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That's leden.io forward slash WBD. Hoddle the vlogger and Stephen Lubke. How are we doing guys?
Doing great, man. I'm pumped for this. This is going to be, this is going to be awesome. It's
us yeah steven the cobbler the cobbler yeah even the cobbler where did that meme come from i've
missed this completely so the bitcoin bugle did this uh did this post it was kind of they they
edited our sec filing and said that uh you know nakamoto had a supplied me with a personal cobbler
and you won't believe the number of people that took it seriously i mean it was really really wild
uh so it was fun are you saying they didn't give you a cobbler you need to negotiate that contract
bro not yet but i'm hoping after seeing the pr that this cobbler got that you know there's a
little bit of room here i think that needs to be memed into reality huddle how are you doing man
what's with the vlogs you bring in vlogs this is very like early 2000s bro we're vlogging is back
and it's on nostr it's on nostr exclusively so if you want to figure out what's going on with the
vlogs, you gotta fucking come to Noster, bro. I'm not, cause I'm not gonna tell you, man.
This is a tease for a vlog that will happen at a later time on Noster. Download Primal. Check it
out. Have you done your vlog today? Uh, no, I don't do it. I don't do it every day. You know,
somebody was like, uh, Hey man, why don't you just post them on YouTube? And I was like,
because then I would be a YouTuber and that's gay. So no, I'm not doing that.
I don't know what you're saying about me there, man. I'm a, I couldn't do the vlog thing. It's,
It's cringe enough for me doing the clickbait YouTube titles.
I'm not sure I can go full vlog yet.
I don't know what's more cringe, vlogger or podcaster.
You know, I think it's like Sophie's Choice.
You, Hoddle, you were early.
You were early to the podcast meta.
I remember years ago, your thesis, while everyone was criticizing too many podcasts,
was everyone needs more podcasts.
And I think that that turned out really correct over time.
Yeah, I was saying, did you have a conversation with a family member in private about Bitcoin?
That could have been a podcast. Why wasn't it a podcast? Why are you not doing enough for Bitcoin?
And then the viewer guys just took that and ran.
Well, and as we now know, you're not just a podcaster, but you're a board member.
Exactly.
It's like the meme in Bitcoin is if you're in it long enough, you become a podcaster, a VC,
and now it's a board member of a treasury company.
Absolutely.
The podcaster to corporate governance board pipeline is,
I mean, it's obvious at this point.
It's a natural evolution that occurred over time.
The best podcasters just really moved up.
They had the skillset.
But are there even any Bitcoin podcasts left?
Are we all just Bitcoin treasury podcasts now?
Yeah, that's true.
That's true.
It has been, honestly, like,
I can't tell you the last time I didn't talk about treasury companies on the show.
Really?
I mean, Cali probably because he's a fucking badass, but it gets, I'm super skeptical,
Steven.
So I'm going to be like the skeptic here.
But why don't you start by just explaining what's happening with Nakamoto?
Yeah, sure.
So we recently completed our merger.
So that's exciting.
That was last week.
And we basically had raised a pipe transaction.
So we raised some money to go public and launch a treasury company.
I think the unique thing for Nakamoto is that it's playing on the, let's call it the playbook that UTXO had been running for over the last year.
And that was Metaplanet, SmarterWeb.
It was a lot of these like very, very successful international plays.
And so Nakamoto was in part, that's not the whole thing, but it was an attempt to, you know, run that playbook, run that strategy with more capital and more reach.
And, you know, there's other elements to it.
There's operating businesses and synergies and kind of a lot we're excited to do.
But it's the international thesis kind of playing out.
So U.S. listed, but launching kind of first movers in each international capital market.
Like one of the things that I've been pretty skeptical about on this is the idea of like a Bitcoin treasury company in every jurisdiction.
Because I don't know if they all need it.
Like the way I've kind of looked at this is there's going to be strategy, probably a few others, and then a really long tale of kind of shit.
And like, why do you think every jurisdiction needs its own treasury company?
Yeah. So I think the basic thesis and, you know, you could have some edge cases in very small markets where maybe that doesn't play out.
But the basic thesis is that there is a ton of capital.
If you're in Brazil, if you're in India, if you're in Japan, there is a ton of capital that cannot easily buy U.S. equities and also, in many cases, can't easily buy Bitcoin.
So these are funds that have mandates.
These are pensions.
These are all sorts of vehicles, retirement accounts that have to invest in kind of local or regional equities.
And then outside of the mandates and the have to, you have it's a it's a it's a pain.
It's difficult.
It's like maybe you could, but it's actually very cumbersome.
You have to set up a U.S. brokerage account.
You need a U.S. bank account.
You have to go through certain regulatory hurdles that are different country by country.
And then finally, there's often elements of like a regulatory arbitrage.
So in Japan, people are familiar with this with MetaPlanet.
there was a tax treatment where you got taxed way more heavily on Bitcoin than on equities like
MetaPlanet. And so I think that people focus a lot on kind of the regulatory arbitrage,
the tax stuff, and there's many other things besides tax treatments. But I actually think
that the larger pool is there's just a lot of money that can't easily or won't easily leave
the country. And so we're pretty high conviction and I'm pretty high conviction that having a
local vehicle and every major capital market is something that'll play out well.
All right. I've got a ton of questions on that, but I want Hoddle's perspective on this.
Do you think that like this kind of long tail where it's win or take most is the likely way
this will play out? I think the way you described it is very close to my own thinking about it,
where strategy, if you look at strategy versus the other treasury companies,
you know, the other treasury companies combined, I think, have one tenth of strategy's holdings,
right? So that's, that lets you know that they're the 800 pound gorilla in the room. And what we
know about Bitcoin is that if you go first in size, it's very hard to unseat you, right? Like,
I, you know, uh, as, as good as I think I am at stacking and hodling over the years,
I'm never going to be able to catch up to a person like Wences Cesares or somebody from
the very early days. They're just in a totally different class than I am. And I think it'll be
the same thing with micro strategy versus the other company. Right. So like, yeah, I think you're
very right. I think a lot of people, I think like, you know, not to be offensive towards Stephen,
but I think Nakamoto is kind of playing for second place. And a lot of, you know, I would put Jack
Mahler's company in the same boat. I would, you know, certain other companies that are spinning up
like Strive. I forget the Strive company, what it's called, but you know, they're all in that
same, like let's play for second category, but second is a big winner. So if you get second or
third place, like you win massively. If you're a treasury company, number 1000, no, you don't win
massively, but second or third, like, you know, there's going to be a lot of spoils for, for those
players in the game. And then I think on the point that Steven was making about the reg arbitrage and
different jurisdictions, et cetera, I'll give you the flip side of that perspective. I think he's
right about that, but I'll give you the flip side about that perspective, which is as an American,
I have exorbitant monetary privilege in the American stock market. And I don't really want
to go into other capital markets. I want to give my money to a company like Nakamoto and have them
do it on my behalf. Right. And so I want to go with an American domiciled vehicle with an American
company with American disclosures. And I don't want to have to do the work of going and
diligencing every foreign market on the planet because it's just a headache and a half.
Yeah. See, that's the point that I really agree with. And Stephen, I'd be really curious to hear
your take on this because I'm not trying to give you a hard time. I'm just trying to understand it
in that like I live in Australia from the UK and in both those places, their own treasury
companies that have popped up and are doing like a local treasury play um but at the same time i
could still just go and buy microstrategy and so like what is the capital you're attracting in
these countries because again with things like smarter web company they obviously did amazingly
well they're down quite a lot since like the top but they're on aquis which is a tiny exchange in
the uk like do they actually get retirement account money into that exchange they do there's a ton of
domestic volume. So even with, you know, an OTC ticker listed in the U.S., so there's easy U.S.
access, I think on a lot of days it was 50-50 or 60-40 trading volume. And that was kind of later
on once they had grown. So there's a material chunk of that. And you think the U.S. is a very
big market that really is coming from local players. And, you know, in the U.S., this was
pretty remarkable, I think. And obviously that was UTXO. That wasn't Nakamoto. I'm just kind of
speaking from the outside here. It was before I joined. And it's a different, you know, it's a
different entity. But there was a huge kind of local, almost nationalist, like a patriotic element
to it that happened, where in these groups, there was a lot of people that really liked
the fact that it was a British company, a UK company with UK operators, and they wanted to
support something locally. That's even more true right in Japan, right? In Japan, they love that
Metaplanet is a Japanese company, and they would much rather give their money to a Japanese company
than to MicroStrategy, assuming, you know, quality is there and those sort of things.
