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Speaker 1: Why would they sell at this time. It seems like

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Speaker 1: a really strange time to be selling bitcoin given that

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Speaker 1: way to my mind, still in the reltive early days

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Speaker 1: football market. Surprisingly, what it seems to have done is

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Speaker 1: it seems to orange pilled all those people.

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Speaker 2: In the US, we have the Black Friday sales right

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Speaker 2: after Thanksgiving in people stand in line at six am

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Speaker 2: to go save money on whatever, electronics or whatever. But

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Speaker 2: when financialize it's go on sell. We don't think about

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Speaker 2: it like that. We're like, oh, I don't want to

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Speaker 2: buy it now it's on sale.

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Speaker 1: Yeah. I mean, it's really a bit of a trap

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Speaker 1: with bitcoin because people will.

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Speaker 2: All right, Adam, we're here at the bitcoin conference, you're

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Speaker 2: like the ogog bitcoiner. First of all, I want to

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Speaker 2: dig into, like some of the big excitement that we

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Speaker 2: have going on with the bitcoin treasury companies. I know

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Speaker 2: you're all about that right now. There's a lot of

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Speaker 2: things that you're doing in that space. But how far

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Speaker 2: have we come in the last fifteen years.

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Speaker 1: Yeah, well, I think we've got a kind of growth,

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Speaker 1: But in terms of metrics in such you know, the

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Speaker 1: lost one, the SPOTTYTFS was a big one, but that

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Speaker 1: was by the courts. It wasn't like the SEC approved

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Speaker 1: it willingly. But now with the current administration and they're

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Speaker 1: more open for business, and so I think we kind

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Speaker 1: of got a lot of metrics caught up with where

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Speaker 1: they would have been without that friction of the last

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Speaker 1: few years. So, you know, it's the regulatory environment for

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Speaker 1: the traditional custodians of shares are now cleared to you

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Speaker 1: custody bitcoin, they got they got some work to do,

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Speaker 1: but they're able to do it. And more of a

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Speaker 1: wave of financial institutions offering accmulated products. Was say things

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Speaker 1: take a while to land because they were say they're

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Speaker 1: going to do it, but then they are going to

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Speaker 1: spend months figuring out the guidelines for their advisors and

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Speaker 1: what allocations they can advise and things like that. So

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Speaker 1: probably in market terms going to land in the short

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Speaker 1: the next six months or something in some of them.

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Speaker 1: And confusingly, the price is only one hundred ten thousand.

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Speaker 1: It feels cheap with the context, right because you know,

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Speaker 1: we got to what seventy three thousand before the halving

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Speaker 1: sev it's very and half. It's not that much higher.

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Speaker 1: And the amount of hostive news announcements from financial institutions

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Speaker 1: or from wealth plans. Now the eachf inflows, all of

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Speaker 1: these things are enormous, and between micro strategy alone, that's

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Speaker 1: two times the mind bitcoin per day since the halving,

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Speaker 1: and black croc i bit another two times. You know,

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Speaker 1: they're traders on bit for x at times absorbing one

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Speaker 1: or two times more depending on market conditions. So it's

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Speaker 1: flying if it falls back, and yeah, and somehow the

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Speaker 1: prices YEA questions who's selling, like why would you what's

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Speaker 1: what's you know, what's going in the head? Why would

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Speaker 1: they sell at this time? It seems like a really

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Speaker 1: strange time to be selling bit cind given that we're

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Speaker 1: to my mind, still in the relatively early days of

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Speaker 1: a ball market with all of the metrics you know,

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Speaker 1: running really hot. So one are the un chain metrics

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Speaker 1: where people try to guess based on you know, which

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Speaker 1: age utos they see moving. It's an indicator and it's noisy.

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Speaker 1: But it looks like some people have been holding bitcoin

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Speaker 1: for a year and a half, two years, So maybe

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Speaker 1: they bought in the previous ball market around the sixty

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Speaker 1: thousand lark. Perhaps they didn't enjoy watching it at fifteen

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Speaker 1: and a half and so they're like, Okay, they're selling bitually,

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Speaker 1: and so maybe maybe that's going on. But you know,

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Speaker 1: whoever is selling, you know, there's a lot of buying

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Speaker 1: they have to run out of close themselves similarly. Yeah,

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Speaker 1: so I think that's when it gets interesting again. Oh yeah,

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Speaker 1: you know, we're we're saying it's not very high, but

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Speaker 1: I mean we just had it all time high in

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Speaker 1: the life a week a few times from it, so

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Speaker 1: it's it's on the mood.

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Speaker 2: Okay, yeah, still, yeah, I want to dig more into

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Speaker 2: those metrics and some of the things that you're working

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Speaker 2: on and where this is all going. But if we

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Speaker 2: go back a little bit so to the point that

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Speaker 2: you're making, right, we have this big pivotal shift in politics,

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Speaker 2: and I think what you were saying is maybe the

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Speaker 2: industry as a whole, maybe bitcoin as a whole, was

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Speaker 2: sort of almost suppressed potentially by this political environment that

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Speaker 2: we had, and now it's sort of got some catch

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Speaker 2: up to do now because the political winds have changed. Right,

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Speaker 2: So that's happening, and there's enormous buying. But of course,

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Speaker 2: as I was thinking, you said it, that means people

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Speaker 2: are selling as well. Somebody's selling, yeah, and so you know,

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Speaker 2: I see there's a lot of people in your the

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Speaker 2: original like cipher punk, and so I see a lot

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Speaker 2: of people online saying, but bitcoin's losing its cipher punk

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Speaker 2: roots and now it's going corporate and now everybody's begging

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Speaker 2: for the government to buy it and these types of things.

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Speaker 3: What would your response be to that?

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Speaker 1: Well, I don't really feel that because the you know,

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Speaker 1: the question is when new people come in, what is

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Speaker 1: their mindset and what do they learned from participating in

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Speaker 1: bitcoin in and so so if you go back a

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Speaker 1: few years, people were not sure. Uh, I mean they

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Speaker 1: would call it the suits coming. But you know, the professionals,

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Speaker 1: the asset managers, the advisors, the wealth management companies say,

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Speaker 1: you know, are they gonna absorb the ethos? And politicians

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Speaker 1: and son and and dilute it basically, right, so they

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Speaker 1: could have a financial success, but gett by diluted in

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Speaker 1: terms of its mission. It's ethos is kind of permission

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Speaker 1: on global money, right, which is a pretty radical thing.

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Speaker 1: And surprisingly actually what it seems to have done is

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Speaker 1: it seems to orange pilled all those people. So you know,

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Speaker 1: you have politicians who are clearly up to here in

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Speaker 1: terms of the personal bitcoin allocation. Who actually get it.

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Speaker 1: Now it seems like we have a president who actually

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Speaker 1: gets it too, right, and part of that was situational

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Speaker 1: that he got politically debanked and it clicked right. One

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Speaker 1: of the Eric Trump had specifically said that, you know,

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Speaker 1: the game debanks made it real for them, right. So,

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Speaker 1: and you know, something similar with El Salvador when they

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Speaker 1: first started in the bitcoin saying, initially people were unsure,

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Speaker 1: you know, is it a poltitionan sort of following a

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Speaker 1: popular trend to you know, to get elected or to

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Speaker 1: bring in bean infestment or hot thing. But then it

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Speaker 1: turned out that you know, actually he was patient zero,

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Speaker 1: and Al Salvador he was the guy that was like

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Speaker 1: pushing it, and they Keley's actually got it in a

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Speaker 1: big way. Right. So, what it seems like is that

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Speaker 1: the sort of incentive alignment of hard money, it brings

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Speaker 1: wholesome incentives to all kinds of situations, is scaling much

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Speaker 1: better than we might have worried in terms of you know,

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Speaker 1: initially mining and trading by individuals and then you know

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Speaker 1: private companies and then public companies, and the ethos is

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Speaker 1: doing well. It's just in a scaled way. And the

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Speaker 1: incentives are holding together in terms of you know, securing

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Speaker 1: the network and the balance of economic incentives to participate

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Speaker 1: in the market and in mining and in building products

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Speaker 1: and services on Birkin. So surprisingly, it's so far it

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Speaker 1: seems to scale all the way and there's a couple

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Speaker 1: more levels to go because the you know, while there

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Speaker 1: are a few sovereign things like a Swiss National Bank

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Speaker 1: has some exposure by a MicroStrategy. I think about one

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Speaker 1: percent of the US equities in micro stratetchery and that

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Speaker 1: will change over time. Yeah, presumably, and ABW, SOFIGN, wellth Funed, Bhutan,

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Speaker 1: El Salador and some others, but those are actually quite

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Speaker 1: small percentages. An another indication of institutional interest levels is

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Speaker 1: somebody went through the Black Crock Eyebit filings and they

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Speaker 1: could see of the people that are obliged to disclose,

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Speaker 1: about thirty three percent was institutional ownership. But nevertheless, you know,

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Speaker 1: that's that's that's a nice number. And I would say

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Speaker 1: the other ETF holders where an ETF was a simpler

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Speaker 1: it's base is sort of accessibility, right, So for the

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Speaker 1: crowd that when they want to make an investment, they

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Speaker 1: call the financial advisor, they called a broker and they

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Speaker 1: couldn't do it before or you know, then the futures

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Speaker 1: ETFs are not attractive products, right, So I would say

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Speaker 1: that is the sort of top ten percent of wealth

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Speaker 1: in the US minus the top one percent, so not

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Speaker 1: the superhigh networth, but just professionals, the doctors, dentists, business people,

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Speaker 1: people with a portfellow that they're taking an interest in. Yeah,

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Speaker 1: maybe you have somebody else managed, but you know, have

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Speaker 1: some input into it, and it's not you know, it's

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Speaker 1: not new money. They're just reallocating something in a portfolio.

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Speaker 1: So I think the fact that they are they're reallocating

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Speaker 1: in a portfolio and they're longer term investors. It turns

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Speaker 1: out we didn't know what to expect, but they are

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Speaker 1: also quite long term investors. So they it's a good

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Speaker 1: type of investor to have because they're not going to

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Speaker 1: panic sell when it drops, said, I better think they

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Speaker 1: might buy some more. You saw that in some of

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Speaker 1: the metrics, so that's interesting to see evolve. It means

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Speaker 1: the the money multiplier, like how much capital needs to

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Speaker 1: come into bitcoin to push it into an next layer

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Speaker 1: as less, so you know, you get higher multiple on

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Speaker 1: the market cap versus the money in. If you have

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Speaker 1: these kind of investors, what's interesting.

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Speaker 2: So if you have stronger hands coming in, more patient buyers.

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Speaker 2: So the point I think what you're making earlier was

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Speaker 2: who's the sellers. And the sellers are people who probably

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Speaker 2: bought around the sixty thousand dollars level. They went through

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Speaker 2: the bear market through twenty twenty two. They didn't like that.

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Speaker 1: Yeah, they got fatigue.

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Speaker 2: Basically, they got fatigue, they sold out. The markets moved

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Speaker 2: from impatient to patient. Now we have the patient buyers,

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Speaker 2: sovereign wealth funds who are thinking generations ahead. So then

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Speaker 2: a lot of this bitcoin goes into deep dark cold

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Speaker 2: storage hopefully, And I think that then, I guess the

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Speaker 2: point you're saying is that when we have that shift

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Speaker 2: of short term buyers to long term buyers, it, I

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Speaker 2: guess it removes the amount of available circulating bitcoin. And

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Speaker 2: when that happens, then it takes less money coming into

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Speaker 2: the market to get a higher multiple off of that.

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Speaker 1: Right.

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Speaker 2: And so then while most people would think that as

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Speaker 2: the market cap of bitcoin gets bigger, the volatility goes down,

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Speaker 2: maybe what you're saying possibly we still have the upside potential,

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Speaker 2: but it limits or dampens the downside.

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Speaker 1: Yeah. Yeah, so yeah, blockstreaming recruits hedge funds manager and

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Speaker 1: he had shom Bill and he had a period where

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Speaker 1: he works on pension funds. So we you know, I

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Speaker 1: went to talk to some pension funds the last couple

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Speaker 1: of weeks fund you know, the fund managers and the

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Speaker 1: fund administrators, to you know, see what it takes to

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Speaker 1: get them off zero. They're still quite early and they're thinking.

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Speaker 1: They're asking very talented questions. But one of the graphs

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Speaker 1: that Sean assembled is a kind of volatility distribution which

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Speaker 1: shows that bitcoin has a fat tail to the right,

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Speaker 1: which they has like high volatility.

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Speaker 2: But it's biased to the upside and asymmetric.

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Speaker 1: Yeah, whereas you know, the the U stock index is

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Speaker 1: more normal, more normal distribution. They got cound and up.

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Speaker 1: I mean there are down downsides too, but the upsides

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Speaker 1: are bigger basically. So that's an interesting data point. And

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Speaker 1: so yeah, I mean I think, hm that you know,

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Speaker 1: they call it redistribution, right that you know, previous generation

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Speaker 1: people sell. Ultimately, it's a story of bitcoin's market behavior

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Speaker 1: is you know, the dips exist to transfer bitcoin from

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Speaker 1: weekends to stronger hands. So it's kind of evolution, and

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Speaker 1: like biological evolution, the people who for some reason are

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Speaker 1: stubborn or persistent or valium investors and the winner's holding

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Speaker 1: the bitcoin. People that are new to investing or can't

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Speaker 1: stand up voltility, they get cheken out because that's it's

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Speaker 1: it is a world experience, even for somebody with equity

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Speaker 1: investment experience, because the battle is just much lower in

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Speaker 1: the actuity world. But it is I think it is.

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Speaker 1: You know, you can see over the long term that

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Speaker 1: the bottles is dropping a bit in bitcoin. I think,

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Speaker 1: you know, these kinds of investors who are managing a

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Speaker 1: portfolio they can realitate. I think you know the message

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Speaker 1: that Sean brought to the pension fund. So he was

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Speaker 1: managing the first US pension fund that put back on

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Speaker 1: a bowe sheet. This isn't a Clara vuta, and he

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Speaker 1: was recommending around a two to three percent allocation with

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Speaker 1: the argument that you know, if if bitcoin half, they

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Speaker 1: could make it back in a couple of months with

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Speaker 1: their normal you know, fixed income diverse by strategies, and

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Speaker 1: that under his administration that pension fund died quite well.

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Speaker 1: They achieved a ten percent so the other ten percent

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Speaker 1: return for ten years in a row, which is good.

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Speaker 1: It's a good top quarter I return for a pension fund.

