WEBVTT - This is Bigger than Crypto 2.0... You NEED To know | Tim Kotzman 0:00:00.080 --> 0:00:02.880 They're literally just putting more and more of the best 0:00:02.920 --> 0:00:06.480 collateral humanities ever known on their balance sheet. Most people 0:00:06.519 --> 0:00:09.400 in traditional media they can't explain to you what micro 0:00:09.440 --> 0:00:10.319 Strategy is even doing. 0:00:10.360 --> 0:00:11.520 They may not even appreciate. 0:00:11.640 --> 0:00:14.040 Everybody wants to pay their bills and get ahead and 0:00:14.160 --> 0:00:16.600 provide a great future for themselves and their family. Back 0:00:16.640 --> 0:00:20.000 in the day when people were stockpiling gold, there were 0:00:20.000 --> 0:00:22.720 companies that did that. The most successful event in England 0:00:22.760 --> 0:00:23.759 became the Bicker of England. 0:00:23.880 --> 0:00:26.159 The very nature of the business is to leverage it. 0:00:26.320 --> 0:00:28.639 Most of them are trying to earn more bitcoin per share. 0:00:28.800 --> 0:00:31.320 But if you don't understand what the target is, then 0:00:31.320 --> 0:00:33.640 how do you really value? Do you find most investors 0:00:33.680 --> 0:00:36.600 have a hard time trying to figure that out. I mean, 0:00:39.440 --> 0:00:40.960 all right, well, let's just talk about the talk of 0:00:41.000 --> 0:00:44.080 the town here, not you, even though you are the 0:00:44.080 --> 0:00:47.200 talk of the town, being the bitcoin tratury space. You've 0:00:47.240 --> 0:00:49.360 obviously started a couple of shows talking about it, sort 0:00:49.360 --> 0:00:51.200 of rose to fame, sort of with sort of the 0:00:51.320 --> 0:00:54.400 micro Strategy True North kind of group, if you will. 0:00:55.400 --> 0:00:57.760 So let's talk about that. Let's start with, first of all, 0:00:58.200 --> 0:01:00.920 what do you see as the difference between companies that 0:01:00.960 --> 0:01:05.080 put bitcoin on the balance sheet versus bitcoin treasury strategy companies. 0:01:05.400 --> 0:01:08.280 Well, I think you kind of just made the differentiation, 0:01:08.360 --> 0:01:09.840 which is like, you can just put bitcoin on your 0:01:09.880 --> 0:01:12.240 balance sheet, right, you have cash coming in, you don't 0:01:12.280 --> 0:01:14.000 need all of it. You can buy some bitcoin, it's 0:01:14.000 --> 0:01:17.320 on your balance sheet. That's one strategy as opposed to 0:01:17.480 --> 0:01:20.880 really using the capital markets, engaging the capital markets, and 0:01:21.040 --> 0:01:26.720 issuing additional equity, issuing debt, issuing other instruments like preferred stock, 0:01:27.440 --> 0:01:32.000 to really aggressively build that bitcoin treasury on your balance sheet. 0:01:32.120 --> 0:01:37.319 So until this conference, I feel like I just kept 0:01:37.440 --> 0:01:42.039 kind of saying in different interviews that you can just 0:01:42.040 --> 0:01:43.720 have to coron the balance sheet, or you can do 0:01:43.840 --> 0:01:48.640 the lbe leverage bitcoin equity strategy or engaging the capital markets, 0:01:48.680 --> 0:01:51.520 however you want to say it, being more aggressive. Some 0:01:51.560 --> 0:01:55.200 people don't like the word playbook, but the micro strategy playbook, 0:01:55.280 --> 0:01:58.080 like that's the strategy. But how else are you going 0:01:58.080 --> 0:02:02.200 to differentiate? And it was really just maybe different operating businesses, 0:02:02.240 --> 0:02:04.480 like we're a healthcare company, that's the operating business, or 0:02:04.480 --> 0:02:07.680 we're a BIAI, that's our operating business. And I think 0:02:07.720 --> 0:02:13.280 what we saw this week was what Matt Cole said 0:02:13.480 --> 0:02:16.360 with alpha and beta of like actually trying to not 0:02:16.440 --> 0:02:19.520 just do the capital markets activity, but almost in a 0:02:19.560 --> 0:02:23.440 hedge fund sort of operating style, go identify other ways 0:02:23.480 --> 0:02:29.760 to buy bitcoin or basically arbitrage your way into more 0:02:29.800 --> 0:02:35.400 bitcoin through those opportunities, and that could be the business. 