And so I think both we see that kind of observationally in the discourse. You also
see it in the trading volume, but there is a real, it's not just a thesis. There really is
capital that comes from those jurisdictions and goes to these vehicles. And I want to echo
something David said, like, yeah, our goal is second place. Like our goal is not,
we're not coming here saying, oh, Michael Saylor, you know, da-da-da-da-da. Like what
HODL said is correct. It's like, when you have that much of a lead, that's a huge lead. That's
difficult to surmount and but to get second or to get third that's a huge like that's a huge
accomplishment right you don't have to say like oh yeah this is gonna this is gonna overtake strategy
uh it just has to be this is gonna be an effective vehicle for accumulating bitcoin at scale and also
bitcoin's gonna go up over time so is the planet nakamoto to obviously you're investing in all
these companies all over the world. But are you also running your own Bitcoin strategy in the US?
Correct. Yeah, absolutely. So we have the US NASDAQ listed vehicle that is, and I should be,
it's Kindly MD is the current listed name. And I should be clear about that.
But we plan to run the full treasury playbook. So raising capital, buying Bitcoin on the balance
sheet, you know, taking on debt, buying more Bitcoin, these sort of things. The difference is
that while we're running that playbook, we're also going to take a percentage, like a portion
of that Bitcoin on the balance sheet, and we're going to deploy it in kind of equity investments
or other investments in these international jurisdictions or other strategies. So I think
we're going to be more active is what I will say. Like we definitely are going to be a little bit
more active while still conservative. It's not like the whole balance sheet gets deployed. And
even on a regulatory basis, we couldn't do that if we wanted to. But we're going to be a little
bit more active. And I think that'll be interesting as I think more of that comes to market.
So the plan there, I assume, is to be higher leverage than the rest of them, because you're
not only doing your own treasury play, but you're investing in others. And so I assume that's your
plan to get to second place. Yeah, I think we do want to be higher leverage. I actually think
micro strat, I think Saylor would agree with this, but I think micro strategy is actually
under levered. And a lot of what they've been trying to do has actually been to get more
leverage. If he could sell five times as many preferreds and raise the leverage ratio, I think
he'd do that in a heartbeat. And when you think about the concept of having leverage in one of
these vehicles, that's actually very self-reinforcing to the MNAV. Like if you have embedded leverage
that is cheaper than what an individual can get,
it makes sense you're paying a bit more for that vehicle
because you're acquiring the leverage with it.
Hold on.
Again, we're kind of talking on behalf of you here, Stephen,
but do you think the risk there with that strategy
is that this is going to be a long tail,
there's a lot of stuff that's going to fall by the wayside,
and by investing in those,
you're adding quite a lot of risk to the business?
Yeah, absolutely.
I mean, listen, higher leverage, higher risk, right?
Like, I think that, you know, I'm sure Steven will admit this, that like, it absolutely is a higher risk play than something like MicroStrategy.
And when you, if you're an investor, I think the question you have in your mind is like, okay, MicroStrategy seems like a guaranteed winner.
Seems like there's kind of consensus about that.
And like, I feel confident, you know, I've owned MicroStrategy now for five years and it's performed very well, despite, you know, all the recent drama on Twitter.
there's a lot of new investors in MicroStrategy who are like,
what the hell, man? I thought this was lever below Bitcoin.
What the fuck, dude? It was supposed to go up more, bro.
We can talk about that in a minute.
But for me as a long-term holder of MicroStrategy,
I've been very happy with its performance,
and I will just continue to hold it into the future.
Full disclosure, I do also own some NACA,
and I view NACA as a fast horse in the race.
But if NACA, you know, underperformed over some medium period of time because of some of these risk factors, it wouldn't necessarily surprise me.
Now, I do have like a decent degree of confidence in leadership.
But when you know, when you're taking a bet on these are two completely different things, like Saylor has shown that he's, you know, genius savant level at financial engineering and financialization.
I mean, nobody is better at him than that.
And if you're going to compete with him, you got to not only do that well, but you are going
to have to differentiate yourself from him.
And I think some of the interesting things about guys like Nakamoto or Jack Maulers is
that these are more Bitcoin nativist.
If we're going to one piece of criticism I would give MicroStrategy and Saylor, even
though they've been lighting the world on fire, is that every time they try and do something
endogenous to Bitcoin, some type of Bitcoin, you know, technology play, it seems to kind
of fizzle out, not really go anywhere.
Everything they've announced, you know, they had like a digital identity announcement.
I mean, there was a business analytics announcement.
Where do these things kind of go?
They just kind of fizzle off into nothing.
And I think that's like actually an opportunity for the young guys who are coming up, like, you know, Stephen and David or like Jack, you know, or some of the guys that are, you know, working over at Strive.
Like, there are opportunities there to differentiate themselves from MSTR.
And those that do it correctly are going to, you know, they're going to print money.
They're going to make, they're going to get very rich.
but obviously like walking the tightrope is difficult and you can fall and that's you know
something that investors should be aware of i think do you have plans to do like any bitcoin
like have a bitcoin business model within this as well as just doing the treasury plays
we absolutely do and that's another point of kind of differentiation here uh and i think it's an
important one in the long term so i think just speaking theoretically i think the end state of
treasury companies is they need to find a way to either to synergize the balance sheet with
operating businesses. Like I'm not, I don't know when that is, maybe that's five years,
10 years, who knows. But at the end of the day, this kind of current opportunity compresses.
And then it's like, okay, well, what do you do with this balance sheet? You've got, you know,
hundreds of thousands of Bitcoin. How are you going to leverage that? I don't mean leverage,
but how are you going to use that to drive returns, to drive cash flow?
And that's actually where, to Hoddle's point,
it's valuable to have a company that is like operators in the Bitcoin industry
that actually are from the industry, that know how the industry operates,
that have a track record, because there's a better capacity to not just achieve,
but also think about that transition and setting up for it and having those,
like even to achieve Bitcoin denominated cash flows, where the more Bitcoin goes up,
the larger those cash flows go. To us, that's like the gold standard, right? If you can really
do that well, that's way better than like uncorrelated operating businesses that, you know,
I just don't track Bitcoin performance at all. So one thing that's very simple is as part of the transaction, we have an option to acquire BTC Inc. and UTXO. And so obviously that's the conference, that's the media business, asset management.
So that's kind of something that is already known to the market and on the table of kind of rolling that in and and also working to synergize that and also working.
Hey, you know, I I'm adjusting to the public company role and you're limited in what you can say if I'm speaking a little differently than usual.
But what I would say there is that, like, if you think about having a network of treasury companies and you think about the existing business, contemplate what synergies you could do there.
There's a long list of things you could do that would cause those to enhance the growth.
So that's that's one part of it.
Another part of it is actually looking at like M activity and saying hey are there Bitcoin businesses that we could acquire that are going to synergize with the balance sheet or the activities of Nakamoto and you know
make this just increase that kind of operating revenue. And so, yeah, that's a goal for us.
I think that's important long term. And while I don't want to state that as like the number one
priority in the short term, obviously, the top priority is buy more Bitcoin and get more Bitcoin
on the balance sheet. That's absolutely something we're looking at. Yeah, it's funny because I
totally agree that long term, these treasury companies are going to have to have a business
model that probably has to be a Bitcoin business model. But right now, it seems like they're just
kind of memes. I don't know if you agree with that, but it's paper Bitcoin summer, bro.
