00:54:39,236
right? Like this is going to continue again, stretches eight months old.

712
00:54:40,816 --> 00:54:45,696
When, when it's a year old, two years old, three years old, like imagine what this future looks

713
00:54:45,696 --> 00:54:51,436
like. I mean, this might be a hundred, a hundred billion dollars of notional outstanding. The

714
00:54:51,436 --> 00:54:57,396
entire credit market is going to have to rethink the relative risk of all of their instrumentation

715
00:54:57,416 --> 00:55:05,236
all of them so hey Jeff Jeff can I share my desktop for a second yeah yeah give me a second

716
00:55:05,236 --> 00:55:18,156
here do this I want to show you what I just did let's see if that works is it sharing okay what

717
00:55:18,156 --> 00:55:25,616
I did was I screenshotted what you just shown right and then what I did is your estimated days

718
00:55:25,616 --> 00:55:31,596
to cover is your last column. Yeah, days to turnover. Sorry, days to turnover. And I just

719
00:55:31,596 --> 00:55:39,636
told ChatGPT, I said, recalculate the last row, but make STRC, make STRC 1.0 and give us the

720
00:55:39,636 --> 00:55:46,256
multiple. And so that way you don't have to divide 28 into them. And so when you do that, so

721
00:55:46,256 --> 00:55:55,536
um say that so strc is 1.00 uh sata is 1.04 equivalently the same and then if you look at

722
00:55:55,536 --> 00:56:00,436
the other ones like for instance you said what was it the jp morgan was the second biggest one

723
00:56:00,436 --> 00:56:08,376
yeah or the biggest one it's 20 it takes 25 x longer in order for that to cover it's just 25

724
00:56:08,376 --> 00:56:15,556
time given given that so if you want 25 x less liquid it's 25 it's 125 the liquidity that's the

725
00:56:15,556 --> 00:56:23,316
way you look at it or strc is 25 times more liquid and and that's the best one out of out of all the

726
00:56:23,316 --> 00:56:33,196
ones you you saw there so you again whether it's 125th or 25 times again strc and sata are 25 times

727
00:56:33,196 --> 00:56:39,916
more liquid than the next one and that and that's a that's a crazy multiple that's why i like to make

728
00:56:39,916 --> 00:56:45,096
these integers really easy you know so nobody has to calculate anything and this takes two seconds

729
00:56:45,096 --> 00:56:47,476
So you did the hard work by getting all the data.

730
00:56:47,596 --> 00:56:48,216
So thank you.

731
00:56:49,056 --> 00:56:51,176
But that's the way I represent this.

732
00:56:51,236 --> 00:56:53,216
But the other ones are crazy.

733
00:56:53,816 --> 00:56:56,636
Look at the Wells Fargo one, 146X.

734
00:56:57,856 --> 00:56:58,156
Right.

735
00:56:58,376 --> 00:57:02,416
So if you had a $100 million portfolio in there,

736
00:57:02,456 --> 00:57:06,076
it would take you 144 times longer to lever out of it,

737
00:57:06,316 --> 00:57:09,076
which means effectively it's stranded money.

738
00:57:09,796 --> 00:57:12,576
I just don't know why anybody holds these things.

739
00:57:12,576 --> 00:57:15,036
like I think if you're going to go issue

740
00:57:15,036 --> 00:57:15,956
equity

741
00:57:15,956 --> 00:57:19,116
and you're like a traditional company like I think

742
00:57:19,116 --> 00:57:21,036
you're dead like your access to that market is

743
00:57:21,036 --> 00:57:23,016
like in my it should be gone

744
00:57:23,016 --> 00:57:24,976
like if I yeah I'm Barclays which

745
00:57:24,976 --> 00:57:26,876
which I'm not but and

746
00:57:26,876 --> 00:57:28,716
I don't know if I'm Matt Gannon

747
00:57:28,716 --> 00:57:30,756
who came came to the

748
00:57:30,756 --> 00:57:32,236
the true north event

749
00:57:32,236 --> 00:57:34,716
you know

750
00:57:34,716 --> 00:57:36,916
and and you and somebody's coming to you like

751
00:57:36,916 --> 00:57:38,696
hey I want to go issue pref capital at

752
00:57:38,696 --> 00:57:39,756
at eight percent

753
00:57:39,756 --> 00:57:48,336
and you're like well i just issued 11 you know 11 percent pref equity over here and it's backed

754
00:57:48,336 --> 00:57:54,896
by capital like four to one yeah you know what's funny why like what do you know the cost capital

755
00:57:54,896 --> 00:58:01,136
is now 11 you know like what people come to these events for for alpha but that guy got the more

756
00:58:01,136 --> 00:58:06,496
alpha than anybody barclays came got interviewed and he got like more alpha than anybody attending

757
00:58:06,496 --> 00:58:23,156
Yeah, I mean, he was brilliant when he was talking about. And I want to go back to something. So look, I'm a credit investor. People are like, oh, if I had access to the private markets. When you do a private placement, the minimum is typically five years.

758
00:58:23,156 --> 00:58:29,976
So if you fork over a hundred grand, let's say, and sometimes they have a hundred grand as a minimum buy-in, right?

759
00:58:30,096 --> 00:58:31,976
And you're like, it's five years.

760
00:58:31,976 --> 00:58:34,776
And they're like, well, I want to get out of it in six months.

761
00:58:35,116 --> 00:58:38,096
There may be no redemption clause for five years.

762
00:58:38,196 --> 00:58:40,776
You were inside that investment for five years.

763
00:58:41,036 --> 00:58:45,456
And you're like, well, if there's no secondary market for it, you're stuck.

764
00:58:46,016 --> 00:58:50,556
So any investment, if you want to do a private placement, right, you're a credit investor,

765
00:58:50,756 --> 00:58:56,136
and you can make 11% on STRC, and you're like, you know what, after two years, I want to go put

766
00:58:56,136 --> 00:59:01,676
my money in something else. You sell it all, market order, and you're out of it. And I think

767
00:59:01,676 --> 00:59:06,696
people, they wish that they were able to get into private deals. But then when I tell them that

768
00:59:06,696 --> 00:59:11,336
you're stuck in it for five to seven years, they're like, oh, I want to get out. You can't.

769
00:59:11,336 --> 00:59:14,876
And I think that's the reason, that's the point where you're trying to say right here.

770
00:59:15,196 --> 00:59:23,516
If you have a big position and you want to go sell it, but if you're selling, it's going to tank the market, then it's not really a good position to be in.

771
00:59:24,036 --> 00:59:25,016
Yeah, agree, agree.

772
00:59:25,076 --> 00:59:26,896
And that's like a Warren Buffett kind of way of thinking.

773
00:59:27,656 --> 00:59:34,456
He's been asked, okay, why do you buy public equities as opposed to real estate, private equity, private debt, et cetera, et cetera.

774
00:59:34,516 --> 00:59:37,296
He's like, well, there's money to be made in most markets.

775
00:59:37,556 --> 00:59:40,056
Like markets present opportunity and capitalize on them.

776
00:59:40,056 --> 00:59:48,056
And there's massive value in being fully liquid in your position, whether that be to raise cash, to deploy more, et cetera, et cetera.

777
00:59:48,196 --> 00:59:52,136
That optionality of a massively liquid equity is very valuable.

778
00:59:53,696 --> 00:59:59,236
So what I think you guys are telling me is that the fixed income market is officially disrupted.

779
00:59:59,456 --> 01:00:02,996
Like if you're a fixed income fund manager, your services are no longer required.

780
01:00:03,256 --> 01:00:06,116
And my recommendation is just take two weeks off and then quit.

781
01:00:06,936 --> 01:00:08,956
Yeah, look, look, I agree.

782
01:00:08,956 --> 01:00:11,296
Look, Charlie Pielo, there was just a chart.

783
01:00:11,656 --> 01:00:15,616
The bond market has been in a 67-month bear market.

784
01:00:16,096 --> 01:00:17,076
67 months.

785
01:00:17,336 --> 01:00:18,936
That's five years and seven months.

786
01:00:19,156 --> 01:00:21,776
The previous bear market was 16 months.

787
01:00:22,176 --> 01:00:24,836
This is the worst bear market for bonds ever.

788
01:00:25,276 --> 01:00:26,996
And it's going on five years.

789
01:00:27,636 --> 01:00:32,456
And if you're in an illiquid bond, right, then, you know, it's weak.

790
01:00:32,816 --> 01:00:37,716
And so, look, where we are today, it's just going to take time for people to, for this

791
01:00:37,716 --> 01:00:38,696
to sink into them.

792
01:00:38,956 --> 01:00:41,516
I do want to show, can I show another thing?

793
01:00:42,276 --> 01:00:42,416
Yeah.

794
01:00:42,856 --> 01:00:43,396
Yeah, okay.

795
01:00:43,576 --> 01:00:44,356
Share a window.

796
01:00:45,156 --> 01:00:49,176
Here, so let me share this, share this window.

797
01:00:50,016 --> 01:00:54,356
So Rohan, met him for the first time, but I've been talking to him on the phone.

798
01:00:54,836 --> 01:00:56,696
So he's a true North fan.

799
01:00:57,616 --> 01:00:58,756
He's not a coder.

800
01:00:59,096 --> 01:01:05,496
And he has coded this site, Bitcoinquant.co.

801
01:01:05,896 --> 01:01:07,236
And I've reposted this.

802
01:01:07,236 --> 01:01:16,716
And he has, when you log into this, you could see that, and he doesn't charge for it, but you can see my name, my real name is right there logged into it, which is fine.

803
01:01:17,036 --> 01:01:20,996
But he has a Bitcoin Preferred Equity Digital Credit Dashboard.

804
01:01:21,636 --> 01:01:24,536
And I love this one over here with STRC volume.

805
01:01:25,016 --> 01:01:27,596
And then he shows you what the volume is above 100.

806
01:01:28,356 --> 01:01:30,816
And then he has this whole analysis on it.

807
01:01:30,816 --> 01:01:40,176
So one of the reasons why I like his page is he says ATM as a percent of volume.

808
01:01:40,776 --> 01:01:43,816
And then over here, I believe he has it set the default setting as a 40%.

809
01:01:44,356 --> 01:01:46,156
And you could drag it lower.

810
01:01:46,296 --> 01:01:47,156
Oh, it's showing you on the right.

811
01:01:47,276 --> 01:01:48,496
It's 25% there.

812
01:01:48,816 --> 01:01:53,176
And you could say what percentage of the amount over $100 were ATM.

813
01:01:53,676 --> 01:01:56,576
And then it tells you the estimated ATM proceeds.

814
01:01:56,576 --> 01:02:04,056
proceeds. So if you want to be more conservative, you say only 25% above the hundred bucks will be

815
01:02:04,056 --> 01:02:08,156
used. And then it tells you the equivalent Bitcoin and it calculates, but you're like,

816
01:02:08,196 --> 01:02:13,336
oh, let's be more aggressive. So we'll go to 40%. And then it tells you on each day,

817
01:02:13,336 --> 01:02:18,176
how much Bitcoin they can conceivably buy. And the total for the week here is 2,500.

