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Yo. Welcome back to another episode of the Jack Maller show. I am your host, Jack, and you are listening to yet another edition of Mail bag Monday, episode 123. Today's title is oil, the fed strategy and the bear market. We're getting back to some macro updates, some broader general bitcoin updates. We'll take a look at oils, drop the straight of Hormuz whether it's open or not. What's going on with the U. S. Treasury unsanctioning Iranian oil. Take a look at the dollar strengthening, gold dropping bitcoin, continuing to react to the lack of fiat liquidity in the world. And then I, I will talk about strategy, hopefully for the last time. So stick around if you want to hear. I got the answers to my question. So for those that don't know, asked a bunch of questions, was genuinely confused. I feel like I got answers and I'm over it. I'm over the topic. I'll, I'll, I'll walk you guys through what I think is going on and then I'm done. I'm over it. I want to talk about bitcoin. So without further ado, let's timestamp this episode. I'm talking to you all at a Bitcoin price of 64,300 doll. 120 US dollars. That put puts Bitcoin's market cap at a clean 1.29 trillion dollars. Our all time high made on 10-06-2025 remains. It's 126, 160 dollars. We are almost 50% off that all time high. We are technically 49 down from that all time high that we made 259 days ago. The last bitcoin block height that was mined are 20 bitcoin block that was mined was block height 954. 906. Tick tock, next block. Okay, let's get into today's episode as we always start. Now I think this has been a month straight. Before you waste time, let's answer these questions first because we're not going to make this a political show. We're not going to chase around politicians and their headlines and mainstream media's version of what's going on in the world. One, is the straight of Hormuz still closed, yes or no? This one I don't actually know the answer, which we'll get into in a second next. Is the conflict still ongoing? Again, it's unclear, although it seems to be. Yes it is. I'll get into that in a second. Are global supply chains still disrupted? Absolutely. And can global debt survive that level of disruption? Absolutely not. So an interesting week because we have now a signed MOU Memorandum of Understanding, which is not a resolution, it is a deal to negotiate, a deal which is, which is progress, but that is not an actual resolution to the conflict. So let's get into it and try and understand a bit deeper as to the macro updates, what's actually going, going on. Because the impact to oil, which impacts the Fed, which is impacting the dollar, which is impacting things like Bitcoin. It's all a very clean story in my opinion. And I'll tell you guys what I make of it, what I think of it, and what I think is going to happen next. Although I don't know the future, don't claim to. But this show is about just trying to find truth together. So first and foremost, let's pull up our handy dandy chart of the straight of Hormuz. The straight of Hormuz remains pretty closed and we can tell just by looking at how many tanker vessels are crossing through the strait itself. This is easily accessible data. And so despite what people say online, despite what the media tries to tell you, you can just pull up this chart. And we used to get anywhere between 50 to 100 vessels crossing through the strait a day. And we're still in the single digits. We're talking one, two, three or four. Four as of yesterday. So we are seeing a bit of a spike, but that's because the number three is a lot higher than the number zero. But relative to where we were pre conflict levels, which was 50, 60, 70, 80, 90, 100, we are far from that. So on a relative basis, the straight remains closed. But technically we are making progress. And I will continue to monitor this chart. Now, the headlines continue to fly. Are we still in a crisis? We being. I'm American, the United States of America. But I'll, I'll speak more broadly. Is the United States still in conflict with Iran? And I just want to be clear that what was signed was an mou, a Memorandum of Understanding, which is interesting. You should go. Bloomberg released an article, kind of digging through the MoU and what it consists of. For example, there's $300 billion of capital that the US gives to Iran so that they can rebuild everything that was destroyed. So, you know, we've talked previously, who's got the upper hand, who's got the leverage? It seems like both sides have leverage. I, I would wage to guess that the United States greatly underestimated the amount of leverage that Iran had in basically being willing to wait this out until the financial markets and the price of oil and the treasury market started to dysfunction, which it did. We'll get into in a second. But I woke up yesterday and this came out. So from cnn, Trump says the US might take over the Strait of Hormuz if Iran doesn't reach a deal and threatens Iranian negotiations are now in talks with President Vance. And so I woke up and was like, wow, okay, so clearly the conflict is not over. Clearly the Strait is not completely open because, because we are now threatening Iran again over the Strait of Hormuz. And so I just want to remind everyone, despite the MoU, that is, that is not an actual deal, that is an understanding to eventually make a deal. And so the headlines continue to fly. So as far as this show is concerned, I'm going to say the Straight is not yet open and operational, especially if what we consider open and operational is pre war levels and the conflict is certainly not officially over. We might be getting some ceasefires. I think we're working towards it. I think both sides are highly incentivized. The United States cannot continue to operate with this level of inflation, with this level of treasury yields spiking. They have to get oil down. And so I think that's what Trump is doing, especially with the midterm elections coming up. With all that being said, we will see now oil is on its way down. So oil is down, I think from well over a hundred dollars a barrel to now under. I didn't check the price right before I hit stream, but I think it's under $75 a barrel. So a significant drop over 20%. And you'd have to ask yourself why, if it's not flowing through the Straight, what's going on? What is the oil market? We all know that markets are the ultimate source of truth. You know, people can say what they want, tweet what they want. Words are cheap, but capital, proof of work, that's the signal in a sea of noise. And what happened is that the US treasury issued a 60 day waiver to help out the oil market. So this from Javier Blas, which by the way, a pretty informative Twitter account through all this conflict in the oil market. So I've referenced this account a lot, would recommend giving it a follow and I quote, it may only last 60 days. I doubt it likely would become permanent. But the US Treasury's waiver is effectively rolling back 40 year plus of American oil sanctions against Iran. Even US refiners are allowed to import Iranian Oil and pay for it in greenback, pay for it in dollars. And he takes a screenshot of the waiver itself. And so again, we're living in this time of fiscal dominance, the bond market, the United States ability to attract lenders so that it can continue to finance these massive