Coinbase being in the game for over a decade, you would have expected them to have more Bitcoin on the balance sheet, but it hasn't come to pass.
And thinking as much of a lead as Coinbase blew in terms of their ability to stack Bitcoin over the years, that's just really unfathomable.
It seems like we have a little bit of that froth right now when it comes to companies buying Bitcoin.
Do you think that that is a top signal?
Are we getting closer to the top than maybe some of us would like to think we are?
Famous last words, but I don't think so.
When you start feeling like, oh yeah, we're going to win and we're going to $10 million tomorrow,
at that point, you've got to start thinking to yourself,
okay, we're getting out over our skis here and there might be a little bit of volatility around the corner.
Assuming that we're still in a four-year cycle,
Do you expect Bitcoin treasury companies to be the reason for the next bear market?
Welcome to the Bitcoin Playbook, where we discuss proven strategies for using Bitcoin in your business.
I'm your host, Josh Friedemann, and Trey Sellers and John Gordon join me today for another Roundup episode.
Today, we talk about how a Japanese hotel company now owns more Bitcoin than Coinbase,
how a movie studio is beginning to add Bitcoin to its balance sheet, and a recent article by
Trey Sellers that cautions you to pay attention to how much you're paying for these Bitcoin
treasury companies. Here are John and Trey. Welcome back to another Roundup episode. Today,
we're going to be talking about a number of stories, many of them connected to companies
buying more Bitcoin, which has been the trend across the last year, especially.
Just at the very beginning of this week, we found out that MetaPlanet now holds more Bitcoin than
Coinbase. So John, I want to turn it over to you first. What are your thoughts on this? Especially,
I guess it's interesting to think about how this Japanese hotel company now has more Bitcoin than
what is America's best known crypto brand. Yeah, I think it's a pretty incredible rise and just
focus on stacking Bitcoin to their treasury as a public company and tapping into the Japanese
markets where many of the early plays are particularly in the US.
I think from an American perspective, and as you mentioned, Coinbase being in the game
for over a decade, you would have expected them to have more Bitcoin on the balance sheet,
but it hasn't come to pass.
Marketing now has been, I think, pretty strong, actually, pro-Bitcoin, showing housing prices
measured in Bitcoin and having more of a focus here.
But of course, there's hundreds of coins and other shit coins on there, ultimately, becoming
more of that casino.
And what they're showing, I think, has been difficult for new retail investors to discern
what's real, what's not.
Where do I even buy Bitcoin if it's second, third, fourth on the page?
So getting to 10,000 Bitcoin, taking out of the strategy playbook, being able to tap into
bigger and bigger capital pools to buy Bitcoin for, as you mentioned, otherwise a hotel operator
is super impressive.
And I think they show no signs of stopping anytime soon.
Yeah, I mean, it's not really a hotel operator, right?
This is a Bitcoin hedge fund that was taken over by strong Bitcoiners who actually understand
the value proposition of what Bitcoin brings to the world and the asymmetric opportunity
that it presents.
And if you decide to embrace that opportunity with open arms and be really aggressive about it, you can actually open up a world of new possibilities for your company, which MetaPlanet is seeing in just limit up day after day after day on the stock price.
I don't know when this is going to end. It definitely will end at some point in terms of like just going up parabolically every single day.
Like that type of move cannot be sustained over the long term. And there's definitely going to be some volatility.
But, you know, the fact that Coinbase has been around for so long, like I bought my first Bitcoin and Coinbase back in like 2014.
And, you know, just looking back and thinking back at what has happened between now and then and thinking as much of a lead as Coinbase blew in terms of their ability to stack Bitcoin over the years.
It's just really unfathomable.
And I think like it really goes to show what the people at the top of that company are actually prioritizing.
I think, you know, they very much view this as a traditional business that plays in crypto.
And they're very much influenced, I think, by like the traditional valuation metrics of a business, which is revenue based as opposed to balance sheet based.
and they're trying to hit these quarterly targets and pulling all kinds of levers that go way far
outside of what is actually optimal for somebody to just embrace Bitcoin and focus in that direction.