0:02:35.400 --> 0:02:40.320 And now I'm hearing conversations of especially as they pop 0:02:40.440 --> 0:02:43.520 up in other international markets. I mean, if you can 0:02:43.600 --> 0:02:47.800 only go to finance or a startup in a certain jurisdiction, 0:02:48.600 --> 0:02:52.160 maybe that bitcoin treasury company can have a different, differentiated 0:02:52.240 --> 0:02:57.160 operating business by launching an OTC desk or doing structured products, 0:02:57.560 --> 0:03:03.480 like just having an operating business that makes sense for 0:03:03.560 --> 0:03:09.519 that market and provides those products and services, but as importantly, 0:03:10.000 --> 0:03:13.080 keep it bitcoin branded, in the same way that Metaplanet 0:03:13.120 --> 0:03:16.080 now is going to do the Metaplanet bitcoin hotel instead 0:03:16.120 --> 0:03:18.799 of just we have one hotel. I've got to keep 0:03:18.800 --> 0:03:20.800 it on brand and keep it bitcoin. 0:03:22.240 --> 0:03:24.560 So then companies that are putting bitcoin on the balance 0:03:24.560 --> 0:03:27.920 sheet not so attractive, like cool, we have money, you 0:03:27.919 --> 0:03:30.120 have a balance sheet, that money's parked in different things. 0:03:30.280 --> 0:03:33.080 You put it in bitcoin, oh well, versus leveraging the 0:03:33.080 --> 0:03:35.080 ballot sheet and the business the revenue of the business 0:03:35.080 --> 0:03:38.680 to then engineer more bitcoin. That's the big differentiator. What 0:03:38.720 --> 0:03:43.040 would you say is the biggest misconception most investors have 0:03:43.200 --> 0:03:44.880 when taken and look at these types of companies. 0:03:47.080 --> 0:03:51.520 I mean most people in traditional media, whether it's CNBC 0:03:52.040 --> 0:03:54.080 or beyond. I'm not trying to pick on anyone in particular. 0:03:54.200 --> 0:03:57.120 They probably couldn't even pick on them all. They can't 0:03:57.160 --> 0:04:00.160 explain to you what micro Strategy is even doing. They 0:04:00.160 --> 0:04:05.160 may not even appreciate bitcoin, and so I think it's 0:04:05.200 --> 0:04:08.160 really there's so many different doors that you can come into, 0:04:08.320 --> 0:04:11.080 whether it's the bitcoin door, or whether it's you know, 0:04:11.360 --> 0:04:15.440 somebody tells their buddy, Hey, there's this mstr metaplant sort 0:04:15.480 --> 0:04:19.200 of stock that's just going vertical during certain periods of time, right, 0:04:19.279 --> 0:04:23.719 not financial advice, and they're like, oh right, it's everybody 0:04:23.760 --> 0:04:26.279 wants to make money. Everybody wants to pay their bills 0:04:26.320 --> 0:04:29.320 and get ahead and provide a great future for themselves 0:04:29.360 --> 0:04:32.800 and their family. So I just think we're that early 0:04:32.880 --> 0:04:35.919 that even talking to some of the employees and executives 0:04:35.920 --> 0:04:39.599 at game Stop at not steak and Shake, No, it 0:04:39.680 --> 0:04:40.360 is steak and Shake. 0:04:41.080 --> 0:04:42.600 A couple hours ago, I was saying. 0:04:43.800 --> 0:04:48.080 One of the places in New York that does burgers, 0:04:48.080 --> 0:04:48.960 but it's not Steak and Shake. 0:04:49.000 --> 0:04:49.960 I was getting all mixed up. 0:04:50.440 --> 0:04:56.400 But they are doing these announcements, but internally, I don't 0:04:56.400 --> 0:04:59.760 think they really expected, especially Steak and Shake, like such 0:04:59.760 --> 0:05:02.840 a reception, such a loyal audience. And I mean they're 0:05:02.880 --> 0:05:06.040 just like saying what every corporate executive has said, which 0:05:06.080 --> 0:05:10.400 makes a lot of sense that hey, it's been overwhelming support, 0:05:10.760 --> 0:05:14.279 you know, but if you are not already kind of 0:05:14.320 --> 0:05:17.279 familiar with that appreciative of bitcoin as the asset, you 0:05:17.360 --> 0:05:20.560 probably weren't expecting that, And so you're kind of scrambling 0:05:20.600 --> 0:05:24.039 from a all sorts of different perspectives, whether it's operational 0:05:24.160 --> 0:05:25.719 or media investor relations. 