It's 100% true. 100% true.
I think a lot of people are like, how is it possible that BlackRock sucks up 800,000 Bitcoins and Singular sucks up 700,000 Bitcoins?
And you have legit nation states buying hundreds of thousands of Bitcoin.
And the price is where it's at.
I would say probably 30, 40 countries are actively in Bitcoin mining.
Not a super popular decision to tell the DOJ, hey, all this Bitcoin you're holding that you think you're going to sell for your own benefit.
it well we're moving that over to treasury and we're going to hold on to it like dog's like f
you no you're not so i mean bing bong i am back with another edition of the state of bitcoin
podcast where i've got the man the myth the legend david bailey in the house and david has been
pivotal in bringing in donald trump and all these politicians and truly just shaping the landscape
in Bitcoin here in the United States.
But David, I'm not going to lie to you.
There's been a little bit of drama here,
which I think it should be all positive
because you've had the Bitcoin Magazine
and Nakamoto essentially merge.
Why don't you talk us through a little bit
about what has just happened
and what you announced just,
what was it, last week?
And yeah, why do you think
you're getting a little bit of blowback
because of all of this?
Yeah, well, first off,
thank you for having me on the podcast.
And I felt like, you know,
with all the bear market vibes that are out there coming on to a green candle podcast would be,
you know, apropos. But yeah, I mean, I think it's bear market vibes. And it's like,
I think our transaction, you know, the real story of our transaction is like, we just completed
the first merger ever of a Bitcoin treasury company acquiring an operating business that
is a Bitcoin operating business. And I think it's a fundamentally unique strategy that like,
time will tell how effective it is and like we're executing it and trying to pioneer it.
But yeah, I think the drama for the most part just stems from the bad performance of the stock,
the bad performance of Bitcoin. I mean, this is just like typical bear market,
you know, environment where no good news can be good news. It has to be bad news.
So yeah, it sucks, but it is what it is. And I mean, I think for people who have been operating
and building businesses for a while in this industry, it's just par with the course. I mean,
And this is like, I think it's my fifth bear market, if that's what we're calling this now.
So, you know, those that can survive the ugliest parts of each downturn are set up in a position to thrive when the oxygen comes back to the space in the industry.
And so, you know, that's been my experience is like all the those that can be most opportunistic and kind of can can parse for themselves what's good and what's bad in the downtimes are set up to outperform.
Yeah, let's dive into that a little bit more because I think, I don't know how much in advance you guys plan out this acquisition, but it seems like you guys kind of got unlucky, where Bitcoin is basically at the lowest it's been and a 50% drawdown.
But was this something that just kind of was planned out for a while? And, you know, it just was kind of bad luck that Bitcoin, you know, had the downturn that it was? Or did you see this as more of just kind of like an opportune time to build in the bear market and kind of grow it when, you know, maybe everything and the vibes are a little bit low, opposed to, you know, maybe the valuations of things just skyrocketing and things getting a little crazy in like a bull market?
it? Yeah, I mean, I think, you know, first off, in terms of just this transaction itself,
when we set up Nakamoto originally to go public, and we raise money around, you know, building a
kind of a new kind of treasury company, you know, BTC Inc and UTXO were kind of from the kind of
genesis of this idea, the operating assets and businesses that we want to contribute into the
business. Now we want to buy more operating businesses than just those two. So our vision
is more expansive than just those two businesses. But we want to buy iconic brands with strong cash
flow, durability, correlation to Bitcoin, you know, because we're measuring our benchmark is
Bitcoin. So Bitcoin's performance. And so we want to have assets that can keep pace over time with
what Bitcoin's growth does so that, you know, in Bitcoin terms, let's say, you know, this transaction
in a hypothetical, these numbers are not correct, but hypothetically, it costs us 1000 Bitcoins of
dilution to buy these businesses, then we need to earn back a thousand Bitcoin of non-dilutive
income. And like that's, you know, if we can earn that back over some reasonable period of time,
now, not only did it not cost us anything, but we actually still can control and own the assets
and the strategic value of them. So that's kind of the thought process around what type of
operating businesses that we want. And, you know, we started with these two because I already own
them. I'm the major shareholder
of them. Our management team
and the strike team that
put together even the Nakamoto fundraise
and all the different pieces of what has become Nakamoto
are the same team.
So yeah,
we've been working on this process.
We hit our deadline, but from the very
get-go, it was Q1 of this year
was when we were going to close the transaction.
And
the timing is shitty
timing to close a merger.
I will say that
Because of the mechanics of the transaction and how it works, you know, we basically, we negotiated, like we put together this pipe deal that all this money came into.
And we basically said, hey, we're going to invest the business in this pipe transaction with everyone else.
Like we're riding with everyone in terms of what happens to the stock price from here.
And I don't think, I mean, at least we didn't anticipate the stock, you know, taking such a beating.
and so you know because of how the mechanics worked in the structure we ended up getting paid
about you know one fourth of like what we originally you know the valuations of the
business came in that now i think probably valuations have changed in this market environment
but even still like we're getting sold at like i think a roughly a 3x EBITDA number which from any
kind of just investor perspective is an incredible opportunity so um i do think like there's great
opportunities that come in the bear market. And to your point, valuations come down on the
businesses that we want to acquire. Talent is cheaper. You're not competing with as many sources.