818
01:02:18,176 --> 01:02:22,816
So, yeah, in three days.

819
01:02:22,816 --> 01:02:38,354
So look look there lots of smart people there And what I want to say about it is that Rohan is not he a business guy He taught himself how to vibe code makes this website right

820
01:02:38,514 --> 01:02:40,234
And he made the original website.

821
01:02:40,574 --> 01:02:44,474
You know, there's two different, not logins, two different pages for Bitcoin treasury companies.

822
01:02:44,854 --> 01:02:47,894
But he does this and vibe codes the whole thing.

823
01:02:48,214 --> 01:02:50,294
And he keeps on updating it.

824
01:02:50,294 --> 01:02:54,734
And this amount of information, you don't have this with other companies.

825
01:02:54,734 --> 01:03:01,934
Like with Apple, I'm unaware of an Apple website that tells me how many iPhones they're shipping and computers they're shipping.

826
01:03:02,474 --> 01:03:07,694
I just don't – or maybe it exists for Tesla, you know, how many cars they're shipping where people guess it.

827
01:03:08,034 --> 01:03:11,594
But this type of coding that you see is just truly unprecedented.

828
01:03:11,974 --> 01:03:13,694
So I just want to point this out.

829
01:03:14,534 --> 01:03:18,394
And this is where we get – you know, people are like, who do we talk to?

830
01:03:18,834 --> 01:03:23,114
Yeah, I have the benefit of talking to Dan or Mason or Jeff or Soleil.

831
01:03:23,114 --> 01:03:27,034
but you know these other guys that come about to do this work it's just brilliant work

832
01:03:29,434 --> 01:03:36,714
totally i mean that's that's like there's so much opportunity to build here i like that that is uh

833
01:03:36,714 --> 01:03:44,074
it's going to be used everywhere i think there's another one strc.live strc.live yeah i found out

834
01:03:44,074 --> 01:03:51,514
today has like a a bunch of different tools so bi-weekly paycheck simulator drip compounding

835
01:03:51,514 --> 01:03:57,834
calculator, rotation back tester, STRC yield calculator, STRC versus savings. And basically

836
01:03:57,834 --> 01:04:01,794
just build a bunch of different tools on top of this to look at different perspectives. Like,

837
01:04:02,134 --> 01:04:05,394
that's so cool. That's one person that's just building this thing. I think, I don't think it's

838
01:04:05,394 --> 01:04:10,734
multiple people. Yeah. I think these are one guy that there's always, it seems to be a dude,

839
01:04:10,734 --> 01:04:14,574
all the guys are like, Oh, I just coded this up. And you're like, and they're like, they're like,

840
01:04:14,614 --> 01:04:20,094
I just whipped it out. And like, you know, they're all like geniuses. Right. But they're using AI.

841
01:04:20,094 --> 01:04:21,374
They build these websites.

842
01:04:21,374 --> 01:04:24,934
They do the auto update and they're brilliant.

843
01:04:25,154 --> 01:04:25,654
The color.

844
01:04:26,114 --> 01:04:31,914
And I love how you could just do like you could drag the columns and you can move them over.

845
01:04:32,554 --> 01:04:36,394
So again, this is some amazing information.

846
01:04:37,394 --> 01:04:44,534
And he does, like I said, when you log in, you can click to the preferred equity versus the Bitcoin treasury.

847
01:04:44,854 --> 01:04:46,474
And then they have their overview.

848
01:04:46,474 --> 01:04:53,494
And again, everybody's got different versions, Bitcoin tax model, top 100 table.

849
01:04:54,154 --> 01:04:58,134
So I just think this is brilliant with the community put together.

850
01:04:58,634 --> 01:05:02,434
Jeff, can I change topics a little bit?

851
01:05:02,714 --> 01:05:03,114
Yeah, sure.

852
01:05:03,394 --> 01:05:04,174
Bring something up.

853
01:05:04,554 --> 01:05:11,374
So this week, there was this report put out by Bitcoin Policy Institute that said,

854
01:05:11,734 --> 01:05:15,614
Frontier AI agents prefer Bitcoin over stable coins and other forms of money.

855
01:05:15,614 --> 01:05:21,834
it asked over 9 000 ais you know during a conversation what's your what's your preferred

856
01:05:21,834 --> 01:05:26,974
you know what do you think is the best payment method for i'm sure you know i didn't look in

857
01:05:26,974 --> 01:05:31,114
too deeply but i'm sure it was along the lines of like agentic payments or something along those

858
01:05:31,114 --> 01:05:36,934
lines and overwhelmingly it was bitcoin and and fong quote tweeted it and he said how long will

859
01:05:36,934 --> 01:05:43,714
take for ai agents to prefer digital credit and strc over traditional credit and other forms of

860
01:05:43,714 --> 01:05:49,834
investment. I was like, Hmm, that's a, that's a super interesting tweet. And so it started,

861
01:05:50,594 --> 01:05:57,634
it started, uh, you know, I started thinking, I was like, Oh, holy shit. Like AI is way better

862
01:05:57,634 --> 01:06:02,434
at perceiving risk. Like it's literally a calculator, right? It's a computer. It's a

863
01:06:02,434 --> 01:06:09,694
calculator. It's way better at, at viewing risk in its full reality probabilistically

864
01:06:09,694 --> 01:06:12,594
than any human will ever be.

865
01:06:12,874 --> 01:06:18,834
So Soleil, what you just said about if you run a credit fund,

866
01:06:18,934 --> 01:06:20,934
well, I think you're fucked anyway

867
01:06:20,934 --> 01:06:25,214
because why would you trust a human over something

868
01:06:25,214 --> 01:06:32,214
that can see the world more in 4D,

869
01:06:32,374 --> 01:06:35,274
more transparent than a human ever could?

870
01:06:35,734 --> 01:06:36,574
And so I responded,

871
01:06:36,574 --> 01:06:40,614
when an AI can fully price risk probabilistically and act on it.

872
01:06:40,714 --> 01:06:45,574
Once agents can model counterparty risk, duration, regulatory, tail risk, end-to-end,

873
01:06:45,954 --> 01:06:51,234
capital allocation stops being narrative-driven, kind of emotional, and starts being mechanical, right?

874
01:06:51,334 --> 01:06:54,234
It's just like, here's the risk, boom, boom.

875
01:06:55,014 --> 01:07:02,594
At that point, digital credit and BDC-backed instruments win on expected return per unit of uncertainty

876
01:07:02,594 --> 01:07:05,294
and not ideology or tradition.

877
01:07:05,294 --> 01:07:10,674
So it's not some like gray haired credit manager who's saying, oh, what's this Bitcoin shit?

878
01:07:10,854 --> 01:07:11,874
Like, no, the AI.

879
01:07:12,174 --> 01:07:13,194
Underwriters disappear.

880
01:07:13,414 --> 01:07:14,034
Yeah, yeah, yeah.

881
01:07:14,154 --> 01:07:15,034
The computer is the underwriter.

882
01:07:15,414 --> 01:07:18,274
But then I went like, then I started thinking about this.

883
01:07:18,274 --> 01:07:27,674
I was like, okay, so what like for all forms of, you know, traditional assets, whether it's credit or it's equity.

884
01:07:27,794 --> 01:07:30,814
I was like, what is like the biggest perceived risk right now?

885
01:07:31,214 --> 01:07:34,854
And I was like, I think it's disruption from AI, right?

886
01:07:34,854 --> 01:07:36,794
I think that's the biggest perceived risk.

887
01:07:37,254 --> 01:07:40,954
So I was like, wait, the AI is the one modeling the risk,

888
01:07:40,954 --> 01:07:42,854
but it's also the one disrupting it.

889
01:07:42,934 --> 01:07:46,934
I was like, when has that ever occurred in history

890
01:07:46,934 --> 01:07:51,834
where the thing that's modeling the risk is causing the risk?

891
01:07:51,934 --> 01:07:54,374
I don't know if that's ever occurred before.

892
01:07:54,614 --> 01:07:59,274
Maybe like the computer, but I think this is just another.

893
01:08:01,454 --> 01:08:02,974
Yeah, it's absurd.

894
01:08:03,254 --> 01:08:04,714
It's when the price.

895
01:08:04,854 --> 01:08:20,134
Right. It's when the disruptor is also the disruptee. It's like, really, you're, you're, you're, you're, you're injecting, you're changing the whole market, but yet you're, you're, you're not seeing that. So I think that, yeah, this is crazy.

896
01:08:20,134 --> 01:08:22,594
You think about like the private credit market.

897
01:08:22,594 --> 01:08:26,594
It's like, again, the rate on private credit is going to go to like 20%.

898
01:08:27,194 --> 01:08:38,214
Like if you want to do a private credit deal, like if you're having to compete with digital credit, the rate's going to have to be higher, not lower.

899
01:08:38,214 --> 01:08:54,114
It's going to have to be 15, 17, 18, 20, because there's no incentive to give your money somewhere else for an opaque risk that I've got to lock up for an uncertain period of time, and I'm uncertain on what the outcome may be.

900
01:08:54,834 --> 01:08:57,654
That market should dry up.

901
01:08:58,874 --> 01:09:01,114
It might take a decade to dry up.

902
01:09:01,854 --> 01:09:04,634
You can dream and imagine a scenario.

903
01:09:04,634 --> 01:09:32,254
Junk bonds too. Like if we're going into a world where a lot of businesses are going to be disruptive, disrupted, a lot of them are going to be grasping for, you know, some kind of injection. And I think what stretch does is it actually speeds up creative disruption. It speeds up capitalism because now there's a, you know, a new floor, a new, a new hurdle rate. And if your business sucks, like the capital is going to go elsewhere.

904
01:09:34,634 --> 01:09:38,874
that's just another way of saying that the risk is mispriced risk is mispriced yeah the cap the

905
01:09:38,874 --> 01:09:49,034
capital can flee and it can it could move fast i think here's an interesting trade short hyg long strc

906
01:09:51,034 --> 01:09:58,234
hyg is the high yield corporate bond etf here's the here's the performance since 2010. so you

907
01:09:58,234 --> 01:10:01,554
You could see here's the last five years performance is down 7%.

908
01:10:01,554 --> 01:10:03,914
The volume is high.

909
01:10:04,874 --> 01:10:07,154
The relative yield is 5.7%.

910
01:10:07,154 --> 01:10:09,914
That's interesting.

911
01:10:10,114 --> 01:10:13,834
If you think risk is mispriced and these instruments are completely different, right?

912
01:10:13,834 --> 01:10:19,034
That might be a very fascinating trade because you have this liquid bond ETF.

913
01:10:19,374 --> 01:10:22,494
If you think this entire market, like cost of capital is going to get repriced.

914
01:10:22,894 --> 01:10:26,454
If the interest rates rise, the prices fall.

915
01:10:26,454 --> 01:10:33,354
So if the interest rate associated with these instruments rise, the price of this should

916
01:10:33,354 --> 01:10:34,014
theoretically fall.

917
01:10:34,234 --> 01:10:35,894
It might move the opposite direction, right?

918
01:10:35,974 --> 01:10:42,234
Because if the actual cost of capital, Fed funds rate drops, maybe the price of this

919
01:10:42,234 --> 01:10:42,614
rises.

