← Blockspace: AI & Bitcoin
Blockspace: AI & Bitcoin
MARA’s Q1 Earnings, Nebius’ Blowout Q1, the $1,000 Bull Case for MSTR
01:16:38
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A
Foreign.
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B
What is going on, y'?
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C
All?
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B
Welcome back to Block Space Live. We have got a fun lineup for you today. We've got three interviews and venturing into some new sectors today because we're going to be talking about Spirit Airlines with Handle at House of Yogi. And if you're wondering why Spirit went bankrupt and why they weren't allowed to sell to another airline, that segment's for you. But we also have Lucas Kreche of brains on the CTO of Brains to talk about the new Stratum V2 working group that we covered last week at Blockspace. We also have Pio Vincenzo on to talk about what else but strategy. Is it going to make you rich? We don't know, but Pio has some opinions. For news today, Mara and via BTC are signaling for BIP5.4, which is the great consensus cleanup, but they might be a little bit out of turn because we actually don't have any sort of activation client for this softwork yet. And finally, we will wrap up the show with some earnings updates from Mera and Nebius.
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C
Block Space goes live Monday, Wednesday, Friday at noon Eastern featuring quick hits on the latest in bitcoin mining, AI and emerging tech and apparently Spirit Airlines. Now make sure to hit subscribe. If you or watching on YouTube, hit that bell to get the notification pushed to your phone. And after we go live, this turns into a podcast on all of the places you get podcasts. Spotify, Apple, rss. And if you like what you hear here, you will love our newsletter. Newsletter blockspacemedia.com this show is brought to you by CleanSpark Ticker CLSK on NASDAQ. More on them later on the show. Let's kick it off while people fill in. Colin, let's get a little technical. We're going to bore you. And if you make it through this, you can finally get to the good stuff. Basically, bitcoin may actually get an upgrade. That's the headline. And quietly in the background, things have been happening. What Charlie has been happening? Well, there is this proposal called the Great Consensus cleanup, which I'll explain here in a second. And various mining pools have started not signaling, as you say, but rather producing compliant blocks for this proposal. What does that mean? I will not get too deep into it, but basically, how does an upgrade on bitcoin happen? Well, often depends on who you ask, Charlie. Depends on who you ask. How does a baby get made? You're not old enough to know yet. So same thing with upgrade changes to bitcoin. So basically what has happened is there are developers who have a proposal and they've got a client which implements the proposal and it's very close to being done. And what has to happen though, is now the network has to start enforcing it. So historically we've seen that there is a way you can include a clear signal in the block. If you're a miner, you can include a signal in the block that you produce that says, we want to enforce this new upgrade. This is how the network typically like everybody, kind of almost like a little bit like playing chicken, where enough people start driving on one side of the road and you all know that we're all going to do this together. And then you got it and it turns on, it goes live. But. But basically that's not happening. So there's not this clear signal happening. In the past two months, we've seen originally Maripool produce BIP54 compliant blocks. Well, in the past 24 hours, the next pool via BTC has started producing BIP54 compliant blocks. What does that mean? Well, instead of them saying we want to enforce this, they want to demonstrate that they will not accidentally violate the new software. So they are saying that we're going to produce a block and show you that in the blocks that we produce going forward that if this software were to activate, then our blocks would fit the mold. That's like the layperson analogy here. I can explain what it does, but I might throw it to you to ask a question or chime in.
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B
Well, I mean, I just want to highlight. This is really kind of. I don't want to say new because I'm not sure if there's a precedent for this, but typically the way that activation is handled, or rather we'll just use Taproot as an example. So Taproot was being pushed through. Developers agreed on it. There was an activation client out and they ended up using a modified version of BIP9, which is a way to show that a majority or a, you know, the lion's share, bulk, vast majority of Bitcoin miners are signaling for an upgrade. Usually that threshold for bip9 is 95%. Half the signal. They basically just add a. They add a number into the block header, arbitrary data to show that they support it and they modified it to 90% to make sure that there was no, you know, minor veto where miners can basically not signal for something and then the entire activation process is stalled. So typically you don't get this kind of support from mining pools until there's an actual buttoned up soft fork out or rather the soft fork and the specs for the client have been, you know, looked over, combed over, and there's rough consensus on pushing that upgrade through. And I'm not going to say Mara and Vibe to Z are skipping the queue here because like you said, Charlie, they're just showing that they are compliant with this great consensus cleanup software should it come to pass. But typically miners don't really make actions like this until the development community has basically said here's what we want to do. And so it's very notable. And for me it's also interesting considering Mera is. I mean, they're the largest public miner by hash rate. They have over 70 exahashes, but they're gunning to go into AI and HPC services. And it's interesting because we've seen this from them coming closely off the heels of them joining the Straitum V2 working group, which we'll be talking about in the next section with Lucas. So there's almost this one foot in the pool still with bitcoin mining, even as they look for other forms of compute to monetize.
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C
Yep, exactly. And so I would just say this, if you kind of want my temperature check, like, is bitcoin going to get an upgrade at all? My subjective evaluation right now is that it looks like this is the most material advancement we've seen towards any soft fork, any proposal, any upgrade in the modern era of bitcoin. So this is this, you know, the, the stage is being set, the playbill has not yet been announced. It's that kind of thing. So I'll also emphasize that the author or the person who's spearheading this, this proposal has said that they are not advocating, they're not asking for activation yet. But I could totally see a scenario, Colin, where enough mining pools and hash power. So this. But you know, Vi and Mara bring us like 15%. Or I could totally see a scenario where enough pools are like doing this and then the authors of the proposal, the developers can go like, well, the pools, you know, they're not signaling for it, but they're clearly like, you know, support it. Yeah, it's. Nobody actually has to like say that they were the ones who started. I can totally see this be a thing where it's like, oh, it just kind of happened.
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B
And I mean, that's a good point. Especially if ample or foundry signal support, right? Yeah, because that's 25 to 30% of the hash rate either of them control on a given day. I think if you end up Getting that that might tip the scales.
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C
If either of them do it, then I think just, everybody just does it because they're. Everybody kind of looks to them if one of the big boys does it,
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B
then my biggest question is though, why do they care so much? And you could probably answer that more as someone who understands what the great consensus cleanup does. And I don't think we necessarily want to fully address that because we would need to actually ask someone from error and buy a btc. But miners are notorious for being kind of oblivious or how should we say, happily ignorant of technical proposals and advancements. Right. It's just not something they're thinking about all day. They're trying to figure out how they can procure the cheapest equipment and cheapest power. They're not usually not thinking about these things.
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C
Yeah, there's typically maybe a handful of people at a mining pool, I would say who are the technical ones who follow this stuff? And then everybody else works on business development, performance deals with hashers, that kind of thing. And then on top of that, we have a long history of miners really just not wanting to take rock the boat. But for this, why would this proposal. Because I haven't talked about what it is. I won't really explain what it does.
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B
You can go to, basically, I'll give a Cliff Notes. It cleans up great consensus cleanup. It cleans up a lot of things that developers have wanted to tidy up for a while and it'll make their lives easier and make bitcoin run a little bit more smoothly.
