Speaker 1: The game of investing has changed ever since my career
Speaker 1: started in two thousand and eight posted global financial crisis.
Speaker 1: The world has changed where fundamental principles are becoming less important.
Speaker 1: Many people kind of joke about whether bitcoin will ever
Speaker 1: be not correlated to equities.
Speaker 2: I put it the other way around.
Speaker 1: I think, actually it's equities that's becoming more correlated with
Speaker 1: bitcoin because equities is also becoming this place to store
Speaker 1: your wealth to find the fastest escape velocity to the
Speaker 1: fiscal dominance that we.
Speaker 2: Are experiencing across the world.
Speaker 1: People are immensely focused on bitcoin treasury companies right now
Speaker 1: at the equity level. But the other big trend that
Speaker 1: I'm seeing and Canter I believe, also recently announced that
Speaker 1: they are going big in a way to provide institutional
Speaker 1: lending that is backed by bitcoin.
Speaker 3: So then what you're saying is that investor sort of
Speaker 3: needs to believe in the long term vision of Bitcoin's.
Speaker 2: All right, Jeff, thanks so much for joining me today.
Speaker 2: Let's talk about the hottest.
Speaker 3: Thing going in the bitcoin space right now, which is
Speaker 3: the bitcoin treasury strategy companies. At least it seems like it.
Speaker 3: It's like all the excitement in the air right now.
Speaker 1: Yeah, Yeah, I can't get enough of it. There's one
Speaker 1: popping up every day.
Speaker 2: Let's just break it down first.
Speaker 3: So is there a difference or how would you say
Speaker 3: the difference is between a bitcoin treasury strategy company versus
Speaker 3: a company putting bitcoin on the balance sheet.
Speaker 1: Yeah, I think there are some philosophical differences as to
Speaker 1: at least how the market is interpreting today. One might
Speaker 1: say coin Based, for example, is a bitcoin treasury company
Speaker 1: because they own bitcoin as part of their business, and
Speaker 1: we have bitwise also as a private company, have a
Speaker 1: bitcoin on our balance sheet. But what I think the
Speaker 1: market has at this point defined to be an authentic
Speaker 1: bitcoin treasury company is building a business around financializing bitcoin
Speaker 1: specifically for an opportunity set that takes an arbitrage for
Speaker 1: what corporates can do that individuals like you and I cannot.
Speaker 3: Access, okay, which is what like the financial markets bringing
Speaker 3: that in.
Speaker 1: Yeah, the capital markets is deep, as you know in
Speaker 1: the US. It is the dominant future of what I
Speaker 1: think makes us exceptional. And the reality is if you
Speaker 1: can access different components of the capital markets, including credit derivatives,
Speaker 1: other forms of leverage, there's different capital efficient ways to
Speaker 1: have bitcoin exposure and risk that you and I simply
Speaker 1: can't really replicate.
Speaker 3: Okay, so that's the financial engineering side of it, if
Speaker 3: you will. So the other side of where they're just
Speaker 3: putting bitcoin on their treasury or the balance sheet, that's
Speaker 3: not really talking about and just real quickly though, so
Speaker 3: you would say, I mean, obviously, big companies like an
Speaker 3: Apple for example, that's in on billion, hundreds of billions
Speaker 3: of cash, if they were to put ten percent of
Speaker 3: that into bitcoin, it's good for bitcoin, but it doesn't
Speaker 3: really change their business model.
Speaker 1: Yeah, this is kind of the dilemma, if you will,
Speaker 1: which is so many of our big enterprises are really
Speaker 1: built specifically to avoid volatility in many ways. If you
Speaker 1: think about what the CFOs and the board of directors
Speaker 1: that these companies would preach, they're talking about wanting to
Speaker 1: expand multiples in ways the volatile as a component can
Speaker 1: be minimized.
Speaker 2: Right.
Speaker 1: It's very rare for Wall Street CFOs to embrace volatility
Speaker 1: as a feature of something they're trying to engineer as
Speaker 1: part of the stock of anything. They're trying to repress it.
Speaker 1: And so the challenge is if you bring bitcoin onto
Speaker 1: your balance sheet, it does bring volatility as we've now
Speaker 1: seen it with micro Strategy and others, and most corporate
Speaker 1: CFOs are not trained to embrace that as an opportunity.
Speaker 1: They think of that more as a cost of capital
Speaker 1: decay that otherwise their own investors may not appreciate, which is,
Speaker 1: you know, the fundamental challenge with companies like Microsoft, where
Speaker 1: there's a clear underwriting framework for how to think about
Speaker 1: that valuation metric, and you don't really want to rock
Speaker 1: that boat too hard by bringing some exogenous factors, especially
Speaker 1: if that exogerenest factor is something that Microsoft can't control,
Speaker 1: and of course Microsoft cannot control bitcoins price.
Speaker 3: Is it also because you know, the market cap of
Speaker 3: their company trillion dollars, two trillion dollars is so big
Speaker 3: that even if they were to put ten twenty percent
Speaker 3: of their balance sheet into bitcoin, maybe it doesn't move
Speaker 3: it enough.
Speaker 1: It's a little bit of, I think, both economic and
Speaker 1: a cultural gap.
Speaker 2: The cultural gap, I think is actually.
Speaker 1: More important, which is that there's a little bit of
Speaker 1: what I call the asymmetric downside to adoption for companies
Speaker 1: like the Mac seven right, which is, there aren't many
Speaker 1: companies who are willing to tolerate that risk as an
Speaker 1: upside capture when they're underwriting the whole business to be
Speaker 1: tangibly valued in a different format. And so you actually
Speaker 1: in that fashion is what I call typically short to put,
Speaker 1: you have a lot of downside, potentially unlimited downside, and
Speaker 1: very little upside capture, right and so I think that
Speaker 1: cultural gap is a big part of it. The other thing, though,
Speaker 1: that will change over time, and I do think companies
Speaker 1: will wake up to this as other bitcoin treasure companies
Speaker 1: adopt these standards, is there is a generational trend that
Speaker 1: is happening with young people growing up and young people
Speaker 1: voting with their capital to buy stocks they like right
Speaker 1: Game Step being a great example of that evolution that
Speaker 1: we saw in twenty twenty and beyond. So I think
Speaker 1: there will come a moment when these companies realize that
Speaker 1: having bitcoin on their balance sheet, despite maybe the little
Speaker 1: bit of the loss with the incumbent investors today, the
Speaker 1: upside of new investors that are excited by saying, oh,
Speaker 1: I'm aligned with this company's eat those in values because
Speaker 1: they believe what I believe, which is bitcoin is the future.