920
01:10:42,994 --> 01:10:48,734
So maybe a difficult trade on the short term, but on a long term basis, I think that seems

921
01:10:48,734 --> 01:10:50,914
like a really fascinating comparison.

922
01:10:50,914 --> 01:11:01,294
And this is like the only other highly liquid, higher yield alternative to, I guess, money market funds.

923
01:11:02,334 --> 01:11:03,954
And it's more volatile, right?

924
01:11:03,974 --> 01:11:06,814
Like if stretch is planning to be pegged at 100, you look at this thing.

925
01:11:07,034 --> 01:11:15,774
And back in 2021, it was $88 and it dropped all the way to $72 and back up to 80.

926
01:11:15,774 --> 01:11:18,814
and it's only paying 5.7% yield

927
01:11:18,814 --> 01:11:22,094
because their capital appreciation here, right?

928
01:11:22,134 --> 01:11:24,914
Like, do we think cost of capital is going to go lower?

929
01:11:26,114 --> 01:11:26,974
I don't know.

930
01:11:28,734 --> 01:11:31,094
So, yeah, it's...

931
01:11:31,094 --> 01:11:34,914
I think risk is just completely mispriced.

932
01:11:35,054 --> 01:11:37,954
Like, the computers are going to be able to calculate this stuff way faster.

933
01:11:38,154 --> 01:11:38,954
It's all transparent.

934
01:11:39,114 --> 01:11:40,314
They're going to understand it quickly.

935
01:11:41,014 --> 01:11:44,234
I think that the future of this stuff would be that

936
01:11:44,234 --> 01:11:51,794
your only access to the capital markets is if you do have

937
01:11:51,794 --> 01:11:56,174
Bitcoin on your balance sheet because you can,

938
01:11:56,174 --> 01:12:00,914
if you had Bitcoin on your balance sheet, your base risk decreases.

939
01:12:03,194 --> 01:12:06,094
Just the base level risk decreases where if you have like

940
01:12:06,094 --> 01:12:08,774
money, you have money.

941
01:12:09,394 --> 01:12:12,834
You have money to do stuff with.

942
01:12:12,834 --> 01:12:24,834
Like if you just have any, any amount of Bitcoin or your balance sheet, and if your whole entire goal is to take your cash flows and buy more Bitcoin, like your access to the capital markets should be greater.

943
01:12:24,834 --> 01:12:32,534
Like it's pretty clear with MSTR that they've got really great access to the capital markets because of the business model.

944
01:12:32,534 --> 01:12:40,474
okay should other businesses do this like if you want if you want money

945
01:12:40,474 --> 01:12:46,074
if you want access to the capital markets this is a pretty interesting business model

946
01:12:46,074 --> 01:12:50,234
can we can we talk a little bit about the

947
01:12:50,234 --> 01:12:57,154
you know when we when people talk about bitcoin they say like bitcoin had a had an adoption curve

948
01:12:57,154 --> 01:13:07,794
and strc now has its own adoption curve because it's you know it is bitcoin but it's it's a it's

949
01:13:07,794 --> 01:13:15,154
a layer four or layer three right it is you know helping the trajectory of the bitcoin adoption but

950
01:13:15,154 --> 01:13:23,354
itself as a product has its own adoption curve like do we have any predictions like when when

951
01:13:23,354 --> 01:13:32,154
does strc when do they sell a billion dollars worth of it when does that yeah in a day in a day

952
01:13:32,154 --> 01:13:37,614
i think fong was saying i think i think the next benchmark is 500 million dollars of daily traded

953
01:13:37,614 --> 01:13:43,634
volume average 30-day trailing i think that's possible in a bull market and so like what are

954
01:13:43,634 --> 01:13:48,314
what are they selling right now at a hundred dollar like they're selling about 50 million a day

955
01:13:48,314 --> 01:13:55,754
right with their current trading volume assuming it trades around 100 100 so that would be like 250

956
01:13:55,754 --> 01:14:02,234
million a day in sales if they can sustain that which is just absolutely insanity at some point

957
01:14:02,234 --> 01:14:07,114
i think it will like there's gonna we're gonna see like a sustained period at like 99 and a half

958
01:14:07,754 --> 01:14:11,834
like a little bit just because like once the market gets flooded it's going to take a little

959
01:14:11,834 --> 01:14:16,074
bit of time to reset but then arbitrage has come in so i think it's going to take time to build

960
01:14:16,074 --> 01:14:19,114
that liquidity but i think it'll happen with a euphoric bull market and i think the leverage

961
01:14:19,114 --> 01:14:25,114
makes them like the first people to get a 2x strc etf out there i think it's really going to change

962
01:14:25,114 --> 01:14:30,634
the landscape like massively it'll be like the next misty it'll be like the next misty except

963
01:14:30,634 --> 01:14:39,834
it's just like every single way yeah without decay it's like you're not selling upside well because

964
01:14:39,834 --> 01:14:43,914
you can also do you could also do a total return swap i don't know i'm just putting it out there

965
01:14:43,914 --> 01:14:48,314
for whoever wants to build this instead of doing you know how like you can lever it by doing borrow

966
01:14:48,314 --> 01:14:55,194
like you borrow at 4.8 and 2x lever you can get up to like 17 and a half percent um just on 2x i

967
01:14:55,194 --> 01:14:59,834
mean you could do like a total return swap and potentially get that dividend rate without the

968
01:14:59,834 --> 01:15:04,394
cost of borrow with a lower cost of borrow by transferring the risk it's difficult but it's

969
01:15:04,394 --> 01:15:07,994
doable and if you did that it would just be absolutely insane and then like we talked about

970
01:15:07,994 --> 01:15:12,394
before like the put market right the put market you'll be able to sell these puts because there's

971
01:15:12,394 --> 01:15:18,394
a little volatility theoretically at a rate higher than the actual dividend income so it won't be rock

972
01:15:18,394 --> 01:15:22,874
dividends but it should be higher income stream over time i mean you can create an etf out of that

973
01:15:23,834 --> 01:15:31,114
yeah so so i was just going to say so um strc uh the week of november 17th it did nine it had um

974
01:15:31,114 --> 01:15:34,894
$987 million traded for that week.

975
01:15:35,434 --> 01:15:39,934
And then the week of February 2nd to the 6th,

976
01:15:40,214 --> 01:15:43,254
$957 million traded in a week.

977
01:15:43,494 --> 01:15:46,494
So it looks like the average is getting up there.

978
01:15:47,274 --> 01:15:48,894
And getting into five,

979
01:15:48,994 --> 01:15:52,754
Dan, you said $500 million in a week average?

980
01:15:53,574 --> 01:15:53,994
In a day.

981
01:15:54,574 --> 01:15:56,574
Yeah, so 4X from here, 4X from here.

982
01:15:56,934 --> 01:15:59,194
Well, it's done over a billion in a week.

983
01:15:59,194 --> 01:16:00,634
So it really just has to get that out.

984
01:16:00,634 --> 01:16:05,134
I'll make that a feature request for Rohan to add in the weekly,

985
01:16:05,854 --> 01:16:08,514
to get that trend line going up with the weekly averages.

986
01:16:10,114 --> 01:16:13,854
What's the trend line of the average 30-day volume or the 60-day volume?

987
01:16:14,054 --> 01:16:15,454
What's that looking like?

988
01:16:16,294 --> 01:16:16,474
Yeah.

989
01:16:16,714 --> 01:16:19,874
I mean, part of it is just scaling it up and getting it out there.

990
01:16:19,874 --> 01:16:23,874
In order to get the volume out there, you need to issue it.

991
01:16:24,414 --> 01:16:26,514
And, I mean, they're well on their way.

992
01:16:26,514 --> 01:16:32,154
I think even at the beginning, the average daily trading volume was much lower.

993
01:16:32,314 --> 01:16:33,794
There was a period of time where it was much lower.

994
01:16:34,754 --> 01:16:34,854
Yeah.

995
01:16:35,154 --> 01:16:39,274
And I'm going to go back to what Matt was saying from Barclays on Monday.

996
01:16:39,934 --> 01:16:49,714
What people don't realize is that if Saylor wants to sell any of the prefs or any MSDR, he needs institutional buyers.

997
01:16:50,334 --> 01:16:53,874
And so what Matt was explaining, the mechanics, how it works, he has four different desks.

998
01:16:53,874 --> 01:16:58,094
He has an equity desk, he has a pref desk, he has a convert desk, and he has a bond desk.

999
01:16:58,674 --> 01:17:02,914
And then he goes to different desks and they're like, well, we want to, we want, strategy wants

1000
01:17:02,914 --> 01:17:07,594
to sell this. He has to call the institutional investors and say, this is what we're trying to

1001
01:17:07,594 --> 01:17:13,454
sell. And then those guys then sell it off to their clients. And, and, you know, he can only

1002
01:17:13,454 --> 01:17:18,174
sell what people want to buy. And I think that's, you know, what we're seeing from STRC. That's the

1003
01:17:18,174 --> 01:17:22,614
validate. It's not that the seller doesn't want to sell really the other products. It's that that's

1004
01:17:22,614 --> 01:17:26,834
the one that the buyers really want to buy that they're honing in on so that's that positive

1005
01:17:26,834 --> 01:17:33,454
feedback loop yeah i i think he doesn't want to sell strife because strife should be 250

1006
01:17:33,454 --> 01:17:40,534
he thinks the value of strife is much higher things that probably is very similar to dan

1007
01:17:40,534 --> 01:17:48,454
where strike should be ripping at a future point in time when bitcoin is ripping um stride is

1008
01:17:48,454 --> 01:17:49,174
probably

1009
01:17:49,174 --> 01:17:52,014
yeah I don't think

1010
01:17:52,014 --> 01:17:54,414
it'll just always have

1011
01:17:54,414 --> 01:17:56,294
I think stride is so dependent on

1012
01:17:56,294 --> 01:17:57,714
strife

1013
01:17:57,714 --> 01:17:59,894
that'll be interesting to watch

1014
01:17:59,894 --> 01:18:01,334
like the delta between the two

1015
01:18:01,334 --> 01:18:02,494
yeah exactly

1016
01:18:02,494 --> 01:18:05,534
so Dan you brought up the put market

1017
01:18:05,534 --> 01:18:07,194
can you walk through that

1018
01:18:07,194 --> 01:18:09,794
you think that the put market for

1019
01:18:09,794 --> 01:18:12,234
STRC will be one of the

1020
01:18:12,234 --> 01:18:14,534
most liquid put markets

1021
01:18:14,534 --> 01:18:15,554
on the planet

1022
01:18:15,554 --> 01:18:18,434
absolutely I think it's super interesting

1023
01:18:18,434 --> 01:18:23,554
because considering the call the options the call options market above 100 will be pretty

1024
01:18:24,914 --> 01:18:26,194
won't really zero

1025
01:18:28,594 --> 01:18:36,354
maybe i'm long i'm long maybe like the you know the 100 maybe it's like 100.1 there's a call option

1026
01:18:36,354 --> 01:18:41,874
market there at some point whatever okay but below it ultimately there's always going to exist some