There's a lot of places where good deals can get created. Whereas when you're trying to grow,
you need to be planting seeds in the bear market and harvesting during Bitcoin summer,
okay? The proverbial Bitcoin summer. And so I think what a lot of people do instead
is they try to invest in the growth in the Bitcoin summer
rather than focusing on harvesting seeds
that have already been planted.
And they never get to see the EBITDA
or growth trajection to actually materialize
because then we switch into a different market environment.
So you just have to make sure that you're like,
basically, you don't want to be lagging
the macro cycle in Bitcoin.
You want to be front running macro cycle in Bitcoin.
So it's hard to do that
because it's a contrarian thing to do.
Everyone else is doing the opposite of it.
So you have to be able to think for yourself,
which is, you know, takes conviction and takes experience.
And I mean, I've made this whole kind of thesis
and worldview is a derivative of us
making every mistake you can possibly make
and having to survive at making every mistake.
I mean, I started this business when I was 22.
I'm 35 right now.
like uh uh yeah like you don't make it that long without learning how to survive and correct for
your mistakes and so yeah our our worldview is painted and and and created by the mistakes we've
made in the past yeah and i think it's it's interesting because it is an ever-changing
landscape especially in the bitcoin space too and you know you guys at nakamoto were kind of
one of the first i guess let's say like bigger bigger names to come in in the bitcoin treasury
companies. But I think the unique thing about, you know, what you guys do at Nakamoto and what
you've done and, you know, what Jack Maulers has done at 21 is you guys kind of went in like as a
strict Bitcoin treasury play where it seemed like, you know, that you guys were, you know,
the first goal was to acquire Bitcoin. And now it seems like you guys are kind of trying to,
I guess, shift to acquire businesses so you could get that cashflow to get Bitcoin. Look,
I don't want to put words into your mouth, but is that kind of like in short, what you guys are
looking to do now was first get the Bitcoin on the balance sheet and then get, you know, some,
I guess, Bitcoin cashflow slash positive businesses on the balance sheet to help
acquire more Bitcoin in the future? Yeah. So, you know, in general, we want to build
an iconic, globally known, very profitable Bitcoin powerhouse that can
provide all sorts of sovereign Bitcoin products and services and can wield its Bitcoin in such a
way to generate outsized performance in the traditional capital markets more broadly.
So we don't necessarily only have to play in Bitcoin. We can play in other arenas around
Bitcoin. But the goal is to always grow the amount of Bitcoin we have at the company.
So, you know, where the vision started was like we actually before we did Nakamoto, we were actually underwriting most of the Bitcoin treasury companies.
So, for example, MetaPlanet, which a lot of people know, fantastic company.
We're the seed investor in MetaPlanet from, you know, it was us and a few of our friends that put in the first capital into that into that company.
We've done probably 15 to 20 treasury companies that we've underwritten at the seed stage level.
So, you know, we had a lot of kind of exposure to this concept before deciding to do it at
Nakamoto.
And the one place that we saw an opportunity to really innovate on the model and where
we think all the treasury companies are eventually going to go is how do you monetize the Bitcoin
on your balance sheet to make money?
Like you need to generate income.
It can't just be a business model driven purely by dilution.
It has to be driven by value creation.
And I think Saylor has a very, very compelling way that he does it.
It's highly scalable.
he's creating value by resolving an asset liability mismatch that investors have and
what investors are looking for from the product he's created. So he is creating a lot of value.
But I think if you can't out-sailor in that regard, then you have to create value in other
ways. And I think there's a lot of ways to create value. I mean, just go look around the world,
there's an infinite number of ways to create value. And so we wanted to monetize our Bitcoin
and generate non-dilutive income.
And so that started by us wanting to focus
on recreating Bitcoin,
what we call Bitcoin securities,
which is just like, you know,
securitized products or equities
that have some correlation
or relationship to the performance of Bitcoin.
We wanted to launch, you know,
these Bitcoin equities in every market around the world.
We're still pursuing that strategy,
but right now that's not a super viable strategy
given the market context.
It's like, you know, if you want to eviscerate,
You set your balance sheet right now, you do a Bitcoin treasury company, you turn one Bitcoin into half a Bitcoin, whereas previously you turned one Bitcoin into 10 Bitcoin.
But what we are looking for is always the best places for us to allocate capital relative to the amount of risk that we're taking on and our time horizon that we can invest as investors.
And so that comes from owning Bitcoin.
That comes from deploying that Bitcoin in other instruments and derivatives.
that comes from investing it into other companies that we think maybe have outsized growth prospects
or in unique markets that we want to tap into.
It also means acquiring private companies that have cash-flowing, income-generating businesses
that over time allow us to continue to grow our Bitcoin balance sheet
or if we're trading at a discount to our Bitcoin holdings to buy our stock back.
And so at the end of the day, if you can't dilute in an accretive way for your shareholders and you don't generate income in an accretive way for your shareholders, then what are you doing as a business?
Like, what are you?
Yeah, I mean, that's a great question.
But I mean, you brought up Sailor's strategy.
I kind of want to dive into that a little bit because, I mean, Sailor's obviously had like such a head start.
And it seems like he's just like different.
Yeah, I mean.
It's a different game.
Yeah.
So, you know, how do you balance, I guess, looking at something like somebody like Sailor and like, you know, do you look at him as like, oh, we can potentially copy this strategy?
