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- [00:00]
Michael
I want to pull this up because I thought this was actually like super underrated. We don't have to read the whole thing, but there was this tweet from bitpaint that said an underrated aspect of stretch design is that effective yield rises as the price of the security falls. This creates a natural equilibrium where it becomes attractive on a risk adjusted basis, even without strategy manually adjusting interest rate. And Parker comes back, says an underrated aspect of Bitcoin is that the effective yield rises as the price of the commodity falls. This creates a natural equilibrium where it becomes attractive on a risk adjusted basis. A lot of mental gymnastics to get people to not buy bitcoin, just buy bitcoin.
- [00:35]
Liam
It all comes down to computers communicating
- [00:38]
Michael
the information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless artificial gold.
- [00:48]
Liam
Is it still rat poison?
- [00:50]
Michael
Probably rat poison squared.
- [00:52]
Host
We need to get into the world of.
- [00:54]
Liam
Okay. This is actually foundational technology.
- [00:57]
Michael
What the Internet of money does is it creates a single network which can do a micro transaction to a giga transaction. The Internet is going to be one of the major forces for reducing the roll of gun. The one thing that's missing but that will soon be developed is a reliable E cash.
- [01:24]
Host
Alrighty gentlemen, welcome back to final settlement. Today is Monday, June 29, 10:42am Eastern Standard Time. Michael's got a beautiful background, nice lake back there. How's it going, gentlemen?
- [01:39]
Michael
It's going good. It's feels like, you know the millennials these days, they do like the birthday months. It's what is it, July 4th week, given that it falls on the weekend. And what better way to celebrate freedom than to talk about paper bitcoin. And you know how others are so happy about it.
- [01:56]
Host
Yeah, yeah, we've got a big list. But as we were discussing before we hit record, I think we've got to start with the elephant in the room which is microstrategy, stretch and Saylor's latest guidance this morning. So just pulling that up, give me a second here. Michael Saylor, he announced a lot. He know normally his announcements are maybe they bought some bitcoin, maybe they diluted shareholders. This was sort of a comprehensive five point plan to strengthen digital credit, enhance liquidity, preserve long term bitcoin exposure and support the long term value creation. So there's a number of things in here, but to summarize it quickly, they raised more cash by diluting common shareholders yet again. They raised the stretch dividend from 11 and a half up to 12, which will become effective in July. And then they established repurchase programs for some of the preferreds. So up to a billion of the preferred, but then also up to a billion of MSTR that they can repurchase. Then they established, this is probably the most notable thing, the BTC monetization program, under which they may sell bitcoin to fund their USD reserve dividends and interest expense repurchases of our digital credit score securities and MSTR under our repurchase programs. So now the USD reserve is up to 2.5 billion, and then they basically have like quartered off 1.25 of BTC that they would sell under this monetization program. So they're saying they're basically including that in the dividend coverage in the USD reserve, assuming that that will be sold, basically. So, yeah. What do we think, guys? Did he save? Did he save Stretch?
- [03:47]
Michael
What's the price trading at right now?
- [03:49]
Liam
Both MSTR and Stretch?
- [03:51]
Michael
A little bit.
- [03:52]
Host
It popped a little bit. I think it's still under 80. Yeah, it was up over. It was at like 81, 82 pre market, then came back down to 77. Now it's around 79 and MSCR is still under 90.
- [04:08]
Michael
What do you got, Liam? I got too many thoughts. I got to orient myself here.
- [04:13]
Liam
Both reacted favorably. I mean, the biggest one is I think that strategy more than likely will never go above this amount of bitcoin on their balance sheet again. They just have too many other programs that they want to do in order to maximize bitcoin per share, and they have a fiduciary responsibility to other things outside of just acquiring as much bitcoin as possible. They are probably going to try to, you know, with this acquisition of Stretch at low levels, et cetera, it will maybe keep the whole dream alive for a lot longer. But I think that we're just probably going to continue to see a slow lead of mstr and all these preferreds continue to go down in BTC terms over a long period of time until they change this strategy of all the perpetual preferreds, it's likely going to give a little bit more confidence in the near term that bitcoin's not going to zero because there are a lot of competing opinions out there by everybody under the sun. But it's obvious that they're willing to monetize bitcoin and the game is running out of competence significantly at this point.
- [05:29]
Michael
Yeah, I think I'm going to try to thread in a cogent way a few things I think personally, and you guys can Share if you feel the same way. I think there's, like, two separate aspects that I deeply care about. One is how the hell do we get out of. And we talked a little bit about it on last week's pod. I think it was last trade and then it kind of, you know, came about in different forms of the elephant in the room of just like institutional allocators. Travis Kling, you know, he has his faults and what happened with him and Ikigai and ftx, but he, he does have acumen, he does have an understanding of the markets. I don't necessarily know if he's full time anymore, but he was referencing that there's just a deep problem as you look at institutional capital and like, why would they come in at this point? And so I just think about that elephant in the room and how do you quell that? I don't. I think there's a lot of nuance that gets lost on Twitter about when, you know, you can. I almost put this tweet out yesterday about, like, you can simultaneously be long Bitcoin, short MSTRs, like value prop, not the stock, just like the notion of a D, while also recognizing that strategy is not going anywhere, that it's not going to, like, unwind, because I think all of those are. Are likely for a lot of pragmatic and prudent individuals. And so I personally, when I think about strategy, forget about the DAT construct. Strategy is its own beast with, you know, whatever Number of Bitcoin 800,000 roughly is. How do they ultimately quell the fears so they can get out of this for the price to go up? And I, I think we all agree the only way the price goes up is if net new buyers come in. In size. And I don't. We don't think that they could come in if they have this overhang sitting there. So it's like, what does that look like? That's one aspect that I think we're just all curious on. And then the other one is just objectively, like, discussing what are we doing here? Like, honestly, what are we doing here? Because if we talk about, there's all this, like, Matt had a great tweet. He referenced it yesterday as. Or I think it was yesterday it was stock or XRP Army. I referenced it to, like, Stockholm syndrome. That's another one I've just been sitting on because, you know, everyone's mad about the tweet, so we just, like, sit on it. But like, Stockholm syndrome in the sense of, like, you've just been beaten across every aspect of exposure and thesis on this asset and people just continue to blindly, blindly defend everything and as the the whole like you know narrative or puck changes or the the goalpost and so if you're stretch investor who, who sits there now who's the marginal buyer if you wanted money market like instrument that sits at 25% par, below par and that confidence as you mentioned Liam. So that's one aspect and then if you're a dat MSTR investor and you're buying amplified bitcoin, well they've already shown that they're willing to dilute common it trades below bitcoin per share basically doesn't mean anything anymore. Even though they bought more bitcoin they diluted more than they purchased. So what are people hanging their hat on like what's the idea? And then the last part is so then as the price appreciates we have to recognize that what they put out this week and all the tweets are reactive. I think it was Pletor had a great post on like what are you guys doing on the marketing side? Like anybody with a brain sees that this is all reactive whether it's sailor tweeting at 1am or 3am or CJ out there just like spewing whatever it's reality is like this is just people making things up on the fly. And so ideally they get out of this for the industry and we can like see the price drift up but to Liam's point like they're just buying time longer this overhang will sit there and institutional allocators who this was meant to be for understand this. They're not brain dead. They're looking at this. They're looking at what was promised was stretched. They're looking was promised with the other preferreds. They're looking at the thesis of the common and why it was supposed to outperform bitcoin. And the last part is it goes back to like Sharpe ratio and volatility. It's like speaking out of multiple sides of their mouth when they talk about bitcoin's Vol is an issue but then you have this like most the most insane volatile stock to the downside. Why would any institutional alligator want it? It's just pure retail driven product.