Speaker 1: That can also I think be a huge tailwind and
Speaker 1: we're kind of living I think moments of these inflections,
Speaker 1: because right now it's the very nacent companies that are
Speaker 1: adopting it. But once they show the path, then I
Speaker 1: think you'll start to see kind of the level ups
Speaker 1: of other companies that are more mid tier going into it.
Speaker 1: And of course the very last will be the most
Speaker 1: to lose the incumbent types.
Speaker 3: Not that this really applies to the treasure strategies, but
Speaker 3: maybe a little bit. But here we're at the Bickcoin
Speaker 3: conference and just this morning, the i think it was
Speaker 3: the president of the Steak and Shake was up up
Speaker 3: there talking on the stage and you were talking about
Speaker 3: how they started accepting bitcoin and the uptick in business
Speaker 3: they've got from that. Right to your point, people being
Speaker 3: aligned ideologically with where they want to spend their money
Speaker 3: sort of makes sense. Maybe a company like Apple, maybe
Speaker 3: it repels as many people as the tracks or something
Speaker 3: like that.
Speaker 2: It's it's a little bit different.
Speaker 3: But so then those businesses have their own finance, their
Speaker 3: own business model. But then it seems like we see
Speaker 3: other companies you mentioned game Stop who sort of have
Speaker 3: like a dead business, a failing business. Maybe it's still
Speaker 3: some revenue, some money on the balance sheet and they're
Speaker 3: not sure what's next for them, and maybe this is
Speaker 3: like a pretty good option for them. Are those the
Speaker 3: companies you see that are sort of like righte for.
Speaker 2: This, Yeah, I think so. I think that's right.
Speaker 1: What we're seeing is a slow evolution of what people
Speaker 1: will imagine the dynam is in behind this bitcoin treasury
Speaker 1: companies to be right in the sense at the very beginning,
Speaker 1: we started with strategy, which essentially is nothing but at
Speaker 1: this point a bitcoin holding company with some financialization features.
Speaker 1: And then I think what you're now going to see
Speaker 1: is game stop. Even though it is a secularly challenged business,
Speaker 1: it is a real business, is real cash flow, and
Speaker 1: it's a consumer facing business actually unlike micro strategy, which
Speaker 1: is B to B and so the wave of companies
Speaker 1: that have a consumer facing aspect to which they can
Speaker 1: onboard new customers by leveraging bitcoin as part of their
Speaker 1: value alignment, I think.
Speaker 2: Is what we're going to start seeing.
Speaker 1: I would almost echo that the excitement people have seen
Speaker 1: around Nakamoto, the other bitcoin treasury company that was announced recently,
Speaker 1: is similar, which is that that's actually a real operating business.
Speaker 1: That's why we're here. The Bitcoin conference generates revenue. Imagine
Speaker 1: aligning the revenue opportunity of a bitcoin centric and adjacent
Speaker 1: company with the ability to add leverage to the bitcoin
Speaker 1: treasury strategy. That's a one plus one dynamic for which
Speaker 1: I think it's potentially greater than two, and we have
Speaker 1: not yet seen it. So I think what we're going
Speaker 1: to see is different kinds of consumer facing bitcoin centric
Speaker 1: companies also adopt the treasury strategy because that then diagram
Speaker 1: is actually pretty pretty powerful and overlap.
Speaker 3: So then when I look at Strategy formerly micro Strategy,
Speaker 3: their stock, the mstr sort of seems to be the product, right,
Speaker 3: their stock is the product. Now they have Strike and Stripe,
Speaker 3: so now they have like three financial products out there,
Speaker 3: and so when I look at these, it's like, well,
Speaker 3: I guess they're financial engineering a new product with a
Speaker 3: new asset. But I guess maybe what you're saying is
Speaker 3: there is probably even more synergy when you can actually
Speaker 3: combine an actual business with that strategy, so not just
Speaker 3: releasing the financial product, but then having some underlying business
Speaker 3: that creates cash FLOWSTA and continue to multiply that.
Speaker 2: Yeah, yeah, that's right.
Speaker 1: I think strategy is so unique because the product, as
Speaker 1: you said up perfectly is the stock and what is
Speaker 1: the stock. It's the most liquid trading stock in the
Speaker 1: capital markets, it has the deepest options market. It has
Speaker 1: a lot of other financially engineered products that have come
Speaker 1: online in the back of the stock yield strategies that
Speaker 1: are engaged in cover cost selling, including bitwise having launched
Speaker 1: them recently, as well as these two X celebrity tfs
Speaker 1: and vice versa. So strategy for sure is the underlying
Speaker 1: engine for a lot of the opportunities that are coming
Speaker 1: a line in the capital markets through bitcoin. But that
Speaker 1: is in itself a pretty unique advantage for being early
Speaker 1: for saleor to have a mass that critical scale. The
Speaker 1: next companies that come online, if you're going to compete
Speaker 1: within the same jurisdiction, we'll have to think a little
Speaker 1: bit differently. I do think there will be a strategy
Speaker 1: clone per global jurisdictions everywhere in the world where there
Speaker 1: is a deep capital markets of investors looking for bitcoin
Speaker 1: exposure in a regulated way that they understand through securities law.
Speaker 1: But within the US markets, for example, you're going to
Speaker 1: have different kinds of companies come to the opportunity set
Speaker 1: and they're going to approach it a little bit differently.
Speaker 3: So then we have like Metaplant in Japan, so they're
Speaker 3: sort of following just a micro strategy.
Speaker 2: Playbook put in a different capital market.
Speaker 3: Yeah, and so we could probably run that, and I
Speaker 3: think actually Nakamoto has been publicly vocal about wanting to
Speaker 3: do that in niche market. So we know there's some
Speaker 3: popping up down in Brazil. We'll be hearing some about
Speaker 3: India here pretty soon, and so different capital markets, but
Speaker 3: in sort of the North American market, then they need
Speaker 3: to have different spins on them, sort of to what
Speaker 3: Knacomoto is doing by wrapping this business in or maybe
Speaker 3: can't or cantor was the equity partners sort of probably
Speaker 3: looks like some maybe financial products in there.
Speaker 2: Yeah, something like that. Yeah, yeah, yeah, that's right.
