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People that use fiat currency as a store of value, we call them more.

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We call them more.

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People that use fiat currency, we call them four.

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There's a name for them.

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We call them four.

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We call them four.

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okay the point is if if you have the superior asset it's going up forevermore

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right i mean right but i mean we should all

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here we go welcome back 2026 true north the investment grade bitcoin podcast episode 50

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Let's get everybody up on stage. We are back. We are going to hit it hard. There's so much to talk

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about. All right. Is everybody refreshed from a little bit of time off? I can tell you I am.

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I'm ready to go. There's a lot to be excited about here and I'm excited to talk about it.

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So welcome to... Let me see if I get my screen off. Maybe not. There we go.

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Okay. Welcome back, everybody. Here we go. We call them poor.

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Okay. True North, the investment grade Bitcoin podcast. This is a podcast about Bitcoin and how

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it's infiltrating the financial markets. We talk about all things Bitcoin. We talk about strategy.

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We talk about Bitcoin treasury companies. We talk about securitized finance. We talk about digital

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credit. We talk about digital capital, how it's all getting integrated into the market. And then

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we also talk about just general macro environment and finance. So this collective crew we've brought

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together. We've been talking about this for about 65 weeks in a row now and excited to get back to

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it for 2026. Thank God we made it through 2025. What a crappy year. We made it through and

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congratulations to everybody for making it through. That was a terrible year. However,

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every setback is a setup for a comeback. And a lot of this episode is to talk about everything

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that's going on in this market environment. We're talking about what is the outlook for 2026? And

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what is potentially on the horizon here in the digital credit environment for Bitcoin and the

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infrastructure that sits behind it? I think there's a lot going on. We'll talk about macro

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environment with Dan. He's got a little bit of a presentation. We're going to do a macro speed run.

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We're going to get into the PREF landscape. Effectively, what is the status of the

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perpetual preferred equities. How have they performed since they were launched? What is the

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environment in which they've had to operate in? We'll talk about maybe some pension funds and get

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into insurance companies and strategic finance. What's happening on the back end? How does demand

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change over time? And then we'll talk about 2026 and the horizon. Maybe we'll make some

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guesstimates on how much Bitcoin MSTR is going to hold at the end of the year for 2026. And maybe

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maybe some Bitcoin estimates for what kind of performance we're going to see throughout the year.

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And thank you. See everybody in the chat. Thank you for popping in the chat. It's awesome.

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And yeah, please let us know where you're from, what you're up to. And yeah, let's get cooking.

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Mike is fuzzy. Can you guys hear me now? Better? Yeah. Okay, cool.

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All right. Well, let's jump right into it.

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STRC had a fantastic day.

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So we are...

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STRC is at a price of $99.

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It closed at $100 even.

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We think there was a significant amount of capital that was raised today

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as STRC was bouncing right at par.

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So exciting day on that front.

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And let's just jump into it.

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Maybe we'll pass it over to Tim.

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Maybe we'll do a round circle.

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Just what are you guys thinking about right now in 2026?

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What are things that are top of mind?

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And yeah, what's going on with you guys?

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Let's pass it around.

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Well, number one, what you're about to hear may be amazing, but it's not financial advice.

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Oh, in real life.

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It's for informational and educational purposes only.

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It's still not financial advice, even in 2026?

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yeah maybe 2027 i don't know but uh i think digital yeah i think digital credits the theme of

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of the year uh you know if 2025 was year zero as you've said jeff then 2026

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mathematically it's got to be year one that's all i got yeah it's uh it's about a year old and

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you're interviewing everybody in the entire market to talk about this stuff so a lot cooking keep on

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keep up the good work. Mason, what are you thinking about? What's going on in Brazil?

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Just a state of the market. What's going on? You did a stock buy.

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Yeah. Yeah. We're, can you guys hear me? We're, we're doing share buybacks at Melius and it's

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exciting, you know, increasing Bitcoin per share by any means possible. So we're about 40% through

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our goal, which is 10% of the free flow. That's the advantage of having a cash flow in business.

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We're able to take our cash flow and buy Bitcoin or our stock at any price. So actually,

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it's a little counterintuitive. As Bitcoin goes down, our Bitcoin per share goes up,

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or at least our projections.

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So we're feeling good.

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We're feeling strong and excited for the new year.

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Heck yeah.

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Great work.

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Great work, Mason.

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Over to you, Dan.

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Let's go, Mason.

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Launch a buck token.

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We got a treasure of a new preferred equity token,

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preferred equity backed token.

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That's exciting.

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What's on your mind?

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Yeah, I'm super, super excited.

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We launched yesterday, January 6th,

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then we already have a million dollars of total value locked.

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The token is our Twitter's buck token.

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But our treasury earnings come directly from our stretch holdings, SDRC.

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And I think it's going to be just a great sort of product built on top of the prefs

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and a really good way to bring these equitized Bitcoin products, stretch in the preferreds,

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to the broader market that's crypto native and isn't necessarily in the US.

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Bingo. I love it. Off to a hot start. I mean, this is how this stuff scales, right? People find out

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because these products have such a high yield, you're able to build within them, right? There's

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such a big delta between the risk-free rate, you're able to create an entire business model

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that fits in between with the delta of the yield. So super exciting. It's effectively the digital

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money concept that Saylor talked about in Abu Dhabi and you're up to market with it.

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So cool. Congrats. So excited. Thanks for the support, guys.

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Yeah, 100%. So late, what's going on? How many episodes are into the Orange Pill

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Investor podcast are you? You're still ripping it. 546.

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Just relentless execution just every day. And you're building up a Noster.

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We've got more spam wars here in 2026. You're leading the charge there. What's on your mind?

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Yep. Every day is an all time high on the number of episodes.

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Yeah, I can't stop, I guess, talking about spam wars. I think quantum FUD was probably a distraction to take people's minds off of spam. But there's good news. We got a BIP 110 proposal that may move a solution to the base layer.

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there's some extreme suggestions out there it's called the cat which would actually freeze

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some of those uh spam transactions um but i think that the uh the benefit of something like that is

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more just to put the fear of god into the spammers so hopefully nothing that drastic would need to

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take place all right all right keep on keeping on stay on top of it over over to you grain you you

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made a book uh ai you're building apps look at you look at you go so proud of you

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Thank you. Appreciate it. Okay. So, so, so one of the interesting parts that I'll,

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that I'll, that I'll talk about. So where do I see 2026? I see it being positive. I think every

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year builds and gets better. We learn more and more. You know, what I did recently, look, I wrote

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a book and what I'll tell everybody, the book itself wasn't important. The important part was

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I completed a project. I said, I wanted to write a book. I wrote the book. I published it. It's on

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Kindle, you could download it, didn't sell a lot of copies. That wasn't the point. What I wanted to

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do is I wanted to compress that book. And I did a video in eight minutes, you could run it in 2x

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speed. And you can be like, wow, okay, now it's four minutes. And I'm like, that's not good enough.

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So I compressed the book down to a post. And that's the post that went viral. And it's a little

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bit over 5 million impressions. So from that perspective, you would ask me a week ago,

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do you think that I could write a post that can do 5 million impressions?

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Absolutely not.

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I'd say possible, but 5 million never.

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And so what I did was I kind of wrote a tweet that means you don't have to buy my book.

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And that's the point I want to get across.

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You just have to think about exactly what Mason just said over there,

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was that they're buying back shares in order to increase the amount of Bitcoin per share.

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That's an important takeaway.

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And then I think what Dan is saying is incredibly important.

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What he did, congratulations, Dan.

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I'm proud of you.

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I mean, where we were literally a year and a half ago, I don't think anybody could have predicted this.

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And if I had a real Coke, I'd crack it open here.

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But, you know, Dan, congratulations.

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The concept that digital credit would be invented, it would go live, and then there's companies that are now building a token on top of that to give double the yield of U.S. treasuries.

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I never thought that was not on my bingo card.

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Yeah, that was my bingo card.

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So what am I seeing?

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I think that everybody's going to continue building this in here.

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Got Mason that's flying down to South America, right?

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I mean, yeah.

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I mean, look at everything we did in the last year and now we're just getting started, right?

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This is year one.

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Let's put our foot on the gas.

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We can build on this stuff.

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Everybody's working hard.

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So good, good stuff, Mike.

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Over to you, Adrian.

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Are we going to get some more lessons on quantum or we'll just dispel the FUD and you can be

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the teacher.

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everybody can drop out of that class and you know we can have some giggles here in 26 too

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yeah um no i think 26 is always to be a good year um the quantum flood that was at the end of the

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year was a little bit strange um but you know it pops up every three months and i do what i can to

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try to spell any of the nonsense whenever i see it um but you know i've been watching stretch pretty

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pretty closely i think that has um potential to be something really really successful i think it's

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already has been successful and i think a lot of people have been kind of clamoring for it to fail

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but it's been holding steady and it's been holding the peg and it's been attracting a lot of attention

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so um especially with the project that dan's working on and there's just a lot of stuff going

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on in the space right now that we've been before seen six nine twelve months ago so i'm pretty

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interested to see what happens in 2026. i'm not gonna make any predictions other than i don't

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think that we're going to see the continuation of the cycle in previous years i don't see like an

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80% drawdown in our future or another, what, 40% from here, whatever it is.

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Yeah, I don't see that happening. Very curious to see what happens with AI, very curious to see

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what happens with Bitcoin. Want to know if we're gonna have any movement on the SBR finally, maybe,

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hopefully, potentially. But besides that, yeah, no, really curious to see what the year's gonna bring.

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Awesome. And look forward to it. I know you've got some analysis. Maybe we can get into it later

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the stream. We were looking at ATM as a percent of total volume over 2025. I was doing some

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analysis earlier. It looked like strategy traded about $1.2 trillion worth of volume in 2025.

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That's not right. Yeah. I don't know about that. Yeah.

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Which is just a staggering statistic, right? Just $1.2 trillion in volume throughout the entire

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year. So totally crazy. Let's jump into, let's start as we have almost every single stream,

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walking through the statistics of the strategy balance sheet because they are the leaders here.

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They've got 673,000 Bitcoin. I'm going to share my screen and then we'll jump into Dan. We'll do

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a macro speed run and talk about the landscape of the market before we get into other things.

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That works for you guys. Also, apparently we've got some like choppiness in the audio,

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some lag on the stream. Yeah, people are saying this only on YouTube. So if you can join on X,

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on my own. Join on X if you can. We've just got too much alpha, right? Too much alpha on here where

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it's making the audio choppy. You know, it happens. Okay, let's get into it because I think

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this is a fantastic story. You know, one thing I've reflected a lot about here in the last,

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I don't know, a couple of weeks is just thinking about what's happened over the last year.

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and how has the strategy balance sheet changed and in what perspective am I looking at?

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Is it, am I looking at a fiat perspective? Am I looking at a Bitcoin perspective?

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Is the story better than it was a year ago? How do I feel about the balance sheet? Is it healthy?

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What's the market look like? And so I'm going to run through this here. So maybe I'll hide this

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for a moment. So compared, so as of today, January 7th, 2026, strategy holds 673,000 Bitcoin on the

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balance sheet. Bitcoin price as of when I did this about 91,000. So the assets held on the balance

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sheet is about 61.5 billion. The strategy price is $162 per share. The USD reserve on the balance

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sheet is 2.25 billion, which is massive. That's increased significantly just over the last couple

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of weeks. They've effectively got enough cash dividends to pay two and a half years worth of

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dividends, which is just an insane statistic. Then we look at the debt on the balance sheet.

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So the debt is about 8.2 billion compared to where it was last year. It's up about,

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what is that? One, about $900 million. Preferred stock issued 7.9 billion.

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So if you look at the net capital, the assets less just the debt on the balance sheet.

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You're looking at, actually, hold on, that number is wrong.

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That plus that.

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The net capital on the balance sheet is $55.6 billion.

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You take $61 billion plus $2.2 billion of USD.

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If you just subtract all of the assets, less the debt, you have $55.6 billion.

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This is up 63% year over year.

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The Bitcoin held is up 51% year over year.

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Bitcoin is down, what was it, 5% year over year. So a massive change there. Annual preferred

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dividend payment, $831, net capital years of dividends. So if you're just to take

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that $55.6 million figure and divide the $831 million of annual PREF dividend payment,

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That's 800. They can pay the dividend for 72 years. Crazy statistic. There's not another balance

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sheet on the planet that has enough capital to pay their debt obligations for 72 years. That is

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an insane statistic. We're talking about the year 2100-ish. If I'm around, that would be awesome.

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You know, it's just so far from now. It's hard to fathom. Then you look at the debt ratio. So

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effectively the leverage ratio. And the leverage ratio has gone from 18.2% down to 9.7%. So the

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leverage ratio is actually down 47% year over year. So you're telling me they increased the

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Bitcoin held by 51% and the leverage is down by 47%? That's a healthy balance sheet. That looks

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that looks incredibly healthy. If you denominate your view of this world in Bitcoin, you look at

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the coverage multiple. Well, the coverage multiple is down 31%. You've gone from 5.5 down to 3.8.

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But what's going on there? Well, they've issued the perpetual preferred equity. The perpetual

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preferred equity is so unique because that capital investment comes in the door and they

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have a dividend obligation, but they never have to pay that capital back. There's no maturity.

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So that's permanent capital held on the balance sheet to pay that interest obligation. So that's

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why the amplification figure is different from the leverage figure. The leverage takes into

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consideration debt that has a maturity that they have to pay back. So when you look at the balance

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sheet, you're like, okay, the Bitcoin held is up 51%. The amplification is actually up 40%

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and they've reduced the cliff maturity on the balance sheet, that's a great story.

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That's a healthy balance sheet. And the Bitcoin price for the assets to be worth less than the

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debt, that's gone from $16.9,000 down to $11,800. It's got to go down, which is a 30% decrease

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year over year. So the percent drawdown needed for the assets to be worth less than the debt

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on the balance sheet would be an 87% drawdown. I like the story. It looks really good.

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So let's take a peek.

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to one. And everybody's like, yeah, so strategy, their leverage is 10. No, no, no, no, no, no, no.

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They have, it's the flip side of this. I have yet to figure out an easy way. I've tried explaining

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this multiple times, but this ratio is the exact opposite of what everybody thinks.

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So what they're saying is, is that they have 90% of all their assets. There's only 9.7%

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that is the actual debt, which is the exact opposite of way leverage is typically discussed.

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And that's why this doesn't make sense to most people because they're like, oh yeah,

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it's pretty close to like putting 20% down on a house. Now, this would be the equivalent. If you

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went to go buy a million dollar house, your down payment would be $900,000. I mean, if you're buying

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a $500,000 house, right? A $500,000 house, you would put down $450,000 as your down payment.

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and only 50 grand of that would be your debt.

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Nobody does that.

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Nobody does that.

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That's the strength of the balance sheet, right?

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That's the strength of the balance.

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And it kills me that I can't figure out an easy way to get that across

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because your metrics are correct.

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Yeah.

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When you think about yourself, right, like with a house,

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If I had a $500,000 house and a $450,000 down payment, your question becomes, what's the probability that I go bankrupt and I'm not able to pay the debt on my balance sheet?

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It's like, I'm going to figure out how to pay this interest payment.

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I'm going to be able to figure out.

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It's not hard.

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You can figure it out.

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And when it comes to this idea of fractional reserve banking, that Hal Finney quote talking about Bitcoin as being a settlement layer for banks, which issue their own paper currency backed by Bitcoin with different amounts of reserve ratios.

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In 1929, during the Great Depression, we were still on a gold standard, but the US dollar was only backed 40% by gold reserves.

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So in what we consider a gold standard era, there was still more outstanding US dollar fiat liabilities than there were reserve assets backing those liabilities.

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And this is the exact opposite, right? There's 20% outstanding liabilities or perpetual preferred products or some form of outstanding yield bearing instrument relative to the 100% or 20% relative to the entirety of their collateral asset, which is no longer gold like it was in 1929, but Bitcoin in this case.

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So like, I think you would be wary if their outstanding liabilities exceeded their total reserves, but that's normal for a bank. So we're just playing in a completely different playing field. And like my thinking is, I think someday, maybe 10 years from now, there could be a world in which strategies preferred equity outstanding actually matches their total Bitcoin assets or some hybrid fractional reserve banking, like some sort of hybrid fractional reserve banking situation going on.

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especially if they're lending their Bitcoin or getting some sort of payment on their Bitcoin from JP Morgan or something.

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I don't know exactly how that works, but I think we're going to see over time higher and higher amplification ratios as the volatility comes down on Bitcoin.

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And as more and more institutions start issuing products that are built on top of this reserve asset Bitcoin.

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Completely nailed it. Completely nailed it.

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As the volatility reduces and the balance sheet grows, that amplification ratio can increase.

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Because what you're effectively doing is underwriting Bitcoin.

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You're underwriting your ability to pay the dividends into perpetuity.

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And you know what?

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I did a little bit of analysis on this.

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Maybe it'll make sense at some point to go back through this kind of calculation that I did on what if you just had this model and you just sold the dividends in order to pay the dividend.

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payments and you didn't even have access to an ATM, the model still works. The model is still

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very interesting if you just did this without access to an ATM to potentially pay dividends or

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other capital markets activities or cashflow from your operating business.

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So one thing that I wanted to put this into perspective, which is just,

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it's just so fascinating, right? Just a little bit ago, I talked about how strategy traded about

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$1.2 trillion in 2025, which is just massive amount of volume. And the question that keeps

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coming to my mind is like, why is this stock so liquid? It has been a top 20 publicly traded

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equity by volume since October of 2024. Okay. It's the 215th largest publicly traded equity

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in the market. Yet today it was the 15th largest by volume. What's going on there? Like I've been

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trying to wrap my head around it. I think it's primarily because it's backed by Bitcoin, which

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is just this hyper liquid asset. And you've got this huge derivatives market that's built behind

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it. And you've got people that are hedging the Bitcoin market in the MSTR derivatives market.

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You've got all of these different components that are brought in here. And Adrian, I know you've got

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some multivariate correlation statistic analysis on this. And maybe we'll hop into that. But

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one thing I wanted to point out. So what I've done here is I pulled all of strategy's

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perpetual preferred equities. I pulled their notional amounts, the shares outstanding,

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and the annual dividend amounts. So the current annual dividend is $796 million for the five

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perpetual preferred equities that are outstanding. Today's trading volume was $4.5 billion.

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Today, $4.5 billion of strategy stock traded hands today. That's 17% of the volume today.

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Okay. So now what's the quarterly dividend? The quarterly dividend is $199 million. That's 4%

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of today's volume. What's the monthly dividend? Okay. The monthly dividend is $66 million. That's

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about 1.4% of today's volume. If you were to break it down by trading day, so divided by 250,

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I think it's right, divided by 250, 250 trading days in the year. That's $3.1 million of capital

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that they would need to raise per day if the volume were to stay around the same, about $4.5

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billion. So it's 0.07% of the daily trading volume. Okay. So it's hard to wrap your head

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around that so i came up with a an analogy imagine you go to a college football game and there are

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10 000 people there and you need to convince seven of those 10 000 people to drink a beer

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how many people would you have to walk by in order to get seven beers drank you probably do it in a

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row you go down one row you'll be able to convince seven people to drink a beer like that's that's

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how little this is like seven out of 10,000. You could get it done with one guy.

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You probably could. You probably could. It's probably Dan to be honest.

