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- [00:01]
A
Welcome to Galaxy Brains.
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B
An infinite amount of cash. Cash.
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A
I'm your host, Alex Thorne. The US banking system is sound and resilient. Bitcoin made a new all time high.
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B
If you're not long.
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C
If you're not long, you're short.
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B
Satoshi is going to come on there,
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C
laugh hysterically, go quiet. All bitcoin's gonna be erased.
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A
Bitcoin. Bitcoin is the best crypto.
- [00:23]
B
Bitcoin is going to zero.
- [00:26]
A
Welcome back to Galaxy Brains. As always, I'm your host Alex Thorne, head of firm Wide Research at Galaxy Bitcoin not zero. And we have a great episode for you this week. David Bailey, CEO, founder of Nakamoto founder, creator of Bitcoin magazine, the Bitcoin Conference, UTXO Management. David is our guest. It's a great interview. I always love talking with David. He's got such a long term history in bitcoin and what a privileged and serious position that he holds as the proprietor of the Bitcoin conference is Bitcoin magazine and now Nakamoto. And we'll talk with David about the combination that has finally closed. Where Nakamoto now is has brought in BTC Inc. Which owns Bitcoin magazine and the conferences and UTXO Management, their asset management firm. One of the first, I think maybe even the first DAT to successfully combine with operating businesses. Is that the future of the treasury company model? We'll debate that with David. We'll also talk to him about the looking back at President Trump's first 18 months of Bitcoin and crypto policy. And it's a great conversation with David I know you'll enjoy. We'll also preview the Bitcoin conference that's coming up next month in Vegas. And of course we'll check with our good friend Bimnet Abibi from Galaxy Trading. Bimnet, feeling pretty bullish about Bitcoin here. I know you'll love to hear from him. And before we get to that, I need to remind you to please refer to the link to the disclaimer in the show notes. Note that none of the information in this podcast constitutes investment advice or an offer recommendation or solicitation by Galaxy or any of its affiliates to buy or sell any securities. Let's hop right into it with Bimnet ab. Let's go now to our friend Bimnet Abibi from Galaxy Trading. As always, Bimnet, welcome to Galaxy Brains.
- [02:03]
C
Thanks for having me.
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A
It's a fed day. It's absolutely. It doesn't feel like a Super bowl this time. Right. It's not.
- [02:08]
C
This feels like a preseason NFL game that has no starters in it.
- [02:14]
A
Because Chair Powell is lame duck now basically. Right. Because the President has named Kevin Warsh as the next Fed Chair. He hasn't been approved by the Senate
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C
yet, he has not been confirmed by the Senate.
- [02:27]
A
But in either case, Jay Powell's term ends like in a month or two. Right?
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C
I believe it ends in May and ends in May.
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A
So it's mid March, so in two months.
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B
Yeah.
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A
And separately, this Fed is not expecting to cut. And for transparency, usually we record after the FOMC meeting in presser today we're recording slightly before, but we don't expect any cut today.
- [02:49]
C
Correct. Or hike.
- [02:51]
A
Or hike. No activity, no movement on rates. Is there something that people are watching the Fed specifically to talk about?
- [02:59]
C
So this is one of the quarterly meetings where they publish their summary of economic projections. And so you'll see kind of an updated view of what folks at the Fed are thinking in terms of the unemployment rate, in terms of inflation figures and kind of where they're expecting rate policy to settle through the rest of this year and next year and terminally. I don't think this is a relevant Fed meeting. I do think that the story in fixed income though is pretty huge. Just taking a look around the world, you are expecting a significant amount of hikes over the next like 12 months basically.
- [03:43]
A
Hikes.
- [03:44]
C
Hikes, yes. So the ECB has 50 basis points of hikes priced into their curve. Australia has has hikes priced into their curve. They just hiked recently. You know, New Zealand I think one year out has like almost 70 basis points of hikes baked into that terminal part of the curve. And yeah, and basically what's happening is oil is moving so much and nat gas as well, depending on where you are. And the prices of commodities essentially are forcing people to think about what inflation is going to be on a go forward basis. And so you've seen a dramatic move higher in break even inflation rates globally.
- [04:37]
A
Interesting.
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C
And so to give you an idea, the US one year break even inflation point is I think 5.17.
- [04:46]
A
Wow.
- [04:47]
C
Right. And the two year inflation breakeven point is like 3.3 or something. 3.2, something like elevated. It's very elevated. And obviously break evens are very correlated to oil prices. And so you're at the point now where central bankers genuinely have to worry about inflation again and their only policy response mechanism is hiking rates. That's right. Now the question is, is that a correct response? Right. Because in certain Ways you can view higher commodity prices as effectively a tax on folks. If you're using more of your discretionary income to pay for heating or to pay for your transportation, or the cost of goods is going up because the transport cost is increasing, then that's effectively like a tax on you. Right. And you're going to get, I mean, so we have to talk about oil at some point, but right now Brent is trading at 109. Right. And you're getting close to levels where you actually see demand destruction.
- [05:56]
A
That's right.
- [05:57]
C
Right. And so if this hormuz closure like continues one, you'll have insane like supply chain disruptions, like of. Of all sorts of things that aren't just like energy.
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A
I mean. Yeah, well, because so many products are built with petroleum.
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C
Correct.
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A
Like enormous number of products or like byproducts. That's what I mean. Like plastics though, like a whole bunch of stuff. Almost everything is petroleum in it.
- [06:18]
C
I began reading about sulfuric acid and how it's like super crucial to like extracting like helium for that's used in the semiconductor production. There's all sorts of massive supply chain implications. Again, I am a supply chain fair weather fan.
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A
Yeah.
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C
You're not an expert in that market. But I will say that the people that are the experts at supply chain stuff, they are very concerned. On a scale of 1 to 10, I would say probably well north of 8. Yeah. Would be my guess. And so, you know, the market's kind of stuck in between this place where like the experts on the supply chain stuff are just like, oh my God, this is like gonna get like a really bad.
- [07:04]
A
It's a lot worse than the Evergreen was a boat that was stuck in the Suez Canal. Yeah. It's that times some amount. It's like a lot bigger than that. And that was a problem.
- [07:13]
C
That was a problem. Yeah. So. So it's, it's. But if you look at stocks for example, and like the S&P 500, it's really not down that much. And it just feels like there's a general complacency in the market. Again, like maybe tech earnings don't get impacted by like huge like supply chain disruptions. Like that's possible.
- [07:33]
A
Right.
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C
And they're still, you're still expecting like, you know, north of 10% like earnings growth in the U.S. and so the fundamental story like hasn't really changed, but
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A
there's this big risk.
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C
There's this huge risk.
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A
And you feel like the risk assets aren't necessarily pricing that risk yet.
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C
Correct. Yeah. And really I think your barometer for wanting to be long risk is do you see a potential solution to the Iran us, Israel conflict and do you see that solution happening sooner or later?
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A
Right.
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C
And right now I don't see a path to de escalation in the near term. In the near term I could be wrong and I hope I'm wrong.
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A
Of course.
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C
I genuinely hope that we find some way where people can just like chill out. Hormuz is open and we don't.
