← The Bitcoin Treasuries Podcast with Tim Kotzman
The Bitcoin Treasuries Podcast with Tim Kotzman
Building Bitcoin Treasuries in Britain with Andrew Webley & Jesse Myers of Smarter Web Company
01:10:17
Loading summary
Transcript50 lines
- [00:00]
A
Welcome back to the Bitcoin Treasuries podcast. I'm Tim Kotsman. I'm here with Andrew Webley and Jesse Myers of Smarter Web Company. Gentlemen, thanks for joining us today.
- [00:09]
B
Thanks for having us, Tim.
- [00:11]
C
Pleasure to be with you.
- [00:12]
A
Pleasure to have both of you. Andrew, I thought maybe this would be a great time, while we have lots of announcements and lots of price action, to maybe step back a little bit to the beginning. I don't know if you want to go all the way back to your childhood, but a little bit about where you grew up and your experience before starting Smarter Web. Your journey to Bitcoin, things that build the story a little bit for us.
- [00:44]
C
Yeah, sure. So probably a good place to start is when I started my career. I started working in 1999, it was just before the dot com crash. And I joined a very small company that became a very big company that's called Hargreaves Lansdowne, which is the biggest retail broker in the UK. I left there after 10 years and I was their head of online. So if you visit their website today or you are a client of theirs, you'll touch something that I had a hand in building. I'm still a client of theirs and I quite like seeing that still. When I left hl, I had always wanted to run my own business. So because I'm a developer, I set up the Smarter Web Co. 16 years ago. The concept was really, really simple and that was that we would build a system that would let us build websites for clients. So we do it all remotely. You know, I've met such a small number of our clients in person over these years. We've delivered it all online. Way before it was trendy to do stuff online because of COVID and such things. And then almost 10 years ago, I found Bitcoin and I thought it was an interesting volatile, maybe store of value, maybe something you trade, maybe something you use as a medium of exchange. But it wasn't until Michael Saylor came out with his Bitcoin strategy that I realized that the ultimate model was a public company and bitcoin smashing the two things together. And that's what really did it for me. I was lucky enough, I suppose, to have the time to look for a company in the UK that I could invest in. I spent two, three years trying to find a company like Strategy in the uk. I still hold strategy shares today, but. But I wanted a UK version of it because, you know, I live in the uk, my kids live in the uk. I. I love the uk. But, but I wanted us to have our own version of strategy, but I couldn't find one. So about 18 months ago I thought, well, if no one else is going to have, have a UK version of strategy, then I'll do it. I'll list my business on the stock market and pursue a Treasury strategy that I believe in. So that's what we did on the 25th of April, which is approximately 10 months ago. We listed our business on something that's called the Aquis Exchange. It's the Junior Exchange in the uk. The reason why I did that was that it was quicker and cheaper. So I don't know whether many people watching have ever listed a business, but it's quite expensive to list a business even on a small exchange in uk. So as a small business, which is what the smarter web company was at that point, you know, there was quite a lot of risk and quite a lot of cost to that. Everyone told me at the time that it wouldn't work and I, I said, you know, this is ridiculous, you know, look at strategy, look at Meta Planet, you know, because metaplanet was around by that point and, and, and we're just going to emulate that model. But, you know, we pushed on, we did it, we involved retail shareholders right at the start and, and then over 10 months, we've grown to be one of the biggest bitcoin treasury companies in the world, with the 29th biggest in the world. We're by far the biggest in the uk. And then a couple of weeks ago, we, we, we, we, we listed on the London Stock Exchange, which is one of the best capital markets in the world. A lot of work went into that and we can touch on that later. But that's me and that's my journey.
- [04:49]
A
Awesome. Jesse, could you give us a little bit of your background, your journey to bitcoin and your journey to however you met Andrew?
- [04:59]
B
Yeah, yeah. Well, I was born and raised in Pasadena, California, came out to Texas, got a degree in accounting, went into management consulting at Bain Co. And that led me to getting an MBA at Stanford. So kind of, as I would later write about, kind of your yuppie elite track, the ivory tower, if you will, and thought I had been trained in money and value and in the world of finance to an extent. And then when I was at Stanford, stumbled into Ethereum. Really. There were a few people who were buzzing about Ethereum and that kind of led me into the whole altcoin universe in 2016, 2017. That was great. And then in 2018, that all got murdered compared to bitcoin. And that forced me to try to figure out what was I missing. Why did I get this so wrong? I thought this was all about technology and that new altcoins had better technology and they would eat market share from bitcoin, the old dinosaur. And when you then start to really dig into why is bitcoin winning and you seriously consider the of bitcoin maximalist content out there, you realize that there's a whole deeper level of the rabbit hole. And this isn't about technology, it's all about money. And in fact, the history of money and Austrian economics is all about increasingly scarce assets winning out over less scarce assets. And then bitcoin is this digital perfection of scarcity and what makes gold a compelling asset. So bitcoin is a perfection, a digital perfection of gold. Especially the sort of coup de grace was reading the bitcoin standard and safe is not very kind to the world that I had come from. But damn it, he was right. And that was a tough pill to swallow. And from that point on, I kind of committed myself to Bitcoin and became a content creator in bitcoin, putting out analysis and writing about bitcoin. Some of those pieces became fairly popular. And little did I know, I was on the radar of Michael Saylor. And so when I put out my perspective on how to think about the full potential valuation of bitcoin within the global