1027
01:18:41,874 --> 01:18:48,994
sort of deleveraging risk like if if for some reason leverage gets flooded into strc which i

1028
01:18:48,994 --> 01:18:53,474
expect it will i think it's going to be like massively levered and then if like bitcoin shits

1029
01:18:53,474 --> 01:18:57,554
the bed or something happens with strategy blah blah blah or the dividends decreased one month

1030
01:18:57,554 --> 01:19:04,674
which ultimately it will be you know maybe it trades down to 99. okay it turns out in 99 cascading

1031
01:19:04,674 --> 01:19:10,114
liquidations for all the people leverage trades out in 97 96. okay but if you're if you want to

1032
01:19:10,114 --> 01:19:15,694
to hold that leverage and you can't sustain that sort of drawdown in strc then i think there's

1033
01:19:15,694 --> 01:19:21,114
going to be a real market for for protection for principal protection in that scenario so you can

1034
01:19:21,114 --> 01:19:29,174
pay the put cost at 95 96 97 every single month and it eats into your yield but we're what you're

1035
01:19:29,174 --> 01:19:36,394
ensuring is that that razor thin sort of price difference between 97 and 94 that could wipe you

1036
01:19:36,394 --> 01:19:40,454
out, you're protected against. So therefore, I think there's going to be a massive market there

1037
01:19:40,454 --> 01:19:43,954
for people who want protection, principal protection. There also will be a market for

1038
01:19:43,954 --> 01:19:48,834
people who want to sell it, right? Because when you sell a 98 strike STRC put, you're essentially

1039
01:19:48,834 --> 01:19:54,654
selling the obligation to buy STRC at 98. And as we've talked about throughout this podcast,

1040
01:19:54,994 --> 01:19:59,614
who wouldn't want to buy it at 98? I mean, you're locking in 2% plus the yield. So therefore,

1041
01:19:59,994 --> 01:20:05,734
and you have the, those will trade at a premium to the dividend because, especially the $100 puts,

1042
01:20:05,734 --> 01:20:07,994
because people will be paying for the protection.

1043
01:20:08,194 --> 01:20:09,494
And since people are paying for the protection,

1044
01:20:09,794 --> 01:20:10,894
there's a small amount of alpha

1045
01:20:10,894 --> 01:20:12,754
in selling the protection to those people.

1046
01:20:13,094 --> 01:20:14,214
Plus they're not rock dividends.

1047
01:20:14,514 --> 01:20:17,714
So I think selling puts will be a great way to get leverage

1048
01:20:17,714 --> 01:20:19,774
because you don't have to actually hold the capital

1049
01:20:19,774 --> 01:20:21,974
to sell the put if it's not a cash secured put.

1050
01:20:26,214 --> 01:20:26,614
Wow.

1051
01:20:27,074 --> 01:20:28,514
That was a lot to rip through.

1052
01:20:28,694 --> 01:20:29,074
But like-

1053
01:20:29,074 --> 01:20:30,134
There's a lot there.

1054
01:20:30,134 --> 01:20:33,834
But you're talking about an institutional model

1055
01:20:33,834 --> 01:20:35,674
of insurance and downside protection

1056
01:20:35,674 --> 01:20:36,714
on a levered trade.

1057
01:20:37,954 --> 01:20:38,214
Exactly.

1058
01:20:38,454 --> 01:20:40,454
This is like the most certain levered trade

1059
01:20:40,454 --> 01:20:42,594
that you could probably take in the entire market,

1060
01:20:43,294 --> 01:20:45,214
which is guaranteed yield.

1061
01:20:47,914 --> 01:20:50,174
I probably shouldn't say those words.

1062
01:20:51,794 --> 01:20:52,374
Levered trade.

1063
01:20:53,294 --> 01:20:54,354
High likelihood.

1064
01:20:55,134 --> 01:21:00,574
High likelihood of outperforming like S&P 500 and QQQ

1065
01:21:00,574 --> 01:21:04,414
and even probably Mag 7 on just the yield.

1066
01:21:04,414 --> 01:21:13,614
If you're levered that yield, it's worth buying the downside protection if it's into a couple points of the yield.

1067
01:21:14,354 --> 01:21:16,214
Well, and think about the 90.

1068
01:21:16,474 --> 01:21:17,914
Let's just say you bought 90 puts.

1069
01:21:18,174 --> 01:21:23,474
You're essentially capping your terminal downside in the case that SCRC goes to zero at 10%.

1070
01:21:23,474 --> 01:21:26,754
So you're paying upfront for that protection.

1071
01:21:27,034 --> 01:21:29,414
But for an institution, that's a pretty cool trade.

1072
01:21:29,414 --> 01:21:33,894
it's like you're probably getting seven percent or seven and a half or eight percent annualized

1073
01:21:33,894 --> 01:21:39,814
return after paying for the 90 puts while only risking 10 in the case that this security goes to

1074
01:21:39,814 --> 01:21:46,854
zero which is a fantastic you know risk profile for someone who thinks the outcome is binary here

1075
01:21:48,214 --> 01:21:54,854
that should be an etf yeah yeah it should be well let's let's start working the put market we can

1076
01:21:54,854 --> 01:22:01,414
get some automation plots going on yeah get the put market rolling but i mean it comes back to

1077
01:22:01,414 --> 01:22:08,774
mason's point right like the the county like the these that infrastructure just us thinking through

1078
01:22:08,774 --> 01:22:17,254
the idea right there like it will happen right it will happen because there's incentive to do it here

1079
01:22:18,134 --> 01:22:24,614
right it will happen because it's going on youtube and then the ais will scrape the youtube

1080
01:22:24,614 --> 01:22:31,174
data and then they'll uh they'll like looking for alpha to steal it yeah they're just following

1081
01:22:31,174 --> 01:22:36,374
dan hillary for alpha trades on uh lover at sdrc that's gonna be weird because they're gonna be

1082
01:22:36,374 --> 01:22:41,414
launching tokens right like they don't have access to brokerage accounts yet so i mean the amount of

1083
01:22:41,414 --> 01:22:42,934
we've got a lot of competition here at buck

1084
01:22:47,174 --> 01:22:53,734
yeah man okay holy moly so much there's so much happening do you want to go through

1085
01:22:54,614 --> 01:22:56,334
Jeff, the slides that you have.

1086
01:22:56,514 --> 01:22:57,514
Oh, yeah.

1087
01:22:58,374 --> 01:23:03,854
Yeah, I pulled a couple of slides from Sailor's presentation.

1088
01:23:05,054 --> 01:23:06,314
I just had a screen grab them.

1089
01:23:07,214 --> 01:23:12,194
But digital equity absorbs the excess return.

1090
01:23:12,194 --> 01:23:13,294
I guess let's talk about this one.

1091
01:23:13,314 --> 01:23:14,954
Really digital capital, right?

1092
01:23:15,494 --> 01:23:19,934
Like what is going on with STRC and these instruments?

1093
01:23:19,992 --> 01:23:24,992
The excess risk and the excess return is being stripped off

1094
01:23:26,232 --> 01:23:29,552
and providing a low volatility digital credit product.

1095
01:23:29,552 --> 01:23:31,432
That's kind of that like more stable flat line,

1096
01:23:31,432 --> 01:23:33,032
11 and a quarter percent yield.

1097
01:23:33,872 --> 01:23:37,512
And the digital capital is the Bitcoin, right?

1098
01:23:37,512 --> 01:23:38,912
Like that's, if you zoom out

1099
01:23:38,912 --> 01:23:39,972
and you look at Bitcoin's price,

1100
01:23:39,972 --> 01:23:41,912
that's effectively how Bitcoin's been moving

1101
01:23:41,912 --> 01:23:46,192
just up into the right super volatile capital asset.

1102
01:23:46,192 --> 01:23:49,352
And how does this all work?

1103
01:23:49,352 --> 01:23:59,272
There's a conservation of energy and that excess risk and that excess return that you stripped off of the capital asset to provide the credit gets shoved into the equity.

1104
01:23:59,632 --> 01:24:11,152
So there's massive volatility because there's effectively like that energy needs to go somewhere like that excess energy that you stripped off of the credit instrument needs to go somewhere.

1105
01:24:11,392 --> 01:24:13,572
And it goes to the common equity.

1106
01:24:13,732 --> 01:24:17,032
And that's why we've seen this just incredible volatility in MSTR.

1107
01:24:17,032 --> 01:24:24,252
are and we haven't seen the volatility to the upside of the perpetual preferred equity model

1108
01:24:24,252 --> 01:24:30,832
in the bull market yet and uh yeah hopefully we've got that on the horizon here soon

1109
01:24:30,832 --> 01:24:36,272
i think every one of those if you look at the chart sorry to drop if you look at the digital

1110
01:24:36,272 --> 01:24:43,712
equity if you notice what's interesting about the chart is that it dips below like whatever at about

1111
01:24:43,712 --> 01:24:50,672
year seven, but after year seven, the digital equity does not drop below digital capital.

1112
01:24:52,352 --> 01:24:52,912
It goes higher.

1113
01:24:55,152 --> 01:25:00,592
It has much higher lows and then higher highs. In the previous cycles, they're saying that

1114
01:25:00,592 --> 01:25:05,712
you could trade below the digital credit and the digital equity, which is the MSTR return,

1115
01:25:05,712 --> 01:25:13,392
could be as low as whatever, 1%. But then it shows that after those two cycles, then it runs up.

1116
01:25:13,392 --> 01:25:15,392
I think that this chart is right.

1117
01:25:15,532 --> 01:25:18,812
The only question is you don't know which peak we're at.

1118
01:25:19,612 --> 01:25:19,992
Yeah, you don't.

1119
01:25:20,472 --> 01:25:21,932
And the thing is, you're never going to know.

1120
01:25:22,032 --> 01:25:25,672
Like, you don't know you're out of a bull market or out of a bear market until you're past it.

1121
01:25:25,712 --> 01:25:28,072
You don't know you're out of a bull market until you're past it, right?

1122
01:25:28,172 --> 01:25:30,312
Like, hindsight is 20-20.

1123
01:25:31,672 --> 01:25:36,772
So, you know, it just depends on your horizon on how you're viewing this entire ecosystem.

1124
01:25:36,972 --> 01:25:41,812
The one thing that's fascinating is, like, the 1X MNav bears, they're all, you know, running around.

1125
01:25:41,812 --> 01:25:44,132
to like, oh, yep, strategies at 1x MNAV.

1126
01:25:44,172 --> 01:25:44,912
It's going to be there forever.

1127
01:25:45,752 --> 01:25:50,032
Like these things go in both directions, right?

1128
01:25:50,052 --> 01:25:52,312
Like there will be a period of MNAV expansion.

1129
01:25:52,432 --> 01:25:56,472
We're seeing it right now on MSTR relative to IBIT.

1130
01:25:56,952 --> 01:25:59,332
I wouldn't be surprised if it expands farther

1131
01:25:59,332 --> 01:26:02,192
than it's expanded in the past as well.

1132
01:26:02,972 --> 01:26:05,552
Maybe, maybe not, just depending on the business model

1133
01:26:05,552 --> 01:26:07,292
and how this all plays out.