0:05:26.880 --> 0:05:28.760 Yeah, I was thinking more along the lines of like 0:05:28.800 --> 0:05:31.560 a traditional investor trying to understand what's going on in 0:05:31.600 --> 0:05:35.000 this big renchursery strategy space and sort of bringing in 0:05:35.040 --> 0:05:38.040 like maybe like a Warren Buffett or Benjamin Graham values 0:05:38.200 --> 0:05:40.760 on type framework. So one thing I hear quite often 0:05:40.800 --> 0:05:42.400 as soon as I talk about one of these things 0:05:42.520 --> 0:05:45.200 is what's the underlying business model? 0:05:45.920 --> 0:05:46.120 Right? 0:05:46.440 --> 0:05:48.800 But when you look at a company like MicroStrategy or 0:05:48.839 --> 0:05:51.920 company like Metaplanet, the stock is the business model, right, 0:05:51.920 --> 0:05:53.920 it is the product that they offer. 0:05:54.960 --> 0:05:55.880 So we're seeing that now. 0:05:55.920 --> 0:05:57.960 So those are some things. I'd also look at maybe 0:05:58.000 --> 0:06:00.440 some of the metrics and how they're measured, right, So like, 0:06:01.560 --> 0:06:04.280 for example, most of them are trying to earn more 0:06:04.279 --> 0:06:07.800 bitcoin per share, but if you don't understand what the 0:06:07.839 --> 0:06:10.440 target is, then how do you really value them? So 0:06:10.480 --> 0:06:11.760 those are some of the things I was thinking about it. 0:06:11.839 --> 0:06:14.600 Or why do some trade, like metaplanic trade is such 0:06:14.600 --> 0:06:18.000 a high valuation compared to a mind strike? Do you 0:06:18.040 --> 0:06:19.839 find most investors have a hard time trying to figure 0:06:19.839 --> 0:06:20.120 that out? 0:06:20.839 --> 0:06:21.039 Yeah? 0:06:21.080 --> 0:06:24.240 I mean even members of True North that they spend 0:06:24.600 --> 0:06:27.200 arguably twelve to sixteen hours a day studying this stuff. 0:06:27.520 --> 0:06:28.440 And they range from. 0:06:28.279 --> 0:06:30.279 Guys that are still in college to guys that could 0:06:30.279 --> 0:06:31.920 be my dad. I'm forty three. 0:06:32.400 --> 0:06:32.599 Yep. 0:06:33.520 --> 0:06:39.600 It's so brand new that any certain aspect to it 0:06:39.800 --> 0:06:43.400 that's not appreciated can kind of throw you off. So 0:06:43.440 --> 0:06:46.000 people are like, oh, it's just the stock and it's 0:06:46.000 --> 0:06:49.479 this flywheel and it's not sustainable. But if you understand 0:06:49.480 --> 0:06:53.360 that bitcoin is pristine collateral and that that's literally within 0:06:53.400 --> 0:06:55.599 a twenty four hour period, if you're selling stock and 0:06:55.640 --> 0:06:58.920 turning right around and buying bitcoin with it. I mean, 0:06:59.320 --> 0:07:02.000 compare that to real estate or building a hotel and 0:07:02.040 --> 0:07:06.440 how long it takes to become profitable, to hold out 0:07:06.520 --> 0:07:08.800 to be profitable from a cash flow perspective, or be 0:07:08.839 --> 0:07:12.120 able to drop that down after all your expenses on 0:07:12.280 --> 0:07:12.960 your balance sheet. 0:07:13.000 --> 0:07:14.280 I mean, they're literally just. 0:07:16.040 --> 0:07:19.200 Putting more and more of the best collateral humanities ever 0:07:19.280 --> 0:07:24.080 known on their balance sheet. And one of the panels 0:07:24.120 --> 0:07:27.760 over in a bitcoin inmesterday at Paris Blockchain we the 0:07:27.800 --> 0:07:31.600 one guy said it really really well. Part of what 0:07:31.640 --> 0:07:35.280 he said was back in the day when people were 0:07:35.640 --> 0:07:39.960 stockpiling gold, there were companies that did that, and the 0:07:40.000 --> 0:07:44.440 company that did that the most