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You can put them down. Um, so you know, just the, the, the relativity there is just so,

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it's just so small. And you think of the, the yearly, the yearly traded volume, like 1.25

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trillion gets 796 million part of 1.25 trillion yeah they're probably gonna figure it out

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they're gonna they're gonna be able to find a way to pay this and even even if they had to sell the

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bitcoin like that that still works bitcoin trades 60 billion dollars a day it's the most liquid asset

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on the planet it's crazy um adrian i'm gonna kick it over to you because i know you feel strongly

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about this and you you think about liquidity you've been doing analysis on this like what what

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What are you thinking about?

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So where should I start?

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I don't want to speak about this in a way that's going to lose people.

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So let's try to use the simple analogies that you've been using.

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One of the things that has been a persistent kind of talking point has been the ATM is driving price, right?

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The issue shares is driving the price down.

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So what I did is I've been doing this for about a year and a half now, and the analysis has been built out.

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What I've been doing is I've been watching the ATM issuance.

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I've been trying to model this statistically to figure out, can I see a clear correlation between

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share issuance and price activity, right? Very, very simply. And to do that, the first thing I did

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was I just took share issuance, kind of like what you did as percentage of volume, and I wasn't

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seeing anything. On any given issuance, there's something between like one to 4%

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percent of the the overall trading volume and on the high time so like in october and november 2024

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they went up to like seven percent at certain times but the thing that people don't understand

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is that the atm is a function of volume it is is something that's market driven it is not as if

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they're just going to be issuing shares when there's no demand for it right so it's a function

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of demand so then i have to think through well what is actually driving price action and to do

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that i started modeling bitcoin i started modeling in options activity then i started modeling in

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what i like to call sector rotation so all of the different bitcoin miners and then i started

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modeling modeling in the etf impact and the impact of another bitcoin treasury companies

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and long story short there's a way that you can attribute a percentage of trading volume and

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activity if you have the appropriate data set and the appropriate sized data sets and over the

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appropriate timeframes. So essentially what I've found is that over the last year, probably more

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accurately over the last 14 months, the options market has actually been driving price activity

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just as much as Bitcoin, if not more than Bitcoin at certain times. And when I say certain times,

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I don't mean like a week or two, I mean for like months. So to feed into what you've been saying,

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why is this equity so liquid? Why is there so much trading volume? It's because people

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are using strategy as a way to place various bets on Bitcoin. It's become a proxy for Bitcoin,

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not just in like a beta play, but it's also a proxy for Bitcoin in the sense of how people are

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playing Bitcoin in the market. The reason why we didn't have like an alt cycle this last year

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is because a lot of it was sucked up by the Bitcoin treasury companies. And also a lot of

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that interest was sucked up by the strategy options market and the overall interest in strategy.

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So what we've been seeing is people that are playing strategy and there's a strong, strong

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correlation between the options market activity and the price activity we've been seeing in strategy.

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So the tune of something like 25% of price variance can be explained just by the options market.

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And I modeled that out using delta exposure. I modeled that out using open interest. I modeled

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that out using gamma exposure. I modeled that out using put call ratios and I also modeled it out

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using the spread between open interest on a weekly and monthly and quarterly basis to see if I can

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cleanly identify when the market was moving and the correlations are stark. And it's not a matter

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of correlation here. It's a matter of attributing. Pause there. Pause there. Pause there for a second.

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I'll pause there for a second.

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What Adrian is saying, if I were to summarize this up,

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is that the option market open interest had a higher correlation

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to the change in strategy price than ATM issuance.

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To the tune of option open interest is around 25% correlation

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and something like the ATM issuance was 0.15% correlation.

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Yes.

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Keep going.

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Yeah.

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And to test that theory, I also modeled out ATM issuance

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using all of them. So I went through the 8K filings and I manually tabulated all the different

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ATM issuances. So that was in 2025, this in 2024 to 2023, and a little bit of issuance they did in

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2022. And I modeled it all the way back to the BSE era. So the Bitcoin standard era was, what was

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that, August 20th, 16th, something like that, whatever it was. And I modeled it out using

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trading volume as a proxy for ATM. Now, why did I do that? And why did I do that first before I'm

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moving into the options is because I need to cleanly say, is the ATM impacting price? And by

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impacting, that means not that it's driving price, that it can actually be seen in the data,

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and it's having a sizable impact on the way the price is moving. The challenge with it is,

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is that I had to do it in a way that the ATM will still show up in the data So first I had to test for that which I was able to find that even if it was a small amount it was still showing despite the fact that i had 50 other variables

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so that tells me that i was modeling it correctly it wasn't getting lost in noise i was attributing

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everything accurately and then on top of that i had to say okay so now that i've attributed it

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accurately how much price action is that actually driving going back to 2020 it almost disappears

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it drives down all the way to zero which makes sense so then i went to 2022 then i went to 2023

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then i went to 2024 and 2025 and that's when it started showing up in the data and at the highest

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peak so that's in no october and november of 2024 it it ticked up to 0.6 percent so then i said to

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myself well what else is going to be pushing the price besides options market then i started looking

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at m2 then i started looking at the federal funds rate then i started looking at the vix long story

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short everything is pushing the price on strategy more than atm by a factor of about seven and that's

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just on the federal funds rate when you look at the options market when you look at bitcoin miners

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when you look at bitcoin itself the impact of price proportionally to the atm becomes almost

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laughable. It completely disappears when I start to put it on a proportional scale.

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So is that me saying that at no point in time can ATM ever impact price? No. What I am saying is

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that for this particular equity, it is too multivariant and the market is too big for

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ATM to be driving price in any appreciable way. And then to make the matters even more interesting,

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I said, well, how far can I push ATM in the modeling until it starts actually having an appreciable impact on price?

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I got it all the way up to 20%.

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Get the ATM up to 20% and still, like, theoretically not making it.

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Using the existing history of the volume, I said, let me crank up the ATM to say, what if they were doing 20% in perpetuity?

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20% in perpetuity, got it up to 2%.

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Yeah.

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So what we're seeing right now is unprecedented.

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We have an equity that has essentially become a betting ground for Bitcoin.

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Yeah, right.

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And I think that's one of the most fascinating things here, right?

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Strategy's gotten absolutely hammered in 2025.

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They've issued more shares, but the balance sheet is stronger.

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And then you could think through, you look at the size of the option market,

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and the option market for MSDR is bigger than the option market for IBIT.

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And that's an interesting perspective.

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So you want leverage on leverage and the market is using MSTR to hedge.

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Now, what that shows you is when this does turn around, it's probably going to be explosive because it's going to flip and go the other way.

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They have to hedge the other direction.

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right so it just like we've seen in the past when bitcoin moves very quickly in a period of 10 to 20

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days mstr is probably going to move quickly times two well the other aspect of that i'll take the

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other side i bet yeah okay well so yeah no i just mean like if like i think mstr is going to outperform

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Bitcoin over the long run. I don't, I think the days of 2XM NAV, 3XM NAV, all things being equal

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right now are over. Also, I don't think it's intellectually honest to say that the price of

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stretch can be capped at a hundred with the ATM and then turn around and say the ATM has no effect

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on the MSDR price. Well, you're comparing two completely different things. The, the, the stretch

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doesn't have the level of interest in this conversation well stretch doesn't have the

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level of interest and stretch doesn't have the level of variables impacting the price

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if all things being equal you would be saying that you have the stretch you have the stretch

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options market which is like almost non-existent and then you have the issuance of shares on the

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flip side with msdr you have the options market you have the issues of shares you have the

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correlation to Bitcoin. You have the impact that's coming from all of the Bitcoin miners. You have

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the impact that's coming from sector rotation. You have the impact that's coming from all the

403
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other Bitcoin treasury companies. You also have the fact that there's all kinds of leverage plays

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on top of MSTR. Then you have the fact that there's options plays on top of it that are

405
00:36:51,957 --> 00:36:59,317
income generating. There are too many factors for one thing to be driving the price. So it's not a

406
00:36:59,317 --> 00:37:04,657
matter of intellectual honesty. It's a matter of scale and impact. And the fact of the matter is,

407
00:37:04,657 --> 00:37:12,058
if they were to issue equity on stretch, could they drive the price down? Yes. But that's

408
00:37:12,058 --> 00:37:17,998
specifically why I said in the case of this equity, because of all the multivariate factors

409
00:37:17,998 --> 00:37:24,357
that come into play, you cannot say that any one thing has been driving price. It's a matter of

410
00:37:24,357 --> 00:37:31,337
attribution. It's a matter of impact. So until someone actually sits down and does what I did,

411
00:37:31,337 --> 00:37:38,097
so go ahead there's a lot missing i like dan's point i mean it does make sense it's like okay

412
00:37:38,097 --> 00:37:42,177
it's it's hard to say that the atm is invisible over here but it's not over here

413
00:37:42,177 --> 00:37:48,418
um but in the in the um on the stretch side i think there's a couple of other

414
00:37:48,418 --> 00:37:54,657
can we pause on that first factor invisible it's not invisible the fact is i i modeled it against

415
00:37:54,657 --> 00:37:59,177
50 different factors and it still showed up well let's pause on liquidity i'm exaggerating when i

416
00:37:59,177 --> 00:38:02,998
stay invisible go ahead let's talk liquidity for a second you're right you're talking about a

417
00:38:02,998 --> 00:38:09,077
company that trades a market right it's got a 60 billion dollar market cap and it's trading 4.5

418
00:38:09,077 --> 00:38:14,797
billion dollars a day for something that's trading 76 million dollars a day right like

419
00:38:14,797 --> 00:38:18,938
if you're going to atm something that's trading 76 million dollars a day yeah you're going to see it

420
00:38:18,938 --> 00:38:23,698
it's a matter of like they i just think i think it's three different things 33 percent of it right

421
00:38:23,698 --> 00:38:25,778
I think it's two different things.

422
00:38:26,898 --> 00:38:36,477
My last point of that is I don't think ATM, like when I say I think ATM has an impact, I don't mean if ATM hadn't been used, it wouldn't have gone.

423
00:38:36,778 --> 00:38:43,317
I think for some reason, something with the press happened such that strategy was bound to go to book value at the end of this four-year cycle.

424
00:38:43,837 --> 00:38:45,738
There was some sort of magnet to book value.

425
00:38:45,998 --> 00:38:47,518
I don't think it was necessarily the ATM.

426
00:38:48,077 --> 00:38:51,957
I'm not saying the recent price movement was a result of the ATM even.

427
00:38:51,957 --> 00:39:18,177
But I am saying that we got to call a spade a spade. If you believe ATM or share issuance is in fact a price suppressor, then you could say on MSTR, while it may not be the only price suppressor or may not even be the driving price suppressor over the past 40 months, you can't say it's not a fundamental price suppressor when it is used in that way on other equities.

428
00:39:18,177 --> 00:39:22,097
absolutely handle that that's what i'm trying to say to you it's a matter of it should you

429
00:39:22,097 --> 00:39:31,137
you cannot simply say that one factor is driving price right i'm saying it can it is a price

430
00:39:31,137 --> 00:39:39,218
suppressing mechanism i didn't say there's more liquidity but the thing is also on the flip side

431
00:39:39,218 --> 00:39:45,058
and the atm was positively correlated with price at the end of the year in october 2020 in october

432
00:39:45,058 --> 00:39:50,177
November 2024. It was actually positively correlated with price. So what I'm trying to

433
00:39:50,177 --> 00:39:56,317
frame here is it's not about is it pushing the price down or is it pushing the price up. It's a

434
00:39:56,317 --> 00:40:04,157
matter of can we see it in the data, which I can, and can we then say what impact is it having on

435
00:40:04,157 --> 00:40:10,477
price? If you're making the assumption that it's price suppressive, I think that comes from your

436
00:40:10,477 --> 00:40:17,198
viewpoint which may or may not be valid all i'm saying is the atm is a function of the market it

437
00:40:17,198 --> 00:40:21,998
is not a driver of the market you're making the atm is a function of the market like i would disagree

438
00:40:21,998 --> 00:40:27,438
with that considering it's a function of the the issuing corporation decides to issue the atm right

439
00:40:27,998 --> 00:40:32,317
yeah but it's a function of the volume it's probably it's probably a function of volume

440
00:40:32,317 --> 00:40:39,677
and the volume is a function of the market so so yeah but let me chime in for a second so so so and

441
00:40:39,677 --> 00:40:41,438
And I'm going to switch to a different topic.

442
00:40:41,777 --> 00:40:43,578
And we have good news about this.

443
00:40:43,877 --> 00:40:45,477
And I think this will bring this to light.

444
00:40:46,317 --> 00:40:56,898
Look, a year ago, sorry, 14 months, I'll say December of 2024, we were all hoping a couple things would happen.

445
00:40:57,277 --> 00:41:02,297
We were hoping triple Q inclusion and we were hoping S&P 500 inclusion.

446
00:41:03,498 --> 00:41:03,738
Okay.

447
00:41:03,898 --> 00:41:08,418
And we all believe that if you get included into an index, there'll be passive buying.

448
00:41:08,498 --> 00:41:09,558
The stock price goes up.

449
00:41:09,677 --> 00:41:26,317
All agree to that, right? Now we apply the symmetry test. You can use a symmetry test early. If you get removed from an index, if you believe it goes up, if you get into it, exclusion on the way out, your stock price goes down.

450
00:41:26,317 --> 00:41:31,518
So then we had FUD about MSCI saying, oh, they're going to get removed from it.

451
00:41:31,817 --> 00:41:38,137
The stock sells off because there's front end loading to say, oh, God, if they're going to remove out, let's sell it before it drops.

452
00:41:38,597 --> 00:41:39,457
That's exactly what we saw.

453
00:41:39,538 --> 00:41:40,518
That's a symmetry test.

454
00:41:40,817 --> 00:41:43,698
Assuming that if something leads to something, it goes up.

455
00:41:43,938 --> 00:41:46,078
If the opposite of that happens, then it would go down.

456
00:41:46,377 --> 00:41:47,498
That's what Dan is saying.

457
00:41:47,837 --> 00:41:51,637
Whatever the data says, we can see that in the real world, that's what happened.

458
00:41:51,837 --> 00:41:53,297
And what did we get yesterday?

459
00:41:53,297 --> 00:41:59,177
msei said we're not or today we're not taking or yesterday we're not taking them out and then what

460
00:41:59,177 --> 00:42:05,357
happens yesterday it's the stock price shoots up and so that confirms the symmetry test so whatever

461
00:42:05,357 --> 00:42:10,078
you want to say about the data the reality is the stock price mirrored exactly what happened there

462
00:42:10,078 --> 00:42:14,677
that's yeah that doesn't make any sense it makes complete sense and adrian i'm going to say this

463
00:42:14,677 --> 00:42:20,398
i said this one time before and we can move on what's different about a stock than with bitcoin

464
00:42:20,398 --> 00:42:23,198
This is a very, very important part about this.

465
00:42:23,238 --> 00:42:24,198
And I've said this before.

466
00:42:24,477 --> 00:42:26,177
With a stock, there's one QCIP.

467
00:42:26,637 --> 00:42:31,438
You cannot tell the age of the share that's being traded for daily volume.

468
00:42:31,758 --> 00:42:34,877
Whereas with Bitcoin, you hear it all the time.

469
00:42:34,998 --> 00:42:39,498
Oh, some OG moved to Bitcoin that never moved from 2011.

470
00:42:40,078 --> 00:42:45,558
Oh my God, he's dumping because for whatever, he knows something and he's selling it.

471
00:42:45,578 --> 00:42:47,117
Even though the Bitcoin just moved, not sold.

472
00:42:47,117 --> 00:42:52,177
So with Bitcoin, you know the age of the coin that actually moves.

473
00:42:52,718 --> 00:42:59,637
And then the specific metric for a long-term holder on Bitcoin is 155 days.

474
00:43:00,078 --> 00:43:03,797
If you hold a Bitcoin for more than 155 days, you're considered a long-term holder.

475
00:43:04,297 --> 00:43:11,218
Now, if you live in America and you pay taxes, you're a long-term holder if it goes over 365 days.

476
00:43:11,538 --> 00:43:13,637
But people are like, well, we don't give a crap about taxes.

477
00:43:13,637 --> 00:43:18,938
but with a QSIP, with a stock, you do not know the age in a given volume.

478
00:43:18,938 --> 00:43:24,657
If it's a net new stock that's being issued through ATM or if it's old stocks that are being traded.

479
00:43:25,297 --> 00:43:27,797
Do you agree that that is true?

480
00:43:29,177 --> 00:43:31,477
Then we'll just agree to disagree and move on.

481
00:43:31,477 --> 00:43:34,637
I think everybody's partly right here.

482
00:43:35,038 --> 00:43:39,258
I mean, if there's more shares trading hands, there's a larger pool of liquidity.

483
00:43:39,258 --> 00:43:46,797
I think there is an impact on the stock price, but it is likely a very, very small impact on the stock price.

484
00:43:46,918 --> 00:43:47,518
There are other things.

485
00:43:48,337 --> 00:43:51,578
The point here, right, it all comes back to volume.

486
00:43:52,177 --> 00:43:54,097
Like, why are people holding this stock?

487
00:43:54,238 --> 00:43:58,518
Like, why is it trading $4.5 billion a day, right?

488
00:43:58,938 --> 00:44:03,177
So, Dan, to your point a little bit, like STRC, why do people hold STRC?

489
00:44:03,398 --> 00:44:04,677
They hold it for the interest rate.

490
00:44:05,258 --> 00:44:08,177
Like, the reason it trades the way it trades is because of the interest rate.

491
00:44:08,177 --> 00:44:12,297
Like if it goes too high and people don't like the risk, they sell it because of the interest rate.

492
00:44:12,898 --> 00:44:14,018
Now, why do people buy MSTR?

493
00:44:15,097 --> 00:44:21,657
It is the accrual of all of the excess volatility of all the preferred equity instruments that they've issued.

494
00:44:22,457 --> 00:44:28,078
So as they are issuing more of these preferred equities, it's accruing like excess volatility.

495
00:44:28,297 --> 00:44:30,578
It's like that's this amplified component, right?

496
00:44:30,578 --> 00:44:32,677
It's like getting more and more amplified.

497
00:44:32,877 --> 00:44:34,797
It's accruing all this excess volatility.

498
00:44:34,797 --> 00:44:40,938
So it would make sense that it is the volatility dampener, because if you need a pool of vol, like where do you go?

499
00:44:40,998 --> 00:44:42,457
You go to the place with all the vol.

500
00:44:43,337 --> 00:44:46,058
It's got all the vol.

501
00:44:46,597 --> 00:44:48,877
And all of the excess vol is shoving over there.

502
00:44:49,058 --> 00:44:52,377
So I think everybody's right to some regard, right?

503
00:44:52,418 --> 00:44:55,258
Like you add 1% more shares, like the pool is bigger.

504
00:44:56,157 --> 00:44:56,998
Do we all get a trophy?

505
00:44:57,558 --> 00:44:59,078
Yeah, I think everybody gets a gold star, right?

506
00:44:59,198 --> 00:45:01,698
We'll make it a true north, true gold star.

507
00:45:01,698 --> 00:45:08,998
The thing with it is that the reason why, I want to be very specific with what I'm saying.

508
00:45:11,317 --> 00:45:15,198
Impacting the price and driving the price are not the same thing.

509
00:45:15,797 --> 00:45:18,777
So I think we need to differentiate that, right?

510
00:45:19,258 --> 00:45:27,677
Then there's also the fact, though, that if I was doing this modeling and I wasn't seeing the ATM and the data at all, that tells me I'm doing something wrong.

511
00:45:27,677 --> 00:45:34,677
So the fact that it's still showing up after all these other factors are accounted for tells me that the model is correct.