1134
01:26:07,292 --> 01:26:10,552
But like there will be expansion there

1135
01:26:10,552 --> 01:26:16,032
because there's this excess energy that's going into the equity, right, that we haven't seen

1136
01:26:16,032 --> 01:26:20,912
before. We've got this new instrument that's shoving this excess volatility into the common

1137
01:26:20,912 --> 01:26:27,012
stock. So it's just a fascinating relativity. Does that top chart also start to diverge

1138
01:26:27,012 --> 01:26:30,792
and stops intersecting? Yeah, it does. Yeah, at first I was thinking every one of those

1139
01:26:30,792 --> 01:26:34,652
intersections would be an opportunity to rebalance your portfolio between the two.

1140
01:26:34,652 --> 01:26:40,632
but at some point you just have to either rebalance periodically or just

1141
01:26:40,632 --> 01:26:44,792
hey it's up or something's down time to rebalance

1142
01:26:44,792 --> 01:26:52,412
i i mean even that concept like rebalancing bitcoin products five years ago that didn't

1143
01:26:52,412 --> 01:26:57,352
exist but what do you talk about rebalance my bitcoin product like i have bitcoin that's it

1144
01:26:57,352 --> 01:27:02,692
yeah you know like i guess i go rebalance into cash and some other stuff like what if i think

1145
01:27:02,692 --> 01:27:09,312
you know bitcoin has a blow off top but now you're like wait a minute this we've talked about

1146
01:27:09,312 --> 01:27:17,372
this since the launch of the press this is the ultimate business right like as as there are

1147
01:27:17,372 --> 01:27:23,972
quote unquote blow off tops people are going to rotate and they're going to rotate into the

1148
01:27:23,972 --> 01:27:31,732
equity instruments and that capital is going to get you know they're going to atm that capital

1149
01:27:31,732 --> 01:27:34,812
and go smash buy Bitcoin with it.

1150
01:27:36,492 --> 01:27:39,272
So it's just like, I mean, the plumbing,

1151
01:27:39,452 --> 01:27:40,532
the architecture of this market

1152
01:27:40,532 --> 01:27:42,032
is just fundamentally changed.

1153
01:27:42,812 --> 01:27:49,652
And the incentive is to hold like all of these things.

1154
01:27:50,692 --> 01:27:53,292
Jeff, can you scroll down to the,

1155
01:27:54,572 --> 01:27:57,272
yeah, this one, no, yeah, that one.

1156
01:27:58,392 --> 01:28:01,192
So digital equity, that's just MSCR common

1157
01:28:01,192 --> 01:28:17,552
And I think the important thing to note for MSTR common holders is that your alpha in this trade is the ability to get on the roller coaster and be on it for 10 years and you can't puke.

1158
01:28:17,952 --> 01:28:20,372
Right. And it's a violent roller coaster.

1159
01:28:20,932 --> 01:28:29,892
It's it as insane lows and insane highs and does, you know, backflips and it's uncomfortable at times.

1160
01:28:29,892 --> 01:28:33,412
but at the end of it, you're paid handsomely.

1161
01:28:33,672 --> 01:28:34,632
But it's two things.

1162
01:28:34,712 --> 01:28:37,632
It's not only the volatility, but it's also the duration, right?

1163
01:28:38,212 --> 01:28:43,112
And I think those two things in combination break people.

1164
01:28:43,332 --> 01:28:47,332
I think people can hold something for a long time if it's not very volatile,

1165
01:28:47,332 --> 01:28:52,452
or they can hold something for a short time if it's insanely volatile.

1166
01:28:52,732 --> 01:28:55,692
But those two things together, it's a really tough hold for people.

1167
01:28:55,692 --> 01:29:00,092
yeah can you overlay my 1080s on this chart

1168
01:29:00,092 --> 01:29:08,612
they hit the white line to fizzle out unfortunately you want to talk about getting motion sickness

1169
01:29:08,612 --> 01:29:14,152
yeah no mason that's a really good point but like and that's actually an interesting parallel

1170
01:29:14,152 --> 01:29:19,072
soleil it's like with a call option right you could just be levering long on ibit with like

1171
01:29:19,072 --> 01:29:23,772
call options or something like that or perpetual futures but you end up hitting this white line

1172
01:29:23,772 --> 01:29:28,972
and when you do in fact hit that white line on the bottom that's zero dollars you get liquidated

1173
01:29:28,972 --> 01:29:33,452
right something happens theta decay liquidation whatever it is this is all risk this is all

1174
01:29:33,452 --> 01:29:38,492
volatility associated risk but because of the nature of the new perpetual preferred structure

1175
01:29:39,132 --> 01:29:45,932
no longer do you have this zeroed out risk because of some liquidation preference it's

1176
01:29:45,932 --> 01:29:50,732
more like liquidation clause or margin clause etc etc so that that's what mason's saying is actually

1177
01:29:50,732 --> 01:29:55,132
the duration's real here now the duration's forever you know you can write any form of

1178
01:29:55,132 --> 01:30:01,192
volatility yeah so i can just buy some digital credit and then with my dividends i can fund my

1179
01:30:01,192 --> 01:30:08,412
uh 1080 addiction for forever yeah and what i would argue is you don't need the 1080s anymore

1180
01:30:08,412 --> 01:30:12,892
yeah like i don't know it's just a meme at this point yeah

1181
01:30:12,892 --> 01:30:22,912
I was, so the idea of funding things forever, I think that's a really fun idea. And I think that

1182
01:30:22,912 --> 01:30:30,732
should be a marketing ploy for strategy. Like the idea of you can fund something forever.

1183
01:30:31,652 --> 01:30:39,072
And I was thinking of like, you can fund, like if I died and I had a fund that had stretch in it,

1184
01:30:39,072 --> 01:30:44,332
I could fund getting flowers delivered to my grave every day or every month.

1185
01:30:44,572 --> 01:30:50,512
I know that's morbid, but it's a really powerful idea, especially if you're, I don't know,

1186
01:30:50,532 --> 01:30:57,172
I was thinking for like nonprofits, just the perpetual nature of this is really something

1187
01:30:57,172 --> 01:30:57,892
to behold.

1188
01:30:58,292 --> 01:31:00,512
And we've never seen anything like it.

1189
01:31:00,512 --> 01:31:05,272
I had several people come up to me trying to incorporate this into their business and

1190
01:31:05,272 --> 01:31:08,892
thinking about like, can I pay my employees in stretch?

1191
01:31:09,072 --> 01:31:15,852
or like have bonuses in stretch or how can I, how can I incorporate this?

1192
01:31:16,232 --> 01:31:22,032
And then I had somebody else come up to me like, okay, somebody needs to raise capital.

1193
01:31:22,212 --> 01:31:22,892
It's funny.

1194
01:31:22,992 --> 01:31:24,692
All this stuff ends up getting pitched to me.

1195
01:31:24,712 --> 01:31:25,812
I'm like, why don't you do this?

1196
01:31:26,612 --> 01:31:34,832
Somebody said, you know, you can go raise capital and buy stretch and fund a golf tournament,

1197
01:31:35,132 --> 01:31:37,172
like a professional golf tournament.

1198
01:31:37,172 --> 01:31:41,672
and it's just an annual golf tournament happens every year it's just funded by stretch it's once

1199
01:31:41,672 --> 01:31:45,952
once a year all of the capital raised just kind of rolls into stretch and when you need to pull

1200
01:31:45,952 --> 01:31:50,092
it out like you pull it out at the end of the year just so you can fund the event and you bring all

1201
01:31:50,092 --> 01:31:57,352
the pro golfers it's like the stretch event and it's like strategy sponsored and like these are

1202
01:31:57,352 --> 01:32:03,392
these are great ideas like these are all great ideas and like people are going to start doing

1203
01:32:03,392 --> 01:32:18,002
this stuff because there just room This is something that sailor talks about as well it like what uh the the basis point fee uh when blackrock sells instruments is like 50 basis points

1204
01:32:18,002 --> 01:32:27,282
25 50 you're like okay well the the delta between the other you know credit products and these new

1205
01:32:27,282 --> 01:32:31,122
new credit products is three, 400 basis points. Like, okay.

1206
01:32:32,502 --> 01:32:37,222
Like there's, there's room to five X the expense ratio on these instruments,

1207
01:32:37,222 --> 01:32:39,422
just by building a product built on digital credit.

1208
01:32:40,962 --> 01:32:41,622
You had to hear Mike.

1209
01:32:42,642 --> 01:32:43,302
See you Mike.

1210
01:32:43,622 --> 01:32:46,562
Yep. I'm going to drop off. You guys are doing a great job. Take care. Thanks.

1211
01:32:46,562 --> 01:32:47,262
I'll see you next week.

1212
01:32:52,482 --> 01:32:57,242
Well taken. And I'd agree. And I'd also say it's like, no,

1213
01:32:57,242 --> 01:33:01,362
not no, like, yes, like this is just the idea of not losing value over time.

1214
01:33:01,902 --> 01:33:04,702
Like we keep talking about like these perpetual financings and this, that,

1215
01:33:04,762 --> 01:33:06,902
and next thing. It's like, yes, that's all cool,

1216
01:33:06,962 --> 01:33:10,362
but that's just the way it should be. Like if you own capital,

1217
01:33:10,522 --> 01:33:12,462
if you own money, whatever it be,

1218
01:33:12,542 --> 01:33:15,062
like it should just be more valuable over time.

1219
01:33:15,322 --> 01:33:17,222
Like that's the idea behind owning the S&P.

1220
01:33:17,842 --> 01:33:20,942
Wow. Novel idea, Dan. You should like not lose money.

1221
01:33:22,162 --> 01:33:24,482
Exactly. And like every year you should, I mean,

1222
01:33:24,722 --> 01:33:27,222
you theoretically could earn interest on it, you know,

1223
01:33:27,242 --> 01:33:32,602
god forbid like there's so there's all kinds of things that we're saying here that are like whoa

1224
01:33:32,602 --> 01:33:36,202
and like breaking our minds but when you step back you're like oh my gosh that's just like an

1225
01:33:36,202 --> 01:33:42,362
effective capital world that's just an effective monetary policy you know like so that's my two

1226
01:33:42,362 --> 01:33:47,962
cents on that whole thing oh that's just debasement not outpacing inflation like or that's not you know

1227
01:33:49,962 --> 01:33:56,362
stretch is just money that doesn't get debased like there you go that's it that's it that's it

1228
01:33:57,242 --> 01:34:01,162
Mason, I've got a couple more here. Do you want to walk through these?

1229
01:34:02,762 --> 01:34:04,522
Nice diggity. It's kind of hard for me to see.

1230
01:34:05,642 --> 01:34:11,002
Yeah. Okay. Well, maximum dividend yield to be investment grade. I thought these were,

1231
01:34:11,002 --> 01:34:13,722
it was a fascinating little presentation there where he walks through

1232
01:34:14,842 --> 01:34:20,682
different assumptions on BTC ARR and duration and what the theoretical

1233
01:34:20,682 --> 01:34:28,422
the theoretical risk quality of these instruments based on those underlying assumptions.