Speaker 1: And I think ultimately the line will start blurring where
Speaker 1: people are going to think of bitcoin as an asset
Speaker 1: that is beating the cost of capital that they could
Speaker 1: potentially reinvest into the ROE. So what I mean by
Speaker 1: this is if you have a real business and you
Speaker 1: have the opportunity to say, hey, actually if I sell
Speaker 1: my bitcoin to take those cash proceeds reinvest in my business,
Speaker 1: that's going to drive a higher ROE, then potentially the
Speaker 1: price of bitcoin in itself. You could imagine people making
Speaker 1: those capital allocation strategies on a pretty dynamic level. Some
Speaker 1: would argue it'd be hard to op perform bitcoin anyway,
Speaker 1: so that Roe calculation would have to be pretty pretty
Speaker 1: specific for that value proposition. But I think if the
Speaker 1: companies are built on the backbone of bitcoin, where their
Speaker 1: revenue is directly related to bitcoin price, you could imagine
Speaker 1: that being actually fairly correlated, and you could imagine there
Speaker 1: is a higher ROE to invest in the equity of
Speaker 1: the business by actually selling some bitcoin, which actually historically
Speaker 1: has never been done before, right strategy never.
Speaker 2: Is selling the bitcoin to buy the stock back.
Speaker 1: Not even necessarily to buy the stockback because that's a
Speaker 1: kind of a dividend to existing investors, but I mean
Speaker 1: even to the idea of like using that to reinvest
Speaker 1: in the business itself in an operating level to drive
Speaker 1: higher ROE. Got it.
Speaker 3: Yeah, yeah, selln the bitcoin to invest in the business
Speaker 3: and the business creates more income which than buy is
Speaker 3: market Yeah, yeah, yeah, exactly. I think that's maybe what
Speaker 3: sort of CP's been talking about. So now we have
Speaker 3: it seems like, I mean, doesn't seem like there are
Speaker 3: all these new terms and terminologies and waste and measure
Speaker 3: these You mentioned financial metrics before, so the BPS, the torque, the.
Speaker 2: M now, etc.
Speaker 3: Right, So, like, what is the problem that traditional investors
Speaker 3: have looking at these new companies and trying to understand them.
Speaker 2: Yeah, great question.
Speaker 1: The most significant trouble that traditional investors have is they
Speaker 1: have never understood financial accounting with the denomination of accounting
Speaker 1: being bitcoin based. So a lot of these metrics are
Speaker 1: being reported in ways to retrain investors' minds to consider
Speaker 1: the foundation of the base layer for your economic calculation
Speaker 1: to be bitcoin itself. So everything you mentioned bitcoin for sure, bitcoin.
Speaker 1: You know, this is this idea of accruing more bitcoin
Speaker 1: at a level in which that rate of acceleration is
Speaker 1: additive regardless of what the price of bitcoin itself is,
Speaker 1: because your unit account is bitcoin.
Speaker 2: That's a pretty challenging.
Speaker 1: Thing because most companies are actually still traded on the
Speaker 1: dollar basis, and investors think about their returns on a
Speaker 1: dollar basis.
Speaker 2: So that's the first part. The second part is before
Speaker 2: you move to the second part.
Speaker 3: So then what you're saying is that investor sort of
Speaker 3: needs to believe in the long term vision of bitcoin. Yeah,
Speaker 3: because if they're going to be on a bitcoin unit
Speaker 3: account as opposed to a dollar then sort of regardless
Speaker 3: of what the US dollar valuation of the stock is,
Speaker 3: as long as the bitcoin is accumulating, then they should
Speaker 3: be okay with that, right, And so if they don't
Speaker 3: believe in that long term vision.
Speaker 2: Then it's hard to get by in that.
Speaker 1: That's right, especially if you're a long only investor and
Speaker 1: not running a market neutral strategy. In the back of it,
Speaker 1: it's actually critical that investors understand this is a bet.
Speaker 2: On bitcoin ultimately. Yes. Yes.
Speaker 1: And the second part that I think traditional investors struggle
Speaker 1: with is that there is a classical training of how
Speaker 1: to imagine what the capital structure should look like of
Speaker 1: a normal operating company, which is that at the top
Speaker 1: there as senior secured creditors. Maybe then you'll have senior
Speaker 1: unsecured creditors, then you'll have junior, you'll have converts, you'll
Speaker 1: have preferred equity, you'll have stock, and actually, very at
Speaker 1: the very top, you might even have you know, customer
Speaker 1: vendor claims things like that, which actually are the first
Speaker 1: to be paid in the event of a bankruptcy. So
Speaker 1: there's actually a way that traditional investors think about the
Speaker 1: distribution of value in which different liabilities attached to the
Speaker 1: assets with a priority waterfall. Okay, what we're seeing with
Speaker 1: these bitcoin treasury companies is flipping that model upside down.
Speaker 1: And that's actually what I think Sailor has been doing
Speaker 1: in a way that has never been done before, which
Speaker 1: is introducing these ideas of having different kinds of leans
Speaker 1: towards that waterfall, but not necessarily having a packaged.
Speaker 2: In the way traditional investors would expect.
Speaker 1: For example, if you're a fixed and come investor, generally,
Speaker 1: what you want to think is you want to turn
Speaker 1: out your yields, so you want to know how much
Speaker 1: you get paid over a duration, so you want a
Speaker 1: maturity date. And then two, you want the ability to
Speaker 1: have some kind of covenant or collateral to be able
Speaker 1: to attach to the acid in the event that you
Speaker 1: feel that gives you more protection than the juniorized equity. Right,
Speaker 1: preferred equity as sale has issued have almost none of
Speaker 1: those features. Right, it doesn't have an exploration date. They
Speaker 1: are actually perpetual instruments that pay cash coupon. And then
Speaker 1: it doesn't even have actually the ability to collateralize the
Speaker 1: asset directly, even though you're slightly more senior than the equity.
Speaker 1: And these are considered at this level fixed income instruments,
Speaker 1: unconventional as it may be, and that is actually something
Speaker 1: traditional investors have a very hard time wrapping the head around.
Speaker 1: Is it rated by Moodies?
Speaker 2: No? Oh, then how do I assess it? You know,
Speaker 2: does it have a term?
Speaker 1: You know, what's the actual corporate credits spread looking like
Speaker 1: versus Gouvey's And you can't do those calculations easily with
Speaker 1: these bitcoin backed bonds and companies.
Speaker 3: What about also when you think about the growth of
Speaker 3: these companies to your point sort of being on a
Speaker 3: bitcoin standard, you have to believe in sort of that
Speaker 3: long term vision. But when you're trying to think of
Speaker 3: you know, I have a venture fund, and so we
Speaker 3: think about what will the market size be.