asset landscape and its place in that context, Saylor loved that and pretty quickly adopted that as his framework. How he approaches thinking about how valuable bitcoin will be in the future, culminating in that Bitcoin24 model of $13 million per Bitcoin in 20 years. That's where that came from. That kind of pulled me in to the bitcoin treasury landscape a little bit. And then it was kind of a combination of a few conversations with Saylor and then with Dylan LeClaire that shifted my thinking away from cold storage bitcoin only to cold storage plus risk asset bitcoin. There's a place for risk in your bitcoin portfolio still. So, yeah, a few conversations with Saylor and more with Dylan leclair as he was really getting going with metaplanet, opened my eyes to this is the next big chapter for bitcoin, its maturation as an asset. I think that we will look back at this as kind of the demarcation point for bitcoin. There's going to be before treasury companies and after treasury companies, and I think it's going to be quite Stark that the treasury companies are the accelerant for bitcoin becoming incorporated into the tradfi landscape and global fabric of capital. And so I got pretty excited about this time a year ago was putting out analysis about Bitcoin treasury companies and the model there and then I was excited about what's the next Meta Planet and I very much wanted to meet Andrew as he was quickly executing on this brand new treasury company in the uk. Happened to be in Vegas for the Bitcoin conference and off to my very first event for that week, stepped onto an escalator and the person who stepped on behind me was Andrew. And so we started talking then and pretty quickly figured out that we work well together. And I got more and more excited about what I see as the biggest opportunity in the world that has not yet been as of a year ago the biggest opportunity in the world that had not yet been explored in terms of capital markets. The US and Japan as of a year ago already had their leaders with strategy and Meta Planet. The UK is the second most important capital market in the world. It's the legacy of the British Empire. Huge amount of global banking and capital intermediation happens in London. My thesis is that there's going to be a winning Bitcoin treasury company in every capital market in the world. And the opportunity to work with Andrew and help advance the lead of the leading Bitcoin treasury company in the second most important capital market in the world was. It was a dream come true.
- [11:45]
A
Appreciate that background. I had the opportunity to moderate a Digital Asset treasury panel recently at the Digital Assets at Duke conference as myself and Ben Workman and Katherine Dowling and Jess went up on stage, one of the hosts of the conference said, all right, now we're going to talk about digital Asset treasury companies and whether they're still going to exist in a few months. So that was our warm introduction. And I don't know if it's that person's viewpoint or the recent volatility, but all of this to ask both of you. Were there a few things that early on that stand out to you now that are top of mind as to what gave you the conviction of this is the next industry, this is the next step. Because for years and years and years it was just microstrategy and then even when others joined it seems like from what you both just said at that point it was probably just strategy SEM or Scientific Meta Planet.
- [13:10]
B
Yeah, it's hard to remember. Just a few years ago everyone would talk about well yeah, microstrategy can do that playbook, but that's because they're a billion dollar software company spitting off cash flows. Nobody else can follow that playbook. And then, of course, MetaPlanet did it. And it started from a $10 million market cap base and pivoted from hotels into this. And it works. And then that opened the floodgates. But we shouldn't be surprised. Bitcoin is for everyone. Bitcoin's for every individual company and government. And it's a tailwind that you can opt into or not. Our view, all three of us, is that bitcoin is monetizing as an asset. It's still quite new in the grand scheme, and it's going to take its place in the global asset landscape. And it's currently 0.2% of global asset value. I don't think it stops there. So I think that this is a rising tide that benefits all individual holders and corporate holders of bitcoin. So this is bound to happen everywhere and with every company to some extent over time. But I think it was metaplanet just kind of showing that it was possible to run this playbook from nothing. That made everybody who wished they were at the helm of a microstrategy, but knew they weren't, all those people then thought, well, actually, if you can do it from effectively scratch, then maybe it's time to try.
- [14:56]
C
I agree with that. And then also, if I think about what I was looking for when I couldn't find a company doing what we've done so far and will continue to do in the future, it's a company that believes in transparency, a company that believes in putting shareholders first. Everything that we've done since the start, we've been as transparent as you can be as a public company. We've put shareholders first and foremost in every decision that we make. You know, when we, we're having internal meetings, we always talk about what this would mean for the shareholders. So we've done it that way. And then if you look at, you know, what is a business at the end of the day? Well, a business is something that's trying to earn a return for its shareholders. If you believe in Bitcoin like we do, you believe probably that for the next few decades, bitcoin's going to average, let's say, 30% a year. And then you think about that in the concept of a business. So how are you going to get a 30% return every single year for your business? By selling whatever it is that you do, or providing whatever service that you do. So if you think about it in really simple terms, it's the best business model you can get because it's going to outperform whatever anyone can do over a longer time period. Um, so I think you probably need to think about it in, in that context. And, and, and, and, and, and it's as simple as that, really.
- [16:30]
A
Do you guys see, through conversations, other emerging companies in your jurisdiction, or is it one of those things where it just takes a lot longer than you might think for people to follow?