And so you can see this stark contrast in the way that you can develop and grow your business if
you focus solely on Bitcoin, as opposed to getting distracted by all the other shiny objects that
don't really have any value, but a lot of people get really enthusiastic about. There's a clear
distinction here, and you can see it in the results. It's interesting how MetaPlanet has
grown so quickly. Trey, you mentioned that its price is just going parabolic. And there have
been pullbacks, but it seems to just keep on climbing. I'm curious to know if either of you
have any sense of where else in the world, regionally or by country, you feel like a Bitcoin
treasury company would do exceptionally well. You know, Japan is interesting. It has some unique
parts about it that make it very attractive to Japanese investors. And then obviously people
that are looking to make gains in the United States and elsewhere also are buying in.
But are there other places, and I don't have a great answer that's coming to mind for myself,
but other places where Bitcoin treasury companies would be especially beneficial to
investors within that country? Yeah, I think one that comes to mind is Korea. I know their
president or new elect is going to loosen some of the guidelines around Bitcoin investing.
And they certainly have a strong monetary base as well. So perhaps riding in the coattails to
Japan and I think the Asian markets, even maybe being ahead on a timeline perspective,
they're sort of ahead too on the investing. Obviously, Bitcoin is trading 24-7, but in terms
of their stock markets. I think that could be a country to watch, just opening up regulations,
enabling more companies to come in, where we see more tech innovation come out of that country as
well. That's one that comes to mind. I don't know, Trey, a few of others.
Yeah, the one that I'm aware of that's in motion, in progress right now is in Brazil. I don't know
exactly how much detail is out there for public consumption at this point in time, so I'll stay
quiet, I guess, at least for now on the details that I'm aware of. But apparently there are some
interesting political or tax advantage type nature going on down in Brazil as well. And
there's a huge amount of capital there that is essentially in a very similar way to MetaPlanet
in Japan, not able to buy Bitcoin. And so these types of companies do bring opportunity for new
capital to come into Bitcoin and get exposure to the price by taking advantage of some of the
regulatory infrastructure that is already in place that prevents them from these people,
these capital allocators, from being able to buy Bitcoin directly. So there's definitely this
arbitrage that's happening across these different jurisdictions. Will that be saturated and those
opportunities be taken up by new companies over time? Yes. What is the extent to that that that
will play out? I don't really know because I'm very much not familiar with all the different
jurisdictions and what those opportunities are. But it's very clear that if you discover those
things and you put those plans in motion, there's a lot of money to be made in kind of taking some
zombie type company and turning it into a Bitcoin treasury company, raising money in the capital
markets and arbitraging these regulatory constraints that investors have and being
able to pump that money into Bitcoin and take advantage of the asymmetric opportunity that
Bitcoin presents. And just the fact that people are starved for the ability around the world to
access this asset that has just performed so well over the last 5, 10, 15 years.
Yep. And if you believe in the long-term trajectory of Bitcoin, which I know all three of us do,
than looking at what Coinbase has not done across the last decade or so.
It's going to go down in history as a major whiff on their part.
At the same time, we have Strategy, who's playing this game at a whole other order of magnitude difference,
where they have purchased more Bitcoin in one week than Metaplanet has across however long it's been stacking.
So there's a lot of interesting things going on in this space.
Another one, a company that's recently started buying Bitcoin is Angel Studios.
Popularly, they're probably most well known for the chosen TV series.
But among Bitcoiners, they probably are well known for previously hosting the Tuttle Twins, which have some great Bitcoin episodes.
They're looking to potentially IPO soon.
And they added 300 Bitcoin to their balance sheet as a way to differentiate themselves in the market.
So I guess the question here is is that going to continue being something that companies that want to IPO are doing And do you see this overall Do you feel like the market will see this as a positive differentiation
Or is it once again just sort of limited to Bitcoiners here?
Yeah, I think it's definitely a positive development.
And for any company that actually does have a positive operating cash flow business to add Bitcoin even before going public,
It is being recognized, Bitcoin, as sound money, as collateral, as something to be valued very positively in that formal valuation when the public markets come to judge whatever that stock price ultimately should be and how much capital then they can raise to expand operations.
So I think kind of a pre-IPO, it's a great strategy.
And certainly for producing content that, as you mentioned with Total Twins, that goes into educating around sound money and helping kids understand and answering the question, what is money?
which ultimately isn't really taught in the schools today, in the public schools.
So it's cool to see that and just make sense, I think, from the leadership at the top.
They've understood these principles and now putting that into action, which is really the important step.
Yeah, what excites me about this is it's another example of a company adding a Bitcoin treasury
as opposed to a brand new Bitcoin treasury company, quote unquote,
which is like these hedge fund structures that we've been talking about.