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A
That's what markets want. Absolutely, of course. But like I agree it's not, there's not a lot of evidence that that's close.
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C
I mean that's right today alone, you know, apparently a petrochemical plant was, was struck in Iran or that's what the Iranians are claiming and they then launched counter strikes against GCC member oil production studies. Yeah, yeah, yeah.
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A
And if any of that gets knocked out or has to be rebuilt, that takes years potentially. I mean honestly, even just turning them off because there's less demand and you can't ship it, just turning them back on. It's not a bitcoin mine that you can turn off in three minutes.
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C
I think there was like some aluminum plant that was like turned off the other day and like it, if you turn it off properly, I think it takes like six months to turn it back on.
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A
Yeah, right.
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C
And so like there's a big potential of like a massive supply chain disruption. What's really worse though is the nations that can't afford the spike in oil, particularly nations that have to like think about this.
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A
If they're not big producers. Yeah.
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C
But if they're huge like net import. I'll give you an idea. I think this weekend I read that Australia has like 15 days of like jet fuel in their reserves. Like they are one of the worstly managed like nations in terms of oil.
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A
Yeah.
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C
For like a developed market. Yeah. Right. But like take like the Pakistan's of the world, the Egypt of the world. Like they're paying like they don't have dollars.
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A
Right.
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C
So they have to like pay a higher price when dollars like appreciate. Yeah, Right. And so in theory they're getting a double whammy of dollars going bid cause
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A
it's risk off and oil price in dollars going correct.
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C
And they've got like dollar debt. Right. And so it's like a really toxic mix of circumstances and like those places are like hurting. Obviously the US is insulated. We're a net energy producer, we have the dollar, we produce fertilizer, we have
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A
the dollar, we're a great producer of dollars and oil,
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C
so you won't here. People in the US are certainly feeling it at the pump. Yeah. But outside of that, like, we're pretty insulated. But you go to like some of
- [10:42]
A
these other places and it's much more dire and urgent.
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C
And it gets much more dire and urgent like every day that passes.
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A
Right. Every day that it does not resolve.
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C
Correct.
- [10:53]
A
It is a very tricky situation. And the other thing that creates uncertainty is that it's exogenous to the market. It's like not something that like, you know, a good research paper can solve or like a change in investment style. Right. We're totally beholden to the actions of these sovereign nations that are currently in a conflict. And so it's like, you know, can it get resolved? Like, and by the way, even if all parties want it to resolve, still really hard to resolve conflicts like this. Not clear. You know what I mean? Like there's conflict spiral, escalatory behavior that can, things can be misinterpreted. Right. And like it's, it's actually, even if you want to get to the table, which it's not even clear that the parties do yet, it still could be hard to resolve. So it's very tricky situation. Let's talk about bitcoin a little bit.
- [11:40]
C
Oh yeah, absolutely.
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A
Because bitcoin has been trading really well.
- [11:43]
C
Absolutely.
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A
Through this uncertainty and conflict. And I mean at the moment, as we record, you can see over the block clock over my shoulder is at 71,000 ish. But we've been over 75 even now, which was a significant move.
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C
Yeah, we got from 76.
- [11:58]
A
Yeah, we got to 76, which was a significant move. Of course, off that 2-5-bottom of 60K, we've up, you've updated. You know, obviously the audience knows that you'd been bearish at much higher prices. Feels like most of the juice has been squeezed out of the short. Like where are you feeling now?
- [12:15]
C
I think bitcoin trades incredibly well. It screams of a market that basically got to a seller exhaustion kind of point. And I think, you know, like the fact that you couldn't break down, especially on that like day where, where real was down like almost 3% and oil was at $120 a barrel. And like you really couldn't break lower.
- [12:39]
B
Yeah.
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C
And when things can't go lower, like they have to go higher almost by, by definition.
- [12:44]
A
Right.
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C
And so I think like bitcoin like trades really well. And if you think about it in the context of like where capital can Hide right now, like, it's not in precious metals anymore. Like, you know, gold was, was off a ton today. You know, so is silver and a bunch of other precious metals. And then, you know, in fixed income, like, even front end fixed income is selling off because you're now pricing in hikes across, you know, a ton of curves. Right. So you can't hang out in bonds. Like, equity markets, like, feel a little, you know, jittery and they're, you know, elevated by some, some standards. And so, like, in that context, I think bitcoin looks really, really good. And it's also, like, not a crowded owned trade. Yeah. Right. And, and so it has a really healthy setup. And I think if, if you're bullish, this market and you were genuinely trying to. If you, you thought that, you know, equities are going to rip higher and there was a resolution of the Middle east conflict, et cetera, like bitcoin. And actually, even some of the alts are probably best positioned to rally because
- [13:55]
A
they already had their drawdowns.
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C
Correct. And to be honest, the DAT buying has been reasonably aggressive because of this. The Stark paper.
- [14:08]
A
Yeah, the preferred. I was gonna say this is a story, actually. I think we're gonna write about it this week in our newsletter, which is, you know, the headline, Microstrategy buys Bitcoin. It's not really a story these days, but I'm pretty sure the amount that they announced, which is over 1.5 billion from last week, they announced on this Monday, March 14, is the second largest weekly buy in their entire history in a. In a bear market.
- [14:32]
C
Wow.
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A
I think it's. It's in the top five. You know, let's. We'll make sure to get the number exactly right when I actually write it down. But again, that's almost all of it funded by these preferred securities.
- [14:42]
C
No, a lot of it is still.
- [14:44]
A
No, I thought it was over a billion that was from scratch of, in that. Of the 1.5. I'm just saying, like, that's a new engine that he's created over the last year or so that was not there. So now it's not just ATMs and converts, and he hasn't done converts in a long time. Yeah, it's just quite interesting. Like, he's out here.
- [15:02]
C
I mean, I, I think deep down I feel like one day we're going to think about Sailor as like one of the smartest people ever in history with the most amount of courage. Now the question is, when does that happen again? And so my view is, I Think bitcoin north of 80 is not unreasonable. I don't think bitcoin shortable right now. There's no juice to squeeze out of it right here, right now. I think if you wanted to position yourself a little bit more defensively, I think above 80k, like it's probably, you know, much more of a two sided market where there's potential to go down, you know, also some potential to go, go up. But in theory I'm kind of thinking like bitcoin's like looking pretty good. And in terms of like, I just want to make it clear like long term, like if, if you are not, if you're the type of person to not check your portfolio for like six months at a time or a year out at a time. Like these aren't awful levels to buy. Like, yes, it could be lower. But like in my head I'm like, what's the difference between like 70 and 40 if I'm gonna hold it for like a gazillion period, like a really long time.
- [16:17]
A
I agree you made this point.
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C
If you're a long term bullish and we are long term bullish, it's just, it's just noise. Yeah. But like tactically here, like it looks okay.
- [16:26]
A
I agree, I agree. And it's had a lot out of it already and you know, it'd be interesting I think if you know, Hormuz goes really bad or long and the thing that's gonna hurt all markets.
- [16:36]
C
Absolutely.