Speaker 2: In five or ten years and what percentage of that
Speaker 2: market can we capture.
Speaker 3: So then we have to sort of think like, Okay,
Speaker 3: if this company's going to grow its revenue, its profits,
Speaker 3: what markets are going into and then how big will
Speaker 3: the bitcoin valuation of the balance sheet but also the
Speaker 3: size of that market be in the future. To try
Speaker 3: to think about it somehow like that, trying to sort
Speaker 3: of future cast the price.
Speaker 1: Yeah, yeah, I think that's a great question. It goes
Speaker 1: back to something we started our conversation with, which is
Speaker 1: what is the endgame for these bitcoin treasury companies?
Speaker 2: Right?
Speaker 1: And so for company again like Sailor and twenty one Capital,
Speaker 1: the financialization, right, the hyper bitcoinization.
Speaker 2: If you will, is in itself the theme.
Speaker 1: But not everyone can do it, and there is going
Speaker 1: to be a long tail of other companies that are
Speaker 1: adopting the bitcoin standard, but their value propositions is going
Speaker 1: to look different. And I think ultimately this is what
Speaker 1: it's going to come down to. I think, as I
Speaker 1: have seen the universe of companies who have bought piccorn
Speaker 1: the balance sheet at a global level, there are some
Speaker 1: common traits that exist within the corporate capital structure and
Speaker 1: the executive team behind these f words. One is they
Speaker 1: tend to be founder led companies because you actually can't
Speaker 1: do this very easily without the social capital of having
Speaker 1: been the founder of the entity to which you can
Speaker 1: convince your board. And the second thing is these are
Speaker 1: pretty radical individuals that are visionaries at some level about
Speaker 1: wanting to see what the future might look different, and
Speaker 1: so I think ultimate trend people will see is just
Speaker 1: the same way that internet companies was not a thing
Speaker 1: in nineteen ninety nine and beyond those who were able
Speaker 1: to kind of still sniff around that opportunity in that moment,
Speaker 1: despite the drawdown, we're the ones that would emerge and
Speaker 1: be incredibly successful in the future. Right, So it's not
Speaker 1: even about the bitcoin price anymore. At that point, you're
Speaker 1: kind of betting on the human capital of people who
Speaker 1: understand something very deeply about a technological breakthrough that's going
Speaker 1: to create value for the equity in almost entirely different ways.
Speaker 1: And so the thing that we're really excited about a
Speaker 1: bit why, which is why we launched O and B,
Speaker 1: which is our ETF that tracks on a rules based
Speaker 1: companies that have more than one thousand bitcoin on their
Speaker 1: balance sheet, is because it gives you a chance to
Speaker 1: invest on a diversified basis a variety of these leaders.
Speaker 3: So for companies that have more than a thousand big
Speaker 3: one on their balance sheet, then they get included into
Speaker 3: this the ATF fasket.
Speaker 2: Yeah.
Speaker 1: Yeah, So we have an index and it is the
Speaker 1: bit Wise Bitcoin Corporate Standard Index, for which the methodology
Speaker 1: is that we actually market kept weight their exposure based
Speaker 1: on bitcoin holdings at a certain level.
Speaker 2: Whether it's on the balance sheet or it's a treasury strategy, either.
Speaker 3: Way, either way, Yeah, yeah, that must be crushing it
Speaker 3: right now.
Speaker 2: It's very popular.
Speaker 1: It's very popular because I think for the theme of
Speaker 1: what we're living in today, it is absolutely sensical that
Speaker 1: you might want to have that kind of exposure. But
Speaker 1: the other reason is, look, you and I we spend
Speaker 1: our time professionally looking at these crypto markets twenty four
Speaker 1: to seven, but a vast majority, vast majority of financial
Speaker 1: advisors and high networks and retail investors they don't spend
Speaker 1: that much time looking at crypto and so when you
Speaker 1: look at the long tail of the thirty plus companies
Speaker 1: that could exist in this index, they don't know ninety
Speaker 1: percent of it, right, And you actually want exposure in
Speaker 1: these smaller companies because it is the smaller companies that
Speaker 1: actually have the chance to outperform the most based on
Speaker 1: the capital denomination of the microcaps.
Speaker 2: Yeah, so you know, we're seeing.
Speaker 3: To your point that you have the index the top
Speaker 3: thirty companies is about where the thousand mark is.
Speaker 2: I guess right, thousand Bitcoin Bitcoin.
Speaker 3: Yeah, a lot thirty companies, But it seems like, you know,
Speaker 3: the last couple of weeks, there's been a lot of
Speaker 3: announcements coming out. You know, obviously the Knakamoto, Kindly Nakamoto,
Speaker 3: the CEP, et cetera. Some of the guys here at Utxosys,
Speaker 3: they're looking at like a dozen a day of new
Speaker 3: ones popping up. So one thing that we're hearing quite
Speaker 3: a bit is is it getting too overinflated? Is there
Speaker 3: a bubble coming in? Something like that? To me, it
Speaker 3: seems way too early to be called in that. But
Speaker 3: what would you say.
Speaker 1: I think there is a lot of exuberance, and with exuberance,
Speaker 1: of course, comes to notion of their potentially being a bubble.
Speaker 1: And I think investors should definitely be careful in wanting
Speaker 1: to approach this market with some discipline and financial principles
Speaker 1: that are able to justify their investing strategies and efforts.
Speaker 1: At the same time, something I've spoken about prolifically is the.
Speaker 2: Game of investing has changed.
Speaker 1: Actually, you know, I grew up kind of being taught
Speaker 1: the intelligent investor Benjamin Grand model, Buffet model. But actually
Speaker 1: I would say ever since my career started in two
Speaker 1: thousand and eight posted global financial crisis. The world has
Speaker 1: changed where those fundamental principles are becoming less important, and
Speaker 1: we're actually living in.
Speaker 2: A world where the.
Speaker 1: Sovereign flows, the corporate flows, like these cross border flows
Speaker 1: across the monetary order being rapidly changing, are almost the
Speaker 1: dominant driver.
Speaker 2: Right. You saw it with QI, you saw it with COVID.
Speaker 1: A lot of the things that are happening is not
Speaker 1: really anymore related to the fundamental earnings power or the
Speaker 1: growth of these individual securities. If anything, equities have become
Speaker 1: an indexed basket to battle inflation. So many people kind
Speaker 1: of joke about, you know, whether bitcoin will ever be
Speaker 1: not correlated to equities.