And so like this is a real business, there's real revenues,
you know, it sounds like they're thinking about going public.
That like adding Bitcoin now to the balance sheet,
I don't know if they just announced that they had done that
or they actually did do that recently.
Seems kind of opportunistic to me, you know, it's like,
hey, let's ride the wave of enthusiasm that, you know,
has been around the Bitcoin treasury companies and Bitcoin unbalance sheet.
That's all fine though, right?
Like the number one contributor to Bitcoin adoption around the world always has been.
And for the foreseeable future, always will be a number go up technology and just the
value of Bitcoin going up and the enthusiasm around that piece of it.
And so, you know, we'll continue to see different cases of businesses and individuals announcing
that they own Bitcoin or that they're buying Bitcoin into a wave of enthusiasm.
That's how that adoption goes forward.
And then you always have these kind of washouts.
I think we're going to see that with some of these Bitcoin treasury companies too, is
that there's a washout period as the price kind of comes back off of the euphoria.
And the people who have not gone into this process with a very strong conviction in what
they're doing and a very good plan for how to manage that type of volatility and any leverage
that they're putting on are going to be kind of flushed out of the game. But you always ratchet
up at a higher level at the bottom there. And so every cycle, we see this kind of step-up pattern
in the people who are riding that adoption wave during the euphoria. And then some portion of them
are washed out, but there's some portion that remains convicted and with a very strong position
to be able to ride into the future waves.
And that's how the strength of Bitcoiners continues to grow over time.
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So it seems like we have a little bit of that froth right now when it comes to companies buying Bitcoin.
Do you think that that is a top signal?
Like, are we getting closer to the top than maybe some of us would like to think we are?
Is that a sign that we're getting towards the top?
Or do you feel like this is still early days?
We're going to see a whole lot more companies buying Bitcoin and a lot more craziness before we actually peak.
Famous last words, but I don't think so.
I don't think we're there yet.
The market really hasn't had that euphoria that I was just alluding to, right?
Like it hasn't gotten away from us.
The price hasn't been able to just kind of run and rip day after day, week after week.
going like orders of magnitude higher the way that it has in prior cycles.
Now, you could make the argument that we're past those days and that we're not going to see that type of movement anymore.
I tend to think that what we've seen thus far in this bull market, which has lasted really kind of two years,
we've been stair-stepping higher for the last two years, but nothing's gotten out of control.
And I think that is a result of new and more institutional adoption and these larger capital allocators coming in.
It's a result of new derivative type structures that are built around the Bitcoin ecosystem that allows for various hedging strategies that kind of keeps a lid on the price going up and also puts a little bit of a floor on the price going down and decreases the volatility that we're seeing.
And then there's just been this massive amount of headwinds from the geopolitical sphere, the macroeconomic sphere that has been weighing on Bitcoin and just not allowing it to just reach escape velocity.
I still think that that is ahead of us.
We shall see.
But I think there's going to be still this period of euphoria where we just jump drastically higher over a short period of time.
And at that point, you're going to start seeing a lot more of this like frothiness that you're referring to, to the point where it like starts to feel like it's getting out of hand.
And at that point, like when you start feeling like, oh, yeah, we're going to win and we're going to $10 million like tomorrow.
At that point, you got to start thinking to yourself, OK, maybe this is getting a little bit we're getting out over our skis here and there might be a little bit of volatility around the corner.
In previous years, I remember talking with a guest.
I don't want to misattribute it, so I won't take a guess at who that guest was.
But they were talking about how right now, or right now being a couple of years ago at the time probably, holding Bitcoin on your balance sheet was potentially almost a liability.
It would make you maybe less attractive, seem more risky to the market.
I feel like that's probably changing.
I'm curious maybe especially John with your insight working with business owners through Satoshi Health Advisors
Do you find that that consideration ever comes into play?
Like if i'm adding bitcoin to my balance sheet or accepting his payment and then keeping it on the balance sheet
Whether or not that will be a positive for their business if they're looking to sell in the future
Does that come up or are they just bitcoiners and they say whatever whatever I have to do?