- [16:52]
C
Yeah, I think there's a bit of both. So, you know, we're so busy at the moment, there's so many things to do. And, you know, every time you think you can't get busier, you get busier. So on one hand, you're not really looking at anyone else. You're just focusing on your company and how you can make your company better every single day. But then when you take a little bit of a step back, you see that there's lots of different ways that you could do a bitcoin strategy. So what we believe is trying to increase our bitcoin per share after that, increase the, the number of bitcoin held, because you need, you need to show your shareholders that there's a reason why they're holding your stock bitcoin per share. But then you also need scale and size, so the, the quantum of all the bitcoin that you hold. But there's lots of other ways, and I'm sure there's ways that none of us have thought of yet where you could adopt bitcoin on your balance sheet. You know, there's lots of things that you can do when you're in different stages, different markets. You know, I think the developed world and the developing world, they'll have different ways of, you know, adapting the model. So I think we're very, very early in the corporate adoption of bitcoin. You know, the building the balance sheet on digital capital, which is what we're trying to do. At a later stage, we'll probably be doing digital credit again, heavily inspired by Saylor. But there's lots of other things that you can do. And I think, like all good ideas, a lot of the things that will probably play out in 10, 20 years time, people probably haven't looked at yet. And that's great, because what we want to see is we want to see more companies adopting Bitcoin as the treasury asset, not one of the treasury assets, the treasury asset. And the more companies that end up adopting bitcoin, the more acceptance it Gets the way that we always talk about it is. So going back to the start of my career in 1999, when lots of people didn't realize that we would use the Internet like we use it today. That's all we're doing. We're building a business on top of the Internet of Money, the Bitcoin network. We're building an app. Smarter Web is an app that sits on top of Bitcoin. And we can use the bitcoin network to then build the business and to build different things that can benefit different types of people. For example, with preferreds in the future, you can smooth out the volatility. Bitcoin is for everyone, but some people don't like the volatility. So what if we can design something so they can have a better return than you would get from a bank account, for example, further down the line, of course. So we're just building something on the very best network that no one controls, that no one can change. The properties cannot be changed of it ever. So we're building the balance sheet on that and it's very, very exciting.
- [20:04]
B
Yeah. I would add that Andrew touched on this, but to make it to piggyback on that, we talk about two different things and we don't often disaggregate them. But what we're talking about most of the time and what we're focused on with Smarter Web is building the best capitalized bitcoin balance sheet in a capital market. And what you can then do with that is the digital credit playbook that Saylor has now pioneered. That's in my view, the biggest, lowest hanging fruit for what you can do with a well capitalized bitcoin balance sheet. But there's tons of other things you can do, different financial business models that you could pursue. And then on top of that, there's all the other mom and pop businesses or any kind of business that can just benefit from having some or all of their treasury in bitcoin. This sort of Tesla approach of hold some bitcoin and enjoy the uplift of that over time. But what we're focused on is the winner take most, lowest hanging fruit in every capital market is to be that the biggest bitcoin balance sheet that could then issue, if it makes sense to do so, could then issue digital credit instruments and continue to grow that balance sheet through that strategy.
- [21:46]
A
Jesse, your chart of global wealth. I know from conversations I've had that bitcoin treasury companies in other countries have taken that chart and put it into AI and said, now do it for my country and it's been really helpful to just see hard exercise to do.
- [22:09]
B
I've done that myself for the uk.
- [22:12]
A
Yeah. So interesting tools and technology that we have. When you look at global wealth, I guess two things. One, and this is kind of like kind of zooming out to the macro. What if anything can we conclude from gold and silver and other things increasing in price and bitcoin, let's say chopping sideways or going down 50% and then on the flip side, when we do get price appreciation in the future, what theoretically could that do to this flywheel For a company like strategy as the obvious example, where if the price is going up and your leverage is coming down, then you have to buy more bitcoin because you want to be amplified Bitcoin, that just to me seems like a very powerful flywheel that might be underestimated because as people are starting to say on social media, we haven't seen this model, this sort of digital credit model in a real a bull market yet.
- [23:28]
B
Yeah, I totally agree. Two juicy topics there on the first one. Gold and silver have had a great year. If you just zoom out a little bit further though, the last five years or so, gold and silver are catching up to bitcoin's strong performance over almost every year over the last 15 years. So one way to look at it is that gold and silver have outperformed this year, but I kind of view it as they were bound to have a relative run versus Bitcoin. And one year out of 15 or so in 1980, all the gold in the world was worth $1 trillion and all the equities in the world was worth $1trillion. So at that point in time there was parity between gold, hard money, neutral reserve asset and equities. And of course since then something like a 10x outperformance of equities versus gold. So I think that with the backdrop of the sovereign debt burdens that are everywhere in the world after 50 years of unbacked fiat and what that has enabled governments to take on in terms of irresponsible debt spending with that backdrop, there's a huge case to be made that you want to hold gold or you want to hold hard money assets. Because the only way out, if you really think through the the math and mechanics, is well, it's either a productivity miracle along with austerity and to sort of dig your way out through surplus out of the debt burdens that every developed world country has at this point, or you inflate away the debt and what that looks like is you screw over bondholders. Bondholders are offered 4%, 5% a year to tie up their capital. And then if you inflate away the value of those debt obligations, because true inflation is 7 or 8%, as Michael Saylor included in, in that Bitcoin24 model, well then the delta every year is you decreasing the debt burden that you owe bondholders. Even though the bondholders think they're making income, they're actually losing. They're destroying value in real terms just by holding bonds. So that's how I see the backdrop here. And in that context, holding a hard money asset is extremely appealing. And I think gold and certainly bitcoin benefit from that and probably have an increasing place in portfolios now and into the future. So gold and silver rallying this year is probably individuals and entities worldwide starting to realize that math points to debasement and inflating away debt. So you don't want to be holding 30 year treasuries, you want to be holding neutral reserve assets and they're catching a bid. So that's the gold side of things. And you'll have to remind me the nature of your second question.