deficits and continue to spend more and more and more money. That is the driving force of all decisions at the end of the day. And so the U.S. treasury, Scott Bessant and the federal government think are far more important than the Federal Reserve, than things like short term interest rates. And so far we've seen the US treasury, the, they've removed sanctions on Russian oil at one point and now Iranian oil. And this is rolling back what Javier says is 40 year plus of sanctions against Iran. And so again, really, really interesting. And this is a signpost, there's no doubt about it. Why would the US unsanction Iranian oil, especially a 40 year sanction? Why would they lift that? Well, you guys know that prices are a function of supply and demand, right? Very simple. And, and in order to get a price down, you can inject a lot more supply that hopefully outweighs the current demand. And so far oil should be at 200, $300 a barrel. But all of the countries around the world have been releasing their strategic petroleum reserves, so their oil reserves to just overwhelm the market with more and more supply just to get the price down. And now the US despite only signing an mou, seemingly not having the strait fully open yet, seemingly not having a full resolution to the conflict yet, they're trying now to fight the oil price down further by lifting sanctions. So you've got countries around the world having extremely depleted oil reserves. What's going to be really interesting is even when this conflict is over, surely all the countries around the world are going to have to replenish their oil reserves. So that'll be interesting. I wonder how low oil can go because all of the biggest countries in the world, especially in the West, I mean after you've seen this conflict, you can't think to yourself like, oh, we're good, this will never happen again. It looks like we are entering a multipolar world. We're entering a world where people trust each other less, rely on fiat and Treasuries less, rely on gold and neutral reserve assets like Bitcoin more. And you're going to need to replenish all of your reserves in case conflict arises once more. It's not clear to me that the world is going to get more calm in Fact, it feels like consensus is the world's going to get more chaotic. And so really interesting stuff. And I think that this is a sign that the US Is feeling the stress of inflation, is feeling, the Trump administration is feeling the stress of unpopularity going into midterms and the price of oil. You got to get the price of oil down. And they're trying to come to terms with Iran. It's not moving as quick as they like. And, and so they are rolling out 60 day waivers that Javier predicts might be permanent, which is undoing sanctions, which is crazy. This is just finding supplies of oil at all costs. So this from NBC. Oil falls on the 60 day waiver of sanctions. So I just wanted to make the point crystal clear. It fell below $75 today for the first time since the pre war levels. So why is the price I wanted to give you guys my thoughts on. Well, it doesn't look like the straight is open. It doesn't look like the conflict's over. Why is the price of oil coming down? Because this obviously has implications on inflation and energy markets and AI. So what's going on? Well, they are releasing sanctions. That's finding new supply. So they're doing whether it's strategic reserves, rolling back sanctions, anything to find more supply to buy a little bit more time and hopefully put a cap on inflation and put an end to the conflict and get to what I predict will be juicing markets eventually, but we clearly aren't there yet. Speaking of, let's talk about Warsh. So the new Fed chair, he had his first FOMC press conference and it was really interesting. I mean, he's coming in in some respects gun blazing. Guns blazing. And in other respects I found it pretty interesting that he definitely tried to position himself as if he's not a Trump puppet. And I'll explain that in a sec. So let's get into it. Well, I actually didn't give myself a slide, so I'll get into it right now. So one, he wants to create all of these committees. So he wants to change a bunch. He wants the Fed to talk less. He wants, he wants to remove things like forward guidance. And so this goes into this kind of school of thought that Scott Bessen has talked about a lot, that Trump has talked about a lot, and that Warsh is now talking about a lot. And he's suggesting pretty significant changes to the way the Fed operates, which is fine. I mean, I have a suggestion to the Fed, just abolish it. We don't need it. But fine, let's continue on assuming we need the Fed. Warsh thinks that they can have a significant less footprint on the world and a significant lesser sized balance sheet. So I found that to be really interesting because he was doing a lot of chitter, chatter and a lot of talk leading up to taking this role. And he stayed consistent through his first press conference with those ideas and that broad thesis. Now, what was interesting is no one knew whether he was going to hint at cutting rates or raising rates, being a dove or a hawk. And what I found fascinating is he definitely presented more hawkish. So Trump over the last 12 months, don't you guys dare forget, was cut rates, cut rates, cut rates. We need rates lower. We need to juicy economy. We're going to reshore production, we're going to weaken the dollar, right? We're going to unwind globalism and we're going to win the AI race. And he was very clear about that. And mind you guys, that the U.S. interest expense on an annual basis is now over a trillion dollars. And so Trump was trying to solve for his biggest, one of his biggest expenses, not quite his biggest yet, but one of his biggest expenses. And as I'll get into later on in the next few slides, the US Needs to engineer a weaker dollar or else it collapses. And this is just math. This is not really. That's not a opinion, that's not a bitcoiner psyop religious statement. That's just math, which I'll get into in a second. And the question was, is Wash going to come in and just obey Trump's orders and cut rates as fast and as much as he can, or is he going to respond to all the inflation that's been caused by this conflict in Iran and potentially hike? And he chose the latter. And I don't buy for a second that he's actually going to hike. I think I saw on some prediction market that they have the odds of a rate hike at 90%. I would fade that so hard. I think that there's no way that they actually hike. But he came out and he said I care about, or we care about one thing and that's prices and we're going to do what we need to do to protect prices. Which is his way of saying we're going to fight inflation. But as I'm about to present, I think he's full of shit. There's no way. The math just doesn't allow it. But here. So here's my prediction and you guys take it for what it's worth. I can't predict the future? I have no idea. This show is not my profession. I don't do advertisements. You're welcome to listen if you want. If you think my opinions are stupid, please, by all means. There's plenty other videos on YouTube. But what I think is happening is Warsh had to come out and basically disassociate himself from being Trump's puppet, establish some sense of independence at the Fed and give himself some credibility. And in the face of rising inflation and in