I'm going to do it for the good of my business
No, I think it's definitely a net positive. And business owners who are recognizing that and have
for the last several years have gotten that uptick in saving in Bitcoin and their treasury and the
most efficient way of getting that Bitcoin, ultimately accepting it for payment. And I think
back to a couple of years ago when I started onboarding my first clients to Satoshi Health
Advisors, the Bitcoin price was around $25K. And at that point that Trey mentioned, when we started
seeing now this stair-stepping upwards of an extended bull run, any payment you've received
and work you provided two years ago, if you've been able to save that in Bitcoin, that's worth
four times more than the work you put in two years ago. So I think that I continue to see
business owners recognizing that and being able to, and also that the percent of patients or
customers or users that are paying in Bitcoin is still going to be relatively lower. And you should
be able, if you can save that in Bitcoin and not have to convert into fiat, you're ultimately going
to see those higher gains. So I think, yeah, the sentiment also in the public market certainly
shifted and it is being seen now. And I agree with Trey, we're not yet nearly at that frothy
level, but we're seeing the movement in to 80 to 100 of publicly traded companies having Bitcoin.
And if you don't have Bitcoin at all, that's going to be super risky, but it gets into how
much leverage are you taking as an individual or a company to get that Bitcoin on your balance sheet?
that's when there certainly could be more of a blow off top and people getting caught,
you know, set out ahead of their skis. So I think more private companies, single,
dual owners that I'm working with certainly see the benefit of adding it and differentiating their
business in whatever sector they're working in compared to other competitors that definitely
haven't adopted it yet. You probably have a chance to be one of the first in your industry to really
integrate a Bitcoin strategy at this point. Whereas in the future, if you don't have a
Bitcoin strategy at all, you probably will get left behind. Similar to what was too young to
appreciate it, but what everyone saw in the 90s with the internet and ultimately the 2000s. And
okay are you going to have a website or are you going to be an internet company No everybody is just using the internet And that kind of the way it goes whether you understand the ins and outs of how it works or not So I see Bitcoin playing that similar role now but having potentially even a magnitude
greater difference because instead of just information, it is money and it is the way
that we have capital and invest in projects and ultimately have that opportunity cost
of capital as well.
Looking now and seeing what Marty Bent and TFTC just put out this last week has been
super fun to play around with. I don't know if you guys have the opportunity cost calculator of
just a Chrome browser extension to see anything priced in dollars now priced in Bitcoin. And I
think that is a powerful effect in how we evaluate any purchasing decisions. And that particularly
weighs it from the business owner's perspective, where you're evaluating, how am I going to allocate
capital? How am I going to grow my business, outpace inflation, and still in the fiat world,
having to earn your money twice, those are really, really important decisions. So yeah,
I think we're still going to see more companies deciding to adopt Bitcoin. We saw a company this
last week adopt Ethereum, and that did not go so well for them in the public markets. So that's
another good test case and just saying, okay, Bitcoin is sound money and everything else isn't.
So that can continue to play out. Yeah, the stigma, I think, around a business
or individuals, but we're kind of focusing on businesses these days, right?
That stigma for adopting Bitcoin, for bringing it into your operations or whatever, is definitely
fading, right?
Like nobody looks at you like you've got two heads and you're putting the business at risk,
existential risk.
If you start to think about what could Bitcoin do for the business, what could Bitcoin do
for the balance sheet?
I was just, I'm in Italy right now.
I was at a wine tasting earlier, forgive me.
And I was talking to this guy from New York who is in finance and we're sitting there and we're tasting, we're enjoying the beautiful view.
And we're talking about what do you do?
He says in finance.
What do you do?
Kind of in finance.
I work for a financial services company that focuses on Bitcoin.
And there was like not even a blink of an eye.
It was just like, oh, that's cool.
You know, and then move on with the conversation.
Like three years ago, four years ago, that type of comment would have been like, oh, really?
You know, you would get like these weird looks.
It just doesn't happen anymore.
And that's because we've kind of crossed the threshold of Bitcoin being something that everybody knows about, somewhat understands.
And it's just become not weird anymore for people to start talking about that.
I do worry, though, that the Bitcoin treasury company ecosystem that is developing, I mean, I fully understand this is like a different, it's different at its core, it's different at its essence.
But it does feel quite a bit like some of the like crypto crazy minias that you have in past cycles, the ICOs, the NFT stuff, like all of that.
There are certainly some undertones that are parallel to those.
I worry that there's something out there that we're not seeing or that the market's not anticipating that could end up in creating some pain for a lot of people.
So, you know, time will tell, but, you know, it's going to be fun to watch for sure.