512
00:45:34,677 --> 00:45:38,677
And I've spot checked this with so many different people at this point, it's kind of ridiculous.

513
00:45:38,677 --> 00:45:52,677
I'm saying that to say this. It is too simplistic to then say, because you're simply issuing more shares, that's having a suppressive impact on price because of all the other factors that are taking place.

514
00:45:52,677 --> 00:45:59,998
taking place yeah right so yeah when it comes to pushing the price i think people are blaming the

515
00:45:59,998 --> 00:46:04,097
road for the direction of the traffic what's been pushing price down is the fact that the market is

516
00:46:04,097 --> 00:46:09,898
telling us very clearly they do not believe in this model whether we believe in it or not that

517
00:46:09,898 --> 00:46:15,078
i think that's that's a good point go ahead mason i yeah i think this is the more interesting

518
00:46:15,078 --> 00:46:22,837
conversation is is what is strategy embody like like what is mstr embody right and i think it's

519
00:46:22,837 --> 00:46:30,277
very multi-dimensional i was talking to ten and i was like let's say you're you're bearish on um

520
00:46:30,277 --> 00:46:37,317
qqq right you're you're you think ai is in a bubble and you want to express that and and like

521
00:46:37,317 --> 00:46:43,898
maybe you have like a more traditional framework and you think bitcoin is just you know nasdaq

522
00:46:43,898 --> 00:46:50,817
beta, right? It's just, it's, it's gonna, it's gonna be more volatile than than the NASDAQ.

523
00:46:50,817 --> 00:46:57,857
And then, you know, strategy is levered Bitcoin, right? Why would you not short strategy? If you

524
00:46:57,857 --> 00:47:02,857
think, you know, that's, that's the position you have, especially at like, let's say they're at

525
00:47:02,857 --> 00:47:10,677
2M NAV. And you also you also fundamentally disagree with that, right? And I think also,

526
00:47:10,677 --> 00:47:17,558
it being a 2MNAV, that could also be an expression of short animal spirits, right? You think the

527
00:47:17,558 --> 00:47:23,398
market's too riled up, everyone's too bullish, and you think it's going back to one. And I think

528
00:47:23,398 --> 00:47:35,438
that's maybe partially what we saw in Q2 to Q4 or until present. But on the flip side, you could

529
00:47:35,438 --> 00:47:43,117
take the exact opposite expression and think, you know, I strategy can be whatever you want for

530
00:47:43,117 --> 00:47:49,058
whoever. And that's what makes it so amazing. Yeah, I mean, nobody wants what they like to

531
00:47:49,058 --> 00:47:54,777
change. So the people who loved strategy, and they were doing convertible bond deals,

532
00:47:54,777 --> 00:47:59,637
when they switch to something new, it's like your favorite band that changes their sound.

533
00:47:59,837 --> 00:48:03,117
And you're just mad and like, oh, they're doing something different now.

534
00:48:03,117 --> 00:48:10,457
but you know the preferreds as far as i'm concerned they're more creative than the

535
00:48:10,457 --> 00:48:17,038
convertible bond deals bingo and they are in their infancy stages and you know just like ai is never

536
00:48:17,038 --> 00:48:22,038
going to be this bad it's only getting better the preferreds are only going to get more liquid

537
00:48:22,038 --> 00:48:27,738
and they're going to be more mature and they're going to be more efficient into it well i'm going

538
00:48:27,738 --> 00:48:34,797
call it infinity but for my lifetime so um you know your favorite band got better they're better

539
00:48:34,797 --> 00:48:40,758
musicians and that's you know they're gonna have a new set of fans really the old fans are gonna

540
00:48:40,758 --> 00:48:46,538
stop showing up and the new fans are gonna arrive have you absolutely nailed exactly where i was

541
00:48:46,538 --> 00:48:53,777
going with this right um dan you you brought up uh this gravity back to one m nav in my opinion

542
00:48:53,777 --> 00:49:01,918
as like viewing risk here as the m nav drifts higher if it does i i personally think it will

543
00:49:01,918 --> 00:49:07,837
and i think when bitcoin moves it's going to drift higher the risk of shorting it back down

544
00:49:07,837 --> 00:49:15,337
to one m nav in my opinion gets higher and the reason i say that right is a lot of people

545
00:49:15,337 --> 00:49:19,617
disagreed with the pref only model right like what happened in this last year there was a lot

546
00:49:19,617 --> 00:49:23,698
of disagreement with the pref model i mean mike you hated it dan you hated it you're like mstr

547
00:49:23,698 --> 00:49:29,297
commons broke and now you're like kind of long here uh with the pref model right there was a lot

548
00:49:29,297 --> 00:49:34,177
of confusion how do you pay the dividends didn't have dollars they issued five like six of these

549
00:49:34,177 --> 00:49:41,617
things the price of bitcoin went down there was a lot of a lot of things going against it now as we

550
00:49:41,617 --> 00:49:45,377
progress into year one and year two and year three and you start to build a track record of these

551
00:49:45,377 --> 00:49:50,578
things and they start to grow the perception of this model is going to change and those tools get

552
00:49:50,578 --> 00:49:57,218
get more valuable and valuable in the, in the toolkit. So as, as the liquidity in those things

553
00:49:57,218 --> 00:50:01,438
build, you're going to start to be able to issue a little bit more of that to give you more

554
00:50:01,438 --> 00:50:06,398
amplification on the common stock when you need it. So, and I think this is a perfect time to,

555
00:50:06,457 --> 00:50:12,038
to talk through this. I, I, um, sharing my screen here. Let's see if we can add it in there.

556
00:50:12,038 --> 00:50:17,657
So, okay, what's happened in the last year?

557
00:50:19,257 --> 00:50:24,297
Okay, this is from January 1st, 2025 to January 1st, 2026.

558
00:50:24,898 --> 00:50:27,438
So behind this, you see the price of Bitcoin.

559
00:50:27,617 --> 00:50:31,617
So you see the purple line is the price of Bitcoin over the last year, right?

560
00:50:31,637 --> 00:50:35,757
It closed down, what, 5.17% year over year.

561
00:50:36,257 --> 00:50:41,177
Every single white vertical line here is an issuance of digital credit in the last year.

562
00:50:41,177 --> 00:50:50,578
So you got strike happened in the end of January, strife in March, stride in June, stretch in July, SATA and stream in November.

563
00:50:51,297 --> 00:51:01,898
What you'll notice here is four out of the five preferred equities were issued when the Bitcoin price was higher than what the year closed at.

564
00:51:02,898 --> 00:51:05,898
Okay, that's interesting.

565
00:51:06,098 --> 00:51:07,797
I think that's really helpful to understand.

566
00:51:07,797 --> 00:51:17,918
And like a lot of, there's been so much FUD in the last, like, I don't know, two months from just horrible, horrible takes saying that there's no demand for these instruments.

567
00:51:18,398 --> 00:51:26,617
Like, okay, well, they raised $8 billion last year doing this and equates to about $18 million a day if you break it down on a per day basis.

568
00:51:26,777 --> 00:51:28,018
But yeah, tell me there's no demand.

569
00:51:28,977 --> 00:51:31,337
So what, why do I bring this up?

570
00:51:31,877 --> 00:51:37,677
So here's every instrument, digital credit instrument that was launched in the last year.

571
00:51:37,797 --> 00:51:43,218
here's the Bitcoin price at which those instruments were launched at, right?

572
00:51:43,317 --> 00:51:46,137
So strike was launched at 104,000.

573
00:51:46,238 --> 00:51:47,578
Stride was 101,000.

574
00:51:47,698 --> 00:51:49,038
Stretch is 117,000.

575
00:51:49,398 --> 00:51:50,637
You look at the notional outstanding.

576
00:51:51,297 --> 00:51:55,498
Then I take the percentage of total of each of these instruments relative to the notional outstanding.

577
00:51:56,277 --> 00:52:03,898
84% of the prefs that were issued in 2025 were issued with a Bitcoin price greater than $100,000.

578
00:52:04,218 --> 00:52:06,038
And we're sitting at Bitcoin at $91,000.

579
00:52:06,038 --> 00:52:17,058
The only one that the underlying balance sheet has grown from a Bitcoin perspective since issuance is STRF.

580
00:52:17,677 --> 00:52:20,558
The Bitcoin price is up 8% from when STRF was launched.

581
00:52:20,918 --> 00:52:25,558
So not a surprise that, honestly, that Strife is trading slightly above par.

582
00:52:25,857 --> 00:52:26,477
Kind of makes sense.

583
00:52:26,598 --> 00:52:27,797
The underlying collateral value went up.

584
00:52:28,698 --> 00:52:32,558
Now, when people are saying that there's no demand on this stuff, I've got to say, you've got to be crazy.

585
00:52:32,558 --> 00:52:39,558
They've raised hundreds of millions of dollars of additional PREF while the...

586
00:52:45,977 --> 00:52:47,177
What happened, right?

587
00:52:47,297 --> 00:53:01,938
Like the underlying value of the collateral held on the balance sheet or the capital held on the balance sheet is going to be improving drastically, which de-risks all of these instruments and makes the relative risk profile look better and better and better.

588
00:53:02,558 --> 00:53:05,817
which should boost liquidity, makes the common stock look significantly better.

589
00:53:05,957 --> 00:53:07,438
As they get more of this instrument in,

590
00:53:07,477 --> 00:53:10,058
they're adding more Bitcoin capital to the underlying balance sheet.

591
00:53:10,677 --> 00:53:11,637
Amplification rises.

592
00:53:12,337 --> 00:53:16,418
Like that's how this, that's why, you know, when you're thinking about like,

593
00:53:16,518 --> 00:53:18,457
okay, we're in year one of digital credit.

594
00:53:18,797 --> 00:53:19,817
Last year was year zero.

595
00:53:20,377 --> 00:53:21,757
It was born last year.

596
00:53:23,518 --> 00:53:24,538
We're at the beginning.

597
00:53:24,877 --> 00:53:27,578
We're at the beginning here from when all of these things were issued.

598
00:53:28,157 --> 00:53:30,857
And all technically from the Bitcoin price perspective,

599
00:53:30,857 --> 00:53:36,377
all of them are technically underwater from when they were ipo so i'm not surprised billion

600
00:53:36,377 --> 00:53:43,657
when bitcoin was uncooperative yes they raised eight billion dollars of this stuff when bitcoin

601
00:53:43,657 --> 00:53:49,977
was uncooperative i think that's a great way to say it absolutely um so you know when you look at

602
00:53:49,977 --> 00:53:57,257
this the fact that stretch is trading what at a hundred dollars they increased interest rate from

603
00:53:57,257 --> 00:54:08,277
10 what is it 9 to 11 but stretch is trading at uh 100 100 and today it traded i don't know 76

604
00:54:08,277 --> 00:54:13,797
million dollars if they if they took 33 of the volume which is what they took back in november

605
00:54:13,797 --> 00:54:17,698
when stretch hit par you're talking about them raising 25 million dollars in a day

606
00:54:17,698 --> 00:54:24,418
that's interesting that's an interesting story uh so i don't know what what do you guys think

607
00:54:24,418 --> 00:54:32,757
about this i like to me if bitcoin runs from here like this is this is a good position to be in like

608
00:54:32,757 --> 00:54:39,657
dan you like the common right now right you're getting in near near nav yeah it's just like

609
00:54:39,657 --> 00:54:45,357
volatility here exactly it's like a like i mean who it's hard to tell if the m nav is going to

610
00:54:45,357 --> 00:54:51,177
expand or not if you get in a book value expands your gravy if this thing trades a book you're also

611
00:54:51,177 --> 00:54:55,018
gravy if you think bitcoin's going out yeah so if you're a bitcoin bull

612
00:54:57,337 --> 00:55:01,257
i get questions about stretch daily the level of interest in it is kind of crazy

613
00:55:01,977 --> 00:55:05,817
of all the preferreds that's that's attracting the most attention from what i for what i can see

614
00:55:09,018 --> 00:55:15,738
yeah i think so too like this idea of it's really scary with like bonds right like so you're telling

615
00:55:15,738 --> 00:55:20,777
me interest rates change and i could lose 20 percent like you're levered on interest rates

616
00:55:20,777 --> 00:55:30,757
The idea of a long-dated bond, and obviously these are perpetual preferred products, but you can use the Macaulay duration formula to figure out kind of how these things will behave based on changes in the interest rate environment.

617
00:55:31,457 --> 00:55:40,998
And right now, they're just trading based on credit spreads and the seasoning of strategies and issuers, so it doesn't really matter the long-term interest rate because the credit spread so high.

618
00:55:41,177 --> 00:55:44,357
Point being is no one wants to take principal risk.

619
00:55:44,498 --> 00:55:45,558
They want to have their money.

620
00:55:45,698 --> 00:55:46,518
They want to get yield.

621
00:55:47,198 --> 00:55:50,578
And they don't care if the yield is a little bit lower here.

622
00:55:50,578 --> 00:55:53,438
They don't care if the stretch yields lower than stride.

623
00:55:54,477 --> 00:55:57,157
They just want to make sure they have $100 when they want to pull it out.

624
00:55:59,257 --> 00:56:01,738
And I think principal risk is the main thing,

625
00:56:01,817 --> 00:56:06,038
and that's why Saylor has said stretch is the killer product, the killer app.

626
00:56:06,218 --> 00:56:09,078
For those reasons, they've been able to stabilize it.

627
00:56:09,098 --> 00:56:09,637
What do you guys think?

628
00:56:09,797 --> 00:56:14,038
I have a question in terms of – so obviously we think the ATM was hit today

629
00:56:14,038 --> 00:56:15,998
as stretch was bumping up against 100.

630
00:56:16,377 --> 00:56:18,377
I've heard that the strategy teams,

631
00:56:18,377 --> 00:56:23,918
they've been very aggressive with their atm issuance at 100 but then on top of that do you

632
00:56:23,918 --> 00:56:28,277
think they will continue to raise the dividend rate so the ex-dividend date you have to have

633
00:56:28,277 --> 00:56:33,998
stretch in your account as i understand it so you have to be holding it on the morning of the 15th

634
00:56:33,998 --> 00:56:39,698
but you have you actually have to have bought it before the 14th because there's an ex-dividend

635
00:56:39,698 --> 00:56:44,598
date and there's ex-dividend date and then a record date the ex-dividend date's the 14th so

636
00:56:44,598 --> 00:56:50,277
if you buy in the 14th you don't get the dividend you have to buy before the 14th to qualify for

637
00:56:50,277 --> 00:56:54,157
your dividend you have to be holding before the ex-dividend date and then you have to market has

638
00:56:54,157 --> 00:56:58,578
to open and you have to be holding it on the record date that's the ex-dividend date is a broker rule

639
00:56:58,578 --> 00:57:08,657
that um the the uh record date is a strategy rule so i think the key is the 13th falls on i think

640
00:57:08,657 --> 00:57:14,738
monday correct right so yeah i think it's tuesday tuesday so i think a lot of this we're seeing this

641
00:57:14,738 --> 00:57:20,137
on a monthly basis as that dividend date as a dividend date approaches the market starts to

642
00:57:20,137 --> 00:57:27,117
pile in and be like let me let me clip this coupon then we see the price retrace on the

643
00:57:27,117 --> 00:57:31,357
ex-dividend date as people sell because they've qualified for the dividend and so i think over

644
00:57:31,357 --> 00:57:36,837
time this will become a more mature market and we're going to see the ex-dividend date fall by

645
00:57:36,837 --> 00:57:40,877
the same percentage as the payout and it's starting to trade like a real kind of fixed

646
00:57:40,877 --> 00:57:44,218
income market. I think it's going to be pretty interesting moving forward. See how that trades.

647
00:57:45,998 --> 00:57:50,457
You hit the nail on the head because if you only had to hold it for three days and you get the,

648
00:57:50,757 --> 00:57:54,117
and you get the dividend and you feel like you have the opportunity to go earn,

649
00:57:54,198 --> 00:57:59,598
you know, more money elsewhere, you're holding it up until that point in time.

650
00:57:59,938 --> 00:58:03,357
And I think one thing that's interesting, if you think about this as a short duration instrument,

651
00:58:03,357 --> 00:58:19,157
If you're, I think up until the 13th, maybe the 14th, Dan, we probably see, unless something drastically changes with Bitcoin, we probably see Stretch continue to trade right at 100.

652
00:58:19,617 --> 00:58:20,498
A thousand percent.

653
00:58:20,738 --> 00:58:21,297
A thousand percent.

654
00:58:21,418 --> 00:58:21,857
Totally agree.

655
00:58:22,677 --> 00:58:26,218
And after the ex-dividend date, we probably see it drop a little bit.

656
00:58:26,218 --> 00:58:38,817
And I think that the amount that it drops will probably start to decrease a little bit more and more over time as that pool of liquidity becomes deeper and deeper and there's more confidence in this instrument.

657
00:58:39,617 --> 00:58:48,177
And one thing I wanted to bring up and share with some people, just because this is like understanding how this was issued, I think is an important understanding.

658
00:58:48,238 --> 00:58:50,657
Like you care about this and you think there's no demand.

659
00:58:50,797 --> 00:58:52,377
Understanding how this was issued is really important.

660
00:58:52,377 --> 00:58:56,578
Okay. So they raised $2.5 billion of this stuff in July.

661
00:58:57,578 --> 00:59:03,677
They went out to market. They went to a bunch of banks and they told the banks like, hey, we want to issue this cool variable instrument.

662
00:59:04,038 --> 00:59:07,957
All the banks were like heads exploding because they've never seen anything like it before.

663
00:59:08,418 --> 00:59:14,977
And you get all these people that were interested in taking a speculative bet on this new instrument being created.

664
00:59:14,977 --> 00:59:19,058
They're like, okay, this is a similar flavor to STRK and STRF that you've launched.

665
00:59:19,297 --> 00:59:22,078
And yeah, sure. I'll buy it.

666
00:59:22,377 --> 00:59:25,498
And so you've got actually a significant amount of interest, right?

667
00:59:25,538 --> 00:59:32,438
So how this works is all of the bankers and you get retail people and they give you an indication of interest.

668
00:59:33,137 --> 00:59:37,398
And they'll tell you exactly how much they're interested in buying and at what price.

669
00:59:38,157 --> 00:59:42,198
And some people will tell you like, hey, at this price, I'll give you $100 million.

670
00:59:43,137 --> 00:59:47,918
Let's just say at 90% and 9%, I'll give you $100 million.

671
00:59:47,918 --> 00:59:57,738
But if you gave me a discount at 80 and 9%, I will, I'll give you 250 million.

672
00:59:58,198 --> 01:00:01,038
So you build like what's an order book.

673
01:00:01,238 --> 01:00:08,098
And so what they ended up landing on was, I think it was $9 per share on par priced at a discount of $90.

674
01:00:08,857 --> 01:00:16,018
So everybody that $2.5 billion of interest, when they first bought this, they bought in at $90.

675
01:00:16,018 --> 01:00:24,797
So as it began to trade up to 100, not only do they get paid the yield, they also get the option of principal appreciation.

676
01:00:25,718 --> 01:00:31,018
So it's got the potential to go up 11% and it's paying you 9%.

677
01:00:31,018 --> 01:00:33,098
So you get a double whammy, you win twice.

678
01:00:33,637 --> 01:00:45,518
Now, the reason I bring that up is because in the IPO, just like any other IPO, there are people that don't give a shit about the yield or anything else.

679
01:00:45,518 --> 01:00:51,498
They just know that they're getting an opportunity to buy something at a discount and the company is going to make this thing go to 100.

680
01:00:52,058 --> 01:00:53,938
They're going to do everything in their power to go to 100.