the face of $100 per barrel of oil, he had to come out and say the right things. Now, I think simultaneously the United States is going to really put pressure on the oil market, unsanction Iran, deplete all the strategic reserves, try and come to a deal with Iran. I saw this morning JD Vance is out in Switzerland continuing to negotiate. If they can put a deal together, continue unsanctioning existing oil supply and flood the market with more supply than there is demand and continue to deplete their strategic reserves, they could put a cap to oil prices which will fight inflation. And I would bet before the year's over, Warsh comes out and says, hey, that inflation was transitory. It turns out it wasn't structural. It turns out, I mean, this is not true. Inflation is all about money creation and the purchasing power, increasing purchasing power in the market. But you know, according to central bankers, he'll say it was a reaction to the Iranian war and we're going to look past that because we need to win the AI race. And because X, Y and Z. And because, and because and because and because. And I don't think they will actually hike rates, at least not materially. Like last time I checked, the market was potentially pricing in two rate hikes by this time next year and I fade that entirely. So put it on the record. I will continue to update. That's my opinion, that's my thesis, that's my best guess. We'll check in on this as the weeks and months go on because as I'll explain in a second, it'll become critically important to bitcoin the bare market and when I think it will end. So let me walk you guys through the math as to again, this is not a bitcoin opinion, a gold opinion, a hard money opinion, an anti central bank libertarian opinion. This is just a math opinion. I'll walk you guys through the math as to why I don't think they can hike. And the Fed is fairly stuck. And we're living in this era of fiscal dominance where all that matters is how indebted the US Government is and how expensive interest is and how weak the treasury market is. Said another way, nobody's left to lend to the United States and the United States is unwilling to spend less money and basically put the world through a Great Depression on steroids. And so the only way out is through the currency. You know, in the dot com crash, they kicked the problem to the housing market, and then in 2008, the housing market blew up. They kicked the problem to the bond market. In 2020, during COVID the bond market blew up, and now they've kicked the problem to the currency. And the currency is the last man standing. It's the final boss. And you know, the bond market is, is entirely dead. You know, China, a lot of our trading partners, especially those that operate in a surplus, they haven't been net buyers of Treasuries in a very long time, like a decade, I'm saying. And they're now net buyers of gold. And gold is the reserve asset on net at central banks, on their balance sheets. And so I would say, you know, the bond markets, for all intents and purposes, is already dead. It's surviving on its last leg from levered hedge funds in the Cayman Islands and from domestic bank deposits here in the United States via regulation changes. The last final boss standing is the currency. And the escape valve of this entire thing is a weaker fiat currency. So it'll collapse two ways, either through extreme austerity in a Great Depression that none of us can possibly fathom, because the amount of leverage and indebtedness that would have to collapse on society would be. It would. I mean, what happened 100 years ago would pale in comparison to, to what we would all go through. But it's fine. I mean, I think Bitcoin would win the ultimate competition of what monetary system we would adopt next. The other option, which is probably far more sneaky and far less painful, depends on who you ask, is by debasing the currency and going through an extreme extended period of inflation. So here's the math I write here. The Fed is stuck. What they want to do is very different than what they have to do now. The big three expenses that, you know, I consider and other macro guys like Luke Grumman consider to be true. Expenses for the United States are entitlements. So, you know, the United States has been unwilling to cut entitlements and say we're not paying those anymore defense spending. So we know that Trump wants to increase defense spending by 50% year over year. It seems like the world is getting people trust each other. Less people are going into conflicts more. The need to defend oneself and have a strong military is only increasing over time. So the United States is not willing to reduce and slash entitlements. They're not willing to reduce and slash defense and their gross interest expense. So if you're $40 trillion in debt and interest rates are above 3%, that's really, really expensive. Okay? And so those three, the big three entitlements, plus defense, plus interest, have crossed over the US's revenues again. Now they were, those three were higher than the US revenues pre Covid, and during COVID they actually flipped where the US was earning enough revenue to pay its base expenses. Does this make sense? So I'm just trying to, you know, make it as clean layman's terms as I possibly can, where if the United States was a business, it's not generating enough revenue to just pay the basic bills, like turn the lights on, have rent, and pay their basic salaries, like functionally insolvent. And now I want to walk through the math of, well, how did they fix it during COVID and then how did it become unwound again where. Now these expenses are way higher than the revenue that the United States is bringing in. So let's walk through the two options that the Federal Reserve has and why. I think it doesn't really matter what they do. And if they try and do what they probably should do, which is raise rates extremely high, kill any amounts of inflation, they will crash the Western world as we know it. Let me walk you through the math. So scenario one is if worse cuts rates, so if he does what Trump wants to do, if he does what Besant has talked about, which cutting rates means the US dollar significantly weakens, okay? Creating new currency and creating more credit becomes a lot easier. So US dollar goes down, inflation goes up, and nominal tax receipts go up. So the amount of revenue that the US generates in terms goes up because the economy is booming. Now, real terms is different, right? The dollar's going down. So nominal tax receipts going up is kind of a misnomer. It's misleading. But bear with me, foreign buying of U.S. treasuries would rise. The bond market would get a little bit more reliable. Now, I still am a bond bear. These things are pieces of trash. But relative to where it is today, it would be stronger because the dollar would get weaker. The reason a strong dollar is bad for assets is because everyone around the world has dollar denominated debt. And so when the dollar gets stronger it gets harder to pay your debt, pay the interest on your debt and so you have to sell dollar based assets like U.S. treasuries, like U.S. stocks. So a stronger dollar is very bad for gold, for Bitcoin, for U.S. stocks, for U.S. treasuries, a weaker dollar is very good for assets. It's a very fancy way of saying debasing the currency and making it worse. Less means assets are going to inflate. And