- [27:26]
A
Yeah, maybe I'll go over to Andrew. Andrew, do you want to any additional thoughts on gold and silver versus Bitcoin and the macro on the downside before we go to the flywheel of digital credit in a, in a bull market that we haven't seen?
- [27:46]
C
No, I think Jesse covered it pretty well. But the point that he made, which I just like to really pick up on, is that gold and silver have had a good year also. And that is just a hard asset becoming more valuable because it needs to be more valuable, because the world is getting more in a mess. The fiat currencies, the inflation, all of the things that are hurting the everyday man on the street. You know, you go to the supermarket, you do your shopping, it's almost criminal how high the prices are going every single month, every single year. So all that's telling us is that real assets are increasing in value and are the place where you want to be. And then if you look at all of the real assets and you think, what's the best real asset of them all? Then in our opinion, it's clearly bitcoin. It's the only asset that I'm aware of in the world that's got a limited supply that can never be increased. You know, that's really important and I think very much underestimated. When you think about what's happening, you Know, specifically in the last two years with bitcoin, you know, that I think when people look back in, say another two or three years from now, they'll, they'll be kicking themselves, just like everyone says at the moment, why didn't I buy Bitcoin at 5,000, 10,000, whatever? You know, it will be the same thing when people realize really what that, that fixed, limited supply means. And I think that's all it is. You do have to be mindful that markets move. The thing that we like about bitcoin is the volatility. And obviously the downwards volatility is not as much fun. And there's people probably out there in the last year that are disappointed with bitcoin because they bought it, you know, in the last year, the last six months, the last 18 months, whatever. But, you know, you just have to zoom out a little bit and think, what, what are the qualities that make bitcoin so special? You know, the things that we've talked about, the portability, you know, you look at gold as a good example. You know, can you send gold to the other side of the world without any cost immediately? Of course you can't. You know, bitcoin can be sent anywhere at a very, very low cost. And that's another great quality of it. So, yeah, I think Jesse covered it very, very well. And I appreciate the last couple of months have been difficult for some people holding bitcoin. But let's see where we are in
- [30:27]
B
the future to add on to that. If you really zoom out and you look at that global asset landscape chart, you see all that value. And if you were to try to categorize it into digital value and analog physical value, well, it's 99.8% analog value and 0.2% digital value. And obviously we live in an increasingly digital world. The Internet's pretty young. But look how it's completely transformed how we do everything when it comes to information. It seems pretty clear to me that that ratio will continue to shift.
- [31:12]
A
Yeah, I was walking around the bitcoin investor week conference that's going on this week here in New York, and at least one person, probably a few people, made note that there were zero hoodies. You know, there were shirts, shirts and ties. I saw this morning at least two, if not three guys in three piece suits. That made me a little nervous, right? And I'm there in a suit and tie. I'm like, three piece suit, are we getting to a four piece suit? What does the future look like here? It's just too many Buttons. But can one or both of you walk us through what the, how you view digital credit, these preferred products? Now there's technology products being built on top of things like Stretch and what this could look like kind of as it develops across more than just one or two public companies. And again, I'm just going to keep asking the question till we get to it, but what could this look like in a bull market? I just don't think we've seen it yet.
- [32:29]
B
Sure, go ahead, Andrew.
- [32:32]
C
But I'll give the very, very short version and then I'll let Jesse do the smart version.
- [32:38]
B
I'll do the long winded version.
- [32:39]
C
Yeah, yeah, well, let. So it's really simple, you know, Jesse will cover it all fully, but it's as simple as this. If you believe an asset is going to increase in value over time, you buy that asset. You need to get the money to buy that asset. So you effectively borrow the money by offering permanent credit to people in exchange for a coupon that they can't get elsewhere. Let's call it 10%. You know, now on day one, which is roughly where we are at the moment, all of the people that don't understand that start to say you've got an asset that's, you know, over the last couple of months has been decreasing in value that you've bought and you've got these liabilities, but the bit that they're missing is as that asset increases in value, the debt that you're paying relative to the asset that you bought is becoming smaller and smaller and smaller. So it's, it's so simple. When you look at the maths and just as everyone looks at Saylor now and they, they, they think that he's a genius for what he's done with the common equity model with a bitcoin treasury company, I would almost guarantee that within a few years people will look back and they will say, that was so obvious. What a brilliant idea. Why did he get such a hard time for it? It's, it's the most simple thing in the world as long as you believe in the future of bitcoin. And that's my short version. And Jesse can do the more intelligent version,
- [34:19]
B
maybe the more meandering version. So the way I view it, and this is part of what got me so excited about a year ago about why this is going to happen in every capital market in the world, is Bitcoin again, teeing up that global asset landscape view of things. There's an osmotic flow of capital from asset classes that don't deliver good returns to asset classes that do deliver good returns. And a big part of that is capital seeks scarcity. So I think there's been over the last 16 years a flow of capital to Bitcoin because of its properties and its scarcity. And, and that's all just been individuals waking up doing their homework, saying, you know what, maybe I should sell some of my bonds and buy some bitcoin. And that is a grassroots thing that's played out globally for the last 16 years. That's pretty slow as a process. What I think bitcoin treasury companies do, they are the plumbing of hyper bitcoinization. And by that I mean what Saylor has done is he has put a straw, a pipe into the equity market. And he has said, I'm going to deliver bitcoin powered returns to people who want to hold bitcoin equity. Now he's said, you know what, the really big reservoir of capital out there is a bond market, fixed income market and the money market. And he has now stuck new pipes into those buckets and said fixed income market to all the capital in the fixed income market getting mid single digit returns, mid single digit yield. Would you be interested in 10, 11, 12, 13% yield instead? Because I can offer that because it's powered by bitcoin that inevitably wins market share over time. And what that amounts to is capital being sucked out of the fixed income market, fiat capital being sucked out of there and, and pumped into bitcoin. Whereas previously it was an osmotic flow of capital that relied on the individual doing their research and getting comfortable with it. What a bitcoin treasury company does is creates the products that meets capital where it's at and creates the attributes that a fixed income investor is looking for. It's just better because it's powered by bitcoin and you can offer more and that ends up winning market share. And so the bitcoin treasury company is this capital pump that is pumping capital out of these tradfi buckets, fixed income and equities and money market, and putting that capital into bitcoin and in the process increasing bitcoin per share, so increasing bitcoin ownership for, for its shareholders. So that's why it's so exciting. This model exists and this model will change, will have a huge impact in each capital market in the world. Because that's kind of a local story ultimately. And that's why I think this accelerates this model. Existing accelerates bitcoin's hyper bitcoinization.