Or are you just looking at this as like you said, a completely different game and we have to find other ways to add value opposed to, you know, maybe some of these other income products or, you know, preferred equities or preferred stock offerings that Sailor's doing?
so we're trying to play a completely different game because like we don't see how we can beat
sailor at his own game so like and i mean that in the most uh uh you know it's with bitcoin you're
competing against everyone but at the same time like you know a rising tide lifts all boats and
like uh uh it's a friendly competition but um uh so yeah like we have to differentiate because we
have to provide compelling value that you know is unique and differentiated and has a different
risk profile and and a different upside um you know but like at the same time like to survive
in business in general when your competitors create something that works really really well
well like you have to be open-minded about uh copying it you know like uh that's just part of
business so i would say like with the preferreds i think it's a super compelling product i think
what he has built for microstrategy is um uh very unique and differentiated i'm probably more
closely following the preferreds that are being issued by um a strive and meta planet to see how
they perform like is there space for more than one and we'll watch and if it works really well
we're going to copy it but like if we we want to kind of have the benefit of watching others
demonstrate how effective it is
because it's really hard to unwind
those types of decisions to your capital stack once you done them So yeah I mean I think we open to doing them We just want to watch and learn and be maximally informed before we do And I think
we want to have a compelling strategy and approach that's unique, regardless of whether we want to do
preferred stuff on the road or not. Yeah, that's all fair to say. I mean, obviously, this is just,
you know, future outward looking and, you know, maybe kind of projecting how the Bitcoin industry
and the Bitcoin treasury play will kind of evolve over time.
But, you know, I think I want to get back to how the Bitcoin treasury companies,
you know, performed last year.
I mean, I think just from, you know, the perspective of everybody in the industry,
I think everybody anticipated Bitcoin to be at a different place,
you know, where it is right now.
But, you know, I think from what everybody's seeing,
and, you know, I don't think necessarily Bitcoin Twitter is real life
or anything like that by any means.
But I think from the treasury plays,
I think it was kind of a unique dynamic
that played out this last year
because it seemed like, like you said,
last year when everybody got started,
it was essentially you buy one Bitcoin,
you get 10 back.
And now it's you buy one and you get half a Bitcoin.
How have the market's dynamics changed?
And why do you think it's changed so drastically
and swung the other direction?
So first off, you have to think about Bitcoin equities in general, and that's broader than just digital asset treasures.
I hate the term dat, but it's like a term of art right now.
But you have to think more broadly than just that category.
But at the end of the day, these things are all, they have some beta, some correlation to Bitcoin's performance and their risk on assets.
So when Bitcoin performs well and people are looking for marginal more risk and more
performance relative to Bitcoin, they're going to flow into the riskier assets.
And likewise, when they're risk off and they're cautious and conservative.
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They're going to rotate from riskier assets into safer assets.
And so I think you've seen that rotation play out with Bitcoin treasury companies.
As Bitcoin's ripping, everyone wants to be in the next hottest treasury company.
When Bitcoin is dumping, they want to be in cold, hard, cold storage Bitcoin with no counterparty risk whatsoever.
That makes sense to me.
Like, I think the other kind of like thing we've seen play out like trend was that way too many dots came to the market way too quickly.
And so what went from just like, I mean, we were underwriting a lot of these.
And so what went from like us underwriting, you know, one a month or one a quarter to like, you know, one a month to like one a week to, you know, getting hit with 20 a day.
I mean, just like an overwhelming number.
And not all of these treasury companies were created equal.
First off, I think treasury companies that are built on assets other than Bitcoin, I'm not going to say they all, I'm not going to paint them all with one bright, wide brush.
But in general, I think you have to build these to be long term durable vehicles.
And if you build on an asset that is fundamentally building on sand, like you're not going to perform well.
So like a lot of liquidity was sucked out of the market by people launching, you know, you name it, crypto token bullshit in a dat form, you know, and they're raising capital from investors that don't necessarily know better between the different assets or, you know, would have played in one speculative arena, but they are playing in this other one for whatever reason.
So the other issue that was created is like not all of these these DATs have a similar vision of what they're trying to build.
And, you know, some of these were very much driven by just opportunism and seizing the opportunity.
And there are some very exploitative agreements that have been papered where there's just a max extraction going on.
I mean, where there's like asset management agreements that are draining out 2% or 3% of the assets from the DAP per year every year on a 20-year contract.
I mean, it's really hard to grow a balance sheet if you're draining it at that pace consistently over time.
So anyway, the broader point I'm getting to is that not all these businesses are the same.
It's hard for the TradFi markets to differentiate what makes them unique or one better versus the other right now.
we're in kind of a prove it to me period where the dots that are differentiated and have a
compelling strategy are going to outperform those that don't and who are going to who are going to
lag i think we're going to see consolidation you know in in the space um but you know i think that's
a good thing honestly like you know we like investors need to understand like which ones
are going to succeed in the future what's going to make it to the next wave of treasury companies
and which ones are not and they're going to it's going to inform their investment decisions you know
downstream. So yeah, I just think 500 dats coming to market in a three month, four month period
is a very difficult thing to sustain and then cross it with a risk off attitude that's come
from Bitcoin selling off. And you're set up for just a calamity in the treasury space.
Yeah. And I mean, I guess let's dive into like the Bitcoin price aspect of all this. Like how
How are you guys like looking at that as something, you know, as a driver of when to get in?
Is there any sort of timing?
Because I know like in the business space, raising money, all these different aspects,
these things take time.
And sometimes, you know, with these deals, it's just unfortunate timing,
kind of like the acquisition that you guys just had.
So is there a way that these, I guess we'll call them DATs,
because I guess that's the new term right here.
Is there a way that they could potentially start to time?