I think it's, well, you know, I'm a big paper Bitcoin summer fan. And I think memes are powerful,
but it's, I think it's more than memes. I have to say that. And the reason it's mostly Bitcoin
acquisition now is because like, think about you have capital. What's the best return you're going
to get on that capital? Is it buying Bitcoin or is it investing in an operating business? Like
what's the rate of return going to be? And the thing is at this stage in Bitcoin, it's very hard
to outperform Bitcoin. So it's rational, I think, for a lot of these businesses to say, hey, on an
incremental $100 million, we're going to just buy the Bitcoin. And later on, that math might change,
and I expect it will change, it will have to change. So this isn't like a permanent state.
But I think it makes sense that right now, we're in a bit of a land rush. And it's saying, hey,
it's a bit of a it's a race right now. Who's going to be number two? Who's going to be number
three? How much Bitcoin can you accumulate? And that's just the phase we're in. I think I think
I understand why people have kind of hesitations there, but I think you just need to understand that, yes, that doesn't last forever, but it also could last for a while.
On the M&A thing, I think something may have just clicked for me.
When you're investing in all these treasury companies in different jurisdictions, obviously some of these are going to be big, some will be small.
And at some point, we're going to see a load of treasury companies start trading at a discount, in my opinion, I think.
Like, would your plan there on the M&A side be to acquire those treasury companies and
essentially stack Bitcoin at a discount as well?
So it's definitely an option that's available to us.
Either treasury companies, there's even, there's a lot of companies actually that have
Bitcoin on the balance sheet.
So basically the angle there is whether it's a treasury company or another entity that
you could acquire Bitcoin through that or acquire a business and Bitcoin.
Those are options that are available to us.
Obviously, it depends on when that moment is in the market.
There's a challenge.
There's a balancing act for those companies.
From the perspective of the company that's trading at a discount,
generally, they could probably sell the Bitcoin close to market price
unless they had enough Bitcoin where they're worried about slippage.
and they're worried about moving the market.
And so if you really have a decent chunk of it,
then it probably makes sense to entertain a buyout offer.
It makes sense to be like,
hey, just come in and buy this whole amount.
I don't want to bring this to the market.
But if it's a tiny one,
I think they probably just sell it.
They can get market price,
unless there's other complications.
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So I definitely want to get into what happens in a bear market with these things. But
HODL, before we do, like Bitcoin price is down like 7% or something.
It's like a tiny, tiny drop for a bull market, but people are freaking out.
And I don't know, the read I have from that is that people are too exposed to treasury
companies, which have been pretty slammed over the last few months.
Like, how do you take that in?
There's definitely some of that going on.
I think, you know, you have this perspective with treasury companies.
You know, part of my thesis has been that there's a bubble forming in treasury companies.
And, you know, when I say that, people give me this pushback where they go, well, I don't
see it. Like they're not taking too much leverage. There's only 60,000 coins that are outside of
microstrategy. Like where's the bubble? And it's like, that's fair. I think we're in the infancy
of a bubble. I think this is like zygote stage of a bubble. Right. But I think the bubble is going
to grow because I think the average investor, what do they really want now that they understand?
Like the Bitcoin story is implicit in the hearts and minds of almost everybody I talked to who's
under 45 years of age now at this point, that's a new phenomenon. Like I went out for drinks with
some friends and every single person, these are guys I know from high school, every single
person at the bar knew the price of Bitcoin without me mentioning it or bringing it up.
That's a big, that's a big deal.
It's the first time that's ever happened.
And I'm now noticing that people have realized they watched Bitcoin go from nothing to $100,000
and they realize that the Bitcoin story is going to happen.
But for some reason, they have a cognitive bias where they think that they are not going
to be a participant in the Bitcoin story.
So for those that do choose to participate in the Bitcoin story, what's their next thought?
I'm late.
I need to catch up.
How do you catch up?
With leverage.
What are the Bitcoin treasury companies?
Levered Bitcoin.
So, you know, there's this sort of idea, I think, amongst the public, especially retail
investors, that, you know, these treasury companies can be like a time machine back
to 2017 Bitcoin prices.
And that idea, I think, is the ember that grows into a massive bubble.
And also, you know, Bitcoin is an idea whose time has come, and the market's starting to realize that.
Similarly, you look back in history to, like, the dot-com bubble, the internet was an idea whose time had come,
and everybody could see the value of the internet, but the internet had not yet been built out.
And some of the promises of the internet that would later be real, like YouTube, which, you know, Mark Cuban was selling as broadcast.com,
they were these kind of janky versions, or like, you know, Pets.com eventually became Chewy, and it sold to PetSmart for $3 billion.
dollars. But like back in 1997, there was no ability to ship bags of dog food through the
mail. Right. So like whenever there's a big Leviathan idea, like this new network that is
Bitcoin, the Internet of Money, the public is not stupid. Eventually they get wise to what's
happening. I think that's happening now. And, you know, that's why I say we're in the infancy of a
bubble here. They get wise to what's happening. And then they start to go through the same
machinations that those of us who've been in Bitcoin for a while have been going through the
last 10 or 15 years where you go, oh, shit, Bitcoin's going to change everything. It's going
to do this. It's going to do that. It's going to do this other thing. And then what happens?
People come along to sell you those dreams for cash. I'm not saying that Nakamoto or Steven are
doing that, but I'm saying there will be companies that are going to do that. And that is going to be
like sort of the formation of the bubble. Every, every big new idea ever resulted in like what you
can call a bubble, like, you know, and really, what do we mean by a bubble? We need a market that
goes way up and eventually contracts because it went up so high. But like HODL was saying with
the internet, it's not that the internet wasn't a world-changing trend. It's just that it's
rational from the perspective of the market. When there is a big new idea, what the market does is
saying, hey, let's invest. Let's bring as much capital as we can as fast as we can to this.
And we're going to push the boundaries and we're going to find the limits and we're going to find what works and we're going to find what doesn't work. And then we're going to cull all the stuff that doesn't work. And we're going to we're going to double down on the winners and the survivors. And that's like there's an economic logic to that. And it happened with the Internet. It happened with railroads. It happened telecom. It also happens with financial structures, investment trust, leverage buyouts, mortgage trust.
So it's not just hard technology, but sometimes people invent new financial structures that are just like how to package investments in capitals, new forms of securities, REITs, private equity.
The roots of private equity and the roots of REITs both found themselves like were created in what you could call bubbles in financial instruments.
It wasn't so much that it was technology. It's that people were packaging assets in new forms, getting a premium on those assets and using that to raise capital and grow. It's a similar angle. I'm not saying those are exactly the same or it will end the same way, etc. I'm just saying that financial structures are economically valuable just as much as technology because they allow capital coordination.
And so it's like it's natural, I think, to assume if there is a big new idea and it's a winner, there is going to be this enthusiasm that comes into the market.
And it's reasonable, I think, to expect a lot of investor interest.
But I also agree with Hodl that like we're in the we're in the early stage of that.
Like he made a point.
There's like 60,000 coins outside of micro strategy.
Treasury companies have not, as a group, deployed capital at scale yet. So to say that this is the zenith, I think isn't right. I think this is a big idea.
And it fundamentally is leveraging the structure of public markets to deliver a growth rate.
And the structure of public markets doesn't change anytime soon.
And I don't think Bitcoin stops going up.
And so as long as Bitcoin keeps going up, and as long as a public company can access financial tools that an individual cannot access,
there's a very straightforward way to deliver incremental returns.
I think my friend, Bitcoin Tina, actually is the one who nailed this when he had a heart.
His thesis was called The Hardest Trade.
And the core of that thesis was that Bitcoin is going to bore you to a million dollars.
I think that's what we're living through now.
And I think actually, Bitcoin Tina's story is that he sold a lot of his money.
he got scared and sold a lot of his coins.
It really was the hardest trade for him.
Yeah, I think it's ironic or, you know,
it's sort of a Greek tragedy in the sense
that the hardest trade was literally so hard
the man who coined the hardest trade
couldn't hold through the trade, right?
So, like, it's gonna be a very long, you know,
there's an old saying, idiom in Wall Street
called wear them out, scare them out.