1234
01:34:28,422 --> 01:34:38,642
So like at a BTC rating of four, BTC volatility of 30 and a 30% BTC ARR is that the effectively

1235
01:34:38,642 --> 01:34:45,102
saying that it's within this green zone, meaning that the credit spread is associated with

1236
01:34:45,102 --> 01:34:49,942
the same risk quality as investment grade instruments.

1237
01:34:50,682 --> 01:34:56,782
So it was really just pointing out that like the interest rate could be higher.

1238
01:34:57,102 --> 01:34:58,342
The BTC rating can be lower.

1239
01:34:58,442 --> 01:35:00,362
If you're a Bitcoin bull, the interest rate could be higher.

1240
01:35:00,462 --> 01:35:01,742
The BTC rating could be lower.

1241
01:35:01,742 --> 01:35:13,142
You can issue a very large amount of this instrument depending on your volatility and ARR assumptions and still have effectively investment grade style risk profile.

1242
01:35:13,842 --> 01:35:15,182
I think that's fascinating, right?

1243
01:35:15,262 --> 01:35:16,282
Like, I don't know.

1244
01:35:16,282 --> 01:35:23,162
in our we've got a perpetual preferred equity instrument out there at sata and it's just an

1245
01:35:23,162 --> 01:35:29,962
interesting market dynamic where people are comparing our instrument to stretch quite a bit

1246
01:35:29,962 --> 01:35:35,322
which which i think is fair it's a very similar type instrument but really like the entire world

1247
01:35:35,322 --> 01:35:38,442
we should be looking at everything else in the market we should be looking at all the other

1248
01:35:38,442 --> 01:35:44,122
credit instruments and the credit spread between the actual risk return credit spread between those

1249
01:35:44,122 --> 01:35:50,762
instruments and these instruments like this is a new bucket of credit products in the market

1250
01:35:50,762 --> 01:35:58,442
and that relativity between what exists today and what exists now is it's like that that's where

1251
01:35:59,242 --> 01:36:05,242
in my opinion i think everybody should be focusing their energy shining a light on the risk profile

1252
01:36:05,242 --> 01:36:14,042
of everything else relative to these things so that's effectively my call to action is like

1253
01:36:14,042 --> 01:36:17,682
build more comparisons to everything else in the market.

1254
01:36:17,682 --> 01:36:20,682
Like everybody's done a great job on building out

1255
01:36:21,722 --> 01:36:24,522
all of this analytics based on these instruments.

1256
01:36:24,842 --> 01:36:27,082
All phenomenal, all fantastic.

1257
01:36:27,082 --> 01:36:28,282
Keep doing it.

1258
01:36:28,282 --> 01:36:32,442
But the real unlock is shining a light on the relativity

1259
01:36:32,442 --> 01:36:36,522
to the rest of the world and being able to share that with other people,

1260
01:36:36,922 --> 01:36:39,002
like other institutional managers.

1261
01:36:39,002 --> 01:36:41,282
Like it would be amazing if I could walk in the door

1262
01:36:41,282 --> 01:36:47,222
at an insurance company and say, hey, insurance company A, I analyzed your balance sheet.

1263
01:36:47,502 --> 01:36:50,402
Look at all the instruments that you hold and look at this one.

1264
01:36:51,642 --> 01:36:56,802
And just have all the data. Look at the website, like see everything here. And that would be

1265
01:36:56,802 --> 01:37:04,082
fascinating. I think there's a big, huge hole that can be filled that will help equip all of

1266
01:37:04,082 --> 01:37:08,922
these people that are operating in the market environment to communicate this to the rest of

1267
01:37:08,922 --> 01:37:17,782
the world. So, uh, what struck me about the event was when these slides are going like people at my

1268
01:37:17,782 --> 01:37:22,282
table and around the room are screenshotting them because they would be up on the screens

1269
01:37:22,282 --> 01:37:26,922
and they're like screenshotting. Cause they're like, okay. And they'll just plug them into AI.

1270
01:37:26,922 --> 01:37:30,662
Now they're like doing research in the middle of the thing, or, okay, I'm going to save this for

1271
01:37:30,662 --> 01:37:36,262
later. And I'm going to do a bunch of research. It's just kind of crazy that, um, the people who

1272
01:37:36,262 --> 01:37:41,862
are just into this are so far ahead of the people that you're talking about that haven't even

1273
01:37:41,862 --> 01:37:49,402
like contemplated making these comparisons and like we're definitely in a cult because

1274
01:37:49,402 --> 01:37:55,842
the obsessiveness that you know people are you know the lengths that people are going to to go

1275
01:37:55,842 --> 01:38:01,002
to these events and like take pictures during the five seconds that this is up on a screen

1276
01:38:01,002 --> 01:38:05,062
just to bookmark it and do the research you know stuff that you're talking about later

1277
01:38:05,062 --> 01:38:09,942
is uh it's just insane and it's going to continue to grow

1278
01:38:09,942 --> 01:38:17,122
yeah i had people taking pictures of my my risk presentation and talking to me afterwards about it

1279
01:38:17,122 --> 01:38:23,002
and uh yeah there's just there's so much opportunity to continue to grow in the space

1280
01:38:23,002 --> 01:38:29,442
like i'm i'm honestly surprised too like i'm i'm figuring out what my role is in this is in this

1281
01:38:29,442 --> 01:38:35,762
entire world and ecosystem and figuring out like getting closer and closer to capital and how to

1282
01:38:35,762 --> 01:38:42,622
how to integrate these instruments into the traditional world it's uh yeah it's a fascinating

1283
01:38:42,622 --> 01:38:49,902
fascinating time we need you training the llms to understand uh digital risk right somebody's got to

1284
01:38:49,902 --> 01:38:58,822
do it all right here's a here's a uh a question when does strc overtake the preferred uh aggregate

1285
01:38:58,822 --> 01:39:08,582
outstanding market cap when is it 300 billion 300 billion what year is it 100x from here it's 100x

1286
01:39:08,582 --> 01:39:24,742
from here and it's 2026 today honestly i think like 2031 2030 2030 2030 that was they sold 8 billion

1287
01:39:24,742 --> 01:39:31,862
last year okay so what if it like what if it what if it triples every year yeah i was gonna say like

1288
01:39:31,862 --> 01:39:39,722
the second bull from here yeah are we in a bull right now so are we in a bear no i'm saying from

1289
01:39:39,722 --> 01:39:44,882
the next one you know if we get one this year 2027 okay okay then the next one after that

1290
01:39:44,882 --> 01:39:48,922
we probably get there look i don't know what you guys are talking about we're just going up only

1291
01:39:48,922 --> 01:39:49,542
until 2030.

1292
01:39:50,202 --> 01:39:51,522
It could be.

1293
01:39:51,582 --> 01:39:52,342
It could be Apple.

1294
01:39:52,462 --> 01:39:52,962
Probably not.

1295
01:39:53,422 --> 01:39:55,202
But it could be.

1296
01:39:55,682 --> 01:39:56,662
You think about, again,

1297
01:39:56,722 --> 01:39:57,642
it's like it all comes back

1298
01:39:57,642 --> 01:39:58,442
to risk profile,

1299
01:39:58,542 --> 01:39:59,222
these things, right?

1300
01:39:59,262 --> 01:39:59,842
Like, I mean,

1301
01:39:59,922 --> 01:40:01,522
if they sell more of it,

1302
01:40:01,562 --> 01:40:02,402
they have more Bitcoin.

1303
01:40:02,622 --> 01:40:03,842
Credit quality goes higher.

1304
01:40:05,302 --> 01:40:05,822
You know,

1305
01:40:05,822 --> 01:40:07,602
like the BTC rating gets better.

1306
01:40:09,742 --> 01:40:11,262
And it makes the equity

1307
01:40:11,262 --> 01:40:11,882
more interesting.

1308
01:40:12,042 --> 01:40:12,782
They raise more capital

1309
01:40:12,782 --> 01:40:13,242
on the equity.

1310
01:40:13,442 --> 01:40:15,102
Like the credit profile

1311
01:40:15,102 --> 01:40:17,022
gets better.

1312
01:40:18,922 --> 01:40:23,882
the price of bitcoin goes higher the credit profile gets better like that it's all about

1313
01:40:23,882 --> 01:40:31,162
credit that's another big takeaway i've had my conversations with sailor this is all about

1314
01:40:31,162 --> 01:40:36,922
credit profile like the credit impacts the equity the equity impacts the credit and they're both

1315
01:40:36,922 --> 01:40:43,162
symbiotic and they both rely on each other so you know one of the questions i asked him is like you

1316
01:40:43,162 --> 01:40:47,262
You know, how, how do I like, how can I think about amplification?

1317
01:40:47,262 --> 01:40:48,922
What's too high of amplification?

1318
01:40:49,202 --> 01:41:02,452
You know how does this how does this like whole thing work together And his response to me was just because your airplane can pull the G without the wings flying off the plane doesn mean your passengers won be dead by the time you get off the plane

1319
01:41:04,292 --> 01:41:09,732
it's like you know the like you might be having a great time flying this airplane

1320
01:41:09,732 --> 01:41:14,052
and uh you land and you know wipe your hands and you're like woohoo that was fun and then you go

1321
01:41:14,052 --> 01:41:20,372
back and there's just blood everywhere because everybody killed each other it's like this these

1322
01:41:20,372 --> 01:41:26,452
are jumbo jets and they rely on everybody being happy like if you're if your guy is sitting in

1323
01:41:26,452 --> 01:41:33,012
first class spills his wine he's going to sue you you know so and what what he was meaning by that is

1324
01:41:33,012 --> 01:41:38,932
the the instruments are so symbiotic and they they work they work in tandem together like if you're

1325
01:41:38,932 --> 01:41:46,132
if your credit investors are happy your equity investors are happy um and that that relationship

1326
01:41:46,132 --> 01:41:52,532
is just critically important. And there was one comment that he made in the interview. It was

1327
01:41:52,532 --> 01:41:59,172
Fong and Saylor at the end on the Bitcoin for Corporation panel. And he said, somebody asked

1328
01:41:59,172 --> 01:42:06,132
about, I think it was like dilution or ATM. And Saylor's comment was, every decision we make

1329
01:42:07,652 --> 01:42:14,292
is focused on the credit quality of the company in the short term or the long term. So I think

1330
01:42:14,292 --> 01:42:20,372
the response was effectively like, I don't care about your MNAV numbers. I'm raising capital to

1331
01:42:20,372 --> 01:42:26,772
improve the credit quality of my company every day. Every decision I make, is this credit positive

1332
01:42:26,772 --> 01:42:33,252
or credit negative? Is that improving my company or not improving my company?

1333
01:42:35,092 --> 01:42:41,972
Fascinating response. Why did he say that? Because the preferred equities are the product.

