← The Bitcoin Treasuries Podcast with Tim Kotzman
The Bitcoin Treasuries Podcast with Tim Kotzman
Bitcoin Treasuries Roundtable with Dan Hillery, James Seyffart, & Chase Palmieri
00:15:08
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- [00:00]
A
Welcome back to the Bitcoin Treasuries Podcast roundtable edition. I'm Tim Kotsman. I'm here with my co host Ed Juleen. Ed, thanks for being in the studio today.
- [00:08]
B
Thank you for having me, Tim.
- [00:10]
A
We are also joined by James Seifert of Bloomberg Intelligence, Dan Hillary and Chase Palmieri. Gentlemen, thanks for joining. And James, maybe we'll start with you. What have you seen with the flows, with the price action? And does that even tell the full story? Meaning, like what buckets do you look at from the flows from these treasury companies? And does retail even move the needle these days? How do you think about all that?
- [00:40]
C
Yeah, I mean the short answer is it's like, compared to like what's happening under the surface. The flows are kind of just standard practice. I mean, there has been a lot of outflows, don't get me wrong, we're looking at over a billion in outflows, like 8ish billion since October 10. But we had inflows on Friday to these things. And granted when I say 8 billion, that sounds like a huge number, right? But you got to keep in mind they, they had a net inflow of about 63 billion up until that peak in October. So like, yes, it's a lot of money, but in the grand scheme of things, most people are staying put. That said, this is the biggest drawdown that any ETF holder has had to see. Obviously, if you were a Bitcoin OG or you were holding Bitcoin before the ETF's launch, you've experienced some drawdowns that are more severe than the 50% one we peaked at. But if you look at other things like the volume, Bitcoin ETFs traded almost $15 billion on one day. That's the new record. It hadn't been touched in quite a long time. So that shows there's a lot of volatility going on. And if you look at the options market, specifically on IBIT options, which has become very liquid and very large, that area is showing a lot of turbulence as well. But for the most part this goes back to something that I constantly say. It's, it's the same as a large of the, a lot of the treasury companies. It's like they're a piece of the market, they're not the whole market. And it's the, the OG bitcoin holders that are really moving the market here as far as I'm concerned. And obviously there, there seems to be some sort of like leverage selling potentially in the options market around I bet there's no way to know for sure. Maybe, you know, a body will surface in the coming weeks, but yeah, that's the way I'm looking at what's going on.
- [02:14]
A
Got it. Dan, Hillary, you were one of the analysts on the most recent strategy earnings call. Can you tell us a little bit about that experience hanging out backstage on a zoom call with a bunch of other legends. Also today you posted on X MSTR is using massive volumes from last week to pump bitcoin. Permanent capital is the best thing for BTC as the available float just decreases. Simple as that. It might be simple for you, Dan, but can you break that down for the rest of us?
- [02:46]
D
Yeah, thanks for having me, Tim. James I think that was a really coherent and great overview of the IBIT market as it stands in the bitcoin market, as it stands from my perspective, the strategy earnings call, it was awesome. There are some real heavy hitters on that call, so it's cool to get to kind of chat with them about their thoughts on the market. I do think as you traverse up in the circles, whether it be in finance or in any industry, you get little bits and deeper insights into the way some of the institutions are positioning and how people are thinking about the market. So you can see kind of the change in sentiment. What I've been noticing is that lots of institutions aren't necessarily being deterred by the pullback in price. They're looking at it as a buying opportunity, which is something I wouldn't have expected. And I think it's just simply that institutions have a much longer time horizon and are more. Have. Have taken years to get onboarded to the bitcoin fundamentals as opposed to kind of fomoing in and then getting scared out by. By drawdown. So that's been something I took away from the strategy earnings call and to my post. I mean, I think people, you know, I always think about bitcoin as whether or not it will turn into an exponential over time. That's the biggest question in my mind for bitcoin growth rate is whether it's a decaying exponential eternally or whether that decaying exponential turns into kind of exponential like Saylor likes to model out into the future. And the only way, the only thing I'm able to wrap my head around is that if strategy continues to stow away bitcoin on their cap table in their treasury, then over time the outstanding float of bitcoin will decrease at a kind of, you know, a linear rate, which means exponential capital flowing in should Kind of be an exponential rise in price once you get some sort of some standard price appreciation. So right now I don't think 50% annualized rate of return is sustainable as an exponential forever. But there may come a point like, I mean the S&P 500 and the NASDAQ both have traditionally exponential returns in the order of 10 per 8 to 12% per year. So there's no reason why Bitcoin couldn't have a steady exponential rate. That's only being bolstered by strategies Permanent capital taking Bitcoin permanently off the market. So definitely something to look out for in the next 20 years. Kind of a long time horizon.