- [38:08]
C
Also. If you overlay there the amplification theory. So let's call it, you know, 25, 30%, whatever you want. And then you start thinking about those numbers as bitcoin increases in value, which is your point, Tim, of what happens in a bull bitcoin market. And then you also keep very squarely in your mind the properties of bitcoin, I. E. The fixed supply. You, you can see how this can drive it considerably higher. So it's going to be one of those things that again, like a lot of other things in life, that when it happens, everyone will say, why didn't I load, you know, load the truck up or back the truck up or whatever that saying is. You know, it's going to be one of those things that's so obvious in the future. You know, it's clear to some people now. You know, clearly there's lots of people that can see it, but there's a lot more people that can't. So it's, it's, it's going to be like, I suppose, throwing fuel on the fire when the price goes up. Because the companies that have got the amplified bitcoin, the digital credit, the preferreds, they will be able to scale those ratios in line with bitcoin going up. And the amount of capital that will flow in at higher and higher prices will drive bitcoin way higher than it is at the moment. There's a lot of people for the last year, two years, whatever, that we're talking about 100,000 Bitcoin and then 250,000. All these numbers around, numbers, that's probably how people come up with them. But if you say to somebody at the moment, I believe bitcoin is going to get to $500,000 in a certain amount of time that isn't that far away. You know, some people can't see it, but then they don't understand these flows of capital that are coming in that will be built upon it. So, you know, it's an incredibly exciting time to be a bitcoin treasury company at the moment, or indeed a bitcoin investor.
- [40:17]
A
This is not going to be official analysis, just what I see on social media announcements, meaning in the current environment, there's only a handful of companies that are continuing to buy, buy bitcoin on a consistent basis. And of course you just had Binance buy a billion dollars of bitcoin. Maybe American bitcoin has an announcement every once in a while, but really it's strategy, Strive smarter Web, DDC West Main Storage, maybe a few that I'm missing that are continuing at whatever scale to buy bitcoin on a consistent basis. What do you think is the difference maker between just doing nothing, which can be a great strategy in certain markets, versus being able to consistently buy more bitcoin, especially at lower prices, which is obviously beneficial to the long term strategy.
- [41:15]
B
Yeah.
- [41:16]
C
So when you're a bitcoin treasury company, there's lots of different angles to it, but obviously a pretty important one is the availability of capital. And that's why we've worked so hard to make sure that everyone of our shareholders understands what we're doing so they can support us, which assists with having liquidity in the market, which means it's easier to raise capital using different strategies that we've got. For example, we've got an ATM style facility that I'm incredibly keen on. We've done lots of different placings since we became a public company. We've done a smarter convert, which is a bitcoin denominated convertible bond, the first of its type in the uk, actually. So you do need capital to buy bitcoin. We believe that we should buy as much bitcoin as we can, irrespective of the price. So if the price goes up, we'll be buying. If the price goes down, we'll be buying. If it stays flat, we'll be buying. Obviously, there's waves, so as market conditions change, there's times when you've got more capital and less capital. If I'm honest, I'm disappointed. This year we've announced two buys so far. We announced 10 bitcoin maybe two weeks ago, 15 bitcoin a day or two ago. I would like it to be more. We've run a tight business, we control the costs. We've got a team of very experienced people, but we, we do have an operating business that contributes a bit. But I would like to be buying more bitcoin right now. And I believe that we're entering that period which people saw last year, where our buys were going up and up and up and up. Obviously that's not a projection, so I think it's just a case of grinding it out in the good times, the bad times. We've got a model that works in all market conditions. A good market, a bad market, a flat market. You know, before we even became a public company. That was all built into the strategy. Obviously we tweaked the strategy and evaluate different opportunities and things. But, you know, our job as a bitcoin treasury company is to try and grow the bitcoin per share. And to do that, you know, you do have to buy bitcoin.