successfully event in England 0:07:44.920 --> 0:07:48.200 became the Bank of England. Like that's where like if 0:07:48.200 --> 0:07:54.080 you can really appreciate that, that's I think the foundation 0:07:54.280 --> 0:07:58.840 of what If you're not appreciating that, it might be 0:07:59.320 --> 0:08:02.280 really tough to kind of write then all the preferred 0:08:02.320 --> 0:08:05.000 stock and all these other tickers and all these companies 0:08:05.040 --> 0:08:08.440 and copycats and what everybody's chatting about. That kind of 0:08:09.600 --> 0:08:13.640 that comes after understanding bitcoin and Christine collateral. 0:08:14.400 --> 0:08:16.440 Do you think most people come into the space understand 0:08:16.440 --> 0:08:17.320 bitcoin at that level. 0:08:19.800 --> 0:08:21.840 No, we're all on a journey. Yeah, absolutely not. 0:08:22.000 --> 0:08:23.840 I mean because if they're trying to get bitcoin for 0:08:23.960 --> 0:08:25.960 shared you know, one of the things I hear I 0:08:26.000 --> 0:08:28.080 want to ask you about is the risk in the market. 0:08:28.120 --> 0:08:30.120 So we'll come to that. But in regards to the risk, 0:08:30.160 --> 0:08:33.280 it's like what happens in a downturn? Well, if my 0:08:33.400 --> 0:08:35.679 goal is to get more bitcoin for a share, what 0:08:35.800 --> 0:08:38.960 is the downturn? Is my bitcoin going up? Because if 0:08:39.000 --> 0:08:41.600 one bitcoin equals one bitcoin, if you're pricing it in bitcoin, 0:08:41.800 --> 0:08:44.079 if on price in bitcoin, what downturn are we talking about? 0:08:44.440 --> 0:08:45.800 And really digging into these companies. 0:08:45.840 --> 0:08:48.719 So that's what these different groups and live streams of 0:08:48.760 --> 0:08:52.520 podcasts are doing a great job just analyzing is what 0:08:52.520 --> 0:08:55.840 what is the risk profile? Because during certain periods of time, 0:08:55.880 --> 0:08:58.720 if something by definition starts with a lower market cap 0:08:59.440 --> 0:09:02.000 and they're really being aggressive with their strategy, there's probably 0:09:02.040 --> 0:09:05.079 going to be periods of help performance versus micro strategy 0:09:05.120 --> 0:09:07.080 or versus right, So it is kind of like this, 0:09:07.920 --> 0:09:12.679 you know coin, it's sort of a phenomenon, but with 0:09:12.880 --> 0:09:16.880 bitcoin as far as these different corporate rappers, so that's 0:09:16.880 --> 0:09:19.600 interesting and to say the obvious, not all of them. 0:09:19.640 --> 0:09:21.680 We're going to be successful. We've already seen, right, won't 0:09:21.760 --> 0:09:24.360 name names with There's already been companies that they did 0:09:24.360 --> 0:09:26.160 the strategy and now you don't hear about them anymore 0:09:26.200 --> 0:09:28.080 because they didn't go about it in. 0:09:28.000 --> 0:09:30.360 The correct way. From a government standpoint, I'll just leave. 0:09:30.200 --> 0:09:30.520 It at that. 0:09:30.960 --> 0:09:33.719 Every day we see headlines about inflation and dead and 0:09:33.880 --> 0:09:37.280 diminishing control over our own money. That's why I always 0:09:37.320 --> 0:09:39.800 come back to bitcoin, because it's go for generations. 0:09:39.840 --> 0:09:40.800 It's built for legacy. 0:09:40.880 --> 0:09:44.080 But protecting your bitcoin legacy the right way is not 0:09:44.120 --> 0:09:48.280 always simple. It demands discipline, focus and the right partner. Now, 0:09:48.280 --> 0:09:51.960 that's why I personally use Unchained Signature. 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I even got my 0:10:30.120 --> 0:10:32.199 parents to set up with them. So if you want 0:10:32.200 --> 0:10:36.080 to get set up, check out unchained signature at unchained 0:10:36.120 --> 0:10:39.640 dot com, slash mark Moss, and as a loyal listener, 0:10:39.760 --> 0:10:42.320 I got a discount for you. Just use code Moss 0:10:42.360 --> 0:10:45.480 ten at checkout to get ten percent off your first year. 0:10:45.520 --> 0:10:49.320 Because your bitcoin isn't just for life, it's for generations. 