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Speaker 1: And if bitcoin did what it did in the past,

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Speaker 1: so you know, when he started talking to them, bitcoin

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Speaker 1: was seven thousand, by the time he got the allocation in,

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Speaker 1: it was seventeen, so already yeah, quite a bit up

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Speaker 1: from that, and that that allocation alone would fill in

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Speaker 1: the remainder of their unfunded pension liability. So, but typically

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Speaker 1: those funds are doing rebalancing every quarter. And a key

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Speaker 1: thing with this allocation is so you were trying to

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Speaker 1: capture the asymmetric upside, so you make a smaller ocasion

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Speaker 1: to manage the votility reci pension funds that like draw

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Speaker 1: down technical period, but you've got to you've got to

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Speaker 1: not rebalance it and you just give away the upside quarterly.

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Speaker 4: So not not rebound nor rebounce the bitcoin. Let that

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Speaker 4: run for rebounce the equities, but let the I mean

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Speaker 4: they do rebalance the the equities. And they're in different sectors,

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Speaker 4: you know, so they'll be in some forestry or some farmlands,

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Speaker 4: different different times there it's goind of diversified, and they

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Speaker 4: will they will monitor those segments and.

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Speaker 1: Rebalance and they've statistically shown them that it helps portfolio.

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Speaker 1: But with a big with this thesis, with a bitcoin,

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Speaker 1: you're going through the asymmetric upside rebouncing. For that specifically,

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Speaker 1: it's just stay the course, keep it five years at least,

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Speaker 1: and historically if it repeats, well yeah.

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Speaker 2: Yeah, let your winners run. Let that thing go. You've

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Speaker 2: been here since the beginning, so you've gone through some

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Speaker 2: pretty extreme long draw downs. Yeah, so you've seen that.

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Speaker 2: You know, I got I started buying around twenty fifteen,

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Speaker 2: so I went through the you know, twenty eighteen, twenty

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Speaker 2: nineteen draw down, and I remember thinking, oh man, why

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Speaker 2: didn't I Why.

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Speaker 3: Didn't I sell? Is it ever going to come back?

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Speaker 1: And right.

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Speaker 3: It did.

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Speaker 2: And then I remember in twenty twenty when it plunged

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Speaker 2: with a COVID crash, and I'm like, oh man, this

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Speaker 2: is it.

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Speaker 3: The markets are done, you know.

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Speaker 2: And then yeah, I never sold any I didn't buy

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Speaker 2: as aggressively as I should have on the dips, but

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Speaker 2: I but I managed a whole drew and I've sort

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Speaker 2: of become numb to the rise at one hundred and

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Speaker 2: ten because I don't want to get.

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Speaker 3: Depressed on the on the crash either.

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Speaker 2: How have you managed to kind of think through that

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Speaker 2: on these these the euphoria and then the crash.

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Speaker 1: Yeah. I mean, actually, of course it depends on people's

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Speaker 1: back crowding, right, but the average person is not self

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Speaker 1: managing or portfolios. So then you know, when you get

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Speaker 1: into bit when it's their first trading of the first

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Speaker 1: self managed investment, and it's a wild introduction to investment.

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Speaker 1: So I was lucky to have, you know, in the

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Speaker 1: early ninth sort of early to mid nineties, I was

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Speaker 1: managing my own savings and trading with E trade in

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Speaker 1: the UK equities market and an I p O and

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Speaker 1: different sectors stock trading, a bit of a day trader basically,

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Speaker 1: so I was kind of new to it, amateurish, and

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Speaker 1: but you get to learn, you know, to handle the

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Speaker 1: roller coaster of the market well tilty and you're you know,

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Speaker 1: you're you're buying to build stocks so they can move dramatically,

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Speaker 1: even if the index it doesn't so much.

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Speaker 2: So but even then as a trader you are buying

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Speaker 2: and selling. They're not really sitting through the VOLGME.

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Speaker 1: Yeah. Yeah, So basically I learned the hard way. So

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Speaker 1: I was doing that and the market was rising, so

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Speaker 1: you know, you couldn't go that far wrong basically, and

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Speaker 1: so I did the day trader thing. But then you know,

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Speaker 1: the market got through, it got into a bare cycle.

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Speaker 1: So I was like, oh, I like this, but I didn't.

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Speaker 1: I was stobborn. I didn't want to realize a loss.

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Speaker 1: So instead I got more sort of scientific and started

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Speaker 1: looking at, you know, why would you want to hold

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Speaker 1: this individual stock in a bear market? You know, people

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Speaker 1: need health care and they need banking, and just start

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Speaker 1: paying attention to the fundamentals, looking at the company specifics

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Speaker 1: and changed my outlook to be more of a value investor.

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Speaker 1: And you know, eventually the market came back and it

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Speaker 1: was fine, right, So I got more introduction to like

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Speaker 1: trading thing there. And yeah, so when bitcoin came along,

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Speaker 1: I was like, oh this is look, this looks fun.

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Speaker 1: Let's let's trade this, right, But you learn like really fast.

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Speaker 1: It's like so at the beginning, I was like thinking

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Speaker 1: about trading it, and then I realized like, well, wait

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Speaker 1: a minute, it's going up exponentially and it's but it's

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Speaker 1: highly volatile. It's just like twenty thirteen, right, So I

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Speaker 1: was like, well, logically, if you you know, if you

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Speaker 1: were selling you know, if you don't. If you don't,

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Speaker 1: if you're selling, what you're saying is you you're hoping

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Speaker 1: it's going to fall so you can fight back lower.

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Speaker 1: But if it's going up exponentially with high volatility, the

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Speaker 1: odds are stacked against you, like a really bad casino rake.

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Speaker 1: So probably that's a dumb idea. So so that can's like, Okay,

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Speaker 1: let's just buy more and not sell if you can,

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Speaker 1: and if you want to like trade, maybe pick an

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Speaker 1: allocation and try to buy when it falls or something

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Speaker 1: like that. Right, And so yeah, and I think along

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Speaker 1: the way, somewhere in there, my my benchmark shifted. So

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Speaker 1: originally I was in you know, some mixture of pounds

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Speaker 1: and dollars and euros and things. I was working internationally,

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Speaker 1: and I gave up worrying about the forex. I was like, okay,

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Speaker 1: I've got a basket currencies. Who cares what happens to

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Speaker 1: the British pound and invests the euro us and and

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Speaker 1: then I yeah, so I basically realized that, well, actually

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Speaker 1: it was starting to care more. Is the number bit

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Speaker 1: one I have going up, not the dollar value of it.

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Speaker 1: So I kind of rednominated in my mind the portfolio

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Speaker 1: value to bitcoin, and then then it's a lot easier, right, Yes,

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Speaker 1: if you just sit through a bad market, it's like, well,

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Speaker 1: I've managed to buy a little bit more bitcoin. Bruce

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Speaker 1: was lower. This could yeah right, and like one bitcoin

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Speaker 1: is one bitcoin became kind of a thing. Actually really

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Speaker 1: didn't care because I was convinced, you know, just wall tilty,

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Speaker 1: it will come back in the next cycle. But to

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Speaker 1: your point about you know, the COVID draw down, Yeah, that,

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Speaker 1: I mean that was pretty dramatic, and as the previous one,

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Speaker 1: I mean they go back further, right. I didn't get

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Speaker 1: active until twenty thirteen, but when I got to experience

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Speaker 1: bus was the run up to thirteen hundred, and I

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Speaker 1: gradually fell was like three hundred and two hundred of

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Speaker 1: it did below two hundred, which I think was a

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Speaker 1: kind of previous psychological number. Okay, that it achieved, and

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Speaker 1: people did not like that. They were like, oh no,

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Speaker 1: it's fallen off the two hundred. That was like the

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Speaker 1: kind of floor, right, okay, and it fell off and

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Speaker 1: it's all over, it's going to ZERI But it only

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Speaker 1: lasted for a day, and so at that point I

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Speaker 1: was like, well, you know, it feels pretty scary, but

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Speaker 1: I guess this is the moment to buy some more. Yeah.

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Speaker 1: So I actually managed to do it. It's good. And

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Speaker 1: I called somebody who'd been sitting on the fence about

364
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Speaker 1: maybe I should buy some bit. It's like, do it

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Speaker 1: now if you're going to.

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Speaker 3: Do it, yeah, and they did. It's crazy. You know.

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Speaker 2: In the US we have the Black Friday sales right

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Speaker 2: after Thanksgiving in people stand in line at six am

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Speaker 2: to go save money on whatever, electronics or whatever. But

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Speaker 2: when financialized, it's go on cell. We don't think about

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Speaker 2: it like that. We're like, oh, I don't want to

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Speaker 2: buy it now it's on cell, which is sort of

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Speaker 2: a yeah.

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Speaker 1: I mean, it's really a bit of a trap with

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Speaker 1: the coin because people will ooscily between you know, they'll

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Speaker 1: see a price target. It's one hundred and hands. It

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Speaker 1: got to almost seven five not very long ago. I'll

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Speaker 1: buy it when it gets to seventy five, right, and

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Speaker 1: it probably would never happen, or if it does happen,

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Speaker 1: that will get scared again. Oh maybe it at full

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Speaker 1: to sixty. It's scared now it's seventy five defense ball,

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Speaker 1: And so they get stuck in this kind of psychological trap.

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Speaker 1: So you know, you can look at different ways. But

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Speaker 1: door cost averaging is kind of a way to do

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Speaker 1: something in the middle, right by by some mom some

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Speaker 1: door cost average and you won't feel bad. And I

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Speaker 1: think also newcomers don't really have a view of your

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Speaker 1: market cycle timing because I know it's they're not that

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Speaker 1: many samples, and the last cycle had an extra all

390
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Speaker 1: type high right at the end of the cycle, which

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Speaker 1: is unusual.

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Speaker 2: But now you said earlier that given all the news

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Speaker 2: that's happened, you feel that one ten is cheap, one

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Speaker 2: hundred anders is cheap. Most people that I listened to

395
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Speaker 2: not here at this event, but most people they say, well,

396
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Speaker 2: bigcoin is too expensive.

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Speaker 3: So they're looking at in the past.

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Speaker 2: Well it's not ten dollars or a thousand dollars or

399
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Speaker 2: ten thousand.

400
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Speaker 3: Now it's too expensive.

401
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Speaker 2: You're thinking it's too cheap because you're looking in the

402
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Speaker 2: windshield and not the rear mirror.

403
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Speaker 3: Know where we're going.

404
00:22:12,080 --> 00:22:15,520
Speaker 1: Yeah, yeah, I mean I think you know one way too.

405
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Speaker 1: You know, I'm just looking at you know, the relative

406
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Speaker 1: price at sixty nine thousand produce pull market or seventy

407
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Speaker 1: three and a half in the second top loss cycle

408
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Speaker 1: and the fundamentals, like the news blow and the fundamentals.

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Speaker 1: At that point, everything is just much much better now

410
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Speaker 1: from the fundamentals and the consistent buying. There are less

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Speaker 1: new coins be in mined coins on exchange are shrinking.

412
00:22:41,600 --> 00:22:45,399
Speaker 1: Say yeah, I think it should be much higher. Yeah,

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Speaker 1: and I'm guessing it will get this sooner or later

414
00:22:48,920 --> 00:22:51,159
Speaker 1: because the cellars will just simply run out coins, so

415
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Speaker 1: they'll get their mojo back and decide that wait a minute,

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Speaker 1: it's taking another run, but let's buy it back at

417
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Speaker 1: a higher price. That's what people do, right, yes, suh. Yeah,

418
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Speaker 1: we tell them they're like, oh no, it's going.

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Speaker 2: Up, and everyone of those are supposed to buy low

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Speaker 2: and sell high, but they all do the opposite, really

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Speaker 2: right right.

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Speaker 1: The other thing I think it's a nice thing to

423
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Speaker 1: look at it for people to deal with falltalty and

424
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Speaker 1: to think about it is there's a metric, the two

425
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Speaker 1: hundred week moving average, which is the four year average

426
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Speaker 1: price basically, and that is a really nice number because

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Speaker 1: it never falls. It's what's going up, you know, slowly

428
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Speaker 1: or fast, depending on stage of the market, and it's

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Speaker 1: generally a floor price like bitcoin for many years never

430
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Speaker 1: closed a month below that price even in a better

431
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Speaker 1: market during COVID it closed a little bit, but you know,

432
00:23:39,840 --> 00:23:42,399
Speaker 1: a ball market, it's nowhere near it, and that number

433
00:23:42,480 --> 00:23:45,320
Speaker 1: is creeping up, and I think at the moment it's

434
00:23:45,359 --> 00:23:47,840
Speaker 1: think forty seven thousand, so with someone between forty seven

435
00:23:47,880 --> 00:23:50,080
Speaker 1: and twenty eight. So if you think about that as

436
00:23:50,119 --> 00:23:53,800
Speaker 1: a potential floor where bigcoin's unlikely, it's full beneath that

437
00:23:54,560 --> 00:23:58,280
Speaker 1: as your kind of bankable value, and then everything above

438
00:23:58,320 --> 00:24:01,719
Speaker 1: that is wall talty, yeah, then you can be calmer

439
00:24:01,760 --> 00:24:04,640
Speaker 1: about And if you get that as your your anchor,

440
00:24:04,880 --> 00:24:08,760
Speaker 1: then you know you won't you won't get say, it

441
00:24:08,800 --> 00:24:11,640
Speaker 1: won't feel so dramatic when it and it drops thirty percent. Yeah.

442
00:24:11,680 --> 00:24:14,119
Speaker 1: I think the other thing that zoom out is a

443
00:24:14,119 --> 00:24:16,840
Speaker 1: good good thing because uh yeah, if you have a

444
00:24:16,920 --> 00:24:19,679
Speaker 1: nice chance of previous ball runs where there's been like

445
00:24:19,800 --> 00:24:23,600
Speaker 1: five or six, it's windy to thirty percent drops right

446
00:24:23,720 --> 00:24:25,399
Speaker 1: on the way to a ball market that's gone up

447
00:24:25,400 --> 00:24:27,199
Speaker 1: like one hundred times in a cycle or something. So

448
00:24:27,840 --> 00:24:29,920
Speaker 1: you know, we had a thirty five percent drop there

449
00:24:30,040 --> 00:24:33,000
Speaker 1: from like that's what do we get to like one

450
00:24:33,080 --> 00:24:35,320
Speaker 1: hundred and nine and then down to like seventy five

451
00:24:35,400 --> 00:24:37,000
Speaker 1: seventy fours, it's like thirty five percent.

452
00:24:37,960 --> 00:24:39,000
Speaker 3: I'm about thirty percent.

453
00:24:39,200 --> 00:24:41,760
Speaker 1: Yeah, But I mean it's normal, right, I mean, going.