And, you know, I think something that we've been grappling
with in Bitcoin this year during this, like, bull market,
this hasn't really been much of anything in my opinion,
but like something we've been grappling with is we don't understand what's happening
and that's okay and I'm just going to admit that freely is like I don't understand how the
Wall Street guys think I don't understand what they're doing I don't understand the way they
move capital I don't understand the way they trade these markets or the way they view them
over a short medium or a long time frame and none of them talk to me they don't call me on the phone
and say bro I think whereas I have a lot of conversation with four-year cycle guys who are
like, dude, it's got to uptober.
It's got to go up.
It always does, man.
It's always got to go up in October.
So I think that we need to break off a slice of humble pie and say, we're in a new phase
of Bitcoin, the financialization of Bitcoin, a broader part of the speculative attack,
if you will.
And these treasury companies are a symptom of what's going on.
And I think we need to just sit back and look and say, maybe our map is not matching the
territory anymore and we need a new map you know it's funny because i totally agree with you i i've
called this bull market boring a load of times and i speak to checkmate pretty regularly he's a good
friend of mine and he's always like you just you just need to like manage your expectations because
this is now like we're in a different world at this point i think um but i want you to to convince
me something because you're both saying you think this is like the early site like stage of this
cycle this bubble um in my opinion and i could be completely wrong here we're much later in that
cycle than i think people understand um but like we've seen mnavs get crushed across the board like
i think strategies at one point what is it 1.4 1.5 something like that metapanets come way down
like across the board mnavs are getting crushed like why do you think this still has legs and and
just to add to that like i think sailor changed the game with these preferreds and is the idea
of just selling common stock to buy bitcoin now just an old boring idea i don't think it is at all
I think that, you know, if you look at these assets, I mean, there were numerous points where, I mean, MicroStrategy traded at a discount at one point.
Like MNAVs have compressed in the past for MetaPlanet.
I think there's been three distinct periods where the MNAV compressed like materially very, very heavily.
In the past, have they ever been when we're like very close to all time highs though?
MicroStrategy did peak early.
It peaked early last cycle.
It did peak way before.
I think there's maybe one meta planet correction that was definitely, I mean, maybe not at all time highs, but at very positive Bitcoin prices.
I'll speak to the point you're making, though.
There was a massive run up in these assets that actually happened while Bitcoin was going slightly upwards to sideways.
And so what you saw was the treasury companies in the spring, in May, they put in multiple hundreds of percent gains.
Like there is a massive, massive move higher for Metaplanet, for SmarterWeb, for H100, for all of these names.
And the market is now digesting that fact.
And I find it somewhat funny because Bitcoiners, when you're a Bitcoin guy, every time Bitcoin would have a drawdown, the people would come out of the woodworks to be like, look, it's down 30 percent.
Bitcoin's over. Don't you feel stupid? And Bitcoin people would say, hey, you know, zoom out.
It's still up this much. It's still it's gone down before it's come back.
And I mean, you look at these these companies and they're still at like, you know, if you bought before, they're still generally at like very good prices.
They're still they've grown tremendously.
There's been a material contraction.
And I don't mean to, you know, make light of that.
Obviously, if you purchased it at the top or, you know, that that stings.
But I just think the the structure.
So anyways, it's happened before.
And this is a volatile asset class.
And I just didn't in that I don't see an idea or a trend that really got exhausted or that had a fundamental event occur.
Like something happened that like really interrupted it.
And so then they compressed.
I think they just went up a tremendous amount.
They had a blow off top and they are consolidating.
Time will tell, of course.
But the reason I like outside of just speculating on what happened in the past, the reason I'm optimistic in the future is because I do not believe that Bitcoin becomes a global asset without there being securitization along the way.
Not that Bitcoin needs that.
I'm not saying Bitcoin needs securitization.
I'm saying you can't invest, invent the hardest monetary asset in the world and not expect
it to come into securities markets and not expect Wall Street to do things with it.
And the size of these things is like this big right now.
I don't believe that there was like, oh, there was a six-month attempt at Bitcoin securitization
and now it's over.
Again, time will tell.
But I think this is a big idea.
And I think so.
I speak with a lot of investment banks on a day to day basis.
Now I speak with analysts.
I speak with investment banks.
I was surprised, very pleasantly surprised.
They all love the idea.
It actually makes more sense to them than Bitcoin.
Bitcoin was hard for them because there's no cash flows.
There's nothing to model.
You can't really plug anything into a spreadsheet.
with these, it's much more speaking their language. There's capital being raised,
there's a growth rate, you can calculate various metrics, you can model this out.
And as I've talked with a number of investment banks, many analysts, some who understand this
really quite deeply, they're all very excited. And it's still the early days for them. They're
wrapping their heads around it. But they're very, I think there's a very positive reception to
having something like this and being able to participate in the Bitcoin landscape from,
you know, from a securitization lens. Firstly, I want to like put a disclaimer here and say,
like, I'm not trying to convince anybody to buy trade. I wouldn't try and convince you of it.
I don't want to convince the audience of it. I do it myself with about 20% of my portfolio,
right still 80 percent bitcoin and the 20 has grown to 20 mainly because of mstr's over performance
right and so like that's where i'm at with it and even you know the guys i talked to in the background
who are like the biggest treasury guys tell me they're 50 bitcoin okay so like that's kind of
where people are at and if you want to go 100 in big or you know in some treasury company that you
just heard about you know in in bangladesh like that's on you and i i'm not i'm not recommending
you do that. Like, I think we all know that the best way to get from here to there is in self
custody, cold storage Bitcoin. That is without question. Now, some people are choosing to go
further out on the risk curve, going to the casino, et cetera. Right. And that's OK. They can do that,
but I'm not going to like promote it. OK, the other thing here is like, I think when you talk
about like, you know, you're not quite seeing it yet. I think one thing that's been interesting to
me is that, like I said, the Bitcoin story is now accepted. Bitcoin earned that. It fought tooth and
nail for years and years. It scratched and clawed its way in the hearts and minds of market
participants. And it proved itself, you know, indisputedly in its price performance and in its
history and in its, you know, robustness, its decentralization, etc. And it's funny to me
because even people who I don't think believe in Bitcoin, like Jim Chanos, who are shorting
MicroStrategy, are out here saying, well, hey, yeah, I believe in Bitcoin, but I don't believe
in MicroStrategy. So I'm arming the difference between the two. I think that the MicroStrategy,
You know, it's interesting, like the MicroStrategy shareholders have been very displeased lately on Twitter.
I don't know if you've noticed.
But there's been a lot of whining and kvetching about the price and, you know, the ATMs and the this and that, the MNAV.
I think what's going on is like, we know this from being early Bitcoiners is that you're going to have to go through this process of the market, you know,
the market sort of proving out why these MNAVs deserve to exist and expand into the future.
And there's this sort of idea that, you know,
having a very large hoard of Bitcoin,
there a speculation that having a very large hoard of Bitcoin will be very useful in the future for XYZ reasons We don really nobody can really quite articulate the reasons why having a large hoard
is better than having a small hoard
because theoretically you should be able to do
the same things you can do with a large hoard
with a small hoard.
But there's this idea sort of when you invest
in MicroStrategy that long-term like,
and you know, like speaking of vibes,
like this was my vibe when I first invested
in MicroStrategy is like,
company with the most Bitcoin wins, dude.
I don't know what to tell you.
That's just how it goes.
So I think that there's a process here
that the market has to go through
where it digests these new substrates,
and Bitcoin treasury companies are a new modality.
And if you're an investor in MSTR, Nakamoto,
whatever it is,
you're going to have to go through the process as well.
And it's kind of interesting.
I was thinking about the MNAVs in terms of like,
remember co-integration from last cycle?
It's almost like the MNAVs are kind of co-integrated
with the Bitcoin price.
It's like, you know,
the plan B gave the analogy
of the drunk walking the dog.
And it's like, yeah,
this is levered Bitcoin,
but it doesn't mean
it's always like perfectly 2X levered.
It's going to move around quite a bit.
And you as the investor
have to make sure
that you can endure that volatility,
which is why the spot products
of these companies
are probably the best long-term bet
rather than, you know,
getting deep in the options game
or some of the leveraged ETF products,
et cetera.
All right.