- [43:34]
B
Yeah. I guess what I'd add to that, Tim, is that over the last seven, eight months, we've seen a downtrend in bitcoin treasury companies globally. And that has been a pretty stiff headwind for everyone. And it has kind of stopped the flywheel for a lot of bitcoin treasury companies. And I think that's in some ways the market testing, cleansing itself and washing out companies that didn't have what it takes to run this model. In the UK context, there were 26 companies that said that they were going to run a bitcoin treasury policy hot on the heels of Andrew pioneering the pathway to do this. And over the last handful of months, it's gotten harder and harder for those companies to keep going and keep executing on the strategy and the liquidity has dried up for most of them. And I think the real differentiator for Smarter Web at this point is our liquidity, our scale and our liquidity. And it's a funny thing about the pure play bitcoin treasury company approach, the sort of winner take most approach, where you have to have critical mass of a community of, of supportive shareholders. There's sort of an intangible network effect there, I think, of Smarter Web is I think, increasingly the name synonymous with amplified bitcoin exposure in the uk, the pure play Bitcoin treasury company model in the uk. And that's because our shareholders are out there talking about Smarter Web and what we're doing and excited about it. And I think that's the secret sauce for any bitcoin treasure company, is having that community of excited shareholders who see your track record of execution and have confidence in the management team and trust in the management team. And I think that frankly starts with Andrew. Andrew's dedication to doing right by retail shareholders matters a lot. It matters a lot to our retail community. And I think that's a big part of why we have that critical mass and that liquidity, that average daily volume in our stock and that average daily volume is the reason we fundraised over the last month to buy 25 bitcoin. All of that came from our ATM style facility. And that's separate from our hopefully larger, lumpier fundraising rounds that we would do through a book build.
- [47:08]
A
What are the ingredients to this seemingly secret sauce of having liquidity in your stock? Because I think the reality, and I think we all also view all of this as more cooperative than competitive at this point. That's, that's the Secret sauce to being able to really have the flywheel of the atmosphere, to raise capital to buy more bitcoin. So is it doing 200 podcasts a year and communicating clearly through that? Is it a dozen different things that maybe we could rattle down a list and some of them are maybe obvious and some of them aren't, or some of them people think, oh, I need to do this, but really, you're wasting your time doing that. Any. Anything you want to throw out there for the good of the community.
- [48:08]
C
Yeah, I'm more than happy to talk about how I see it. I can't claim that I've got all the answers, but I believe that if you want to run a bitcoin treasury company successfully, you just need to work hard. There's a saying that my older brother likes to use, which. Which I'm sure he stole off someone else, which is that the only place that success comes before work is in the dictionary. And. And it's as simple as that. You know, it's. We. We're running a business, so, you know, for a moment forget, it's a bitcoin treasury company, you know, so smarter web, before we became a public company, was a private business that I worked hard at every single day for 16 years to make it survive effectively. So when you run a bitcoin treasury company that's a public company or any other type of public or private business, the way that you make it work is work. It's no more complicated than that. And then on top of that, what you have to do is you have to speak to the people that you're asking to support you. In our case, our shareholders are kind of like our customers, really alongside our customers in the operating business. And you have to communicate with them. And you can do that through podcasts with great people like you out there, you can do it through. We do a weekly update every Saturday morning that we put out to people that we sort of stumbled into, and it's now something that we do every week. You can do it through improving your website. You know, we offer a very good web design service, so if you want to improve your website, speak to us and we'll. We'll help you with that. Anyone that's watching doing any type of business, you do it through demonstrating your execution. You know, you have to prove to people why you should exist in the business landscape. You know, you can't just say, I should exist, therefore everyone should like me. You know, life doesn't work like that. So you prove to people that you can do it through execution. Behind the scenes, there's lots of things that people don't see. So you make sure you've got the right processes in place. There's lots of processes that people wouldn't even realize that we have to have. That's quite important. What do you think, Jesse? That's probably the main points, isn't it?
- [50:40]
B
Yeah, but it's also the way you do it. I think the way you communicate needs to inspire trust and frankly, Andrew does that off the charts. I think you have to carry yourself with integrity and actually care about your shareholders. And that should be table stakes for any management team in a public company or any company. But you need to be able to inspire that trust in shareholders that you're working hard, doing what's in their best interest and you're going to make and that your judgment that you apply is sound and has them in mind. And so it's about communicating, but it's also about making sure that shareholders understand and know and feel deep down that you are working for them.
- [51:54]
A
That makes a lot of sense. I feel like you can be a gregarious, fun loving person, but at the same time I'm reminded of watching Fong on stage in New York this week and he said something that I'm sure he said before, which was, you know, we've been in the public markets for X amount of years and we take our responsibility to our shareholders extremely seriously. And I feel like when you kind of start from that sort of a platform, you can then have that established and, and really go from there and making yourself and your products available. You know, I've, we've all seen strategy have their products listed on Robinhood and other platforms that they're trying to again put more products in the market for Bitcoin. And maybe that's a decent segue to your listing in London. Can you guys share a little bit about the behind the scenes of the work that goes into that, whatever you can share and what that experience was like?