454
00:24:41,560 --> 00:24:44,720
Speaker 2: Back to twenty twenty two dep Since then, I think

455
00:24:44,760 --> 00:24:48,320
Speaker 2: we've had nine pullbacks of twenty five percent or more

456
00:24:48,680 --> 00:24:51,439
Speaker 2: in that period. Oh okay, so yeah, so it's just normal.

457
00:24:52,160 --> 00:24:54,200
Speaker 2: I want to get back into some of these Biglin

458
00:24:54,240 --> 00:24:56,840
Speaker 2: Treasury staff and things that I know that you're working

459
00:24:56,880 --> 00:24:59,520
Speaker 2: on and sort of just taking that back first thing.

460
00:24:59,560 --> 00:25:01,760
Speaker 3: I just want to dressed though quickly. You mentioned like

461
00:25:01,760 --> 00:25:02,440
Speaker 3: the suit's coming.

462
00:25:02,720 --> 00:25:04,280
Speaker 2: That's the first time I've actually ever worn a suit

463
00:25:04,320 --> 00:25:06,840
Speaker 2: of the bitcoin conference. I'm using mister black t shirt guy.

464
00:25:07,320 --> 00:25:09,440
Speaker 2: But the corporations are here, right, I guess I'm one

465
00:25:09,440 --> 00:25:11,800
Speaker 2: of them now. But you know, one thing that people

466
00:25:11,840 --> 00:25:15,760
Speaker 2: think about is, unfortunately the distribution from the decentralized sort

467
00:25:15,800 --> 00:25:19,080
Speaker 2: of retail, you know, people that came to originally and

468
00:25:19,160 --> 00:25:21,399
Speaker 2: now sort of transferred to the to the corporations, if

469
00:25:21,440 --> 00:25:25,760
Speaker 2: you will, the institutions. You mentioned that, it's people think

470
00:25:25,800 --> 00:25:28,760
Speaker 2: that maybe they could change Bitcoin changes them. It seems

471
00:25:28,800 --> 00:25:31,120
Speaker 2: like it seems like it and I would agree with that,

472
00:25:32,119 --> 00:25:36,040
Speaker 2: But do you see danger in it becoming too centralized

473
00:25:37,800 --> 00:25:40,440
Speaker 2: with all the corporations and institutions and the sovereigns coming in.

474
00:25:41,000 --> 00:25:43,520
Speaker 1: Yeah, I mean, I think you know, you can look

475
00:25:43,560 --> 00:25:51,240
Speaker 1: at the folk drama twenty fifteen to twenty seventeen. It's

476
00:25:51,240 --> 00:25:57,199
Speaker 1: the Block Size Wars, Yeah, as an example where the mean,

477
00:25:57,480 --> 00:26:00,199
Speaker 1: I would say that was resolved by the market going

478
00:26:00,240 --> 00:26:02,080
Speaker 1: into people were uncertain about what was going to happen.

479
00:26:02,119 --> 00:26:04,320
Speaker 1: You know, some people thought the miners were decision makers

480
00:26:04,400 --> 00:26:07,920
Speaker 1: or these genes or developers, but actually missed the market

481
00:26:08,359 --> 00:26:10,520
Speaker 1: made the decision and everybody else looks shamed to go

482
00:26:10,760 --> 00:26:15,679
Speaker 1: with Yeah. So and like, now that we've seen that, okay,

483
00:26:15,720 --> 00:26:18,600
Speaker 1: that seems reasonable. Now right, you've got a radical free

484
00:26:18,640 --> 00:26:23,160
Speaker 1: market money. The market will resolve whatever debates there are.

485
00:26:23,840 --> 00:26:27,840
Speaker 1: And so with that president, that's good because it gives

486
00:26:27,840 --> 00:26:29,760
Speaker 1: you the predictability. You know, next time it might be

487
00:26:29,880 --> 00:26:31,480
Speaker 1: dramatic because you go out of never mind, you just

488
00:26:31,840 --> 00:26:34,400
Speaker 1: you know, short the futures if you disagree with it,

489
00:26:34,160 --> 00:26:37,959
Speaker 1: if the if the ecosystem guys. So, I think, you know,

490
00:26:38,080 --> 00:26:41,359
Speaker 1: it was interesting to watch that because the activist investors,

491
00:26:42,200 --> 00:26:43,880
Speaker 1: you know, the people that were like, we're not really

492
00:26:43,880 --> 00:26:46,200
Speaker 1: sure what to do, or thought it might be mildly

493
00:26:46,240 --> 00:26:48,879
Speaker 1: good for companies in the retail payment space. They were

494
00:26:48,880 --> 00:26:51,479
Speaker 1: big blocks but like it would be nice, but they

495
00:26:51,480 --> 00:26:55,440
Speaker 1: weren't willing to like dieing in a financial bow right right.

496
00:26:55,520 --> 00:27:01,240
Speaker 1: And the guys that were you know, early early investors,

497
00:27:01,280 --> 00:27:05,679
Speaker 1: the people it was really a mission for they were

498
00:27:05,920 --> 00:27:09,040
Speaker 1: they were kind of ferocious in the market and all

499
00:27:09,080 --> 00:27:11,480
Speaker 1: in and so of course they won't That's what happens

500
00:27:11,480 --> 00:27:14,800
Speaker 1: at a market, right, So people sit on the fence,

501
00:27:14,840 --> 00:27:17,160
Speaker 1: they're not their voice is naturally heard in the market.

502
00:27:18,080 --> 00:27:21,600
Speaker 1: So so I think that's that's one factor. And then

503
00:27:22,240 --> 00:27:28,520
Speaker 1: you know the the custodian effects because with the ETFs

504
00:27:28,520 --> 00:27:31,400
Speaker 1: and the treasury companies and our companies that are fiduciaries

505
00:27:31,520 --> 00:27:35,520
Speaker 1: for they're investors or in a ETF, you know the

506
00:27:35,640 --> 00:27:39,199
Speaker 1: unit holders who are they're just managing the security of

507
00:27:39,240 --> 00:27:42,560
Speaker 1: it basically, right, there's no kind of management discussion on there.

508
00:27:43,000 --> 00:27:46,560
Speaker 1: So I think that they are you know, you probably

509
00:27:46,560 --> 00:27:51,240
Speaker 1: don't want too much in the hands of professional asset

510
00:27:51,280 --> 00:27:55,399
Speaker 1: managers because you want the activist investors. You're looking at

511
00:27:55,440 --> 00:28:00,199
Speaker 1: the network and you know, speaking up or trading if

512
00:28:00,240 --> 00:28:03,280
Speaker 1: they see something coming after rails. But I think ultimately,

513
00:28:04,000 --> 00:28:06,360
Speaker 1: if you know, if one E t F or one

514
00:28:06,440 --> 00:28:11,600
Speaker 1: treasury company try to pick a side in a future

515
00:28:11,680 --> 00:28:16,960
Speaker 1: policy cind of debate. There is feedback loop, which is

516
00:28:16,960 --> 00:28:19,320
Speaker 1: people will sell their units in the biolettle right, so

517
00:28:19,359 --> 00:28:21,920
Speaker 1: if the Lizard assets are the management that drops the

518
00:28:22,000 --> 00:28:24,760
Speaker 1: zero through out of business, right, I think they'll that

519
00:28:24,800 --> 00:28:28,240
Speaker 1: will make them, you know, pay attention that. Maybe that's

520
00:28:28,240 --> 00:28:30,960
Speaker 1: not what people want, so then it's a feedback loop.

521
00:28:31,000 --> 00:28:33,720
Speaker 1: But I do think you don't want too much in ETFs.

522
00:28:34,000 --> 00:28:38,560
Speaker 1: But you know, Bitcoin's distribution helps. And like I say,

523
00:28:38,640 --> 00:28:42,320
Speaker 1: if people care about decentralization, buy some bitcoins, cold store it. Yeah,

524
00:28:42,440 --> 00:28:44,280
Speaker 1: we'll take it out of the ETF. Now you can

525
00:28:44,360 --> 00:28:47,040
Speaker 1: you can fix it. You know. See in bitcoin you

526
00:28:47,040 --> 00:28:51,000
Speaker 1: can't really sort of complain to somebody if you do

527
00:28:51,040 --> 00:28:53,480
Speaker 1: it yourself, right, So if you care about something by

528
00:28:53,600 --> 00:28:55,640
Speaker 1: buying cold store, and of course, as you said, you

529
00:28:55,680 --> 00:28:59,960
Speaker 1: know the people the the cohort that are selling bitcoin

530
00:29:00,920 --> 00:29:03,520
Speaker 1: from a couple of years ago, you know they're doing

531
00:29:03,520 --> 00:29:06,000
Speaker 1: the opposite, right, which is they're selling the coins to

532
00:29:06,040 --> 00:29:08,000
Speaker 1: the softom weve phones. And so the Treasury company I

533
00:29:08,120 --> 00:29:11,000
Speaker 1: use so the ETFs and the Black Croc, I mean

534
00:29:11,160 --> 00:29:15,400
Speaker 1: as well as the ETF Black Croc did something else interesting,

535
00:29:15,680 --> 00:29:20,520
Speaker 1: which is they recently made the position paper suggesting a

536
00:29:20,520 --> 00:29:25,000
Speaker 1: two percent allocation or diversify punts, which is a helpful

537
00:29:26,080 --> 00:29:29,080
Speaker 1: a reference point for people like Sean who are making

538
00:29:29,080 --> 00:29:32,440
Speaker 1: a similar recomdemnation in twenty nineteen. But yeah, they can say, well,

539
00:29:32,480 --> 00:29:34,720
Speaker 1: Black Croc also is saying something similar, right, so right,

540
00:29:35,280 --> 00:29:39,760
Speaker 1: people will in a finance world will feel the Black

541
00:29:39,760 --> 00:29:43,400
Speaker 1: Croc saying it kind of covers them, you know, as

542
00:29:43,680 --> 00:29:46,440
Speaker 1: if that goes wrong, or people will feel comfort that

543
00:29:46,520 --> 00:29:48,280
Speaker 1: there's multiple people recommending.

544
00:29:47,880 --> 00:29:51,720
Speaker 2: It, so then you don't see the centralization from the

545
00:29:51,720 --> 00:29:54,720
Speaker 2: ETFs or the corporations. There's a big problem as long

546
00:29:54,800 --> 00:29:57,600
Speaker 2: as people continue to exercise.

547
00:29:57,200 --> 00:29:59,680
Speaker 3: Their ability to vote with their money, I guess.

548
00:29:59,600 --> 00:30:02,720
Speaker 1: Yeah, But as long as it's not too extreme, I

549
00:30:02,720 --> 00:30:05,760
Speaker 1: think it's it's okay, and it's it's providing a family

550
00:30:05,760 --> 00:30:07,800
Speaker 1: to the market, which is making theme more accessible to

551
00:30:07,880 --> 00:30:10,560
Speaker 1: a wide range of people. And you know, you know

552
00:30:10,560 --> 00:30:13,560
Speaker 1: about the suits thing, now, I think it's a bit

553
00:30:13,560 --> 00:30:15,840
Speaker 1: of a misnoming there because we have a kind of

554
00:30:16,040 --> 00:30:18,880
Speaker 1: simplified view of the world, but actually almost all of

555
00:30:18,880 --> 00:30:22,840
Speaker 1: the money being managed by professional asset managers his money

556
00:30:22,840 --> 00:30:24,800
Speaker 1: of individuals, you know, it's their pension funds are like

557
00:30:24,840 --> 00:30:28,040
Speaker 1: insurance policy. It's a managed like a neutral fund or

558
00:30:28,040 --> 00:30:31,080
Speaker 1: some managed fund, right, and so you know that that

559
00:30:31,320 --> 00:30:35,440
Speaker 1: is good for the individual. So you know with the

560
00:30:35,560 --> 00:30:38,440
Speaker 1: pension fund that got bitcoin in there, you know that

561
00:30:38,520 --> 00:30:42,760
Speaker 1: was actually the transport authority, right, So it's the policeman, firefighters,

562
00:30:42,880 --> 00:30:46,640
Speaker 1: train drivers, all these guys who you know, they're going

563
00:30:46,680 --> 00:30:50,720
Speaker 1: about their lives. They're not focusing on manually investing. Say,

564
00:30:51,640 --> 00:30:53,480
Speaker 1: if there's a bitcoin in there and it improves the

565
00:30:54,120 --> 00:30:57,200
Speaker 1: improves their pension, it's good, right, Yeah.

566
00:30:57,280 --> 00:31:00,000
Speaker 2: Yeah, And I think there's also aligned interest there as well.

567
00:31:00,040 --> 00:31:03,120
Speaker 2: Well if you think about you know, whatever ETF or

568
00:31:03,120 --> 00:31:06,120
Speaker 2: whichever fund. I mean, they want bitcoin to remain valuable.

569
00:31:06,280 --> 00:31:08,720
Speaker 2: Otherwise if they lose their business, and if you break

570
00:31:08,760 --> 00:31:11,840
Speaker 2: the decentralization, then bitcoin loses the value and then they're

571
00:31:11,840 --> 00:31:13,640
Speaker 2: sort of shooting theirselves in the foot a little.

572
00:31:13,400 --> 00:31:13,920
Speaker 1: Bit, right.

573
00:31:14,200 --> 00:31:16,400
Speaker 2: So from that standpoint, it seems like we're at least

574
00:31:16,440 --> 00:31:19,880
Speaker 2: aligned economically to keep it decentralized and secure.

575
00:31:20,080 --> 00:31:20,280
Speaker 1: Yep.

576
00:31:21,640 --> 00:31:25,120
Speaker 2: What about So we have been having almost another sort

577
00:31:25,120 --> 00:31:27,520
Speaker 2: of not really a block size war debate, but there's

578
00:31:27,520 --> 00:31:31,280
Speaker 2: been a debate going on recently about the block size

579
00:31:33,240 --> 00:31:37,719
Speaker 2: was that the op net oh yeah, Maturn and you know,

580
00:31:38,320 --> 00:31:41,360
Speaker 2: expanding that obviously, then there's like, well, how about we

581
00:31:41,400 --> 00:31:44,640
Speaker 2: have a different the nots you know, protocol taken off.

582
00:31:45,200 --> 00:31:47,120
Speaker 2: How do you look at something like that, I mean,

583
00:31:47,200 --> 00:31:48,880
Speaker 2: do you think that there should be something done or

584
00:31:48,920 --> 00:31:50,800
Speaker 2: you're also sort of the same thing where like let

585
00:31:50,800 --> 00:31:52,680
Speaker 2: the market sort of decide how that plays out.