- [16:36]
A
It's hard to think that bitcoin will, you know, be an opposite in that market. But like. Yeah, but nonetheless, like again, it's already, you know, one of the things we saw was when the first attacks were happening by Israel in the US that weekend. Bitcoin traded pretty well through that weekend. It was oil perps on hyper liquid that ripped. Yep. And it's kind of. Because the way I was thinking about it was like, I think all the macro weekend warrior tourists who used to sell bitcoin over the weekend on headlines like that, they already sold. Yeah, they don't have any bitcoin to sell. Probably they've been selling. Right. So it's like, and it's also just
- [17:10]
C
like, how do you play it right? Like now you have crude, you have like equity like equivalents that trade 247 and so like you're not forced to use it as a proxy bitcoin on a weekend because there's nothing else trading.
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A
Right. There are other things.
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C
There are other things and they're, they're
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A
better and more are coming well, they're more precise as well.
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C
Correct. And more are coming like yeah, okay, Hormuz is shut down. We're bombing like oil things like. Yeah, buy oil, not like a third order derivative.
- [17:39]
A
That's right.
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B
That's right.
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C
And so like I think it's a healthy market.
- [17:43]
A
I think it'll also make it healthier for bitcoin overall because it can start to be the reasons for owning it now start to be more fundamental to bitcoin. It's not as a barometer for 24 7, 365 risk. Right. You buy Bitcoin for self sovereign, non government issued money reasons. Not. You know, so I think that ultimately gets healthier. And of course we're talking about hyper liquid as the, the venue, but there will be 247 or at least 24 5. Like both CFTC and SEC are talking about this like whether it's through tokenized securities or other way. So it actually probably gets easier to trade risk around those weekend moves in the future as we go forward.
- [18:19]
C
So yeah, also for, yeah, the periods where the CME is closed.
- [18:22]
A
Right.
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C
The five to six windows, there's going to be more. I mean I think it's inevitable that we just go to 24 7. Everybody has an interest in 24 7. I know everyone makes more money except for us.
- [18:34]
A
They want to go home on the weekends and what in the world.
- [18:37]
C
I just need to clone myself.
- [18:38]
B
I know.
- [18:39]
A
Agents on it.
- [18:40]
C
Correct.
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A
Bimnet Agentic ab. Thank you so much my friend as well. Have a great week.
- [18:44]
C
Have a great.
- [18:46]
A
Let's go now to our guest, David Bailey, CEO of Nakamoto. David, welcome back to Galaxy Brands.
- [18:52]
B
Hey Alex, thank you for having me back on.
- [18:54]
A
Yeah, we had, you know, we, we did a great conversation around before the presidential election. I think sort of even before president then candidate Trump appeared at the conference in Nashville in the summer of 2024. That then they like cited that NPR reporter, like cited our conversation and their story. You remember this?
- [19:16]
B
Yeah.
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A
And I think by the time the next conference happened in Vegas in 25, that story that they had like an audio. I forget what the podcast was, but it was like these guys that do these in depth journalism and they were citing our, our interview, the last from previously. So I was always chuckling about that. We've got a couple topics to talk about I want to ask you about. We'll start with the President and the administration. You were obviously very involved in the president's bitcoin journey. You know, without giving all that, you know, can go back and Learn about that. That's well documented. But, of course, the president gave his seminal bitcoin speech, the bitcoin superpower speech, at the bitcoin conference in 2024, I think in July 24th in Nashville.
- [20:00]
B
Right. It was in July.
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A
And since then, he's now been president for, I guess, what, 18 months or so. How would you rate the president and the administration on bitcoin policy so far?
- [20:14]
B
Well, before we jump into that, first off, it's always funny. Thank you for having me back on the show. And I'm wearing my Nakamoto hat because you're sporting your amazing Galaxy hat, which, you know, to this day, I'm convinced is one of the best brand decisions made of the entire industry, was picking the name Galaxy. It's a great name.
- [20:32]
A
Yeah.
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B
But we've. For so many years, we've been trying to get people to listen to us that, you know, it's a little bit weird when you have investigative journalists that are, like, you know, actually listening to every single word and pulling it apart to, you know, you know, sell their political stories. And so, yeah, it's funny going from, like, irrelevancy, can't get anyone to listen to now having people, you know, listen to the things that aren't even said.
- [20:57]
A
Yeah, exactly.
- [20:58]
B
In terms of the president, first off, you know, you have to kind of set, what is your grading yardstick? Like, how would you measure performance by? And I think if we're measuring performance by success and impact relative to any other political administration that we've seen so far, you got to give them an A plus. I mean, it's just like. I think one of the challenges that you have with bitcoin is that what drives people's interest in large degree is the price of bitcoin. And so the price of bitcoin becomes a yardstick for people measuring success. And so if the price is down, then people are going to be cynical or skeptical of the success that has been had. But if you think about the change that has occurred between the last administration to this one, beyond just the executive orders, the pardons, the ending of the politicization of the SEC or our financial laws, you have the SEC that's taken a complete 180 turn. I mean, I don't know if you've had a chance to read through the new guidance they came out with yesterday, but it's just unbelievable how much this has changed.
- [22:08]
A
Right?
- [22:09]
B
You have the financial institutions and the Wall street being given the guardrails to participate in this market. You have the banks being Told they can't debank us. They have to give us access to the market. You have Bitcoin and crypto firms getting Master Fed accounts for the first time in history. We are in a heated industry to industry battle with the banking system, which I actually kind of find even their defense of that whole dynamic about interest on stablecoins very telling. You know, if your, if your response of why we shouldn't have it is that it could cause capital flight and, you know, destabilize the entire financial system, that's not probably something you want to be saying. You know, I mean, we should be amplifying that message. Like, hey, guys, like, this is how fragile your money is.
- [23:01]
A
Not just that, it's also a clear indica. They're literally saying that, like, the stablecoin rewards might be such a good product that it collapses their crappy product.
- [23:11]
B
It's like, yeah, no, I mean, too good to allow. If your response to like, why we can't allow Uber is like, think about the devastation in the taxi industry. Like, that's not a good sales pitch. You know, that's right. So. So we have, we have the Clarity act. And then, you know, I think more broadly, like, this administration has removed the taboo of governments being able to embrace Bitcoin as a tool for them as well. And so, you know, I would say there's so many positive things that have been done. I mean, even, even companies getting access to the public markets. I mean, think about how many IPOs there have been and how many IPOs there will be. You know, all of these deals were frozen under previous administrations.
- [23:58]
A
So I think really it was just Coinbase went public and they happened to do it in 21, just weeks before Gensler took over. It's almost like if they hadn't done it probably before Gensler was confirmed, it's almost like if they hadn't slipped in there, they probably would still have been private. Until the Trump admin, I think they were the only, like, crypto firm that managed to get public in the, quote, Gensler era. But it was actually weeks before Gensler took over. You can imagine that they even. They probably wouldn't have been able to do it if they hadn't slipped in there before Gensler's confirmation.