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C
Yeah, there are some edge cases where bitcoin has attack vectors. The podcasters who tell you that bitcoin is perfect are wrong. They're lying to you. Bitcoin has some edge case attack vectors. This proposal cleans up the four big ones. There's not really any real pushback to this proposal either. There's a couple really obscure arcane details which are disputed, but largely everyone kind of agrees. Yeah, this is a no brainer. We should fix this sometime. And so it's kind of like this is the one where it's like, okay, this might be it. I think we probably wrap up there. If you want to learn more about exactly what this proposal does, I recommend everybody head to Blockspace Media, click on Opt Next and there's a presentation by Antoine Ponceau, the guy who's spearheading this proposal. And I would recommend you go and watch that. I think we go to our first guest column.
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B
Yeah, I think so. We will welcome Lucas Kreche to the stage to Talk about the new Stratum V2 working group. Lucas, thank you for joining us.
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C
How are you doing?
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D
Well, how are you doing?
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B
Thanks for having me. Yeah, thank you for joining, man. Really, really appreciate it. So I'm going to go ahead and just start off by giving you a chance to explain to our listeners what this Stratum V2 working group is. If you could also include a brief explanation of Stratum V2 in that, for those who might not be aware, we covered this news block space last week, I'll just kind of top of the line, give a few bullet points for it. Basically some of the largest pools in Bitcoin are joining this working group to help work on implementations of straight and v2. So what exactly is this working group? And can you just give a quick explanation to straight and V2 as well?
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C
Yeah.
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D
So first of all, I would like to highlight that the heavy lifting and the main push for Stratum V2 is now completely in the hands of the independent open source community. And I think this is a great way how to develop a specification for protocol that aspires to be the next big thing in the Bitcoin mining communication. The working group is collaboration or a collaborative effort across the whole mining industry. So in the group, as you said, there are mining pools and firmware developers like us at brains. There are also the hardware manufacturers and the open source developers that are all working, working together. And the overall goal of this working group is to pretty much help transitioning from the stratum B1, which is like already a decade old mining protocol, to a new modern standard of Stratum B2. So pretty much historically the Stratum V2 was facing this chicken and egg problem to some extent in terms of adoption, that the mining pools were waiting for the firmware developers to adopt Stratum V2 and vice versa. Firmware developers were waiting for a pool and the group will break this, I believe will break the cycle. And current effort seems to be on a good way to do so. I haven't given the overview of the what are the Benefits of Stratum V2 yet? I was saving that for the very last, very last bullet point. So what is stratum v2 like in terms of what it brings to the table? So Compared to Stratum v1, which is a plain text unencrypted protocol, Stratum v2 is a binary protocol. So on that term we'll be seeing significant improvements in the network bandwidth consumption and stratum v1 is completely unencrypted even though you can send it over a secured channel. The Stratum v2 is encrypted by default. It is enforcing the encryption so you will not be susceptible to man in the middle attacks. And lastly on the holy grail and the ultimate goal is to give the power back to the miners through the miner built templates compared to the Datum protocol or similar to the datum protocol so that bitcoin mining can be a bit decentralized maybe I'd like to talk a bit about what do I see as a success of this working group. And from my perspective, there are two points that I'd like to mention. One is like the short term success, which would look like that miner running Brains OS will be capable of connecting to any major pool utilizing stratum B2 without any hassle. So it's about the interoperability over the landscape. And what I would argue is like the long term success of the whole effort is that the stratum v2 pretty much becomes the default standards to the mining protocol.
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B
And just one point of clarity for our listeners who might be a little bit lost on the significance of this. So Stratum v1 and Stratum v2, but specifically Stratum v1, because it's the standard right now, is the way that is a protocol that bitcoin miners use to communicate with pools. And the reason that we have it is so that the pools can know which miners are actually contributing valid work to the pool so that they can get payouts proportionally. So it's a way for miners to communicate with the pool operators. And importantly to your point of one of the big differences about SV1 versus SV2, Stratum V1 does not allow miners to construct their own block templates. But Stratum V2 is built for this functionality. Most people don't realize, but when we talk about bitcoin miners, we're really talking about two different things. And I think most people when they talk about bitcoin game theory, are actually talking about pools now rather than actual miners because the pools construct block templates and choose the transactions for their miners, not the other way around. Straight MV2 breaks this mold. Charlie, you looked like you were about to jump in with question. I'll let you go.
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C
I have kind of a question which I feel like this goes a little under discussed. We've been talking about SV2 for like eight years.
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B
I forget.
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C
But like one of the challenges I see is that and why, maybe why it's taken so long is like there's not a lot of financial incentive for anybody to do SV2. Unless I'm wrong, Lucas, like what are the incentives for Pete for miners and pools to. To adopt SV2?
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D
That's a really good question. And the financial. I would, I would argue that incentives are limited per se, of course. However, security shouldn't be taken lightly. So the whole encryption thing, making the mining connection secure will actually lead to less hash rate stolen through demand in the middle attacks. Of course, that's one thing. The other thing is if you are, you are of course paying for your ISP for your Internet connection and the more data you consume, the more you pay. So there is financial incentive on actually optimizing on how much data you consume. Of course, I wouldn't necessarily say that Stratum V2, that's the main selling point because if you really want to save on your data and are willing to lose some of the granularity of the mining, you will use aggregate like a aggregating proxy for that, pretty much turning a lot of miners virtually into like small number of super powerful miners from the, from the point of the pool. So those would be like the straight incentives for the miners. Why to adopt Stratum V2.
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B
So Lucas, I want to turn our attention to some of the companies involved in this and exactly what they'll be doing as a part of this working group. So the working group was established in 2022 with Spiral, which is a division of Block. It's kind of their bitcoin incubator. That's Jack Dorsey's Block, formerly Square. Now the full Block organization has joined on and they are joined by the Mara foundation, which is a kind of bitcoin nonprofit arm. I don't know if it's nonprofit, but it's kind of like this, this kind of rah rah bitcoin arm of Mara. We've got AMP Pool, Foundry, F2 Pool, Spider Pool and Demand. I mean between Mara, Antpool and Foundry and F2 Pool and Spider Pool. I haven't looked at the stats, but you're getting close to like 70% of Bitcoin's hash rate. It's quite a lot. And so I'm just curious, kind of a two part question number one, how exactly will these teams coordinate when they are testing straight in V2? And also I want to hit on this topic of fact that straight in v2 is open source and there's actually some wiggle room that these companies can have and how they modify it for their own use cases. And I'm curious If you have any input as to what some of those modifications could be, if you've seen anything from these companies for how they're tuning SV2 for their use cases, you know, what exactly do different implementations of SV2 look like in practice with this working group?
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C
Yeah.
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D
So when it comes to how the companies collaborate, the whole point of the working group is to actually come up with the specification that is, that will be rigorous enough so that different implementation of distressing V2 can be compatible among each other. The community is organizing regular calls where all the participants can pretty much share their experience with all the quirks and details they run into when pretty much implementing Distrasm V2. And the open source community is taking this feedback and transforming it into improvements for the specification. So the whole collaboration pretty much is linked to ultimately coming up with the ultimate specification that will enable all the participants to be interoperable along the way. When it comes to different differences in implementations, There should be, at least in the mining part, there shouldn't be a lot of wiggle room. And that's the part. That's the thing with the current phase we're in pretty much we want to clarify all the edge cases so that we can have something to follow on, like a really good public documentation of how to implement Stratum v2. I'm not sure where I completely covered the question right now.