586
00:31:53,200 --> 00:31:58,520
Speaker 1: Yeah, I mean it's it's kind of slide effects of

587
00:32:00,320 --> 00:32:04,480
Speaker 1: censorship resistant permissionless network is you can't stop people. They

588
00:32:04,480 --> 00:32:08,000
Speaker 1: can do whatever they want, get paid the fees, they

589
00:32:08,080 --> 00:32:10,280
Speaker 1: can fill out what cat pictures if they really want to.

590
00:32:10,600 --> 00:32:15,400
Speaker 1: Right now, that's kind of disappointing because there are uneven

591
00:32:15,400 --> 00:32:20,200
Speaker 1: wealth distribution in the world and the best, the hardest

592
00:32:20,480 --> 00:32:25,800
Speaker 1: and strongest asset protection assurances from holding directs on chain

593
00:32:25,920 --> 00:32:28,680
Speaker 1: utexsos in hardble world or something right, so, you know,

594
00:32:28,760 --> 00:32:32,680
Speaker 1: outside of the bigcoin space, your options are like offshore banking,

595
00:32:33,360 --> 00:32:37,040
Speaker 1: maybe real estate in Florida, you know, life insurance rappers.

596
00:32:37,040 --> 00:32:40,680
Speaker 1: There are more things that people do for asset protection purposes,

597
00:32:40,680 --> 00:32:43,240
Speaker 1: and bitcoin lowers the barrier to entry to that and

598
00:32:44,000 --> 00:32:45,760
Speaker 1: being able to protect your assets is a big deal

599
00:32:45,800 --> 00:32:51,560
Speaker 1: in some parts of the culture world, right so you know, ultimately,

600
00:32:51,960 --> 00:32:59,840
Speaker 1: if in global terms, wealthy people having fun with NFTs

601
00:32:59,840 --> 00:33:03,239
Speaker 1: and things are clogging up the chain with you know,

602
00:33:03,800 --> 00:33:09,000
Speaker 1: the latest tad thing, they're effectively pricing out some emerging

603
00:33:09,040 --> 00:33:11,400
Speaker 1: market people from owning a Ugexso so they're going to

604
00:33:11,480 --> 00:33:14,200
Speaker 1: get to be you know, they'll have to do it

605
00:33:14,200 --> 00:33:16,000
Speaker 1: in a less secure way, right, They'll have to use

606
00:33:16,040 --> 00:33:19,240
Speaker 1: a custodian or something else. So that's kind of unfortunate.

607
00:33:19,320 --> 00:33:21,640
Speaker 1: And of course the thing that's creating that is it's

608
00:33:21,640 --> 00:33:25,400
Speaker 1: hard to scale blockchain the technological limits which people are

609
00:33:25,400 --> 00:33:27,440
Speaker 1: trying to improve, but at the moment, it is what

610
00:33:27,480 --> 00:33:30,320
Speaker 1: it is. So yeah, I mean, I think you you

611
00:33:30,360 --> 00:33:33,840
Speaker 1: can't really do that much about it. There are some

612
00:33:34,200 --> 00:33:37,600
Speaker 1: kind of loose things in the network that make it

613
00:33:37,640 --> 00:33:41,280
Speaker 1: more work to bypass the sort of anti spam like

614
00:33:41,600 --> 00:33:45,400
Speaker 1: common sense limits in the network. The network healthy, but

615
00:33:45,640 --> 00:33:47,760
Speaker 1: you know, it doesn't do that much because they can

616
00:33:49,720 --> 00:33:53,360
Speaker 1: use a minor like a pool or a minor's accelerate API,

617
00:33:53,560 --> 00:33:58,400
Speaker 1: they can bypass all the policy limits. So and then

618
00:33:58,400 --> 00:34:00,000
Speaker 1: the other funny thing about the opera ton is that

619
00:34:00,000 --> 00:34:03,800
Speaker 1: it's not what people are using. They're using some other

620
00:34:04,160 --> 00:34:06,760
Speaker 1: scripts like tap route script because they get seventy five

621
00:34:06,800 --> 00:34:10,080
Speaker 1: percent discount on the fees do that. So actually the Operaturn

622
00:34:10,080 --> 00:34:13,200
Speaker 1: has not been used for the images anymore. So the

623
00:34:13,280 --> 00:34:16,480
Speaker 1: debate was kind of a little bit missold in terms

624
00:34:16,520 --> 00:34:21,279
Speaker 1: of what it was about. It's actually about some kind

625
00:34:21,280 --> 00:34:24,920
Speaker 1: of layer to anchor transaction that was hitting the limit,

626
00:34:25,840 --> 00:34:27,920
Speaker 1: which was I think eighty bytes and they were like

627
00:34:27,960 --> 00:34:29,879
Speaker 1: one hundred and twenty eight, so they didn't quite fit.

628
00:34:30,719 --> 00:34:33,399
Speaker 1: And they didn't want to use an x area because

629
00:34:33,400 --> 00:34:37,239
Speaker 1: they care about decentralization, because their anchor transaction doesn't make

630
00:34:37,320 --> 00:34:39,160
Speaker 1: it in they could lose money on a layer to you.

631
00:34:39,719 --> 00:34:42,280
Speaker 1: They really wanted it to be standard in the network,

632
00:34:42,760 --> 00:34:46,680
Speaker 1: so they did some other trick, which is users up memory.

633
00:34:47,040 --> 00:34:51,120
Speaker 1: So it's not ideal anyway, so kind I think still

634
00:34:51,120 --> 00:34:53,319
Speaker 1: a little bit in progress, but probably they'll just do

635
00:34:53,480 --> 00:34:58,000
Speaker 1: some kind of simple change to accommodate that. I think

636
00:34:58,000 --> 00:35:02,239
Speaker 1: there's like a little bit of a blown drama. I

637
00:35:02,320 --> 00:35:03,799
Speaker 1: think the things you bear in minds is that you

638
00:35:03,840 --> 00:35:08,200
Speaker 1: can't do anything about it, right, say, it's a side

639
00:35:08,200 --> 00:35:10,160
Speaker 1: effect of permissionlessness.

640
00:35:09,520 --> 00:35:13,160
Speaker 2: Right, Yeah, Well they're making a change to allow more

641
00:35:13,160 --> 00:35:16,360
Speaker 2: of it, right or not? Was then making a change

642
00:35:16,400 --> 00:35:17,680
Speaker 2: to be able to censor.

643
00:35:17,400 --> 00:35:20,000
Speaker 1: It, right, Yeah. I mean I think the debate is

644
00:35:20,040 --> 00:35:25,120
Speaker 1: because even you know, there's there's two types of a

645
00:35:25,200 --> 00:35:28,400
Speaker 1: rule in the net. One is the sort of node

646
00:35:28,440 --> 00:35:32,520
Speaker 1: policy or minor policy, and that you know that the

647
00:35:32,600 --> 00:35:35,040
Speaker 1: node can say, well I don't I don't relay that,

648
00:35:35,239 --> 00:35:39,799
Speaker 1: or I won't mind that. But there's the actual consensus rule,

649
00:35:39,800 --> 00:35:42,200
Speaker 1: which is the rule that mass for whether a transaction

650
00:35:42,320 --> 00:35:46,160
Speaker 1: or a block is balad that one you can bypass

651
00:35:46,200 --> 00:35:47,560
Speaker 1: by getting you know, you can get to that one

652
00:35:47,600 --> 00:35:49,680
Speaker 1: by going directly to a minor or to a poll,

653
00:35:50,160 --> 00:35:52,040
Speaker 1: and so even if not, you know, people can still

654
00:35:52,080 --> 00:35:54,400
Speaker 1: bypass it, and that's what they're doing, right, Yeah, So

655
00:35:55,560 --> 00:35:58,279
Speaker 1: it's it's not that you know what I think the

656
00:35:58,320 --> 00:36:01,520
Speaker 1: problem is people like are annoyed about the spy, so

657
00:36:01,560 --> 00:36:04,640
Speaker 1: they want to fight back, yeah, and so like, why

658
00:36:04,680 --> 00:36:06,760
Speaker 1: don't we do this even if it's not very effective,

659
00:36:06,840 --> 00:36:09,960
Speaker 1: they want to yeah, push back, right. And then the

660
00:36:10,040 --> 00:36:11,920
Speaker 1: other kind of argument is, well it doesn't you know,

661
00:36:12,000 --> 00:36:14,400
Speaker 1: people are already bypassing it. It won't really have much effect.

662
00:36:14,480 --> 00:36:17,560
Speaker 1: So you get this kind of you know, no clear

663
00:36:18,520 --> 00:36:21,560
Speaker 1: strategy is going to win, and alms race stuck the thing, right,

664
00:36:21,640 --> 00:36:23,359
Speaker 1: So it's kind of a trade off.

665
00:36:23,480 --> 00:36:26,760
Speaker 2: I don't I don't know the technical detail and technical

666
00:36:27,920 --> 00:36:30,879
Speaker 2: capabilities to really sort of understand it, but I sort

667
00:36:30,920 --> 00:36:32,440
Speaker 2: of look at it in the same way, which is

668
00:36:32,480 --> 00:36:34,319
Speaker 2: sort of like the free market can sort of win,

669
00:36:34,400 --> 00:36:37,080
Speaker 2: and like, right now the block space is pretty empty. Yeah,

670
00:36:37,239 --> 00:36:42,080
Speaker 2: and if economic transactions aren't more valuable than spam, then

671
00:36:42,200 --> 00:36:46,080
Speaker 2: that's a problem. And if someone's willing to pay for it,

672
00:36:46,120 --> 00:36:49,120
Speaker 2: is it spam, because then you're trying to say someone else,

673
00:36:50,480 --> 00:36:52,600
Speaker 2: someone else's value is not valuable.

674
00:36:52,600 --> 00:36:56,440
Speaker 1: Right, right, Well, I mean, yeah, I thought I think

675
00:36:56,440 --> 00:36:59,440
Speaker 1: the free market, does you know, does resolve it in

676
00:36:59,440 --> 00:37:02,720
Speaker 1: a way, because because there are times when the bitcoin

677
00:37:02,800 --> 00:37:06,879
Speaker 1: transaction fees are very high and then they don't want

678
00:37:06,880 --> 00:37:09,200
Speaker 1: to know, they get pushed down, right, these cases get

679
00:37:09,200 --> 00:37:13,239
Speaker 1: pushed down, and so I think the you know, the

680
00:37:13,280 --> 00:37:15,920
Speaker 1: network kind of oscillates between low and high fees. So

681
00:37:16,120 --> 00:37:19,400
Speaker 1: probably you know, when when there's a big run up

682
00:37:19,400 --> 00:37:22,640
Speaker 1: in bitcoin price, the traders tend to push their fees

683
00:37:22,719 --> 00:37:24,360
Speaker 1: up because they don't they don't really care what the

684
00:37:24,360 --> 00:37:27,520
Speaker 1: fees are because they're paying maybe ten their susplints to

685
00:37:27,560 --> 00:37:32,960
Speaker 1: an exchange commission and the fee is nominal, irrelevant, and

686
00:37:32,960 --> 00:37:34,359
Speaker 1: they want to get in the next block because they're

687
00:37:34,360 --> 00:37:36,359
Speaker 1: trying to trade, so they'll just say what's the fee,

688
00:37:36,360 --> 00:37:38,040
Speaker 1: and there's pay twice as much, right, and then they'll

689
00:37:38,040 --> 00:37:40,720
Speaker 1: just quite push the fees up. So that's really the driver.

690
00:37:41,600 --> 00:37:46,719
Speaker 1: But it goes through cycles. So yeah, I mean, I

691
00:37:46,760 --> 00:37:50,320
Speaker 1: don't know, this was just a normal drama, normal drama

692
00:37:50,440 --> 00:37:56,120
Speaker 1: when the Treasury company angle is an interesting trend as well.

693
00:37:56,160 --> 00:37:58,440
Speaker 1: There was an advantage of what days ago here by

694
00:37:58,440 --> 00:38:01,160
Speaker 1: stay at the conference where I had a number of

695
00:38:01,200 --> 00:38:06,759
Speaker 1: the Treasury companies speaking like panels talking about their company experiences.

696
00:38:07,560 --> 00:38:10,720
Speaker 1: And apparently there are at this point eighty such companies

697
00:38:10,760 --> 00:38:13,719
Speaker 1: globally of various sizes. You now, if you if you

698
00:38:13,760 --> 00:38:15,719
Speaker 1: ask them, it's a name, and they're probably to name

699
00:38:15,800 --> 00:38:18,520
Speaker 1: like five or ten, right, But they're apparently anymore in

700
00:38:18,560 --> 00:38:21,879
Speaker 1: different parts of the world. So it's it's a growing phenomenon.

701
00:38:22,880 --> 00:38:27,719
Speaker 1: And then as in effect, it's been something people are

702
00:38:27,719 --> 00:38:32,080
Speaker 1: grappling with. So people from a bitcoin ecosystem, like bitcoin holders,

703
00:38:32,760 --> 00:38:35,480
Speaker 1: some of them are skeptical like, well, why why can

704
00:38:35,560 --> 00:38:38,600
Speaker 1: a company charge a premium above the bitcoin price? You know,

705
00:38:38,600 --> 00:38:40,799
Speaker 1: they'll say, well, you know, why are you paying two

706
00:38:40,840 --> 00:38:44,439
Speaker 1: hundred thousand dollars for a bitcoin aside this company and

707
00:38:44,719 --> 00:38:48,040
Speaker 1: the traditional finance people who are used to valuing companies

708
00:38:48,040 --> 00:38:51,480
Speaker 1: based on cash flow, some of those are also confused

709
00:38:51,520 --> 00:38:54,440
Speaker 1: to say, well, why isn't the value of the bitcoin

710
00:38:54,480 --> 00:38:57,680
Speaker 1: on the balance sheet? You know, then the asset value

711
00:38:57,840 --> 00:39:01,840
Speaker 1: like one multiple, right, plus the enterprise value, and so

712
00:39:01,840 --> 00:39:03,920
Speaker 1: I think things some of the people are still getting

713
00:39:03,920 --> 00:39:08,960
Speaker 1: to grips with, and I've been you know, involved in

714
00:39:09,120 --> 00:39:11,960
Speaker 1: trading them for a few years. They got interested in

715
00:39:12,800 --> 00:39:16,120
Speaker 1: sort of supporting micro strategy early on because you know,

716
00:39:16,400 --> 00:39:22,080
Speaker 1: initially they just took their investment to protect against inflation eroding.