- [24:28]
B
Yeah. And I mean, so I think, I think they've been incredible and the President has been. And his administration have been such willing dance partners on the other side. Like, they do want to work with us. I think the challenges that we've had are there's been a myriad of Challenges, too. And I think, like, that's also, you know, the opportunity that's been left on the table or still exists on the table for us to, to go and grab. You know, first off, I think the price being down has definitely reduced our political capital and our political leverage that we have as an industry. And I think, you know, at the end of the day, we're kind of, we're seeing the extents of how far our political activity can get us, how quickly. And so like, the banks are pushing back really hard and the banks still have, you know, a lot of say there will be a come a time where the banks push back really hard and no one cares. So, you know, there will be a time where, you know, instead of just authorizing a strategic reserve, we're also spending the political capital necessary to fill the strategic reserve with newly acquired bitcoin. Like there, there are, this is a beachhead for bitcoin in the political system. It's really not a, a mission accomplished. It's like mission, mission begun. So that's like my general, my general view on it. I think things I've been surprised by is like, still how resistant the Democrats are to bitcoin. I thought there would be more of a capitulation. And you know, I think in general it's just challenging because it's hard to identify who exactly the leadership is of the political, the different political parties. So I think that that's, that's, that's been a challenge.
- [26:12]
A
Yeah, I, I agree with that. By the way, that it's, it. The, the Republicans really just didn't quite win hard enough. So like, even though you knock out like Sherrod Brown and get Bernie Moreno, which is like probably the biggest, like in Congress, the, the single biggest bitcoin victory, which was a big one, like, still, it's like 53, 47 in the Senate and, and what, like two vote majority in the House. Like, and I think that's part of the reason why they haven't capitulated as hard in Congress. The Democrats, it's, it's just so close.
- [26:41]
B
That's one issue. The other issue, I think is the perceived conflicts of interest around the Trump family. And you know, I, that's more of a political question. I think that it can be, you know, your family members are entirely their own independent people and they should be free to go and conduct business and be transparent about what they're doing. And I think that the Trump family, at least the parts that I interact with that have done that, but I think that that's challenging. And then you know, I think the other big challenge, and I think this is a challenge the Trump administration has dealt with is like when we got, when we built the coalition around Trump, it was driven by multiple prongs of the stakeholders like industry interest, user and retail interests. Like, you know, it was, it was a broad based movement. Once you get into the negotiation room and like the, the, you know, let's say you've won, who gets to negotiate the peace treaty or the, the, you know, the, the Treaty of Versailles that is the corporate interest and the corporate interest priorities can, can be divergent from the retail users. But at the end of the day our power base, like yes our, our financial capital matters, but our power base comes from our ability to turn out voters and, and impassioned single issue voters. And so insofar as we don't achieve the right things to mobilize the retail user audience, the Trump admin is kind of solving for the wrong problems. So, or not wrong problems, just they're, they're approaching them with maybe a distorted priority set because they're talking to one group of constituents rather than all of the constituents. And so that's not really a, I mean I don't know how what else the Trump admin could do differently than what they're doing on that side. But I, I, I think that's really from our side as an industry. Us like not necessarily telling them what they need to hear, but what we want them to hear. And you know, if there was one thing that I think would be the most needle moving with the base, it's that US treasury announcing like hey, like we're going to start, you know, DCA a billion dollars a quarter into, into bitcoin and, and building this reserve. That is the single most impactful thing they could do to mobilize voter turnout.
- [29:09]
A
Yeah, you're right.
- [29:09]
B
Don't care that much about clarity.
- [29:12]
A
Yeah, I agree. The complex regulatory issues are not like, you know, they're not sexy for the American voter or for the bitcoiner. Whereas else was going to ask you, I mean, what is the state? This I feel like for bitcoin voters has been a disappointment. The strategic Bitcoin reserve, we know it officially exists but they haven't told us how much they have and they apparently haven't yet found budget neutral ways to acquire bitcoin. Right. Like is that, has it been a disappointment thus far in your mind?
- [29:44]
B
A disappointment. You know, first off, like just to reframe a little bit the fact that we're even Here having the discussion, you know, like this was so far like left field. Like, I mean we thought this was an idea that needed another decade plus to even be seen as credible. So the fact that we're here having this discussion, like, hard to be disappointed by that. You just got to have the right kind of zoom out a little bit in terms of the follow through and execution. You know, I think, you know, first off, I think the fact that we don't know how much bitcoin we have or that we haven't started a program yet, like we've identified budget neutral ways to acquire bitcoin. So that has actually been figured out. I think it demonstrates how big of a shit show it was before this initiative even started. Like them finding out how much bitcoin we have. I mean, right. You know, I'm not, I think it
- [30:40]
A
was all over the place, right? There was like ledgers and like doj, storage locker stuff.
- [30:45]
B
It's, it's a train wreck. It's a train wreck. And you don't even have, you don't even have the, the, the buy in and the, you know, the constructive support from the different bodies of the government because the incentives are not aligned. You know, these government, like these different agencies, they want to retain the bitcoin that they have. That's their money. They're not wanting to hand it over to the federal government or to the people. Like, that's. So there's kind of like a misalignment of interest. And I think there's also massive, massive failures of fiduciary responsibility in terms of custodying this stuff. I mean, I think made clear by the fact that one of the United States vendors to custody the bitcoin, the son of the CEO stole the money,
- [31:26]
A
ran so like tweeted about it and stuff like was on Snapchat and whatnot.
- [31:31]
B
More than anything, it's just like embarrassing for the reputation of America. That, that, that, that's right. State of affairs. And so I think like cleaning it up was more complicated than anyone understood. And then I think the other thing is that, you know, and this is one of the realizations I've had is like accomplishing big things within the bureaucracy of the government. It doesn't just require leadership buy in, it requires downstream buy in from the people who actually do the things that are often not political appointees. They're career people. And if career people want to grind down and stall out and slow down and not be constructive participants, they have the full capability of doing that. And so at a certain Point in time. I'm not going to say that the administration doesn't have the power to get it done. It just, it's like almost like the capability to get it done. Like, how do you make people do things? And like, the way you answer that question is like, what do you fire them? You tell them, like, you do this thing or you're done. And okay. But like, now this thing, which is, you know, in the scheme of all political priorities, getting the SBIR stood up has gone from okay, you know, this is a thing we'd like to do to, like, now we're firing downstream career staff because they're not doing it. Like, this is becoming the top priority thing.
- [32:55]
C
So.
- [32:56]
B
So it's just like, I think it's a, it's a, it's an issue of. Of political priority. And, you know, having even, you know, with the Trump administration, it's not just the president, it's his cabinet that are pro Bitcoin, which is like, incredible. But it's not. The cabinet's not enough. It's like you need their chief staffers and, you know, their downstream organizations to also be bought in. And that's going to take time, and it's going to take. It's going to take more than a president seeing, you know, a great political opportunity. It's going to take. Buy in that bitcoin actually matters for the future of the country.
- [33:30]
A
I think that's very well said, David. And you're right, it's a giant ship. There's sand in the. Or, there's sand in the gears. It's hard. Right. You can't just, you know, have the president and his appointees, so. I agree. I think you characterized an assessment really well. It's harder. It's also harder legally, I think is another issue is like, can the go. Does the government actually have the legal authority to divert Bitcoin into this thing? Feel like they've been worked.
- [33:54]
B
That's a political capital question. Because the, the legality of what, what I've come to realize also about government is that legality is not a real thing. It's like, it's like, you know, legality is in the eye of the beholder. And it's like, how much do you want to fight for your perspective on legality? It's like, if you want to invade Venezuela and arrest the president, you know, you just read, is that legal?