Yeah, and I was going to say that's where proof of reserves comes in and public companies
that are stacking Bitcoin can really show, hey, here is cryptographic proof that this
is our Bitcoin, because I think we do run into those similar challenges as Trey you're
alluding to, but ultimately of paper Bitcoin, of Bitcoin being issued beyond the 21 million
Bitcoin that we know will ever exist.
As of today, we have 450 Bitcoin that are being mined every day on average, so $50 million
into the market. If there's enough demand to buy that up, we'll see the price level out as demand
continues to grow. And we see these different buyers coming in, or at least announcements to
buy, which isn't fully buying, and then isn't necessarily priced in or can't be priced into
Bitcoin itself. We run the risk of previous cycle where we had companies ultimately fraudulently
saying, hey, we have Bitcoin on behalf of customers, or here now we have Bitcoin on behalf of equity
holders and is that Bitcoin really there or not? And so that's where ultimately holding your own
keys, whether as an individual or business, you can help address any of those question marks that
might come in because certainly could be a play here later on in the cycle or for companies that
are maybe trying to take out a loan towards the top to go and buy a Bitcoin and then not being
able to cover and getting margin called. Yeah, the leverage is always what kills it,
right? There's always some hidden leverage that you can't see or that people don't understand,
or that is beyond the scope of what they're able to measure. And it feels totally fine when the
market's going up, or there's just a little bit of volatility or whatever. It's like, oh yeah,
I can manage this. I've got a plan. And then all of a sudden, it's like Mike Tyson comes and
punches you in the face and your plan is no longer really holding up to scrutiny.
So man, I just, it worries me a little bit to see like all of the focus outside of what
like the core of this whole thing is, which is like old Bitcoin, hold your own keys if
you can at all and just like stay humble and stack sets, right?
Like that that is that is never going to steer you wrong when you start when you start reaching for yield, when you start like getting super excited about what's going on in these different avenues of potential excess return above what Bitcoin can provide.
That's where things start getting dangerous.
So just a word of caution to everybody who's thinking about these things.
If you are hit by a bus right now, could your family access your Bitcoin?
When's the right time to stop hotlink and use Bitcoin to impact your family's lives, not just yours?
What if Bitcoin doesn't reach the value you expect or it takes longer to reach that value?
Do you have a plan?
Do you have the proper trust structure to avoid probate, maintain your privacy, and minimize taxes?
Do you want to avoid taxes to stack more sats or leverage your stack without selling?
Should you add Bitcoin to your business's balance sheet?
Are you truly confident in your self-custody setup? If any of those questions made you stop
and think, you probably realize that simply buying and holding Bitcoin is not a complete
financial plan. That's where StrongWealth comes in. Orange-pilled advisors blending traditional
financial planning with deep Bitcoin expertise, giving you the best of both worlds, so you can
sleep peacefully knowing you're making the right moves for your family no matter what happens.
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So to that end, you've recently written an article about maybe the dangers of the MNAV,
or at least the MNAV getting a little too far out on your FHIR BTC substack.
So if you don't mind, we've kind of probably already discussed some small elements of this over the last 20 minutes or so.
But could you kind of give a brief rundown and maybe a plug for the article?
Yeah, we've talked about this a little bit. I was definitely alluding to it earlier in our conversation. But probably the most well-known metric around these Bitcoin treasury companies is the concept of MNAV. And it stands for multiple of net asset value.
And essentially what it is, is how much, what is the enterprise value of this company versus the underlying Bitcoin that they're holding?
And is the business actually trading in the market at a premium or a discount relative to the Bitcoin holdings?
Like we know where the Bitcoin trades in the market.
We know what that's worth.
And if you can take it at face value, to John's point, if you can take it at face value that a company owns a certain amount of Bitcoins on their balance sheet.
and the value of the business is below the value of that Bitcoin,
there's a pretty good chance that you're at least going to be able to recover
and maybe even outperform Bitcoin if you're buying the shares of that company
because you're essentially buying exposure to the underlying asset of Bitcoin
at a discount to where the Bitcoin itself is trading in the market.
But most of these companies are trading at a premium
and sometimes a really massive premium.