which assets inflate the most depends on their scarcity level predominantly and their monetary characteristics. Which is why Bitcoin has been the best performing asset since it's been invented is it's the best way to monetize a debased dollar. Makes sense so far. Now if war does the opposite and does what he kind of hinted at, he's claiming to do, which is hike rates, which, well, the opposite would happen. The US dollar would go up, the stock market would fall, Bitcoin would fall, gold would fall, tax receipts for the United States would collapse. So the US's revenue would go down, people would be getting poorer because the dollar is getting stronger. Foreigners would sell their US treasuries because again I mentioned the US denominated debt. There's about 13 to 14 trillion dollars worth of USD denominated debt around the world. So as I mentioned earlier, Bitcoin's market cap is 1.2 trillion. So there's about 14 bitcoins worth of debt that would need servicing if they started hiking rates and the ten year would spike again. Housing, unaffordability, mortgage, it would be. So the, the point is they're stuck. What are you going to do? You have inflation. Inflation's not going away. Remember the Fed's 2% target? We still haven't gotten there. So if Warsh was real about wanting to fight inflation, I don't know why he didn't just cut. What's the point of telling us? You're thinking about it, you're the Fed chair now. Cut. He didn't. Why did he not? Because if you cut the dollar, strengthens assets, crash and the US revenue declines and you go into this death spiral where the United States is not bringing in enough revenue to pay its baseline expenses. And the only way, only way to make the math work would be to print the money in, in a very literal way so you don't hike rates to fight inflation, only to have to print the money no matter what makes sense so far. So these two charts are from Luke Groman and this will help you guys visualize it. So on the left. Let's look at, let me zoom in here. This is what cutting interest rates from the Fed would do to help the situation. Now, I'm not saying both, both decisions have pros and cons. Both, both are not good for someone. And that's the problem with central planning. This is why we must separate money in the state. Money should not be monopolized by any central party, any central planner. We have to get money out of the hands of government, central banks and, and money needs to live in a distributed digital network. It has to, it has to. For this very reason. There is no good option but the United States if they want to improve their fiscal position. So let's just say that is the definitive goal. Improve the fiscal position. They need to cut rates. So what you're looking at in blue here is the United States revenue, okay? As I mentioned, if they cut rates, the dollar gets weaker, assets go up, their tax revenue goes up as well. So the blue line would increase. And if they were to cut rates, the orange line, which is their total expenses, would begin to flatline. Why? Well, their interest payment for one would go down because obviously if you lower the interest rate, you're paying less on the total debt that you've taken out, right? And so you're starting to flatline and bring down your expenses and you're starting to grow your revenue. That's exactly what happened. If you look before COVID look at how much higher the US's expenses were versus its revenue we saw from 2019 leading into 2020, US revenue receipts were coming down and its expenses were skyrocketing. And so how did the, you, how did the orange line go down in the blue line skyrocket? Well, what happened in Covid, they cut rates to zero and they printed a bazooka ton of money stimulus checks. Every amount of liquidity and money printing money printer went burr. And that's how the U. S got back into relative solvency. But Bitcoin went from 3,000 to 69,000. Bitcoin 20x insane level of asset inflation. And now we're in the same position where the total expenses for the United States has skyrocketed and revenue has started to tail off. And so if I go to the right now, this is what would happen. If the Fed starts to hike rates, the blue line starts to come down because the overall revenue that the US would bring in would start to tail off, the economy would get weaker. We all know rate hikes crash Silicon Valley bank rate hikes make credit creation harder. Rate hikes will crush assets, crush the bond market. So money gets tighter, the dollar gets stronger, US Revenue comes down and their expenses go up. Because if you think the interest payments are expensive now, wait until war starts hiking rates. He's just adding more to your baseline expenses. And so Warsh can say whatever he wants to say. But this is just math. Right now, the United States does not bring in enough money to pay its baseline expenses. Let me say it another way. If the United States does not want to cut rates, weaken the dollar to juice the markets to make the economics work, they could tell everyone that entitlements are off the table, we could have no defense budget, and then we'd start be we'd start making progress because the orange line would come down. But the question is, can the U. S. Government say we no longer can service a military and we're no longer to pay entitlements? And this is the problem with politics is even if Trump came out and actually said that, well, no one like he wouldn't, well, he can't run, but the Republicans wouldn't win the next election. You know who's going to win the next election? The person that's going to say, I'm going to protect you, I'm going to pay all your entitlements, and I'm going to give you a bunch of free shit that's Politicking 101. I'm going to give you a bunch of free shit and I'm going to make your dreams come true. So even if we have a politician that wants to do the right thing, spend less, not go to so much war, it doesn't matter. It doesn't matter because that's not who wins elections. And so I think it's math. And so why are we in a bear market? Well, if you understand what I just said, the only thing that matters is the level of the US Dollar. The US Dollar is too strong. And I've talked about this on plenty of times, plenty occasions on this show is we can all solve the US problem in 10 seconds. Don't be the world reserve currency. The US dollar has a permanent premium baked into it because it is the world reserve currency. And for many, many decades, that was a privilege. You get cheaper access to energy, you get to finance your military to be the strongest in the world. But eventually it becomes a problem. And the problem part is right now the dollar's way too strong. And the stronger the dollar gets, the worse it becomes. For a world that's indebted, denominated in dollars and So I write here, the US and the west need a much weaker dollar and higher inflation to avoid a sovereign debt crisis. Everything else is noise. Nothing else matters. Now, in the meantime, if I pull up the dxy, so the dollar index chart, look at this chart. The dollar's on the rise. So through 2020, through the beginning of 2025, the dollar fell dramatically. And what happened? Right around then and going into October, bitcoin went to 126,000. Since then, the dollar's bottomed out and it's back on the rise. Why is it back on the rise? Well, everything we just talked about, especially with the new Fed chair