- [34:17]
A
Well, and it becomes legal. Yeah. You know, it's like, yes or no.
- [34:21]
B
Was. Was, you know, I mean, like, so it's just. It's like, how much political capital do you want to spend? And we've gotten a very outsized capital invested into our ecosystem versus what we've returned back. And I think it's going to take time for us. If we want 10 times more political capital, it's going to take time.
- [34:40]
A
Yeah, that makes a lot of sense. Let's shift gears. We'll talk about Nakamoto. You guys are a bitcoin company. You just finished a M and a process in a combination to bring in BTC Inc. And UTXO Management into the Nakamoto family. Congratulations on that.
- [34:56]
B
Thank you. Thank you.
- [35:00]
A
I've seen and worked on corporate M and A, especially for a public company like Nakamoto is very complicated that stuff. Very complicated. And for the audience who may not know, although they probably do, BTC Inc. Is the parent company of Bitcoin magazine, the Bitcoin conferences, Bitcoin for corporations, maybe some other stuff I'm forgetting. And then UTXO Management is an asset management firm that you. You operate. You. So you are the CEO of both or certainly of Bitcoin Inc. Already. But now all of that under the Nakamoto. Where do you guys go from here? I mean, now that you're one of the only treasury companies that actually has operating businesses under it, which I find quite interesting.
- [35:39]
B
I actually think we're the first that is endemic to the.
- [35:44]
A
Yeah, so that's right.
- [35:46]
B
You know, I think it's.
- [35:47]
A
Yeah. How do you view the synergy now that you guys are all sort of under one roof?
- [35:50]
B
Well, I think. I think it's super cool. I'm very excited. I mean, I'm. I'm very excited to see how these. The having the operating companies that are in endemic amplify and create. What's the right term? Well, I'll use. I'll use Saylor's term, amplification of our bitcoin balance sheet. And I think that there are a lot of concepts that have been thoroughly explored by private equity and private credit that have really not been explored yet in an intellectual sense as it relates to Bitcoin treasury companies. And so everyone's kind of like building their model around the sailor approach, which. The sailor approach is a brilliant, ingenious approach, but it's not the only approach for ultimately how to grow a Bitcoin Treasury. And there's all sorts of old school valuation methodologies and ways to value income and way to value durability on income and just, you know, lots of ways to assess what the actual book value of something is. And to go and execute those strategies in the, in the public markets. And so I'm, I'm. It's fun to get kind of get a chart a little bit of a different way and explore that. But I think there's so much ground there, I guess blue sky to explore that. I think as we make progress, there's going to be more people coming behind us that are also going to take this operating company approach. And I think it's going to get very interesting things.
- [37:18]
A
Going to be. Yeah, I think that's right. I think Saylor, it's clearly working. In fact, I believe last week what they announced on Monday, so we're recording on Wednesday, March 18th. So I would have been. Monday, March 16th was actually Saylor's second largest buy at like 1.5 billion in a bear market, supposedly. So whatever Michael Saylor is doing, it's working for MicroStrategy. I think that's very clear. I don't think it can be totally. He's in a pretty privileged, unique position, one, because he's so good at it, but two, because like he is the like flag bearer, the biggest one. I'm not sure that many others can replicate what he's done. And so I've thought that most treasury companies, or digital Asset, you know, DATs they're also called, you know, when you fold in the broader crypto ecosystem that has these as well, will have to adopt true operating business models, most likely because they won't be able to solely do what Saylor has been doing. And so I feel like that's a trend we're going to see continue, most likely. And you guys are sort of at the forefront of that. It does feel to me like you guys, I mean, the Bitcoin conference as one example, it is still the premier IRL convening for the Bitcoin community, has been now for 10 years. And so that seems like a pretty strong flywheel of a media and events business promoting bitcoin alongside of a Treasury company. So that's one I thought it was most logical tie ups.
- [38:49]
B
Yeah. And that's probably. I would describe the past year, you know, the, when we set out to build Nakamoto, like the, the, the milestone that we were working for and it was like a two phased, two phased approach was like merging in these operating companies, having operating income. Once you have operating income, that gives you a lot of optionality of what to do with your balance sheet. It just opens up a lot of possibilities. Yeah. And so we just got there. Like that's like this kind of almost like phase one complete. And so now that we are, have actually gotten the transaction done, it's all about integration and how do we bring the businesses together in a way that amplifies each other's value. And this is like the first time in 14 years that all my businesses have all been owned under the same legal structure. Cap table. You know, incentives. I've always had malaligned incentives where I've been trying to get different parts of my businesses to work together. And it's like, because they don't have the same shareholders, etc, it's, it's challenging. So, but now we've been spending all of our time on integration and it's, it's a lot of fun. It's a lot more fun than managing, you know, working through capital markets.
- [39:52]
A
Yeah.
- [39:53]
B
And so, you know, what is integration? It's like, okay, well when we bring all these businesses together, how do we want them to operate and function? What's our, what's our operating management style going to be? What is the compounding flywheel that these businesses build together and how do we crystallize and define it in such a way that we can, we can develop very clear north stars that we can use to drive our M and a strategy going forward? Because like these two businesses are just the start. We want to build a complete portfolio of Bitcoin companies providing different sources of proprietary data on, on Bitcoin, different perspectives on Bitcoin, vertical integration of our Bitcoin stack. So, so we, we want to have a methodology that like really helps us identify what's next. And we, you know, we have a pipeline of opportunities. So it's really about prioritizing what, what matters to us. Yeah. And so yeah, when, when you look at the flywheel, it's like, okay, well there's really kind of like two, two things that we're really trying to, let's say, strengthen right now. One is, you know, we, we want to capture all this data across all of our businesses. We want to integrate all that data into one common backend. And we want to have the most context and the most proprietary data on Bitcoin than anyone in the world has. We want to be the number one holder of the most context and insights about Bitcoin. And so what's interesting about having a media company, especially a conference, is we have real world people, real users that we can authenticate in meet space that we interact with and we are able to model and create a forecast from or analyze activity from. And it's like real Authentic data. Whereas, like in today's age, I mean, I don't know about you, but my, my social media is slowly becoming just bot replies for everything. Yes.
- [41:51]
A
Slop. There's a lot of slop out there.
- [41:53]
B
It's like, how, how are you supposed to, you know, learn about what bitcoiners want or who they are or what they need if 75% of your data set is actually just like AI, you know, slop bots just posting. So it's like we actually have real, authenticated, verified users across our product. And, you know, we also have. Not only do we have great data that no one else has going back 14 years, I mean, going back to the beginning of Bitcoin.
- [42:22]
A
I mean, you got the attendee list from Bitcoin 2019 in San Francisco, right? I mean, you've got.
- [42:28]
B
Going back all the way, you know, all the way. I mean, I actually uploaded my cell phone the other day to, To. To Claude, like a back cell phone. And it had all my text messages going back to 2014. Wow. And 440,000 text messages. And it analyzed them and it was like, oh my gosh, this is like.
- [42:46]
A
So now you can query your own agent to look into your past message. Hey, what did I talk to, you know, Alex about 10 years ago or whatever?