- [09:28]
Host
Yeah, a few things just to add on to what you described. Like I think regardless of what Saylor tweeted this morning the people that are proponents, the people that own these securities would have spun it in a way that this is positive. Like it. It actually doesn't matter what he says to your point Whether it's, you want to call it Stockholm syndrome or whatever, they're just bag holders and they want to rationalize any move that gets made, regardless of what he did. I think they would have been positive. And the best example of that is like, you had a lot of people the past two weeks saying, oh, they don't need to do anything. Stretch is a free market asset. It's just going to naturally come back to par. And then he announces this five point plan, which is doing something. And so you can't on the one hand think that he didn't need to do anything, but then cheerlead when he does something. And then the other point, just around the overhang and sort of institutional capital coming into bitcoin and seeing this as, you know, I won't say I don't. I've never really viewed it as a systemic risk to bitcoin. Like, bitcoin would be fine, but it could be potential sell pressure. Right. And so I do think in that sense, like, yeah, they bought themselves some more time. Like they raised cash now, yes, it continues to damage common shareholders. But I think what their view is is basically like those proverbial institutional allocators that may be allocating to spot bitcoin might feel better now that strategy has more cash and they bought themselves some more time for the eventual thing that solves all of this for them, which is bitcoin going back up. And we referenced last week that there's some like, that's sort of at odds with each other, right? Because if the overhang is sort of too near term, then the bitcoin price may take longer to recover. But I think extending their Runway a little bit may actually allow them to kick the can down the road a bit and allow bitcoin to recover. And then frankly, a lot of the, you know, a lot of things get better for them if bitcoin starts recovering. And so the other thing I would say is like, and you mentioned this, Michael, like, you know, our stance has never been like, MSTRs imploding tomorrow. And it's also never been like, you know, these things shouldn't exist necessarily. Like, it's free market. These things can exist. Our only stance was like, let's dissect and understand the fundamental risks of these things and understand the way that they're marketed and maybe sort of the disconnect in terms of how they're marketed versus the underlying risks versus just owning spot bitcoin and cold storage. And so, yeah, I don't know if you guys have anything else on that or move on. But there's, I mean there's a few
- [12:06]
Michael
things I think like ultimately we keep discussing this because this is the main topic outside of AI that's just sucked the air out of the discourse. I mean people across the board got Darren revel with like 2 million followers of all our sports, you know, tweeting about it. So we got to talk about it. And then I think it is relevant because we have probably lost listeners and but we've also gained a lot of clients and a lot of investors and a lot of just individuals that respect that we've been talking about this prior to any of this issue. Like I always go back to the, the Jordan tweet. It's easy to talk when you're, when you're up a little bit, but you know, it takes a good man to talk when you're even score or down. Like we were below that. We were talking about this way before when it was a hot thing and you know, dads could do no wrong or, or, and also specifically stretch could do no wrong. And your, your point is, is super valid. Like why would anybody like all of our assets and the businesses tied to bitcoin going up and this is a huge problem, but the reason why you speak about it is because it is a problem. And I think this is ultimately comes back to lack of first principles, thinking and understanding second and third order effects. Because at the end of the day the way that they got in this position was financial engineering around the DAC construct that was just selling common because if you just sell common and you have a multiple of M Nav or some appreciation, well you have to go further and further on the risk curve because more people step in and then you had ETFs that launched and so you're just layering on more, you're daisy chaining more and more risk onto the product. And the other aspect is like, you know, if anybody's honest with themselves, they have to be looking. Even you could be the biggest bull for msq. Or everyone's out there wondering like what's going on? How are they going to get out of this? And, and so imagine family members and others that were put into Stretch. There's no shortage of stories online that you have to at least you can be the biggest MSTR bull, have all your bags there but be a little concerned of like, well what's happening, what's wrong with the thesis and recognize, well maybe this isn't exactly what I thought. And then it's specifically risk adjusted Maybe I should just be holding bitcoin. I want to pull this up because I thought this was actually like super underrated. We don't have to read the whole thing, but there was this tweet from bitpaint that said an underrated aspect of stretch design is that effective yield rises as the price of the falls. This creates a natural equilibrium where it becomes attractive on a risk adjusted basis, even without strategy manually adjusting interest rate. And Parker comes back, says an underrated aspect of Bitcoin is that the effective yield rises as the price of the commodity falls. This creates a natural equilibrium where it becomes attractive on a risk adjusted basis. A lot of mental gymnastics to get people to not buy bitcoin, just buy bitcoin. I just think that just underscore this whole thing in a nutshell. It's like you can just talk in circles around all the different reasons why stretch or MSU are good buys, or you can just buy the underlying that it's based on and then just go back to your life and not actually have to worry about this now. This will still be hanging out there. As far as bitcoin price, which, which maybe is the last piece you mentioned, it's not existential to bitcoin. I think why everyone has a valid concern about it is because it's like a similar Mt. Gox situation. That Mt. Gox wasn't existential for Bitcoin, but it gives you three to four years of just a horrible bare market and a big overhang of like institutional capital in this world, institutional capital, custody, all the things that are embedded in why finance is scared of bitcoin. If this thing goes sideways, I don't think it'll go sideways completely. But that's also not out of the realm of possibilities if that downward reflexivity happens, which is just a big concern for everyone, including the biggest MSTR bulls, because it's not without question that it couldn't happen.
- [15:34]
Host
Yeah, all well said. Maybe the last thing I'll say is, I think the other point that I've tried to make over the past several months is like the strategy has changed and that's okay. And you have to recognize that there's a reason the strategy changed. Right? Like they are right now. They're stacking USD and setting up their structure and framework to be able to sell bitcoin that's just completely different than what the stock was sold as a year, two year, three years ago. And if you're honest with yourself about that, you may still want to be an investor. But the reality Is the strategy, pun intended, has changed. And you can look at that and say, well, why? Why did the strategy change? Because it wasn't going according to plan. Like he needed to adjust and credit to him for adjusting, I guess. I mean he could have just let the thing blow up theoretically. But he's doing things that are reactive to your original point, Michael. Like he is reacting to the market, he's reacting to these proverbial institutional investors. And so, you know, just have that in your head. As you are an investor of these things or think about investing in them, you have to keep underwriting what the strategy is going forward because we, we now know it can and will change.