717
00:39:22,160 --> 00:39:26,280
Speaker 1: There they had half a billion cash reserves from the company,

718
00:39:27,160 --> 00:39:30,200
Speaker 1: and during COVID they were worried that it was just

719
00:39:30,200 --> 00:39:32,040
Speaker 1: shrinking at ten percent a year and there's nothing they

720
00:39:32,040 --> 00:39:36,160
Speaker 1: could do. The treasury rates were really low, so they

721
00:39:36,239 --> 00:39:38,080
Speaker 1: hit on the idea of using bitcoin. But after that

722
00:39:38,120 --> 00:39:41,359
Speaker 1: they turned around it keept buying more and more, right,

723
00:39:41,840 --> 00:39:45,040
Speaker 1: So it started this sort of exploration of phenomenon. So

724
00:39:45,120 --> 00:39:48,520
Speaker 1: I invested in it partly because I wanted to support

725
00:39:48,600 --> 00:39:51,520
Speaker 1: what Sailor was doing, which was he was sort of

726
00:39:51,560 --> 00:39:54,480
Speaker 1: trying to orange pill the corporate world, like the company

727
00:39:54,480 --> 00:39:57,720
Speaker 1: world so using bitcoin as a reserve asset, a company

728
00:39:57,760 --> 00:40:02,880
Speaker 1: reserve asset, and you know, then when you are trading

729
00:40:02,920 --> 00:40:06,680
Speaker 1: those things, you try to figure out, like economically what's

730
00:40:06,719 --> 00:40:12,000
Speaker 1: going on, and you know you're by buying it a premium,

731
00:40:13,040 --> 00:40:15,760
Speaker 1: you've got to form a uh, if you're a value investor,

732
00:40:15,800 --> 00:40:18,600
Speaker 1: which is my outward, you want to feel that that

733
00:40:18,680 --> 00:40:22,520
Speaker 1: premium is defensible. Why is it there? Is it going

734
00:40:22,560 --> 00:40:24,120
Speaker 1: to hold onto that premium long time or is it

735
00:40:24,120 --> 00:40:24,680
Speaker 1: going to collapse?

736
00:40:24,880 --> 00:40:25,120
Speaker 3: Right?

737
00:40:25,280 --> 00:40:26,800
Speaker 1: Is it like a bubble and it's going to collapse.

738
00:40:26,920 --> 00:40:31,160
Speaker 1: And so the way I was able to persuade myself

739
00:40:31,160 --> 00:40:34,799
Speaker 1: and it's safe to invest in two times premium is

740
00:40:35,080 --> 00:40:36,600
Speaker 1: you know, you can look at it historically, like it

741
00:40:36,880 --> 00:40:38,640
Speaker 1: bounces between I don't know, maybe one and a half

742
00:40:38,680 --> 00:40:40,239
Speaker 1: and three and a half in a bear market, but

743
00:40:40,239 --> 00:40:44,919
Speaker 1: it's a board market and maybe between you know, one

744
00:40:44,920 --> 00:40:47,880
Speaker 1: point five and two and three you know, in the

745
00:40:47,960 --> 00:40:52,080
Speaker 1: last six months probably, And so you can look at

746
00:40:52,080 --> 00:40:54,319
Speaker 1: the range and say, well, it's lower than the middle

747
00:40:54,360 --> 00:40:55,719
Speaker 1: of the range, so that you could buy some, but

748
00:40:55,800 --> 00:40:58,400
Speaker 1: that's just super expensive. Yeah, I mean, it's just like

749
00:40:58,520 --> 00:41:00,440
Speaker 1: looking at the market. But in this it should be

750
00:41:00,480 --> 00:41:02,920
Speaker 1: like a fundamental reason why does it even have a pinion?

751
00:41:03,560 --> 00:41:07,160
Speaker 1: And so I think there's a reason, which is that

752
00:41:07,719 --> 00:41:12,720
Speaker 1: it's generating yield, so not in a normal interest sense,

753
00:41:12,960 --> 00:41:16,399
Speaker 1: but they are increasing the bitcoin per share and annualized rate.

754
00:41:16,760 --> 00:41:21,279
Speaker 1: And in twenty twenty four, micro Strategy achieve seventy three

755
00:41:21,400 --> 00:41:25,640
Speaker 1: and a half percent increase in bitcoin per share and

756
00:41:25,719 --> 00:41:29,399
Speaker 1: in twenty twenty five years today he did some more.

757
00:41:29,480 --> 00:41:32,680
Speaker 1: So it's over two times from January twenty twenty four.

758
00:41:33,360 --> 00:41:35,800
Speaker 1: And so my argument is, well, if you would or

759
00:41:36,160 --> 00:41:39,399
Speaker 1: micro Strategy in January twenty twenty four, it's now paid

760
00:41:39,400 --> 00:41:39,959
Speaker 1: for that risk.

761
00:41:40,440 --> 00:41:42,920
Speaker 3: Now it's you know, that's the deeds to cover a metric.

762
00:41:43,160 --> 00:41:45,759
Speaker 1: Yeah, so that that was the kind that thinking was

763
00:41:45,760 --> 00:41:47,640
Speaker 1: a genesis of that, and I tried to put like

764
00:41:47,680 --> 00:41:49,320
Speaker 1: a calculation on it. Well, you know, what are you

765
00:41:49,400 --> 00:41:52,120
Speaker 1: really saying? Well, it's just how many miles? How many

766
00:41:52,160 --> 00:41:56,680
Speaker 1: days does it take until the yield catches up with

767
00:41:56,760 --> 00:41:59,600
Speaker 1: the current en nerve And so you can look at

768
00:41:59,600 --> 00:42:03,000
Speaker 1: that core is saying well, in Macrostrategor's case, it was

769
00:42:03,040 --> 00:42:06,880
Speaker 1: about eighteen months. It's moving around quite quickly. Right, So

770
00:42:06,960 --> 00:42:08,640
Speaker 1: if you you know, if you buy it and you

771
00:42:08,719 --> 00:42:11,759
Speaker 1: think in eighteen months, there's more time to run because

772
00:42:11,800 --> 00:42:14,879
Speaker 1: like the other part of the thinking is that when

773
00:42:14,920 --> 00:42:20,200
Speaker 1: bitcoin is fully adopted, you know it reaches this you

774
00:42:20,200 --> 00:42:23,320
Speaker 1: know how Finney's two thousand and nine bitcoin could be

775
00:42:23,400 --> 00:42:27,720
Speaker 1: addressable market two hundred trillion. I think we're starting to

776
00:42:27,760 --> 00:42:32,040
Speaker 1: see that becoming much much closer to reality, and so

777
00:42:32,480 --> 00:42:34,919
Speaker 1: in buying this so and I think once bitcoin does

778
00:42:34,960 --> 00:42:38,640
Speaker 1: get there, the treasury strategy doesn't work nearly as well.

779
00:42:39,239 --> 00:42:42,480
Speaker 1: Where mostly but the effect is mostly mostly an arbitrage

780
00:42:42,520 --> 00:42:47,960
Speaker 1: on the fact that bitcoin is increasing my adoption very

781
00:42:48,040 --> 00:42:51,320
Speaker 1: rapidly and in four year periods. But once it's fully adopted,

782
00:42:52,040 --> 00:42:54,239
Speaker 1: it doesn't have you know, if the dollar value won't

783
00:42:54,239 --> 00:42:58,319
Speaker 1: increase that fast, more like an inflation hedge. Right, So

784
00:42:58,400 --> 00:43:02,160
Speaker 1: my thinking is just conservatively, maybe it will do better.

785
00:43:02,160 --> 00:43:06,439
Speaker 1: But conservatively, let's assume that the MNF drops to one.

786
00:43:07,280 --> 00:43:10,720
Speaker 1: Once that's happened, maybe that's in a couple of decades.

787
00:43:10,719 --> 00:43:12,719
Speaker 1: In how it takes. So the conservatives like, let's say

788
00:43:12,719 --> 00:43:15,239
Speaker 1: it takes a decade, it will drop to one. So

789
00:43:15,880 --> 00:43:19,120
Speaker 1: if you're buying it two, if it doesn't achieve any years,

790
00:43:19,200 --> 00:43:21,680
Speaker 1: you can lose half your money by maturity rate in

791
00:43:21,719 --> 00:43:26,880
Speaker 1: bitcoin terms. But that adoption is not you know, not

792
00:43:26,880 --> 00:43:29,920
Speaker 1: going to stop now in most bitcoins opinion, right, So

793
00:43:30,080 --> 00:43:33,600
Speaker 1: you say, well, if if it you know, it continues

794
00:43:33,600 --> 00:43:35,960
Speaker 1: its adoption and it reaches this level, there's like a

795
00:43:36,400 --> 00:43:39,040
Speaker 1: one hundred times bi con press appreciation between here and

796
00:43:39,080 --> 00:43:44,600
Speaker 1: there and a few market cycles, so probably you know,

797
00:43:44,719 --> 00:43:48,200
Speaker 1: you will get you know, it will cover the two

798
00:43:48,200 --> 00:43:51,640
Speaker 1: times p m F you know, in the next year

799
00:43:51,719 --> 00:43:55,600
Speaker 1: or two, and then then you're covered. And the rest

800
00:43:55,600 --> 00:43:58,120
Speaker 1: of it is upside with organization.

801
00:43:59,600 --> 00:44:02,680
Speaker 2: So the my our kits are discounting mechanisms, right, so

802
00:44:02,719 --> 00:44:04,560
Speaker 2: we're trying to buy something cheaper today than it will

803
00:44:04,560 --> 00:44:06,640
Speaker 2: be in the future. And so what you're saying is

804
00:44:06,880 --> 00:44:08,960
Speaker 2: even though the m NAV we're buying, we're paying more

805
00:44:09,000 --> 00:44:13,680
Speaker 2: for the bitcoin today at the rate of their continue

806
00:44:13,719 --> 00:44:17,160
Speaker 2: to appreciate or acquisition of more bitcoin, then it'll cover

807
00:44:17,239 --> 00:44:19,040
Speaker 2: and then we'll be in the positive in the future.

808
00:44:19,080 --> 00:44:21,160
Speaker 2: So we are buying a discount today based off or

809
00:44:21,200 --> 00:44:23,719
Speaker 2: it will be. But then we see that days to

810
00:44:23,880 --> 00:44:25,759
Speaker 2: cover number very quite a bit.

811
00:44:26,080 --> 00:44:26,800
Speaker 3: So then why.

812
00:44:26,680 --> 00:44:31,800
Speaker 1: Yeah, well, it's the I mean, the market price is changing,

813
00:44:32,280 --> 00:44:35,279
Speaker 1: so you know that that will directly do it. It's

814
00:44:35,360 --> 00:44:42,759
Speaker 1: like a little bit fautilty and it will you know

815
00:44:43,000 --> 00:44:44,920
Speaker 1: it will fall. I mean at the moment, there's a

816
00:44:44,960 --> 00:44:48,640
Speaker 1: short seller from a short march strategy, Jim Channels in

817
00:44:48,680 --> 00:44:52,640
Speaker 1: a short sellar ye, And I mean he's he's not

818
00:44:53,040 --> 00:44:57,600
Speaker 1: just straight out shortening be dangerous. He is long bit.

819
00:44:57,680 --> 00:44:59,960
Speaker 1: I mean he's a dollar investor, but he's long bitcoin

820
00:45:00,040 --> 00:45:01,799
Speaker 1: a short mac strategy. So he's trying to compress the

821
00:45:01,880 --> 00:45:04,640
Speaker 1: M and F. I think that's as bad timing because

822
00:45:04,680 --> 00:45:08,319
Speaker 1: it was already low. And of course, you know, Mike

823
00:45:08,360 --> 00:45:10,760
Speaker 1: strategy is not standing still. Right if I'm more bitcoin,

824
00:45:10,840 --> 00:45:13,480
Speaker 1: it was five hundred thousand and it's five and eighty,

825
00:45:13,800 --> 00:45:16,120
Speaker 1: it'll be six hundred you know soon enough. Yeah, And

826
00:45:16,120 --> 00:45:21,799
Speaker 1: that's just adding pressure against Channis is short, right, So

827
00:45:21,840 --> 00:45:23,880
Speaker 1: I think you left to get out of the way

828
00:45:24,160 --> 00:45:29,360
Speaker 1: sooner or later and then say that. So that's you know,

829
00:45:29,400 --> 00:45:30,880
Speaker 1: that's the kind of a short term. There were a

830
00:45:30,880 --> 00:45:33,480
Speaker 1: couple of other short funds that tried it. I think

831
00:45:33,480 --> 00:45:35,960
Speaker 1: one of them went under from it was Heisenberg Capital

832
00:45:36,160 --> 00:45:40,560
Speaker 1: and then Citrin Research and then channel Us. Yeah, so

833
00:45:41,800 --> 00:45:43,399
Speaker 1: I think I think like at least one of them

834
00:45:43,400 --> 00:45:46,080
Speaker 1: blew out by doing it. It's a very dangerous doing

835
00:45:46,080 --> 00:45:52,520
Speaker 1: anything short short and bitcoin very dangerous shorten M and

836
00:45:52,600 --> 00:45:56,120
Speaker 1: I also quite dangerous because it's elastic because you just said,

837
00:45:56,120 --> 00:45:58,160
Speaker 1: you know, it can be three, it can be two.

838
00:45:58,280 --> 00:46:02,440
Speaker 1: That's a big margin, right, So you're shorting some kind

839
00:46:02,480 --> 00:46:05,160
Speaker 1: of Bitcoin derivative effects. And it's all very bold.

840
00:46:04,960 --> 00:46:07,680
Speaker 2: Off, which is not a lot different than traditional stocks

841
00:46:07,680 --> 00:46:10,040
Speaker 2: with like a PE ratio. They could go from forty

842
00:46:10,080 --> 00:46:11,680
Speaker 2: seven to fifty two or something like that.

843
00:46:11,800 --> 00:46:14,359
Speaker 1: It's quite analogous the PE ratio in a way. Yeah,

844
00:46:14,640 --> 00:46:16,640
Speaker 1: and then the other phenomena is that you see that

845
00:46:17,000 --> 00:46:20,799
Speaker 1: different strategy companies have a different regime. So you can

846
00:46:20,800 --> 00:46:26,759
Speaker 1: see that Meta Planet and or Japanese hotel company one,

847
00:46:27,640 --> 00:46:31,359
Speaker 1: they have a very rapid rate of bitcoin appreciation, and

848
00:46:31,680 --> 00:46:35,720
Speaker 1: the Blockchain Group, a newer one in Paris software company.

849
00:46:36,880 --> 00:46:41,680
Speaker 1: It's LPG is the ticker, and both Metaplanet and ORPG

850
00:46:43,120 --> 00:46:46,480
Speaker 1: are increasing the Bitcoin for share much more rapidly. And

851
00:46:46,600 --> 00:46:50,279
Speaker 1: so you know, I was so you know there m

852
00:46:50,360 --> 00:46:54,440
Speaker 1: nev on Metaplanet has been between five and tend it's

853
00:46:54,520 --> 00:46:58,880
Speaker 1: much higher they micro strategies maybe like two to three.