- [05:09]
A
Long time horizon. Speaking of Chase Palmieri, co founder of Acropolis we have about 20 million bitcoin mined, 1 million left to be mined. You're in more of the corporate space. What are you hearing in this market environment?
- [05:24]
E
What I think has kind of come to light for a lot of corporate entities and obviously individuals, but you can kind of extrapolate it out to corporate entities as well, is the importance of cash flow during a time like this. If you're a business that already blew your load, bought as much Bitcoin as you could, potentially even leveraged that Bitcoin up, and now you're getting margin called and you either have to post more collateral or pay off some of the principal to bring the loan back into the the health zone for your ltv. It's a dangerous time to have been a corporate entity or an individual that does not have cash flows. But if you are a sustainable, profitable company, as you should obviously be trying to be, this is a really opportune time because you've already convinced your board, in the case of the clients we work with, you've already done the work to establish a Bitcoin treasury policy, you've already begun your acquisition strategy and you basically just get to take whatever those free cash flows were. Buying 50% of Bitcoin, now you're buying a whole Bitcoin. So Bitcoin is 50% off for the corporate entities that have managed to continue to drive cash flow and value that so that they can be opportunistic during these types of bear markets or drawbacks.
- [06:40]
A
Ed, any questions for our panelists before we close out the roundup here?
- [06:46]
B
Joe Burnett wrote an excellent article on X today, which Samson Mao kind of added onto and it's a longer article, but he kind of gets to the point where he says this is a good sign because it shows that Bitcoin is becoming an integral part of the overall financial mechanisms that drive the world economy and Wall street, et cetera, had a scary moment last week, week before last, at a local meetup where a guy that was there that I. I can't dox him, but basically works for one of the companies where they should really know what's going on. And you kind of. This is one of our OG friends. And he sat there and he goes, guys, we're sitting around all day and we have no idea what's going on. And, you know, I said, I'm going to go play in traffic now, because you're the one that's supposed to know. You know, are we in this phase where we're going up against gold and silver, going up against AI stocks, and the bitcoin thesis will prevail. We just have to be patient. You know, a lot of people are calling Gemini and saying, you know, are these bitcoin companies just going to sell their bitcoin and go bankrupt?
- [08:01]
A
And one of them just did. Well, they didn't go bankrupt. They sold some bitcoin, though. Over $300 million worth of bitcoin.
- [08:07]
B
Yeah. Nobody really ever knew what Kango was doing in the first place. But, you know, how do we reassure people? How do we tell people that, yeah, this is just part of the. Well, you can't say cycles anymore, but this is part of the process.
- [08:21]
A
You're the one saying this time isn't different. So I guess it's still the same cycle, but I mean, almost. I kind of want to pull James back in for a moment before he has to run. What are the flows and what's the story around them when it comes to other things that is taking attention away from bitcoin? We're talking about gold, silver, other metals that no one's ever heard of. Any thoughts there?
- [08:45]
C
Well, I've heard of those metals, but, yeah, the precious metal baskets, they went crazy recently. Right. So two things on that one. I want to go back to something that Dan was saying about, like, permanent holders. And part of the reason why I think particularly the ETFs have been such strong diamond hands with these things is because when they're coming in one, they're not. They're not an entire portfolio. Right. For the most part, people putting this are putting this as a small portion of their portfolio. And when they're doing it, they understand how volatile this asset is. Right. So when you see these huge drawdowns, yes, we see outflows, but it's rather muted compared to, like, if you saw an active equity manager that went down 50 plus percent. You'd probably see tons and tons and tons of outflows. You just haven't seen that because most people understand what they're getting themselves involved with. So I think that's one part of it. So the other part to what you said is what's happened recently is that we, within towards the end of 2024, Bitcoin ETFs actually came close to catching up to Gold ETFs and assets. Gold ETFs launched in 2004. Now they are trailing by a couple hundred billion in assets because gold has taken in tons of money, so have other precious metals ETFs, including precious metal basket ETFs. And Bitcoin is lagging rather severely because it's seen net outflows and its price has gone down. Um, so. And the other part of it is like, I'm not the first person to say this but like if you look since roughly June of this past year, I mean, Bitcoin has been extremely correlated to the software sector. The stuff getting hit hard because of, because of what's going on with AI and people believing that software is going to get killed by AI or at least software as a service type seat modeling. So looking at that, it's like this Bitcoin is acting a lot more like soft software than it is like hard money and gold. So anyone looking at that should be either a, trying to figure out why that's happening and be at least a little bit concerned because it's supposed to be an uncorrelated asset, but it is, like you said, it became an ETF and it's become correlated to a lot of other financial assets, including at least over the last six to seven months, software stocks.