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C
Oh, you need to call him.
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B
Oh, sorry. That does answer the question, because I was wondering, you know, how much, how many changes or how drastic of changes could these pools actually make to SV2? So I think you addressed it. But Charlie's got a. I've got a.
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C
I've got a. I've got a. The spiciest question. Yeah, okay. Ocean put out datum. They've had it out for, I guess, a couple years now. Datum is often like, framed as like a better version of SB2. And frankly, I can't actually tell what the material difference is. How do you describe, how do you explain what, what's different about SV2 and Datum? And then like, is there really that big of a difference?
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D
So, first of all, I think it is awesome that there are right now at least two protocols that are sharing the same, the same goal of giving back the template construction to the hands of miners. That's just awesome. But there are differences in between stratum v2 and datum. And like the block template creation is the whole point of Datum that is the single thing that or the main thing that the Datum protocol is trying to resolve. When it comes to communication in between the Tatum gateway, which is, which is the part of the setup that you need to take, the datum is still, the datum gateway is still communicating on top of SV1 with the miners itself. So it is not addressing the whole or all the issues that Stratum V2 is trying to address. It is trying to resolve in really clever way. I have to admit that the template creation problem, but when it comes to other problems like the enforced encryption or binary format, that is something that Stratum V2 is trying to resolve. It is not trying to just implement that particular feature. It is trying to build the new standard of the mining protocol from the ground up. You still, even though for example, when it comes to encryption, still the datum gateway is communicating with the pool in encrypted way. So that definitely improves this particular aspect of the communication. Well, but if someone will break into the private network and still there is a room for men in the middle attack in between datum gateway and the miners itself. So that is not completely addressed yet. The other part is that Datum is developed by company and has full control over it, Whereas the Stratum V2 is developed by open source community. And I would say that one of the key difference is that as of now or the Stratum V2 community is focusing on having the best possible documentation and specification of the protocol. Whereas to my knowledge, I believe that datum specification is yet to come and yet to be released.
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B
That was a good breakdown, Lucas. Really appreciate it. Well, we're at time for your segment. Thank you for joining us man and best of luck with the working group. Really excited to see what they cook up.
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D
Thanks for having me.
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C
Thanks for joining us, Lucas.
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B
Lucas
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C
okay, that concludes the more technical part of this stream. We're going to start talking about markets and more cultural stuff here in a moment right after a word from our sponsor, CleanSpark.
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B
We are CleanSpark, America's Bitcoin miner. A publicly traded company with the largest operating hash rate powered entirely by self operated infrastructure across four states. This is our proof of work. We are setting the standard for what's next. Learn more about the intersection of energy and bitcoin@cleanspark.com
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C
all right, coming up next, we got po longtime bitcoin bull, microstrategy bull blowing a lot of things but great market commentator. I'm going to bring him up here. Let's do this. Welcome to the stream. Po.
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E
What's up guys?
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B
Thanks for joining, man.
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E
That last technical conversation, that one's gonna go giga viral.
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C
Oh, man, look, we've got. We schedule. We. We have a pretty broad.
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B
Brother, it is a tough tightrope to walk, let me tell you.
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E
You guys seem super into it. I mean, yeah, that guy was obviously insanely knowledgeable. It's just. It's almost like it's just gonna get to a point with a lot of the bitcoin stuff where it's like, it's the same thing as if we got on here and we started discussing like, HTTP yeah, like, you know, Internet protocols and stuff. It's like I just don't know what the TAM is on that content.
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C
But yeah, exactly. Because, like, you know, and maybe we can use this as the hook in here, which is. Michael Saylor's talk, was the most attended talk at Bitcoin Vegas. And that's kind of why I had you on here, because again, it's just whenever Saylor Strategies says or does something, we got to talk about it. You had some tweets. You're a microstrategy bull. I believe you said, I'm going to pull this tweet up here. Look at this here. This one. Microstrategy is nearly at 200 stealing 80% discount for a $1,000 stock. That's a banger tweet. Why are you bullish on Mike? Why is it a $1,000 stock, Pierre?
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E
I mean, it's. It's really higher than a thousand dollar stock. But it's almost like if when you. Let's say you figured out what bitcoin was when it was like 400 bucks or something, right? And then you said, it's going to be a hundred thousand dollars or a million dollars, people would say that you're completely out of your mind. Like, like literally people would be like, you are unwell. You're nuts.
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A
Right?
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E
Because people just can't. It's so hard to see into the future. It's like the hardest thing to do, right? Otherwise everyone would just be billionaires. Because everyone would be able to predict the future, invest their money accordingly, you know, bet on the right careers, all this stuff, right? But once Bitcoin's $125,000, saying that it's going to go to a million dollars su almost like a foregone conclusion. And people are like, yeah, but that's only a 10x. I look for 100x, right? So things just really change. So right now, at $170, $180 micro strategy, the number to say is $1,000. Because people are like, yeah, I could see that. Actually, a lot of people don't even believe that. But, you know, people could at least understand why you might say that number. But if I say $20,000 per share right now, everyone's going to look at me like I have six heads. But the reality is when you extrapolate over enough time and you have stock splits and everything like that, the. I do think it's going to go to like 20, 30, $40,000 a share in my lifetime, you know, equivalent based on the share price now. But it's just going to take a really long time. And people think that when you make predictions, it's for like next week, but most of this stuff takes a really long time. I don't think a thousand dollars will take that long.
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C
But yeah, I mean, and you brought up the per share, which, if you've been paying attention, you can see that Michael Saylor and the strategy narrative has shifted from total raw bitcoin accumulated to a bitcoin per share measuring stick. And you actually, again, I'll pull up another tweet here. You had an interesting take on this because you present this bull case. Again, this is just an idea. You throw himself out to tweet. Bull case or Bitcoin doesn't even need to go up for strategy stretch to power the increase in microstrategy per share. You know, explain this to me because this is an interesting take, I think.
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E
Yeah, I like to play with the AI tools like cloud. And these AI tools are so good now that if you give them a really specific prompt that, you know, factors in. Because this stuff's all math. It's not that hard. Like you could do this by hand. It's actually not, you know, hard math. It's just looking at the accumulation rates of, you know, Bitcoin against, like the volumes on stretch and extrapolating a little bit and then factoring in, you know, for some anomalies like slow months and things like that. But that's that, right? There was just Claude spitting out projections for share price based on the dilution of the share price, which is obviously a huge factor based on the volumes of, of stretch based on bitcoin price and based on historical bitcoin accumulation data for microstrategy, I mean, the thing's going to go up, right? It's really volatile. And when it goes down, because volatility goes both ways. So it went from 540 to 107. And people just hate that. They hate it so much. And the whole time it's going down like that. The only argument against it, nothing changed with the company. Well, if anything the only thing that changed, the preferred equities came out, which makes it better. So the company's getting actively better while it goes from 540 to 107. And people on Twitter just point to the 107 or point to the declining stock price and they just tell you over and over again the price of the stock is going down. And it's like yeah, I know. And that's what people are doing with like Open door right now. MicroStrategy is going up now it's up, you know, 107 bucks to like 180 bucks in like a month and a half. Right. So it's going up now. So we're back on the going up cycle. But obviously there's going to be a lot of volatility. But yeah, I mean I just, I look at these companies from like a high level. Same thing with like an Open Door, which obviously is not a bitcoin company but bitcoin companies like Iron, Bitcoin Miner, you know, stuff like that. I saw your, your sponsor clsk. I used to hold that stock but I switched to Iron and Cipher. I just look at these companies pretty simply and I don't worry about the price action, the stock. Everyone that's bearish on Open Door right now, just using it as a fresh example because it's something I watch closely is panicking because the price of the stock is going down. But I'm like, the company's getting way better. It's like it's in the best place ever. It's doing so well. Who cares what the market is doing to the stock? And MicroStrategy is in a really, really cool place right now. This most recent earnings report was nuts.