0:10:49.880 --> 0:10:52.280 Yeah, it's important to have the alignment throughout the governance 0:10:52.320 --> 0:10:53.760 of that to do that, But let's take a look 0:10:53.760 --> 0:10:55.440 at it. If we think about the companies again, like 0:10:55.480 --> 0:10:58.360 micro strategy, you're a better planet if their ticker is 0:10:58.400 --> 0:11:02.439 the product they're offering, then I would ask you the question. 0:11:03.000 --> 0:11:04.360 Right now, a lot of people are saying, maybe this 0:11:04.440 --> 0:11:07.000 is an over a zuber bubble. Maybe we're seeing this 0:11:07.120 --> 0:11:10.800 rise too fast and the crash is coming. How many 0:11:11.080 --> 0:11:12.920 of these types of companies do you think the market 0:11:12.920 --> 0:11:17.199 could bear. I think the market can bear an infinite 0:11:17.200 --> 0:11:19.559 amount of companies just putting bitcoin on the balance sheet 0:11:19.679 --> 0:11:25.160 without taking on leverage. Certainly beyond that, I don't know 0:11:25.320 --> 0:11:29.000 I think I don't know that micro Strategy would ever 0:11:29.040 --> 0:11:31.480 do this. But let's say we go to get into 0:11:31.720 --> 0:11:34.920 a bear market and there's a company that they have 0:11:35.000 --> 0:11:38.880 ten bitcoin but they're trading at eight bitcoin. Well maybe 0:11:38.920 --> 0:11:41.720 a company that's in a really strong position, like MicroStrategy 0:11:41.720 --> 0:11:45.400 could just buy them for nine bitcoin and everybody's happy enough. 0:11:45.720 --> 0:11:48.400 So I think they'll be kind of like what we're 0:11:48.400 --> 0:11:53.000 seeing with the miners, some consolidation and some just all 0:11:53.040 --> 0:11:56.439 of that different nuance of about activity and m and 0:11:56.480 --> 0:11:57.440 a as we as. 0:11:58.800 --> 0:12:01.400 Just is it of this break new future? 0:12:01.920 --> 0:12:05.240 Yeah? Yeah, I mean we have thousands of financial products 0:12:05.240 --> 0:12:07.360 in the market today, are tens of thousands of financial products, 0:12:07.360 --> 0:12:08.840 and if you look at each one of them having 0:12:08.920 --> 0:12:10.760 a little bit of a different strategy than you might 0:12:10.760 --> 0:12:13.080 almost look at them as like an ETF, right, where 0:12:13.080 --> 0:12:15.000 each one is just a little bit different. And there's 0:12:15.000 --> 0:12:17.000 thousands of ETFs as well, but. 0:12:16.960 --> 0:12:19.760 There shouldn't be thousands more. I mean, guys that we 0:12:19.800 --> 0:12:21.800 all know and love in the space that have pioneered it, 0:12:21.840 --> 0:12:24.680 I mean they've specifically said the comment, I don't know 0:12:24.720 --> 0:12:28.120 why there aren't more ETFs and structured products like there's 0:12:28.200 --> 0:12:34.000 just and it's hopefully it gets back to the foundational 0:12:34.160 --> 0:12:39.160 education of bitcoin, like own bitcoin, go through that process 0:12:39.200 --> 0:12:42.200 to really educate yourself on it as round yourself with 0:12:42.240 --> 0:12:44.760 people that can help you with that. But whatever door 0:12:44.800 --> 0:12:48.520 they come in through, great, right, it's all good for bitcoin. 0:12:48.840 --> 0:12:52.040 Yeah, So if they're like these ETFs, then there should 0:12:52.040 --> 0:12:54.000 be even more of them, like you said, then, like 0:12:54.000 --> 0:12:55.679 I said, there's maybe an infinite mouth that we can 0:12:55.920 --> 0:12:58.680 absorb into the market. The problem will become how do 0:12:58.720 --> 0:13:01.920 you get attention? So anyone can go watch an ETF. 0:13:01.960 --> 0:13:04.240 I could do that. I've looked into it. How do 0:13:04.240 --> 0:13:06.280 you get attention to that ETF? So we sort of 0:13:06.280 --> 0:13:08.200 have this window and time right now where these companies 0:13:08.240 --> 