The Hurdle Rate Podcast – Episode 41: Structurally Bullish

Date: December 23, 2025
Hosts: Tim Kotsman, Jeff Walton, Ben Workman, Matt Cole
Theme: Reflections on a transformative year in Bitcoin, macroeconomics, and financial innovation; deep dive into bitcoin as "the hurdle rate" for capital allocation; anticipation for the future of bitcoin in global finance.

Episode Overview

In this packed year-end episode, Tim, Jeff, Ben, and Matt take stock of 2025—a year marked by relentless developments in Bitcoin, institutional adoption, and financial structuring. The episode reflects on new market paradigms, the evolution of the bitcoin corporate treasury model, and the compounding impact of innovative financial products. The hosts examine how bitcoin is increasingly becoming the standard against which all other investments and capital deployments are measured ("the hurdle rate") and offer insights into what 2026 might hold.

Key Topics & Insights

1. 2025: A Year in Dog Years

• The hosts marvel at how much has changed in only one year, likening the pace of evolution in Bitcoin and related sectors to "dog years."
  • "The space really does move in dog years...it feels like it's been five or seven years." – Matt (03:38)
• Stressed the importance of adapting and adopting a bitcoin mindset and treasury standard throughout the year.

2. Strive's Strategic Journey and Ethos

• The team reflects on Strive's unique approach—only launching products they believe in and would personally use.
  • “I'm not going to make this product if I wouldn't buy it. And I loved it. That fits the bitcoin ethos.” – Jeff (04:21)
• Recap of milestones: public listing, network-building at major conferences, product launches, and reverse mergers, all within an intense 101-day period.
• Emphasized the necessity of focus and integrity in this fast-moving, complex space.

3. Structural Revolution – From Bonds to Prefs

• Recalled massive shifts in capital markets:
  • The emergence of fair value accounting for bitcoin
  • The introduction and proliferation of preferred equity ("prefs") as a new tool for bitcoin treasuries.
    • “Prefs hadn't been launched. Those didn't exist...Now we've got...five preferreds in the market publicly.” – Ben (06:12)
• Transition from solely convertible bonds to a more diversified set of instruments enables broader participation in bitcoin via traditional market vehicles.

4. Bitcoin as the True Hurdle Rate

• The core concept: using bitcoin as the benchmark for all capital deployment decisions—both for companies and individuals.
  • “Bitcoin is the hurdle rate...you can start to leverage a balance sheet and utilize it in different ways.” – Jeff (08:14)
• Candid discussion about how this standard brings discipline, clarity, and a high bar to investment choices:
  • “It's amazing how many things you can say no to in a very short period...can I beat the returns of bitcoin with this? Most of the time, the answer is absolutely not.” – Ben (30:56)
  • “It quickly allows for...what Saylor calls the laser like focus.” – Matt (31:08)

5. Capital Market Acceleration: Strategy & Scale

• Analysis of huge capital raises (e.g., Strategy's $748M in a week), comparing this to globally significant finance institutions.
  • “Strategy is sitting on more capital than all of Lloyd’s of London.” – Jeff (15:38)
  • “Lloyd’s has been at it since the 1600s. Strategy’s raised that much money in five years.” – Jeff (16:48)
• Noted how raising such sums is now “hardly a footnote,” highlighting the normalization and growth in the space.

6. The Institutionalization of Bitcoin Finance

• Insight into product evolution:
  • Common equity as "amplified bitcoin"
  • Prefs as a pathway to stable USD yields with bitcoin-backing
• The hosts view 2025 as the year that laid the groundwork for more robust, risk-aware, and institutional-grade bitcoin finance in 2026 and beyond.

7. Market Bewilderment & Opportunity

• The traditional finance world still often fails to grasp the new operating models enabled by Bitcoin and blockchain.
  • “Traditional finance is still in its bewilderment phase.” – Matt (13:10)
• Clear conviction these models will eventually pervade even the world’s largest companies and become generational mainstays.

8. Reflections on Compounding & Convexity

• Emphasis on the compounding effects of bitcoin, smart business pivots, and innovative capital structures:
  • “It's hard to wrap your mind around...it's compounding. It's bitcoin compounding. It's good decisions compounding.” – Matt (18:11)

9. Separation of Business Models & Evolving Strategies

• Not all bitcoin-focused companies are taking the same path—some favor structured finance and prefs, others (e.g., Jack Mallers/Strike) are choosing different operational models. Both approaches are seen as healthy for the bitcoin ecosystem.
  • “There's no one size fits all here...if it's advancing bitcoin, Bitcoin's winning.” – Ben (27:04)