Because it seems like a lot of these treasury companies came on and essentially bought the top and have written it.
Yeah, that includes us.
That includes us.
I think we aped all of our cash in at like 116.
Yeah.
You know, how to answer the question.
So with the price of Bitcoin, like you cannot predict the price of Bitcoin or what it's going to be.
So the fundamental challenge that operators have who are running public companies, and I'm going through this process as we're kind of getting our sea legs of being a public company, is you have to kind of divorce yourself from the short-term changes in the stock price or the short-term changes in Bitcoin.
and you have to think in like longer term strategic lens.
And so it doesn't really matter
if the price is kind of shitting the bed today
because you're not making the decision
to buy this company or to do this thing
based on the market dynamics today.
You're doing it based on where you think
the market dynamics will be five years from now,
10 years from now.
Like what fundamentally is the type of company
you want to be?
And then the rest is sort of lesser important considerations
around, you know, what are we trying to build?
So to the question of like the price in general, can you repeat the question?
Sorry, I'm...
No problem.
It was basically just like with the way that, you know, these public companies work, is
there a way that these, you know, treasury companies had almost timed the market or is
it just...
I don't think so.
And I think like part of the reason we want to have income is because there is an asymmetry
to buying Bitcoin.
that comes from accumulating Bitcoin in down cycle.
So like, let me give you a scenario,
which maybe is self apparent to most people,
but I think there are some surprising conclusions
you can pull from it.
But if the price of Bitcoin is sitting at 100,000
and it trades like,
and you have 100,000 bucks,
you can buy one Bitcoin, okay?
If the price of Bitcoin goes from 100,000
down 50,000 bucks to 50K a Bitcoin,
you can buy two Bitcoins.
If the price of Bitcoin goes from 100,000 bucks up
$50,000, the same amount of dollars, you can buy two thirds of a Bitcoin. So there's actually an
asymmetry where when the price of Bitcoin goes down, the amount of Bitcoin that you can buy
grows disproportionately relative to the amount of you lose on the upside. Meaning that it's like
more valuable to be deploying cash as the Bitcoin price goes down, you know, than it is to deploy
that same cash, you know, only in up environments, like you're going to way outperform. So yeah,
I think the goal for these treasury companies is they need to learn how to operate in all market
environments and conditions. Like they need to be able to, you know, we could have a prolonged
multi-year bear market. There is nothing in how Bitcoin is structured that says that that's not
a possible thing. And from my perspective, it pays to assume and prepare for the worst always.
So, you know, that's how you survive the bear markets is like you always assume it can get
worse than it is. And I don't think a lot of people really, you know, they build their business
around how they think they wish things would be in the future, rather than what happens if it gets
worse. So, yeah, I think it's impossible to time the price of Bitcoin. I think it's a really tough
thing. I will say if there's one thing that I wish retrospectively, like looking at our business,
is when Dat Mania is going on, there's a lot of pressure to just amplify the beta of the business
and to amplify its Bitcoin exposure.
And I think that some of those things that the market wants
might be in conflict with the long-term strategy
of what maximizes performance.
And so you have to be able to tell the market no
or tell your shareholders no, no and why,
or no, this is why we're not doing that.
Or otherwise, the rat race of your competitors
will drive you into strategic business decisions
that maybe like are inconsistent
with what you want to do long-term.
So yeah, yeah.
Can you dive into that a little bit more?
Yeah, so like, let me give an example.
Like I took on this convertible note,
$200 million convertible note
at a 0% interest rate for the first two years.
You know, the guys who gave me the note, nice guys.
I'm not besmirching them.
They have a certain business model, you know,
And for an operator who is purely looking at the marketplace of like, okay, similar has a convert, microstrategy has a convert.
This is kind of the go-to playbook is get a low-interest convert that gives you a long-term duration on the note.
That's what the market wants, and that's the path forward.
Well, you know, our company, for example, the difference between our company and those companies and doing something through like a reverse merger structure, which is sort of what we did, is like we don't have a mature like cap table like those companies do.
Like we don't have a bunch of index funds that own our stock.
And so typically when you do like a convertible note and the people who do the convert short your stock, there's a bid underneath the stock that comes from these like passive index funds and passive investors that like keep the stock from massively tanking.
I mean, it's still like, you know, when GameStop does a convertible note, they might drop 20 or 30 percent on a convertible note.
But then they'll stop and then the stock recovers as the as, you know, capital flows in.
Well, if you don't have the, you know, age and maturity of your cap table, then if you have a $200 million short put on your stock, like it's going to wreck your stock price.
And so that's something that like we didn't appreciate about the difference between the different businesses.
And there's really, you know, wasn't there wasn't any reference point to point to and say, hey, look, this is the this is the overhang that this is going to cause.
And so, you know, taking that debt ultimately had an outsized impact to our business.
And so the question is like, well, did we really need to take the $200 million convert in the first place?
Like, was that a mistake to take that convert?
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You know, but from at the time that we were doing it, you know,
the mindset is maximize the amount of Bitcoin.
Bitcoin is going to 250,000 bucks, 350,000 bucks.
And so we're getting a 0% interest loan that can't be called.
And we're going to be able to deploy this in Bitcoin.
We're going to get to write it up.
So like that's the pressure of the market speaking,
where the market wants you to time the price of Bitcoin
because that's what the market wants
is they want you to only make the right decisions
and be the beneficiaries of that.
But the reality is no one can know exactly
what's going to happen to the price of Bitcoin.