I've got millions of questions in there,
But Stephen, I want to go back to something you said first.
Like, I agree with you that the securitization of Bitcoin is inevitable.
It's going to happen.
I'm not against that in any way because like Bitcoin is money for enemies.
People are going to use it however they want to use it.
But the question I would have is like, why are you so convinced that this is the model?
Like, this is the way that Bitcoin will get securitized.
And then to add to that, you also said like when Bitcoin goes down, we're all like zoom out, bro.
But if you ask me, is Bitcoin going to exist in 20 years?
A hundred percent yes.
Like I've quite literally, we all have like bet our lives that Bitcoin is still going to be here in 20 years.
If you ask me if like XYZ penny stock treasury company is going to exist in 20 years, I'm probably at less than 5%.
So like, I think there's a difference there.
But like, why is this the model?
Why is this how Bitcoin will be securitized?
Yeah.
So, I mean, I think it's and let me I hope I can keep all these points in mind at the same time.
I first want to say my goal in coming on here is also not to tell people to go buy treasury stocks.
I've never said I've never said that.
I've never been like, oh, yeah, man, you got to go put all your money in these things or do something like that.
And I think me and David have both been very vocal of like, you know, cold storage.
Bitcoin is irreplaceable. So just like throwing that out there like now to your to your question.
Yeah. I mean, you're I am in no way saying that like some individual treasury stock or corporation or any corporation, really.
I mean, you could even I think Bitcoin is going to be around longer than Amazon.
I think Bitcoin is going to be around longer than Ford.
Like, you know what I mean?
When you start talking about an individual corporation, you're talking about a corporate entity with operators, with business decisions and all these things like those things don't last as long.
In many cases, sometimes, you know, I'm not saying no corporations stick around.
And I think there's a lot of virtue in trying to build something.
And we would like to be in that category of building something that lasts, but it's different than a decentralized network. Right. And so I think there's just this thing that like, I don't I'm not saying I don't I think few people are saying that.
Bitcoin, the asset or Bitcoin, the network and treasury companies are comparable in the same way
that they exist in the same place of the risk curve, especially if you're talking about like
tiny new ventures that are just getting going. And that's to a point that I agreed with from
Hoddles that this is this is early. These companies don't have a lot of coins. Like I'm a lot more
confident that micro strategy will exist in some form than one of these new companies with under
a thousand coins. Right. And that's just, you have a risk curve now, but the risk curve is BTC
denominated. That's kind of the cool thing. Uh, and like, that's a side point, but, um,
so I agree with you, like, like these are not at all the same thing or comparable and,
but risk isn't exactly a bad thing. And I know there's a big, I think, I think the fiat world
is like, there's no savings. Savings doesn't exist. There's only investing. You have to
invest to save. And Bitcoiners are like, screw that. You should be able to save your money.
That's Bitcoin. I don't want to have to take like operating risk just to keep my value.
That's beautiful. I love it. But if you take that all the way to the other side,
all we should ever do is save. No one should ever invest in any venture. No one should ever
deploy capital or go out the risk curve or anything like that. I don't think that's right.
First of all, I think it's very obviously not right because if everyone did it, the entire economy would stop because no one would have businesses, right?
So you need actors that are investing in enterprises to keep everything going.
So anyway, so these things are different.
Now, your question was why is this the vehicle?
I think this is the beginning of a shell of a vehicle.
Like, I'm not even saying like this, we've got it all figured out.
This is how you do it.
And I think that's been evidenced in the micro strategy story where it's evolved over time.
What he was doing in the beginning and what he's doing now are very different.
And there are new products and there are new angles.
And it's because this is in very many ways being worked out.
And but do I think there is a strong value in having an operating entity or a business that is touching Bitcoin directly, that has the express corporate mandate of acquiring more Bitcoin?
Yes, I do. And I think there's evidence to this today.
When you look at these filings, we had the largest sovereign wealth fund in the world, the Norwegian Sovereign Wealth Fund, report they doubled their micro strategy position, roughly speaking.
They had a large increase in it in their last reporting.
We had huge investment banks that are constantly reporting this.
Why didn't they buy the ETF?
Because they want to invest in equities, in corporations.
There's mandates.
There's tons of restrictions.
There's all of these different reasons.
But you see these very large pools of capital are buying micro strategy stock, in some cases
also even meta planet.
These represent mediums that capital allocators need. And so one of the reasons I'm confident on
this is because when you understand kind of the whole investment landscape and securities landscape,
there's just people that need something like this. And so in many ways, treasury companies
are very pragmatic and they're responding to what's right in front of us, which is that
People have demand for levered Bitcoin. There are many actors that have demand for they need to buy corporate equities. They can't do the spot ETF or they don't want to do the spot ETF. And due to the structure and moment in time of fiat, of where we are, of Bitcoin and fiat, that there is value to be provided by leveraging the tools of public finance to acquire Bitcoin.
And that's the thing I'm really bullish on. Like you said, why do you think these are the right vehicles? Because when you think about this moment in time where capital markets are like, hey, like HODL was saying, fine, we believe you on Bitcoin. We believe you. It's going to be a thing. Bitcoin's going to be a thing. BlackRock did it and the president.
And the next question is like, OK, how do we acquire enough Bitcoin? How do we acquire more Bitcoin in the most capital efficient way possible? And the answer to that question is always going to be a public vehicle. A public vehicle will have a lower cost of capital.
And so in many ways, like that's the that's the concept. And so like I'm willing to bet on that concept. And I'm willing to say that, like, if people want Bitcoin, there will be demand for capital efficiency in deploying it from the perspective of the corporation. Right.
Obviously, if you buy it at like the maximum MNAV and then the MNAV contracts, that wasn't
capital efficient for you, but it was capital efficient for the vehicle.
And that's why these things exist.
And that's why I think they'll continue to exist.
And I think it will evolve.
That's my other point is this is not a finalized, hardened form.
These vehicles, I think, will evolve dramatically.
So I know I'm like a bit of a doomer on this, but I do find kind of the bear take one of the most interesting and something that people should be sort of aware of and potentially ready for.
Like in a bear market, what do you think happens?
And with this, I think it'd be worth separating strategy from everything else just because of like their size.
And I think I think they're going to be fine.
Like they're pretty under leveraged.
I don't think there's a real risk that they go under any point.
So let's start with strategy.
What do you think happens with strategy in a bear market?
Do you think they go below 1xm nav?
It certainly could. It certainly could. And I will tell you as somebody who had a large position in GBTC last time around, GBTC went 50% below NAV, and it had been trading at a premium which was 200% above NAV at some point.
And so to go from, you know, 200% above to 50% below, it hurts.
It stings quite a bit as an investor.
And you have to be incredibly convicted in order to make it through.
And what happens is with GBTC, and I can predict this will happen for MicroStrategy
because we're already seeing this with like the proof of reserve comments and all this stuff,
is at the very bottom, when you're at your most vulnerable and most fearful and most shell-shocked,
people come along and they go, they don't even have the Bitcoin, bro.
they don't even have it fucking michael saylor spent it on coke and yachts dude it's gone dude
right like like that's that's what happened with gbtc people started saying that the bitcoin wasn't
even there and i i i had to spend two days diligencing it and being like wait a second no no
it has to be there because of this and this and this and i had to go through all the the facts and
of course they did have all the bitcoin that they purported to have and so you know it got repriced
when the etfs came in and blah blah blah but like there was a tough period of time there where you
had to make it through as an investor. And I think that you should be prepared if you're
investing in these treasury companies for a very difficult period of time. I mean, the volatility,
listen, like, like Saylor says, volatility is vitality, but like, Hey man, there's a lot of
highs and lows in life. Like this can suck for quite a while before it gets better. So like,
yeah, if we, if we hit a deep bear market, be prepared for rocky waters ahead.
The thing that I think warrants the most conviction is that there is a way to structure a public vehicle with the express purpose of acquiring as much Bitcoin as you can that makes all the sense in the world.
And if you're bullish Bitcoin, you should be bullish this element.
And there are many kind of evolutions this market could go through.