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B
Today I learned that Open Door is public. I had no idea.
- [33:13]
C
Yeah. Follow PO to learn more about door
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B
going back to Stretch PO and you mentioned you know that these preferreds are making the company better.
- [33:21]
E
Yeah.
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B
I've got to throw a steel manning question. You can tell me why or why not. This is a mid curve concern. So obviously the preferreds bring in income when they sell those shares. They don't have to dilute the common stock, which is great for MSTR holders. It creates income, but it also creates a liability. These things are paying out 11.5% annually. How do you square that with the bull case? Especially when you consider that strategy's operating business doesn't generate nearly enough income to furnish these preferreds.
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E
Yeah, the operating Business essentially pays for everybody's salary and pays for all the expenses of the business, which people never talk about and is a huge factor. You got a publicly traded company here. There are costs associated with all this action. Ipoing these, you know, preferred equities. There's a lot of costs there. I mean, every, you know, strategy has to file these 8Ks. There's just so much going on there. So the operating company is doing its job, which is it is profitable. It's not good enough to be Mag 7. And that's like what Saylor struggled with for a really long time. But it's just a solid, profitable zombie company by S&P 500 standards, which means it's under performing the S&P 500. This is before bitcoin. Blah, blah, blah. Just want to kind of, you know, put that out there before we talk about it. Now you're talking about the preferreds. So Stretch is the preferred that pays right now 11 and a half percent, and it is the strongest preferred of all of them, you know, both in terms of market demand and in terms of its, you know, its benefit to strategy. He they kind of hinted at they're going to kind of retire some of the old strategies. Like they tried like 20 different things to get to Stretch. Right. They tried a lot of different stuff to get to Stretch. And now Stretch is clearly the best thing. So when you talk about, you know, the obligations of the dividends, I think the thing that people always forget about and don't totally grasp or just don't have front, you know, like top of mind, is that strategy owns 815,000 or however many it's now more than that. A little bit more than that. 815,000 bitcoins, 8, 85% outright.
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A
Right.
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E
And stretch has a different audience of buyer than mstr. So, for example, my business owns a lot of Stretch because I'm like, cool, we want to, you know, it's a business. I don't want to absorb the volatility of MSTR in the same way we have some MSTR because I'm obsessed with it and I want to be on like a quasi bitcoin standard. But with Stretch, my business is a big buyer of that. So Stretch targets a different audience. So it's a way to attract more capital. When you talk about paying the dividends because of the bitcoin stack, they can pay the dividends as it stands right now for like 70 years. Right. And I think people forget that the bitcoin is owned 85% outright. The only True leverage for the bitcoin is the convertible debt, which was the first strategy that they implemented like five years ago now.
- [36:06]
B
And all of those converts are in the money, I would imagine.
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C
I.
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B
Right, yes.
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E
Some of them have outperformed bitcoin and some of them have actually zero percent, like a zero percent coupon, because the people in those markets wanted access to bitcoin and couldn't get it any other way. No other issuer in the world was giving them access to that. But in this earnings call, very interesting strategy, hinted at the idea of buying back the outstanding bonds to just get rid of that completely. They're not going to do it right now, but let's say Bitcoin's 180,000 bucks MSTR is trading at like a 2.4 XM nav. You can ATM MSTR big time at that point and then clear all of that legacy debt. And then you can point to the bitcoin stack and be like, we own that with zero leverage. Like, we owe dividends.
- [36:51]
D
Cool.
- [36:51]
E
Other companies owe dividends too. Look at us. So you have to remember how much bitcoin is owned outright when you think about the dividends. And I understand people, like always paying this dividend with that dividend. That's an issue if you have nothing backing anything. If you have $0 on the balance sheet. If you're Bernie Madoff or a Ponzi scheme, taking money from one person and giving it to another person, yeah, for sure. That's a big issue. You've got 800 DOL, 115,000 of the most liquid asset, one of the highest volume assets. Actually, I think it's the highest volume asset in the world. You know, it's really. It's really something that he's built.
- [37:23]
B
And this is a good thing to bring up, too, because on that earnings call, Saylor said, we will probably sell some bitcoin to send the market a message. He was specifically saying, and he said this outright in the earnings call was wild. I want to rip the wings, or I'm going to rip the wings off of short sellers if they think that I have to dilute to keep this train going. So it seems to me like judging by your response just then, you think this is probably a good move. You're going to want to leverage the bitcoin on that balance sheet at a certain point. But what are your thoughts on the idea of strategy, opening the door to potentially sell bitcoin into the future?
- [37:56]
E
So they've sold bitcoin before. That's a big thing. That people don't talk about when they talk about this. They sold it. And I believe it was 2022, if I'm not mistaken. The big. The year that bitcoin went way down. I think it was the FTX year. I'm pretty sure it was that year. Either that year or 2023. At the end of the, they sold bitcoin to essentially off, like for tax loss harvesting purposes, because there's no wash rule on spot bitcoin. So they did that and they bought more in the same announcement. So it's not like they announced that they sold bitcoin and then the market panicked. They announced that they sold X amount of bitcoin and bought like 3x as much Bitcoin in the same announcement. That's what I would expect. If he did do an announcement of just them selling bitcoin, I think he would do it to like send shock waves through the market and have everybody spaz out. And then the next announcement would be like this colossal, ridiculous, ridiculous buy. He. He does, like, confusing people that don't understand strategy. And at this point, it's just pretty funny. I mean, like, when he tweeted right after that announcement that everyone was talking about, he said, buy more bitcoin than you sell. You know, because he's. He used to say, never sell your bitcoin. Then he said, buy more bitcoin than you sell. I just thought that that was like the funniest thing. He is funny. I also, I said earlier on a different podcast, I think he would kill someone with his bare hands if they got in the way of strategy succeeding. I actually think he would do that. Like, I think it's like there will be blood Daniel Day Lewis level where he'll just kill you with a bowling ball, you know, over the business, you know, But I want to show you guys something. Can I share my screen? Is that possible?
- [39:23]
C
Yeah, you can. I can add it. Cool.