- [53:01]
C
Yeah, go for it, Jesse, because we opened the market together. So you can say it as well
- [53:08]
B
as I guess that was a culmination of about seven months, Andrew, maybe eight months of a process to uplist from the Aqueous Exchange to the London Stock Exchange. And actually that process began a little bit before I started working with Andrew. And it's funny enough that the goal the whole time from the outset for Andrew was when we reach a certain, I guess market cap milestone, then we will begin the process to move to London Stock Exchange. And that happened in two or three weeks after listing the company. So it all happened pretty quickly. But then, yeah, it's a seven month process of effectively an entire IPO all over again. That means getting your sponsor, your accountants, the auditors, legal team, all working together to put together prospectus and then there's a dialogue between the company and the regulator, the FCA about everything that's in the prospectus and back and forth and rounds of comments. Until a few weeks beforehand we didn't know if we would be approved or when. And then it all happens pretty fast. And before we knew it, we were at the London Stock Exchange opening up the market last Tuesday and Andrew invited me to press the button with him, which was quite an honor and not something I imagined I'd be doing just a year ago even. And yeah, so Andrew, you can kind of share your experience of the day and you know, because for Andrew this is a 16 year journey of building his business and running it as a web design business. And then boom, all of a sudden a ton of change in about nine months after going public as a web design business with a bitcoin treasury policy.
- [55:23]
C
Yeah, it was quite surreal when you set up a business and your objective is that you want a business that can effectively provide for your family and anything else is a bonus. And then you slog your guts out for many, many years and the business gets harder and harder and harder. Still profitable every single year, but harder. You don't necessarily expect that in less than 12 months or whatever it is that you would be standing opening the London Stock Exchange with a crowd of 100 people because we had lots of shareholders there, advisors, you know, some family, some friends, you know, obviously the whole team. You don't really see that one coming. And, and, and a bit like Jesse said, because it all comes together so quickly at the end. You know, you, you almost don't even see it when it's there. You know, you, you know, we've got the photos so we'll, we'll, we'll, we'll, we'll be able to look back and, and remember it. But it was, it was great, but it wasn't just great for our shareholders and for the team and you know, the advisors and all that sort of stuff. This is great for bitcoin, this is great for bitcoin treasury companies. This is great for the uk. So it's, it's great on all of these different angles, which is, you know, what we're trying to do, we're trying to do something positive that's good for. That's good for the future. That's good for, you know, the, the next generation in the uk, you know, and obviously global investors that want to. Supporters. The, the branding that we had there in the London Stock Exchange was quite surreal to see because, you know, over the last couple of months we've put a lot of effort into rebranding the company. That's another thing that's very important about bitcoin treasury companies, you know, a strong brand that's sincere and true into what you believe in. So, you know how you present yourself externally. And we had all the banners out, didn't we, Jesse? And one of our slogans, which includes the word digital capital, obviously. And Alex, who we work with, had created all the graphics and he had put a lot of effort into understanding how they would all fit in. And it was just really cool. I. I'm ever so proud of what we've achieved as a team in quite a short space of time. And I'm very, very much focused on this mission which, which is what I want to be. I want to. Well, now that we've achieved the LSE side of things, I want to become one of the biggest companies in the UK and then I want to become the biggest company in the UK in time. And, you know, we'll. We won't rush that. We'll. We'll try and make the right decisions. You know, we do everything over the medium to long term. You know, we don't make decisions that impact things for a day or even a week. We always try and make progress in a week. But decisions are medium to long term. And we see the London Stock Exchange as being a structural, defining moment in allowing us to access greater pools of capital and build on it. So that's where we're going with it. I feel. I almost feel accepted by the traditional financial system. You know, they. It's almost like they invited us in, you know, and they saw that we deserve a place there and, and that's good for Bitcoin because that's part of the acceptance, you know, that that's what we need to happen over the next couple of years. We need it to become more and more accepted for people to understand that we are building a balance sheet on the best asset ever. You know, bitcoin is going to underpin the entire world from a financial system point of view. And so, yeah, it's pretty cool, but we're very, very much focused on the future. Whilst we did enjoy last week.
- [59:38]
B
Yeah. And we genuinely think that if the bitcoin treasury company Thesis is right. The largest companies in every capital market in the world will, will be the leading Bitcoin treasury companies in that capital market. That's the scale of what's happening here in terms of capital structure shifting from analog capital to digital capital. And so that's what Andrew quite deliberately put as our banner slogan in all the photos. It says bitcoin is digital capital and then has a Smarter Web logo. Packs it all into quite a tight little sentence there. And I think hopefully we get to look back on that moment as quite a statement of what bitcoin is bringing to the London Stock Exchange and to the UK capital market in general. Bitcoin is digital capital and Smarter Web is here to bring that to portfolios on the London Stock Exchange.
- [60:44]
A
Andrew, you were talking about the mission being focused on the mission and also painted this picture of this moment with the team, shareholders, advisors, friends, family, all being there in this one moment. And you have the first ever Bitcoin Treasuries Unconference UK coming up at the end of May. Can you tell us how all that came to be and what your kind of vision is for that?