1334
01:42:44,292 --> 01:42:50,692
that is the product like if you want to go sell and i don't know if you noticed there was hardly

1335
01:42:50,692 --> 01:42:57,892
any talk on mstr during through the entire event like very little some of it was about like uh you

1336
01:42:57,892 --> 01:43:02,852
know this conservation of energy excess volatility goes to common stock but all of it was about the

1337
01:43:02,852 --> 01:43:07,972
product the digital credit product mstr will figure itself out right people will figure out

1338
01:43:07,972 --> 01:43:12,692
what the valuation of mstr is the market will dictate what that is it's probably going to be

1339
01:43:12,692 --> 01:43:17,692
be significantly higher than it is right now. But the product and the focus and the credit

1340
01:43:17,692 --> 01:43:23,452
quality of the product is the biggest, most important thing for the company, period.

1341
01:43:23,452 --> 01:43:27,492
Yeah, I really like, oh, you want to jump? See you, Dan?

1342
01:43:29,092 --> 01:43:29,592
See you, Dan.

1343
01:43:31,632 --> 01:43:38,752
I like that response to that question. I think he said pretty bluntly, we don't make,

1344
01:43:38,752 --> 01:43:44,332
you know, dilutive decisions or something along those lines, right?

1345
01:43:44,392 --> 01:43:48,692
We don't think dilutive decisions, like every decision is accretive, credit accretive.

1346
01:43:48,692 --> 01:43:57,132
Yeah. So people who are, you know, the Twitter trolls or the journalists.

1347
01:43:57,552 --> 01:43:58,812
The dilution bears, I guess.

1348
01:43:58,892 --> 01:43:59,552
Yeah, yeah, yeah.

1349
01:43:59,592 --> 01:44:00,412
Dilution bears.

1350
01:44:00,672 --> 01:44:06,692
It's not real. Like everything they're doing is accretive, right?

1351
01:44:06,692 --> 01:44:12,972
Like the incentive for them or for a sailor as the largest shareholder, right?

1352
01:44:12,972 --> 01:44:16,692
Like obviously it's to do the most creative thing possible.

1353
01:44:17,532 --> 01:44:21,552
And be consistent, reliable, transparent, understandable.

1354
01:44:21,972 --> 01:44:28,692
Like, you know, whether you're shorting the company or longing the company, you need to know like this is what like that's what he's going to do.

1355
01:44:29,212 --> 01:44:29,692
Yeah.

1356
01:44:30,172 --> 01:44:30,612
Yeah.

1357
01:44:30,732 --> 01:44:30,892
Yeah.

1358
01:44:30,952 --> 01:44:34,312
These morons saying sailors diluting the shareholders.

1359
01:44:34,592 --> 01:44:35,952
He is the largest shareholder.

1360
01:44:35,952 --> 01:44:42,592
man he's not he's not diluting himself yeah his whole thing is like i want more bitcoin exposure

1361
01:44:42,592 --> 01:44:48,672
period like how do i how do i do that how do i create the most efficient vehicle to do that

1362
01:44:48,672 --> 01:44:57,132
i i create digital credit i sell digital credit and that amplifies my equity my digital equity

1363
01:44:57,132 --> 01:45:04,912
yeah uh yeah there's a lot of uh dilution bears out there it's a it's a creative they're all

1364
01:45:04,912 --> 01:45:05,952
accretive transactions.

1365
01:45:06,372 --> 01:45:07,712
Like you think about it again,

1366
01:45:08,392 --> 01:45:09,552
like look at the balance sheet.

1367
01:45:09,812 --> 01:45:11,352
The balance sheet of the company in 2020

1368
01:45:11,352 --> 01:45:13,212
was they had $500 million.

1369
01:45:14,652 --> 01:45:15,832
Now they've got 50,

1370
01:45:16,352 --> 01:45:16,692
I don't know,

1371
01:45:16,712 --> 01:45:19,112
$55 billion worth of Bitcoin.

1372
01:45:20,252 --> 01:45:21,892
I think that's pretty accretive.

1373
01:45:24,432 --> 01:45:25,092
So what?

1374
01:45:25,152 --> 01:45:26,032
They sold a bunch of equity.

1375
01:45:26,172 --> 01:45:27,532
Like they've got $55 billion.

1376
01:45:27,972 --> 01:45:29,052
Like who,

1377
01:45:29,292 --> 01:45:30,292
like would you not,

1378
01:45:30,452 --> 01:45:31,652
like do you not want that?

1379
01:45:31,732 --> 01:45:33,272
Do you not want to go from $500 million

1380
01:45:33,272 --> 01:45:38,132
dollars to managing 50 billion dollars and probably like the largest company and the largest balance

1381
01:45:38,132 --> 01:45:43,572
sheet the world's ever seen 10 years from now like no that's a no-brainer everybody wants it

1382
01:45:43,572 --> 01:45:51,652
i think uh one last thing we should touch on before we wrap up was the the conversations we heard

1383
01:45:51,652 --> 01:46:01,232
in the the banking realm right from from morgan stanley and and city um they they came out and

1384
01:46:01,232 --> 01:46:10,712
kind of confirmed what I think Saylor has been alluding to for a long time, but also recently,

1385
01:46:10,712 --> 01:46:17,952
which is banks are building infrastructure. And actually, they need to build this infrastructure

1386
01:46:17,952 --> 01:46:26,472
because a lot of the capital, when it goes into the crypto ecosystem, it doesn't come back in.

1387
01:46:26,472 --> 01:46:33,812
right so so it's really a threat to their whole entire business model in general of course so

1388
01:46:33,812 --> 01:46:40,572
i think i think the banks are put in a position of adapt or die and and what i think we've started

1389
01:46:40,572 --> 01:46:48,692
to see is they're starting to adapt at their own speed but in time yeah as soon as that capital

1390
01:46:48,692 --> 01:46:55,232
leaves it's gone you got you got jamie diamond sitting on uh uh the news saying like oh if you

1391
01:46:55,232 --> 01:47:00,712
want to offer yield like go be a bank and it's like okay then cracking gets announced that they're a

1392
01:47:00,712 --> 01:47:06,812
bank and uh you know it's just the timing is just so crazy but you're completely right you've got

1393
01:47:06,812 --> 01:47:12,372
to operate within this ecosystem and think through it or else you're going to get left behind

1394
01:47:12,372 --> 01:47:23,032
so you got perspective yeah the the guys that i interviewed um it was uh it was anchor wait

1395
01:47:23,032 --> 01:47:26,552
anchor schedule i think was the first to have the charter right and then uh

1396
01:47:28,312 --> 01:47:33,832
bitco um mike belshie's bitco also had um ended up getting a charter as well so they're

1397
01:47:33,832 --> 01:47:37,192
they're making these things happen and one of the questions that i had asked was

1398
01:47:38,072 --> 01:47:46,152
like uh simon dixon tried to get this done a long time ago he had been kind of an insider in the um

1399
01:47:47,192 --> 01:47:52,152
the the financial system and he's like hey i want to build a bitcoin bank you know like

1400
01:47:52,152 --> 01:47:58,952
no rehypothecation and just like hey we take deposits and then we just we don't uh you know

1401
01:47:58,952 --> 01:48:04,232
do all this funny business and they wouldn't give him the charter he's like they're like no you you

1402
01:48:04,232 --> 01:48:08,712
can you can do that but you have to work with another bank that's going to do the rehypothecation

1403
01:48:08,712 --> 01:48:14,472
for you and um they just wouldn't do it so the landscape is either changed or you know

1404
01:48:14,472 --> 01:48:22,792
know, to allow these things to happen. But the whole economic system is kind of being,

1405
01:48:23,132 --> 01:48:27,692
their hand is being forced to adopt Bitcoin and make way for Bitcoin.

1406
01:48:32,872 --> 01:48:40,112
Completely. I think I'm just pulling up here. Yeah, Mike Belshi, boom. He responded to Jamie

1407
01:48:40,112 --> 01:48:47,472
jamie diamond uh share my screen here oh did he yeah he did he said right so this is the jamie

1408
01:48:47,472 --> 01:48:56,592
diamond interview this is why i saw it so jp morgan is joe jamie diamond pushes back on crypto firms

1409
01:48:56,592 --> 01:49:00,832
says stablecoin rewards are the same as bank interest and he said we did become a bank and

1410
01:49:00,832 --> 01:49:04,912
we have all the same requirements diamondless in addition to that we have better liquidity than any

1411
01:49:04,912 --> 01:49:11,632
bank even better than jpm because we hold all assets in 100 reserve no rehab application and

1412
01:49:11,632 --> 01:49:17,552
uh it's just an epic move you got a publicly traded ceo that's blasting back on jamie diamond

1413
01:49:17,552 --> 01:49:26,512
about um banks providing or stable coins providing interest it's i mean this video is so cringe if

1414
01:49:26,512 --> 01:49:33,392
you haven't seen it go watch it yeah it's it's it's pretty pathetic like i i they have to adopt

1415
01:49:33,392 --> 01:49:54,422
Because otherwise like stretch in a tokenized version like buck and then just a stable coin and then Bitcoin like what else do you need That is an economy outside of the traditional financial system That is it already big It already half a billion people

1416
01:49:54,422 --> 01:50:01,222
but it's only going to get bigger over time. And like the incentives to stick with the slow system

1417
01:50:01,222 --> 01:50:07,942
are getting close to zero. Yeah. Like why, and especially you're going to have,

1418
01:50:07,942 --> 01:50:09,702
You know, older people are going to die off.

1419
01:50:09,702 --> 01:50:12,702
Younger people are just natively computer, right?

1420
01:50:12,702 --> 01:50:19,342
They're natively working on iPhones and cell phones and digital digitally native.

1421
01:50:20,462 --> 01:50:22,982
And they just are going to want to do things differently.

1422
01:50:23,382 --> 01:50:25,862
And they're going to operate with the companies that they grew up with.

1423
01:50:25,862 --> 01:50:35,542
Like, I'm probably going to want to operate with BitGo and River and, you know, whatever other company that I'm used to interacting with, because that legacy system.

1424
01:50:35,542 --> 01:50:46,642
I mean, I just got off of like my JP Morgan, like my Sapphire Reserve credit card because they were paying me all these points and the points were getting debased and I couldn't use them.

1425
01:50:46,722 --> 01:50:52,782
And I'm like, this is bullshit. And I just cashed them in for cash, you know, cut up the credit card, deleted it.

1426
01:50:53,402 --> 01:50:56,742
And now I shifted over. I've got a Gemini card for now.

1427
01:50:57,362 --> 01:51:02,682
But like, why would I not get all of the Bitcoin back credit cards or the Bitcoin reward credit cards?

1428
01:51:02,682 --> 01:51:05,502
And especially when the price of Bitcoin is down 40%, right?

1429
01:51:05,622 --> 01:51:08,342
Like the rewards have doubled effectively.

1430
01:51:09,182 --> 01:51:11,542
And it's like, why not?

1431
01:51:11,662 --> 01:51:12,882
Like if those products are available,

1432
01:51:13,082 --> 01:51:18,062
like I have no reason to use any of those like legacy systems

1433
01:51:18,062 --> 01:51:21,382
that are just dated and they're not keeping up with the times.

1434
01:51:22,682 --> 01:51:23,202
Yeah.

1435
01:51:23,302 --> 01:51:26,042
And then you add like AI agents into that

1436
01:51:26,042 --> 01:51:28,302
and the speed at which they will transact

1437
01:51:28,302 --> 01:51:31,702
and the volume and traditional systems

1438
01:51:31,702 --> 01:51:33,162
aren't designed for that.