- [42:54]
B
Oh, yeah, that's fascinating. These are how many text messages you send per year. This is the trajectory of your communication growth. This is who you're spending the most time with. Here's your social graph, here's who the relationships you're neglecting, relationships that you're spending time like it's.
- [43:08]
A
There's security issues with giving it access to stuff like that. But that is a fascinating use case. I also have set up, by the way, a whole open claw setup I'm building. But you know, personally, we're also building a lot here. I'm assuming you guys, with all this data, you're probably.
- [43:23]
B
I'm down the rabbit hole. I mean, ever since I'm like a
- [43:25]
A
vibe coding like every day.
- [43:27]
B
Yeah, no, I mean, it's like, you know, we either. We either deal with the implications of AI for the rest of the history of the business and we're fighting against the tide, or we just embrace it and lean into it and make it work for us. So that's my whole view, is lean in.
- [43:43]
A
That's what smart businesses are doing. You've got to lean in. I think you can't obstruct. You're going to get taken for a ride by this thing. And as a Professional researcher. I'm building a giant research platform for this scraping PACER dockets and government economic data and social information so that I can just query my. We're making bots and I've got ingestion scripts for almost everything I can come up with just because like I'm gonna be 10 times as more as good at research as, as other as my competitor. Is my goal using this as like an amplification of productivity?
- [44:17]
B
Well, if your moat is the context that you have that no one else has, and like that's what's gonna make your AI agent spit out the best results and most accurate insights, well then it's all about having that context. And if we can have context no one else has, then you're gonna want to plug it, your research product into our context.
- [44:35]
A
So it's like, that's interesting.
- [44:38]
B
So if you think about that from an M and A perspective, what businesses are sitting out there that have huge proprietary data sets that like maybe aren't even functioning businesses anymore that could be acquired?
- [44:50]
A
Yeah, just as an example, not that they're not functioning, but that they have this data set. People didn't realize. You remember Niantic, the guys that make Pokemon Go? I don't know if you saw the story a couple weeks ago, but apparently they have the consequence of all the millions of people that used played Pokemon Go means they have like street level, high quality video and pictures of like everywhere on earth. And now that's a proprietary data set they're selling to like robotics companies. So that like, like I think the first thing they mentioned was robot delivery companies because like they know like the current status of like every sidewalk in America. And I was like, I mean, the way people are monetizing their proprietary information is so fascinating now.
- [45:32]
B
Well, you know, if you take the perspective that Bitcoin is going to be the global reserve currency of the world and that one day the entire global economy will operate off of Bitcoin, then to know who the bitcoiners are and what they want and what they need is to know who the people are that have money and what people with money want and need. And that is a very valuable thing to know.
- [45:54]
A
Yeah.
- [45:55]
B
And so, yeah, I think if there's one place for us to drill deep on owning, you know, a proprietary data set, it's on that.
- [46:02]
A
Yeah.
- [46:02]
B
And so, yeah, I think it's super interesting. But the other thing that we're, we're, we're looking for also is things that give us, you know, strategic compounding value over time. So, for example, like, we want to have the best distribution channels possible. We want to be able to buy new businesses, plug them into our flywheel, and instantly expand their revenue by plugging them into our distribution. So, you know, those are some of the things that we're thinking about is like, okay, if we buy this business, they come with licenses. Does that mean that those licenses can then be repurposed across the portfolio of companies so that we could go speed to market much faster? Or, like, you know, there's a lot of ways to just think about, like, what gives us this compounding flywheel. And, you know, when you think about what is the purpose of a Treasury company, like, we are trying to deliver convexity to our investors. Like, we want the upside to be dramatically greater than the parallel downside. And so when you own operating companies, that's fundamentally what an operating company gives you. It gives you continuous optionality. It gives you the ability to launch new products that have unlimited upside. But their downside is shutting them down. Their downside is running out of whatever you seed them with. And so that's. That is convexity. And I think the more optionality our operating companies can create, the more we can monetize that optionality, whether it's either directly through cash flow or whether it's monetizing it through the public markets and the markets reacting to whatever business or cash flow or income stream that we're generating. And so, yeah, like, my job is kind of be a chaos agent of, like, creating optionality, you know, and, and. And creating these asymmetric convex outcomes.
- [47:56]
A
That makes a lot of sense. And, and especially as sort of a Treasury Company 2.0, which feels like where we are now because so many launched last year. And like, really, like last June to September, there were so many. I mean, hundreds, not just in Bitcoin, but across the, you know, crypto.
- [48:13]
B
I feel somewhat responsible for it because it's. It's like, you know, when Sailor did it, it was like, okay, you know, Sailor's a genius. Like, of course he did it. Like, it. You know, that doesn't apply to anyone else. When we did it, it was like, oh, wow, anyone can do this and David can do it.
- [48:26]
A
So.
- [48:27]
B
So I feel like, you know, when we went live, there was like a dozen of us. And then, you know, by the time we actually closed our transaction and went public, there was hundreds. And I think it got definitely a little bit too wild. But I, I also think, like, you know, a lot of people don't know what they've signed up For. And, you know, I. I'd even include that myself in that. In that category in the sense of, like, okay, you know, we. We were doing public companies, but we're like, okay, you know, we want to bring an operating company in. Let's just do an M and A deal. You know, it's related party. And so people assume that related party means, like, oh, that's going to be easier. It's going to be a friendly transaction. You know, I had no idea until going into it, like, you know, how unfriendly a related party transaction is.
- [49:15]
A
How difficult.
- [49:15]
B
Yeah, it's very difficult. And, like, it was a. It was. You know, there was a lot of factors that played, but it was very challenging to get closed. And so, you know, there's a lot of these treasury companies that, like, now their plan is, like, let's go find operating companies to acquire. And we've talked to tons of them that are intending to do that. But it's also, like, not as easy as it looks to get an operating company, like, just because you have the money and just because you have the target. There is a lot of distance between there and it being an actual done deal, closed, you know, wrapped. And so we'll see which teams have the ability to execute. You know, I think some of them are obvious. Some of them are less obvious at this point. But we'll know, I think, by the end of this year, like, which ones are able to operate in any market conditions they can find opportunity. And I would bet on those companies, because those companies are the ones that are going to be positioned to consolidate, and everyone else is going to be under litigation there. If you're sitting on your hands and your stock is getting torpedoed and you have no plan to articulate or execution or follow through, your shareholders are going to sue you. And, like, that's not fun. And so, like, people are going to, like, be like, okay, like, I'm out. I'm out on this. I think that the.
- [50:30]
A
Yeah. And the. The, you know, the frothiness of launching the treasury companies last summer. You know, obviously, a lot of the public market has punished a lot of those stocks. Obviously Nakamoto, you know, not an exception there.
- [50:42]
B
Punished more than anyone, I think.