- [10:47]
A
Dan, Hillary, anything to add on that and what are your thoughts on the ecosystem that's developing on top of some of these preferred products such as Buck Token and others?
- [10:57]
D
Yeah, I think the preferred. I think it's going to take a lot of time to see the effects of the preferred market reflected in Bitcoin's price. Because it's like a three derivative kind of layer, right? Like if you were to buy Buck, our Treasury sits in strc, so you buy Buck, then that would flow into STRC and then strategy would issue sdrc and then that would flow into Bitcoin and then, you know, that's ultimately permanent capital and Strategy's balance sheet that then never leaves Strategies treasury and that reduces the float of Bitcoin. So over time it should make the price of Bitcoin go up like that takes a long time to work itself into the price of an asset like bitcoin, which trades billions, billions of dollars of volume every day. So I think it's one of those things where you just have to be confident in the trajectory of bitcoin accumulation. Especially with strategy, buying whatever it was, 7, 70 million last week, these buy and buy and buy and buy. And there's a lot of institutional investors that will do that over time, buying the dips, creating structured products that force inflows into ibit and other ETFs like James has mentioned. So I think there's steady accumulation, but it doesn't mean the price steadily goes up.
- [12:06]
A
Chase, anything to add?
- [12:08]
E
Yeah, I mean, to the folks that are worried out there or looking at 2025 as a total loss, I think it was our most bullish year perhaps to date. I just don't think that we got the bull market, but the that we laid with everything from the FASB rule changes to the US Strategic Bitcoin reserve, sovereign nation, state adoption, regulatory clarity, corporate adoption, especially amongst publicly listed entities. I mean, there is too many wins from 2025 to list. The only thing that we didn't win on was seemingly price. But I think that that really relates to M2 money supply and the fact that we have watched the liquidity kind of dry up over the past 24 months. And the foundation though that was laid in 2025 to me screams massively bullish upside. Once that liquidity that we all in bitcoin know is bound to come eventually because of global deficits, because of money printing. To me it's just a super bullish outlook. We just have to wait for the inevitable.
- [13:15]
B
Yeah, price goes up and everybody's feet go from being cold to hot again. Right. Because when we.
- [13:22]
E
The narrative of this bear market which is starting to sink in, would change 15k higher from here. If we get to 85, 90k again in a week, maybe the bear market narrative flips back to the start of the next bull. I mean, everything is just narrative in retail. But I think what everybody on this call is calling out is that we have a new class of buyer. The institutions that are the ultimate diamond hands. I mean, bitcoiners have been famous for the HODL mentality, but it's really institutional capital that has properly position sized themselves for bitcoin's volatility. They will be the ultimate diamond hands and they will outlast most of the retail that are seemingly capitulating right now.
- [14:06]
A
James Sieffert Bloomberg Intelligence where can people find you online? Reach out, connect?
- [14:11]
C
Yeah. Easiest online is just on X or Twitter or whatever you want to call it these days. J, S E Y F F. That's where I'm most active, I guess outside of Bloomberg Terminal. Otherwise, if you have Bloomberg Terminal, that's easily the best place to get me. That's where all my research is. But I do share a chart from here, here or there on Twitter and then LinkedIn too, but way more active on Twitter and X.
- [14:33]
A
Awesome. Dan Hillary, where can people reach out to you and the other folks over at Buck Token?
- [14:37]
D
If you're interested in Buck, feel free to reach out at our website. Buck IO my Twitter My X account is Hilary H I L E R Y underscore Dan. Feel free to DM there as well.
- [14:49]
A
Awesome. Chase. Where's the best place to connect?
- [14:52]
E
Yeah, on X or LinkedIn? X will be Chase Palmieri. LinkedIn Again, just search Chase Palmieri. Happy to talk to anyone.
- [14:59]
A
Awesome. Gentlemen, thank you for joining us on the Bitcoin Treasury's Roundtable. Appreciate your time.
- [15:06]
E
Thanks.