MetaPlanet is like the biggest example out there right now. It's trading, I've seen 6x,
I've seen 9x, I've seen like way more than that. MicroStrategy back in the day traded
somewhere between 4 and 10 at one point. It's very short lived though, right? Because anytime that
multiple gets really out of hand, there's a huge incentive for the company itself to issue shares
to take advantage of that premium and buy Bitcoin with it. They're selling paper and buying the
underlying asset. There's a lesson in there. But then there's also a really big incentive for the
market itself, just generally speaking, the market to front run the company coming in and taking
advantage of the premium because they're taking advantage of that premium expansion as well.
Ultimately, when you're buying these companies, and this is the point that I'm trying to make,
the trade is, does the premium that you're buying, if you buy it at 2x, is that going to at least be
sustained or grow? Is it going to expand from 2x to 3x or 2x to 4x? If it does, you outperform
Bitcoin But if it compresses and the natural forces around all of this ecosystem is for it to compress you will underperform just holding spot Bitcoin So you need to take the calculus that you need to
make for any investment is like at the base level, Bitcoin is your hurdle rate, right?
Is this investment, does it have a chance of outperforming Bitcoin? And does it have a chance
of outperforming Bitcoin to a large enough extent that it's worth the extra risk that you're taking
on by not just buying spot Bitcoin and going out on this risk curve. I think that there are a lot
of people who get caught up in the euphoria of the Bitcoin treasury companies and any other
investments around this ecosystem, and they don't really actually understand what the trade is.
It's ultimately a basis trade, right? How is this company trading versus the underlying Bitcoin?
If you're not thinking about it that way, you have not thought deeply enough about what the
opportunity cost is to holding Bitcoin or not. And that's what it ultimately comes down to.
That's what the post or the article goes into. It's defining MNAV, it's showing how it works.
And then it's issuing this word of caution that like, hey, it's okay if you want to play this
game. I own a little bit of strategy and think like it's totally fine to do that. But you need
to understand what the dynamics are here, how they work. And you need a benchmark or barometer
as to whether or not you're actually exceeding that hurdle rate that is Bitcoin's returns.
But there's really no reason that the MNAV should go below one, right? Because last I checked,
similar has an MNAV below one. So to me, that's a value stock right there. Now, whether or not I'm
going to buy is a different thing. I don't have any plans to, but it seems like there would never
be a good reason to have an MNAV below one, or am I missing something? Well, it could be that
there's future expectation that the company is in trouble and they're going to have to sell Bitcoin.
There could be a whole lot of other dynamics that at least temporarily causes the market to value
the company below its Bitcoin holdings. If you look at that same company and you think
these are not valid or this is a short term trend or something like that, then yeah, it's a great
opportunity. MicroStrategy traded at a discount or very close to par on its Bitcoin holdings
during the kind of depths of the bear market.
That turned out to be a fantastic opportunity
because they were able to grow their Bitcoin stack so aggressively.
And that's the other point that I kind of hint at,
and maybe in a future post I'll go a little bit more in depth,
is there's this concept of BTC yield,
which essentially is measuring how fast can a company grow its Bitcoin stack
in percentage terms.
And MetaPlanet has been growing their Bitcoin stack by over 100% or 200%.
percent on a very short term basis. But they're also starting from a much smaller number. As that
number gets larger, so we've seen with strategy, it's harder and harder to grow at a very high
Bitcoin yield. That yield allows the denominator of this MNAV calculation to grow, which basically
creates this break-even point of any kind of premium compression that you would be experiencing.
Less the yield that you're getting is where that breakeven point is residing there.
So the point is that you've got to take in all these different prognostications or calculations into this investment thesis.
Is the company valued fairly relative to its Bitcoin holdings?
Are they going to be able to grow their Bitcoin yield?
Have you timed this correctly?
Are you going to be able to get out of the trade at a premium expansion at some point in the future so that you can actually harvest that premium yourself?
Because if you can't do that, you are spinning your wheels versus Bitcoin and maybe even ending up with a wealth that is less than what you would otherwise have if you just bought spot Bitcoin and chilled.
That's a very easy calculation.
You just buy Bitcoin and you wait for it to do its thing.
If you try to outperform it, it's going to be very, very difficult to do.
Yep.
John, any additional thoughts here?
Not really.
And Trey, you covered that really well and definitely recommend anyone that wants to dig in further to read the article.
Super helpful.
I think we see these terms and MNAV and being thrown around a lot on X and people analyzing.
So being able to dig into it yourself and make those investment decisions is super important.
And just maybe one point I'll add is that it does have, of course, the additional layer
of counterparty risk.