Why did we need to take on that convert in the first place?
What strategically did it achieve for us to do so?
I'm not saying there's a right or wrong answer to that.
I'm just saying as an operator,
you're dealing in the arena of all these competitors, like you're executing based on
like what you're being judged against your peers on. And if you're trying to do something unique
and differentiated, those two things might not be exactly aligned with what you should be doing.
Yeah, I mean, it definitely is like, like we were saying, you know, a little bit earlier,
it's kind of like a different game when you're when you're getting into, you know, the Treasury
play, and you're kind of like a newer company. Is there any, I guess, I mean, you know, obviously,
you're new to this, right? Being a publicly traded company CEO, obviously you've run, you know,
Bitcoin Inc or BTC Inc and UTXO for quite some time, but it seems like it's a little new territory
for you. And does that, are there any, I guess, worries or, you know, like obviously some growing
pains that you've been going through, like any like big lessons that you've taken as, you know,
the first time CEO of a publicly traded company?
You know, there are a lot, there are a lot. And I mean, I think, you know,
I don't know what the math is on like how many CEOs of public companies are
first time CEOs versus their, like, this is their second or third, you know,
public company. I would imagine, you know,
most founder let businesses ultimately the founder becomes the CEO of the
company. And, you know, you, you got to learn the rodeo somehow. I mean,
you know, everyone's a rookie at something at some point. But, you know, from the perspective
of the things that I've learned, I think that are the most different from a private company is like,
first off, you know, these are regulated securities. There's a certain duty and level
that is expected of public companies. And so there's just way, way, way more red tape in terms
of saying things, you know, defending yourself. Like, that's one of the most challenging things
about this whole like drama from this past week is like there's people just saying like
like really nasty things about it that are just not true and like my instinct is like i want to
jump in and like be like hey that's not true and the reality of running a public company is you just
you can't do that you just have to be you know take the take the blows and so you know um uh so
i think communication is much harder whereas like i mean as a private company ceo i've been canceled
for those of you that don't know me, I've been canceled like three or four times. And it's like,
I'm just used to like going in there and like going blow for blow and like, let's, let's duke
it out. Um, so I think like communication is a challenge. I think, uh, you know, getting your
pacing as a public company is a challenge. Like when I first came into this, you know, I'm used
to like startup speed where like everything's measured in, in like weeks, you know, like what
did, what are we getting done? What are we shipping this week? Um, whereas with a public
company, there's a different pacing and you, it takes a little adjustment to understand like the
tempo of what a public company can do and all the moving parts, like, you know, just to put out a
press release, people don't understand like how many eyeballs have to touch or be a part of just
a press release. You know, when you consider all the different levels of, you know, PR sign-off,
marketing sign-off, legal sign-off, like, like depending on what's in the agreement, like
opposite parties legal signing off. Like it's very complex. So, um, you just have to like,
kind of pace yourself correctly. And it's hard to know that without like, just like,
you know, getting on a ship and going sailing and getting your sea legs. I mean,
that's what I would describe it to, um, and understanding the rhythm. And then, you know,
I would say the last thing is like, when you're like a first time CEO, there is an, um,
and maybe an overemphasis on like thinking that other people have, you know, know the answers to
the things that you're dealing with. And, you know, what I found through this process is like,
there's definitely people who have very experienced informed opinions that I would,
I would overweight their opinions versus others. But like, at the end of the day,
they're all opinions. And, you know, on topics that, you know, you might think that there's only
one way to think about, you know, maybe I've had 40 phone calls with like different shareholders
on that topic and half of them tell me one thing and half of them tell me another thing. And so
at the end of the day, like there's no replacement for like you being the decision maker. There is
no experience that or wisdom that a banker or a lawyer or an investor is going to be able to tell
you that's going to tell you like, this is the right decision because so-and-so told me to make
this decision. It's truly you're on your own. So, you know, the nice thing about running a
public company for 13 years is like, we've always been on our own. That's how we've always made
decisions. But it's definitely a challenge, especially when the market's going through a lot
of volatility and you're getting a lot of scrutiny. It's like you want to make sure that you kind of
follow the best practices and the best practices are really go make money and operate with integrity.
Those are the best practices. That's a pretty wide, ambiguous advice to give, but I think it's true.
Yeah, now I want to kind of shift to a little bit more of, I guess, you know, what has happened with the political side of things, because, you know, you are obviously pretty vital in getting the Trump campaign and the Trump administration really onto the Bitcoin space.
Obviously, Trump spoke in Nashville a couple of years ago. J.D. Vance spoke this past year. And I'm sure there's there's plenty of big announcements for the upcoming one here in Vegas. But, you know, how do you see, you know, I guess, how do you judge the overall, I guess, like administration, you know, just coming in just off the bat from your initial conversations to how things have kind of played out over the what past, you know, 14, 15 months or so.
So, you know, first off, I want to say that the president has been an incredible advocate and his administration has been an incredible advocate for Bitcoin in our entire industry.
And like we owe him a deep loyalty for everything he's delivered.
No administration has ever delivered shit for us.
Like they've only like literally come at us and attacked us.