coming out and saying he might raise rates, well, that's going to get the dollar up and that's going to hit asset prices hard. And so with the dollar on the rise, well, what did gold do? Gold's down 10% about this month, which for gold is a huge move, huge move. Let's look at SpaceX. SpaceX was down 10% today and is now trading below its IPO price. So again the Fed and the US government is stuck. You guys want to come out and talk a big game that you're going to fight inflation, you're going to raise rates. Well, watch all the fancy tech stocks fall. Watch gold fall. And this as I've said before, Bitcoin has been warning us this whole time. Bitcoin tells the future. It is the ultimate source of truth because it's the freest market we have access to. Bitcoin's been screaming for months now that there's not enough liquidity in the system to survive. They have to start printing money. Bitcoin's been screaming that from the rooftops. And people's had an all time high stock market. While consumer sentiment is at all time lows, the stock market is a centrally planned phenomena. It is not. Now, I'm not saying the stock market's kicked Bitcoin's ass in recent performance. I'm not talking shit. I'm saying if you want a truly free market, if you want the truth, if you want a self sovereign neutral money that actually operates with integrity, that's what Bitcoin is. And you can look back the last few months and go, holy cow. But Bitcoin was just foreshadowing the inevitable reality, which is we're faced with inflation but they can't hike rates. They can't or they can. And like I said, we all go through a level of austerity and great Depression that's so severe and so profound. But there's just no way with the way modern politics work that that's going to be allowed to last. Because someone's going to campaign and say I'm going to give you a bunch of free shit and they're going to print the money. You know, it's modern day society has no pain tolerance. There's no concept of proof of work and self responsibility. That's why I just think that the political system and modern day the way society functions and has been conditioned. I just, my bet is that they are going to print the money. But this is why bitcoin has been struggling. And I think we're in a bear market and we'll continue to struggle. The liquidity is not there. If I go back to these charts from Luke, the difference between the orange and blue line is, is profound. They have to find a way to get liquidity into the system. And it seems that Warsh plan and Bessant and these guys, it seems that their plan is to deregulate the banking system so that banks can enter the treasury market and credit creation. So giving loans to AI companies and such with unlimited leverage. So basically allow bank balance sheets to lever up unlimited with an implicit government backed guarantee while leaving the Federal Reserve fairly unchanged or not, you know, changing short term rates too much. We'll see what happens. But the point is the market cannot survive like this much longer. And this is why my recommendation has been hanging there. These markets are tough. You know Bitcoin, there's no central planner that pads you and protects you. There's no one in Bitcoin that says oh no, the market's Gonna Close at 5 or oh no, there's a shock break absorber so that, so that you know, if bitcoin's down 10%, that the market's halted and it can't go any lower. Bitcoin, you are, you are experiencing the world as it truly is. Which is hard for most people because most people have been conditioned and raised in a false reality. Politicians and central planners and big corporations have protected their life experience, has made sure oil was permanently affordable no matter how hard they worked, made sure that stocks couldn't go down too much, made sure that markets closed on time so you could have a beer with your friends. And Bitcoin is a truly free market. That doesn't protect you from reality, from the truth. It's a very raw and real experience. And so seeing Bitcoin lead the market and crash down and be in these bear markets, it's gut wrenching. It's hard But I've given this motivational speech before. This is, you know, this is, this is the part that makes it all worth it. Right? Obviously, you could buy the top forever if you want, and there's no problem with that strategy. But you know the people that say, oh, I wish I got into bitcoin early. I wish I was there to buy the dips. I wish I was there last bear market, those people just got lucky. Well, everyone wants to buy the dip until it's time to buy the dip, and that time's now. This is where it's painful. This is where it hurts. This is where you get paid to show up and give this monetary network that is attempting to solve some of the world's hardest problems. It needs attention. It needs resources. You know when, when people say, didn't your dad just get lucky buying Bitcoin in 2013? Said, no. Bitcoin needed attention. It needed time, energy, effort, labor. It needed someone to start meetups. It needed someone like my dad to go on Reddit and answer questions. It needed someone to press buy because if the price was always zero, we wouldn't be here today. And so what was the hard thing that people back then did? Well, before regulatory clarity, before institutional adoption, before strategic reserve, before an etf, when bitcoin was written off as something that was surely going to go to zero, there were people that took their time, energy, effort, labor and showed up. And those are the same characteristics that are going to get you paid today. You want to buy the dip, you want to buy low, you want returns, and if you don't, that's fine too. But this is why I encourage everyone. Don't try and pick the bottom. Don't stress out looking at charts. Earn more than you, than you consume and turn on your dcas. Touch grass, work on relationships, be healthy. You know, that's what for everyone that wants to know. That's what my dad did. My dad didn't have one giant large purchase. He DCA from 2013 to today, Legend. So I end kind of this little section here with we're seeing the largest outflows from ETFs, I think since they've launched. And it's just, to me, it's a story as clear as day. If you guys want to know where bitcoin's going, look at the DXY chart. Let's watch the strength of the dollar. The level of the dollar is all that matters. Okay? If the dollar gets too high, they're going to have to do something. I wouldn't be surprised if we saw a rate cut, I wouldn't be surprised if we saw new legislation, some stimulus. They need a weaker dollar. It's just math. And I don't know when that's going to come. I don't know how long the bear market's going to last. But bitcoin's been telling us that this whole time for many, many months now. And markets either scare you out or wear you out. And bitcoin typically tries to do both. You gotta hang in there. You gotta stay humble. You gotta stack SATs. You gotta turn your DCAs on or obviously don't and come back in a year or two or three or four or five. And you know, my fiance is gonna want something really nice. And, you know, you can buy some of my sats at a much higher price. But that's my analysis and my recommendation. Any questions you guys have on that, obviously leave them in the comments. Dylan's in there in the live chat and I'm happy to go deeper into the macro, but it's good to be back talking about