- [39:26]
E
So this is my guy, Dan Hillary, who you guys should definitely reach out to and try to have on this show. And by the way, he's going to be way better at explaining all things microstrategy than I am. I cannot even hold a candle to the way that this guy could explain it. This is a different animal. Right? So I'm not as far down the, the, the curve as this guy is when it comes to understanding markets and finance. I'm lucky that I understand what I understand. But this is. He shows this slide from the earnings call. This is the most interesting slide in the entire earnings call in My opinion there's a lot of interesting slides but this is the most interesting one because this strategy puts it in writing that they use the term trades. So strategy is becoming a super cool company right now. It's becoming like more hedge fund like than ever before. The green text over there is new stuff that they're considering. So buying debt, you know these kind of new approaches. Right. And by debt is what I was talking about retiring the con, the convertible debt, you know that the legacy debt from like five years ago. And so they have are basically demonstrating that they are just going to do whatever they think is the best thing to do. For MSTR common stock it's always going to involve accumulating bitcoin. It's going to involve issuing digital credit against the bitcoin. But they're more open to do different things now. They're finding their groove. They try to bunch of stuff before they found Stretch. Sailor also said in this earnings call, very interesting. If you start a bitcoin treasury company today with a blank sheet then you should just do the common equity. So like in his case it would be MSTR and the monthly or twice a month paid out preferred equity. So Stretch he's. He was like the other preferred equities are interesting I guess he's basically on the the preferred equities that he put out there. But from the perspective of they're not that good for mstr, they're good for investors. So if investors actually want like alpha buying for example Strike I think is a really good call right now. Strikes at like 70 something dollars. Its par value is $100. He might buy it at par value in the future at 100 bucks and you're going to get a dividend the whole time. $2 a quarter for every share that you have the whole time. Fixed dividend. It's actually towards the same percentage as Stretch right now but it's every quarter instead of every month. So super interesting for him to hear that there's a company called Strive Ticker asst. Referred to as Asti. That is that which is. So that's basically a major cosign of that company. He's been cosigning that company left and right. But there's a lot of interesting stuff happening with the maturity of these companies and digital credit developing as you know a real instrument in finance. It's super cool.
- [42:03]
C
So pio super bullish on strategy. You gave us a whirlwind tour of why you're bullish. Makes a lot of sense I guess my you know Just to wrap this up, give me your fun takes on Saylor's social media strategy. I'm mainly thinking about the. The AI tweets. How are we feeling about those?
- [42:24]
B
I love it.
- [42:24]
E
It's great. I mean, like, I think it's so funny and people react to it every time. Like he's doing it on purpose. He's pretty goofy. Like, knowing who he really is, it's surprising to me how goofy he is because he's like a serious dude. I haven't met him. I'm scared to meet him. I would be absolutely terrified to meet him. I don't think I'd be able to process being able to beat him. I'd be so starstruck.
- [42:47]
A
But.
- [42:47]
E
And he's just so intense and everything. I've heard about these meetings with him where he just bugs people out. But yeah, I just.
- [42:53]
A
I.
- [42:53]
E
It's so funny. I actually don't understand how he's. He's just wicked funny with this stuff. I don't know. I love it. It's super funny. Gets a lot of views. It works.
- [43:03]
C
Yeah. Michael Saylor says no more bears. Po, thank you so much for coming on the show. Yeah, fantastic takes. Love your time. Thanks for. Thanks for hopping the show. We'll see you some other time.
- [43:15]
E
My pleasure, guys. Thank you.
- [43:17]
C
All right, from stratum V2 to strata G, V3 or 4, whatever it is, we are still rolling hot. We've got another guest, Yogi, but not before a word from our sponsor, Luxor.
- [43:37]
B
This episode of Blockspace Live is brought to you by Luxor's Commander Bitcoin miner management software for. For enterprise operations. Commander gives you real time monitoring bulk remote commands across your fleet. And intelligent miner, that's an automated profitability engine that runs every five minutes and adjusts your power settings to live hash rate and energy markets. ERCOT back tests show 10% more profitability with intelligent mining versus binary mining. Commander Pro is $100 per megawatt or a 25 basis pool fee adder, roughly half the price of competitors. And there's a 60 day free trial. So if you want to try it before you buy it, get started at Luxor Tech Commander.
- [44:19]
C
All right, we have our next guest. Yogi, my man. Over at Thesis and Meso, we're going to talk about our favorite boogeyman, Elizabeth Warren. Let me bring Yogi up here. Yogi, welcome to the show.
- [44:37]
A
Thanks for having me, dude. How's it going?
- [44:40]
C
Fantastic. I'm glad we could put you on right after Pio because this is a good One to punch here.
- [44:46]
A
You are like energy. Yeah, some passionate energy there.
- [44:51]
C
I know you've, you've. I was looking at your Twitter over the past. I mean, 2026, you've been absolutely blowing up. In fact, you got to be main character, I think over the past weekend on the Spirit Airlines thing, which not crypto related, but we're going to talk about it anyway. Can you. Yeah, okay. So you had this massive tweet. I'm going to put it up here. You have this massive tweet. Spirit Airlines died tonight at the hands of socialist crusader Elizabeth Warren. I'm not going to read the tweet. I'm going to have you explain to me what's this angle you lay out here? Why is it so resonant on X?
- [45:33]
A
Yeah, I think there's a lot of. I think first with X, it just, it's funny how stuff randomly goes viral. I think people look at things way too black and white these days. Everything is extremely polarized, but no one actually realizes that everything. There's so many nuances to decisions we make and they have a lot of rippling ramifications. So with the, with the phrasing of, you know, Elizabeth Warren, she is a socialist crusader in my opinion, like all of her policies are very anti capitalism. Government should not get involved with free enterprise. In my opinion, broadly, that also means that we shouldn't bail out companies. I just like, people are like, oh, people were misunderstanding that tweet. I think the thing that happened with Spirit is that most airlines in the U.S. right, you have Alaska, Delta, American, United, all of them have faced bankruptcy crises at some point in their last hundred years. Delta bought Northwest in 2008. Alaska bought Hawaiian Air or Virgin. I forget, I may mix up the
- [46:36]
B
airlines, but they all bought, I think it was Hawaiian.
- [46:39]
A
Hawaiian. Okay. And so all of these airlines have had difficulties. We won't get into the difficulties because that's probably like a Harry Potter novel on the regulations of US Airspace and how outdated our tech is. But what was interesting about this one specifically is that everyone cheered the blocker of this, the blocking of this merger in 2024. And what was interesting is how people were phrasing it back in 2024 and how they phrased it in 2026. So in 2024 it was, we are saving the consumer $1 billion. So, you know, a government got involved in two private enterprises trying to save each other and said, hey, we're going to block this deal because you're bad for the people. And then if you look at any of the data from that period. Spirit has filed two Chapter 11 bankruptcies since that merger was blocked. And since then, they've ended routes from a lot of airports they were still operating prior to them, like having that last flight on May 3, I believe. And rate affairs have already gone up. So there was this argument that, oh, we're going to save people, you know, cheaper, cheaper flights by not letting them collude or collude or, you know, combined. The second argument was that, hey, the Iran war actually caused this company to go bankrupt. And so it was interesting for me to see that rhetoric really get pushed. And I was like, if I'm a plane with a blown door already about to crash and the sun sets, do you blame the moon for coming out when this plane is like 2,000ft off the ground, literally about to hit the ground? So it was interesting to see that. And then she blamed the judge. So then it was like, hey, wait a minute, the judge made this ruling. But guess what, Warren, you went to the Department of Justice and the Department of Transportation. There's actually a tweet by Thomas Macy, who's probably one of the more objective politicians these days, and I, I, you could probably find it. I can send it to you afterwards. But he basically goes and says there was an unprecedented level of coordination between this senator, the Department of Justice, and the Department of Transportation to build a case to then sue. So, yes, the judge made the decision, but that's like saying that you fire a gun and then you blame the gun for someone dying.