For example, if strategy or treasury company starts earning a return stream on the Bitcoin, let's say strategy starts generating 3%, like anything crazy, or 4% or 5%, there's now a growing cash flow component that's coming that then gets a multiple.
And so if they have a, you know, 100 billion in Bitcoin or whatever it is, and then they now have leveraged the treasury, they're either issuing financial products, they're earning a return from it in some way, you know, there's development in the market.
they now have the value of the assets plus a multiple on the return stream, which is growing
every year. And that, and that marks the equity above the, the nav, like it trades for more.
That is a, you know, like a, like a price to earnings multiple is similar and different. And,
you know, I, I appreciate the, you know, there are people in traditional finance that would push
heavily back on that. A PE multiple is the same as an M nav and they're, they're distinct,
but they're both examples of the market pricing future growth to today.
Like that's what a PE multiple is, is it's saying you don't get to buy my business for
just the net present value.
You have to pay me for how fast I'm growing because if I hold onto the business for another
five years, well, I'm worth 30% more, right?
And so we discount that back to today.
And I would argue there's a very similar structural thing with the MNAV because there's a growth rate. There's a growth rate on the Bitcoin per share. So maybe, you know, I mean, some of these companies are growing it at a ridiculous rate. But even if, you know, you were growing it at 30% per year and able to do that consistently, like that's worth more than just the net present value. How much more? Who knows? Like, just like what's the right PE multiple for NVIDIA?
Nobody knows. There's no right answer there. But there's a simple point that you have to pay a multiple for future growth. And so if these companies get to a point where they're able to synergize the treasury with cash flows, that expands the MNAV or the valuation, which they can then use more effectively to buy more Bitcoin,
which goes into the return stream, like the operating, like the cash flows.
And so there's just there's a lot here.
And it's again, like, I think it's early.
I don't think this landscape is fleshed out.
And at the end of the day, packaging Bitcoin acquisition efforts in a corporate vehicle
gives you just such a wider landscape to operate from it.
And that's the key principle.
That's the thing that I think you can be at this kind of stage, like pretty confident about.
I know I'm a bit of a doomer here, but assuming strategy survives, I think that the rest of the companies, let's say they hold less than 100,000 Bitcoin.
I don't know the exact figure.
I don't see that as like an existential risk to Bitcoin.
We saw someone come and sell like 80,000 Bitcoin a couple of weeks ago.
But I do think the more interesting side will be what happens with those smaller companies in a bear market.
so like if you take let's say any coin any company that has less than a thousand coins
like what i don't know is if there's sort of a doom loop scenario where if they're trading
at a discount to nav for a long period of time if they'll ever be able to get out of that in the
sense that like if if there's little liquidity on the stock and they can't just issue more common
stock to buy more bitcoins try and pump nav like what happens do they end up having to sell bitcoin
to repurchase their stock to drive the stock price higher like i this is the thing that i'm i'm not
very sure about yeah i mean if you're a small a very small company with no cash flow that's
trading at a discount to nav for a long time that's not a good position to be in but that's a
that's not that's not like a category criticism that's a like this is a a poorly operated a
company that was just not able to succeed and i'm sure there will be many of those and i'm sure there
will be, you know, you've talked a lot about like the long tail of treasury companies. I don't know
that I've ever responded to that. That long tail will almost certainly exist. There will, you know,
like, I mean, we were talking about.com and we were talking about, you know, there's always that
long tail. Um, that's, that's almost certainly going to happen. I think the more interesting
question is like, um, are there, what, what are the winners look like? What, what is the landscape
for the winners. Like how, how, how many winners, like, um, what do those companies like turn out
as and what role do they play in the future? So, you know, I'm not here to, uh, put lipstick on
the long tail of, you know, quick companies that don't know how to do this poorly. Like they will
certainly exist and they won't be in a strong position. And like to survive a downturn, you need
cash flow or you need capital or you need access to debt or you need, you know, and so on. Right.
There's a number of factors that'll help a prolonged downturn in Bitcoin. Now, how prolonged
are those downturns going to be? You know, one of the points HODL was making at the beginning was
like the quality of this market is different. Wall Street's here. They're operating under
different rules. And God, I mean, I know every cycle people come out and they say,
four-year cycle's over, bro, not going to happen. And then they're wrong. And so it's like incredibly
like intellectually risky to take that stance. But I truly struggle to imagine a two-year 70%.
Like, I don't think you can get both. I don't think you can get a magnitude of a drawdown of
like 70% and a two year duration. Uh, I think you could obviously still have drawdowns. I think
they're shorter lived. I think they're less extreme. I think Bitcoin at this point has,
I really characterize the Bitcoin bear markets as a large segment of the market, um, losing
conviction existentially in the asset. It's not like, Oh man, this thing's gonna correct for a
year and I just can't handle it. It's like, no, it's like they think Bitcoin's over. Like it's,
it's, it's done. Like, um, and it's that sort of existential fear in the asset that I think has
driven the historical Bitcoin bear markets. And I think with a combination of like the level of
integration, the capital that's available to buy these things, like it's not just, you know,
individuals that aren't seasoned investors like you have 90 billion dollars in the etfs you know
what i mean like there's capital that has come into this thing and uh it will deploy on a discount
especially in a world where um given the macroeconomic environment given the fiscal
environment given the landscape we're in bitcoin's a very attractive asset and so all of that to say
Like, I think companies need to be profoundly prepared for bear market conditions.
They need to have a strategy.
Like, you can't just like, if you not having a constant, highly elevated MNAF to operate
at, like, is the end.
Like, you don't, you know, that's not a sufficient strategy.
um but also like outside of that um i i do expect that these kind of the duration of these kind of
moves are going to be shorter and that does make the landscape easier i think also as we talk i've
become convinced that like the small treasure the long tail like they just don't have enough coins
to cause a significant correction here inside of treasure correct yeah yeah i know i agree with
in terms of like Bitcoin price, but HODL, like one of your, maybe your second biggest meme after 6.15
is green, green, green, red. Do you think that that is dead?
You know, I have to say like, I'll go out on the intellectual
limb because what do I have to lose anyway? I've said every stupid thing you can say in this space.
Yeah, I think it's dead. I think it's dead. I think we're in, you know, the new era of Bitcoin.
Bitcoin is trading like something like Nvidia or like a tech stock. It's not trading at all in any
way where i have any understanding of how it's trading i can't anticipate how it's trading uh i'm
bored by it because i think i'm addicted to the dopamine of its early volatility and you know by
the way i think that's that's the thing we should talk about one of the things that's causing people
to go into treasury companies og bitcoiners to go into treasury companies is the addiction to
dopamine because as bitcoin matures and the vol recedes and the returns are more stable early
Bitcoiners are like, this sucks. This is unbearable. I want to get 10 times more wealthy
every four years. I'm getting wealthier every day. It's unbearable, Danny. I can't stand it.
I need to be poor and then rich again and then poor again and then rich again.
So I think that's part of the behavior that's motivating people to take
more risk, more leverage, higher volatility. We're addicted to it. We're addicted to it.
I totally agree. And one of the funny things is like, I've not been in this as long as you,
I got in in like 2016, 2017.
But normally you just get a vibe of what's going to happen.
And I don't have the vibe anymore.
I don't know what's happening.
It's because Larry Fink doesn't call us up and be like, hey, bros.
Yeah, like we're out of the loop.
We're out of the conversation.
We have no clue what's going on.
You know it going to be wild But I do agree though I don think that these are going to cause any real impact on Bitcoin assuming strategy survives which I think it does Steven what your take over the next few years on Bitcoin
What do you think is going to happen?
I know HODL's got a big bet with Pete, which we can talk about.
Yeah.
I'll point out something.
Many times in this conversation, I don't want to answer your question, but many times
in this conversation, you've been like, I think strategy is fine.
in that is a like there's a little bit of an admission there that is saying well if you get
big enough if you get xyz then this this thing can work and you know then it's kind of clarify
my point there because you are right i do think it's size i think size is probably the most
important factor and i don't know what the the right size to hit is but i think also it's i i'm
bullish might be the wrong word but i'm very confident that preferreds are going to work
pretty well. I think that's tapping into a huge market. It's exciting.