macro stuff. Chapter two, we're going to revisit the strategy topic one last time. I'm. I'm over it. I'm kind of sick of it. I genuinely had questions. I feel like I got those questions answered. So I'll walk you guys through those answers and then we'll get to some Q and A. And I know a lot of you want to hear my thoughts on Illinois and the potential new bill that's for grind my gear. So just want to. Don't want to leave you guys hanging there. Let me take some sip of some water and we'll get into strategy. Okay, cool. Chapter two, strategy. I got answers to my questions. So for those that don't know, it's two weeks ago at this point. Oops. It's two weeks ago at this point that I basically started to ask myself some questions. Eventually I'll get to this part. I asked Michael Saylor some questions, but the questions that I asked on this show two weeks ago, so episode 121, was that Bitcoin treasury companies used to have a very simple capital structure. They found leverage through convertible debt. And so they had bitcoin common equity and convertible debt, and they would raise convertible debt. It was very simple in my opinion. They got a lot more complex when they introduced these preferred equities. And so two weeks ago, when everyone on this show and in my Twitter DMs and just basically around the world was asking like, hey, what's happening? Are these Preferreds going to be successful. There's lots of questions about the Bitcoin treasury companies. And so obviously I have this platform and I really try to be as accessible and as transparent as I possibly can. So I presented some of my thoughts and my thoughts were it was unclear to me how everyone in the new capital structure post the preferred equities wins, especially when Bitcoin is in a bear market. So what do I mean by that? Well, if you are sitting on a bitcoin position that's underwater. So right now, now MicroStrategy has been buying Bitcoin for five years, but they're currently sitting at about a 10 billion dollar loss. Unrealized, obviously. And listen, there's no problem with that. You just stay humble, keep stacking sats and hodl, right? So you know, there's no issue with that in isolation. But if your Bitcoin is underwater, you also are trading under net asset value. So if you issue more shares then that is dilutive. So you can't sell Bitcoin necessarily because you'd be selling all your bitcoins at a loss. You can't issue more common stock because you'd be diluting existing shareholders. So but you've signed up for this perpetual payment that you must make every month and they owe billions of dollars a year. And so then what do you do? And I basically walked through all of the options where every single option, some, everyone benefited except for one group. So for example, if you just sell the Bitcoin then Bitcoin is disadvantaged. But you know, you're not diluting MSTR shareholders. You're still paying the preferred holders their dividends and you're not screwing with the existing debt. Okay, fine. If you issue MSTR then you're not selling Bitcoin which is good for Bitcoin, but you are diluting and damaging MSTR common shareholders while still making whole on the preferred payments. Okay, fine. Now if you wanted to make both Bitcoin and MSTR happy by not selling Bitcoin and not diluting MSTR shareholders, well then you can just tell the preferred people, hey, sorry, it's a bear market. We don't have the money right now because we're trading below nav and our Bitcoin position is down. We have to wait for Bitcoin to go up again. Fine. Good for MSTR shareholders, good for bitcoin, bad for the preferred. Bad for people that invested in things like stretch as a savings. Okay, but there was no option that I could see where everyone wins. Once you have a Preferred where stretch is not convertible debt, it doesn't convert into equity. So you owe what is now 11.5% forever. So you owe $2 billion forever. So it doesn't matter, you know, if bitcoin was in a bear market and you didn't have to come up with the cash, you can just kind of stay humble right now and just do nothing. But you constantly have to be coming up with money forever, no matter if bitcoin's in a bull or bear market, which makes this now a bit trickier for bitcoin treasury companies. And that is basically what I was confused about. And I gave my opinion two weeks ago. Fast forward. I then was presented from a bunch of people online and even Saylor himself saying things like, well, microstrategy is not trading below nav. And I was like, wait, what? According to classic definitions of enterprise value. And classic. And I went over this on the last episode, just how finance has traditionally been measured. It is trading below nav and issuing MSTR is dilutive. And so that is when I asked Michael. And for those that don't know, I'll repeat the story. I was on a panel before I asked that question. I was getting in my Uber. My chief of staff, who you guys all know, Dylan, he was texted that Michael had made mention that he welcomes my questions on his panel and invited me back in. And so I only went back in because I was invited. It felt weird to say, hey, why don't you ask your questions in front of Michael and engage in a conversation with him instead of asking questions when he's not present. It felt like I was almost being called out in a way, not in a bad way, but I just couldn't imagine saying, no, never mind. I'm going to keep asking questions on my show when Michael's not there. It felt. I don't know. And I mean, it's part of bitcoin's culture to continue to ask questions in the open. People can disagree. I don't find the fact that I had questions like a problem within itself. So anyways, that's what happened. Now, fast forward. Last time we spoke, stretch was at $100. Last episode, now stretch is at $88. So a lot has happened. Obviously, Stretch had not the best week. It fell over 10%. And it is an instrument that's designed to stay at around 100 bucks, I think technically between 99 and 101. And it being at $88 is obviously not a good thing. And so what is strategy doing about it? Strategy Today came out and says that they raised $335 million worth of capital. They bought $300, like US$300 and $35 million worth of Bitcoin. And if you click into the filing, you realize that this was all raised with MSTR common stock. So they did not sell bitcoin. They did not. So if you go back to my slide, who burdened the cost this week and it was MSTR shareholders. So they didn't sell any bitcoin. So the bitcoin holders were unaffected. They didn't pause the preferred payments or the preferred payments. The preferred holders were unaffected. They didn't mess with the convertible debt. So the convert debt holders were unaffected. But the people that were impacted and that did have to suffer the consequences were the MSTR common shareholders. And you can see evidence of that just by this screen in their filing that shows that they issued $335 million of proceeds of MSTR and they use that money to do the activity that they did. I also found it interesting that they prioritized buying so much fiat over bitcoin because clearly they are listening to the market and worried about the price of stretch and they're trying to instill some confidence into the credit worthiness of stretch, which is totally reasonable. I'm not saying this decision was bad, by the way. You guys can tell the tone of my voice, like