And so to have someone who's an actual, you know, partner and, you know, wants to dance with us and collaborate with us constructively like that, that's a complete breath of fresh air. And I think the path forward for like the political spectrum go like from this point forward, I think every administration will hold that same stance or should hold that same stance.
you know i think you know uh in terms of just like the day-to-day political side the past six
months i've been fully focused on nakamoto and executing on nakamoto and so i'm not i'm not um
the point of the spear as i was a year ago on this topic i think that there's a lot of challenges
that the administration has faced um you know i think the democrats have been much more
resistant. I think there was more expectation that with the change in leadership in the
Democratic Party, there'd be a change of tone on this issue. And it hasn't happened in a big way
yet. There's been incremental progress, but not in a big way. And I think that the Trump
administration also, there's the executive branch and the appointees that Trump has. And then there
are the legacy career bureaucrats that actually work and do the work inside of the government.
And so if you don't, you know, those are not political appointees. And so while the Trump administration and this political apparatus, I'd give an A plus to in terms of just like how supportive they've been. If that support doesn't go downstream into the actual career bureaucrats, they can stall out, you know, the most well-intentioned, well-supported initiatives of an administration.
So, for example, like the strategic Bitcoin reserve, something that's been very slow to progress.
You know, I know that there's been a lot of challenges the administration has faced, you know, internally within the government getting this done.
As you can imagine, it's like not a super popular decision to tell the DOJ, hey, all this Bitcoin you're holding that you think you're going to sell for your own benefit.
Well, we're moving that over to Treasury and we're going to hold on to it.
Like DOJ is like, F you.
No, you're not.
So, I mean, so like you, it makes sense that it's not an easy thing to do, but I think maybe we underestimated or underappreciated, like just how, how, how wide and deep we need to be to truly penetrate, um, support from the government on some of these issues.
yeah so that'd be like my high level response
but I do think the wins that we've received
in terms of the pardons
the pardon for Ross Ulbricht
SAB 121
the Genius Act
I think there's a lot in the Clarity Act
that I feel like for Bitcoiners
isn't as relevant
there's also a lot in the Clarity Act that is
and I know that there's been a lot of work done
a lot of political capital spent
on getting the Clarity Act across
The thing I love the most about Bitcoin is the community.
There are so many great people and so many lifelong friends that I've met at conferences
all around the world, and I wouldn't trade it for anything.
Now you can have the same opportunity by going to two of the biggest conferences in the world.
There's Bitcoin Las Vegas in April 27th through 29th.
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yell at me heckle me a little bit from the crowd or if you've never been to europe or if you're a
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all right enough from me let's get back into the show so i think you know they've done a great job
but they're probably suffering from the same problem that the treasury
companies are suffering from, which is like the price is down.
The price is the yardstick of success.
And so if the price is down, then it's like blame.
The efforts are not being sufficient or they're not being, you know,
thorough enough.
And I don't think you can in any way blame this administration for the,
the price performance. Like if anything,
without what the administration has done, the price would be much lower.
So, yeah, that's my general view.
either the regulatory framework, their Bitcoin mining operations, their Bitcoin buying operations.
I mean, there is multiple countries with multi-billion dollar stacks of Bitcoin that are direct
derivative of the United States providing leadership on this topic. So I do think that
that phenomenon is a major trend in Bitcoin that is still playing out and is going to get much
bigger. And it really began in earnest with this admin. Yeah. And Eric, Trump has come out and said
and kind of hinted at a lot of different countries around the world because potentially secretly
stacking Bitcoin or mining Bitcoin and not really announcing it. Is that kind of, I guess,
100% true. 100% true. Okay. Can you... Which is shocking that the price is down.
Like that's, that's the thing. I think a lot of people are like, how is it possible that BlackRock sucks up 800,000 Bitcoins and Singular sucks up 700,000 Bitcoins and you have legit nation states buying hundreds of thousands of Bitcoin and the price is where it's at, you know?
So I, but yeah, I mean, it's 100% happening.
We've met with governments that are doing it.
There's the number of governments that are mining has gotten very large.
Like I would say probably 30, 40 countries are actively in Bitcoin mining.
There's kind of like a process of like, you know, when countries decide to dip their toe
into Bitcoin, like how do they dip it in?
And like mining and using some like latent energy resource that's wasted seems to be
the easiest yes to start with, but then it slowly progresses to, Hey, we need a strategic Bitcoin
reserve. And there are multiple countries that maybe they wouldn't call it a strategic Bitcoin
reserve, but in essence, it is a strategic Bitcoin reserve and they're, they're building
them and growing them. Why haven't there been like announcements then? Is it, is there a potential
they want to keep the price down? So they want to stack as much as possible because they realize
it's a skid asset or why no big major announcements? Yeah. I mean, first off,
no investor that is entering into any position is incentivized to want to make announcements
about them entering into a position. They'd rather make the announcement when they're done
entering into the position and they want you to go buy it or they want exit liquidity or something,
but they're just not a reason to do it. And we've actually been a part of multiple
nation state conversations where we've really tried to push them to announce it at our conference
or like let us break news And they just like guys like there just there isn there isn a reason there isn a benefit for us to do this Now I do think that there are other ways that benefits can be captured
where it does make sense to announce.
So part of the reason that Trump announced
that he was going to do an SBR
is because he's trying to build political capital
and a political coalition
that's going to put him in the White House.
Okay, well, every president who runs for office
has the same dynamic.
They need to build political will, political backing,
And guess what? Like Bitcoin is incredibly popular with people around the world in every country, in every demographic, college educated, no education, rich, poor, black, white, Muslim, Christian, whatever.
It is ubiquitous across society that people own Bitcoin.
And so I think you'll see more nations, not necessarily the nation announcing that they're doing stuff, but the political leadership of those nations who want to score the political capital, talk about it because there's some utility to them to talk about it.