854
00:46:59,160 --> 00:47:03,200
Speaker 1: And so you know, in buying Metal Planet at five,

855
00:47:03,239 --> 00:47:05,280
Speaker 1: which is lower endo the range, you kind of feel

856
00:47:05,280 --> 00:47:08,360
Speaker 1: it like what that's a big multiple is it is

857
00:47:08,400 --> 00:47:09,960
Speaker 1: it safe or is it going to like fall to

858
00:47:10,320 --> 00:47:12,080
Speaker 1: you know two or three like motor strategy and it's

859
00:47:12,120 --> 00:47:14,879
Speaker 1: over shot now, right, And so that was my kind

860
00:47:14,920 --> 00:47:17,799
Speaker 1: of wrestling with, like should I be buying this or

861
00:47:18,040 --> 00:47:20,560
Speaker 1: is it already over plowing? Right? And so then I

862
00:47:20,600 --> 00:47:23,560
Speaker 1: got onto the months to cover and I realized that

863
00:47:23,880 --> 00:47:26,480
Speaker 1: it's you know, it's months to pay for it. Even

864
00:47:26,520 --> 00:47:29,799
Speaker 1: that big premium premium was it was about three point

865
00:47:29,880 --> 00:47:33,319
Speaker 1: three times at the time, but they had doubled them

866
00:47:33,320 --> 00:47:37,120
Speaker 1: a bitron on a balance sheet in one quarter, so

867
00:47:37,200 --> 00:47:40,520
Speaker 1: now it's just sixteen times annualized. Yeah, so I mean, okay,

868
00:47:40,600 --> 00:47:43,080
Speaker 1: maybe that's a short term effect and it's going to

869
00:47:43,120 --> 00:47:46,200
Speaker 1: average a bit lower, but it's really aggressive. And say

870
00:47:46,239 --> 00:47:49,120
Speaker 1: the months to cover was only like five or six months.

871
00:47:49,520 --> 00:47:51,080
Speaker 1: So when you look at it like that, you know,

872
00:47:51,120 --> 00:47:53,520
Speaker 1: as long as they keep something close to that track,

873
00:47:54,480 --> 00:47:57,000
Speaker 1: buying at five to even five times or a three

874
00:47:57,000 --> 00:48:00,160
Speaker 1: point three at the time, it's actually you know, real

875
00:48:00,239 --> 00:48:03,480
Speaker 1: through that risk. And so that that is a useful

876
00:48:05,080 --> 00:48:07,319
Speaker 1: metric to say You've got to overlay it with your

877
00:48:07,400 --> 00:48:10,600
Speaker 1: risk perception of yeah, you know, will they continue, is

878
00:48:10,600 --> 00:48:13,960
Speaker 1: it reputable what they're doing? And are they execution focused right,

879
00:48:14,080 --> 00:48:16,360
Speaker 1: And some of these guys are like, Sailor is amazing

880
00:48:16,360 --> 00:48:16,960
Speaker 1: at execution.

881
00:48:17,120 --> 00:48:17,359
Speaker 3: Yeah.

882
00:48:17,719 --> 00:48:19,960
Speaker 1: Just when you think he's done, he finds another billion

883
00:48:20,000 --> 00:48:23,160
Speaker 1: from something else or seventeen million. Yeah, so never bet

884
00:48:23,320 --> 00:48:25,840
Speaker 1: it's Sailor buy more bitcoin. Basically is the end message

885
00:48:25,840 --> 00:48:29,720
Speaker 1: that they have delivered repeatedly to the markets. But you're like, okay, yeah,

886
00:48:29,760 --> 00:48:31,480
Speaker 1: but Channels has given it a go, so good luck

887
00:48:31,520 --> 00:48:31,879
Speaker 1: to the guy.

888
00:48:32,040 --> 00:48:33,120
Speaker 3: And what about all BG.

889
00:48:33,280 --> 00:48:36,319
Speaker 2: So what we're seeing also now is if Sailor sort

890
00:48:36,360 --> 00:48:39,520
Speaker 2: of created this strategy the name of the company, and

891
00:48:39,520 --> 00:48:41,879
Speaker 2: now he's given the strategy other people and they're following it,

892
00:48:42,760 --> 00:48:44,759
Speaker 2: and then we're starting to see different versions of it,

893
00:48:44,880 --> 00:48:47,239
Speaker 2: variations of it. So All BEG is doing it more

894
00:48:47,239 --> 00:48:48,520
Speaker 2: on like a bit bond.

895
00:48:49,200 --> 00:48:52,120
Speaker 1: Yeah. Actually it's quite innovative for what they've done. So,

896
00:48:52,600 --> 00:48:54,920
Speaker 1: I mean, I think sometimes what people are doing is

897
00:48:54,960 --> 00:49:02,440
Speaker 1: because the market available market mechanisms are different in different jurisdictions.

898
00:49:02,560 --> 00:49:05,080
Speaker 1: So in the case the mess Planet there using moving

899
00:49:05,080 --> 00:49:08,000
Speaker 1: strip warrants because they don't have an ATM and it

900
00:49:08,040 --> 00:49:10,640
Speaker 1: has a similar effect. Apparently they don't have a lot

901
00:49:10,680 --> 00:49:14,520
Speaker 1: of debt, so it's basically at the market, and in

902
00:49:14,760 --> 00:49:17,719
Speaker 1: the French one it did something interesting, which is is

903
00:49:17,719 --> 00:49:21,560
Speaker 1: a convertible note technically, but it's a bitcoin basis one.

904
00:49:22,400 --> 00:49:25,319
Speaker 1: So the interesting thing there is they don't really have

905
00:49:25,360 --> 00:49:28,759
Speaker 1: a debt ratio because what they'll do is they will

906
00:49:28,800 --> 00:49:32,760
Speaker 1: accept bitcoin in kind, or you could send in euros

907
00:49:32,760 --> 00:49:36,160
Speaker 1: and our buy bitcoin and then you have a like

908
00:49:36,200 --> 00:49:40,040
Speaker 1: with other conversed convertibles, as a conversion premium. If it

909
00:49:40,080 --> 00:49:42,560
Speaker 1: does up thirty percent, then you have the option to convert.

910
00:49:43,040 --> 00:49:46,200
Speaker 1: And if it you know, if it reaches maturity and

911
00:49:46,239 --> 00:49:48,920
Speaker 1: it doesn't reach the conversion premium, they don't already have

912
00:49:48,920 --> 00:49:50,719
Speaker 1: a credit risk because they just give the bitcoin back

913
00:49:51,000 --> 00:49:53,480
Speaker 1: and then they put the bitcoin in a separate special

914
00:49:53,520 --> 00:49:58,960
Speaker 1: company ring fenced and the in custody of an independent custodian,

915
00:49:59,640 --> 00:50:05,400
Speaker 1: and so they can actually sell a lot more convertible notes.

916
00:50:06,200 --> 00:50:09,439
Speaker 1: So you know, with with the euro or the dollar

917
00:50:09,480 --> 00:50:13,200
Speaker 1: basis convertible note, the company is sort of moderating how

918
00:50:13,239 --> 00:50:17,000
Speaker 1: much debt ratio they take on, and you know, micro

919
00:50:17,080 --> 00:50:20,200
Speaker 1: Strategy has said they want to keep it no more

920
00:50:20,239 --> 00:50:24,080
Speaker 1: than twenty to thirty percent leverage, so one point two

921
00:50:24,160 --> 00:50:27,080
Speaker 1: to one point three, and of course they can moderate

922
00:50:27,080 --> 00:50:29,319
Speaker 1: it right they can build the laboratrature up to one

923
00:50:29,320 --> 00:50:31,320
Speaker 1: point three, then they can sell some shares at the market,

924
00:50:31,600 --> 00:50:33,799
Speaker 1: which reduces their debtoration, and they can do it again.

925
00:50:33,840 --> 00:50:36,279
Speaker 1: So they kind of oscillate. Yeah, but in a in

926
00:50:36,320 --> 00:50:39,279
Speaker 1: an LPG, particularly because they they are recent and they

927
00:50:39,320 --> 00:50:46,239
Speaker 1: start small. They you know, if that was debt, their

928
00:50:46,239 --> 00:50:50,520
Speaker 1: debt ration would be enormous. Because it's not debt, it's fine, right,

929
00:50:50,600 --> 00:50:55,160
Speaker 1: so enable them basically to move faster because they have Yeah,

930
00:50:55,920 --> 00:50:59,120
Speaker 1: so basically they have a debt instrument that doesn't create

931
00:50:59,120 --> 00:51:02,399
Speaker 1: a debt liability effectively, right with a conversion. So that's

932
00:51:02,400 --> 00:51:05,680
Speaker 1: pretty interesting. Now, of course, you know you're the bitcoin

933
00:51:05,719 --> 00:51:09,359
Speaker 1: and the MNF. If that eventuality happens, which rink, right

934
00:51:09,360 --> 00:51:11,520
Speaker 1: because it be given back bitcoin that people have thought

935
00:51:12,000 --> 00:51:16,200
Speaker 1: was part of the formula. But nevertheless, the you know,

936
00:51:16,200 --> 00:51:21,400
Speaker 1: it's the situation, the scenario in which a treasury company

937
00:51:21,520 --> 00:51:24,880
Speaker 1: would have to repair there is that bitcoin is lower

938
00:51:24,920 --> 00:51:27,440
Speaker 1: in five years. They're generally trying to target at five

939
00:51:27,520 --> 00:51:30,560
Speaker 1: year bonds, which is a pretty good time frame. Yeah,

940
00:51:30,640 --> 00:51:32,840
Speaker 1: so most bitcoins are like, oh, I'll take those odds.

941
00:51:32,880 --> 00:51:37,600
Speaker 1: That's unlikely, right, but if it did happen, it might

942
00:51:37,640 --> 00:51:41,480
Speaker 1: be painful for the company to refinance, right, they might

943
00:51:41,520 --> 00:51:45,480
Speaker 1: have to sell shares very dilutively if they sold bitcoin

944
00:51:45,920 --> 00:51:49,080
Speaker 1: definitionally but a lower price, and so it would be painful.

945
00:51:49,160 --> 00:51:52,520
Speaker 1: And so then it brings into the question for the lender, well,

946
00:51:53,480 --> 00:51:56,520
Speaker 1: you know, that's that's the stress case credit risk. Can

947
00:51:56,600 --> 00:52:00,759
Speaker 1: it pets back? And what micro Strategy is doing is

948
00:52:00,760 --> 00:52:06,400
Speaker 1: they're trying to double over collateralized to provide assurance. So

949
00:52:06,440 --> 00:52:09,600
Speaker 1: firstly they've got you know, average lower cost bitcoin and

950
00:52:09,640 --> 00:52:14,040
Speaker 1: a lot of it. But secondly, they're generally you know,

951
00:52:14,600 --> 00:52:19,120
Speaker 1: selling you know, a billion of convertible nodes and a

952
00:52:19,120 --> 00:52:22,560
Speaker 1: billion at a ATM. So they bought two billion bitcoin

953
00:52:23,080 --> 00:52:26,080
Speaker 1: and they got one billion of convertible debt. So this

954
00:52:26,320 --> 00:52:29,960
Speaker 1: kind of overclateralization. Yeah, and then they're not doing it

955
00:52:30,000 --> 00:52:32,600
Speaker 1: too much so that they don't create a debt ratio.

956
00:52:33,040 --> 00:52:34,640
Speaker 1: But you know, the most of the people that buy

957
00:52:34,640 --> 00:52:41,200
Speaker 1: in the converts in MicroStrategy are delta neutral kind of arbitrage. Say,

958
00:52:41,280 --> 00:52:44,080
Speaker 1: you know, they'll buy one hundred and fifty million hedge

959
00:52:44,080 --> 00:52:46,320
Speaker 1: funds specializing this, they'll buy one hundred and fifty million

960
00:52:46,840 --> 00:52:49,400
Speaker 1: of the convert they'll short one hundred million of the stock,

961
00:52:50,040 --> 00:52:53,560
Speaker 1: and what they're left with is any fifty million long

962
00:52:53,640 --> 00:52:56,600
Speaker 1: day call option and they will do a kind of

963
00:52:56,600 --> 00:53:00,520
Speaker 1: option yield strategy. And Microtractor is fantastically balt bitcoin, so

964
00:53:00,520 --> 00:53:02,520
Speaker 1: they can have a lot of fun doing it. When

965
00:53:02,560 --> 00:53:05,680
Speaker 1: it reaches the conversion premium, they'll sell it by the

966
00:53:05,719 --> 00:53:08,560
Speaker 1: next crunch. Yeah, and so you know, as as they convert,

967
00:53:08,880 --> 00:53:11,399
Speaker 1: the debt ratio is getting reset again. So it kind

968
00:53:11,440 --> 00:53:15,400
Speaker 1: of sets a nice h kind of sequence when in

969
00:53:15,719 --> 00:53:18,920
Speaker 1: microstretch and bring more money in. These guys are bringing

970
00:53:19,000 --> 00:53:21,480
Speaker 1: new types of money and that doesn't even care about

971
00:53:21,600 --> 00:53:23,920
Speaker 1: direction of bitcoin or even believe in it necessarily, right,

972
00:53:23,960 --> 00:53:26,200
Speaker 1: but they can they can help bring the capital in.

973
00:53:26,320 --> 00:53:27,600
Speaker 1: That's it's it's interesting.

974
00:53:28,400 --> 00:53:30,640
Speaker 2: How many of these types of companies do you think

975
00:53:30,680 --> 00:53:31,399
Speaker 2: the market can bear?