1439
01:51:33,342 --> 01:51:35,022
We're going into a fundamentally

1440
01:51:35,022 --> 01:51:36,262
a new world.

1441
01:51:36,702 --> 01:51:38,002
I think one of the coolest parts

1442
01:51:38,002 --> 01:51:39,142
about the preferred equity

1443
01:51:39,142 --> 01:51:40,842
is it's using existing

1444
01:51:40,842 --> 01:51:43,622
traditional finance wrappers.

1445
01:51:45,742 --> 01:51:46,262
Okay.

1446
01:51:46,882 --> 01:51:48,962
I can understand banks

1447
01:51:48,962 --> 01:51:50,382
pushing back on stable coins.

1448
01:51:50,502 --> 01:51:50,722
You're like,

1449
01:51:50,842 --> 01:51:52,142
I can't track this.

1450
01:51:52,522 --> 01:51:53,642
It's different from the track.

1451
01:51:53,742 --> 01:51:54,502
It's on its own blockchain.

1452
01:51:54,802 --> 01:51:55,462
It's somewhere else.

1453
01:51:55,562 --> 01:51:57,982
It might be based in the Cayman Islands

1454
01:51:57,982 --> 01:51:58,842
or something like that.

1455
01:51:59,062 --> 01:52:00,682
And it sounds sketchy.

1456
01:52:00,682 --> 01:52:05,722
it's probably sketchy for even politicians to try to understand because they like can't wrap their

1457
01:52:05,722 --> 01:52:13,242
head around it but then you look at like stretch and sata and the other perhaps it's like this is

1458
01:52:13,242 --> 01:52:19,082
publicly traded it's an equity it sits in a brokerage like you could get it on robin hood or

1459
01:52:19,082 --> 01:52:24,282
any other brokerage account and like all it takes is reframing reframing like how you think about

1460
01:52:24,282 --> 01:52:30,122
like where that money sits and all of a sudden you're like if my bank account is an app that i

1461
01:52:30,122 --> 01:52:36,462
I have on my phone and it's just tracks some numbers that sit there.

1462
01:52:36,462 --> 01:52:38,082
Who cares where it sits?

1463
01:52:38,082 --> 01:52:41,882
You know, like if it's in Robin Hood or yeah.

1464
01:52:41,882 --> 01:52:42,882
Yeah.

1465
01:52:42,882 --> 01:52:43,882
Who cares?

1466
01:52:43,882 --> 01:52:44,882
Who cares where it sits?

1467
01:52:44,882 --> 01:52:45,882
Like, well, I can wait.

1468
01:52:45,882 --> 01:52:46,882
Okay.

1469
01:52:46,882 --> 01:52:49,882
This is this is a digital world, right?

1470
01:52:49,882 --> 01:52:55,802
Like historically, if you had to go to a bank or something like you might feel differently,

1471
01:52:55,802 --> 01:52:58,742
like to go get money, you actually had to go somewhere to go get it out.

1472
01:52:58,742 --> 01:53:01,502
Like I don't, I don't need to go anywhere.

1473
01:53:02,002 --> 01:53:05,162
Like I can move my money and I can just sit on an app and sit somewhere.

1474
01:53:05,162 --> 01:53:10,962
Like why not have it where I can have like be earning capital on it.

1475
01:53:11,222 --> 01:53:14,942
And I don't have to do anything weird or new or novel.

1476
01:53:15,202 --> 01:53:16,922
Like it's just the existing system.

1477
01:53:17,522 --> 01:53:20,822
So yeah, man, I mean, it's cool.

1478
01:53:22,402 --> 01:53:23,122
Super cool.

1479
01:53:24,162 --> 01:53:24,602
Okay.

1480
01:53:24,702 --> 01:53:25,302
Final thoughts.

1481
01:53:25,362 --> 01:53:26,062
We got to wrap it up.

1482
01:53:26,062 --> 01:53:34,682
we'll pass it around. Soleil, final thoughts. Yeah, so I always get encouraged when the

1483
01:53:34,682 --> 01:53:40,902
control system starts to bend the knee, but then my paranoid crypto anarchist starts to kick in a

1484
01:53:40,902 --> 01:53:46,742
little bit. And sometimes when it seems like the control system is capitulating, it's really just

1485
01:53:46,742 --> 01:53:53,002
kind of trying to transition from the proof of war military industrial complex and money debasement

1486
01:53:53,002 --> 01:53:57,562
financial industrial complex to a technical industrial complex. So they're going to be

1487
01:53:57,562 --> 01:54:03,622
introducing AI, stable coins, CBDCs, social credit scores, all that junk. And it's less of a system

1488
01:54:03,622 --> 01:54:09,342
collapse. And it seems like it's a little bit more of a controlled demolition, if you get my meaning.

1489
01:54:10,342 --> 01:54:14,982
And sometimes it gives me a little bit of a false sense that progress is being made when the old

1490
01:54:14,982 --> 01:54:20,202
system falls, but it's kind of all according to plan. And so they're trying to replace the old

1491
01:54:20,202 --> 01:54:27,262
control system with the new and only Bitcoin exists outside of all control systems. So the

1492
01:54:27,262 --> 01:54:32,742
only thing we really have to do is stack sats and cold storage, run nodes, join a decentralized

1493
01:54:32,742 --> 01:54:38,362
mining pool. And none of the paper Bitcoin FUD really matters. Just stack sats.

1494
01:54:38,882 --> 01:54:40,382
Stack sats. Always be sure.

1495
01:54:41,382 --> 01:54:50,182
Yeah. I'll second that. I think what stretch is an amazing innovation for short term

1496
01:54:50,182 --> 01:54:58,162
money, right? If you're a Bitcoin or if you believe in Bitcoin, this is an actual tool that

1497
01:54:58,162 --> 01:55:05,842
we can use that's going to be helpful in our lives. I think same thing with MSTR. I think it's

1498
01:55:05,842 --> 01:55:11,322
an amazing trade, but of course it doesn't have the properties of Bitcoin. So as we're having

1499
01:55:11,322 --> 01:55:19,202
these conversations, keep in mind the wide range of risks and tail events and

1500
01:55:19,202 --> 01:55:34,682
You know, Bitcoin, there is no second best, but I am I am super excited about what is being created here and how it's going to progress Bitcoin in, you know, to the next level.

1501
01:55:35,142 --> 01:55:39,242
Yeah. I completely agree with both of you guys. Stack and sats hard.

1502
01:55:39,242 --> 01:55:42,442
The coolest part is you're aligned with Saylor.

1503
01:55:43,182 --> 01:55:44,322
You're stacking sats.

1504
01:55:44,482 --> 01:55:45,662
You're like, great.

1505
01:55:45,862 --> 01:55:59,562
Now a company is going to orange pill the credit market and bring more energy into this market, which is good for anybody that's holding cold storage Bitcoin.

1506
01:55:59,562 --> 01:56:01,922
And you want to hold this long term as a capital asset.

1507
01:56:01,922 --> 01:56:08,722
like there will likely be a point in time where the price of Bitcoin is as such, you might be

1508
01:56:08,722 --> 01:56:14,402
willing to part with your Bitcoin because the MSTR shoving as much capital as humanly possible

1509
01:56:14,402 --> 01:56:22,082
into it. Or you're thinking about, you know, like building a business on top of it. So you want to

1510
01:56:22,082 --> 01:56:27,422
run your own flywheel and try to help convert the world onto a Bitcoin standard of truth money.

1511
01:56:27,422 --> 01:56:32,942
So, yeah, I mean, I'm incredibly bowled up here.

1512
01:56:33,102 --> 01:56:34,902
It was a big day in the Bitcoin market.

1513
01:56:35,222 --> 01:56:39,442
I think I'm watching volume every day.

1514
01:56:39,962 --> 01:56:45,922
I'm watching these instruments trade every minute and how they're trading and how they're moving.

1515
01:56:46,962 --> 01:56:49,322
I think the equities are incredibly exciting.

1516
01:56:50,502 --> 01:56:56,242
And, yeah, this is everybody spending a lot of energy to build out the digital credit ecosystem.

1517
01:56:56,242 --> 01:57:01,862
and there's no better place to be working in right now, in my opinion.

1518
01:57:03,482 --> 01:57:07,442
So figuring out how you can incorporate digital credit into your company,

1519
01:57:07,582 --> 01:57:13,542
your corporation, your life is energy worth spending.

1520
01:57:14,662 --> 01:57:19,122
Yeah, I think that was the biggest takeaway from Strategy World

1521
01:57:19,122 --> 01:57:23,362
was go out into your community and you now have this tool,

1522
01:57:23,362 --> 01:57:24,762
show people this tool.

1523
01:57:24,762 --> 01:57:26,222
it will improve their life.

1524
01:57:26,562 --> 01:57:27,842
It will improve the Bitcoin network.

1525
01:57:28,422 --> 01:57:31,202
It's like showing people the wheel.

1526
01:57:31,482 --> 01:57:34,542
Like showing people Bitcoin is like showing them fire, right?

1527
01:57:34,562 --> 01:57:37,602
Like you show them fire and you're like, wow, that's crazy cool.

1528
01:57:37,662 --> 01:57:38,882
And you're like, wait, this could kill me.

1529
01:57:39,722 --> 01:57:41,882
And then, but like STRC is like the wheel.

1530
01:57:42,042 --> 01:57:42,862
You're like, okay.

1531
01:57:43,022 --> 01:57:43,742
Yeah, yeah, yeah.

1532
01:57:43,802 --> 01:57:45,682
You know, like it's not going to kill you,

1533
01:57:45,742 --> 01:57:47,842
but your life's going to be a lot easier if you use it.

1534
01:57:50,382 --> 01:57:54,002
STRC is like a space heater to fire, right?

1535
01:57:54,002 --> 01:58:00,522
It gives you the warmth, but none of like the, you know, burning fire, smoke, all that.

1536
01:58:00,622 --> 01:58:01,762
It's just the warmth.

1537
01:58:02,022 --> 01:58:05,442
It's just, you know, you could turn it on and it keeps you warm, but it's like.

1538
01:58:06,022 --> 01:58:07,262
No carbon monoxide poisoning.

1539
01:58:07,782 --> 01:58:07,942
Yeah.

1540
01:58:08,022 --> 01:58:10,502
None of the other benefits of the fire.

1541
01:58:10,882 --> 01:58:13,282
So, yeah.

1542
01:58:13,402 --> 01:58:15,382
So thank you everybody for being here.

1543
01:58:15,562 --> 01:58:18,102
Please like and subscribe on the YouTube channel.

1544
01:58:18,102 --> 01:58:22,862
It helps us, helps amplify the message and get it out further and appreciate the time.

1545
01:58:22,862 --> 01:58:25,482
and we will see you all next week.

1546
01:58:25,562 --> 01:58:26,462
I think I will be on the road,

1547
01:58:26,582 --> 01:58:27,602
but yeah, we'll catch you next week.

1548
01:58:28,882 --> 01:58:29,382
See y'all.

1549
01:58:29,802 --> 01:58:30,122
Adios.