0:13:11.760 can sort of take advantage of that, but eventually the 0:13:11.840 --> 0:13:14.000 law of doomision or turns will sort of diminish that. 0:13:14.120 --> 0:13:18.280 So do you think this sort of irrational xuberance last 0:13:18.720 --> 0:13:21.840 six months, twelve months, a year? 0:13:21.960 --> 0:13:22.920 How does that take her off? 0:13:23.000 --> 0:13:26.000 I know some guys are looking at it as it's 0:13:26.000 --> 0:13:28.400 going to be the it's going to be the traditional cycle, 0:13:28.480 --> 0:13:30.760 and you know, no matter what happens, you're going to 0:13:30.920 --> 0:13:32.760 take a certain amount off the table, or at least 0:13:32.760 --> 0:13:35.680 have that mindset of later this year, right is just 0:13:35.760 --> 0:13:40.520 be really thoughtful about what you're doing if you're, you know, 0:13:40.679 --> 0:13:43.600 wanting to get out of a position. But I think 0:13:43.600 --> 0:13:46.000 it's going to be a longer I mean, just everything 0:13:46.080 --> 0:13:50.880 from the US regulatory environment, the government, I mean, everything 0:13:51.440 --> 0:13:54.560 seems to be setting up for the potential of the 0:13:54.600 --> 0:13:57.880 price going quite a bit higher this year. 0:13:57.679 --> 0:13:58.839 And into next year. 0:13:58.840 --> 0:14:02.920 I mean, if the the US government or I saw 0:14:03.000 --> 0:14:06.200 something on x about Adam back City's consulting and software 0:14:06.240 --> 0:14:09.280 wealth funds. I mean, these things are happening. So if 0:14:09.320 --> 0:14:12.760 they kind of stare step their way up the way 0:14:12.800 --> 0:14:15.880 that we've heard for a while now the ten basis 0:14:15.920 --> 0:14:19.040 points to one percent, two percent. Now you're hearing five percent, 0:14:19.120 --> 0:14:20.920 and not just from the Kathy Woods of the world, 0:14:20.960 --> 0:14:23.680 but from more and more, you know, the black Rock 0:14:23.760 --> 0:14:26.440 saying one to two percent that keeps stair stepping its 0:14:26.480 --> 0:14:30.560 way up. Then arguably we might make sense that the 0:14:30.600 --> 0:14:32.640 price just stair steps its way up and it just 0:14:32.680 --> 0:14:35.400 grinds up with volatility for a longer period and maybe 0:14:35.400 --> 0:14:36.920 we see some sort of low offt top in twenty 0:14:36.960 --> 0:14:40.760 twenty six. Yeah, nobody knows the future. 0:14:41.520 --> 0:14:44.400 Nobody knows, but we do know cycles and we know 0:14:44.440 --> 0:14:46.960 how they repeat it, so most likely until proved otherwise 0:14:47.000 --> 0:14:51.400 they're going to repeat the nature of this business. If 0:14:51.440 --> 0:14:54.360 we talk about the Treasury Strategy companies, the nature of 0:14:54.400 --> 0:14:57.760 that business is leverage, right, leverage the balance sheet to 0:14:57.840 --> 0:15:01.000 increase the bitcoin for a share. So the very nature 0:15:01.040 --> 0:15:03.080 of the business is to leverage it. And then we 0:15:03.120 --> 0:15:06.320 know humans then take things too far, so then naturally 0:15:06.360 --> 0:15:08.560 some people are going to push it way too far. 0:15:09.320 --> 0:15:10.680 And so we talk about sort of like the warm 0:15:10.720 --> 0:15:12.440 buffet quote. Right when the tide goes out, we see 0:15:12.440 --> 0:15:16.360 wo'swining naked. So a lot of people thought Sailor would 0:15:16.360 --> 0:15:19.040 get liquidated in the last downturn. He built a balance 0:15:19.080 --> 0:15:21.280 sheet in a way that he didn't. But some people 0:15:21.320 --> 0:15:23.960 maybe won't do that. So I guess what would you say, 0:15:24.000 --> 0:15:27.600 are some of the biggest risks or red flags that 0:15:27.720 --> 0:15:30.800 you would look for in some of these companies going 0:15:30.840 --> 0:15:33.080 into a downturn that might scare you? 0:15:34.160 --> 0:15:37.200 Yeah, I mean to your point, the leverage ratio super important. 