Speaker 2: I put it the other way around.
Speaker 1: I think, actually it's equities that's becoming more correlated with bitcoin,
Speaker 1: because equities is also becoming this place to store your
Speaker 1: wealth to find the fastest escape velocity to the fiscal
Speaker 1: dominance that we are experiencing across the world. And so
Speaker 1: from that perspective, the opportunity to invest early in those
Speaker 1: moments and trend and momentum is a skill, and I
Speaker 1: think young people are not necessarily blind to those having
Speaker 1: been the more interesting ways to to participate in the
Speaker 1: financial opportunity. So I try to be very level headed
Speaker 1: about sharing that it does require some discipline. But at
Speaker 1: the same time, you'd also be incorrect if you're spewing
Speaker 1: that these companies are worthless because the DCF model dosn'
Speaker 1: support X, y Z, when in fact there's other kind
Speaker 1: of things that are driving the markets and ways that
Speaker 1: I think some retail investors are very clever about.
Speaker 3: Yeah, I would say, to the point of it being
Speaker 3: a bubble. At the same time too, it's like how
Speaker 3: much of the ecosystem does X even represent? And Bigcoe
Speaker 3: represent of that? And then child your companies even of that,
Speaker 3: and so while it seems like the echo chamber is allowed,
Speaker 3: at the same time it's like relatively small.
Speaker 2: But I'm curious.
Speaker 3: So if micro strategy of MSCR is the product, and
Speaker 3: then strike and strife are the products, and then each
Speaker 3: one of these companies is sort of a new product,
Speaker 3: if you will, Right, So they have some little differences
Speaker 3: in the underlying business model and the difference in there's
Speaker 3: treasure strategy, but then at the end of the day,
Speaker 3: they're like financial the chicker basically is the product, right,
Speaker 3: So then how many financial products can we have in
Speaker 3: the market, Like if I almost look at them, almost
Speaker 3: like I don't want to say an ETF, but you
Speaker 3: know it's a new financial product.
Speaker 2: Like how many of those can the market? There? Totally?
Speaker 1: Totally, And this goes back to what the bubble we're
Speaker 1: talking about actually is. I would say the bubble is
Speaker 1: actually the hyper financialization of the capital markets in itself. Right, consider,
Speaker 1: for example, that some of the most successful ETFs that
Speaker 1: are coming to market these days are in conduits, investing
Speaker 1: conduits to make all kinds of different bets that historically
Speaker 1: have no correlation to that idea of a diversified basket
Speaker 1: two x celebrity tfs, right, Actually, one of the most
Speaker 1: high performing ETF I think the one that was the
Speaker 1: highest performing ATF that actually beat bitcoins priced last year
Speaker 1: was the Nvidia.
Speaker 2: Two x celebritytf Yeah, it makes sense.
Speaker 1: And so that hyper financialization in itself is in it
Speaker 1: is a reflection of kind of the state of our
Speaker 1: society today, whether you like it or not.
Speaker 2: I mean, we're in Vegas, just walk out, that's exactly right.
Speaker 1: And I mean think about zero day experty options as well.
Speaker 1: Those things have become popularized last year, and I believe
Speaker 1: at last summer the zero day expery options for both
Speaker 1: the SMP and AS that now account for more than
Speaker 1: fifty percent of the options volume in total. Imagine that
Speaker 1: people are now treading zero day expery options and there's
Speaker 1: now conversations in DC to permit singlely options that are
Speaker 1: going to have Monday experis, Wednesday experts and Friday expertis.
Speaker 2: Some would say, wow, isn't that a little too much?
Speaker 2: Like why do we.
Speaker 1: Need such specificity about managing risk at this level? But
Speaker 1: if you are arguing about that, you're already lost. That's
Speaker 1: where the world is going. And so in a way,
Speaker 1: strategy and these companies that are financializing the product as
Speaker 1: the stock, it's not new in the sense that those
Speaker 1: signs have already been present for a long time in
Speaker 1: where the capital markets.
Speaker 2: Is evolving into It just happens.
Speaker 1: So that bitcoin is the best asset to do this
Speaker 1: because one it's extremely volatile, which is very good for
Speaker 1: hyper financialization, and two, the belief that bitcoin can also
Speaker 1: be pristine collateral, unlike stocks themselves, lend you the ability
Speaker 1: to imagine it like a credit asset, and credit assets
Speaker 1: generally are not very volatile. So bitcoin gets the opportunity
Speaker 1: to live in both worlds where you imagine it's pristine collateral,
Speaker 1: but I'm also going to give you a heck of
Speaker 1: a volatility for you to optimize around your beforeier construction.
Speaker 3: So would you say that we have the first new
Speaker 3: financial asset in whatever five hundred years, and when we
Speaker 3: try to understand those things as humans, we compare them
Speaker 3: so it's sort of like this, it's sort of like this,
Speaker 3: sort of like this, but it's actually something completely different.
Speaker 3: And then that gives us a new set of building
Speaker 3: blocks to build things that we haven't imagined before. And
Speaker 3: so we're maybe just barely scratching the surface of what
Speaker 3: we could do with an asset like this.
Speaker 2: Exactly right.
Speaker 1: I think challenge that investors have faced so far is
Speaker 1: because bitcoin is so volatile, and because it's also technically
Speaker 1: a very unproductive asset today in the sense that it
Speaker 1: doesn't really generate yield, it's actually not participating in the
Speaker 1: actual growth economy in a tangible contribution. There hasn't been
Speaker 1: an ability to imagine credit provisioning for bitcoin in a
Speaker 1: sound way, and so I think, as we all know,
Speaker 1: the credit markets actually the fuel that drives a lot
Speaker 1: of the opportunities, especially when it comes to securitization models
Speaker 1: and long term investors that are insurance companies who want
Speaker 1: something more stable to earn off of something like bitcoin,
Speaker 1: and we haven't seen those opportunities yet. And the challenge
Speaker 1: is there's really two credit models that are groomed within
Speaker 1: the traditional finance industry. One is the Moody's SMP version
Speaker 1: based on the strength of the operating company, So if
Speaker 1: the operating company has cash flows that is underwriteable, you
Speaker 1: can assign some kind of credit rating to that according
Speaker 1: to their capitalization. The other model is the asset backed model,
Speaker 1: which is the business of actually taking a bunch of
Speaker 1: different collaterals that are asset backed and securitizing it in
Speaker 1: the ways you can give ratings based on the structure
Speaker 1: and the soundness of that structure in itself, which now
Speaker 1: we're talking about collateralized asset lending, and to date we
Speaker 1: haven't seen a lot of collateralized lending on bitcoin assets
Speaker 1: come to market in a very institutional way. But I
Speaker 1: think that's the other big trend that is happening. People
Speaker 1: are immensely focused on bitcoin treasury companies right now, at
Speaker 1: the equity level. But the other big trend that I'm
Speaker 1: seeing and Canter I believe, also recently announced that they
Speaker 1: are going big in a way to provide institutional lending
Speaker 1: that is backed by bitcoin. That is the other big
Speaker 1: tam that is going to be unlocked by bitcoin.