976
00:53:32,000 --> 00:53:34,920
Speaker 1: Yeah, it's very interesting questions. So somebody I know in

977
00:53:35,280 --> 00:53:39,600
Speaker 1: a private banking so wealth management banking, ask me this

978
00:53:39,680 --> 00:53:44,080
Speaker 1: question and I was like, huh, interesting question, Like how

979
00:53:44,120 --> 00:53:46,479
Speaker 1: scalable is it? You know, if if Butcher had away

980
00:53:46,600 --> 00:53:49,520
Speaker 1: in Apple and Microsoft plow in, well they can press

981
00:53:49,560 --> 00:53:54,080
Speaker 1: the opportunity. Now, what I came to think about is actually, no,

982
00:53:54,320 --> 00:53:59,360
Speaker 1: it's enormost it's effectively it's an arbitrage between the bitcoin

983
00:53:59,440 --> 00:54:04,640
Speaker 1: futures two hundred trillion bitcoinized financial markets, which I think

984
00:54:04,640 --> 00:54:07,799
Speaker 1: of as not displacing the fit currencies but sort of

985
00:54:07,880 --> 00:54:10,920
Speaker 1: sucking out the monetary premium and everything. There's monstal premium

986
00:54:10,920 --> 00:54:13,160
Speaker 1: in the stock market if you take out the mt

987
00:54:13,320 --> 00:54:16,399
Speaker 1: monetary expansion, the stock indexes haven't gone up that much,

988
00:54:16,920 --> 00:54:20,480
Speaker 1: and montal premium in real estate are and other bards

989
00:54:20,560 --> 00:54:22,320
Speaker 1: all kinds of things where people are trying to preserve

990
00:54:22,360 --> 00:54:26,160
Speaker 1: their assets so preserve their svenu powers. So if you

991
00:54:26,280 --> 00:54:28,680
Speaker 1: if you take the two hundred trillion, that is the

992
00:54:28,719 --> 00:54:31,560
Speaker 1: size of the arbitrage, and then that's an enormous amount

993
00:54:31,600 --> 00:54:34,320
Speaker 1: of money. So you can look at the treasury companies

994
00:54:34,360 --> 00:54:37,399
Speaker 1: as one of the vehicles to arbitrage that future because

995
00:54:37,440 --> 00:54:39,960
Speaker 1: they've got you know, while bitcoin's going up, they can

996
00:54:40,000 --> 00:54:44,920
Speaker 1: bring forward corporate capital mechanisms and buy that at a discount,

997
00:54:45,000 --> 00:54:48,320
Speaker 1: and their actions are also applying pressure to bitcloining probably

998
00:54:48,600 --> 00:54:51,920
Speaker 1: bring that period forward so kind of accelerate you know,

999
00:54:52,239 --> 00:54:55,480
Speaker 1: highly at bitcoganization basically. So from that point of view,

1000
00:54:56,000 --> 00:54:58,760
Speaker 1: I think it's very scalable and you can see that sailor,

1001
00:54:59,040 --> 00:55:01,440
Speaker 1: you know, was relaxed about getting I think he has

1002
00:55:01,520 --> 00:55:04,880
Speaker 1: an annual conference where he tries to encourage people to provide

1003
00:55:04,880 --> 00:55:07,960
Speaker 1: the playbook and explain the accounting rules are used. It's

1004
00:55:07,960 --> 00:55:10,200
Speaker 1: got a bit simpler now with the spottytfs for companies

1005
00:55:10,239 --> 00:55:13,080
Speaker 1: to use those even but you know, clearly he's not

1006
00:55:13,200 --> 00:55:17,040
Speaker 1: feeling it's competitive in terms of you know, for people

1007
00:55:17,040 --> 00:55:20,000
Speaker 1: who are doing an arbitrage, sometimes they're trying and keep

1008
00:55:20,040 --> 00:55:22,240
Speaker 1: it quiet because they know that it's not very scalable,

1009
00:55:22,239 --> 00:55:24,440
Speaker 1: and other people pile in it it'll just pit. But

1010
00:55:24,560 --> 00:55:27,960
Speaker 1: here it's it's an enormous dislocation. So it's like the

1011
00:55:28,040 --> 00:55:29,160
Speaker 1: arbitrage of a century.

1012
00:55:29,200 --> 00:55:31,720
Speaker 2: Basically, well, he's got five hundred and eighty thousand bitcoin,

1013
00:55:31,760 --> 00:55:32,799
Speaker 2: and if everybody jumps in.

1014
00:55:32,760 --> 00:55:33,920
Speaker 3: And pushed the price of bitcoin up.

1015
00:55:34,120 --> 00:55:36,520
Speaker 1: Yeah, but usually yeah, yeah, right, Well, I mean I

1016
00:55:36,520 --> 00:55:41,719
Speaker 1: think there is an effect, which is that strategy is

1017
00:55:41,760 --> 00:55:44,600
Speaker 1: a bit index to the MNA if you can hold.

1018
00:55:44,960 --> 00:55:48,400
Speaker 1: So if you have a higher m nerve, you know,

1019
00:55:48,520 --> 00:55:51,759
Speaker 1: for m nerve it's three rather than two. When you

1020
00:55:51,840 --> 00:55:56,200
Speaker 1: sell shares or sell convertable notes, it makes it more

1021
00:55:56,320 --> 00:56:02,000
Speaker 1: accretive bitcoim per share per dollar. And that's partly where

1022
00:56:02,360 --> 00:56:05,480
Speaker 1: Metal Planet and LPG have an advantage is they have

1023
00:56:05,520 --> 00:56:08,120
Speaker 1: a high mp and so when they do a corporate action,

1024
00:56:08,719 --> 00:56:12,520
Speaker 1: whichever version, it's more effective like that. So it's a

1025
00:56:12,560 --> 00:56:15,840
Speaker 1: little weird because kind of sort of self reinforcing, it

1026
00:56:15,840 --> 00:56:17,719
Speaker 1: has a high m A high m F helps it

1027
00:56:17,840 --> 00:56:20,360
Speaker 1: keep a high en F because the corporate actions. So

1028
00:56:20,880 --> 00:56:23,480
Speaker 1: that factor is one thing that makes people skeptical. But

1029
00:56:23,880 --> 00:56:25,759
Speaker 1: they do need a fundamental to get it to the

1030
00:56:25,840 --> 00:56:29,879
Speaker 1: high mnds and and and earn it, like justify it

1031
00:56:30,360 --> 00:56:32,880
Speaker 1: and keep it. You know, they'll they'll drop and then

1032
00:56:32,880 --> 00:56:36,840
Speaker 1: they'll come back. So there is something fundamental there. But anyway,

1033
00:56:37,080 --> 00:56:41,080
Speaker 1: I think it's enormous. And that's the scalability question and

1034
00:56:41,120 --> 00:56:43,839
Speaker 1: the other one is sort of sustained sustainable. You know,

1035
00:56:44,680 --> 00:56:51,359
Speaker 1: can can these companies maintain their yard? You know, can

1036
00:56:51,400 --> 00:56:53,520
Speaker 1: they keep doing it? Or is or is that just

1037
00:56:53,520 --> 00:56:59,520
Speaker 1: going to droop? And you know one theory for why

1038
00:56:59,520 --> 00:57:03,239
Speaker 1: it might four as they get bigger. You know, if

1039
00:57:03,239 --> 00:57:05,920
Speaker 1: you if it takes it very small, they can create

1040
00:57:05,960 --> 00:57:08,160
Speaker 1: a fifty percent return. Start with one bitcoin. You can

1041
00:57:08,160 --> 00:57:10,160
Speaker 1: buy half a bitcoin and now the fifty percent return

1042
00:57:10,400 --> 00:57:14,040
Speaker 1: in one shot. Right, So now, so that's true, but

1043
00:57:14,120 --> 00:57:15,879
Speaker 1: you know, once it gets going and it's you know,

1044
00:57:15,960 --> 00:57:20,080
Speaker 1: it's one hundred million versus get getting off one hundred

1045
00:57:20,120 --> 00:57:25,920
Speaker 1: billion in Sailor's case, they you know, they have I

1046
00:57:25,920 --> 00:57:29,400
Speaker 1: think their ability to raise is somewhat scalable with their size,

1047
00:57:29,680 --> 00:57:33,200
Speaker 1: right because you know, sort of the debt ratio, right,

1048
00:57:33,240 --> 00:57:36,200
Speaker 1: if they're both targeting on one point three debt ratio,

1049
00:57:36,720 --> 00:57:40,040
Speaker 1: you know, one hundred million guys they can raise thirty million,

1050
00:57:40,080 --> 00:57:43,520
Speaker 1: and one hundred billion can raise thirty billion. And Sailor

1051
00:57:43,640 --> 00:57:48,320
Speaker 1: is doing it. You know, he is bringing him larger

1052
00:57:48,360 --> 00:57:52,520
Speaker 1: amounts of money in bigger chunks. And you know, I

1053
00:57:53,080 --> 00:57:57,240
Speaker 1: guess the other question is do they start to exhaust

1054
00:57:57,560 --> 00:58:01,600
Speaker 1: the arbitrage players and the bond market competition, right, But

1055
00:58:01,640 --> 00:58:06,680
Speaker 1: those markets are very big, yeah, and the the the

1056
00:58:07,640 --> 00:58:12,800
Speaker 1: convertibles are extremely attractive for those traders. They're the best,

1057
00:58:13,320 --> 00:58:17,400
Speaker 1: the better upside, the best fertility product on the market

1058
00:58:17,440 --> 00:58:21,880
Speaker 1: for their strategy. So I think ultimately, you know, if

1059
00:58:22,200 --> 00:58:26,080
Speaker 1: it starts to become significant in that market, you know,

1060
00:58:26,680 --> 00:58:29,520
Speaker 1: people looking for you, they're really from something else. It's

1061
00:58:29,520 --> 00:58:31,800
Speaker 1: not very interested in the treasuries or fixed it them

1062
00:58:31,960 --> 00:58:33,800
Speaker 1: or sud it, right, Yeah, So I think that makes

1063
00:58:33,840 --> 00:58:38,560
Speaker 1: it more scalable. But it could you know, it could

1064
00:58:38,720 --> 00:58:40,440
Speaker 1: cause it to be a bit harder to go big.

1065
00:58:40,520 --> 00:58:42,560
Speaker 1: But there are some advantage being big, which is they

1066
00:58:42,640 --> 00:58:46,880
Speaker 1: get into stock indexes that benefit from passive flows of

1067
00:58:47,000 --> 00:58:50,760
Speaker 1: people making regular savings that get dropped into like an

1068
00:58:50,800 --> 00:58:54,240
Speaker 1: index one. So I think sailor is you know with

1069
00:58:54,400 --> 00:58:56,880
Speaker 1: my strategy, they're in one of those inexperts. Another target

1070
00:58:56,960 --> 00:58:59,520
Speaker 1: coming up, which now they need a certain number of

1071
00:58:59,560 --> 00:59:02,400
Speaker 1: cause off the pul tea and they and size and

1072
00:59:02,480 --> 00:59:05,040
Speaker 1: they get in there, so they may get into it soon.

1073
00:59:07,080 --> 00:59:08,920
Speaker 2: Well let's uh, I mean, like I said, this is

1074
00:59:08,960 --> 00:59:10,680
Speaker 2: the most fascinating thing going right now. I love this

1075
00:59:10,840 --> 00:59:15,240
Speaker 2: moving new things and new terminologies. Let's uh, let's let's

1076
00:59:15,280 --> 00:59:18,880
Speaker 2: wrap this up and talk about the potential for risk

1077
00:59:19,520 --> 00:59:24,439
Speaker 2: because inherently this business model relies on leverage to grow,

1078
00:59:25,200 --> 00:59:27,640
Speaker 2: and of course leverage is that double edged sword, especially

1079
00:59:27,680 --> 00:59:30,200
Speaker 2: in a bitcoin world where it's extremely volatile both to

1080
00:59:30,240 --> 00:59:32,520
Speaker 2: the other side and the downside. So in order to

1081
00:59:32,720 --> 00:59:35,160
Speaker 2: do good in this strategy, I have to use leverage.

1082
00:59:35,200 --> 00:59:38,720
Speaker 2: And so that's number one. And then some people are

1083
00:59:38,840 --> 00:59:41,000
Speaker 2: naturally always gonna take it too far number two. And

1084
00:59:41,080 --> 00:59:43,360
Speaker 2: then on top of a volatile asset, so how are

1085
00:59:43,400 --> 00:59:44,840
Speaker 2: you looking at that the risk side of it.

1086
00:59:45,440 --> 00:59:51,720
Speaker 1: Yeah, I mean it's effects what it depends which which

1087
00:59:51,720 --> 00:59:54,960
Speaker 1: approach they're using. So you can see micro strategy. They're

1088
00:59:55,000 --> 00:59:57,600
Speaker 1: quite transparent that they're learning, you know. So they start

1089
00:59:57,680 --> 01:00:01,800
Speaker 1: with one strategy. So when they started, they used their treasury.

1090
01:00:02,000 --> 01:00:04,200
Speaker 1: I mean, firstly they did a share buy back opper

1091
01:00:04,360 --> 01:00:06,160
Speaker 1: so that people didn't believe in they could leave, so

1092
01:00:06,200 --> 01:00:09,840
Speaker 1: they brought them back at prinion most people stayed. They

1093
01:00:09,920 --> 01:00:12,720
Speaker 1: bought a first slug of bitcoin with cash and an

1094
01:00:12,760 --> 01:00:16,520
Speaker 1: a rat of cash possible on us, right, and so

1095
01:00:16,560 --> 01:00:18,560
Speaker 1: the next thing they days talk took a corporate bond.

1096
01:00:18,920 --> 01:00:21,040
Speaker 1: It's a long running company or a steady revenue, so

1097
01:00:21,120 --> 01:00:22,960
Speaker 1: they had a credit rating to bring in a big

1098
01:00:23,000 --> 01:00:26,920
Speaker 1: corporate bond because they brought up a debt ratio. And

1099
01:00:28,320 --> 01:00:30,680
Speaker 1: so they were quite aggressive into their first bear market.

1100
01:00:31,080 --> 01:00:32,920
Speaker 1: In the price fell, they did more, more and more

1101
01:00:32,920 --> 01:00:37,760
Speaker 1: and more right, and they actually ended they overcuoked it.

1102
01:00:38,040 --> 01:00:40,600
Speaker 1: So you know, I went back and looked at it,

1103
01:00:41,720 --> 01:00:44,040
Speaker 1: and I bought some of it in that bear market period,

1104
01:00:44,080 --> 01:00:45,840
Speaker 1: but I went back and looked at it in terms

1105
01:00:45,880 --> 01:00:49,960
Speaker 1: of how much debt they'd had versus then that I said,

1106
01:00:50,240 --> 01:00:52,800
Speaker 1: the bitcoin and the debt got larger than bitcoin for

1107
01:00:52,960 --> 01:00:55,360
Speaker 1: five months in a row. So if that was a

1108
01:00:55,600 --> 01:01:00,880
Speaker 1: leverage position on exchange, they would be liquidated it. So

1109
01:01:01,760 --> 01:01:05,400
Speaker 1: now they it wasn't in a directly margin coller ball.