So I think that's the big calculation in seeing.
And if anyone here probably read Nick Bhatia's Layered Money, his first book, but you know
that in times of trouble, we can kind of go race up the layers to get what is really true
or sounder money.
And especially with the different layers of stock that are being issued by some of the
treasury companies, strategy included, understanding what order you are and the pecking order if
things do go wrong in terms of getting your money out of an investment is super important
to understand versus getting caught up in, oh, I could make these huge multiples, but
you also could go to zero.
And I think, again, that's where holding Bitcoin itself and maybe you go out at that point
and want to play around and people are entitled to make those decisions that you're comfortable
with. But certainly understanding the basics and some of those calculations can also identify
opportunities where companies are undervalued. As you mentioned, Semler being under one,
maybe it is a great opportunity. We'll see. And I think just from someone who's been working in the
healthcare industry for a while, I think healthcare in general has way under exposure to Bitcoin.
Right? This is a $5 trillion industry a year, 20% of the economy and very limited healthcare
adoption so far. Starting to see a little bit more, but still very early days.
As we get a little bit further into this bull market and things start heating up,
it's going to be harder and harder to discern which one of these new treasury companies that
are sprouting up every week are actually good investments relative to what they historically
may have been in this first cream of the crop. The companies that have sprung up around here,
they probably understand Bitcoin a lot better. When you get a little bit more mature in this,
like things start getting a little bit crazier. It gets a little bit looser in the way that people
approach this and they add more leverage. And that leverage is what ultimately kills people.
So again, like if you're going to play in this world and I'm not advocating that you don't,
I'm just saying like you need to understand that you're swimming with the sharks a little bit,
right? So you need to understand how all of these mechanics work so that you can make good decisions
about your investments. And just make sure that you've got a solid bag of Bitcoin in cold storage,
like in keys that you control before you even think about any of this other stuff.
Yep. So as we're finishing up today, maybe Trey, we'll start with you. In addition to wherever
you'd like for people to go, maybe this final thought, given that, assuming that we're still
in a four-year cycle. Do you expect Bitcoin treasury companies to be the reason for the
thing that triggers the next bear market? Right now, I kind of feel like they're going to be a
key component. Will they trigger the next bear market? Probably not. I don't think they'll trigger
it, but I think they will exacerbate it as some portion of that market gets into a position where
they need to actually sell Bitcoin to cover some of the liabilities that they start to accrue.
Not everybody is going to be able to issue 0% convertible debt at a five or seven year tenor.
The interest rates are going to start creeping out.
The tenors are going to start compressing as things mature in the bull market.
And that makes the investment that much more risky.
And so when there is some type of headwind that starts the bear market, at that point, it puts these companies under pressure.
They have to make decisions that they wish they didn't have to make.
And that's going to put more pressure on the market and allow all of us who are just staying
humble and stacking sats to acquire a little bit more at cheaper prices.
So that's my perspective there.
How's it going to play out, man?
I don't know.
I wish I did.
I would be a lot wealthier right now.
But you can start to see some of the patterns here reemerging.
So that's why I'm trying to warn people to just keep your head on a swivel there a little
bit.
Follow me on X at TS underscore HODL and check out my newsletter, FireBTC.
It's firebtc.substack.com.
Yeah, great convo, guys, as always.
You can follow me on X or Noster at TheBitcoinYogi.
And for my new company, SoundHSA, we do have another Sats for Steps challenge going on this
week if you're out to align with the Prague conference.
Bitcoin Prague is happening later this week.
If you hit 21,000 steps over those three days, you can earn 2.1 thousand sats paid out instantly
to your lightning wallet.
So if you want to get the sensation of receiving an instant Bitcoin payment, magic internet
money at the speed of light, check out our apps on HSA.
And yeah, you can also participate from anywhere.
You don't need to be in Prague, of course, but it's great to see consistent Bitcoin events
happening around the world, connecting people from all over.
So we're excited to be a part of that.
Great. Well, guys, thank you so much for your time today. We'll talk soon.
Cheers.
Thanks a lot. Cheers.
Well, friends, it's a wrap. Thanks so much for listening to this episode of the Bitcoin Playbook.
If you want to reach out to either me, Trey, or John, you can find those links down in the show notes.
And be sure to check out Trey's recent Fire BTC article talking about the MNAP.
As always, keep building, keep growing. Until next time, keep living and leading well.