681
01:00:54,558 --> 01:01:01,137
So you've got all of these institutions that are like, yeah, look, I'll give you all this capital.

682
01:01:01,317 --> 01:01:03,538
I'm going to buy it at 90 and I'm going to sell it when it goes to 100.

683
01:01:03,957 --> 01:01:04,418
I don't care.

684
01:01:04,558 --> 01:01:12,698
Maybe I'll take, you know, maybe I'll clip a couple months of coupons as the liquidity builds in this thing and I can kind of drip shares out into the market.

685
01:01:12,698 --> 01:01:15,698
So what that effectively is, is an overhang.

686
01:01:16,698 --> 01:01:18,698
Like I think people don't really understand that.

687
01:01:18,698 --> 01:01:23,698
Like that is an overhang on the stock for the people that don't want the yield,

688
01:01:23,698 --> 01:01:24,698
don't care about the yield.

689
01:01:25,698 --> 01:01:30,698
They're waiting until the principal appreciates and they're just dripping shares out because they're like, great.

690
01:01:30,698 --> 01:01:31,698
I got another 10%.

691
01:01:31,698 --> 01:01:32,698
I got another 10%.

692
01:01:32,698 --> 01:01:34,698
And they've held this instrument, what for six months.

693
01:01:34,698 --> 01:01:37,698
And they got 10% because they bought it at 90 and they've been selling at a hundred.

694
01:01:38,698 --> 01:01:40,698
So there's an overhang on this stuff.

695
01:01:40,698 --> 01:01:45,877
an overhang on this stuff. And once that overhang is gone and these shares are in the hands of

696
01:01:45,877 --> 01:01:51,078
people that want the yield, the amount of volume and their ability to pull capital in the door on

697
01:01:51,078 --> 01:01:56,277
this thing is going to be insane. This is like a pipe deal. Everybody's had the boogeyman of the

698
01:01:56,277 --> 01:02:00,477
pipe. This is effectively, you can think of it like a pipe deal or any other IPO arbitrage

699
01:02:00,477 --> 01:02:05,677
opportunity. And that is fundamental in understanding how this works. I think we're

700
01:02:05,677 --> 01:02:13,357
probably getting close to a lot of those shares being turned over and in different hands for the

701
01:02:13,357 --> 01:02:18,457
people that you know didn't want to be in this instrument long term so so jeff let me reconstruct

702
01:02:18,457 --> 01:02:25,538
what you're saying uh sailor decides to do a digital credit product so what he does is he calls

703
01:02:25,538 --> 01:02:34,098
up a book runner calls up his his um investment bank and says look i came up with digital credit

704
01:02:34,098 --> 01:02:39,777
it's called strike stretch whatever these instruments are and shows them the prospectus

705
01:02:39,777 --> 01:02:45,777
and says look i'm gonna sell i want to know what your appetite is for this and it pays this yield

706
01:02:45,777 --> 01:02:51,857
and they read it they agree to it and they say fine so what they do is because it's not available

707
01:02:51,857 --> 01:02:58,018
and and the brokerage houses can come and say hey do you want to buy this and so you sign up on your

708
01:02:58,018 --> 01:03:03,137
brokerage house yes i want to buy this on the first day and they gauge that amount of interest

709
01:03:04,098 --> 01:03:11,498
So let's say they want to raise a billion dollars, but they find out that there's only going to be $200 million worth of retail coming in and buying it.

710
01:03:12,137 --> 01:03:16,738
So what the institutions do is they buy the full $2 billion, right?

711
01:03:17,578 --> 01:03:21,038
Saylor will say sometimes there's a green shoe and it's oversubscribed.

712
01:03:21,177 --> 01:03:22,677
We've been talking about this for years.

713
01:03:23,018 --> 01:03:24,357
The green shoes are not new.

714
01:03:24,657 --> 01:03:26,257
Same thing with an MSTR ATM.

715
01:03:26,918 --> 01:03:27,617
He'll do that.

716
01:03:27,617 --> 01:03:33,977
So the brokerage, what happens is the investment bank and the book runner give Saylor a billion dollars.

717
01:03:34,098 --> 01:03:39,337
So Saylor goes and buys a billion dollars worth of Bitcoin and he announces the orange dot, right?

718
01:03:39,418 --> 01:03:40,418
And you're like, okay.

719
01:03:41,257 --> 01:03:43,817
Now they gave him a billion dollars.

720
01:03:43,938 --> 01:03:44,857
And what do they do?

721
01:03:45,098 --> 01:03:48,418
They're sitting on a billion dollars worth of these shares.

722
01:03:49,398 --> 01:03:52,198
Now they have $200 million for people that want IPOs.

723
01:03:52,297 --> 01:03:53,598
They give it to the $200 million.

724
01:03:54,098 --> 01:03:56,438
Now there's $800 million left over.

725
01:03:57,098 --> 01:04:03,518
The casual observer on X, you know where I'm going is, oh, then they just dump the other $800 million.

726
01:04:03,518 --> 01:04:08,018
in a market order when the market opens and crash the price and short it.

727
01:04:08,018 --> 01:04:10,558
That is exactly what has not happened.

728
01:04:10,558 --> 01:04:14,898
What Jeff is saying here, Jeff, if I understand what you're saying and reconstructing it,

729
01:04:14,898 --> 01:04:28,275
they then drip those shares out to the market over the course of days weeks and months to keep the price relatively stable because they don want to lose the money that they gave the sailor to go buy the magical

730
01:04:28,275 --> 01:04:36,775
Bitcoins. Are we all in agreement that that's the way an ATM and this works? Absolutely. And what an

731
01:04:36,775 --> 01:04:41,535
awesome deal for the bankers, right? Or the people that purchased in the IPO, right?

732
01:04:41,535 --> 01:04:45,295
Oh, wait, let me give the good news. Why would a banker do this?

733
01:04:46,355 --> 01:04:51,015
The banker gets paid a fee.

734
01:04:51,755 --> 01:04:54,875
And you're looking every time they do this, it lists the line item.

735
01:04:54,995 --> 01:04:55,675
This is the fee.

736
01:04:55,935 --> 01:04:57,155
The banker gets a fee.

737
01:04:58,055 --> 01:05:05,795
What the banker also has, and this is not nefarious, is nobody knows how much of the shares the banker has.

738
01:05:06,435 --> 01:05:08,435
The banker knows, but we don't know.

739
01:05:08,595 --> 01:05:10,395
And we don't know how many people bought the IPO.

740
01:05:11,115 --> 01:05:13,555
Now, let's assume that the IPO was oversubscribed.

741
01:05:13,555 --> 01:05:21,915
So there's $1.2 billion worth of retail, and the bank gave Saylor $1 billion.

742
01:05:23,375 --> 01:05:26,215
You're like, oh, what happens in that case, Green?

743
01:05:26,575 --> 01:05:27,875
Oh, well, that's really easy.

744
01:05:28,155 --> 01:05:29,235
What does the bank do?

745
01:05:29,455 --> 01:05:36,135
Not only do they keep their fee, they slowly issue out those shares in the market to capture the spread.

746
01:05:36,575 --> 01:05:37,815
Like, oh, that's manipulated.

747
01:05:38,215 --> 01:05:39,835
No, that's the way you would do it.

748
01:05:39,835 --> 01:05:46,795
I just said, if you had all of this, would you dump the shares on day one at the open with a market order?

749
01:05:46,995 --> 01:05:47,095
No.

750
01:05:47,335 --> 01:05:47,575
Never.

751
01:05:48,155 --> 01:05:49,775
You distribute it out slowly.

752
01:05:49,955 --> 01:05:51,395
I don't know why people miss this.

753
01:05:51,755 --> 01:05:53,595
We've been talking about this for a year and a half.

754
01:05:54,735 --> 01:06:02,115
The coolest part for the people that were holding it or like that invested in the IPO is like, even if you didn't care about it, right?

755
01:06:02,695 --> 01:06:06,375
You look at a company like Strategy, you're like, they're at least going to pay the dividend for a year.

756
01:06:06,715 --> 01:06:08,955
So you're like, I've got a year to drip this out.

757
01:06:08,955 --> 01:06:25,035
If I think the company is going to actively manage it to 100, I'm like, cool, I can make 11% watching you go from 90 to 100. And I get paid while I'm holding it. I get paid every month while I'm holding it. It's just a fantastic deal.

758
01:06:25,035 --> 01:06:27,135
So anyway, I think we're close.

759
01:06:27,295 --> 01:06:31,295
We're probably pretty close to getting rid of the overhang that's on top of that.

760
01:06:31,375 --> 01:06:39,635
And then you're starting, you'll probably start to see people that are holding these instruments a little bit more long term, whether it be pension funds, insurance companies.

761
01:06:39,935 --> 01:06:40,055
Yeah.

762
01:06:40,235 --> 01:06:42,415
So I'm going to add an extra word in here.

763
01:06:42,835 --> 01:06:45,815
One of the words that you'll see come up sometimes is equilibrium.

764
01:06:46,595 --> 01:06:50,555
What happens is, oh, or stabilize over time.

765
01:06:50,555 --> 01:06:58,695
So as the shares get into the market, as the market becomes more comfortable with it, they're like, oh, it's stabilized or now it's in equilibrium.

766
01:06:59,035 --> 01:07:00,795
And that's what you're seeing in stretch.

767
01:07:00,995 --> 01:07:05,075
The range for that is going to be somewhere between $98 and $100.

768
01:07:05,435 --> 01:07:07,895
But the goal is to keep it between $99 and $100.

769
01:07:08,575 --> 01:07:10,935
Maybe they could peg the vol less.

770
01:07:11,095 --> 01:07:15,295
I think Saylor said on the last call, it's at 5%, he can get to 3%.

771
01:07:15,295 --> 01:07:16,555
And the goal is to get to 1%.

772
01:07:17,275 --> 01:07:19,555
Well, Dan's going to take it even lower.

773
01:07:20,355 --> 01:07:24,215
Dan's going to take it lower because what's going to happen is they're going to build on top of it.

774
01:07:24,215 --> 01:07:28,015
And it's going to be there'll be a perpetual bid on it for multiple areas.

775
01:07:28,335 --> 01:07:28,815
Right.

776
01:07:28,915 --> 01:07:30,635
So this is where the market's going.

777
01:07:32,135 --> 01:07:38,975
And but guys, by the way, people think the preps are going after the bond market.

778
01:07:39,855 --> 01:07:40,375
Right.

779
01:07:40,915 --> 01:07:42,535
Oh, the preps are going to bond market.

780
01:07:42,935 --> 01:07:45,575
Stretch is going after the money market funds.

781
01:07:46,035 --> 01:07:46,555
Right.

782
01:07:46,555 --> 01:07:51,075
And Saylor has talked about this in Miami specifically and multiple places, most recently in Miami.

783
01:07:51,315 --> 01:07:53,515
But the money market funds is $7 trillion.

784
01:07:53,995 --> 01:07:54,795
And think about that.

785
01:07:54,875 --> 01:08:00,155
Well, if it's liquid, right, then think about this.

786
01:08:00,255 --> 01:08:03,175
If your money market fund pays, I don't know, what does a money market fund pay?

787
01:08:03,715 --> 01:08:05,675
1%, right?

788
01:08:06,035 --> 01:08:10,535
And if you're a brokerage house, you're like, eh, we'll give people 6%.

789
01:08:10,535 --> 01:08:12,435
We'll keep 5% for ourselves.

790
01:08:12,435 --> 01:08:19,115
the bank or the brokerage house would make a five percent spread and i know this because i posted

791
01:08:19,115 --> 01:08:23,775
this back in miami and i tagged sailor in it i'm like did i get it right and he's like

792
01:08:23,775 --> 01:08:30,055
yep so that's exactly what we're trying to do here they're going to keep that spread so

793
01:08:30,055 --> 01:08:36,435
the first three the most of the preps are the bond market but stretch is going after the money

794
01:08:36,435 --> 01:08:41,675
market fund and that's seven trillion dollars the craziest part is it's both right like

795
01:08:41,675 --> 01:08:47,615
like imagine your bond portfolio with liquid bonds that are beating everything else like that

796
01:08:47,615 --> 01:08:54,855
that's the craziest part it's both yeah it beats everything it beats every bond out there from

797
01:08:54,855 --> 01:09:01,535
every facet like you know you know it's less risky it's less volatile it's more liquid like

798
01:09:01,535 --> 01:09:06,675
every single facet out there and maybe we'll get into the bad bond of the week but i want to i want

799
01:09:06,675 --> 01:09:11,375
to wrap this up with two things i go first i think probably one of the biggest problems with trad fi

800
01:09:11,375 --> 01:09:17,355
or investment banks looking at it is the first thing is that they don't understand it.

801
01:09:17,475 --> 01:09:19,295
And the second thing is it's too good to be true.

802
01:09:20,295 --> 01:09:22,075
They're just like, no, it's too good to be true.

803
01:09:22,215 --> 01:09:23,235
It's going to implode.

804
01:09:23,335 --> 01:09:24,155
It's too good to be true.

805
01:09:24,615 --> 01:09:28,235
That's the reason why Saylor invented the green dots and acquired cash.

806
01:09:28,435 --> 01:09:32,095
Because somebody is like, can you ensure that this is going to get paid?

807
01:09:32,155 --> 01:09:34,615
And we're like, yeah, what's the current metrics on that?

808
01:09:34,655 --> 01:09:35,515
We can pull it up.

809
01:09:36,415 --> 01:09:37,395
It's two and a half years.

810
01:09:37,775 --> 01:09:38,855
They've got two and a half years.

811
01:09:38,855 --> 01:09:43,215
It's like 30, 34 months or something on, on what do you call it?

812
01:09:43,215 --> 01:09:44,195
On the cash balance.

813
01:09:44,195 --> 01:09:45,175
And what is it?

814
01:09:45,255 --> 01:09:47,595
70 something years on the Bitcoin.

815
01:09:47,835 --> 01:09:48,695
It's insane.

816
01:09:49,055 --> 01:09:52,095
It's, it's like crazy over, over capitalized.

817
01:09:52,835 --> 01:09:53,275
Right.

818
01:09:53,415 --> 01:09:55,035
And I want to call it one last thing.

819
01:09:55,095 --> 01:09:56,655
We can, we can move on.

820
01:09:56,975 --> 01:09:57,275
All right.

821
01:09:57,275 --> 01:09:58,435
You've had like five last things.

822
01:09:58,555 --> 01:09:58,695
Great.

823
01:09:58,795 --> 01:09:59,095
Come on.

824
01:09:59,395 --> 01:10:00,755
But no, I'm known for that.

825
01:10:00,815 --> 01:10:01,495
I'm really known for that.

826
01:10:01,895 --> 01:10:05,255
Look, Matt Cole said something and you said this about goodwill.

827
01:10:05,255 --> 01:10:11,055
if software is made free by AI, Matt Cole said this, then the goodwill for software

828
01:10:11,055 --> 01:10:18,055
pretty much goes to zero. He said that. And I wrote that is awesome and horrifying at the same

829
01:10:18,055 --> 01:10:23,335
time. So I mean, think about this. So you're going to talk about the bad bonds that are doing,

830
01:10:23,595 --> 01:10:28,515
the transparency on strategy, the dashboard showing you in real time what it is. But if

831
01:10:28,515 --> 01:10:35,195
other companies had to show real time value of their software and specifically relative to AI,

832
01:10:35,255 --> 01:10:42,535
coming in oh my god if i was a ceo i'd be like of a software company right now i i would have a i

833
01:10:42,535 --> 01:10:47,255
would have a crisis meeting right now and say how are we going to make sure that some other company

834
01:10:47,255 --> 01:10:55,335
using ai doesn't offer the same functionality for one one hundredth of the price yeah i would be

835
01:10:55,335 --> 01:11:00,695
scared about that yeah go ahead go ahead mason you're going to jump in yeah yeah no i mean i

836
01:11:00,695 --> 01:11:05,275
I think what we want to see over the next few years

837
01:11:05,275 --> 01:11:08,335
or maybe next decade is massive disruption.

838
01:11:09,155 --> 01:11:14,335
And I think what Bitcoin and digital credit are,

839
01:11:14,755 --> 01:11:17,275
it's kind of safe harbor for both parts

840
01:11:17,275 --> 01:11:19,535
of a traditional portfolio, right?

841
01:11:19,595 --> 01:11:20,955
If you're looking 60-40.

842
01:11:21,955 --> 01:11:25,975
Yeah, like digital credit is obviously better

843
01:11:25,975 --> 01:11:27,275
than any single bond out there,

844
01:11:27,335 --> 01:11:28,355
any single money market.

845
01:11:29,335 --> 01:11:30,655
And realistically, it's not that

846
01:11:30,695 --> 01:11:37,655
hard to figure out like you have to accept bitcoin as kind of a you know a a thing that is going to be

847
01:11:37,655 --> 01:11:45,635
here and then you just show them the financials like jeff you can pull that up it's like if if

848
01:11:45,635 --> 01:11:52,535
anybody with any kind of financial literacy uh who know who's managing capital can can

849
01:11:52,535 --> 01:11:59,035
and really internalize what that means then it's it's not it's not hard to figure out right

850
01:11:59,035 --> 01:12:26,895
So I think digital credit will be safe harbor for the bonds, which are going to increasingly be disrupted. And then it's the same thing for the equity side, right? Like, if I think a pretty popular trade right now is going to ensure software service, long hardware, I think ultimately everything gets disrupted. And that's why you have Bitcoin.

851
01:12:26,895 --> 01:12:46,735
So I think the really interesting conversation here is what does adoption look like? What is the timeframe for a catalyst? Because we know what we've got, right? But how does that play out? And I think we'll keep watching in the meantime.

852
01:12:46,735 --> 01:12:55,575
yeah 100 so i'm going to summarize what mason said what he said is short basically short software

853
01:12:55,575 --> 01:13:01,095
long hardware what that means is that one of the reasons why nvidia trades so well and people are

854
01:13:01,095 --> 01:13:05,355
like oh well some other company will come out with better hardware than video nvidia has a software

855
01:13:05,355 --> 01:13:11,015
stack on top of it called cuda cuda and so it's not only do you have to come with better hardware

856
01:13:11,015 --> 01:13:16,395
but everybody that's wrote the ai apps that run on top of nvidia needs to have the software that

857
01:13:16,395 --> 01:13:22,255
that that uses it in the case of nvidia it's embedded right you have to use their software

858
01:13:22,255 --> 01:13:28,515
with their hardware now what you're also saying mason the meta message here is you know microsoft

859
01:13:28,515 --> 01:13:33,015
is a software play and use any hardware the hardware had no value the bigger play here is

860
01:13:33,015 --> 01:13:39,935
apple what do you do apple you buy the computer can only run apple software and so meaning the

861
01:13:39,935 --> 01:13:44,355
operating system so i think this is where the market's going how is this related to strategy

862
01:13:44,355 --> 01:13:50,655
strategy is the biggest issuer of prefs full stop right jeff is there any company that's issued more

863
01:13:50,655 --> 01:13:55,975
prefs than strategy no no way they're like set records with all the ipos they've set records with

864
01:13:55,975 --> 01:14:03,235
the uh the trading volume they've set records with they're the first company to put a atm on

865
01:14:03,235 --> 01:14:09,055
top of a preferred equity which is super novel i think everybody really overlooks like how how

866
01:14:09,055 --> 01:14:15,295
crazy novel that is like they can issue debt like capital as equity any day of the week like

867
01:14:16,175 --> 01:14:22,895
that is a that is such a valuable tool that is commonly overlooked right and stretch it's the

868
01:14:22,895 --> 01:14:28,015
only way the only way stretch is able to be created was because of the atm on top of the preferreds

869
01:14:28,895 --> 01:14:34,415
right and the other part would stretch stretch was the largest ipo of the whole year correct yeah

870
01:14:34,415 --> 01:14:38,415
Yeah. I think one came out at the end, but I think you're right.