But you're not going to see the Treasury Department give an update about how many Bitcoins they've accumulated in the market until there's some reason they should.
Yeah, it's interesting.
I guess I'm not super familiar, I guess, with the regulations around certain governments, but it seems like, you know, it would be, you know, because we've heard, of course, like some sovereign wealth funds, you know, announced that they're holding maybe IBID or, you know, the Norwegian sovereign wealth fund is famous for holding a lot of micro strategy stock.
uh well i guess now strategy but um you know i guess uh yeah it doesn't uh uh benefit them
necessarily to announce that that these governments are quietly stacking behind the
scenes but 30 to 40 seems pretty significant to say the very least for on the mining side i'd say
on like the stacking side where they're like they are they have a bitcoin balance sheet that they
have to maintain and custody and protect shit it's probably still i mean i would i would expect
it to be like 10, 10 plus. So, I mean, it's, it's, um, it's kind of crazy to say that number,
considering that just a couple of years ago, it was like one, I mean, it was, it was, uh,
El Salvador and, and what's Bhutan. So, you know, we've really got up the ladder pretty quickly.
Um, but yeah, I think, um, uh, you know, if I were to kind of describe like the,
where I'm like most excited in Bitcoin right now, it's really introducing these like very
big picture ideas that touch all parts of society. Like how do we run the balance sheet of our
government and fusing those ideas with Bitcoin, where we're making Bitcoin like real in a tangible
way that affects people's lives. And like, you know, when a government has a balance sheet of
Bitcoin and Bitcoin goes up, the whole country wins, you know, and likewise, when it goes down
and there's a whole country that owns Bitcoin, the whole country loses. And I think, you know,
watching that story play out is it's so fascinating and so interesting. And it's really,
I feel like the process by which Bitcoin slowly eats the world.
Yeah, and I think it's definitely going to be accelerating.
But you mentioned, you know, about these governments potentially announcing at the Bitcoin conferences.
I'm curious, with this merger that you guys just went under with Bitcoin Magazine,
how is the conferences going to change, if any?
And is there any potential of like expansion?
Because I know you guys obviously have, you know, Vegas this year, Amsterdam, Abu Dhabi,
Mina, you know, it seems like you guys are expanding.
Yeah, Asia as well.
So is there any, yeah, how is it going to change?
Yeah, I mean, there's a lot of opportunity for growth.
I think, you know, this is probably not the time or place.
I'm not really probably the one who to break that.
Probably the CEO of BTC Inc. is.
But yeah, I mean, we've built what I think is a really well-known business.
I mean, I think most Bitcoiners have heard of these businesses that we've built.
I feel like a large swab of just mainstream normies have heard of the Bitcoin conference.
And, you know, we want to take this to the furthest level possible.
We want to take this.
We want to create assets that are going to be strategically important for how Bitcoin develops.
You know, when Bitcoin's at a million bucks of Bitcoin, when Bitcoin's at 10 million bucks of Bitcoin.
And so, yeah, we're looking for all sorts of ways to grow the TAM of what we're pursuing, what Bitcoin can pursue.
And we have a lot of ideas.
And we've never had a balance sheet of the size that we have to be able to go and pursue those ideas.
And we are extremely creative people.
We've been in Bitcoin for 13 years.
We've seen it involved in all these different ways.
you know i think having the resources that we have at nakamoto with a public company
plus tied to the creativity we have of ways to create asymmetric value for bitcoin
um there is a whole world of super interesting things that have just become possible to us with
this merger and so uh i won't get into any specifics but i yeah it's a game changer for
the company game changer yeah it definitely seems like it is going to be and it seems like there's a
lot of different you know figures I'll call them uh influential people outside of Bitcoin that are
now starting to get into the Bitcoin space you know obviously we've seen the likes of Saquon
Barkley we've seen you know musicians artists kind of hint at it um you know maybe wear some
Satoshi Nakamoto merch I mean it seems like everybody is kind of starting to go towards
Bitcoin uh or at least it's starting to get a little bit more mainstream uh how much of a factor
Or do you think that that plays into it?
Because obviously, you know, you've been building in the Bitcoin space for 13 years.
So now there's it seems like there's more eyeballs than ever on it.
And that number just keeps going up exponentially.
So, you know, how does that affect maybe the change of the speakers, the dynamic and, you know, maybe, you know, how you see, I guess, the marketing team, so to speak, of Bitcoin start to play out?
Yeah, I mean, I think the most powerful, the most powerful message for Bitcoin is the ideas that underpin Bitcoin. And like, I think like the culture of Bitcoin is one of the most powerful tools we have to spread and expose people to these ideas without them having to be a book nerd.
I mean, 99% of people are not book nerds. They're not going to go pick up, you know, an Ayn Rand novel or pick up some, you know, Mises novel to understand this stuff. And, you know, religion figured this out a long time ago.
Like you don't have to read all of the deep lore of a religion in order to get the basic tenets of a religion.
And so, you know, from the perspective of this being an ideological technology, us being able to condense down complex ideas into mimetic cultural, you know, forces is extremely powerful.
And it's like why we spend so much time trying to prioritize getting artists, musicians, athletes, actors, people that the mainstream interact with through culture, because that's it's it's a force multiplying effect of getting our message out there.
Yeah, I mean, it definitely is. And I mean, it brings in new audiences, new people who might not have done that.
And I think at the end of the day, it's just a bunch of touch points that will make you essentially look into Bitcoin.