10. Bitcoin vs. Traditional Wealth Preservation—A Generational Shift

• As technological and demographic shifts occur, more financial power shifts to a digitally native generation:
  • “Technologists are going to be inheriting a lot of this wealth...born with computers in their hands.” – Jeff (47:20)
• The hosts anticipate a return to "generational thinking" in business, enabled by treasury strategies that resist currency debasement.
  • “Now you can build these generational businesses again...persists throughout time.” – Ben (50:40)

11. ETF Flows and Diminishing Supply

• Recent ETF launches have started absorbing meaningful portions of bitcoin supply; strict investment-policy constraints mean demand will likely keep accelerating.
  • “There's about 1.4 million Bitcoin in ETFs...That's 6, 7% of the supply. And ETFs just launched in 2024.” – Matt (39:28)
  • “There's simply just not enough bitcoin to go around.” – Matt (41:05)

12. Supercycle and Unrelenting Bullishness

• The hosts highlight the supercycle thesis—the idea that shrinking bitcoin supply and rising institutional demand will produce outsized price appreciation in coming years.
  • “The concept of being bearish, it makes no sense...[Zoom] out and you just see where this is going and you're just like, I am so bullish.” – Matt (42:45)
• Skepticism towards recurring bear narratives ("fear porn" about quantum computing, etc.) is dismissed in favor of long-term optimism and action.

Notable Quotes & Moments

"Strategy is sitting on more capital than all of Lloyd’s of London... Lloyd’s has been at it since the 1600s. Strategy’s raised that much money in five years. That’s crazy."
— Jeff, 15:38

"Bitcoin is the hurdle rate. And we've been talking about how companies can use bitcoin as the hurdle rate and start to think about your, think about capital deployment ... and whether or not that makes sense within the framework of a bitcoin standard."
— Jeff, 08:14

"You just realize how much complexity is in those models. There's always value leakage along the way...so it makes it really difficult to have confidence in being able to say yes, this will beat the hurdle rate."
— Ben, 32:17

"Now you can build these generational businesses again that can persist and reinvent themselves and maintain that capital position over time. ... Right now you’re getting stuck in shorter and shorter term thinking because you have to."
— Ben, 50:40

"If you're a bitcoin treasury company and you're participating in the capital gold rush and you're starting to turn your gaze away from all the fear narratives...it's a way more fun way to build. People can be bears. It's way more fun to be a bull."
— Ben, 44:45

"Technologists are going to be inheriting a lot of this wealth too...born with computers in their hands...that's a completely different population that is going to be interested in how they...control their wealth."
— Jeff, 47:20

"Anybody out there that's thinking, you can't just do things, just follow Tim's arc. ... Middle of the night, has a thought, puts it out there, says he's going to throw together this in person conference in like 30 days. Then he just goes and finds a way to get it done."
— Ben, 55:43

Timestamps for Key Segments

• (00:00 – 01:49): Rapid-fire roundup of major news: Pentagon–Musk/XAI, JP Morgan crypto, Ghana, and legislative focus in the US.
• (04:21): Strive’s product ethos & the bitcoin standard for wealth management
• (05:36): Strive’s public market journey & recap of “dog-year” whirlwind
• (08:14): Introduction of bitcoin as the “hurdle rate”
• (10:30): Digital risk & the Spotify data breach as macro risk context
• (11:11 – 19:00): Strategy’s capital raises, the emergence of prefs, industry compounding, and market acceleration comparisons
• (24:49): New structures, pref products, and changes in capital formation strategies
• (27:04): Discussion of divergence in bitcoin business models and market segmentation
• (30:30 – 33:23): Hurdle rate mindset—corporate capital allocation and its clarifying impact
• (39:28 – 41:05): ETF flows, supply constraints, and the inevitability of price appreciation
• (44:20 – 44:46): Cultural/mindset shift—from fear to optimism
• (47:20 – 50:40): The generational shift and the return to long-term, legacy-oriented business perspectives
• (52:01): Comparing bitcoin treasury companies to legacy businesses and the absurdity of comparing Lloyd’s of London with Krispy Kreme, Build a Bear, etc.
• (53:17 – 58:24): Tim's personal 2025 reflections, community impact, and encouragement to act and build in the space
• (58:29 – End): Holiday wishes; optimism for 2026 and beyond

Looking Forward: 2026 Outlook

While the team ultimately decides to save detailed 2026 predictions for a future episode, their conviction remains clear:

• The foundation set in 2025 will likely drive rapid and structural growth across bitcoin and securitized finance.
• Innovation, optimism, and action will shape the next chapter—participants are encouraged to "just do things."
• The compounding effects of good decisions, strong communities, and a bitcoin standard will only accelerate.