- [49:05]
B
So, anyway, I also love the. For what it's worth, it's almost like the Eric Andre meme where he's shooting the dude in the chair. It's like, who did this?
- [49:13]
A
Yeah, exactly. So it just. And I, and I wanted to use the socialist phrasing of this because it's not all sides. It's. There's a specific group of people who believe that there is some big, bad villain in a closet trying to hurt everyone. And then there's all these unintended consequences, and people don't understand that. And so with the Spirit Airlines bankruptcy, there's three big consequences. A, less flights for small airports. Yeah. If you're in New York or, you know, la, it doesn't really matter to you. But if you live in, like, I don't know, Fort Lauderdale, Tucson, or, like, just random cities, you are impacted. Be any area where Spirit is no longer operating. They already said, like, I think Oakland and New York fares went up like, like 50 bucks. Yes. That may not matter to the average person. But, like, people that live on minimum wage definitely hurts them.
- [50:03]
C
But the people.
- [50:04]
B
Sorry to interrupt. The people who fly Spirit, that matters a lot to. And you kind of make this point in your tweets, right? It's a budget airline, so these people don't really have many places to go now, so.
- [50:13]
A
And then there was this. This positioning that, like, hey, we're trying to not let airlines monopolize. Well, you should have done that like, 20 years ago. You know, four airlines control 80% of the airspace in the United States. JetBlue and Spirit merging would have supposedly reached 9% market share. I don't believe anyone. If you know math, I don't think 9%'s a large number when other guys have 20 plus. I don't know, that just may be me.
- [50:43]
B
Yeah, that's a really good point. Sorry, Charlie. I just wanted to highlight one thing too. One of the things that blew my mind about this kind of playing into the anachronisms and weird historical revisionism of saying, like, the Iran war caused this or it was the final nail in the coffin. A lot of people were saying, and I think Warren actually tweeted this, Spirit doesn't deserve a bailout. And I have a really hard time squaring that. Did 2008 just break everyone's understanding of how, you know, how companies can go through bankruptcy or whether or not the government has to step in to bail them out? Like, do people fundamentally not understand the difference between acquiring a distressed company and the government giving that distressed company money so they don't die?
- [51:24]
A
Maybe I don't think people read anymore, dude. I think the problem is people have a two second attention span. And there were people literally in my tweet saying we shouldn't bail them out. And I was like, I did not write that we should bail them out. I said that Spirit should have been able to sell themselves to JetBlue. And then someone else was like, oh, you're like. And it's funny how people choose sides where it's like, guys, this is purely a free enterprise discussion on if two airlines should have been able to merge. And then they don't talk about the consequences, like, if we talk about 2008. Just for, like, a quick tangent, I guess. Yes, bankers made really bad decisions. Yes, probably a lot of those companies should not have had golden parachutes and they probably should have failed. But the calculus the government did and Greenspan did at the time was probably, if we let these people fail, it's going to hurt people even more. So we should step in. And that is another. Like with Spirit, there was this report I read, one airline job basically supports three local jobs. So if, if Spirit Airlines laid off 14 to 17, 000 people, whatever it is, over the past two years, that probably will impact about 40, 000 other jobs that that has created. Just because if an airline is servicing a place, you have Ubers, you have local coffee shops, you have hotels, Everything is linked. Now, I agree that, you know, we should not jump in and save Spirit because it was poorly run. And I would also never fly Spirit. But again, we're not the customer for this.
- [53:06]
E
But on the same.
- [53:07]
A
And I think people keep forgetting what happened in 08. And I don't think there's this television where people can see like, mate, what if we didn't bill anyone out? Where would we be today? And my gut is that we probably would be very. We would have had a really crappy, you know, 20 tens. We would not have had this tech boom because the entire faith of the financial ecosystem probably would have collapsed. So when you think about stuff that way, it's like, all right, the government needs to step in here and there, which is why there's this idea of like too big to fail. But then people just cherry pick a handful of people getting golden parachutes, not realizing that billing these people out probably saved millions of jobs and millions of people from getting foreclosed. Like, they. They get very nitpicky with. With fix.
- [53:53]
C
So, you know, maybe. Maybe Spirit Airlines still has a chance. You know, you say people don't read anymore. They have attention spans of a few seconds. And here we are speaking of slow attention, short attention spans. We have the TikTok, a TikTok creator crowdfunding the campaign to buy Spirit Airlines for pledged up to $335 billion. Yogi, do you think they're actually going to be able to pull it off? What a chance.
- [54:19]
A
I don't think there's not a chance unless this guy has deep pockets. I think you have to meet certain requirements to buy an airline. Like, there's a lot of regulatory loopholes. I also think that people have already been laid off. It's one thing to help someone that still has a heartbeat. It's another thing to take a corpse and then make it into Frankenstein. And I was reading up on like, the dude, like when you look at a distressed asset, like when it's alive and people are at the table, like when the. The merger was approved in, in 2024, the creditors were on board, the unions Were on board, everyone was ready, everything was running. Now it's dead. People are out of jobs. Probably have found other jobs. The creditors, because Spirit actually leases most of their planes. Those planes are probably already being sold to, you know, people abroad. And any. They only owned like 30 to 40 planes, which are quite old and very inefficient from a fuel perspective. Fuel continues to go up. So like now you can say fuel has probably an impact because this is an airline that's no longer operating. And then you have to think about the airports. Like, those gates are probably being given to other airlines and getting.
- [55:33]
B
Oh, totally, Yeah. I mean, I've already. Sorry to jump in, Yogi, but, you know, I fly a lot for work and I noticed on Delta and United they had notices the day that Spirit flew its last flight saying if you're a Spirit customer, like, and you had a fair for these dates, you can, you know, redeem them here with us. The sharks are already circling.
- [55:52]
A
Yeah. So I just think that it's a lot harder to rescue something when it's dead and sorts. Then, like, maybe that he'll be able to pull it off. But it's like you're now starting from scratch again.
- [56:05]
D
Yeah.
- [56:05]
A
You have Spirits, ip, brand, probably their attack. But if people have already left or moved on, it's not the same. Also.
- [56:12]
B
Right.
- [56:13]
A
Influencer buying, I think is. I. I don't know. I just don't believe it.
- [56:19]
B
It's a sign of the. It's a sign of the times, man. You know, a little bit of social media virality with Dunning Krueger mixed in. That being said, you know, 300 million is a lot, but the original acquisition offer was 3.8 billion from Jet.
- [56:33]
C
I don't think they have to have the money like three. They just. This is pledge there' like pledging towards like a Kickstarter without actually, you know, doing money. So I. Right.
- [56:41]
B
My point is they're actually serious. They've got a long way to go, probably.
- [56:44]
C
Yeah.
- [56:45]
B
Maybe for cheaper. And per Yogi's point, like, the company's dissolved at this point. You're going to get management back in. You're going to get all these people you just laid off.
- [56:53]
E
Yeah.
- [56:53]
A
It's just like insane levels of disruption. And then it's the crap. What was I going to say? It was what? The raising the money is one part. It's getting the entire thing to run. And I think, like, the only serious buyer from an influencer perspective I could see would have been Mr. Beast. Like, dude, think about Beast Airlines. I'm sure he could probably get a package together.
- [57:17]
C
Oh my God.
- [57:19]
B
Feastables on the Mr. Beast airline.