- [61:20]
C
Yeah, sure. So I've been lucky enough to go to different conferences and to listen to lots of good speakers, to learn things, to meet other people, all of the things that you would expect someone to do at a conference. And last year, the conference I enjoyed the most was in September and it was the conference that you ran in New York. Jesse and I both went to it and it was great. I sat through almost every minute of the speakers there because I enjoyed the content, you know, that's, you know, without stating the obvious, why you go to a conference, you know, or certainly why I go to a conference. Anyway, so I wanted to do something like that in the uk. And then I was talking to yourself and Ed last year and you said that you wanted to do something in, you know, lots of different areas as well, including the uk. So we immediately said to each other, well, let's just do it together. And I think we agreed there and then that we would do that. So, you know, with a combination of the Smarter Web and with a combination of the unconferenced team we've managed to put together, I think it's approximately 30 speakers so far. So they're all on the website. We've got a number of sponsors, you know, some great names have said they'll support the idea and we'll start small, you know, compared with some of the big conferences. But we'll try to put On a day of great content and it's happening on May 29th. I, I insisted to us all that we'd have it in Bristol, which is where I live, which is an hour and a half on the train from London, really accessible. You can get to Bristol from all parts of the uk, so, and it's a great city with lots of things going on, great music scene, great sports, banksies from Bristol as well. So it's a great quirky place to have the Bitcoin owned conference. And yeah, I've been delighted. I've invited all of the people that are involved in the Bitcoin treasury public sector, so there's lots of other companies. This is a Bitcoin Treasury's unconference, powered by the Unconference team and Smarter Web. It's not just a Smarter Web event, it's a Bitcoin Treasuries event. And then, you know, luckily enough we've had some great support from international companies as well. So Fong from Strategy is going to speak. Matt Cole from Strife is going to speak. We've got Alex from Capital B, he's going to speak. Sander from H100, he's going to speak some of them, virtually some of them in person. So we, we've tried to sort of overlay some international experience alongside all of the UK experience and we're looking forward to it, aren't we, Jesse? It should be a great day, like. Yeah, and, and, and if anyone wants to come to it, you know, you can just visit our website and, and, and, you know, buy, buy tickets, you know, and, yeah, and, and, and I'm looking forward to yourself and Ed coming to Bristol in person as well. Tim.
- [64:44]
A
Yeah, Jesse, I was going to say I don't think you and I have talked about this, so what was your reaction when. I'm just making this up, But Andrew said, jesse, we're doing a conference.
- [64:56]
B
Yeah, well, as with many things behind the scenes at Smarter Web, I was like, how are we going to do that on top of all the other things? But Andrew somehow makes it happen and the real answer there is that he's pulled in the best talent for doing this, which is yourself and Ed. I echo Andrew's sentiment that it was the most unique and enjoyable conference, bitcoin conference that I think I've ever been to, actually the one in New York. And I commend you for, I think, wisely thinking, you know what, we've done this now in the, the biggest capital hub in the world, New York City. Now let's do it in the second biggest capital hub as well, and that's the uk. So I think your order of markets to expand into is quite right here.
- [65:54]
A
Yeah, we're very, very excited. Super appreciate you spending quite a bit of time with us today. I know you guys have a lot going on. What, what would you like to leave people with? And in case people don't want to click one or two things on the Internet, what's the exact name of the website they should go to? Andrew, to reach out and find out more about the conference and events and what's going on at Smarter Web.
- [66:25]
C
So if people want to find out a bit more about the company, the conference, view our Bitcoin treasury analytics, all of those good things, find our social media, they can go to www.smarterwebcompany.co.uk smarterwebcompany.co.uk the thing that I would like to leave people with is I would like them to think about, you know, what have we done so far, but what do they think we can do in the future? The future is the important thing here. You know, I know that we've got a pretty intense couple of weeks coming up. There's lots of different things going on. Obviously I'm not allowed to say the detail of some of the specifics there, but yeah, I'd like people to look at what we've done, to think about do they think that's a reasonable performance and then from there they can make their own decision of whether they think that we offer an exciting future for them.
- [67:24]
A
Jesse, any closing thoughts? And also, could you both let everyone know what other events you might be attending or speaking at? I believe, Andrew, you might be in Vegas here in about a week. I'll be there as well for the Bitcoin for Corporations conference.
- [67:41]
B
Yeah, we'll both be in Vegas in about a week. Andrew has been invited to be a part of a panel of international Bitcoin treasury companies. I think quite a. I had to guess a handpicked selection of Bitcoin treasury companies that Michael Saylor might like the team or like the capital market or some mix of that. So Smarter Web will be alongside Meta Planet and Capital B and Orange, so Japan, France and Brazil. We'll also be going to some other events later in the year. But yeah, I guess final thoughts for me is because of the nature of your show here, Tim, it makes me think about the grand movement here that may or may not be happening. We'll see if we're fools or if we're dead right that Bitcoin has a place in public market balance sheets. I think bitcoin is the best asset in the world. I think it will continue to appreciate it. 30% a year for the next decade or two. Saylor thinks so, Andrew thinks so. In London markets, I think over the last decade or two, the FTSE Index companies have averaged about 6% growth per year. So if that's true, and our balance sheet is built of an asset that grows at 30% a year, and we're seeking to increase bitcoin per share through using capital market tools to do so, then what's going to be the best performing company in the UK capital market over the next decade? Well, who knows? But if we're right about this thesis, then you could have a pretty educated guess. And I think that might happen everywhere. And so I'm super excited about what's really the early days of the Bitcoin treasury playbook playing out worldwide. And Tim, you're shining a light on that happening everywhere.
- [70:04]
A
Andrew Webley, Jesse Myers, thank you so much for your time and look forward to seeing you in Vegas, Bristol and beyond.
- [70:16]
C
See you soon, Tim.
- [70:17]
B
Thank you, Tim.