- [16:51]
Michael
And it, and it's pure gaslighting. Make no mistake about it. When somebody can criticize or discuss this objectively and also be long bitcoin and be super bullish bitcoin, you know, we talk about on last trade when we say like, you know, bips and interest rate and it gets so like the debt and like let's take a step back from the ephemeral large numbers of strategy and let's just look at an individual. An individual can take out a credit card debt, buy bitcoin, Bitcoin can still moon and they get blown the fuck up. Like, like that's the whole story of this industry is leverage kills because you have a volatile asset. You have all these other second and third order things that are happening, whether it's interest rates, counterparty risk with custody, how you manage the financial leverage. So to discuss and criticize or, or openly talk about the downside of it doesn't make you a bear. Doesn't make you. I would say it makes you even more bullish because you actually looked and understood risk directionally versus people out there just went into this stock and they talk about it publicly, that they're 75 to 80% into MSTR.
- [17:57]
Liam
So and the last thing on that too is and why a lot of us have been just objective from day one is that we've seen a lot of the history of bitcoin and how there have been these heroes that have eventually kind of pivoted away from and lost a lot of their credibility. Whether it's, you know, somebody like Bitcoin Jesus, Roger Bear or whoever, and a lot of their followers who have followed them blindly have lost a lot of their money. And not to say that they're all exactly the same, but, but just being objective and not necessarily thinking that somebody, because they have some amount of bitcoin on the balance sheet, they're going to be extremely successful and know how to use it well. Like Eos is another great example of just using shitcoin to buy more Bitcoin. It's not necessarily always going to result well for the shareholders on an underlying basis. And that's probably something that we need to do a little bit of a better job of objectively describing where we've been in the past, what's where some of these blow ups have been just because it's. There are a lot of parallels between how there have been just these massively idolized people in Bitcoin's history that have naturally kind of went down a different path and, and another part of that and why strategy and Bitcoin probably hasn't performed quite as well as we would have anticipated is a lot of the discourse around Bitcoin not being money and not being used on a long term basis, whether it's from governments and settling cross border trade, etc. And saying that just stretches money because a lot of institutional allocators, it's not interesting to them if 95% of the discourse is around, you know, just putting Bitcoin in leverage and using it just as a capital asset, it can and will be more than just that and used as a way for, you know, nation states to settle trade on a long term time horizon basis. And it's time to kind of go a little bit more back to the basics of what really makes Bitcoin valuable on a long time horizon. And as the shift focuses away from these dots back towards Bitcoin's absolute basic fundamentals is going to drive some of this bull market coming back as well.
- [20:03]
Michael
Yeah, I mean there's one key component to this that is objectively true even though people would argue that it isn't. And it has to do with like it's a very, the, the fiat angle is a good example of like we were all born into it. So it's really hard to unwind that.
- [20:18]
Host
Right.
- [20:18]
Michael
Because if you just naturally use dollars and understood that gold, gold hasn't been money from a day to day perspective is that the DAC construct is objectively an experiment and a speculative experiment. It's TBD if it's going to work out. But if you think about, you know, somebody coming in 2020, 2021 and on these things have existed so they just assume they will always exist and nobody ever goes back to just like the basics of wool. Is there a dollar treasury company, Is there a gold treasury company, Is there a silver treasury company? There aren't okay, well why aren't there? And then what would be the reason for a bitcoin treasury company that is purely you know, spot bitcoin? So I think just like underwriting on that base print principle and that's what made this always easy to like look at. Because sure you can make up the narrative but then it goes back to Brian's discussion on financial engineering because the second you go out of selling common you have to continue to propagate that narrative especially when other vehicles come in just for spot exposure. And so now you end up in this situation and we're in the eye of the storm at this point because Bitcoin's at 59, 60K and stretching MSTR sitting in the 70s or 80s.
- [21:26]
Host
All right, we're going to move on, lots to get to but that was a good discussion and we're going to move on to some AI related topics. Our good friend Sam Altman talking about their new models. Now I'll just say you know up front calling their latest new models sold Luna and Terra. That had to have been on purpose, right? Like that's a, that's a troll job by whoever was in charge of naming these things. But basically for those who are just listening, this is Sam Altman tweet. He says good news first. Seoul is a smart, efficient and significant step forward. It is the same price as GPT5.5. Also launching in the GPT5.6 family is Terra with 5.5 level performance at half the price. Bad news. At the request of the US government it is launching today in limited preview instead of the open access launch we are planning on. We are working with the government to get general availability as fast as we can. And so this is something we kind of alluded to or touched on in past weeks and months around the sort of ring fencing from a regulatory perspective that a lot of these larger frontier AI companies are angling towards. But then you know we had the Mythos fable sort of debacle a few weeks ago which it was released then unreleased. And so this is sort of the latest in that story of just these you know, more closed source things being held tighter and tighter to the chest in terms of you know, basically government led restrictions. So curious your guys thoughts on this. What are the implications?
- [23:03]
Ramp Media Announcer
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- [23:49]
Liam
I mean, this is awful to see. I don't know, the messaging has been just terrible out of Silicon Valley and why this needs to be be. Obviously they think they're creating God and a dangerous God that they're saying that only they should have access to. We didn't add it to the list this week, but there was Dario talking about the defense of why open source is actually very dangerous and why it actually can have limitations on how the users can really roll that back. And they are very careful to say that it shouldn't be the government that actually should be the one choosing how people use their models, but it should be the ones who are actually creating the models themselves. I think that we're going more and more towards the bifurcation of AI towards what is going to be closed, accessible to only a small group of people. I would imagine that the US government is either using these new models to train their own internal AI frontier models, they're not going to release the public, or the more likely one is some version of OpenAI anthropic all just get merged into the Department of War for national, national security concerns. And I think that this is going to be a non starter for more and more enterprises that continue to see these types of situations happening because each of their models could be held out at a longer basis too and they could lose access. And so it's going to be some combination of open source models that companies are going to need to run as well as the frontier models just from business continuity and backup perspectives. Not great to see from a government perspective.