0:15:38.320 --> 0:15:43.000 Sale and Strategy very publicly said they're targeting a twenty 0:15:43.040 --> 0:15:48.840 or thirty percent equity leverage point, So anyone that's maybe 0:15:49.160 --> 0:15:54.360 above that, and again digging into the details, of it 0:15:54.480 --> 0:15:59.520 technically was impossible. After Salem got the traditional bank loans 0:15:59.600 --> 0:16:02.560 off of it balance sheet, it like it wasn't it's 0:16:02.600 --> 0:16:05.920 not collateralized. There's no margin feature on any of this. 0:16:06.080 --> 0:16:10.400 And so to the extent that companies can follow that playbook, 0:16:10.440 --> 0:16:14.560 for lack of a better word, I think they'll be 0:16:14.600 --> 0:16:17.040 in a better position than the people that are trying 0:16:17.040 --> 0:16:19.520 to just make it up as they go and really 0:16:19.760 --> 0:16:24.840 just view it more as a trade. And so yeah, 0:16:24.880 --> 0:16:25.480 I think so. 0:16:25.840 --> 0:16:28.080 The leverage is sort of the main thing you're looking for. 0:16:28.080 --> 0:16:31.120 The leverage and what are the covenants, what are the 0:16:31.120 --> 0:16:35.840 details about Like if bitcoin goes down to eighty thousand dollars, 0:16:36.240 --> 0:16:38.880 you know, do they need to sell some bitcoin? And 0:16:38.880 --> 0:16:45.720 and again you know Strive and Knakamoto, right, David Bailey 0:16:45.920 --> 0:16:49.080 and mac cole have both set publicly bitcoin per share. 0:16:49.120 --> 0:16:51.120 We're gonna optimize for bitcoin per share and that could 0:16:51.120 --> 0:16:55.720 mean buy bitcoin or selling bitcoin. They're super sharp people 0:16:55.760 --> 0:16:56.240 in the industry. 0:16:56.280 --> 0:16:56.720 I talked to you. 0:16:56.720 --> 0:17:00.480 They're like, yeah, when you're a smaller player, and I 0:17:00.520 --> 0:17:02.440 think Davids had said this right, when you're when you're 0:17:02.480 --> 0:17:04.679 a smaller player, you can probably do that. 0:17:04.720 --> 0:17:06.000 And you're not going to move the market. 0:17:06.040 --> 0:17:08.840 But at a certain point, you know, they may just 0:17:08.880 --> 0:17:11.600 by personal opinion, I think they may rethink that because. 0:17:11.880 --> 0:17:14.359 Just the messaging. What do you think. 0:17:14.720 --> 0:17:19.040 My thought is, when you're smaller, maybe it gives more 0:17:19.040 --> 0:17:21.760 investor confidence that it's being actively managed. But when you 0:17:21.800 --> 0:17:23.280 get to the point of like a strategy, and you 0:17:23.320 --> 0:17:26.679 have half a million bitcoin or a million bitcoin, I 0:17:26.720 --> 0:17:29.240 mean I feel like the messaging has to be that 0:17:29.280 --> 0:17:30.520 you're not going to sell your bitcoin. 0:17:33.320 --> 0:17:35.159 I think everyone's going to have their own strategy, and 0:17:35.160 --> 0:17:37.520 that's why all these financial products will have a place 0:17:37.560 --> 0:17:39.120 in the market. Right There's going to be a place 0:17:39.119 --> 0:17:41.080 for all of those. Speaking of strategy, what do you 0:17:41.080 --> 0:17:43.400 think about Michael Saylor's comments about not learning the show 0:17:43.440 --> 0:17:44.240 truth on reserts. 0:17:46.760 --> 0:17:48.840 I think if people listen to the whole ten to 0:17:48.880 --> 0:17:52.040 fifteen minute response, it is very thoughtful and nuanced, meaning 0:17:52.240 --> 0:17:56.160 he's open to doing a zero knowledge proof potentially at 0:17:56.160 --> 0:17:59.560 some point where it masks the address. So I think 0:17:59.600 --> 0:18:07.760 there are are maybe not actual technical, physical so to speak, risk, 0:18:07.960 --> 0:18:11.800 but if you have bitcoin in a wallet and then 0:18:11.840 --> 0:18:15.879 that bitcoin moves, and you just have every single cyber 0:18:15.920 --> 0:18:19.000 hornet in the world just like well, that one coin 0:18:19.080 --> 0:18:21.400 moved and it's creating all this fud. I don't think 0:18:21.400 --> 0:18:24.440 