871
01:14:38,595 --> 01:14:39,915
Okay. Yeah. I think you're right. It's close.

872
01:14:40,055 --> 01:14:41,375
Okay. Well, okay. It's close.

873
01:14:41,375 --> 01:14:44,455
It's either the largest API, largest IP over the years.

874
01:14:44,555 --> 01:14:47,975
Right. So I think we're looking at, you know,

875
01:14:47,995 --> 01:14:53,595
if we want to be mad at something, be mad at Bitcoin, be mad at forever.

876
01:14:53,735 --> 01:14:55,355
Whatever reason the price went down,

877
01:14:55,515 --> 01:14:58,355
we didn't get any fricking help from Bitcoin. That's.

878
01:14:59,915 --> 01:15:02,655
And that's what strategy buying 250,000.

879
01:15:04,415 --> 01:15:08,935
Right. I like when I hear something, oh, we don't like Saylor, what are you doing?

880
01:15:09,015 --> 01:15:11,495
Because he's going to make the market worse.

881
01:15:11,635 --> 01:15:13,095
I'll be like, you know what, dude?

882
01:15:13,595 --> 01:15:18,475
If strategy didn't buy 250,000 Bitcoins, I don't even want to talk about what the price of Bitcoin would be.

883
01:15:18,615 --> 01:15:20,275
Because I'll tell you right now, it'd be lower.

884
01:15:20,935 --> 01:15:21,615
It'd be way lower.

885
01:15:21,615 --> 01:15:24,935
If the ETFs weren't there, if the derivatives market wasn't so huge.

886
01:15:24,935 --> 01:15:27,935
If the spot Bitcoin ETFs were and they weren't doing this, it would be lower.

887
01:15:27,935 --> 01:15:37,075
on this point i think we should talk about msci briefly because msci came out and they had reversed

888
01:15:37,075 --> 01:15:41,355
their stance and now they're allowing companies with digital assets greater than 50 of their

889
01:15:41,355 --> 01:15:46,555
treasury to stay within the index funds and so a couple things that are really interesting here

890
01:15:46,555 --> 01:15:51,675
they came out with this note on it was october 10th the day of the flash crash companies with

891
01:15:51,675 --> 01:15:56,995
greater than 50 of their digital assets they're considering removing them from all of the next

892
01:15:56,995 --> 01:16:01,095
funds. And it created this huge period up until January 15th, they were going to make their

893
01:16:01,095 --> 01:16:08,135
decision. And so they had almost an entire quarter to figure out what they wanted to do with this.

894
01:16:08,135 --> 01:16:14,335
Well, that creates uncertainty for the entire market everywhere. It creates uncertainty on

895
01:16:14,335 --> 01:16:19,435
all of the digital asset treasury companies, creates uncertainty on Bitcoin on top of having

896
01:16:19,435 --> 01:16:24,355
like four-year cycle bros YOLOing out of this thing. And then you've got uncertainty on PREF

897
01:16:24,355 --> 01:16:29,655
models and you've got all this stuff happening. And then fast forward to a couple of days ago,

898
01:16:30,255 --> 01:16:37,835
Morgan Stanley comes out with a Bitcoin ETF. That's interesting. MSCI used to be owned by

899
01:16:37,835 --> 01:16:44,475
Morgan Stanley, but they were divested in 2007. That's interesting. Just a lot of things that are,

900
01:16:44,475 --> 01:16:47,915
when you plug them together and you look at this timeline, like if you wanted to

901
01:16:47,915 --> 01:16:51,975
increase and scare the market and get some increased Bitcoin exposure,

902
01:16:51,975 --> 01:17:00,435
that's a pretty good way to do it to create some uncertainty within the market of the largest

903
01:17:00,435 --> 01:17:06,355
continuous public publicly continuous buyer of the stuff and then you've got potentially

904
01:17:06,355 --> 01:17:10,315
coordinated FUD with JP Morgan and that like Walter Bloomberg account it was just like

905
01:17:10,315 --> 01:17:16,515
heinous ridiculous takes in all of Q4 but really it was uncertainty from from quite a quite a few

906
01:17:16,515 --> 01:17:23,475
things can i speak on that 100 walter bloomberg thing i was at the naples family office that

907
01:17:23,475 --> 01:17:29,855
sailor spoke at and he was on stage straight face bitcoin's going to 10k in the next three months

908
01:17:29,855 --> 01:17:30,955
i'm like

909
01:17:30,955 --> 01:17:40,515
you know you know that meme are you sure about that exactly and so but what's so interesting

910
01:17:40,515 --> 01:17:45,875
is i saw a post today from him it seems like and so on call sheet on call sheet bitcoin reclaiming

911
01:17:45,875 --> 01:17:52,255
100k just hit 40 percent this month which is very high like if you price that as an auction

912
01:17:52,255 --> 01:17:57,855
that you know that's pretty high options markets getting really expensive both for mstr and bitcoin

913
01:17:57,855 --> 01:18:02,255
some things change long-term holders obviously have stopped selling like some sort of momentum

914
01:18:02,255 --> 01:18:06,635
has shifted but my point being is walter bloomberg came out of the post it wasn't walter bloomberg

915
01:18:06,635 --> 01:18:12,415
it's the other guy mike mcglone excuse me mike mcglone did the speech at naples he came out of

916
01:18:12,415 --> 01:18:18,315
post today and said there may be a reason a scenario in which bitcoin doesn't go down to 10k

917
01:18:18,315 --> 01:18:26,375
during uh 2026 i'm like oh uh really uh and that's and he says because of reduced volatility in the

918
01:18:26,375 --> 01:18:31,095
the equities market and for some other nonsense reason so he's pretty much saying the equities

919
01:18:31,095 --> 01:18:34,535
market may have a good year and there's so many reasons why the equities market could

920
01:18:34,535 --> 01:18:40,015
will probably have a good year credit spreads are extremely tight on all the junk bonds bitcoin is

921
01:18:40,015 --> 01:18:45,295
performing really well, not hitting all the resistance levels or whatever shelf falling

922
01:18:45,295 --> 01:18:48,175
off TA lines that people were saying was going to hit.

923
01:18:48,555 --> 01:18:51,835
And I think it's because the institutions are stepping in and buying, much like they

924
01:18:51,835 --> 01:18:55,915
front ran the end of the four-year cycle, they're front running the end of the bear

925
01:18:55,915 --> 01:18:56,635
market, right?

926
01:18:57,395 --> 01:19:02,235
Essentially, our four-year cycle, we hit $126K four months early.

927
01:19:03,335 --> 01:19:06,435
And I think institutions will do the same thing, and they'll start buying on the way

928
01:19:06,435 --> 01:19:11,595
down as they get their entry prices months in advance of when the historic bear market would

929
01:19:11,595 --> 01:19:16,515
end, which is in the second half of 2026. So like if you're going to buy something, if you want,

930
01:19:16,515 --> 01:19:24,275
if you like it at 50,000, you're a buyer at 65,000. Any smart investors probably kind of

931
01:19:24,275 --> 01:19:27,735
thinking that way, especially if you believe it's going to a million plus over a long period of time.

932
01:19:28,695 --> 01:19:36,035
Yep. Hold on, Mason. I got to pause. I've got to plug this. We've got a short commercial break

933
01:19:36,035 --> 01:19:42,635
kind of uh we have true north vegas this is happening in partnership with strategy world

934
01:19:42,635 --> 01:19:48,795
here in february at strategy world i believe it is february 23rd through february 26th the

935
01:19:48,795 --> 01:19:54,415
strategy world our event is going to be on the 23rd it's going to be a great time there's 150

936
01:19:54,415 --> 01:20:00,895
tickets in total that will be sold so far we've already sold 67 44 of the tickets have been sold

937
01:20:00,895 --> 01:20:03,655
and once they're all gone, they're all gone.

938
01:20:03,835 --> 01:20:07,535
So if you want to come have a very unique,

939
01:20:07,775 --> 01:20:10,755
interactive experience, come talk with us, hang out.

940
01:20:11,195 --> 01:20:13,135
The tickets will get you access to,

941
01:20:13,715 --> 01:20:17,015
we'll have a happy hour at a cool location afterwards.

942
01:20:17,815 --> 01:20:19,655
There's about four hours of content.

943
01:20:19,835 --> 01:20:21,115
This content will be interactive

944
01:20:21,115 --> 01:20:23,635
and we'll do a little bit of presentations,

945
01:20:23,635 --> 01:20:24,755
a little bit of conversations

946
01:20:24,755 --> 01:20:26,895
and probably some rotation of topics.

947
01:20:27,275 --> 01:20:29,515
You'll get a chance to meet and hang out with everybody

948
01:20:29,515 --> 01:20:32,115
and it will be a great time.

949
01:20:32,175 --> 01:20:34,235
It'll be slightly elevated from what we did last year.

950
01:20:34,975 --> 01:20:38,015
And I'm sure we'll have a couple of guests

951
01:20:38,015 --> 01:20:41,875
from some of the Bitcoin companies swing by.

952
01:20:42,235 --> 01:20:45,575
So please take a peek at it, come hang out with us.

953
01:20:45,755 --> 01:20:48,335
We'd love to meet anybody that's interested in this.

954
01:20:48,655 --> 01:20:50,715
And if you're interested in hearing

955
01:20:50,715 --> 01:20:53,935
what's going on in the strategy world,

956
01:20:54,015 --> 01:20:56,095
there's an entire Bitcoin for Corporations track

957
01:20:56,095 --> 01:20:58,195
at Strategy World for three days in a row.

958
01:20:58,195 --> 01:21:03,795
So you can hear this from the horse's mouth, from different banking institutions, different treasury companies.

959
01:21:04,055 --> 01:21:09,615
And you can really interact and network with all of these people in a very small group of people.

960
01:21:09,915 --> 01:21:12,395
So it's a fantastic event.

961
01:21:13,055 --> 01:21:17,415
It's going to be bigger and badder than last year and really looking forward to it.

962
01:21:17,535 --> 01:21:18,775
Anybody else have anything to add?

963
01:21:19,775 --> 01:21:21,375
Yeah, you know, I'll chime in one thing.

964
01:21:22,995 --> 01:21:24,535
Look, meeting us is great.

965
01:21:24,535 --> 01:21:31,015
um what i'll tell you is that michael saylor is is accessible if you go to event where he is

966
01:21:31,015 --> 01:21:35,955
especially if you go to this event there's a really good chance that if you look for him

967
01:21:35,955 --> 01:21:40,495
you could find him meet him and talk to him and so if you want to meet the guy yourself

968
01:21:40,495 --> 01:21:45,855
i would suggest you go to the event and you go and talk to him that i mean we we met and talked

969
01:21:45,855 --> 01:21:51,795
spoke to him many times in orlando last year and and i met him previously the year before that two

970
01:21:51,795 --> 01:21:56,895
years ago was the first time I met him in person. And I talked to him multiple times over multiple

971
01:21:56,895 --> 01:22:02,015
days that I was there. So I suggest that everybody come not just to meet us so you can meet him also

972
01:22:02,015 --> 01:22:09,115
and the rest of the executive team. It's Andrew Kang, it's Sharice, it's CJ, it's Charlie, it's

973
01:22:09,115 --> 01:22:13,535
everybody on the strategy team will be there. And if you want to talk the Bitcoin treasury strategy

974
01:22:13,535 --> 01:22:18,415
and you want to hear it from the people that are working, there's likely going to be bankers there.

975
01:22:18,415 --> 01:22:20,195
There's likely going to be lawyers there.

976
01:22:20,315 --> 01:22:30,015
If you want to talk to these people that are actually operating behind the scenes, it's not the Bitcoin, you know, the big Bitcoin conference in April.

977
01:22:30,215 --> 01:22:31,195
It's this event.

978
01:22:31,355 --> 01:22:32,795
It's the strategy world event.

979
01:22:32,895 --> 01:22:38,195
I think last year there were like 400 people there, 400, 500 people at the strategy world event.

980
01:22:39,295 --> 01:22:41,115
Everybody was incredibly accessible.

981
01:22:41,815 --> 01:22:42,875
Yeah, right.

982
01:22:43,015 --> 01:22:44,835
I'm not saying anything is wrong with the Bitcoin event.

983
01:22:44,835 --> 01:22:50,575
The problem with the Bitcoin event trying to meet Saylor is there's 25,000 people there.

984
01:22:51,135 --> 01:22:55,255
So the security was tight because there's 25,000 people.

985
01:22:55,475 --> 01:23:01,515
With these events, because they're much, much smaller, you can get there, meet him, and it's great.

986
01:23:02,655 --> 01:23:02,775
Yep.

987
01:23:03,295 --> 01:23:03,535
Okay.

988
01:23:04,355 --> 01:23:05,415
Back to you, Mason.

989
01:23:05,835 --> 01:23:06,915
Sorry, I had to interrupt.

990
01:23:06,915 --> 01:23:28,915
Yeah, I want to get into Dan's macro slides, but maybe one way to lead up to this is I think the market may soon start to appreciate the fact that Bitcoin has less regulatory risk than a lot of individual companies or sectors.

991
01:23:28,915 --> 01:23:45,995
And I think we're seeing this even today, right? You had two pretty substantial kind of keeping announcements from Trump, which may or may not come into effect. One was corporations won't be able to buy single family homes.

992
01:23:45,995 --> 01:23:58,335
And the other was that defense companies can't buy back stock or pay their CEOs or executives more than $5 million, right?

993
01:23:59,455 --> 01:24:07,575
I don't know if there's any precedent for this, but defense stocks went down. Blackstone went down.

994
01:24:07,575 --> 01:24:26,295
And the fact that there was this response to me just indicates that the executive branch or government in general can cause substantial volatility.

995
01:24:26,295 --> 01:24:36,155
Whereas with Bitcoin, sure, it can have negative price action from regulatory actions, right?

996
01:24:36,995 --> 01:24:39,735
But what I think we've seen is adoption.

997
01:24:41,115 --> 01:24:43,575
Mason, your audio is horrible.

998
01:24:44,275 --> 01:24:46,915
Can you try jumping off and jumping back on?

999
01:24:47,395 --> 01:24:47,515
Yeah.

1000
01:24:48,575 --> 01:24:48,875
All right.

1001
01:24:48,875 --> 01:25:07,935
Yeah. While Mason does that, I think what he's getting at is basically the president can move markets with a single tweet, move the real estate market a day, move the defense stock market, and then kind of reversed course and said, oh, military spending is going to go from a trillion to 1.5 trillion.

1002
01:25:07,935 --> 01:25:17,315
And then all of a sudden, it was at Lockheed Martin closed, closed up on the day after this crazy volatility.

1003
01:25:18,215 --> 01:25:19,435
Let's try to get Mason.

1004
01:25:20,515 --> 01:25:21,495
You guys hear me?

1005
01:25:22,295 --> 01:25:22,795
That's better.

1006
01:25:24,495 --> 01:25:25,335
Loud and clear.

1007
01:25:26,035 --> 01:25:26,435
All right.

1008
01:25:27,095 --> 01:25:35,135
I don't know how much you got, but essentially we're seeing increased volatility from regulatory risk.

1009
01:25:35,135 --> 01:25:42,175
And I think in the world that we're going into, Bitcoin is a safe harbor.

1010
01:25:42,455 --> 01:25:44,735
And hopefully the market will begin to appreciate that.

1011
01:25:45,035 --> 01:26:01,615
And it will be events such as what we saw today, which will be a catalyst for viewing Bitcoin as more of a risk off asset than it is right now, which is a risk on Brazilian Wi-Fi.

1012
01:26:02,495 --> 01:26:03,535
That's a great comment.

1013
01:26:03,535 --> 01:26:08,995
he's got the brazilian no and uh mace and i were talking about this the other night and i think

1014
01:26:08,995 --> 01:26:14,675
it's super spot on because part of sailor's whole talk track and why it's also the underpinning for

1015
01:26:14,675 --> 01:26:20,795
why strategies applying leverage to the bitcoin is if you believe bitcoin is going up 30 arr and

1016
01:26:20,795 --> 01:26:26,175
it's risk-free then you want to apply leverage and you can get higher returns you're upping your risk

1017
01:26:26,175 --> 01:26:31,575
on an asset that has no risk right if you believe bitcoin has no risk but it has volatility

1018
01:26:31,575 --> 01:26:37,395
then by applying leverage you're introducing risk onto the asset which is an interesting way to look

1019
01:26:37,395 --> 01:26:43,415
at it and so i think the the difference in the market the way the market's not understanding

1020
01:26:43,415 --> 01:26:49,155
bitcoin is i think it's overestimating the risk in bitcoin and if it truly does become this sort

1021
01:26:49,155 --> 01:26:57,675
of risk-free pristine capital asset then um you know equities won't look as enticing but that's

1022
01:26:57,675 --> 01:27:02,475
that's old news we've talked about that before yeah it's the this kind of risk is mispriced right

1023
01:27:02,475 --> 01:27:07,775
equity risk is mispriced all of these all of these other things are trading at you know 30 50 xpe

1024
01:27:07,775 --> 01:27:13,515
multiples 100 xpe multiples and now you've got bitcoin which universally trades at one xpe every

1025
01:27:13,515 --> 01:27:18,595
day now you've got companies that are trading and applying leverage on top of it that are now

1026
01:27:18,595 --> 01:27:23,855
trading at like net asset value like what what is it what is a digital credit company vehicle worth

1027
01:27:23,855 --> 01:27:29,615
Like what is the vehicle that strategy has created?

1028
01:27:30,235 --> 01:27:31,175
Like what is that worth?

1029
01:27:33,715 --> 01:27:35,435
Probably more than that.

1030
01:27:36,855 --> 01:27:38,615
Probably a lot more than that.

1031
01:27:39,335 --> 01:27:42,095
Like what would somebody be willing to pay for this vehicle?

1032
01:27:42,435 --> 01:27:46,215
What do you think strategy would be willing to pay to sell the vehicle?

1033
01:27:50,095 --> 01:27:51,135
I don't think there's a number.

1034
01:27:51,135 --> 01:27:51,955
There has to be a buyer.

1035
01:27:51,955 --> 01:27:58,555
right now there's no buyers a number i just i just don't i just don't think that there's a

1036
01:27:58,555 --> 01:28:03,855
there's a number right that's an interesting concept yeah so look i'll give something

1037
01:28:03,855 --> 01:28:11,255
interesting you know why would somebody buy the mstr common stock so so strategy is the operating

1038
01:28:11,255 --> 01:28:14,675
company and they offer all these different products we've already talked about on the

1039
01:28:14,675 --> 01:28:21,195
preps mstr common so what happens is if the the preps are mostly designed to have

1040
01:28:21,195 --> 01:28:26,155
it clips some form of the volatility in order to pay you a yield.

1041
01:28:26,335 --> 01:28:29,975
That's exactly what sellers all the time in the slide that talks about,

1042
01:28:30,315 --> 01:28:34,795
hey, we have oil and then we break it down into different fuels

1043
01:28:34,795 --> 01:28:37,215
and different purposes as we distill it down.

1044
01:28:37,915 --> 01:28:40,395
So in this case, what happens is-

1045
01:28:40,395 --> 01:28:41,995
They don't clip the volatility though.