- [25:37]
Michael
Yeah, I think this kind of touches on a lot of the discussions we've been having around like Hegelian dialectic around these two firms and both playing off of each other, but ultimately going to the same outcome of, you know, privately leveraging or creating their own tiered stack of who gets what. To be honest, it's probably existed like that for the past 10 years, I think it was rumored, I don't know if it was Citadel or Millennium who had like their own model way before the market did. And that's how they were able to like out trade. And obviously the US government has what they have. I can't help but just like look at this and think of bitcoin parallels in the same way for anybody that's been in bitcoin for a while, you've kind of rationalize if bitcoin's going to become money, you're just going to have different tiers of ownership and how it's structured. And I think there's a mix between the beauty of, of the market and a global market is there are competing forces in nature. So in a world where bitcoin could be, you know, censored or completely banned, it doesn't exist because you have this like global competition. It's kind of the example of that was the chegzit where you know, mining in China was deemed outlawed and then it moved over. It's like you can ban your country from a hard asset but others can't. So I think that this notion of similar here is other countries will be competing, releasing. So that gives like solace to the fact that you will end up with these open source models no matter what. But then it's really the reality of does the government specifically in the US go more draconian and hard or do they just go based on the like naivete, convenience that consumers like? Because we see this, right? This is why MSDR and ETFs have seen successes because somebody who just wants to click a button and so I think that's a dangerous precedent. I think that there's, there's a confluence of things happening. The other one I don't know if you guys listen to all in this past week, but it was, it was fascinating to know the level of competency when people are at. Because like Chamath talks a good book. But then it's like the, if you ever got to a concert or a song swap or even basketball, like when you see one player that you would think it was like a 1A and then he goes up to a real 1A and then he looks like A, B or C. Chamath was going on this whole diatribe around, you know, consumer protection and like social media and why in the UK they're putting in the age deal verification. And Travis was like, Kalanick was like, oh, I'm sorry Chamath, that's very much incorrect. This is all about, you know, consumer verification to know who's online. Because I think that's where this all goes, right is eventually you have to kyc. You have to get onboarded to access any of this. And I know everyone listening here is probably playing some form or fashion with AI and I feel it personally, it's like you're just giving up all of your information, you're giving up all your thought patterns, your process and that's going to be used in 10 different ways and that's not to your benefit, from your knowledge base, what you know, to your patterns. So we're just in a really interesting time with all of this. I'm positive in the sense of the optimism in just like society progressing is like we will figure out a way there'll be a market that forms. I think the hardware specifically it's been understood like the GPU stack with Nvidia was so much far better. But supposedly that GLM22 was trained on the Huawei infrastructure, which is pretty stellar because it was understood or thought that Huawei couldn't train these newer models. So I think like that stuff will get out there. It's in China's probably best interest that it's out. So it's going to be a fascinating competition, but in the short order, especially for everyday consumers that aren't going to go further than Claude or Chat GPT, you're just giving up everything. And businesses are going to do the same thing as well. For the vast majority, there's no reason like they're barely rationalizing how do you like disperse this new technology in an organization? Think about how many like months or years it's going to take to be like, oh shit, wait, we want to own this stuff. It's not going to happen all at once.
- [29:26]
Host
Yeah, agree with all that. And then this sort of directly relates to another item we have on the list, which this was a report, I guess on a Chinese forum from the past week or over the weekend, maybe on Friday. That's basically, I mean this to me helps explain part of the reactive nature of whether it's OpenAI or anthropic and wanting to do more staged releases, holding the frontier models closer to the chest in the sense that this stuff is leaking out and being resold. So what this tweet says is Chinese resellers are offering Claude tokens at 70 to 90% below official anthropic API prices. They achieve this by reselling capacity from pooled clawed max accounts, payments fraud and also reselling the model output and reasoning chains to various Chinese labs. They are subsidizing model access in exchange for user logs and reasoning traces which they then sell as training data, allowing them to operate below cost. So is that, I mean, do you guys agree with that? Is this, are these two items related in the sense that to me it seems kind of reactive? Like if this stuff is getting out, we need to be, need to hold this stuff a little bit tighter and not just release it to anyone with a $20 or $200 max subscription.
- [30:39]
Michael
I mean from a technical, like obviously we're on or I'm personally not on the super technical side, but from just a pure like business, commercial and like game theory. This makes a lot of sense, right, because you have the labs with the researchers, with the compute and they're at the very forefront of putting as much token and new algos to come out with net new models. And that's where the US has been leading the problem is that it's data and data can be multiplied, you know, copied. And so you have these distillation methods that have been occurring where you have, you know, a farm that's sitting wherever and you're just effectively running. It's actually interesting because you can go down these rabbit holes and this is exactly what a company should be doing. A company, no, seriously, like a company goes and asks the questions to these other models and then gives the questions in the best form from cloud and chat GBT to train your own local model and then you can keep that proprietary. So it makes a lot of sense. Now the question is a, is this purely reactive? Is this kind of posturing? Because this has always been happening and they're using this as a reason to do it. I don't necessarily, like, I don't know if it's true and I don't even necessarily know if it matters because these guys are smart. Like they could have seen this, the consequences and this has probably been happening forever. This is how Deep SEQ was trained, this is how every future model was trained. I think they end up, you end up in a just genuine catch 22. Because I do think like from everything I've heard, they are chasing the God complex and trying to create this AGI and if you're trying to do that, you don't really have any options. You've seen this in the capex spend. So now you just have to try to like throttle or hinder anybody else trying to distill your, you know, latest frontier model.
- [32:18]
Liam
Yeah, I think that all of this will inevitably be leaked and be able to train other models. It's going to be incredibly difficult to bring fence your own data, how you are using your tokens and subscriptions. It's just going to be something that happens out there. Just like we've seen with all the different ways that piracy has been used over time. And then using AI in order to maximize your own private piracy is just going to accelerate it even further. And a lot of what we're seeing in terms of, you know, different frontier models trying to capture the entire stack and likely trying to ban or make it inaccessible to use open source models is probably a lot of what we've seen in the cryptography wars back in the 1990s where they tried to ban encryption and PGP was created as a actual, I think it was like the same thing as weapons grade, like selling weapons internationally. And they're probably going to do the same exact thing with open source calling it a national security risk for AI. But in the long term it's just code and math and it will be too far out there that they're not going to be able to be able to ban it for a long period of time. And so I think that the cat's just too far out of the bag at this point for there to be draconian regulations right now. But for until that's really widely accepted and contested in court, there will be a lot of consumers who go to the OpenAI's and anthropics which will just continue to train all these open source models too.