I'm over it. I'm going to give you guys my opinion and the answers that I found and if you disagree, great, invest in whatever you want. But I initially wanted answers to my questions and I got them and I'm going to present my thoughts. So they're trying to, they're, they're basically buying fiat right now to try and get stretched back to 100. It doesn't look like $300 million was enough. Now listen, I'm going to get into it, but people are telling me that, no, this transaction isn't dilutive. No, MSTR shareholders aren't the ones carrying the burden. You're just trying to sell your own companies. You're just trying to be an asshole. You're just misleading. You're just a nepo baby. You're just all these things and I'll address all in a second. But guys like, I mean, the reality is bitcoin was up 2 1/2% today. So on the left I have the Ibit ETF. So Ibit was up 2.47% today, which I would think people that actually buy, there's nothing that replaces bitcoin and Cold storage. So I'm not even going to compare Bitcoin and cold storage to these two instruments. I think if you are not buying something like a bitcoin treasury company, you're probably investing in ibit. I don't know, you have a retirement account, you have some brokerage, you have some capital that can't buy Bitcoin and move it to cold storage. But if you look, IBIT today was up 2 1/2% and MSTR was down 2.73%. So like, I'll get into why. These are just facts that, like, I'm not asking questions anymore. This isn't up for debate. Like, MSTR shareholders got hurt today for the benefit of bitcoin and preferreds. That's just a fact. And if you're okay with that and you're an MSTR shareholder, fine. I mean, I'm not going to tell you how to live your life, how to invest your money. I'm a free market maximalist. I don't really care. But for all of the people that do support me and do ask my questions and do want my genuine opinion, I've got a lot a big following on X, a big following on YouTube. I mean, I'm not here to talk to the people that think I'm a piece of and hate my guts. That's not who I'm talking to. I'm talking to the people that respect me and support me and want my opinion. And my opinion is it seems like right now the MSTR shareholder is expected to carry the burden, which obviously begs the question of why would you hold it right now? If it is the escape valve? If it is, how you know they're gonna monetize the bear market? I don't know the answer to that. I could be wrong. That's my opinion. Now I want to just cite a little bit of FUD and the reactions I've gotten online. So I tweeted yesterday, I'm trying to talk about Bitcoin again. Like, again, I'm over this. I got my answers. I don't think they were great answers, which I'll get into in a second, but I got them and I'm moving on. So I'm trying to talk about how governments are misallocating our dignity and how this is. And this guy replies to me and he says we all believe in the same thing. Why do you have to create FUD against mstr? It's like you want to win by pushing them down. That is the mentality of a loser. Okay, next, this post on Reddit, which claims I'm a performative financial elite insider from a powerful family. I'll just read the beginning just because I'm going to reference it later. Jack is not a genuine person. He's very performative. He comes from a family of financial insiders with the CBOE, etc. However, he attempts way too hard at appearing like a common person. The stunt he pulled at Prague proved why I would never invest in a company that he runs. There's only two possible reasons he would publicly ask Sailor what shareholder dilution means. A, he genuinely doesn't know how dilution works and wants more insight.
- [52:18]
B
Or.
- [52:18]
A
Or B he's openly confronting Saylor in public, trying to spark some debate and fuel public hostility against mstr. Either one of those reasons are not why you want the CEO of a company. Blah, blah, blah. He says, motherfucker, you have a $5 million penthouse in Chicago. Do you think we're stupid? Your closet's big. If you're not materialistic and you aren't using 500 square feet worth of space in your house, why do you even own that place? Just use the goddamn room. No one's going to care. You look like a weirdo. You're dising. Okay, fine. So I'm a, I'll get to. I'm a financial insider. Because here's the thing. None of this is true about me, which I'll get to in a second. And I'm not a high flying executive. I don't consider myself to be some elite compared to normal plebs where I can't just hop on here and address it. And honestly, on Father's Day, it just became too much like, I love my dad more than anyone in the world. Everything that people say about him and my family is a lie. And so, yeah, I just. Fuck that. The other thing is that people are genuinely just confused. So this person, someone sent me this tweet, said, according to their website, microstrategies, M nav is 1.13. Are you calling this fake? This is a company regulated by the sec, listed on a public stock exchange and audited. I'm sure if these numbers were wrong, we would hear about an official lawsuit rather than some Twitter influencers complaining. Okay, and then this guy, this guy made a. I actually don't know. I think his name's Michael. Sorry, I, I, I really didn't even mean to. This is a unpleasant screenshot of your face. I did not mean to do that. But he made basically a 20 minute video blasting my character. Basically. More or Less. He acknowledged some achievements I've had in my career in the 13 years I've been working on Bitcoin, but basically said I'm a disingenuous, misleading piece of shit and attacked my character and basically said I'm a bad person. So I'm going to. Here's what I'm going to do because I'm over this, guys. I'm over debating and asking questions. I got the answers. I have facts. I'm going to present my facts and I'm going to keep building. That's what I do. I build like I control what I can control, which is, you know, I'm keep building products at strike and we're going to keep crushing it and hopefully making things useful and making the world a better place for what we believe in. And I'm happy to address all of my incentives, my family, all of that stuff, and then I move on. Okay, first of all, was this accretive? So I just want to bring you guys back to MicroStrategy's last quarterly earnings where they presented this slide and they said the actual threshold to issue accretively is 1.22x. So going back to this, where the guy says the m NAVs at 1.13. This is why I was asking the questions in the first place. I was not trying to be an asshole. I was not trying to do any secret messaging. I was not trying to cause any drama there. These, all of these metrics were invented out of thin air. These are not traditional finance metrics. Nobody grew up learning these metrics. Nobody's heard of these. These were all invented by, by the company themselves. So in order for someone like me to understand them and whether they are reasonable or not, how to apply them, how to think about them, I have no choice but to start asking people. And I didn't only ask Michael. I was invited to ask Michael during his panel. I also asked people from the strategy team. By the way, everyone including Michael, has been super kind. Super kind. Nobody's been disrespectful to me. The strategy team answer my questions. I had coffee with the Strive guys, was able to