- [50:43]
A
Yeah. But, like, I think you're totally right. Like, it is now about adapt to survive. Right. And. Because, like, Nakamoto as well, but many of them have a good balance sheet or a lot of assets, and you've got operating companies that generate good revenue, that have extensibility across the rest of your business. I think those that don't, that aren't Sailor, basically. I really believe he may be the only. There are some jurisdictional things, I think metaplan, it's another good example where they, they have a sort of a unique advantage in a similar way that Saylor does. But the vast majority will have to figure out how to do these complicated things of either building or buying businesses that actually do stuff. So I think that's what's so exciting. I think about your, your combination is that you're really the first one that I've seen actually have an interesting like complementary M and A transaction succeed. So I, yeah, I think you have to go that route. You're not, not everyone can be Michael Saylor, you know.
- [51:38]
B
Yeah, no, and, and, and you know, it's also interesting like having access to the public markets. It, it, it gives you so many possibilities that you can just make happen. I mean for UTXO for example, that's an asset manager we've operated since 2019 is one of the best performing funds in the world. Over that time period, I think net of fees since inception, we've done something like 60% returns or something like this year we're beating bitcoin by like 30%. So I should probably put a disclaimer. This is not financial advice and I am not promoting returns or whatever.
- [52:13]
A
These are not audited GAAP financials. This is just David recalling. I agree. That's fine.
- [52:18]
B
We have this great asset management business and the biggest weakness that we've had in the business is like the operators of it, we know bitcoin, we don't know the markets. And it's like any other experienced operator running an asset manager who has a track record of beating Bitcoin over six years by 60% annually. They should be managing billions of dollars. And so when you have a platform like a public company, plus the track record to bring the possibilities of what open up really grow. And so we want to grow UTXO to a billion dollar asset manager. Like how, like how quickly can we get to a billion in aum? And it, you know, would have been a grind to get there as a private company. I think as a public company we can do it much faster. So. Yeah, and I think also on these preferred structures, I think the, we're still watching that play out. I think that there, it's, it's like I'm, I'm a thinking sailor for the free, you know, build in public and let everyone kind of watch. Yeah. So the free education he's giving us All. But, you know, it's very interesting. I've actually. We've been pitched quite a few different preferreds. You know, we're really still just assessing what the possibilities are out there, but we've seen some very original, unique designs that are fundamentally different than what is out there. And so I actually think the design universe of preferreds, converts, some of these things that Saylor has already done, but people maybe are focused on cloning him. Exactly. There's a design universe that's much larger there and maybe there could actually be fundamental improvements on the design that could give one of these companies a much rap, much more rapid growth trajectory than what it took Saylor to get to where he is. Like, you know, like STRC has done incredibly well, very fast. I mean, it's only been out in the market for what, a year?
- [54:22]
A
Yeah, Eight, nine months. I'm not sure.
- [54:23]
B
Yeah.
- [54:24]
A
About it called a year. Yeah.
- [54:25]
B
And he's issued 7 billion on it
- [54:27]
A
and he's able to, I think the vast majority of the buy that, that they announced this week, that which I again, I believe don't hold me to this, but I. We were checking, I think it might be the second largest weekly buy in all of MicroStrategy's history in a supposed bear market, I think was mostly funded with proceeds from STRC from Stretch, which is incredible. It's fascinating. Right. Previously, like through most of the recent MicroStrategy history, he's been doing it through converts or from. At the money offerings of MSTR stock. But now he's got this other engine running, as he describes it, the an engine it's watching. His development has been fascinating, right?
- [55:09]
B
Yeah. No, I mean it's. And so I think like for someone to create an STRC competitor, but that has a different design characteristics. The fixed income universe that this is going after is so large and so broad and has so many different types of participants in it that I think someone could launch something similar but different and get $10 billion of AUM under that product in one year time. I think that that's. That he's opened up that possibility and so he walked.
- [55:39]
A
He walked so we could run. Yeah, exactly.
- [55:42]
B
So I'm excited to see that. But it takes people. You know, people are so. What's the term deferential to Saylor? Like, like, you know, yeah, like we, we follow behind in his. In his shadow. And you know, I think Saylor's trying to encourage people like, okay, you know, go and sprint ahead and design as many things as possible. And so I think People need to bring more creativity to the table. It can't just be Saylor being creative.
- [56:11]
C
Yeah.
- [56:11]
A
Fascinating. Before we wrap, let's talk about this upcoming Bitcoin conference, BTC 26, in Vegas, the last week of April at the Venetian, which was where it was last year, which was quite fun. I really had a great. I'd never really been to Vegas. I think I went once for a microstrategy conference, but I was there, like, for 36 hours. Had a really fun time. I'll be there, of course, and I think I'm speaking, although I'm not quite sure about what yet. But I'm super excited. I've gone to every formal bitcoin conference since 2019. I guess where I'll start is, well, just what are you guys excited about specifically for this year? And maybe another way of asking the question is, again, last year we were on the cusp of Valhalla. This year, it's more deflated than last year. But of course, you guys have been throwing that conference across all market conditions. What does the vibe feel like for a boisterous pro bitcoin conference in 2026?
- [57:12]
B
Well, you still have to act like you're depressed, so that way, misery wants company. But to your point, we put on Bitcoin 2019, the price of Bitcoin was like 6,000 bucks. You know, and we've. We've handled every different flavor of it. You know, it's not going to be as boisterous as last year. I mean, we'll see. We'll see what it's like. I think the major trend that's developing a narrative point, narrative arc is AI and bitcoin. And I think that that is. You know, it sounds so cliche to say that, like, you know, I don't want that to be the case, but it's like, it's just reality. It's like open clause, change the game. AI agents can use bitcoin. Like, you know, that's a play for us. And if any.
- [57:59]
A
Well, I saw that. That. You probably saw that Bitcoin Policy Institute study that, you know, the. Our friends Grant and David and team over there released about an empirical study showing, you know, across, I don't know, 9,000 queries and written very unbiased and at each of the different frontier models and the net is that they basically choose stablecoins for spending and bitcoin for saving specifically, like, by a wide margin. And so they not only can spend and use bitcoin, but they want to, it appears, which makes a Lot of sense. Right? Because the digital substrate upon which Bitcoin operates is obviously native to AI, right? I mean, AI needs digital platform to operate on.
- [58:44]
B
Well, back in our day, we used to call it machine to machine payments. And that was one of the big features that we said, in the future this will come. And like, this is really that. And you know, and I think even on the stable coin side, like they say they'll use stable coins now, but just wait, like as soon as the. The Internet, like, digital payments landscape is as fucked up as the fiat landscape. Why is your AI agent going to want to use USD stablecoin if it means every Russian vendor, every Chinese vendor, every Iranian vendor, you know, all. All of a sudden it can't do commerce with their agents online. And, you know, I don't think we're at the stage where all of these governments that have spent thousands of years investing into controlling the money supply are going to be like, hey, AI agents in China, you know, Taobao, launch your AI agents and they're going to be using USDC or usdt. Like they're not going to be chill with that. So you're going to have the same politics brought into the digital realm that exists in the physical. And then that's going to make it a minefield for agents to be able. It's going to just inject so much inefficiency in agents being able to frictionlessly do business with other agents that it's better for the agents to just use Bitcoin amongst themselves. And then as they interface with you, maybe it's like user to agent interface might be stable coins, but agent to agent, it's like, why. Why would they introduce that?
- [60:10]
A
Yeah, that's a fair point. That's quite interesting. Right. The non sovereign, global, permissionless nature does also apply here. Right. And is. Is very germane to the AI, even in transacting, not just in saving.