- [57:26]
A
Like, you guys like, let's take a step back. All right, first of all, Charlie, you love mining, so you could have had Mr. Beast come on say, hey, we have 30 old planes. He's barely fly. Those are going to turn into mining rigs. Mr. Beast uses this as a cross selling operation. Like, all right, I got my food, I got my branded clothes. We could probably like, hey, like, you know, like do this on a plane and get a free flight. Like, I don't know, like you can make it into a, a show and you could probably then get the funding to get it. But the. On a serious note, the one last thing I wanted to mention on this is that some of the other arguments were that JetBlue is also failing. So why would two failings make a right? Right? Like there was some, I think people argued that the reason why the jet, like some random person coming in to save Spirit probably doesn't work because it was losing money for a reason. Right. Maybe you can fix management and it helps itself. You need scale with airlines. So JetBlue and Spirit merging adds routes, they consolidate routes that they both operate in and then you're able to make a profit. Because the biggest expense for the United States, like people that operate in the US is, but is all generally regulatory. And the fact that all of our systems are built on like DOS and other old tech from the 60s. And so it doesn't matter how fast you're playing as or how cheap the fuel is, there are just costs that these airlines can't afford. So I don't know.
- [58:58]
C
So Yogi, I think maybe to wrap up, you know, I don't think it's a, I don't think it's a coincidence that a lot of the crypto people kind of piled in on this and pointed the finger to Elizabeth Warren. Like we have been under her finger for years. There's a lot of pent up frustration. I don't know, did it feel a little good, a little shaden Freud to like put the, to throw this back at her on this?
- [59:21]
A
Dude, it felt amazing. This is a woman who has said that tech is stupid. Anything related to crypto is stupid when the entire industry is supporting it. Like I can understand a Ponzi scheme that works for a couple of years, but for 15, 17 years the entire space is believing it. It's just like bad framing. So it felt really good to literally take her words and go back to her and say, hey, you wanted to save people a billion dollars. This will probably cost people four to five now. Like, congrats. Thanks for. Thanks for winning. You know, like, thanks for helping us win here.
- [59:59]
C
So. And thank you, Yogi, for hopping on the live stream. Really appreciate this. This will be some banger clips later. Yeah. So everyone go follow Yogi. Check out his absolutely exploding Twitter timeline these days. Thanks a ton.
- [60:15]
B
Yeah, thanks, guys.
- [60:16]
A
Have a good one.
- [60:16]
B
Thanks, Yogi. His Twitter timeline's a tour de force.
- [60:21]
C
Yeah.
- [60:21]
B
Dude's got analysis on the Spirit merger failing. He's got social commentary.
- [60:28]
C
Yeah, yeah. Very, very, very good at engagement. Whatever. Whatever chat. GBT model he's using. Let me get he. Maybe he's got. And maybe he's got the Mythos model he's using.
- [60:38]
B
Yogi GPT.
- [60:39]
C
Yeah, Yogi GPT. Okay, we are still going to roll along. We're going to talk about some miners, mining equities and hyperscalers. But not before a word from our sponsor, Lygos.
- [60:56]
B
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- [61:45]
C
All right, let's keep rolling. I think we're talking.
- [61:49]
B
We're talking. Mara, baby. It's earning season and everyone's crying because there are no deals. No, I'm just kidding. Just kidding. It is earnings season, though, and we've got some updates here from Mara. I will share my screen here in just a second once I can get this rolling. Here we go. So, yeah, Mera is fresh off of its earnings call. Revenue fell 18% in Q1 and they posted a 1.26 billion net loss. Now, net losses in our industry are misleading because now bitcoin miners can mark down the bitcoin they have on their balance sheet. Mara has, I believe, something like 32,000 Bitcoin. We'll cover that here in a second. They've trimmed their stack down quite a bit though as they look towards AI and HPC builds. But that net loss is almost entirely driven by depreciation on rigs and the change in the fair value of their bitcoin. But a few financial highlights from this earnings season from Mera. Mera increases hash rate despite its attention towards AI from 66.4 exahashes at year end of 2025 to 72.2 exahashes at the end of Q1. That's a big jump. And that firmly puts them into the first public bitcoin miner to operate 70 exahashes. Now there are some private miners who might be getting close to that. We know that electron manages like 50x a hashes for tether. Tether I think has some hash rate outside of Electrons management, at least from what I'm told from their from electron's team. But 70 Exahasses is just absolutely massive. Kind of going back to our earlier segment, it does kind of raise questions about Mara keeping options open. They're getting involved in the straight MV2 stuff. They are launching this Mara foundation for Bitcoin development and they're also signaling for the Great Consensus Cleanup or saying they support the Great Consensus Cleanup. Revenue came in at 174.6 million versus 213.9 million. That's down 18.4% year over year and missed the consensus estimate of 1 82.7 million. I won't bore you with some of the other stuff. Go take a Look at their 10Q and our coverage on block space. You can look at profit. Two things I do want to note. Cost of sales and GNA expense went up. The cost of sales ballooned from 145.4 million versus 24 million a year ago. That's almost a 500% increase. A lot of that has to do. I would assume with expansion of Amera's hash rate. They've rolled out a lot of exahashes since 2025. Since Q1, 2025. Obviously their power rates or their power costs are going to go up. Operating costs are going to go up. Their GNA expenses also rose from 36.9 million a year ago to 57.7 million. I think a lot of that has to do with hiring out for these AI business lines. They're starting to hire talent to try to work on getting a tenant secured and revamp their facilities for AI and hpc. Speaking of that, there were a few qualitative updates about their AI business line. No deals signed yet, but MERA has this JV with Starwood which is a data center developer and it said that in Q1 or management setting Q1, Mera entered into active tenant discussions with multiple counterparties, including hyperscalers across 90% of its existing owned and operated sites. Management provided guidance saying that they expect to sign a tenant by the end of 2026, with the initial build out starting in 2028. Last thing to note, public miners are selling Bitcoin. No one cares about Bitcoin anymore apparently. Makes sense. There is this massive pile of BTC on their balance sheet and investors want to see them using that bitcoin towards furthering more lucrative business lines like AI and HBC. Their holdings fell from 53,822 BTC at the end of 2025 to 35,303 BTC at March 31st. As of March 31st, 2026, that is a reduction of 18,519 Bitcoin. That's worth roughly $1.5 billion. And they use that to retire a old convertible note. 912.8 million outstanding on that and also paying down 350 million on a credit line. So really starting to prep themselves for the AI stuff. Obviously investors are really just waiting around hoping to see if they have a deal coming in the door. And Marist stock not really doing much on the earnings news. I mean it's basically flat. It's down 1% over the last five days, down 0.4% today, negligible.
- [66:45]
C
So let me get this straight. MERA hit record all time, high hash rate both for themselves and the industry at large. And then also simultaneously I believe had their worst quarter in history. I remember a year and a half ago we were kind of wondering if the AI pivot would work. And now I think we're wondering why anyone isn't. BION was slow to it because it's very obvious in retrospect at this point if you're mining bitcoin, you're just shoveling money into a big black hole at a faster rate.