Speaker 2: Let's stick into that a little bit.
Speaker 3: So it was actually, I think last year at this
Speaker 3: conference a two billion dollar line bitcoin credit line, and
Speaker 3: I think it.
Speaker 2: Was too sort of unlost started unlocking.
Speaker 3: Some of this bitcoin liquidity that's in these corporate balance sheets.
Speaker 2: But I mean, bitcoin lending is nothing new. We have
Speaker 2: plenty of companies that are loaning against bitcoin.
Speaker 3: Are you talking about it more from like pairing it
Speaker 3: with other like loan products like real estate products, auto products,
Speaker 3: things like that, or like how are you seeing that that, Pam.
Speaker 2: Yeah, great question. Yeah.
Speaker 1: Historically, the problem and the challenges with bitcoin in the
Speaker 1: credit market has been that there really aren't many borrowers
Speaker 1: looking for termed exposure to borrow the bitcoin or even
Speaker 1: barrow dollars against it with termed.
Speaker 2: Exposure that's the collateralized it. Yeah.
Speaker 1: Yeah, yeah, because you know, take for example, the housing market.
Speaker 1: The reason the mortgage market works is because people are
Speaker 1: committing to borrow for thirty years in a fixed basis.
Speaker 1: Of course there's refine and prepaid you can go forward with,
Speaker 1: but the contract is long dated. Historically, the folks who
Speaker 1: have been engage in these markets were not long term borrowers.
Speaker 1: They tend to be market makers or traders who are
Speaker 1: kind of coming for the fast moving opportunity set of arbitraging,
Speaker 1: the inefficient yield ecosystem that can exist in DeFi and
Speaker 1: potentially translated to the centralized finance system as well.
Speaker 2: And so.
Speaker 1: The only way to change the credit market is you
Speaker 1: have to create a real demand function for long tenored borrowing.
Speaker 1: And I think at some level that's a calculation on
Speaker 1: an LTV basis as to how much you're willing to
Speaker 1: take the possibility of default and impairment risk that institutions
Speaker 1: are very good at underwriting these things for so, I
Speaker 1: think the unlock you will come to see is that
Speaker 1: hopefully there will be people that are borrowing with more
Speaker 1: termed exposure than kind of the overnight or the spot
Speaker 1: market in which you can't actually build a yield curve
Speaker 1: on the back of bitcoin. So once you have a
Speaker 1: yield curve on the back of bitcoin. I think that's
Speaker 1: when you're going to see a lot of more interesting things.
Speaker 3: I guess the problem would be because of the volatility
Speaker 3: and not knowing where that appreciation is going to go
Speaker 3: over the next term whatever three, five, ten, twenty years.
Speaker 3: Then it's probably hard to set that interest rate without
Speaker 3: knowing what that appreciation rate will be because I guess
Speaker 3: number one and then number two, like typically we want
Speaker 3: to borrow in FIAT because it's appreciating asset versus borrowing
Speaker 3: and appreciating assets.
Speaker 2: I think are those two challenges that you would see
Speaker 2: in that.
Speaker 1: Yeah, I think that is at the core the problem,
Speaker 1: which is credit is generally not provisioned for very volatile assets.
Speaker 1: And this is also I think the opportunity with DeFi,
Speaker 1: which is that part of why credit underwriting is so
Speaker 1: challenging for volatile assets is because it's historically been challenging
Speaker 1: to liquidate those in ways to imagine avoidance of impairment, right,
Speaker 1: you don't have real time visibility into the underlying performance
Speaker 1: metrics of these receivables or these corporates. So if you
Speaker 1: think about like student loan securitization or credit card receivable securitization,
Speaker 1: it's on a lagging basis. You get to see the
Speaker 1: underperformance of some of these loans, but the reporting is
Speaker 1: delayed and it's not very accurate, and it can be fudged,
Speaker 1: and there's a lot of things you have to build.
Speaker 1: Then a risk premium for the beauty of bitcoin is
Speaker 1: actually you don't any of that. It's very transparent with
Speaker 1: the prices, it's actually very easy to take ownership of
Speaker 1: the collateral if you're structuring it the right way on
Speaker 1: a custodial basis. And for all those reasons, you can
Speaker 1: imagine despite the volatility, the ability to actually seize liquidation
Speaker 1: in a way to avoid impairment as the lender in
Speaker 1: itself is the unique feature too. People just haven't been
Speaker 1: able to price that yet because we haven't been able
Speaker 1: to bring those forthcoming abilities of DeFi for risk management purposes.
Speaker 1: So people would say, yes, the volatility is higher, but
Speaker 1: maybe it's offset by the fact that I can liquidate
Speaker 1: this thing much more easily, much more transparently, without having
Speaker 1: to enter into some kind of tri party agreement with
Speaker 1: a creditor that I don't know. No, you're facing a
Speaker 1: smart contract. Those kinds of things I think will be
Speaker 1: unlocks we just haven't seen yet.
Speaker 3: Yeah, yeah, it's gonna It's going to evolve pretty rapidly.
Speaker 2: So now we have these treasury companies.
Speaker 3: Going to go back to that topic something again your
Speaker 3: fund bit. Why is you're tracking that as we talked about,
Speaker 3: we have all these new companies that are popping in
Speaker 3: and we're seeing them pop you know, three hundred percent,
Speaker 3: five hundred percent, one thousand percent like relatively quickly. Like
Speaker 3: I said, talk of the bubble and whatnot, a lot
Speaker 3: of people think that sort of the fact you mentioned Benjaminraham,
Speaker 3: sort of like a warm buffet quote, right, the rising
Speaker 3: tide lifts all boats and when it when it goes out,
Speaker 3: you seuse for me naked. So back to Bickuin's volatility
Speaker 3: for your cycles maybe whatever that is a lot of
Speaker 3: people are afraid of what may happen, you know, in
Speaker 3: a big woing pullback, and how many of these companies
Speaker 3: will be exposed.