1110
01:01:06,280 --> 01:01:09,080
Speaker 1: They had the equity cushion, had plenty of revenues paid,

1111
01:01:09,880 --> 01:01:13,000
Speaker 1: i mean the interest on it, so they just you know,

1112
01:01:13,200 --> 01:01:16,320
Speaker 1: plowed through it. They did something tactically interesting, which is

1113
01:01:17,440 --> 01:01:19,680
Speaker 1: they had at the tail end of it, like a

1114
01:01:19,720 --> 01:01:25,360
Speaker 1: two hundred million collateralized backcoin learn from Silgate, and silver

1115
01:01:25,440 --> 01:01:28,160
Speaker 1: Gate started to suffering the market and they needed liquidity fast,

1116
01:01:28,640 --> 01:01:34,200
Speaker 1: so they actually bought back their own debt like a

1117
01:01:34,240 --> 01:01:37,520
Speaker 1: thirty percent discount of silver Gate. So that works out well.

1118
01:01:38,040 --> 01:01:42,160
Speaker 1: But generally speaking, I think you can see that they've

1119
01:01:42,160 --> 01:01:44,920
Speaker 1: blearnt from it, right because now they are targeting the

1120
01:01:45,040 --> 01:01:53,400
Speaker 1: conservative leverage ratue. And they also cleaned up the call ability,

1121
01:01:53,760 --> 01:01:56,000
Speaker 1: you know, so there's no direct lean on the Bitcoin.

1122
01:01:56,440 --> 01:02:00,000
Speaker 1: It's restructured things and they had, you know, the negotia

1123
01:02:00,040 --> 01:02:04,280
Speaker 1: empowered to do that, so it's in a safer position.

1124
01:02:04,960 --> 01:02:08,480
Speaker 2: And but they're able to do that because of who

1125
01:02:08,520 --> 01:02:10,320
Speaker 2: they are. But what about all the new entrants there.

1126
01:02:10,280 --> 01:02:13,240
Speaker 1: Well, that's a very good question. So you know, there

1127
01:02:13,360 --> 01:02:16,920
Speaker 1: is a potential risk that some new entrants push it

1128
01:02:17,000 --> 01:02:19,960
Speaker 1: too far in like an attempt to catch up or

1129
01:02:20,800 --> 01:02:24,600
Speaker 1: you know, getting a bit too exuberant and pylon straight

1130
01:02:24,680 --> 01:02:29,160
Speaker 1: debt that then they have difficulty servicing in a bed market, right,

1131
01:02:29,320 --> 01:02:34,360
Speaker 1: get too high leverage. Now, some of them, like two

1132
01:02:34,400 --> 01:02:36,200
Speaker 1: of the ones that have a very high in end

1133
01:02:36,240 --> 01:02:40,760
Speaker 1: the have actually have almost no debt. Interestingly, so matter

1134
01:02:40,800 --> 01:02:44,320
Speaker 1: Planet has almost no debt and LPG has debt, but

1135
01:02:44,400 --> 01:02:47,840
Speaker 1: it's bitcome basis debt. So the debt there if bitcoin

1136
01:02:47,880 --> 01:02:51,200
Speaker 1: principles that drinks and so they're not never get into

1137
01:02:51,280 --> 01:02:54,520
Speaker 1: a kind of solvency issue with a guilty to repay, right,

1138
01:02:55,360 --> 01:02:57,760
Speaker 1: So but yeah, you might you might see that in

1139
01:02:57,800 --> 01:02:59,760
Speaker 1: a bear market that some people have made some kind

1140
01:02:59,760 --> 01:03:04,640
Speaker 1: of rick suberant straight debt structures that could you know.

1141
01:03:04,840 --> 01:03:06,320
Speaker 1: So I think I think one of the worst risk

1142
01:03:06,360 --> 01:03:09,800
Speaker 1: points is people looking at the big ones and saying,

1143
01:03:09,840 --> 01:03:12,880
Speaker 1: well it if microstrech is sold like five hundred thousand

1144
01:03:12,880 --> 01:03:16,480
Speaker 1: bicker in the market, well create I don't think that's

1145
01:03:16,520 --> 01:03:19,520
Speaker 1: happening because you know, the debt ratio is low and

1146
01:03:19,600 --> 01:03:21,880
Speaker 1: they got a lot of levers to play with. And

1147
01:03:22,000 --> 01:03:24,800
Speaker 1: the debt. A lot of the debt they have is convertible, right,

1148
01:03:25,440 --> 01:03:28,240
Speaker 1: and so they can you know, they're converting it as

1149
01:03:28,320 --> 01:03:29,880
Speaker 1: it as it, which is premium. So the debt that's

1150
01:03:29,920 --> 01:03:34,560
Speaker 1: left over when the market turns presumably well eventually is

1151
01:03:36,920 --> 01:03:39,480
Speaker 1: you know, it's it's manageable. And I think the other

1152
01:03:39,600 --> 01:03:42,480
Speaker 1: thing is, you know, the average entry price and bitcoin

1153
01:03:42,520 --> 01:03:45,880
Speaker 1: in this loan sixty five something probably is gradually creeping

1154
01:03:45,960 --> 01:03:48,560
Speaker 1: up to seventy. So they got they got some hydron

1155
01:03:48,880 --> 01:03:51,920
Speaker 1: from one hundred and ten level, right, and you know

1156
01:03:52,120 --> 01:03:55,240
Speaker 1: the floor price this two hundred week moving average is

1157
01:03:55,240 --> 01:03:58,520
Speaker 1: also creeping up forty seven. Soon enough it will be

1158
01:03:58,600 --> 01:04:02,840
Speaker 1: fifty saying, and if that's an indication of well the

1159
01:04:02,880 --> 01:04:05,880
Speaker 1: market probably won't fall below that kind of region. You know,

1160
01:04:06,280 --> 01:04:11,200
Speaker 1: there's a safety in that. But you know past history

1161
01:04:11,200 --> 01:04:14,760
Speaker 1: doesn't necessarily predict the future also, right, and you know,

1162
01:04:14,800 --> 01:04:21,520
Speaker 1: if the phenomena gets big, you know, it could contribute

1163
01:04:21,520 --> 01:04:24,520
Speaker 1: to the market dynamics in a negative way. I guess, yeah, yeah,

1164
01:04:24,840 --> 01:04:26,840
Speaker 1: So you know, you just hope that the people that

1165
01:04:27,280 --> 01:04:30,760
Speaker 1: take the risk that goes wrong do it when they're small,

1166
01:04:30,800 --> 01:04:32,560
Speaker 1: so they don't have an impact on the market. Well,

1167
01:04:32,960 --> 01:04:34,960
Speaker 1: the other thing that occurs to me is that you know,

1168
01:04:35,200 --> 01:04:39,200
Speaker 1: a bigger strategy company could buy them, you know, if

1169
01:04:39,280 --> 01:04:39,800
Speaker 1: it makes sense.

1170
01:04:40,080 --> 01:04:46,160
Speaker 2: Yeah, all right, last question, where do you see bitcoin

1171
01:04:46,280 --> 01:04:51,680
Speaker 2: in this bitcoin treasury strategy sort of being in five

1172
01:04:51,760 --> 01:04:53,560
Speaker 2: years from now, in twenty thirty.

1173
01:04:54,480 --> 01:04:56,640
Speaker 1: Well, I think, you know, because what I was saying

1174
01:04:56,640 --> 01:05:00,680
Speaker 1: about the scalability or to approach, I think eventually it

1175
01:05:00,760 --> 01:05:04,600
Speaker 1: will pull in some of the larger cap companies because

1176
01:05:05,960 --> 01:05:09,560
Speaker 1: you know, there's a there is literally a fiduciary obligation

1177
01:05:09,720 --> 01:05:12,840
Speaker 1: to protect their shelves interests, and some of these companies

1178
01:05:12,880 --> 01:05:15,160
Speaker 1: are sitting on a billion dollars bus up cash or

1179
01:05:15,360 --> 01:05:16,680
Speaker 1: having more rate ten billion or.

1180
01:05:16,640 --> 01:05:17,320
Speaker 3: Something at all.

1181
01:05:17,640 --> 01:05:22,760
Speaker 1: Yeah billions, yeah right, And so you know, realistically, with

1182
01:05:23,000 --> 01:05:27,880
Speaker 1: the empty mercery expansion and the debt ratio in the

1183
01:05:27,960 --> 01:05:34,360
Speaker 1: major economies, we're probably facing you know, a decade or

1184
01:05:34,360 --> 01:05:39,160
Speaker 1: two of financial repression, which means that the implation rate

1185
01:05:39,280 --> 01:05:41,280
Speaker 1: is higher than the interest rate. And so if you

1186
01:05:41,320 --> 01:05:45,360
Speaker 1: know they have ten billion or more sitting in US treasuries,

1187
01:05:45,400 --> 01:05:48,160
Speaker 1: they're just straight up losing it, right, And so that's

1188
01:05:48,280 --> 01:05:51,960
Speaker 1: not you know, I mean, Warren Buffett would say cash

1189
01:05:52,040 --> 01:05:53,959
Speaker 1: is king, and he's waiting for an opportunity in the market,

1190
01:05:54,000 --> 01:05:55,400
Speaker 1: and he's good at like waiting for the bomb of

1191
01:05:55,440 --> 01:05:58,680
Speaker 1: the market to go buy stuff. But in the meantime, like,

1192
01:05:58,800 --> 01:06:01,240
Speaker 1: why is he losing money on the cash? Wait? You know,

1193
01:06:01,360 --> 01:06:07,040
Speaker 1: there's obvious alternatives. So I think, you know, some of

1194
01:06:07,200 --> 01:06:11,680
Speaker 1: the sort of more technology focused companies with younger management

1195
01:06:12,200 --> 01:06:14,040
Speaker 1: will probably start to get there. You've seen a couple

1196
01:06:14,120 --> 01:06:24,880
Speaker 1: of shareholder requested votes for the boards with Microsoft and

1197
01:06:25,000 --> 01:06:28,720
Speaker 1: Apple are not it didn't get past. But the question

1198
01:06:28,840 --> 01:06:32,120
Speaker 1: is coming in and there are bitcoiners in there, you know,

1199
01:06:32,520 --> 01:06:36,080
Speaker 1: I know somebody who is. And there's some ext Microsoft people,

1200
01:06:36,760 --> 01:06:40,480
Speaker 1: people on the the top management on the board who

1201
01:06:40,520 --> 01:06:42,960
Speaker 1: are bitcoiners, right, And so there are people around them

1202
01:06:43,600 --> 01:06:45,720
Speaker 1: that understand bitcoin, have been at bitcoin for a while.

1203
01:06:46,320 --> 01:06:49,000
Speaker 1: Who would you know, try to explain it to them. Yeah,

1204
01:06:49,160 --> 01:06:50,640
Speaker 1: for sure, and don't have to like put all the

1205
01:06:50,720 --> 01:06:51,960
Speaker 1: cash in it, but like and.

1206
01:06:52,000 --> 01:06:53,920
Speaker 2: They see what strategy is doing, so they're like, hey,

1207
01:06:54,160 --> 01:06:55,880
Speaker 2: we we should probabe do something similar.

1208
01:06:56,760 --> 01:07:00,800
Speaker 1: Yeah. Yeah, So I think they they're missing a trick.

1209
01:07:01,160 --> 01:07:06,240
Speaker 1: And you know, it's actually kind of surprising how few

1210
01:07:06,360 --> 01:07:12,320
Speaker 1: companies participate in the treasury company play in that you

1211
01:07:12,400 --> 01:07:15,320
Speaker 1: could see that sailor was, you know, trying to leave

1212
01:07:15,320 --> 01:07:17,560
Speaker 1: the dance right, you know, this kind of dance floor

1213
01:07:17,600 --> 01:07:20,240
Speaker 1: phenomena one pubs and dancing. Eventually everybody Johns joins in,

1214
01:07:20,760 --> 01:07:23,080
Speaker 1: and you know he's leading it. He's out on the bridge,

1215
01:07:23,120 --> 01:07:24,880
Speaker 1: he's on the making voyage of the flight to show

1216
01:07:24,920 --> 01:07:29,280
Speaker 1: it safe, full conviction. It's contagious. So i'd like this

1217
01:07:29,400 --> 01:07:31,440
Speaker 1: is great. Less, you know, let's see some more. And

1218
01:07:31,480 --> 01:07:34,400
Speaker 1: he's running the conferences and nobody's got in. I mean

1219
01:07:35,040 --> 01:07:38,000
Speaker 1: they come in now, but they're starting from the smaller end,

1220
01:07:38,120 --> 01:07:41,640
Speaker 1: like the innovative ends. But yeah, I mean I guess

1221
01:07:41,680 --> 01:07:45,520
Speaker 1: there are some a few public companies doing it. I

1222
01:07:45,600 --> 01:07:47,800
Speaker 1: mean just during the conference there was one of the

1223
01:07:47,960 --> 01:07:51,240
Speaker 1: Trump media companies with a convert you know.

1224
01:07:51,680 --> 01:07:54,920
Speaker 2: Yeah, yeah, I mean to the dance floor analogy. I mean,

1225
01:07:54,960 --> 01:07:57,160
Speaker 2: the one person dances alone for quite a while and then.

1226
01:07:57,120 --> 01:08:01,320
Speaker 3: Two well apparently it's now eighty right, so like they're

1227
01:08:01,360 --> 01:08:02,880
Speaker 3: coming and it just takes time.

1228
01:08:03,160 --> 01:08:03,360
Speaker 1: Yep.

1229
01:08:04,080 --> 01:08:06,080
Speaker 3: Great, Well I think that's a good good chance to

1230
01:08:06,120 --> 01:08:06,600
Speaker 3: cut it off.

1231
01:08:07,560 --> 01:08:09,280
Speaker 2: Anything you're working on that you want to draw attention

1232
01:08:09,360 --> 01:08:10,560
Speaker 2: to that people should be checking out.

1233
01:08:11,520 --> 01:08:16,080
Speaker 1: Oh yeah, I mean we're just doing a you know,

1234
01:08:16,240 --> 01:08:20,320
Speaker 1: whatever helps to help bitcoin reach its potential reach the

1235
01:08:20,400 --> 01:08:25,200
Speaker 1: mission objective of involving more people in bitcoin recent pushes

1236
01:08:25,320 --> 01:08:28,400
Speaker 1: into bringing the pension funds and endowments to get them

1237
01:08:28,439 --> 01:08:30,479
Speaker 1: off serio. So you bought Sean Ville who had the

1238
01:08:31,360 --> 01:08:34,320
Speaker 1: inside experience of trying to get bitcoin in there and

1239
01:08:34,439 --> 01:08:38,120
Speaker 1: the outside experience of being an hedgebonter manager, so trying

1240
01:08:38,160 --> 01:08:39,439
Speaker 1: to help help them do it.

1241
01:08:40,720 --> 01:08:42,880
Speaker 3: Get off zero. All right, we'll sign it up with that.

1242
01:08:43,160 --> 01:08:43,680
Speaker 3: Thanks so much.

1243
01:08:43,960 --> 01:08:44,240
Speaker 1: Thank you,