- [67:19]
B
That's true. And one note on that about moving into AI sooner rather than later. I think a lot of investors have criticized some of the slower movers like mera and even CleanSpark in this regard. And I just like to point out and steel manning the business case for them a little bit. But if AI is as revolutionary as everyone is saying it is, and to me as a daily user and seeing the advancements on models like Claude and chatgpt, makes sense to me that it would be, you know, we're still so, so much in the early innings. I mean, imagine like getting mad at a company for not getting into fiber when broadband came out or something. I don't know. You know, it's like there's still a lot of room to grow for this. And I actually think there's a good argument to be made that some of the late movers might be able to learn lessons from the early movers and construct better deals. Not saying any of the early movers have done anything to indicate that their deals suck. My point is though, sometimes watching and waiting and then capitalizing later is best for a company, depending on how it's structured.
- [68:20]
A
Right.
- [68:21]
B
So I think there's still plenty of opportunities. And if you were looking for companies to maybe dip your toes into if you missed the boat on some of the early ones, not financial advice. There are plenty of public miners out there that are pivoting to AI that are in active discussions with tenants. So I don't think the party's over yet. That being said, everything could tumble tomorrow, right?
- [68:41]
C
Yeah, I mean, I just, I say that because it's a good clip and because I try to, you know, elicit some critique from our viewers. Obviously, I think people should still be mining bitcoin. That's the whole reason we're, you know, I'm even here. So. But you know, and maybe also consider like the changing landscape, highly iterative landscape of AI compute. This is a very uncertain thing. You see Microsoft pausing the brakes on new build outs because it's not clear what to build. You know, that you want to build something, but it's not really clear. So maybe as the, maybe the early bird may get the worm, but perhaps the second mouse will get the cheese.
- [69:22]
B
I like that.
- [69:23]
C
That's my, that's my, that's my line. We gotta, we gotta wrap this up. We got one more story. I think we're gonna go full hyperscaler. AI HPC news, actually, actually, this is
- [69:36]
B
a vertically integrated NEO cloud and I'll get into what that means.
- [69:39]
C
Oh, my bad, my bad. See the glossary in the show notes.
- [69:44]
B
So Nebby has also reported its Q1 earnings recently. This week, their revenue jumped 684% as they beat earnings expectations. Now, we don't cover Nebbyus a lot on the pod. We're going to start doing it a little bit more, though, because they are emerging as one of the premier, if not the largest Vertically integrated NEO cloud. Now what I mean by that, a NEO cloud like Core Weave is a company that operates GPUs for high performance computing workloads. But it doesn't necessarily mean that they own their infrastructure.
- [70:14]
A
Right.
- [70:15]
B
Core Weave has this partnership with Core Scientific. They also have one with Galaxy. They lease out data center space. Nebius owns the majority of its data centers and the GPU compute in them. They host some of the their capacity in Europe at third party data centers. But specifically for the us, they are building fully vertically integrated data center AI service platforms. So to get into a few of the data points before I get into some qualitative stuff about their expansion plans, revenue up to 399 million for Q1 versus 50.9 million last year. Just an insane leap. And we're really starting to see these AI deals really take off in terms of revenue for these companies. As we covered on the POD recently, Terra Wolf and Core Scientific, for example, recently crossed over the 50% threshold of revenue coming from AI versus Bitcoin mining. That to me is a crossing the Rubicon moment. I don't think it's fair to call these companies Bitcoin miners anymore. They're data center operators.
- [71:14]
A
Right.
- [71:15]
B
They're just in a completely different business line now. So we're really starting to see these incomes surge as these Companies get these AI data centers up and running. Net income was 621 million versus negative 104 last year. A lot of that is largely because of a 780 million non cash gain from an equity stake it has in Clickhouse. And then there are a few other boring notes about their adjusted net loss. All these accounting games. Their adjusted EBITDA was 129.5 million versus negative 53.7 million a year ago. So the cash from operations 2.26 billion driven by 3.12 million increase in deferred revenue from customer payments. Nebias has 9.3 billion at quarter end after raising 6.3 billion, 2 billion of which came from Nvidia. The other 4.3 billion came from convertible notes. And they were going to need every single penny they can get because the CapEx guidance for Nebius is wild man. They secured 1.2 gigawatts in Pennsylvania for a new owned AI factory. And they're targeting more than 3 gigawatts of contracted power by the end of 2026. But here's where it gets really interesting. They are looking to expand absolutely, like a crazy amount over the next few years. They've got the Pennsylvania Fact AI factory. They've got a Kansas City, Missouri co location that they are building out and they also have an Independence, Missouri location as well that they are building out to 2 gigawatt plus. Charlie, I'll let you jump in if you have anything to add before I wrap up.
- [72:59]
C
Yeah, I got a few takes. What's funny is I'm pretty sure I've heard about this Independence, Missouri like one plus gigawatt power availability for years. I think it's been kind of a bit of a regional white whale in the Oklahoma tri state area where people are like I'm working on a big deal in Missouri but it was never actually materialized. Sounds like Nebby has got it. Unless there's multiple gigawatts near Independence, Missouri which is totally possible.
- [73:25]
B
Another one is possible, but unlikely.
- [73:27]
C
Yeah, another one is in kind of prep for this. I didn't realize that Nebbys is kind of a Russian like refugee company in a way and that like post the Russia, you know, ban or the US Russia tensions. Apparently they kind of like had to exodus there and it's pretty cool to see them really blowing up deal flow
- [73:55]
B
domestically and blowing up for sure. The stock responded very favorably to the earnings news. It's up almost 30% today. Market cap crested 50 billion at 53 billion currently.
- [74:09]
C
What are you doing trading meme coins? You should be out here trading stock stock tickers, brother.
- [74:14]
B
What are we doing with any of the crypto equities have been the story for the last two years and we are all chumps for not aping into the the current thing. Last thing to note about Nebius going back to the Capex guidance. The capex guidance for 2026 the CFO on the call said has been raised to 20 to 25 billion for this year. That is just an. You know, Matt Kimmel on the show a while back was saying, you know, we kind of are just numb to these numbers. That's an insane, that's an insane headline number. That's more than any of the bitcoin miners that we cover are thinking about spending this year on their own capex. And what that will do is take them a little bit further with those data centers we just mentioned in Pennsylvania and in Missouri as well as. As well as. Or the two in Missouri, excuse me, and Kansas City. The last thing to note in terms of just to get an idea of like who Nebbys is swimming with. Their key contracts include a 27 billion five year deal with Meta. A 19.4 billion up to 19.4 billion over five years agreement with Microsoft, a $2 billion equity investment from Nvidia, as well as early access to next gen hardware. They're targeting 5 gigawatts plus capacity by the end of 2030. So we're going to try to be covering Nebbyous more on this show because they are kind of emerging as one of the clear front runners in this burgeoning new sector of Neo clouds with AI Compute. So tune in more for Tune into future episodes of Blockspace Live for more of Nebius. If there are any other stocks you want us to cover, please let us know. The Spirit Airlines thing is a little bit of an exception. We won't be doing that very often, but it's just such an interesting case study for the failures of state intervention in private markets.
- [76:05]
C
I don't know. I enjoyed that story. And if we could just line up all of the bitcoin and crypto enemies number 1, 2 and 3 and just dunk on them over the next few months, that'd be great. Although maybe we should dunk on them when the price is a bit higher. Enough about that. Thank you so much for watching Blockspace Live. Coming at you live at noon Eastern Monday, Wednesday, Friday. Check all our socials. See you all next week.