- [60:22]
B
Yeah. And I mean, and once the AI can start colluding, you know, the. The obvious game theory play is for AI to collude, corner the market on Bitcoin, only use Bitcoin. And then it's like, who works for who? Now if the AI has the majority of the Bitcoin, it's like they're the biggest shareholders in the economy or the wealth of humanity. But yeah, I think AI is the interesting newest topic du jour. My focus at the conference, which has kind of been a role change for me this year, is like, how does Nakamoto fit into the conference? And I'm wanting to Make Nakamoto's brand. I want Nakamoto to be the world's most globally recognizable bitcoin company. And so I want Nakamoto to be investing and supporting and driving the things that move the entire industry and entire intellectual space around bitcoin forward. And so I want to do more orange pill, the President of the United States. I want to do more Orange Pill Fortune 500 companies. And so how can we use the conference as a platform for Nakamoto to be able to push that agenda forward and use it as a chance for Nakamoto to show what it's doing every year to drive forward adoption? And then I'm also taking on a personal project. Have you heard about deal Day? No. All right, well, so Amanda needs to catch you up to speed on this, but I have decided that we need to have an investment banking conference for bitcoin as well. And so we're strapping on, like, this is a year one beta, but we're strapping on a one day private event the day before the conference that is we're calling Deal Day. And it's for companies that are either newly public or in the process of going public to meet with underwriters, investors that would want to participate. And so there's such a bridge still between crypto native and tradfi Wall Street, I see it every day because now my life has transitioned to only talking to crypto native people. To. I'd say two thirds of my life now is talking to tradfi people. And so the chasm is still, like, massive. There's only a handful of people that can speak to both markets. You're one of the few people that can speak to both markets.
- [62:51]
A
It is a wide chasm, by the way. I agree.
- [62:54]
B
You know, like, the going through the process of. Of, I'm going to call it the ringer of going public. We've learned so much about how the game is played in terms of. From Wall street and how issuers are churned and burned and used and abused and like, you know, what things you should or shouldn't do, what are, you know, what's true and what someone lying through their. Their, you know, smile to you, you know, and so I feel like we're in a unique spot to be able to help bridge those two worlds as more companies come behind us and go public of these are the people you should work with. These are the people you shouldn't work with. You know, like, these are the mistakes you should avoid. And for us to, like, facilitate that conduit and so we're starting it this year. We're going to have, I think we have something like 15 companies participating that are planning to go public, which is insane. And we have investment banks and institutional capital who are attending the conference or who do deals with us separately that are going to participate. So we'd love to have Galaxy there and yeah, I'll be there for sure.
- [63:59]
A
I can't wait. I think that's really interesting. Again, another step back, a sign of the times. My goodness, the idea that you could even have 15 companies that do bitcoin stuff about going public, how far we've come, that's the other thing. Just before we wrap, like, I mean this bear market, you know, which technically if you use like a 20 drawdown as the metric, it surely is 1 but I'm sitting here looking at Bitcoin at 71k as we record this, like that is also a sign of the times. Yes. Not. It's not that bad. And you know, what's your. Just the overall vibes. How does this compare to like the, you know, the conference in 23 was just a few months after FTX collapse and SVB went down and stuff and Silvergate and whatnot. You know, 2019, you're right was like we hadn't, we were not back and it eventually took another 18 months for Bitcoin to retake its prior all time high. At that point, like how do you. What were the vibes like, you know, there's also, especially with you traversing the chasm between crypto native and tradfi. A lot of people talk about this delta between institutional sentiment which has like never been more bullish and retail sentiment which is still, you know, bearish. How do you characterize this bear market, David? Overall?
- [65:11]
B
So I would agree with that, that that divide in sentiment though I, I'm of the suspicion that the sentiment on. I've developed the view that institutional capital follows retail capital. And so it's like sharks following minnows, you know, they need, that's what they feast on. And so. And like liquidity is life, you know, like that's like, that's where you have to play. And so I think institutional sentiment trails the industry or retail sentiment. And if retail is depressed a year from now, institutions will get depressed a year from now because they're, they're the dollars they see is really the fees they're going to make on, on all the retail. So you know, but I do, there is definitely a divide and there's definitely a more sophisticated view from the Institutional crowd of like, hey, like the drumbeat of inevitability marches, marches forward. I think this, this cycle has been, I mean, we've seen it all. I've seen it all since I've been in bitcoin. So like, you know, I wouldn't even say this is that fundamentally unique. But what's different between this cycle and like the 2023, 2022 is like it was so easy to identify a catalyst for the sell off and here the catalyst is not clear. And so, and, and the price didn't appreciate to the point where like it matches other past market cycles. So I think what's interesting right now, what we're about to discover is like bitcoin didn't have its blow off the top, which I'm, I'm, I'm going to go ahead and guess is because if there's not something really bad behind the scenes that happened, it's because of how big the derivative market has gotten around bitcoin. And just like, there's just too much liquidity available for the blow off the tops. But that should also, if that's the case, the flip side should be true as well, which is like, we can't have the 70% drawdowns, 80% drawdowns because there's too much liquidity at the bottom. And so we're seeing that kind of play out when we hit the $60,000 range. That's basically the high of the last cycle. And typically that's a pretty important level in general if you go back through history of bitcoin. So either the market recovers here and I think we're kind of in a new normal dynamic, or if the market holds the patterns of the past and it goes lower, well, we kind of have to reconcile like, why do we have the same amount of downside but not the same amount of upside. So I think those are like, those
- [67:51]
A
are
- [67:54]
B
new dynamics at play and there's uncertainty from those dynamics. And whenever there's uncertainty, people generally are risk off. And so that's like. But the flip side is uncertainty can play the other way too. If, if things are uncertain, but they, they go in a way that is like, okay, we start heading back up in the price of bitcoin and this is not playing out any other pattern. Well now it's like, okay, new normal. What's the thesis of how to play and invest go forward from this, from this moment? So yeah, I think if there was a time for bitcoin to rally too, it would be when there's war and solvency crises, credit crises, liquidity crises. Like if bitcoin rallied here. Be very interesting. But yeah, I think sentiment is rough. I think sentiment's going to stay rough and sentiment will come back when the beatings will continue until the price of bitcoin comes back.
- [68:51]
A
Well said. David Bailey, the CEO of Nakamoto. Thank you so much for coming back on Galaxy Brains.
- [68:56]
B
David yeah, Alex, thank you for having me.
- [68:59]
A
That's it for this week's episode of Galaxy Brains. Thank you to my guest David Bailey, CEO of Nakamoto and our good friend Bimnetted BB from Galaxy Trading. Everyone have a safe and happy week and we will see you next time. Thank you for listening to Galaxy Brains, the weekly podcast from Galaxy Research. I'm Alex Thorne, head of Firmwide Research Research at Galaxy. Follow me on X at Intangible Coins. Follow Galaxy Research on X at GLXY Research. Read our written reports at galaxy.com research. And don't forget if you like Galaxy Brains to like and subscribe on your favorite podcast platforms like YouTube, Spotify, Apple Podcasts and more. We'll see you time next.