Speaker 2: It seems like strategy. I mean, there was.
Speaker 3: Plenty calling for them they're going to be liquidated, Michael
Speaker 3: Sims be forced to sell. Of course that wasn't the case,
Speaker 3: but a lot of these newer ones maybe won't be
Speaker 3: as safe. So what are you looking at in regards
Speaker 3: to like risk management and potential dangers.
Speaker 2: Yeah, great question.
Speaker 1: You're absolutely correct that generally.
Speaker 2: We live in a world where the.
Speaker 1: Worst things you could ever imagine, we'll probably at some
Speaker 1: level be abused by somebody. So you always have to
Speaker 1: have that doubt in the back of your mind that
Speaker 1: even though you want to avoid it, someone's going to
Speaker 1: do it, and you have to prepare for that moment.
Speaker 1: And that's kind of the entropy of the capital markets anyway.
Speaker 1: This isn't even like a crypto specific thing. It just happens.
Speaker 1: So when you have a creative financial market like the
Speaker 1: United States promoting a lot of these virtues.
Speaker 2: So the thing that I would highlight is really the long.
Speaker 1: Term winner of these treasury companies are going to essentially
Speaker 1: be able to garner investors who are a bitcoin aligned.
Speaker 1: So I think it's going to be more critical, more
Speaker 1: important than ever that the bitcoin treasure companies are able
Speaker 1: to honor the things that bitcoiners really care about, which
Speaker 1: is security and transparency. And then the third thing, which
Speaker 1: I think is the most important thing, sovereignty. And we're
Speaker 1: going to see a wave of companies that may not
Speaker 1: recognize these features and may in fact abuse it. And
Speaker 1: so from that perspective, I think just understanding what bitcoin
Speaker 1: represents to us in ways that corporates can also adopt
Speaker 1: it with similar alignment will be a pretty easy limits
Speaker 1: test to understand how you want to navigate that journey security,
Speaker 1: for example, being a situation where Hoddle being the driver
Speaker 1: of how investors invest. You don't really want to invest
Speaker 1: in a bitcoin treasure company that is engaging in re hypothication, right.
Speaker 1: You don't want to have the situation where their creditors
Speaker 1: do actually have leans against the bitcoin asset and can
Speaker 1: liquidate you.
Speaker 2: That's not what Hoddle is about. So that's not going
Speaker 2: to fly. Transparen parncy.
Speaker 1: There's been a lot of conversations about whether proof of
Speaker 1: reserves should be brought upon for treasury companies, as it
Speaker 1: has been brought on for exchanges as well, And there's
Speaker 1: nuances to this conversation, which is that on the pro side,
Speaker 1: there is something virtuous about what bitcoin unlocks in the
Speaker 1: ability for us to have life transparency into holdings. But
Speaker 1: these are also securities, right. These are not actually non
Speaker 1: custodial wallets you and I have. These are securities, which
Speaker 1: means there's a lot of other liabilities even away from
Speaker 1: the proof of reserves that can exist in the corporate
Speaker 1: structure that has nothing to do with crypto.
Speaker 3: That could impair those even if we saw the accidens
Speaker 3: there that they could be impaired.
Speaker 1: By just the same way that the centralized exchanges would
Speaker 1: show proof of reserve. But you knew that it meant
Speaker 1: nothing two years ago because you don't know what's on
Speaker 1: the other side of the liabilities, and so it's actually
Speaker 1: not that useful.
Speaker 2: But I think big coinners really.
Speaker 1: Care about this, which is that whole motto of you know,
Speaker 1: trust but verify, and you're going to see more companies
Speaker 1: I think, innovate upon this custodial model as well to
Speaker 1: show some level of transparency, and we're going to keep
Speaker 1: pushing the curve on what's possible. They're mindful, of course,
Speaker 1: of the securities law, for which there's unique challenges that
Speaker 1: also come through the audit and the financial filings, the
Speaker 1: tenk k's, the ten queues, etc.
Speaker 2: And the sovereignty thing.
Speaker 1: I think is really important because people really want to
Speaker 1: know that when they buy a stock that you're buying
Speaker 1: the stock and support of the management team who is
Speaker 1: supporting bitcoin and not necessarily for another purpose. And I
Speaker 1: think there's going to be more conversations around what exactly
Speaker 1: how are you supporting bitcoin? You know, what kind of
Speaker 1: contributions are you making to the community at large, whether
Speaker 1: it's the developers or whether it's some kind of nonprofit
Speaker 1: endeavors that are going on to help the ecosystem of
Speaker 1: new entrepreneurs. But these things are going to become, I think,
Speaker 1: a little bit more value aligned, the same way like
Speaker 1: ESG investors were driven by values, right you bought companies
Speaker 1: who bought into this estreet construct because it reflected what
Speaker 1: you believed in promoting good environment, social governance factors. And
Speaker 1: I think the same will be true, which is when
Speaker 1: you say you're a bitcoin treasury, how are you promoting
Speaker 1: bitcoin in the space.
Speaker 3: And so we need to make sure that the team
Speaker 3: is aligned a founder and the board because otherwise they
Speaker 3: could sell or liquidate early.
Speaker 2: Need to make sure that the investor base is also.
Speaker 3: Aligned with the founder and the board and they have
Speaker 3: that long term vision. If you get too many short
Speaker 3: term thinkers and traders in there, then that could wreck things.
Speaker 2: And then maybe the third thing though.
Speaker 3: That I'm sort of thinking about, is like, if they're
Speaker 3: leveraging up and they're taking on debt to do these things,
Speaker 3: you know, potential term lengths of the debt, you know,
Speaker 3: things like that that can cause a problem. So if
Speaker 3: you know it came to as a recourse loan, it
Speaker 3: came to you know, in a downturn of the market cycle,
Speaker 3: something like that, do you look at look at look
Speaker 3: at those factors.
Speaker 2: Yeah.
Speaker 1: Absolutely, I think that's why Sailor was brilliant when he
Speaker 1: was able to finances capital structure. Once upon a time
Speaker 1: in history. You may know he did have recourse loans
Speaker 1: and those were removed in honor of now having convertible
Speaker 1: bonds which have no claim and then the preferred equity
Speaker 1: securities which have zero claim.
Speaker 2: And so.
Speaker 1: Those are the alignment features that are now coming online
Speaker 1: that maybe people didn't perceive to be important.
Speaker 2: For five years ago.