1046
01:28:43,055 --> 01:28:45,495
Clipping the volatility would be like selling calls to pay the dividends.

1047
01:28:45,975 --> 01:28:46,695
They're not doing that.

1048
01:28:48,855 --> 01:28:49,995
Great mid-transferring.

1049
01:28:49,995 --> 01:28:52,475
I think, Grain, you're transferring.

1050
01:28:53,355 --> 01:28:54,335
Yeah, I get what you're saying.

1051
01:28:54,335 --> 01:28:58,395
I just want to be like, that's a distinction that I think is important to mention.

1052
01:28:58,575 --> 01:29:00,195
Like, they're not clipping the volatility.

1053
01:29:00,355 --> 01:29:02,395
They're not taking the volatility off their balance sheet.

1054
01:29:02,475 --> 01:29:06,735
They're actually throwing more volatility into the balance sheet, and they're underwriting the risk of the instrument.

1055
01:29:08,135 --> 01:29:10,875
So, Jeff, I agree with what you're saying.

1056
01:29:11,395 --> 01:29:18,035
Because they add more Bitcoin to the balance sheet, overall, the company can have higher volatility because they have more Bitcoin.

1057
01:29:18,175 --> 01:29:19,335
Is that what you're trying to point out?

1058
01:29:19,335 --> 01:29:24,295
No, I'm trying to point out that strategy doesn't clip the volatility to pay the dividends.

1059
01:29:27,355 --> 01:29:27,755
Okay.

1060
01:29:28,035 --> 01:29:34,855
Well, from what I heard from Saylor, and I believe to quote him exactly, is that we strip the volatility out of it to pay a yield.

1061
01:29:35,175 --> 01:29:37,095
He uses the word strip all the time.

1062
01:29:37,615 --> 01:29:38,895
Strip the volatility out of the prefs.

1063
01:29:39,635 --> 01:29:41,755
Yeah, strip the volatility out of the prefs to pay the yield.

1064
01:29:41,915 --> 01:29:47,895
I use the word clip instead of strip, but he's reducing the volatility with the prefs in order to pay the yield.

1065
01:29:47,895 --> 01:29:49,815
We got clippers and strippers here.

1066
01:29:50,015 --> 01:29:51,135
Clippers and strippers.

1067
01:29:51,695 --> 01:29:53,755
I'm not going to touch that one.

1068
01:29:54,155 --> 01:29:54,435
Okay.

1069
01:29:54,675 --> 01:29:55,515
Clippers and strippers.

1070
01:29:55,895 --> 01:29:58,175
So what I'm trying to say here.

1071
01:29:58,495 --> 01:29:58,715
That makes sense.

1072
01:29:58,795 --> 01:29:59,315
That makes sense.

1073
01:29:59,395 --> 01:30:00,955
They're stripping the volatility from the preps.

1074
01:30:01,115 --> 01:30:03,115
That excess volatility is going to the common stock.

1075
01:30:03,255 --> 01:30:05,055
That makes the common stock more attractive.

1076
01:30:05,275 --> 01:30:06,815
They're able to use that as an ATM.

1077
01:30:07,375 --> 01:30:07,535
Right.

1078
01:30:07,735 --> 01:30:11,035
And the common stock is the most volatile wine.

1079
01:30:11,275 --> 01:30:12,255
It's the most volatile wine.

1080
01:30:12,575 --> 01:30:12,775
Okay.

1081
01:30:12,895 --> 01:30:17,035
So my point about this is if strategy is right, which I think they are,

1082
01:30:17,035 --> 01:30:20,255
I want to own as much as that company as possible.

1083
01:30:20,435 --> 01:30:25,355
So if I need either quarterly or monthly payments, I would buy the prefs.

1084
01:30:25,815 --> 01:30:27,195
It's not all or nothing.

1085
01:30:27,515 --> 01:30:29,495
I could buy stretch.

1086
01:30:29,615 --> 01:30:33,595
There's almost very little or no upside in the underlying price of it.

1087
01:30:33,915 --> 01:30:40,735
If I want strike, strike gives you more upside and it gives you less yield or yield depending

1088
01:30:40,735 --> 01:30:41,495
upon how it trades.

1089
01:30:41,495 --> 01:30:46,875
My point here is this, is that if you think that strategy is right in issuing digital credit

1090
01:30:46,875 --> 01:30:53,915
will become the next form of attacking the bond market and the money market funds, I would want

1091
01:30:53,915 --> 01:30:58,395
to own a part of that company. That's the simple equation. If you agree with that.

1092
01:30:58,395 --> 01:30:58,955
What's it worth?

1093
01:30:59,515 --> 01:31:02,715
And what's it worth? I think it's worth a lot more than what it is right now.

1094
01:31:03,275 --> 01:31:09,835
Yeah. It's funny. The chief marketing officer at Strive asked me the other day, he's like,

1095
01:31:09,835 --> 01:31:14,475
how long do you think you're going to work at this company? And I just, I giggled. I totally giggled

1096
01:31:14,475 --> 01:31:16,435
because my response was,

1097
01:31:16,515 --> 01:31:19,075
I think this might be the last company I ever worked for.

1098
01:31:20,175 --> 01:31:21,215
I think there might be one.

1099
01:31:22,155 --> 01:31:25,595
It's like, what is this company worth?

1100
01:31:26,815 --> 01:31:31,495
A lot more than what anybody is willing to sell it for.

1101
01:31:32,715 --> 01:31:37,115
You know what one of the weirdest things in Silicon Valley is?

1102
01:31:37,335 --> 01:31:39,395
Somebody says they're a serial entrepreneur

1103
01:31:39,395 --> 01:31:41,395
and they always sell off a company.

1104
01:31:41,935 --> 01:31:43,295
I'm like, okay.

1105
01:31:43,295 --> 01:31:47,615
If the company is so good, why are you selling it off, right?

1106
01:31:47,855 --> 01:31:54,415
The reason why they're selling it off is because they got paid so much money that they don't think it's going to continue to go up, right?

1107
01:31:54,515 --> 01:31:58,375
Because if they sell it and it continues to go up, that means they sold it too early.

1108
01:31:58,895 --> 01:32:01,035
But that logic is lost on these guys.

1109
01:32:01,595 --> 01:32:01,795
Totally.

1110
01:32:02,075 --> 01:32:09,695
Well, you kind of like reach this economies of scale and you're like, all right, I got to pull the parachute now because I think the risk of going any further here doesn't make a ton of sense.

1111
01:32:09,695 --> 01:32:12,075
An example of this, I saw a chart the other day.

1112
01:32:12,155 --> 01:32:18,375
It was showing Zoom, the company that does the web software.

1113
01:32:18,815 --> 01:32:22,835
It was showing their earnings over time, and then it was tracked with the stock price next to it.

1114
01:32:23,375 --> 01:32:27,255
And so as earnings were growing really quick, like right during COVID, the stock was booming.

1115
01:32:27,735 --> 01:32:28,715
And then earnings flatlined.

1116
01:32:29,275 --> 01:32:30,195
Stock crashed.

1117
01:32:31,855 --> 01:32:33,555
And it's like, well, where does Zoom go from here?

1118
01:32:34,875 --> 01:32:36,375
Somebody can create a Zoom app.

1119
01:32:36,615 --> 01:32:39,555
Mike, you could probably go create a Zoom app on AI today.

1120
01:32:39,695 --> 01:32:46,375
yeah and you know one of the craziest parts about this everybody's talking about zoom in 2020

1121
01:32:46,375 --> 01:32:50,895
right because that's when covid hit and zoom take oh we're going to do a zoom call we're going to do

1122
01:32:50,895 --> 01:32:57,555
a zoom call i'm sitting there like this i didn't buy the stock right and i'm like really i'm going

1123
01:32:57,555 --> 01:33:04,615
to date myself during the internet bubble when i was at global crossing i provisioned the the the

1124
01:33:04,615 --> 01:33:13,255
circuits on the back end for webex i had been using video conferencing literally for 20 years

1125
01:33:13,255 --> 01:33:20,695
and i was the guy that that provisioned and sold those deals to webex which got acquired by by cisco

1126
01:33:20,695 --> 01:33:25,735
so my point here about this like oh my god you just heard about zoom we had to convince people

1127
01:33:25,735 --> 01:33:31,415
back in the old days like oh you're gonna have video on a call and so many people were dead set

1128
01:33:31,415 --> 01:33:36,055
against this i don't it's like yeah but you had to go to the office anyway why are you dead set

1129
01:33:36,055 --> 01:33:41,655
against the dead set against this so the question is is like oh zoom came out you're right where's

1130
01:33:41,655 --> 01:33:46,375
it going to go from there that's when you said that's when you see when the founders sell off

1131
01:33:46,375 --> 01:33:52,775
because there's no longer any upside left in it right but but when you when you have a huge bitcoin

1132
01:33:52,775 --> 01:33:59,655
balance sheet and the the preferred equity vehicle it's just like why like why why would ever like i

1133
01:33:59,655 --> 01:34:00,995
I don't think there's anything better than this.

1134
01:34:01,055 --> 01:34:07,875
I think there's like just a few companies on the planet that have this vehicle structure.

1135
01:34:08,135 --> 01:34:09,895
It's just, it's really appealing.

1136
01:34:10,155 --> 01:34:10,875
It's really appealing.

1137
01:34:11,155 --> 01:34:14,055
And I think the company could last for a thousand years.

1138
01:34:15,635 --> 01:34:22,415
You know, it's just, it's a very interesting dynamic, right?

1139
01:34:22,415 --> 01:34:28,535
Like these companies, like if Zoom were to have Bitcoin on the balance sheet, maybe the

1140
01:34:28,535 --> 01:34:29,635
stock performance would be significant.

1141
01:34:29,655 --> 01:34:36,315
different right i don't know yeah i'm gonna go back to what you said about risk from all these

1142
01:34:36,315 --> 01:34:44,895
companies um i had posted that i was using i use claude i'll i'll explain this very very quickly

1143
01:34:44,895 --> 01:34:49,995
what happens and why why risk is not priced correctly so i saw all these video all these

1144
01:34:49,995 --> 01:34:56,095
posts about claude so i'm not a computer programmer my degrees in economics i don't write code i can

1145
01:34:56,095 --> 01:35:01,615
do configurations though for routers and switches and set that up in computer networking anyway so

1146
01:35:01,615 --> 01:35:06,495
what do i do i'm like i want to do i always want to do an iphone app so what do i do i go into

1147
01:35:06,495 --> 01:35:12,255
chat gpt tell it to write the mvp and i tell all the parameters that i want to be in the app and i

1148
01:35:12,255 --> 01:35:16,975
say make sure you're right so it works for claude i never logged into claude log into claude with my

1149
01:35:16,975 --> 01:35:25,135
google account by the way it's free paste it into it claude goes cool we'll write up the app for you

1150
01:35:25,135 --> 01:35:46,975
It writes up the app. It does it in seven different modules. I don't know why it did seven modules. Now I want to emulate that iPhone app. So then I download Xcode, right? Because I'm a Mac guy. Guess how much Xcode is? It's free. Download Xcode, paste the code from Claude into Xcode, and then I emulate it on my Mac and I wrote an app.

1151
01:35:47,715 --> 01:35:51,255
So now, if you've got me, let's be very clear about this.

1152
01:35:51,595 --> 01:35:56,555
I'm a reasonably intelligent guy, but when it comes to writing iPhone apps, I'm an idiot.

1153
01:35:57,215 --> 01:35:58,355
I'll be very clear about it.

1154
01:35:58,355 --> 01:35:59,335
I never wrote one before.

1155
01:35:59,435 --> 01:35:59,735
Guess what?

1156
01:35:59,775 --> 01:36:00,575
I didn't write the code.

1157
01:36:00,855 --> 01:36:01,715
I used Claude.

1158
01:36:01,795 --> 01:36:04,755
I did that all in an hour, right?

1159
01:36:05,715 --> 01:36:08,715
The scary part was the functionality that I wanted in the app.

1160
01:36:08,715 --> 01:36:10,595
I tested it first in ChatGPT.

1161
01:36:11,355 --> 01:36:15,955
ChatGPT got 70% of the functionality by itself natively.

1162
01:36:15,955 --> 01:36:36,493
So now my point is crazy That why that why what happens with this what going to happen in the future This is what going to happen with AI You going to be rewarded on your creativity your motivation to go do something And the fact can you complete it Now once you complete it if it makes no money you don do anything with it again

1163
01:36:37,513 --> 01:36:38,533
That's what happens.

1164
01:36:39,153 --> 01:36:42,833
And so now what's going to happen with all these companies, and I would be really scared about this,

1165
01:36:43,292 --> 01:36:46,533
wow, we built a company with 1,000, 5,000, 10,000.

1166
01:36:46,533 --> 01:36:49,852
What happens if another company can replicate all of our functionality

1167
01:36:49,852 --> 01:36:53,153
and do it with one-tenth or one-one-hundredth other people?

1168
01:36:53,993 --> 01:36:55,433
That is frightening.

1169
01:36:56,133 --> 01:36:56,333
Totally.

1170
01:36:57,033 --> 01:37:03,773
So one last thing. I wrote a book on AI. It's going to go live and probably tomorrow, the next day.

1171
01:37:04,833 --> 01:37:09,292
It's a pretty good book. So you guys will check it out. I'll post it. You had to stay on here to

1172
01:37:09,292 --> 01:37:14,693
hear it first for me, by the way, the book will not generate enough money for me for any part of

1173
01:37:14,693 --> 01:37:19,953
it. But I now have this clarity of thought about how AI works by writing this. So anyway, with that

1174
01:37:19,953 --> 01:37:25,733
said. All right. Well, we'll jump into a quick session on bad bond of the week. And I'm just

1175
01:37:25,733 --> 01:37:26,633
going to jump into it here.

1176
01:37:52,213 --> 01:37:55,173
Now that everybody's got that stuck in their head

1177
01:37:55,173 --> 01:37:56,852
for the next little while.

1178
01:37:57,173 --> 01:38:00,352
We are going to look at the Saks bond.

1179
01:38:00,513 --> 01:38:01,792
I'm sharing my screen.

1180
01:38:02,792 --> 01:38:04,713
Everything is super laggy today.

1181
01:38:05,053 --> 01:38:05,953
Sorry about that.

1182
01:38:06,073 --> 01:38:06,913
Sorry about the audio.

1183
01:38:07,953 --> 01:38:09,733
I follow this guy, Junk Bond Analyst.

1184
01:38:09,913 --> 01:38:11,093
It's been just a ton of fun

1185
01:38:11,093 --> 01:38:12,933
watching all of these junk bonds

1186
01:38:12,933 --> 01:38:13,673
that he posts about.

1187
01:38:13,753 --> 01:38:15,613
He posts about all of these junk bonds

1188
01:38:15,613 --> 01:38:18,373
and what's happening with them,

1189
01:38:18,713 --> 01:38:19,813
all of the bankruptcies.

1190
01:38:19,813 --> 01:38:22,153
So if you want to learn about junk bonds

1191
01:38:22,153 --> 01:38:23,613
and follow along what's happening,

1192
01:38:23,613 --> 01:38:31,113
It's just, it's so crazy what's happening in this market for yields that are very similar to the perpetual preferred equities.

1193
01:38:31,693 --> 01:38:33,973
And they just have significantly more risk.

1194
01:38:34,573 --> 01:38:35,613
And I'll explain why here.

1195
01:38:36,073 --> 01:38:36,993
So you look at Saks.

1196
01:38:37,213 --> 01:38:40,613
So the luxury fashion retailer, have you heard of Saks Fifth Avenue?

1197
01:38:41,573 --> 01:38:43,113
This is that same Saks.

1198
01:38:43,953 --> 01:38:44,453
So Grain has.

1199
01:38:44,993 --> 01:38:46,753
Grain has heard of Saks Fifth Avenue.

1200
01:38:46,893 --> 01:38:48,433
He's had to buy some presents in his day.

1201
01:38:48,433 --> 01:38:54,653
You know, when you buy a Ferrari, you got to go get the ladies something from Saks too.

1202
01:38:56,173 --> 01:39:00,773
So Saks skipped a debt coupon payment while negotiating with creditors amidst a potential

1203
01:39:00,773 --> 01:39:02,193
chapter 11 bankruptcy file.

1204
01:39:03,013 --> 01:39:09,973
In 2020, December of 2024, okay, not that long ago, Saks raised $2.2 billion to finance

1205
01:39:09,973 --> 01:39:12,493
its acquisition of Neiman Marcus via Jeffries.

1206
01:39:12,633 --> 01:39:16,213
Jeffries is a private credit, like banking institution.

1207
01:39:16,533 --> 01:39:18,133
They sold the deal to investors.

1208
01:39:18,433 --> 01:39:22,633
Just six months later, those bonds were trading at 25 cents.

1209
01:39:22,633 --> 01:39:25,213
So basically the,

1210
01:39:25,213 --> 01:39:30,213
what was worth $2.2 billion in December of 2024 is now worth,

1211
01:39:30,473 --> 01:39:35,473
you know, 550,000 or 550 million just six months later.

1212
01:39:36,733 --> 01:39:40,013
And the creditors conducted an aggressive liability management deal that

1213
01:39:40,013 --> 01:39:42,093
rearranged repayment priorities. And again,

1214
01:39:42,093 --> 01:39:45,053
injected $700 million fresh capital to fund the business.

1215
01:39:45,313 --> 01:39:48,433
So what happens in this is they go back to investors and say,

1216
01:39:48,433 --> 01:39:52,253
hey, the deal's not going super well.

1217
01:39:52,773 --> 01:39:53,813
This is falling apart.

1218
01:39:54,073 --> 01:39:55,733
We need 700 million more dollars,

1219
01:39:55,913 --> 01:40:00,713
but we're gonna strip some debt payments on top of this

1220
01:40:00,713 --> 01:40:02,833
and we'll put your senior in the capital stack

1221
01:40:02,833 --> 01:40:05,473
just so we can figure out how to do this bankruptcy.

1222
01:40:06,453 --> 01:40:07,533
And so those new notes,

1223
01:40:07,913 --> 01:40:10,133
those $700 million of additional fresh capital

1224
01:40:10,133 --> 01:40:13,693
that came in the door today trade at 37 cents.

1225
01:40:14,813 --> 01:40:16,733
So you got $700 million that came in the door

1226
01:40:16,733 --> 01:40:18,193
and now it's trading at,

1227
01:40:18,433 --> 01:40:26,433
what like 250 million dollars something like that and when while the pre pre the reprioritized notes

1228
01:40:26,433 --> 01:40:31,713
from a year ago traded just seven cents so those original 2.2 billion dollars of bonds now trade

1229
01:40:31,713 --> 01:40:37,233
at seven cents so they're worth i don't know 100 million 70 million dollars something like that

1230
01:40:37,233 --> 01:40:42,993
maybe less and that additional 700 million dollars of capital that came in the door is worth 37 cents

1231
01:40:42,993 --> 01:40:48,273
of what that original value is so this is the type of stuff that's happening in the market

1232
01:40:48,433 --> 01:40:50,113
Like, how do you underwrite this?

1233
01:40:50,233 --> 01:40:54,833
I just, I just can't believe that people are signing up to just get punched in the face

1234
01:40:54,833 --> 01:40:55,073
again.

1235
01:40:55,553 --> 01:41:00,033
Like, it's just like, I want you to spend more time.

1236
01:41:00,713 --> 01:41:07,433
I can't understand how any, any bond salesman or underwriter or whatever book runner or

1237
01:41:07,433 --> 01:41:12,453
investment bank, whatever the, whoever that was for this, I don't know how they could

1238
01:41:12,453 --> 01:41:13,153
sell this.