that's helpful, even if it's not like an actual security risk, 0:18:24.440 --> 0:18:27.480 I don't I think that could turn into a really 0:18:27.520 --> 0:18:31.840 big kind of fud storm that nobody really needs. With 0:18:31.960 --> 0:18:35.800 that said, it certainly differentiates if Strategy is not going 0:18:35.840 --> 0:18:38.240 to do it, but metaplanet is doing it. You know, 0:18:38.280 --> 0:18:42.040 there's all of these different features that people can consider 0:18:42.640 --> 0:18:45.240 selling points. I guess you could say, yeah, that that 0:18:45.320 --> 0:18:46.600 kind of leads into. 0:18:47.520 --> 0:18:49.840 Yeah, I mean there's all kinds of unknown risks that 0:18:49.880 --> 0:18:51.880 we don't know about. You do you know some known risks? 0:18:51.920 --> 0:18:54.919 So for example, dustin attacks, right, So why I'm publicizing 0:18:54.920 --> 0:18:57.439 what those wallet addresses are, You're potentially setting yourself up 0:18:57.520 --> 0:19:01.440 some attacks that way. I think there's also potential treasury management. 0:19:01.760 --> 0:19:03.880 So you might not want to hold all five hundred 0:19:03.920 --> 0:19:05.879 and eighty thousand bitcoin in a single wallet. You might 0:19:05.920 --> 0:19:09.120 want twenty or two thousand wallets, and then you might 0:19:09.160 --> 0:19:11.320 decide you want four thousand wallets, and then you might 0:19:11.359 --> 0:19:13.080 decide you want to go to two thousand wallets again, 0:19:13.119 --> 0:19:15.280 and then every time you move those number one, how 0:19:15.280 --> 0:19:18.040 do you update people on four thousand wallets? Number two, 0:19:18.359 --> 0:19:20.639 to your point, are coin moves. Then does the market 0:19:20.680 --> 0:19:23.560 react to that, Oh my gosh, they're selling or whatever? Right, 0:19:24.080 --> 0:19:26.480 And so from a lot of perspectives, you could see 0:19:26.520 --> 0:19:28.320 plenty of readings why you wouldn't want to do that, 0:19:29.000 --> 0:19:32.560 as to why you would want to do that. What 0:19:32.680 --> 0:19:34.720 the people seem to be pretty upset about right now 0:19:34.800 --> 0:19:37.639 is it doesn't really align with the ethos or the 0:19:37.680 --> 0:19:41.440 ideology of bitcoin, because they should be not trusting, but verifying. 0:19:45.040 --> 0:19:47.840 Do you think that by showing proof of reserves though, 0:19:47.920 --> 0:19:51.880 it gives people a false sense of security because even 0:19:51.920 --> 0:19:55.159 if they see the bitcoin there, do they really have 0:19:55.200 --> 0:19:58.160 a claim to it? What other encumbrances could there be 0:19:58.200 --> 0:20:00.760 against that bitcoin? Where are they on the stack? So 0:20:00.840 --> 0:20:03.000 maybe it gives people even a false sense of security 0:20:03.040 --> 0:20:03.320 that way. 0:20:04.080 --> 0:20:07.520 Yeah, I think those are all great points. And I mean, 0:20:08.080 --> 0:20:10.080 unless there's something that I'm not familiar with, all the 0:20:10.080 --> 0:20:12.640 ETPs all these corporate rappers, you don't have a coin 0:20:12.680 --> 0:20:16.720 on the bitcoin, maybe they'll be like kind of exchange 0:20:16.800 --> 0:20:18.560 on the eutpsys or a point. I'm sure there will be, 0:20:18.640 --> 0:20:22.200 whether it's six months or six years from now. But yeah, 0:20:22.280 --> 0:20:26.560 I think they're they're all important considerations, and yeah, you 0:20:26.560 --> 0:20:30.399 don't want that proof of reserve stuff just constantly in 0:20:30.400 --> 0:20:34.560 the news cycle. That's probably not helpful. And to repeat 0:20:34.600 --> 0:20:38.680 what's been said for five years now, you should be self. 0:20:38.480 --> 0:20:40.080 Sovereign, you should have own bitcoin, you should have. 0:20:40.040 --> 0:20:44.480 Happen to cold storage. So I mean, is there some 0:20:44.600 --> 0:20:47.440 way that something's in like super deep cold storage. Like 0:20:47.520 --> 0:20:49.520