Are the preferred something that you would look to do at Nakamoto? Carry on your answer,
but also- Yeah, absolutely. And I think the preferreds are very exciting. And
that's an example, like this reinforces the thesis I've been trying to present that
only an institution with a large enough balance sheet of Bitcoin can issue those products because
you need a counterparty that's taking the directional risk. And Goldman's not going to do
it. And JP Morgan's not going to do it. They're not going to hold $100 billion of balance sheet.
They can't, first of all, because of regulation. So you need an institution that says, hey,
we'll stomach the vol for you, volatility as a service, and then we'll peel off some of that
excess return for you so you can make your 9%. And that's a Bitcoin collateralized financial
product. I think you see more of those things. I think that's part of what's evolving here.
And this is what I mean by the securitization of Bitcoin. I didn't just mean treasury companies.
I mean products, security products that treasury companies produce that require Bitcoin collateral.
If you really think Bitcoin becomes a crucial part of the global financial system,
these sort of things need to happen. You need actual Bitcoin financial products and securities
and things. And I think this is the early stage. I don't know where it all ends up. I don't know
what it all looks like. But I agree with you. And I think it's important. And I think it's part of
the it is a real product they're producing. And Saylor has said this. I'm iterating his phrasing,
but he's called it like refining or this is what Solomon Brothers did. So there was like a
tranching of bonds. But in traditional finance, there's something similar here where they broke
out the bonds into different buckets for different risk profiles and categories of investors.
And so this is something with a history where you take an asset class and you kind of extract
certain properties from it and you bundle it up.
And that's what sailors looking to do here.
And I think there's a lot more room for that of kind of taking some of the properties from
Bitcoin and giving different investors different buckets.
Yeah.
These are the CDOs of Bitcoin.
That's what we're doing here.
No, I'm just kidding.
And Nakamoto is like a CDO of a CDO.
It's a synthetic CDO, yeah.
I'm looking at Bitcoin Treasuries, shout out MVK.
So 21 have got like 40,000 coins.
Adam Back's company is 30.
You guys are at 5.7 thousand.
Yeah.
What is big enough, do you think?
That's the question, right?
So like coming back to, you know, where I tangent is it like, you know, you said like, yes, size is what allows, you know, you're going to make it if you get big enough.
The answer is nobody knows.
Like where is that bar?
But if you handed me, or if I handed an operator a structure that had a couple billion dollars of Bitcoin in it and said, no more equity sales, you can't use an ATM, you can't do any of this stuff, sink or swim, can they make it?
I think so. I think if you get handed an operating structure and you're somebody
that understands the ecosystem, that understands Bitcoin, could you take a
$5 billion wrapper without doing an ATM and without doing some of these things and make a
company? I think you could. That's a lot of capital, especially if you're bullish Bitcoin
and Bitcoin's growing. And you say, hey, in a few years anyways, this thing is worth quite a bit
more. So I don't, you know, nobody knows where that, where that kind of threshold is, but I don't,
I don't think it's anywhere near strategy. I don't think you have to get to strategy scale. I don't,
I don't think it's like, if you don't have a hundred billion dollars in Bitcoin, you're in
trouble. I would think it's substantially lower. Now, is it 200 coins in a micro cap stock XYZ?
Like probably, probably not. That's, that's not sufficient scale. If suddenly all of these other
advantages turned off. But I think, you know, I think as that kind of grows, you get a couple
billion dollars and I think it's probably closer to that mark. But I'm also like, there's a
theoretical there, which is we're saying like these other factors kind of go away and you kind of can't
use the current playbook. I'm obviously bullish that the current playbook persists.
I know me and Hoda both said we don't really have a great vibe check on this bull market,
Stephen, but how much of an impact are the treasury companies having in terms of buy side pressure?
Obviously, there's an answer to that question with and without without micro strategy. I'm just
going to like exclude micro strategy here. And I don't think it's been very material at all,
because I don't think there's been a huge amount of Bitcoin bought. And, you know, when you look at
that listing that you read off, some of those were existing coins, right? So in some of the
structures, there wasn't like buy pressure that came in there. It was just coins into a structure
that's still pending.
So of the ones that actually have done buys,
I think it's, I mean, it's less than the Galaxy seller.
So we saw in real time,
someone unload 80,000 with a negligible,
you know, one or two or 3%, right?
And so-
That's gotta be one of the most bullish things
that's happened this cycle.
Yeah.
The fact that made very little difference.
Absolutely.
I mean, it's, yeah.
And I'll be, I have to be careful what I say here,
but like we recently did a large purchase, right?
Like we did it.
It's a liquid market.
Like that's what I'll say.
It's like, it's a liquid, it's a real liquid market.
And that's great.
And so, you know, if you just take all those treasury companies
and, you know, add it up, it's sub the galaxy seller,
or at least it was when I did these calculations last time.
So I don't think it's been mechanically like a big component.
Maybe the narrative has added a little special sauce to it where everyone's like, whoa, there's all these treasury companies.
Let me buy some more Bitcoin.
But I think it's I think I don't think it's been a huge driver on like the price of Bitcoin, which has been I think it's had a great year, but it's been lower volatility.
And then I think this is a point HODL made that I wanted to jump on.
Um, yeah, I, I think these companies like in some ways, um, like volatility as a service,
or they're a way to go get higher vol on Bitcoin, like, and like Bitcoin's trading at lower vol
in some reasons, in some ways you could even like, including micro strategy, you could argue that
the treasury companies are stabilizing it a little bit. There's, they're almost, they're
almost exporting the vol. They're saying, hey, we're going to bid Bitcoin every week, no matter
what. And that's going to stabilize Bitcoin. And then we're going to trade at a higher volatility.
Do I think that that has really happened at scale yet? Not to a huge degree, but I think it
absolutely could be part of the landscape you're looking at.
Well, I guess that also plays into the hands of your narrative in the sense that if the
category of Bitcoin is dropping over time, like that makes the treasury plays more interesting.
Yeah. I, yeah, I think, I think there's after so many years, I think there's demand for higher
volatility than what Bitcoin's currently given. I think there's interest in that. That's not saying
go put all your money in this or X, Y, Z, but it's saying, Hey, like hot, like let's put 5%,
10%. I'm going to, I'm going to take a portion of my portfolio. Let me do it on a higher vol asset.
like I think there is demand for that yeah hodl you've got a million dollar bitcoin bet with pete
by the end of 2027 how confident you feel I feel decently confident in that actually still still
so you think we get a 10x basically I have until January 1st 2028 so I get okay I get all that
Not 2027.
I got two years and change for that bet to pay off.
I mean, after having been in Bitcoin for a long time,
that's not that big of a move from here to there.
I mean, we just went 15K to 124K.
It's pretty damn close to the same amount
needed to go from here to there.
Really, it's contingent on is the four-year cycle over.
right and so i i guess you know implicitly and explicitly i'm i'm in on that thesis with the
bet with uh pete you know the thing that i could see playing into your hands i don't know if it'd
be anywhere near big enough to get to a million dollars in two years but like i think trump is
going to run things insanely hot next year um everybody's like going into the midterms i yeah
like i maybe that's the problem maybe everyone thinks that and it won't actually happen but um
that's a scenario I could see playing out. Why do you think it can hit a million in such a short
period of time? Well, just I think that, I mean, first of all, that's, you know, it's not that
short of a period of time. It's two years, right? Which is like the same amount of time it took to
go from here to there. And I think, again, like the four year cycle could be over. And so that's
the reason why is because this is trading in an entirely new way. That's, you know, unknown to most
of the actors in the space.
So like, yeah, if we get the right macro environment,
that could definitely happen.
I think right now the bet would be to fade me
and think Pete is going to win the bet.
But I'm, I don't know.
I still feel like I have a decent 50-50 odds
in order to win.
I fucking hope you win that bet.
Well, we all hope.
We all hope I win that bet, right?
Even Pete hopes you win that bet.
All right, before we close out,
anything you want to finish on?