1239
01:41:13,333 --> 01:41:13,773
Right.

1240
01:41:13,873 --> 01:41:17,813
Cause you know, I heard there's a company called, look, I get that Saks Fifth Avenue and even

1241
01:41:17,813 --> 01:41:24,373
markets or luxury goods, but I just don't know how they're able to pitch this to institutional

1242
01:41:24,373 --> 01:41:30,173
investors, why this makes any sense. Can anybody explain this to me?

1243
01:41:32,333 --> 01:41:35,193
I don't get it.

1244
01:41:35,233 --> 01:41:41,533
And by the way, after it crashes, they go back to different people and you think they

1245
01:41:41,533 --> 01:41:48,633
would do some form of due diligence and be like, well, the previous ones are down 70 or 80%. So we

1246
01:41:48,633 --> 01:41:52,593
want to come in now because all of a sudden we think Saks is going to rocket back up because

1247
01:41:52,593 --> 01:41:58,453
they bought Neiman Marcus. I can't figure it out. I think the crazy part about it, well, it's like,

1248
01:41:58,573 --> 01:42:01,793
okay, so there's a couple of things going on here. One, it's just showcasing that these are

1249
01:42:01,793 --> 01:42:06,653
illiquid, right? Like the new notes are trading at 37 cents. The old notes are trading at seven

1250
01:42:06,653 --> 01:42:13,173
sense. Basically, nobody wants to buy them. Okay. That means you have to go through the bankruptcy

1251
01:42:13,173 --> 01:42:17,233
proceeding to go get your money back. How much money is going to be left at the end of the

1252
01:42:17,233 --> 01:42:22,373
bankruptcy proceeding? I don't know. I don't want to do the analysis and I don't want to be a part

1253
01:42:22,373 --> 01:42:27,493
of it to find out. That's what makes the price of these things. Because like, why would you?

1254
01:42:28,852 --> 01:42:34,653
Who cares? Like, this is the last thing that I want to spend my time doing is underwriting,

1255
01:42:34,653 --> 01:42:42,213
like the balance sheet of this, all of the, all of the stores, all of the, um, the inventory and

1256
01:42:42,213 --> 01:42:46,233
all these stores, how do you liquidate it? Like, what is liquid? Is there anything liquid?

1257
01:42:46,953 --> 01:42:52,573
Like, it's just a horrible deal. And I just can't believe people signed up to get punched in the

1258
01:42:52,573 --> 01:42:57,633
face multiple times. Um, even after recognizing this stuff is already done poorly, which is crazy.

1259
01:42:57,633 --> 01:43:01,813
You know, and the other part, you know, we, we, we've talked about this before,

1260
01:43:01,813 --> 01:43:06,733
when I talked about the Blockbuster, when they went bankruptcy, they had a $1 billion bond

1261
01:43:06,733 --> 01:43:13,173
and they had leaseholds. Somebody's like, oh, well, somebody, they bought these bonds because

1262
01:43:13,173 --> 01:43:18,873
they'll give them a claim on real estate. Now, I'm sure if we do two seconds worth of analysis here,

1263
01:43:18,873 --> 01:43:25,113
they don't own the building of the real estate. And so I was like, how can a leasehold be valuable?

1264
01:43:25,753 --> 01:43:31,013
A leasehold is valuable in the case of Blockbuster because they needed that in order to generate

1265
01:43:31,013 --> 01:43:34,933
revenue or cash flow. And then that would pay the bond. They'd be like, okay, we get it.

1266
01:43:35,193 --> 01:43:39,093
Well, when you declare bankruptcy, then there's virtually no cash flow, right? Or it's

1267
01:43:39,093 --> 01:43:43,693
completely impaired. So at that point, then the leasehold becomes a liability because you just

1268
01:43:43,693 --> 01:43:48,213
want to close down stores, but you have to continue paying for a lease that you no longer use.

1269
01:43:48,533 --> 01:43:53,352
So this is like a disaster that unfolds that any of us would look at and be like,

1270
01:43:53,352 --> 01:44:00,613
this makes no sense, right? So I will guess right now, and this is clear because in San

1271
01:44:00,613 --> 01:44:05,933
Francisco while Union Square has come back and Neiman Marcus is absolutely gorgeous that is a

1272
01:44:05,933 --> 01:44:12,453
gorgeous store you could eat on in the corner with glass on multiple levels it's absurd it is a

1273
01:44:12,453 --> 01:44:16,953
and you go in there and you see professional football players it's completely awesome Neiman

1274
01:44:16,953 --> 01:44:23,213
Marcus but in the exact opposite corner is the empty Saks Fifth Avenue and they took off all the

1275
01:44:23,213 --> 01:44:29,373
names and logos but you could see because you know the sun hit it and so while that has recovered

1276
01:44:29,373 --> 01:44:36,493
you're like there's no nobody really wants sax is not going to reopen that location it's not no way

1277
01:44:36,493 --> 01:44:41,633
so i i just see this and i'm just like i want to meet that salesman one day because that's the

1278
01:44:41,633 --> 01:44:47,933
best salesman in the world he sold crap twice twice he sold he sold a pile of crap twice

1279
01:44:47,933 --> 01:44:57,093
i mean that's what makes these digital credit things so exciting it's like

1280
01:44:57,093 --> 01:45:03,393
they look really good from a risk perspective.

1281
01:45:03,573 --> 01:45:08,193
You don't have to underwrite inventory across stores,

1282
01:45:08,333 --> 01:45:09,173
across the globe,

1283
01:45:09,173 --> 01:45:14,953
and speculate on people liking those luxury goods.

1284
01:45:15,093 --> 01:45:16,933
Are they going to like those luxury goods a year from now?

1285
01:45:17,113 --> 01:45:18,352
I have no idea.

1286
01:45:18,893 --> 01:45:21,553
And let me give you guys another thing that will come in with this.

1287
01:45:22,293 --> 01:45:24,973
I am going to – this is not a guess.

1288
01:45:25,473 --> 01:45:27,073
There's two things that are happening here.

1289
01:45:27,093 --> 01:45:31,373
First of all, in June of 2025, they went back to resell this.

1290
01:45:32,453 --> 01:45:41,933
Everybody knows that Trump instituted the tariffs, which means if they're luxury goods, they're imported from outside the United States.

1291
01:45:42,513 --> 01:45:46,653
So now all of a sudden, the price of your goods go up just because of the tariffs.

1292
01:45:48,073 --> 01:45:49,213
Oh, my God.

1293
01:45:49,852 --> 01:45:51,653
It's due to additional taxes.

1294
01:45:52,113 --> 01:45:53,333
What do rich people hate doing?

1295
01:45:53,413 --> 01:45:55,693
They hate paying more money for the same thing.

1296
01:45:55,693 --> 01:45:59,373
It's not that they can't afford to do it, but that becomes another headwind.

1297
01:45:59,753 --> 01:46:04,513
But they still were able to sell these bonds, even though everybody knows about the freaking tariffs.

1298
01:46:05,253 --> 01:46:08,453
Again, I would like to meet, I want to meet the salesperson.

1299
01:46:08,633 --> 01:46:10,793
I will pay for dinner if somebody finds the guy.

1300
01:46:11,493 --> 01:46:15,373
Pay $10,000 for the dinner with this guy because I just want to hear how smart this guy is.

1301
01:46:15,633 --> 01:46:17,933
Well, you brought up strippers and clippers earlier.

1302
01:46:18,213 --> 01:46:19,973
I mean, I'm sure there's some of that going on.

1303
01:46:22,233 --> 01:46:24,133
Soleil, you had some perspective.

1304
01:46:24,133 --> 01:46:25,633
You were thinking about these things?

1305
01:46:25,693 --> 01:46:31,113
oh no i was just gonna say with um with their financial situation maybe they should just start

1306
01:46:31,113 --> 01:46:38,693
a gofundme only fans sax fifth avenue only fans i mean just toe picks from all the employees that

1307
01:46:38,693 --> 01:46:44,093
like that might do it uh i mean who knows these days uh and then you you'll load that into some

1308
01:46:44,093 --> 01:46:49,533
call she bets and maybe the bonds are worth something um okay there's one more thing i

1309
01:46:49,533 --> 01:46:53,693
wanted to talk about and before we wrap this up and this is kind of in the theme with bad bonds

1310
01:46:53,693 --> 01:46:59,213
here i was doing a bit of analysis on uh pension funds and this is this was this kind of spooked me

1311
01:46:59,213 --> 01:47:04,413
a little bit honestly um and i kind of want to leave people with this thought because if you've

1312
01:47:04,413 --> 01:47:10,253
got a pension fund it might be worth looking into what is in your pension fund um whether that's your

1313
01:47:10,253 --> 01:47:16,253
state or your local company and so what what you're seeing here on the graph this is pension funded

1314
01:47:16,253 --> 01:47:23,133
pension fund funded ratios by category as of 2025 and i use perplexity to come up with this analysis

1315
01:47:23,133 --> 01:47:28,033
So, yep, you know, don't take this as fact, but like, I think it's probably directionally correct.

1316
01:47:29,093 --> 01:47:37,333
And I looked at corporate pension funds, public pension funds, and just wanted to see like how funded are they?

1317
01:47:37,453 --> 01:47:38,593
How underfunded are they?

1318
01:47:38,973 --> 01:47:40,273
We talked about this on the hurdle rate.

1319
01:47:40,352 --> 01:47:44,653
So if you're interested in this topic, go listen to this week's hurdle rate podcast, the At the Hurdle Rate.

1320
01:47:45,213 --> 01:47:49,273
Matt Cole, CEO of Strive, myself, Ben Workman, and Tim Kotzman.

1321
01:47:49,273 --> 01:47:52,553
We unpack things every week and we did a deep dive into this.

1322
01:47:53,133 --> 01:47:55,852
But one thing that was really interesting here is this blue bar.

1323
01:47:56,813 --> 01:47:58,333
So this is public pensions.

1324
01:47:58,333 --> 01:48:02,433
So think of all state pensions across the entire United States.

1325
01:48:02,553 --> 01:48:04,133
This is a United States analysis.

1326
01:48:04,553 --> 01:48:13,373
What this analysis was showing is that public pensions across the United States are 17% underfunded.

1327
01:48:15,352 --> 01:48:16,352
That's crazy.

1328
01:48:16,793 --> 01:48:17,933
That's a crazy statistic.

1329
01:48:18,533 --> 01:48:20,493
17% underfunded.

1330
01:48:20,493 --> 01:48:25,313
So if everybody retired today, that means there would be a 17% gap.

1331
01:48:25,453 --> 01:48:28,673
Like all the money you said you were going to pay out everybody isn't there.

1332
01:48:29,093 --> 01:48:30,333
17% is missing.

1333
01:48:30,753 --> 01:48:33,493
Everybody has 17% less than you said you were going to pay out.

1334
01:48:33,913 --> 01:48:34,453
Yikes.

1335
01:48:35,033 --> 01:48:35,593
Yikes.

1336
01:48:35,953 --> 01:48:36,433
Big yikes.

1337
01:48:36,733 --> 01:48:36,873
Okay.

1338
01:48:37,373 --> 01:48:44,293
The 50th percentile, the mid-funded pension funds are 22% underfunded.

1339
01:48:45,693 --> 01:48:46,253
Okay.

1340
01:48:46,593 --> 01:48:49,713
Bottom quartile are actually 40% underfunded.

1341
01:48:50,493 --> 01:48:55,073
Okay, so how do you come up with the Delta?

1342
01:48:55,373 --> 01:48:56,513
You have to take more risk.

1343
01:48:57,852 --> 01:49:01,733
You have to go further out on the risk curve to come up with the Delta.

1344
01:49:02,173 --> 01:49:15,113
Or you've got to rely on more employees coming in the door that are going to contribute to the pension fund to help make up for that Delta in the underfunded rate.

1345
01:49:15,953 --> 01:49:16,753
That's interesting.

1346
01:49:16,753 --> 01:49:22,973
And the reason I brought this up is because I had a conversation with a guy this weekend that kind of spooked me a little bit.

1347
01:49:23,093 --> 01:49:26,953
He was telling me about his pension from a prior employer.

1348
01:49:28,193 --> 01:49:31,873
And the employer is pretty, they've got a pretty large pension.

1349
01:49:32,113 --> 01:49:33,293
They're like a healthcare company.

1350
01:49:33,913 --> 01:49:38,593
And 60% of the pension was invested in private equity.

1351
01:49:39,613 --> 01:49:43,833
And 17% of the pension was invested in high yield credit.

1352
01:49:43,833 --> 01:49:52,413
okay so you got 77 percent of the company is probably in very illiquid things what happens

1353
01:49:52,413 --> 01:49:59,013
when 20 percent of the private equity businesses that you're invested in go tits up because of ai

1354
01:49:59,013 --> 01:50:07,633
like what happens to your pension fund that that was spooky he was spooked um and then you know

1355
01:50:07,633 --> 01:50:12,193
when I was talking to Matt Cole on Monday on the hurdle rate pod,

1356
01:50:12,913 --> 01:50:15,193
CalPERS, I did analysis looking at CalPERS.

1357
01:50:15,313 --> 01:50:20,133
CalPERS had about 20%, 19% or 20% of their portfolio in private equity.

1358
01:50:20,973 --> 01:50:25,553
Okay. They're a significantly bigger company or significantly bigger operation.

1359
01:50:25,833 --> 01:50:27,653
They've got more risk, more liability.

1360
01:50:27,933 --> 01:50:29,653
They kind of conceptualize that.

1361
01:50:29,653 --> 01:50:31,953
But yeah, it just,

1362
01:50:32,153 --> 01:50:36,813
there's so much risk out there in all of these things,

1363
01:50:36,813 --> 01:50:40,913
all over the place and they're underfunded, they're banking on more employees coming in the

1364
01:50:40,913 --> 01:50:46,153
door to help fund them so all of these older folks can retire and pull out on their pensions

1365
01:50:46,153 --> 01:50:53,233
into the future. There's a lot of risk out there. Which, Jeff, if we're looking in the future,

1366
01:50:53,413 --> 01:50:59,893
do you think there's going to be more or less employees? I think the trend is less employees.

1367
01:50:59,893 --> 01:51:07,113
probably less employees right so if there are less employees who's going to make up for the

1368
01:51:07,113 --> 01:51:14,893
delta in this so the other question is right so if you're if you're 17 underfunded and somebody

1369
01:51:14,893 --> 01:51:19,593
draws on this or if you have a big portion of your you know past employee population that starts to

1370
01:51:19,593 --> 01:51:28,293
draw on this that it doesn't it doesn't come out um proportionally right so they're going to

1371
01:51:28,293 --> 01:51:31,753
continue to like if you've got all these boomers that are retiring and going out and they're

1372
01:51:31,753 --> 01:51:37,913
drawing on the pensions they're going to get paid 100 so you have a disproportionate impact that's

1373
01:51:37,913 --> 01:51:43,333
that's having an impact on all of the younger people that are putting into these pension funds

1374
01:51:43,333 --> 01:51:48,673
they're millennials or gen z that are getting pension funds if they're still around i'm most

1375
01:51:48,673 --> 01:51:56,473
everybody's shifted to 401k these days but i mean this is a this is a big issue and it's an issue on

1376
01:51:56,473 --> 01:52:02,633
state level you've got state level employees like what happens when a state level pension fund

1377
01:52:03,753 --> 01:52:08,953
doesn't like they start not paying the boomers that think that they're going to get the money

1378
01:52:08,953 --> 01:52:15,753
from the pension fund you have you have civil unrest you have people that are very pissed off

1379
01:52:17,033 --> 01:52:22,793
what is like what does that look like and i i don't know the answer to that like how do you

1380
01:52:22,793 --> 01:52:29,033
you fix that can you fix it guys look i could i could tell you a horror show from personal

1381
01:52:29,033 --> 01:52:36,393
understanding so by a strange confluence of events um the first company worked at in silicon valley

1382
01:52:36,393 --> 01:52:43,593
i left that company and due to due to a weird scenario i ended up at a startup that went that

1383
01:52:43,593 --> 01:52:49,193
basically fizzled out and i was there for like three months and it was weird so i got a job at

1384
01:52:49,193 --> 01:52:55,513
Nortel. So I joined Nortel. You'll see how it's really in a second. And so they onboard me and

1385
01:52:55,513 --> 01:53:02,313
they have a pension and the pension paid 3% of your gross base pay. I'm like, okay. So then what

1386
01:53:02,313 --> 01:53:11,033
I do is I sign up for the 401k and I do just a regular contribution. So I don't know, a month

1387
01:53:11,033 --> 01:53:14,953
later or something, I'm like, guys, this is kind of weird, but I checked on it. It seems to be

1388
01:53:14,953 --> 01:53:20,693
legal. I'm signed up for the, I'm paying for the 401k and the pension. And a whole bunch of people

1389
01:53:20,693 --> 01:53:26,013
said to me, this is 2005. This is not like the old days. They're like, why would you, why would

1390
01:53:26,013 --> 01:53:33,852
you do your own 401k if you get a free pension? And I'm like, what? It's like, what? I'm like,

1391
01:53:33,873 --> 01:53:38,813
I'll do the double dip, right? This makes total sense. Anyway, this is where the horror show

1392
01:53:38,813 --> 01:53:45,073
happens. So I was there for about a year. They did reverse, the company was, it was a hundred

1393
01:53:45,073 --> 01:53:50,133
years old and it basically imploded at the peak of the internet bubble. It was 50% of the Canadian

1394
01:53:50,133 --> 01:53:56,453
stock market, Nortel. Anyway, so I leave the company and I had told people, I said, I was,

1395
01:53:56,633 --> 01:54:00,773
I just told them, I said, I can't believe you people didn't ever did the 401k. They'd been

1396
01:54:00,773 --> 01:54:07,193
there for 20, 25 years. So I leave the company six months later, Nortel liquidates. I get phone

1397
01:54:07,193 --> 01:54:13,953
calls from a bunch of people. They're like, what happens to my pension? I'm like, I don't know.

1398
01:54:14,053 --> 01:54:18,173
Why are you calling me? And they're like, they never did. These people worked there for 20,

1399
01:54:18,232 --> 01:54:23,193
25 years and never did the 401k because that was less money out of their paycheck.

1400
01:54:24,232 --> 01:54:30,352
Now there's a pension guarantee corp that went in. This is why the 401ks and IRAs came out

1401
01:54:30,352 --> 01:54:35,073
because of the exact problem you're talking about. These people have no idea what I'm talking about.

1402
01:54:35,073 --> 01:54:40,273
None whatsoever. And that hit a whole bunch of people that put 25 years in at Nortel.

1403
01:54:40,553 --> 01:54:44,113
I get that this is old, right? Everybody's saying, oh, why are you talking about something

1404
01:54:44,113 --> 01:54:51,913
that happened 20 years ago? The people just could not price in any form of risk. And they thought

1405
01:54:51,913 --> 01:54:57,073
this company would live forever because it was free. And that's why they didn't have to do it.

1406
01:54:57,073 --> 01:55:04,593
So after I left the company, a month later, I applied and I was able to get this. I filled out

1407
01:55:04,593 --> 01:55:11,693
the paperwork in triplicate and mailed it back in, got a form, printed it all out, mailed it back in.

1408
01:55:11,693 --> 01:55:20,173
And I rolled the pension into my IRA account. Yeah. And it was non-taxable. Now they took,

1409
01:55:20,293 --> 01:55:25,613
it never grew again, but I didn't have to worry about this. And I, again, so, you know, Jeff,

1410
01:55:25,653 --> 01:55:30,033
when you talk about these things in theory, this is all real stuff. I don't know how people,

1411
01:55:30,213 --> 01:55:34,453
I don't think that anybody just says to them, can you explain to me why you bought this?