- [33:57]
Michael
Yeah, I think the last thing in this kind of ties to early writers, our thesis and something I was going to share with you guys over the weekend. It was a, it was a pretty good pod. If you guys are familiar with Corman or I don't want to butcher his names. James McAvid. McAvity. No, it's McCavity MC A V. But point is, is like he runs a firm called Corman in West Texas and he did some very interesting analysis on like the topography and found effectively like the lowest cost of production for mining. He's just been understood as the lowest cost or I think it was a mix between wind and like, like a cavity that existed on a spot in West Texas. But what's interesting and fascinating at the end of that pod was and we've seen this across the board, good friends with like Matt Loestra and I didn't actually listen, I don't know if you guys did on the tvpn but they had them with Giga Energy. It's this idea that the infrastructure providers for compute tokens are going to be rewarded from daisy chainers, scrappy versions versus somebody that's trying to go out and build world class data centers for AWS or Google because they're fundamentally different clients. When you think about AWS and the number of clients and the recourse if they ever go down versus training models is a little bit different. Point being is he was, he talked and hinted about some big exits working with multi trillion dollar firms on because this is kind of like you know, most people know the bitcoin miners were at the forefront and now AIs come in and the, the ROI on CapEx. But I couldn't help but think that we will see that it doesn't feel like it now. It definitely doesn't feel like it. This is probably the bottom that this will happen around bitcoin infrastructure but you can see 12, 24 months as the price appreciates. These firms will have to go to the firms that are able to understand and because they're fundamentally like juxtaposed with if you were just going to a regular data infrastructure provider they're going to you know, spend 10x and have to do it in the way that it normally was versus how the bitcoin miners were and those firms are just reaping the wards tremendously. You see this obviously with like core weave and core scientific, et cetera, et cetera and it just made me think like we're going to see the exact same thing when it comes to bitcoin infrastructure as this stuff gets repriced as a monetary unit and then obviously how it embeds with stablecoins and other assets.
- [36:21]
Liam
Assets,
- [36:23]
Michael
yeah.
- [36:24]
Host
That's super interesting. Okay, slight aside and then we're going to get to some digital asset stuff. But we talked about SpaceX a few weeks ago, it went public. Just a wild chart. If you bought SpaceX on the open market anytime after five minutes from the IPO, you're now underwater. I think it's at like 155 right now. And the unlocks in terms of insider shares have not even started. I think the first round of unlocks is in August. So yeah, I mean we, we talked about this. A company going public at you know, the largest IPO ever, over a trillion dollars ran up in the first week of trading and now it's roughly below where it IPO'd. Unless there's anything on that, I think we'll move to the digital asset side of things. There's a number of headlines and announcements. His first one might Be Michael throws to you. Franklin Templeton has closed its acquisition of 250 Digital and launched Franklin Crypto, a new active digital asset arm targeting pensions and sovereign wealth funds. Franklin Templeton's been pretty active in the sort of broader crypto space for a few years now, it seems. So what does this latest move mean for them?
- [37:33]
Michael
Yeah, I mean, I think just the one note on the galaxy or the SpaceX stuff is like, this is really where the time to be focusing on the fundamentals, because we talk about all these different firms and the way they're trading. And yes, you might be able to time things, but the reality is you have to just turn back into a trader and it's just treacherous out there. You think about all these different. It doesn't even matter if it's like private credit, bonds, equities, bitcoin, gold. The only way I would be able to navigate is like, what's the fundamentals where like the market. And then you just have to hold your breath and just go make money until the. The price corrects and hope you're right or plan to be right. And I think we know that the fundamentals around commodities make sense in an inflationary environment. Franklin Templeton, this is interesting because I believe this is what spun out last week. We talked about that dividend fund that was taking equity dividends and spinning it into like 5% into BTC. I thought this was interesting because it's on a ring of other digital asset news. But also Seth Gins and the team from Coin Fund have been in the space for at least like 10 years. I remember it from back in my New York days. They were, I think they were rounds in like 2016, 17. And I do think that while we know crypto is kind of like on its way out, that firms that have been around in the digital asset, you know, fund space will come up with innovative, interesting things because they've seen what hasn't worked and that that's a good example of it where you're taking equities and putting them into BTC to help institutions get exposure. So I thought, this is interesting. We'll see where it goes. I would expect we also get a lot of crypto noise down the road with these products. You were, you were privy to the. I think it was 2024 when you heard the CEO of Franklin Templeton talking in a. In a room. I don't necessarily know if it was private convo, but they love crypto. Yeah, they're still trying to figure out.
- [39:16]
Host
I would not describe them as as bitcoiners, they are. They are crypto people, and that's okay. You know, that's what makes a market. Another headline from last week. ICE Intercontinental Exchange and OKX established joint venture to bridge traditional and digital asset markets. Liam, maybe I'll throw this one to you. What do you got on this?
- [39:39]
Liam
I don't have a ton other than just. It's going to be interesting. I think that they're looking to bring tokenized stocks essentially to all digital asset holders. It's more so everything's going to get tokenized. Whether it really provides a ton of incremental value. I don't think that there's a ton to necessarily be captured by firms out there other than just slightly more efficient. It's going to be 247 over a long period of time. And as more and more assets go into the digital economy, whether it's stable coins, tokenized assets, it's going to inevitably all kind of partially come back to bitcoin as over a longer time horizon. And everything's just going to be a token. That's an asset that is kind of ephemeral outside of kind of just the physical asset side of things. And so it's just interesting to see more and more of this happen. Then there's probably going to be some issues to be worked out on the near term, but these are two pretty big players, so we'll see. Might be interesting.
- [40:42]
Michael
Yeah, I mean, I. We don't have to go through all of them. I can rattle them off and we can have a brief discussion unless you, you guys want to. But I think there's the ICE OKX angle. Anchorage also came out with tokenized platform for this is more related to dollars and tokenized deposits. Hazel Network, something similar. It's a partnership between Vantage Custodian, another infrastructure provider. And, you know, Vantage is a more regional bank looking to, you know, really stay at the forefront of the tokenization efforts for deposits. We can go a little deeper on why that makes sense in a second. Black stablecorp and credit unions are another example because there's a, there's a, a fight happening. Doesn't get talked about a lot, but it's effectively between regional and community banks. And then the, the big banks. It's happening around disintermediation and the concentration of dollars into large banks. And so the large firms like JPM are working on their own tokenized infrastructure. And so there's a bunch of firms doing that as well to try to compete with deposits. And then the Last one was BlackRock and Athena, which I thought was interesting because BlackRock's Aladdin platform that pipes into most institutional allocators, how they model out portfolios, they brought in Athena, stablecoin. And to Liam's broader point, I think I'm probably the most interested or fascinated by this and we'll see where it goes, but simply because I think that all of this for better or worse is going to end up as the standard and probably sooner than we would like. And so obviously stablecoins have taken a little bit of a, you know, background with everything that's happening in AI. But I think that the machine and how it wants financial services to look is basically an everything app and everything you won't own, so you'll stable coins you don't own, they're sitting somewhere. The tokenized securities, the tokenized credit, it will be sitting somewhere. And the players that are able to vertically integrate that and offer the best experience we have to be fair. And there's a reason why MSTR has its value and ETFs have its values because people like going through their brokerage, they still understand a 6040 is not going away tomorrow or even 10 years from now that people will get the benefit of going into tokenized private public securities. And then because they're technology, you can leverage them, you can do other things. I think we sit as a group that while that will happen, the real value will accrue to as you include Bitcoin and gold specifically next to those assets because it allows for people to recognize over a long enough time horizon they have better counterpart, they're better assurances, better fundamentals. And I do think there's going to be a lot of firms to be built that come through that thesis that understand the traditional world and how they're trying to integrate tokenized securities and deposits. But also putting Bitcoin and best in class financial services around that will be kind of like the emergent winners long term. So I'll pause there.