This maybe isn't the closing note, but you mentioned running it hot. You have to. You have to. That's also part of the landscape here is we tried to rein in the spending. We tried to cut. We tried to rein it in. We tried to shore it up. The market pitched a fit.
it was politically challenging to do. And I mean, it's a valiant effort in many ways,
but what ended up happening was the reality of you got to grow your way out of it, or at least
try to grow your way out of it. And you're seeing that messaging coming out of the treasury.
that's this whole stable coin like the state it's like a it's like a twin stable coin ai bet where
it's like we're gonna get a lot more buyers for the debt we're gonna issue a ton more debt we're
gonna invest an astronomically huge amount of money into like ai infrastructure and data centers
and uh like we're gonna we're gonna try to drive growth and and that means like a huge amount of
money coming to the market. It's very bullish for Bitcoin. And it's at a time where I think
there are significant uncertainties in the larger world that are both fiscal and macro that are
reasons why you'd want to own Bitcoin, like expanding fiscal deficits, more money. Also,
AI in a way I think that people aren't talking about of like, if you do actually get like the
bullish AI scenario where there is like a real disruption of like certain jobs and things that
puts a whole lot of variability into like equities, right? Like there could be a lot of equities
that, um, their future earnings are very unpredictable. Like if AI starts moving fast
enough, it's very hard for me to be like, well, this database company, like, what are they going
to be like in five years? Or McKinsey, is McKinsey going to be around in five? Like, I mean, if AI
goes fast enough, I legitimately don't know. Will that happen? I don't know. But all of that to say,
it gives you a kind of unique, unique, a unique thing where it's like, well, do you want to keep
betting on the forecasting of specific earnings? Or do you want to own a fixed supply monetary asset
that's just going to kind of broadly benefit from these net trends, right? I think that becomes a
more compelling pitch to somebody, right? I think it just, it's more reasonable. It's got the backing
of BlackRock. There's institutional level liquidity. It's accepted now. So all of that to
say, like, I do think one of the other stories in this whole thing is that we're in an incredibly
constructive environment for Bitcoin's growth. And Bitcoin keeps growing robustly. It's not hard
to bet on companies that are just saying, hey, we're going to pull all the levers we can to buy
more Bitcoin. You know what I mean? Like, obviously, things are tougher in a big Bitcoin bear market
and all those sort of things.
And I do believe fundamentally,
like you need a management team
that has a plan for that,
that is preparing for that,
that doesn't,
like the whole business
isn't betting on this going up forever.
That being said,
I think it's a very constructive landscape
and it would not surprise me at all
to see Bitcoin up this year,
next year, the year after.
I just, it wouldn't surprise me.
Green, green, green, green, green, green.
That's the new meme.
No, I'll close with this.
You know, when we were in Vegas together,
you asked me about the morality of treasury companies.
And, you know, there was kind of this pause
in the conversation where me and you were both like,
hmm.
I've thought about that a lot since.
I've thought about it a lot since that moment too.
And I think I've come to a conclusion,
which is if you look at this from the outside,
I mean, let's just call it what it is.
This is shit coining.
It's a form of shit coining.
Everything that's not Bitcoin is a shit coin.
So this is, in some sense, a form of shitcoin.
And some of the things that are going on in treasury companies, they mirror what went on in shitcoins, right?
Like with the private placements, insider access.
The most uncharitable view of treasury companies I could give you is that it's a classic, you send me one Bitcoin, I send you two Bitcoin back scam.
But the two Bitcoin is in the form of the MNAV, right?
So that's the most possibly uncharitable view I could give.
I don't believe that to be true.
I think it is like a straight up game and that's why it's morally defensible to play.
But then I thought about the conversation that me and you had and I was thinking, what is the deeper meta here?
Why do I have a feeling that this is okay?
Whereas when we were participating in the markets a few years ago, I had a feeling that it was immoral to shitcoin, right?
And I think a part of it is about alignment.
So we have had a tremendously, all of us,
we've had a tremendously difficult time getting horses to drink.
We've been leading people to the water, but we cannot make people drink.
So like we, you know, we're all the annoying,
probably everybody that listens to this podcast,
unless they're brand new, is the annoying Bitcoin guy
in their friend circle or their family circle.
And you've been giving the rant and, you know,
Jay Powell's going to do this.
And the geopolitics of the situation in the Ukraine are this.
And, oh, did you know that Bitcoin is strictly limited to 21 million?
And, oh, by the way, Satoshi Nakamoto, this and that, blah, blah, blah.
We're all that guy, right?
And, you know, to be frank, most of our family members look at us like we're a combination of insane and retarded.
And then they choose not to buy any Bitcoin because we kind of are unkempt and unwashed and uncouth and, you know, just not really well-mannered in society.
And that's on us.
Maybe some of us should take a shower and put on a nice shirt every once in a while.
But I was thinking about this and I was like, okay, it actually pains me that I can't save people.
Call it what you want.
It's survivor's guilt.
It's this or that.
But I'm actually kind of unwilling to leave people behind.
And I was like, what does all this have to do with the treasury companies?
Is that via passive indexation, we are embedding a shitload of Bitcoin in the public markets.
There's 162 million Americans that invest in the public markets, either in the form of straight up stock investment, 401ks or pensions.
So we are giving those people 162 million Americans, plus investors from foreign markets who invest in the American markets, either via their sovereign wealth fund or straight up.
We are giving them access to Bitcoin exposure.
So they are getting Bitcoin, whether they like it or not.
and we're able to actually put them in a lifeboat
because we know the Titanic hit the iceberg two hours ago
and the water's up to our ankles
and we're not going to be in denial about it.
We're going to get people in the lifeboat.
And I think that's part of what is going on
in treasury companies
is we're embedding Bitcoin in the markets
in a way that's accessible to a vast majority
of passive indexation investors, right?
And of which there are 162 million.
So that plus combined with the SBR
is how you get the rest of the Americans in.
And then you basically, you get to live in a world in which your Bitcoin goes way up,
but you don't have to, you don't have to suffer and watch everyone else suffer alongside you
as you're getting richer, because that's, that's not a world that anybody actually wants to live in.
I don't want to like that's Citadel theory.
I don't want to live in a Citadel while people are dying outside the walls of the Citadel.
I want to do my best to ensure that the people that live around me are taken care of.
And you know, that everything is going to be copacetic now.
Okay, I can hear the people being like,
awfully high-minded bullshit for a shit corner.
What happened to you, dude?
I used to listen to you, dude.
I brown bagged my lunch because of you, American HODL, dude.
I fucking, I named my kid after you, dude.
I fucking, I lived my life by some of your mottos, dude.
I have 6.15.
What happened to you, dude?
You think it's okay to do treasury companies?
Dude, fuck you, dude.
Fuck you, man.
Fucking piece of shit.
So I can hear that.
I understand.
But that said, that said,
I do think that this is the meta on the morality of shitcoin treasury companies.
And to be honest, there's alignment with us too.
Because if Bitcoin goes up tremendously and our friends and neighbors and family don't have any Bitcoin, they're going to want to kill us and take our Bitcoin.
so let's prevent that from happening
by embedding bitcoin deep in the public
market so later it can be seized by the government
y'all I'm American HODL it was great to be here
I hope you have me back
what a way to
close out Stephen any last
things where can people find you where do people find out more
about Nakamoto show your links
HODL that was fucking amazing
yeah I'm on Twitter
Stephen Luka look up
my name DMs are open reach out
anytime Nakamoto also
So on Twitter, Nakamoto.com, we got a great URL.
Yeah, just I run investor relations.
So if you have questions or you want to learn more, I'm the right guy to reach out to and happy to chat.
And go to primal.net for slash hodl for hodl's daily vlogs.
This is amazing.
Thank you, guys.
Appreciate it.
Yeah, absolutely.
Good to be here.
I walk by, I'm dead inside, I remain my kid
I ain't know about that, Treasury Company, Danny's so bald
We can see his thoughts, and they not good
Treasury Company
What Bitcoin did, do and shit caught it
But it's cool now, cause it's Treasury Company
The American Heart Elf, you're dead to me
Steven Lovka can walk on by
Q1&A