1412
01:55:34,593 --> 01:55:41,973
yeah and what an interesting thing that matt was explaining is like the people that are running

1413
01:55:41,973 --> 01:55:49,693
calpers or like the investment that are making the investment decisions are appointed politicians

1414
01:55:49,693 --> 01:55:58,732
they're not finance people so if you want to go talk to them and tell them hey like why don't you

1415
01:55:58,732 --> 01:56:04,913
consider this digital credit. If they started today, the earliest that they could potentially

1416
01:56:04,913 --> 01:56:09,513
start adding this instrument to the pension fund is probably like three years from now,

1417
01:56:09,513 --> 01:56:18,293
if they started today. And so you've got this like concept of you've got to have track record.

1418
01:56:18,593 --> 01:56:23,893
Nobody's going to take this risk for something that's new, newly issued. And there's probably

1419
01:56:23,893 --> 01:56:28,473
going to be a sort of hockey stick pattern of adoption on these digital credit instruments.

1420
01:56:28,732 --> 01:56:44,173
And there's this short period of time, probably the next three years, where this outsized alpha is available for the rest of the market before these things are rated, the people that understand them, and the adoption grabs hold in the rest of the traditional financial market.

1421
01:56:45,653 --> 01:56:50,953
Because even if they started today, it's going to take time in order for these things to come in the door at these places.

1422
01:56:50,953 --> 01:56:58,573
and one other one other graph i'm going to share here which is um oh man maybe dark mode is not

1423
01:56:58,573 --> 01:57:05,413
the way to do this but asset allocation of the top 10 u.s the top 10 u.s state pension funds from

1424
01:57:05,413 --> 01:57:12,293
24 to 25 and so i've got calpers calsters so california new york florida texas and new york

1425
01:57:12,293 --> 01:57:19,993
teachers wisconsin washington uh and what this shows is the breakdown of assets in each of these

1426
01:57:19,993 --> 01:57:26,473
pension funds. And a couple of things stood out to me is just the large portion in public equity

1427
01:57:26,473 --> 01:57:33,852
and the large portion in private equity and watching and just seeing how that is over 50%.

1428
01:57:33,852 --> 01:57:42,113
Those two components are over 50%. And we've spent a lot of this show talking about potential equity

1429
01:57:42,113 --> 01:57:48,913
risk. And so if there is this potential equity risk in the market, how do these things change?

1430
01:57:48,913 --> 01:57:57,852
These are large, large pools of capital with large assets under management with large liabilities.

1431
01:57:59,033 --> 01:58:12,093
And I think it's just good to be, I don't want to like scare everybody, but I think it's just good to be aware that, you know, pensions do have risk associated with them.

1432
01:58:12,093 --> 01:58:13,693
And not all pensions are the same.

1433
01:58:13,833 --> 01:58:15,352
Like you just say you have a pension fund.

1434
01:58:15,352 --> 01:58:19,953
like a company that provides you a pension fund is different from a state that's providing you a

1435
01:58:19,953 --> 01:58:23,753
pension fund they're they're investing in different things they have different liabilities they're

1436
01:58:23,753 --> 01:58:32,273
probably worth looking into in general yeah they're not all risk-free anyway okay so we're

1437
01:58:32,273 --> 01:58:38,993
at two hours bored everybody to death on uh risk let's do a go around we'll pass it to everybody

1438
01:58:38,993 --> 01:58:44,953
do final thoughts and we will see you at some point next week thank you tim for being around

1439
01:58:44,953 --> 01:58:47,113
for the entire episode of The Hardest Working Man in Bitcoin.

1440
01:58:47,253 --> 01:58:47,873
I'm going to go to you.

1441
01:58:47,973 --> 01:58:50,693
Final thoughts after watching everything here.

1442
01:58:52,753 --> 01:58:56,333
I'm just excited to have Mike on the Bitcoin Treasuries podcast tomorrow.

1443
01:58:57,033 --> 01:58:58,732
I'm going to go to sleep.

1444
01:58:58,953 --> 01:59:02,253
I'm going to sleep fast and get up, do some meetings tomorrow,

1445
01:59:02,253 --> 01:59:03,352
and then hang out with Mike.

1446
01:59:03,513 --> 01:59:05,293
So I'm super excited.

1447
01:59:05,533 --> 01:59:10,653
Before we started, I think maybe it was just you and Mason, Jeff,

1448
01:59:10,732 --> 01:59:12,573
but I said, I'm excited.

1449
01:59:12,573 --> 01:59:15,533
If you're not excited, your exciter is broken.

1450
01:59:15,933 --> 01:59:21,193
So I just think 2026 is going to be astronomically unbelievable.

1451
01:59:22,153 --> 01:59:30,193
Just look at every single thing that could be possibly in our favor from interest rate

1452
01:59:30,193 --> 01:59:34,073
trajectory to digital credit instruments.

1453
01:59:34,893 --> 01:59:40,513
And then you overlay that with sentiment and it's just kind of hilarious.

1454
01:59:40,513 --> 01:59:42,493
So those are my final thoughts.

1455
01:59:42,573 --> 01:59:47,773
yeah most of all the financial people in large institutions like they're not even on x they don't

1456
01:59:47,773 --> 01:59:52,513
even know this stuff is happening but they may be working in the space like there are a lot of people

1457
01:59:52,513 --> 01:59:55,993
that are working in the bitcoin space they can't even access x

1458
01:59:55,993 --> 02:00:03,333
which is funny like uh i've spoken with many of them actually and that they just have no idea

1459
02:00:03,333 --> 02:00:07,693
about like the hurdle rate pod or true north podcast what we're talking about or anything

1460
02:00:07,693 --> 02:00:14,013
like this yeah also kind of kind of doesn't make sense but uh or doesn't matter but i like that

1461
02:00:14,013 --> 02:00:18,933
now that dan's beside me it looks like we're actually it looks like we share a wall kind of

1462
02:00:18,933 --> 02:00:23,533
oh yeah like we're right beside each other all right over to you dan

1463
02:00:23,533 --> 02:00:33,093
i think 2026 uh there's a drucken miller quote out there about 2026 anyone saying that they know

1464
02:00:33,093 --> 02:00:38,433
what's going to happen in 2026 is lying it's one of the most unpredictable market environments that

1465
02:00:38,433 --> 02:00:46,753
he's ever seen so i don't feel like i have any place making any predictions but i do think um

1466
02:00:46,753 --> 02:00:54,153
the outlook is strong for bitcoin adoption over the long term and the thing the best thing to do

1467
02:00:54,153 --> 02:01:00,393
is expect the unexpected all right so dan says god candles bitcoin at a million at the end of the

1468
02:01:00,393 --> 02:01:06,693
year and he knows all of the things. I think you're right, Dan. There's a, I mean, everything,

1469
02:01:07,193 --> 02:01:11,833
people are working in the space. We have no idea where this is going to go. A lot of people are

1470
02:01:11,833 --> 02:01:20,893
working hard and things look bullish. Over, over to you, Mike. Yeah, look, Tim, I can't wait to do

1471
02:01:20,893 --> 02:01:24,833
this tomorrow. I I'm really looking forward to it. We've never done a podcast together, so

1472
02:01:24,833 --> 02:01:30,293
that'll be awesome to do it. Dan, congratulations. What you're doing with, with Buck being

1473
02:01:30,293 --> 02:01:35,913
involved with us and everything you're doing, putting together is awesome. I agree with you,

1474
02:01:36,073 --> 02:01:40,473
with what Druckenmiller said. I totally get it. It is incredibly hard to figure out what's going

1475
02:01:40,473 --> 02:01:48,553
to happen this year. And I will just quote, Finding Nemo. Keep on swimming. No matter what

1476
02:01:48,553 --> 02:01:54,293
happens, just keep on swimming. And if you get into that current and you go faster, awesome. If

1477
02:01:54,293 --> 02:01:59,153
you don't, that's the only thing you can do. Just keep on building, doing it, and new things will

1478
02:01:59,153 --> 02:02:06,352
come up. Did I think I was going to end up writing books? No, I didn't think anybody said to me,

1479
02:02:06,352 --> 02:02:10,193
you write a book. I'm like, no, why would I do that? So just keep on swimming. Who knows what

1480
02:02:10,193 --> 02:02:18,913
happens? So yeah, this is the most exciting story in all of finance. And keep talking to people.

1481
02:02:18,913 --> 02:02:26,433
If you're not talking to people, you have, you know, like that lady that's in New York,

1482
02:02:26,433 --> 02:02:31,393
head of housing now talking about owning property is racist so like yeah keep talking about this

1483
02:02:31,393 --> 02:02:36,273
stuff and and try to talk to other people it's just it's really powerful and keep on swimming

1484
02:02:36,273 --> 02:02:43,953
just keep showing up like soleil who's shown up for what 546 episodes in a row 546 episodes in a

1485
02:02:43,953 --> 02:02:49,553
row that's a lot of fun and they're always it's always an all-time high on number of episodes

1486
02:02:50,113 --> 02:02:52,273
that's right that's great tomorrow's a new all-time high

1487
02:02:52,273 --> 02:02:59,033
final thoughts so what do you got all right so from an option seller's perspective

1488
02:02:59,033 --> 02:03:06,693
uh there's this guy that i um that i really like uh his channel's called real pnl and he's one of

1489
02:03:06,693 --> 02:03:13,833
the only guys that sells courses that's like legitimately shares his pnl um so he's he's not

1490
02:03:13,833 --> 02:03:18,373
a scammer he's one of the guys that actually inspired me to cover my trades the way that i do

1491
02:03:18,373 --> 02:03:24,533
and um but one of the cautionary tales that he has for someone who just holds stock or

1492
02:03:24,533 --> 02:03:32,453
sells options is that you know the the stock can just go to zero right if if they get disrupted

1493
02:03:32,453 --> 02:03:36,753
they can just go to zero and then you're just left holding nothing right you're just

1494
02:03:36,753 --> 02:03:42,973
pulling thin air at that point but if you are holding a bitcoin treasury company

1495
02:03:42,973 --> 02:03:53,093
even if the 1x MNEV bears are correct, the bear case isn't zero. The bear case is 1x MNEV.

1496
02:03:53,993 --> 02:03:58,633
And if they're trading at leverage, it's plus whatever their leverage amplification is.

1497
02:03:59,213 --> 02:04:07,273
So it's never ripe for disruption like other stocks are. So I think it's kind of like the cure

1498
02:04:07,273 --> 02:04:11,653
for anyone who is like, you know,

1499
02:04:11,673 --> 02:04:13,253
just worried that, okay,

1500
02:04:13,293 --> 02:04:15,333
my computer chips are going to get disrupted

1501
02:04:15,333 --> 02:04:17,073
or whatever product and service you have

1502
02:04:17,073 --> 02:04:18,033
is going to be disrupted.

1503
02:04:18,313 --> 02:04:20,232
You can't disrupt the Bitcoin balance sheet.

1504
02:04:22,433 --> 02:04:22,953
Bingo.

1505
02:04:23,553 --> 02:04:24,433
Yeah, completely agree.

1506
02:04:25,953 --> 02:04:28,573
Yeah, you have ultimate flexibility

1507
02:04:28,573 --> 02:04:31,293
and you know that there's value.

1508
02:04:31,293 --> 02:04:35,433
Like having the commodity asset on their balance sheet,

1509
02:04:35,533 --> 02:04:36,893
yeah, you know that there's always value there.

1510
02:04:37,273 --> 02:04:44,173
So like if you under, if you take out the tail risk of Bitcoin going to zero,

1511
02:04:45,073 --> 02:04:46,813
which you're like, okay, is the internet going to break?

1512
02:04:46,852 --> 02:04:48,013
Is there going to be a global EMP?

1513
02:04:48,713 --> 02:04:48,993
Okay.

1514
02:04:49,033 --> 02:04:52,613
Well, I've got guns and whiskey for that, for that situation.

1515
02:04:52,873 --> 02:04:56,533
And if that doesn't happen, then like, I'm going to keep operating this in this lane.

1516
02:04:56,732 --> 02:04:57,232
You got it.

1517
02:04:57,333 --> 02:04:57,933
You're nailing it.

1518
02:04:59,013 --> 02:04:59,393
Cool.

1519
02:04:59,493 --> 02:05:00,113
Over to you, Mason.

1520
02:05:01,113 --> 02:05:03,453
Yeah, I have a quote as well.

1521
02:05:05,013 --> 02:05:07,253
Oh, your audio is awful again.

1522
02:05:07,833 --> 02:05:08,493
Oh, man.

1523
02:05:10,133 --> 02:05:10,393
Okay.

1524
02:05:10,393 --> 02:05:11,293
Goddamn, it's a good quote.

1525
02:05:13,013 --> 02:05:16,893
Here, I'm going to – do you think it's my connection or my mic?

1526
02:05:18,313 --> 02:05:19,973
Oh, man, I have no idea.

1527
02:05:20,973 --> 02:05:22,113
I think it's your connection.

1528
02:05:22,273 --> 02:05:25,133
Open up the door and maybe the Wi-Fi will flow through the door.

1529
02:05:26,273 --> 02:05:26,673
Doorway.

1530
02:05:27,773 --> 02:05:28,373
Oh, man, it's a good quote.

1531
02:05:30,873 --> 02:05:31,273
Whatever.

1532
02:05:32,453 --> 02:05:33,293
It's your connection.

1533
02:05:33,453 --> 02:05:34,053
We can't hear you.

1534
02:05:34,333 --> 02:05:35,113
Drop it in the chat.

1535
02:05:35,453 --> 02:05:36,453
Drop your quote in the chat.

1536
02:05:37,273 --> 02:05:39,913
And get better, get mesh wifi.

1537
02:05:42,153 --> 02:05:42,673
Okay.

1538
02:05:43,833 --> 02:05:48,273
My final thoughts is, oh, actually before that, if you like this, please like,

1539
02:05:48,273 --> 02:05:51,433
and subscribe, apparently we were supposed to say that now this is the investment

1540
02:05:51,433 --> 02:05:52,433
grade Bitcoin podcast.

1541
02:05:52,513 --> 02:05:56,633
We've talked about stuff like this for the last 60 weeks in a row.

1542
02:05:57,013 --> 02:06:00,133
We're out here analyzing this stuff.

1543
02:06:00,133 --> 02:06:01,573
We are working behind the scenes.

1544
02:06:01,573 --> 02:06:04,793
Many people are working in the industry now, and we've got a really unique

1545
02:06:04,793 --> 02:06:12,433
perspective of what's actually happening here. So the YouTube channel is called BTC True North.

1546
02:06:12,553 --> 02:06:19,013
Go check it out. All of our live videos are there. The X page is MSTR True North. Go check us out

1547
02:06:19,013 --> 02:06:23,073
there. We all have X handles. Those will be available within the YouTube channel. You can

1548
02:06:23,073 --> 02:06:26,793
look in the description. You can see all that stuff out there. So please like, subscribe,

1549
02:06:27,133 --> 02:06:32,313
follow along. That helps us out. Appreciate the support. My final thoughts are, in my opinion,

1550
02:06:32,313 --> 02:06:37,913
the four-year cycle is broken the four-year cycle is now broken forever i think the og sellers that

1551
02:06:37,913 --> 02:06:44,553
were focused on selling here and with the potential of buying back lower at 60k later down the road i

1552
02:06:44,553 --> 02:06:51,273
think that probability is incredibly low and uh i think the the architecture of the market is

1553
02:06:51,273 --> 02:06:56,393
completely changed and i think what we will see with bitcoin price action moving forward will be

1554
02:06:56,393 --> 02:07:01,833
significantly different than times past and it could just be a grind higher in perpetuity

1555
02:07:02,313 --> 02:07:06,633
with volatility along the way. I think the years of 80% drawdowns are gone.

1556
02:07:07,253 --> 02:07:11,753
And now that these instruments are tapping all different capital markets at different periods of

1557
02:07:11,753 --> 02:07:17,513
time, there is significantly different ways to buy Bitcoin at different periods of time. And

1558
02:07:17,513 --> 02:07:22,133
you're seeing it now, right? Like companies like Strategy, MetaPlanet, our company, we have been

1559
02:07:22,133 --> 02:07:31,913
buying Bitcoin, even though the price of Bitcoin has been down. So that can extend into the future

1560
02:07:31,913 --> 02:07:33,253
because these products exist.

1561
02:07:33,653 --> 02:07:36,033
And I think it's a fascinating development in the market

1562
02:07:36,033 --> 02:07:37,073
and that's only going to be bigger

1563
02:07:37,073 --> 02:07:39,933
as the years move forward.

1564
02:07:42,213 --> 02:07:44,213
Mason, we'll try one more time with a new connection.

1565
02:07:47,533 --> 02:07:48,333
And he's on mute.

1566
02:07:51,232 --> 02:07:52,153
Can you guys hear me?

1567
02:07:52,893 --> 02:07:53,333
What do you got?

1568
02:07:53,693 --> 02:07:54,973
I can hear you loud and clear.

1569
02:07:56,153 --> 02:07:57,773
You can? You can?

1570
02:07:58,593 --> 02:07:58,993
Okay.

1571
02:07:58,993 --> 02:08:00,993
I heard a quote today from...

1572
02:08:02,513 --> 02:08:04,053
Okay, okay.

1573
02:08:04,573 --> 02:08:06,713
I heard a quote from Mel Madison today.

1574
02:08:06,973 --> 02:08:10,013
He said, when the market gives you opportunities to buy,

1575
02:08:10,213 --> 02:08:12,933
there's no narrative in the zeitgeist to reinforce buying.

1576
02:08:13,213 --> 02:08:15,653
And that's why conviction matters.

1577
02:08:16,993 --> 02:08:18,533
So I'll leave it there.

1578
02:08:18,852 --> 02:08:19,493
Thank you, guys.

1579
02:08:19,553 --> 02:08:20,493
I think this will be a good year.

1580
02:08:22,653 --> 02:08:23,913
Bullish 2026.

1581
02:08:24,133 --> 02:08:25,613
I've got the bull right behind me.

1582
02:08:25,852 --> 02:08:26,633
We're going higher.

1583
02:08:27,513 --> 02:08:27,833
Appreciate it.

1584
02:08:27,833 --> 02:08:28,153
We'll see.

1585
02:08:28,413 --> 02:08:28,813
Yeah.

1586
02:08:28,973 --> 02:08:29,933
One last plug.

1587
02:08:30,013 --> 02:08:31,173
We'll see everybody in Vegas.

1588
02:08:31,633 --> 02:08:32,693
Come hang out in Vegas.

1589
02:08:32,993 --> 02:08:33,213
Yeah.

1590
02:08:33,393 --> 02:08:33,773
We'll,

1591
02:08:33,852 --> 02:08:34,793
we'll post that in the chat.

1592
02:08:34,913 --> 02:08:35,633
Come hang out in Vegas.

1593
02:08:35,793 --> 02:08:35,973
We'll,

1594
02:08:36,053 --> 02:08:38,273
we'll meet everybody in person and we'll have a great time.

1595
02:08:38,713 --> 02:08:38,873
Yeah.

1596
02:08:39,613 --> 02:08:39,953
Good night.

1597
02:08:40,073 --> 02:08:40,232
Awesome.

1598
02:08:40,513 --> 02:08:40,773
See ya.

1599
02:08:40,913 --> 02:08:41,232
Good night.