- [43:33]
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- [44:07]
Host
Yeah, I mean, if I zoom out a little bit because I feel like for the past 12 months or so we've talked a lot about whether it's tokenization efforts, stablecoin proliferation, and now more recently tokenized deposits. I kind of zoom out and I think about it in the context of like, you know, 2017, 2018 era when there was a large push around this idea of enterprise blockchain, you know, privatizing blockchains basically, you know, better, faster databases. And all that kind of went away when that sort of bear Market in 1819 occurred. And I think part of the, you know, if you think about, from the perspective of a lot of these institutions and enterprises, they were unsure if like the space would continue to exist. Right. Like, if bitcoin dies, maybe the rest of this crypto stuff dies. So let's pause whatever we're doing, let's shelve our plans. I mean, you saw another sort of start stop in, in 22, obviously with the FTX stuff. But now I kind of view a lot of what we've discussed, all these announcements, these deals, these partnerships over the past 12 months as basically following through with like the, the original dream of like enterprise blockchain. It. Like Liam, you described, like, I would say the benefits are somewhat marginal. The benefit, most of the benefits accrue to the issuers. And so it's, it's a different story than sort of the crypto people sold in 17 and then again in, in 2122. In terms of these native tokens having these value accrual stories. It's much more on the issuer side that you're going to see the value accrue for these deals and all these initiatives. But I kind of see it as like, well, these people now understand, like bitcoin's not going away, the space isn't going away. So we may as well sort of build around these technologies to sort of gain those marginal benefits. And we also know the reason on sort of the more of the US Government side in terms of stablecoins and why there's an appetite for the proliferation there in terms of, of, you know, demand for, for our debt. And so when I think about it in that, that context, like, you know, Michael, as you described, like, it's easy, I think it's easy to get caught in like, you know, as on the bitcoin side, like, oh, this is all a distraction. Like we're, you know, great, we're doing enterprise blockchain now. But I think the, the actual takeaway here is like this is the journey, you know, whether it's an individual in 17 learning about crypto and then eventually coming to bitcoin, like these institutions, these enterprises are going through a similar journey in the sense that they're eventually going to realize that yes, there's marginal benefits to putting these things on blockchains, tokenizing treasuries, what have you. But going through that process I think will actually be the education required to understand why bitcoin is different. And I think that that's what this market in general has suffered from historically is like people can't distinguish, okay, like how is bitcoin different than the rest of crypto? And it's not until you actually go and build with these things and try to create products that you actually understand the differences. And so that's kind of, if I, if I zoom out and think about, you know, all the things we've discussed over the past 12 months with all these different firms getting in and partnering with crypto native firms and, and doing these deals, like I think it's just the, the education process that's playing out in real time and, and ultimately this is what will prompt people to recognize why bitcoin is different.
- [47:38]
Michael
Yeah, I agree with all that. I think the one way I would differ is the education I don't think has them coming out on the other side recognizing that bitcoin deserves a spot in a portfolio above 10% as an example. Because I think that, I mean obviously over a long enough time horizon that'll play out. But when you just think about the mental model I use is none of this stuff can happen. And you probably go back to electricity, railroads, different products, even in the Internet, consumer Internet, that they don't happen until the regulatory apparatus and the different flow of funds and we look at like are, are deemed okay by the machine. And we saw this with you know, the new administration, the new acts that are coming. And so I think that the mental model is a, the reason why there's follow through is because it's happening no matter what. And I think like maybe the, I don't know if it's a dog wagging the tail or tail wagon the doll, but it's the notion of debt. Stable coins are proliferating dollar dominance. And so then if you have stable coins proliferating now tokenized deposits have to become a thing for banks if they're going to compete. And so that pushes and then you see like BlackRock as a, you know, pioneer with whatever their background is and then the biddle and all the tokenized stuff is that that's the machines. The first part, the second part is I think that the crypto space, this doesn't have to be exact, but it's probably directionally right is crypto was the test net for all this, meaning atomic swaps and staking assets and like lending against them and LTVs and all that stuff is going to just get basically ported over to the traditional equity world. And to your point, like they're not censorship resistant, they're not permissionless, but, but they do enough. In the same way a stablecoin can be seized, but it lets you open up other efficiencies that these firms gravitate, they galvanize around it, they invest, we've seen all the capital come in and then institutions will be born that leverage this and others will, will die because they just can't wrap their heads like the vanguard gardens of the world. And then the last part is yes, then the market will demand bitcoin. They'll have to insert it there. But they will always be thinking about the traditional 6040 and wrapping their heads. Like we have so many conversations with RAAs, individuals, institutions that for them just to like, even if bitcoin went to $350,000, for them to deeply say okay now this needs 20%, they'll always go back and be like, well what would cause it to keep going up? Why wouldn't it cut in half? And then why would I put 20% of my portfolio? There's so I think we just have this long way to go here. But I think that it's kind of a cousin of the crypto trader that's a bitcoiner that tries to make crypto that's like the true pirate Binance or CZ as an example. I think there's a better way to play that. And what we try to think about is we know bitcoin's the best, we know all the things we talk about. But at the end of the day, if we want to win as investors, win as participants of the market in our outlook, we have to recognize that the market is going to adopt these things. And the large number of consumers are still, these concepts are still so foreign. And so you have to play in both sides of the world to do it.
- [50:40]
Host
Yeah, that's all fair. I totally agree. This is a long term story. I don't mean to say that people are going to wake up to the realities of bitcoin this year or even next year. It's definitely going to take a While to play out a few other headlines deals. Leah, maybe I'll hand this one to you. Kraken eyes a 15% stake in AAVE at a $385 million valuation. I think one, one point that's interesting to me in this is so they're valuing the company AAVE at 385 million. The AAVE token I believe trades at like 3x that valuation. It's over a billion in market cap. And so this is a kind of an interesting thread from the sort of crypto native space for the past several years of like, like how do you sort of separate token value versus equity value and you know, where is, where does the value accrual story actually play? So any thoughts on this, what it means for Kraken? We've talked about Kraken in their sort of IPO plans recently. What do you got?
- [51:50]
Liam
Yeah, I think that the, well the big difference on ABE is, you know, what actually accrues value between tokens and the actual companies behind it. It's going to be different based on how each of these companies is structured. I think that's less interesting to me. More interesting is on the Kraken side they're obviously trying to get their foot in the door deeper on kind of the defi side. And all of these exchanges, when you look between like Bitgo Gemini, Kraken, Coinbase, they're all going to continue to see as tokenized stocks make a bigger push and, and they all go into prediction markets and expand out from just bitcoin trading and digital asset trading. They're all going to have to find their niches if they really want to find where markets will value them over the long term, especially as they go public. And I think this is Kraken just kind of saying our niche and our angle is going to be more defi than anything else and they're probably going to try to get integrated into that angle. Whether that's really the best long term view, kind of unsure at this point, but that's a story that they can tell investors when every other one of these exchanges looks somewhat similar. I just thought that was interesting as they go public here and it looks like they continue to have they raised a 20 billion and then they raised a down round at 13 and we'll probably go back to 20 which they were just valued at their last round as they go public sometime soon.