You know, I mean, I know I probably heard about Bitcoin like three or four times before actually diving in.
But I think I think it's actually not to interrupt you, but I think like on this point specifically, this is one of the key differentiators of what we've built at Bitcoin magazine and the Bitcoin conference.
It's actually why I think the Bitcoin conference has become as massive and successful as it has been is because we did the best on displaying the Bitcoin counterculture and letting people who are not seeped in that world come and like get a taste of it.
Like, I don't know what other conferences had half pipes at their conference of Tony Hawk skating on it.
You know, I don't know other like like this.
The Bitcoin conference is such a unique product.
It's such a unique event experience.
And that's because it's built on top of Bitcoin culture.
And the reason it is built on top of Bitcoin culture is our entire team has been in Bitcoin so long that we were able to build a product that as Bitcoiners spoke to us.
And that still is the underlying, what's the right word, vibes of the product.
well can you hint at uh maybe some things that we should anticipate in vegas and here coming up in
a couple months is there anything like uh surprising that that is the bitcoin culture
that'll kind of i guess like dive into this well i mean i think in terms of the the bitcoin culture
piece of it there's all sorts of ways that it shows itself at the conference i mean i think
like we outside of just the content that we put on display like we try we have a huge effort to
to make the event free for open source developers and open source projects so
that we can pull in more technical people to the event that are willing to,
you know, meet others and share ideas. Maybe people that are more introverted.
You know, we,
we have a whole Bitcoin bazaar where we just bring in a ton of merchants that
are selling cultural artifacts for Bitcoin, like, and I,
I don't even know the right way in a, like a peer to peer marketplace.
And it's adds a really cool charm to the event. You know,
we have a art gallery every year where we have tons of artists around the
world come in and present and auction their art.
I think someone told me we've sold over $10 million of art through these art
auctions at the conference or some, some large number like that.
And so those are all ways that we like imbue the, the, the,
the ethos. And then every year we have narratives and stories that we try to
develop. So like last year,
probably one of the proudest moments that we've had at the conference was like,
okay, we just got Russellbrook pardon. Like here,
like we're also getting to address the entire Bitcoin community.
Like that's extremely exciting.
There's a couple narratives we're cooking on right now
that we're excited to show off at the conference.
And then every year in the programming,
we try to have surprises that we drop as we get closer and closer.
I don't want to like spoil any of our marketing plans,
but I mean, yeah, every year,
I don't know how we outdo ourselves,
but the programming team just keeps one upping.
Yeah, I mean, you guys are doing a great job.
Obviously you had, like I said, you know,
Trump a couple years ago, J.D. Vance and a bunch of other political figures of this past year.
And yeah, I mean, I think it honestly it's played the conference itself has played like a pivotal
role in just the political and cultural landscape in Bitcoin throughout, you know, at least the
United States and globally, definitely now. But how do you, I guess, balance that as well? Because
obviously, we've got Vegas, the biggest one here. But you guys, like we said, are expanding.
how do you get a different vibe of you know how each of these conferences should be and
you know what I guess each region is kind of I guess demanding or hungry for in in each region
around the world that you guys are throwing these conferences at yeah man it's very different like
the bitcoin community all over the world is one of the coolest parts about bitcoin
is like it's very diverse it's extremely diverse and like different parts of the world
have different ways of understanding what Bitcoin is to them.
And the event kind of morphs into a reflection of like,
who are the attendees and the speakers and the sponsors that constitute the event?
And each event has a different flavor.
And it's kind of hard to articulate exactly what makes them different.
But if you go to each of the events, like they each have a different style
and like primary interests that stem come out of that event.
I don't know. It's interesting. I would say Europe is probably more anarchistic, more cypherpunk-y. I'd say Asia is more speculative, more investment-driven, more technology-driven. I would say mining-driven.
I would say that the Middle East, not huge on the cypherpunk ethos, you know, more bigger on the self-sovereign ethos.
So it's interesting to see like how different cultures, you know, make Bitcoin make sense to them.
But yeah, I feel like we just try to do a good job of like reflecting the, we always hire people on the ground.
We have team members on the ground.
We spend all year trying to build the ecosystem in those markets.
I think it's one thing that we're going to expand upon in the future is like, okay, we're doing a conference in these places. How can we expand the Bitcoin footprint even larger? And then, yeah, I think like we look at our business as, you know, the different arms of it.
BTC Inc. is like an information services business. And I think that there's a broader swath of
products and services that BTC Inc. can offer beyond just the conference and just the magazine.
Those two things are platforms that we can use to do more for Bitcoin. And so, yeah,
I think that answers your question. I hope so. Yeah, no, it does 100%. But David,
you've been very generous with your time. And yeah, I mean, appreciate you coming in,
shedding some light on some of the controversy and also to peek in a little bit behind the scenes
as to how you've been able to help bring in, you know, this Trump administration and everything
going on in the Bitcoin space. But why don't you tell people who don't know where they can find you,
where they can find you and what else you got going on?
Yeah, you can find us at Nakamoto.com, the Nakamoto handle, Bitcoin Magazine.com,
b.tc. We really have a lot of places you can find us. You can find me, David F. Bailey,
on Twitter. And, you know, as my wife would tell me, hate us or love us, you know,
you're talking about us. So anyway, Brandon, thank you for having me on the space. And
yeah, dude, hopefully we can do this again in a few months.
Yeah, man, let's do it. Yeah, it was great talking to you. Thanks so much for your time.
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