Speaker 1: So I think the conversation is constantly changing, and we
Speaker 1: have to also be mindful that bitcoiners are not the
Speaker 1: easiest people to navigate.
Speaker 2: They have a lot of views, and.
Speaker 1: Sometimes their views are also very pure in ways where
Speaker 1: they don't like the idea of hyper financializing bitcoin in itself.
Speaker 1: I remember when the options market opened up for the
Speaker 1: ETF in December last year, that a lot of bitcoin
Speaker 1: investors were very anti options. Basically thought it was paper
Speaker 1: bitcoin synthetic in ways that it wouldn't reflect true scarcity
Speaker 1: in the ways.
Speaker 2: That is part of the narrative.
Speaker 1: But I think over time they've come to realize, actually,
Speaker 1: there's a world in which options market is additive to
Speaker 1: bitcoin's price discovery, which we all know is higher, and
Speaker 1: those things can also accelerate demand for a new kind
Speaker 1: of investors that historically would never have touched bitcoin. For instance,
Speaker 1: these convert buyers that are buying micro Strategy bonds.
Speaker 2: They're not interested in bitcoin.
Speaker 1: They're not buying convertible bonds on micro Strategy because they're
Speaker 1: Bitcoin maxis. They're buying it because they see the tremendous
Speaker 1: yield opportunity to harvest the volatility in a way that
Speaker 1: the convertible market permits by having the ability to trade
Speaker 1: the GAMA exposure on the calls and find that to
Speaker 1: be a valuable endeavor. And those investors would never have
Speaker 1: come online to buy billions of dollars of the paper
Speaker 1: where they're willing to then dilute and convert themselves into
Speaker 1: micro Strategy in their version to a profit, but actually
Speaker 1: the greatest profit opportunity was bitcoiners, because the only reason
Speaker 1: micro Strategy went up in value is presumably because bitcoin
Speaker 1: did as well.
Speaker 3: Right, Yeah, And there's so many more questions I'd love
Speaker 3: to dig into. Run out of time though, but I'd
Speaker 3: love to find out more about, you know, sort of
Speaker 3: the credit thing you talked about potentially the opportunity to
Speaker 3: tam of putting that.
Speaker 2: Bitcoin back out there some sort of flatteralized debt.
Speaker 3: I know, in the bit wise folder that was being
Speaker 3: passed around yesterday at the event, I talked about ways
Speaker 3: to earn yield on bitcoint and how you might see
Speaker 3: that as a growing space sort of in this DeFi space.
Speaker 2: But then that also then sort of maybe leads back
Speaker 2: into the qualification conversations.
Speaker 3: So anyway, there's a lot we could dig into in
Speaker 3: regards to that, but are out of time, so let's
Speaker 3: just end it with them. Where do you see this space,
Speaker 3: the bitcoin treasury space in five years thirty.
Speaker 1: I think it's a big market, and I think it's
Speaker 1: going to be one in which it'll fundamentally alter the
Speaker 1: fabric of retail investing.
Speaker 2: And Institute Investing.
Speaker 1: Think about Coinbase having entered the S and P five
Speaker 1: hundred micro strategy, having entered NASDAC, it means by definition,
Speaker 1: at this point, every American owns crypto. And there's something
Speaker 1: profound there, which is that no matter your view, your politics,
Speaker 1: whether you like it or you dislike it, or whether
Speaker 1: you believe it or you don't believe it, it doesn't matter.
Speaker 1: It's in your portfolio. And I think Bitcoin Treasury Companies
Speaker 1: is inevitable. In the same way that these two new
Speaker 1: entrants made a dent into your index exposure. We're just
Speaker 1: going to see a lot more people have bitcoin as
Speaker 1: a component of their cultural alignment as a business model,
Speaker 1: and so I think the conversation is changing when I
Speaker 1: think about the investment leadership of an asset management firm
Speaker 1: like bitwise and others. It's now past the stage of
Speaker 1: preaching why bitcoin is important. That was very useful for
Speaker 1: over ten years when people were skeptical. But we are
Speaker 1: now here at a moment where bitcoin's gone pretty mainstream.
Speaker 1: We have jadad vance coming here we speak tomorrow. We
Speaker 1: have Senator Loomis talking about the Strategic Reserve Bill. It
Speaker 1: is no longer controversial to really think about bitcoin as
Speaker 1: an asset. The next wave of investment leadership will come
Speaker 1: from those who are able to financialize that even beyond
Speaker 1: the data exposure to more alpha centric opportunities. As you've said,
Speaker 1: how do you generate yield on bitcoin? How do you
Speaker 1: participate in the credit market on bitcoin? How do I
Speaker 1: thoughtfully execute cover call strategies on bitcoin? How do I
Speaker 1: participate in the layer two ecosystem like Babylon and Core
Speaker 1: and earn unchain opportunities that enhance the security model for
Speaker 1: the Bitcoin network. Those things are all going to actually
Speaker 1: be the next wave of ideological upgrades, and I'm just
Speaker 1: super excited to be a part of that conversation on
Speaker 1: behalf of bitwise, but of course also here with you
Speaker 1: and the Bitcoin conference.
Speaker 3: Yeah, anything about bitwise you want to tell us about
Speaker 3: or just go check it out?
Speaker 2: Yeah, no, come check us.
Speaker 1: That we've been around for now eight years, which in
Speaker 1: itself in crypto, as you might know, is a long time.
Speaker 1: And I think the one thing I'm really proud of
Speaker 1: bitwise for is we have always always put the importance
Speaker 1: of a duce of your duty at the top of
Speaker 1: navigating this journey. So our largest index fund, which is
Speaker 1: the Bitwise ten index fund publicly traded own's top ten
Speaker 1: market exploded exposure and the way you construct those can
Speaker 1: also include difficult exposures like FTT or Luna, and I'm
Speaker 1: very proud that we historically have avoided all of those
Speaker 1: things on behalf of our investors because we care very
Speaker 1: deeply about stewarding the crypto ecosystem and the way that
Speaker 1: we believe it should go. And so I know it's
Speaker 1: easy to talk about the financial opportunities a lot, and
Speaker 1: that's certainly what gets me out of bed as a
Speaker 1: trader myself, but it's really important to keep in mind
Speaker 1: we're all in this not just for the profit opportunity,
Speaker 1: but we have to care and nurture the actual stewardship
Speaker 1: of where the business of the crypto industry will go.
Speaker 1: And that's actually what's going to be leaving a mark
Speaker 1: on the history of our participation here.
Speaker 2: Awesome, all right, thanks so much, thanks for having me