- [53:21]
Michael
Yeah, the only two things I have to add there are supportive of like yeah, it makes sense from an optics perspective. You're just bolting stuff on I do think there's an interesting angle that I just thought of about what we talked about with tokenized equities and if you can play into this lending protocol to offer other financial services in a crypto world. And then the other one that I have no knowledge of, but it'd be worth looking into is I wonder if this has anything to do with the 1010 blow up and if AAVE had any kind of impairment and specifically with Kraken throwing Kraken Ave's relationship. If they saw that and this was a way to basically fill that hole.
- [53:59]
Host
Well, that was what's mentioned here is I don't know what their, their potential issues were on 10 10, but earlier this year with that kelp dao exploit, AAVE was impacted by that. So it could be related to that. Another deal, Mike, maybe I'll hand this to you. SBI holdings agrees to acquire Japanese crypto exchange BitBank in a $288.6 million deal. What do you got?
- [54:25]
Michael
I thought this was super bullish and interesting because you see a lot of sovereigns in Asia Pacific, specifically Korea, South Korea, making plays into digital asset crypto firms. And I think this goes back to the machine and the recognition that these assets are going to come on chain and people are still right now in this bear market making allocations, either acquiring or investing in the infrastructure. So I thought that was interesting to call it.
- [54:52]
Liam
This specific deal of SBI and BitBank comes right on the heels. I think within the past month Japan changed the regulations around Bitcoin specifically in crypto, so it's now taxed the same as equities. The tax regulations have completely changed and they have now clear rules of the road too. And so I think that the clear parallel is when the Clarity act does get passed, the same thing is going to happen in the US There are going to be other banks, large financial institutions that now have rules of the road and will want to acquire other firms in this space. And that's just something that's going to take a little bit of time. They probably have their exact targets mapped out or at least a few and are just waiting on the regulations to get the green light so that they don't have something clearer to tell their board as well.
- [55:38]
Michael
Yeah, this will be an interesting thing to monitor with that new change in the tax treatment and what happens with Meta Planet, because I think that this was like similar to sailor and strategy in the west when it came to the arbitrage for retirement accounts to get exposure and then Meta Planet served as this for the tax treatment and you see the sentiment online with what's going on there and trying to roll out other financial services not really catching a bit on the equity side. I just wonder, I don't know anything about the Japanese markets and like how they would regulate it, but I wonder if they'd ever step in. I feel like that's a smaller market that would be easier to not saying they disband it but require more assurances or in the counter to that would be like they like that their sovereign or the entity within it holds a large amount of this position. From a strategic perspective. I think it's just, it'll be interesting to watch and see how if anything plays out with Metal Planet with these new guidelines because I don't necessarily know why people would go into that if you can just go get spot exposure via like an ETP or direct via an exchange.
- [56:42]
Liam
Yeah, well I think that was interesting that a few weeks ago or maybe a month ago now at this point Meta Planet did make a small acquisition of like $15 million of some securities exchange and they're going to be offering like bitcoin derivatives to their clients as well. And I think it looks like offering, you know, bitcoin with some amount of yield that they're going to rehypothecate. And you know what, it may or may not work out, but at least they're trying to offer some bitcoin products and kind of be the bitcoin bank of the future. It's probably for those who recognize that there's going to be more risk out there, but that's probably some sort of end state of what a lot of these dots pivot into of actually offering bitcoin products.
- [57:23]
Michael
Yeah, I mean not to like toot our horn or pat ourselves on the back, but like this is. I'm surprised that hasn't happened and I'm actually not surprised because these aren't entrepreneurs so they wouldn't necessarily know where to go and make the money. But like we talked about this a year ago if not greater because there was already people recognizing okay, the dag, the DAC grift is kind of like moving on. So now we got to go figure out how are we going to do bitcoin denominating yield. But the explanation was that still didn't make sense because there's not at scale large firms doing bitcoin denominated credit products. And anybody that has, they've effectively blown up when you think about Celsius, Blockfi etc. So there's like two prime and a few others, but they operate within real walled gardens of like certain scale. Call it 100 million dollar facilities because you start to go further out there, there's not enough demand for that to generate the, the revenue to increase an equity multiple and what a DAT would need. So we talked about that and. But I still think like that would have been a smarter move because you can, at least from an optics perspective, like we talked about with AAVE and Kraken, you can tell a story, you can play that off of vibes because that's what the public markets are. But they hadn't even like graduated to that step. They're just still sitting on the existing one. And the second step was still a false, you know, primitive. It doesn't make sense based on what we talked about. But yeah, I mean like you see this on the sentiment even with the, the MSTR bulls, like why don't you just go buy something that produces cash flow so you can at least throw it in there and to have a better story, like.
- [58:51]
Host
Yeah, totally agree. I just pulled this up because I hadn't, I hadn't looked at it in a while, but Clarity act on Polymarket being signed into 20 into law in 2026. This was as high as 75% back in early May. It's now basically a coin flip. So who knows what's going to happen. Alex.
- [59:12]
Michael
Alex Thorn had a good. I don't know if it was in research or a tweet, but they have it at exactly 50, 52. And his context was it was less substantive around what was in the act. It was more about the schedule basically this summer and then going into midterms. And what would that look like? This one's hard to forecast because I think like there's a lot of stuff we've talked about and being pro that it would happen this year from an admin perspective. But when you think about whether it's Iran, all the other stuff, midterms, all the other, these other issues, like, I just don't know where this sets. It's hard to understand where all this like financial infrastructure and plumbing for this new world sits in the context of everything else they have going on. AI.
- [59:57]
Host
Yeah, that's totally fair. And I think it's like this month that basically would have to be voted on later this month, so we'll see what happens. But this was a headline that I think we briefly touched on last week. I don't remember if it was on the show or on tlt, but Binance to stop providing services to the EU after failing to obtain their MICA license. Mika, I guess goes into effect this week actually on July 1st. Any thoughts on this?
- [60:31]
Michael
So I added this because I thought it was fascinating that they got the approval in Greece and then it was Lagarde that effectively blocked it because. And again not a Europe expert on digital assets, but you can kind of feel the reeling of not only European markets, but then capital flight. They've been very public from like the BIS all the way to Lagarde talking about it as the escape valve that they're working on their own like Euro dollar or Euro currency. And there's like real concerns of cryptocurrencies proliferating because it makes complete sense. Like if you have a draconian, not a great capital market for wealth, you would opt for something like this to move assets. And so I just thought it was fascinating from like a company builder perspective and how you navigate that. If you got the preliminary approval and then at the last minute the president of the central bank effectively blocked you, it'll be something interesting to multiple on.
