The Hurdle Rate Podcast

Episode 47 – A Time To Build

Date: February 10, 2026
Participants: Tim Kotsman (host), Matt Cole, Joe Burnett, Ben Workman

Episode Overview

This episode, titled "A Time To Build," centers on the current landscape for Bitcoin investors amid market volatility and “Investor Week” in New York City. The hosts dissect Bitcoin’s enduring value proposition, market corrections, the evolution of treasury companies, and the cyclical psychology within the crypto space. They challenge mainstream panic, emphasizing structural strategies, long-term conviction, and how bear markets serve to strengthen both assets and communities.

Key Discussion Points & Insights

1. The Value & Timing of Bitcoin Conferences

• Bear Markets as Crucibles:
  • Conferences during bear markets are seen as especially valuable, attracting those with genuine conviction and stimulating original, creative thinking.
  • Matt (01:40): "The ones in a bear market are actually the most important ones... These are the moments to understand. Is the thesis broken? Is it not broken?"
• Cultural and Knowledge Exchange:
  • Insider conversations and honest debates happen when the hype is low, helping participants test and reinforce Bitcoin’s core theses.

2. Surviving Volatility as a Bitcoin Investor

• Understanding Conviction:
  • People who understand Bitcoin’s fundamentals can stomach volatility; those who buy “because they bought” tend to exit under pressure.
  • Matt (01:40): "You have to have deep conviction because this asset is volatile."
• Lessons from Treasury Companies:
  • Structuring to avoid margin and leverage mistakes is crucial.
  • True resilience comes from underwriting “expected volatility,” not trying to predict price cycles exactly.

3. The Cycle of Purging and Building

• Who Sells in Downturns & Why?
  • Joe (09:45): "One is like you're overexposed... Two, you could be overleveraged... Three, it purges a lot of people that don't necessarily understand what they owned."
  • Bear markets cleanse weak hands and bad ideas, consolidating ownership among those with strong theses and sound balance sheets.
• Value of Time Over Insider Knowledge:
  • Matt (12:13): "There's two sources of alpha. One is insider information, the second is time. The alpha... is time.”

4. Risks of Leverage and Margin in Bitcoin

• Dangers of Margin:
  • Numerous references to individuals and companies forced to sell in downturns due to margin calls and leverage.
  • Matt (13:09): "It is key...to be extremely careful using margin with regards to bitcoin. 72 hours [margin cure period] is helpful, but you just don't want margin. This is such a volatile asset..."

5. Recent Market Events & Broader Financial Trends

• Kango’s Forced Sell and Market Weakness:
  • Example of a treasury company (Kango) selling half its Bitcoin, evidencing the peril of poor structuring.
  • Insights about market reactions, ETF flows, and how traditional finance responses compare.
• Emotional & Community Reactions to Volatility:
  • During the Duke conference, hosts experienced panic in real-time, revealing psychological tensions among both newcomers and veterans.
  • Tim (19:35): "People were rushing toward the stage saying, 'Did you see the price of bitcoin went down by $2,000 while you guys were up there?'"

6. Searching for Explanations: Narrative Fallacy

• Attribution Error:
  • Joe (23:29): "The price moves and then market narratives try to justify why the price moved... A lot of these moves could just be random noise..."
• Durability of Bitcoin’s Fundamentals:
  • Bitcoin’s monetary and technological properties—scarcity, divisibility, durability, censorship resistance—remain unchanged despite wild market swings.

7. Macro Backdrop: Volatility is the New Normal

• Comparing Assets & Broken Correlations:
  • Traditional safe havens like metals exhibiting unusual volatility; confusion around Bitcoin’s non-correlation to gold and silver spikes.
  • Markets, including SaaS and tech, are being upended by AI and structural economic shifts.
• Heightened Volatility Linked to Innovation:
  • Matt (28:00): "When AI is disrupting the entire economy... that's just going to be messy... It increases the value of fundamental analysis."

8. ETF Flows and Investor Sentiment

• Reassuring Data Point:
  • During recent drawdowns, expectations of massive ETF outflows were unmet—net inflows actually occurred.
  • Ben (34:15): "Everyone had a narrative... they weren't diamond hands, they were unloading. None of that turned out to be true...That was really reassuring."

9. Bitcoin as the Ultimate Store of Value

• There’s “Nothing Better to Sell Into”:
  • Once you’ve adopted Bitcoin, traditional asset classes (stocks, bonds, gold, real estate) don’t compare for capital preservation.
  • Joe (38:40): "We already cashed out. We cashed out into bitcoin. What else are we going to cash out into?"

10. Strategy’s Earnings Call and Corporate Adaptation

• Shift to ‘Stretch’:
  • Company is doubling down on its digital credit product, seeking higher credit ratings and more resilient balance sheets.
  • Ben (44:31): "My takeaway as an investor... they're telling you that they're betting the farm on that one product... they have to be very measured and consistent in actions and in words..."
• Creditworthiness At the Forefront:
  • Discussion that weathering difficult cycles and keeping strong reserves is key to earning investment grade status and outlasting downturns.

Notable Quotes & Memorable Moments

• “The ones in a bear market are actually the most important ones.”
  – Matt Cole ([01:40])

• “You build during the bear, so you can thrive during the bull.”
  – Joe Burnett ([07:44])

• “It is key... to be extremely careful using margin with regards to bitcoin.”
  – Matt Cole ([13:09])

• “You have Ben saying, don’t borrow your conviction.”
  – Tim Kotsman ([46:57])

• “You already cashed out. We cashed out into bitcoin. What else are we going to cash out into?”
  – Joe Burnett ([38:40])

• “The most common bias in bitcoin is that you’re not bullish enough. And then probably 1B would be, your time horizon is not long enough.”
  – Matt Cole ([28:00])

• “Everyone was holding their breath... expecting massive outflow numbers from the ETFs, and they didn’t come. It was net inflows.”
  – Ben Workman ([34:15])

• “Markets at work... literally nothing has changed about bitcoin. It functioned perfectly.”
  – Ben Workman ([34:15])

Timestamps for Key Segments

• 00:00-02:00 | Episode intro & conference excitement
• 01:40-06:30 | Value of bear market conferences and testing conviction
• 06:30-12:13 | Who survives and thrives in volatile markets?
• 12:13-16:58 | Margin/leverage pitfalls and lessons
• 19:35-23:29 | First-hand market panic and emotion at the Duke conference
• 23:29-26:20 | Narrative fallacy and Bitcoin’s unchanging fundamentals
• 26:20-28:00 | Macro market volatility & failed correlations
• 28:00-34:15 | AI disruption, SaaS collapse, staying bullish
• 34:15-38:40 | Investor sentiment, ETF flows, fundamental analysis
• 38:40-41:40 | Bitcoin as ‘endpoint’ for wealth transfer
• 41:42-46:57 | Strategy’s earnings call, focus on ‘Stretch,’ credit ratings
• 46:57-end | Wrap-up and resonant takeaways

Tone & Style

The tone is analytical, candid, occasionally humorous, and consultative. The hosts speak as industry insiders addressing an audience that values technical insight and sober analysis over hype. Jokes about the chaos of live panels and market tremors are balanced by serious guidance for both new and veteran investors.

Conclusion

This episode delivers a robust, grounded outlook for both individuals and institutions navigating the current Bitcoin landscape. With an emphasis on structural resilience, patience, and a focus on the asset’s fundamentals, the hosts drive home the message: bear markets are a time to build, reinforce, and prepare for the next major cycle.