- [61:26]
Liam
The great decelerationists over there are just really trying to slow innovation however they can. Yeah, I think like something like 75% of digital asset firms are going to be exiting the EU on I guess within two days from now. So not great to see over there.
- [61:44]
Ramp Media Announcer
Yeah,
- [61:47]
Host
this was a headline added late ad to the list but tether surpasses Ethereum to become the second largest cryptocurrency right behind bitcoin. This is to be expected.
- [61:58]
Michael
Dollars in bitcoin. That's all that exists out there, man. It's like it's all that.
- [62:02]
Host
This is nature, nature healing itself right here. All right, we've got a few minutes left. Last thing on the list was Facebook and prediction markets. Why not? Why not another prediction market?
- [62:18]
Michael
Who says I included that link because if you look at it, it's actually from 2020. So they had tried to roll this out. Well and I put this one purposely because Facebook test forecast and app making predictions about world events like COVID 19. This was 20 2020. They're coming back. I think the, the interesting. I don't know if we share this with you, Liam. We kind of like stumbled on it on last trade that there might be something here simply from a gamification and like the notion of meta parent owning, what is it, 2 to 4 billion consumer accounts. And they start with the gamification because there's not real world value, it's more point systems but the amount of insights you can glean or specifically training AI because you're able to like influence and get people's like you know, think about like that user experience or incentive flow is a little bit or fundamentally different than how people interact online when they, when they produce like their interest or directional bets. Could be one of the angles of it that might be reading too far into it but it's just something like to think about that these large firms have such size and distribution. I mean like Apple's another example. The AI play and the hardware there's I think second and third order like chess that they're playing that we don't even know when it comes to their distribution and what it means.
- [63:33]
Liam
Long well they already have everybody already arguing about politics online on Facebook so it just makes sense that they should be able to bet on what's going to happen in the elections and stuff coming off of it too. Yeah, I mean it'll be extremely successful from a revenue perspective is my bet.
- [63:49]
Host
But yeah, I mean the takeaway for me here is like, you know, prediction market's going to be a trillion dollar industry. I'd probably take the over there because this was a good treat from Charlie Belolio. The amount wagered on sports in the US has just absolutely ratcheted up over the past few years. In 2018 it was 6.6 billion. Last year was 165 billion which is just insane to think about. And prediction markets is just an extension of, of gambling. It's a new form of gambling. And so once you add sort of that volume and demand these numbers are only going to accelerate as sort of financial nihilism proliferates and people turn towards this. So we're not great from a societal perspective, but makes sense that Facebook wants to get into this game.
- [64:41]
Michael
We need to come up with our own inflation index that is qualitative and quantitative. Because when I think about these quantitative, yes, it's growing but then inflation adjusted how much is it really growing? When you think about dollars it reminds me of like the GDP aspect and then the qualitative angle is we all forget and I think this is natural. It's where a lot of alpha is of like we, we live in such a clown world because of the, the money being broken that there's all these downstream effects. And I would make a strong argument that's why ADAT exists of like the world over financialized people forgot how to deliver value. And so rather than go and actually work hard to build something, you effectively are taking out debt to buy Bitcoin and call it a business model. And then others think that you can make more money because you didn't get into bitcoin. And that's how you end up in this spot. Like it's not exact, but that's directionally how we got here. And once you understand like that's the system we're in. And that's why these things exist. Because I think for a very long time, if you were born in the 70s and 80s, like a lot of things made sense because they were just rooted in. There was inflation, but it wasn't like this. And you still had that like Frankenstein aspect of a society. But we've just gone of past event Horizon, specifically past 2020. And so you have these things exist, but people's mental models are like, if I see it and if somebody says it's true, that I followed it must be true. And now you back into a position of having to defend it forever when it's just fundamentally not. And I think more and more people should really look at the world through that lens and that's really where we'll have a huge opportunity. We're not incorrect. That's who they're going to be. The winners in this new world is being able to look at it through both lenses and trying to come out from what's the signal versus the noise.
- [66:16]
Host
Yeah, when, when the money's broken and you can't save in a form of money, you're forced to speculate. And then there's the other component of basically investing and speculation has been conflated with saving over the years because people just, you know, put their money into the S&P 500 and think that that's sort of just like how you save when in reality that is still speculating, it's investing. And then, you know, when you break down what the S P has done, it's like basically, you know, maybe keeping pace with monetary debasement and inflation. So then that's why people take even more incremental risk on top of that. Whether it's going into DATs or just pure gambling.
- [66:55]
Michael
The dads remind me of being a contrarian for contrarian sake. Which is always the worst move you can be. Because if you think about it like the bitcoin angle has exposure of people that hate it or try to detractors, but they have no basis.
- [67:08]
Host
Right.
- [67:08]
Michael
We, and we've talked about this. Once somebody does a work, it's a one way street. But on the dad side you have people from all walks of life that are incredibly intelligent Telling individuals that this doesn't make sense. Whether it's like the Darren Revells and people from tradfi or people in like, you know, traditional culture and finance. On the athletic side, you have traditional bitcoiners that have been here forever that have generally been right on most things. Saying it, you have like the Peter Shifts of the world. You have every different angle. So you're either insanely contrarian and write and you're going to make a lot of money or all these people are maybe onto something. But nobody has that discussion of. It's just an interesting situation we find ourselves in.
- [67:51]
Host
Yeah, that's fair. Anything else, boys?
- [67:55]
Liam
And bitcoin's in deep value territory, so there's a lot of noise out there. But bitcoin has the real fundamental value and thesis. And anytime we're this low, it's. I got very excited.
- [68:08]
Michael
It's a good point. I mean, like, think about, you know, trying to build a position or just like, when it got to 120, it was really exciting, but it was also, I felt a real, like, angst of, like, man, what's the narrative? How are we going to change these units to get individuals to understand that this is just a better money, it's better savings. But to look back and be in 2026, which I think is a big part of how MSTR got this position, because nobody could have forecasted will be in 2026 with all of this clarity. Regulatory, like, everything that's happening, SBR, ETFs, and we're sitting at $59,000. That starts to really weigh on the converts and everything else that was positioned or financially engineered. So to your point, deep value you can pick up even if you're just DCA in or buying $10,000 worth, that's buying you, you know, close to you, whatever that is. Like 15 of a coin. I don't know how long we sit here, but you should take advantage of it.
- [68:59]
Host
It cheap sats. You heard it here first.
- [69:02]
Liam
100%.
- [69:03]
Michael
All right, good stuff, guys.
- [69:05]
Host
Thanks. Later. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that on Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice regardless of where you are on your bitcoin journey. We'd love to hear from you, visit onrampbitcoin.com contact to schedule a consultation with one of our private client advisors.