get answers, made complete sense. Okay. But the reason I have to ask the questions is exactly this. This guy's like, M nav is above 1. How is this dilutive? Well, it's dilutive because in their own quarterly earnings, they said if we issue it below 1.22, it is dilutive. It has to be above 1.22. So you would ask, well, what's the point of Them like this metrics feels a little bit misleading. Why don't we measure it the right way where we're not like having 1.22 be the break even. But I mean you guys forced my hand. I brought my receipts. So this is a clip from the strategy earnings call where they said exactly what they just did was dilutive. So again, I'm not here to cause fud. I'm like, guys, I'm not, I'll tell you this, I'm not the type of man and I'm not the type of bitcoiner that's going to stick his tail between his legs and not like be genuine and be curious. I'm not afraid to be wrong. I'm not afraid to ask questions. And if that becomes a cultural problem within bitcoin, we have way bigger problems. So these are not my words. Let's listen to the CEO strategy. By the way, very nice guy, never been mean to me. But this is what he said on their earnings call. Let me mute myself and play this. So where it used to be a 1xm navigation as we add debt and as we add preferred primarily to our structure, the break even increases. Right now it's about 1.22x. That means at 1.22x or higher. M nav. It's accretive for us to sell MSTR and buy Bitcoin below 122xMF. It's actually more accretive for us to sell bitcoin right. And pay off our dividends than it is above 122 XMF. So we're okay. That's a direct quote from the CEO. On an earnings call he said below 1.22 XM NAV which by the way they are, they're at 1.1 right now. We should sell bitcoin to cover these expenses that we've accrued and not sell MSTR because that would be dilutive to mstr. I didn't say that. They said that. And I'm just trying to figure out what the going on. Okay. I care, at the end of the day, I care deeply about bitcoin. I've been doing this for almost 14 years. It's part of my family at this point, which I'll get into. And that's them on the earnings call. And if you disagree with that, I don't know what to tell you because that's the leadership on a public earnings call in plain English saying what they just did was dilutive. And I go back and you look at the Market. Bitcoin was up and MSTR was down. And why is that? It's because it was hurtful to mstr, which is fine. There's like, I'm not going to tell. Sailors built an incredibly big company, super successful, way more successful than any company I've built so far. That's fine, whatever. I'm just crazy to be so defensive while I'm trying to be honest. Oh, and also this guy made this video. He basically said I go back on my promises and that, you know, I basically like my. Yeah, I'm disingenuous and I can't be trusted. And so I also just want to claim, you know, sure, let me say something. I am no stranger to humble pie. Like, I oftentimes get my ass kicked and I deserve it. That's part of being in bitcoin. This isn't about me. I don't want to be the main character. Bitcoin has humbled me and taught me very, very valuable life lessons that I needed to learn. And every time you guys and the Internet and bitcoin says, yo, dude, you're not being humble enough, you're being an asshole, you said something that wasn't true. I don't argue with that. I acknowledge it. I put my hand up and I say, you're right. Because I'm here to help. I'm here to play hopefully a small but valuable role in bitcoin's inevitable success. And bitcoin's not about me. Bitcoin's not about right. And so I also want to say, you know, here's an example of the strategy team that said something on an earnings call and did the opposite. They said if they were in this situation, they would be selling bitcoin and they did the opposite. This is not the first time that they've done this previously. Sailor came out and gave guidance that they would only aggressively sell mstr between a 2 1/2 times and 4 times m nav. This was last year and above. 4 times mnav above a thousand dollar per MSTR share. And this is an article from Yahoo Finance Strategy updates its MSTR 2 1/2x M NAV guidance after two weeks. So two weeks after they gave this guidance, they undid it. So this is the second time in 12 months that what they've said on an earnings call they violated weeks afterwards. Which is fine. I just want to restate. Building companies is hard. It's really easy for people sitting in the audience to be commenting and telling people in the arena what to do. It's hard. It's hard. But I'm not going to have people question my character and my willingness to be authentic and accessible. You don't like my hair, you don't like my voice, you don't like my closet. That's fine. Especially on Father's Day. I'm not gonna stand for people attacking my family and making up lies about my dad and attacking my character, claiming that I'm full of. I lie. I make too many promises. When literally what happened today? The strategy leadership team told us on their earnings call they wouldn't do. Okay, I only have a few more receipts because I feel like I've already made my point. Now, why is Stretch down so much? Well, this tweet was sent to me. It's much longer. Not trying to short circuit Jesse here. You can read what he has to say if you want, but he says at the bottom, why the sell off? This appears to be a liquidation cascade. And there was this thesis that there was a carry trade unwind and all this liquidation and it wasn't necessarily strc's fault. And you can't blame strategy and STRC for this. Let me play you two clips from two separate conference presentations.
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B
Stretches like the risk free rate in the crypto economy. If you're looking for the free market risk free rate, it's 11 and a half percent and it compares to, you know, nothing in yen or, or Swiss francs. But now if you look at this chart, you see there's a mother of all arbitrage opportunities here. If you're looking for the carry trade, you borrow at 2% in euros and you invest in stretch. You catch the difference. If you're a defi trader, imagine looping 2% to 11 and a half percent, capturing 9 and a half percent percent times 10. Now 10%. 10x leverage sounds dangerous on a 40vol asset. But what if I give you a 2vol asset at 2vol? You can 10x lever it and the, and the volatility is like the S and P index, but you captured 95% yield.
- [63:51]
A
Okay, guys, I'm sorry, but you made me do it. Why was there so much leverage carry trade defi bullshit in like all in stretch? Well, because they told everyone to do that. Mind you, there were bitcoiners, including myself, they were like, why are we promoting shitcoins? Why are promoting defi? There's going to be a ton of extreme leverage in these things. I mean, Dylan. Sorry, Dill. I hope that you're okay with me sharing this. He was like, damn, bro, I've got some cash that I'm saving up for my wedding. You know, Dylan and I are both recently engaged and he's like, should I put it in one of these bitcoin treasury instruments because It'll give me 10 plus percent on my savings. And I was like, dude, please be careful. Obviously do whatever you want, but they're going around at these conferences literally, like, you can't say, oh, the carry trade. This isn't their fault. They're literally keynote saying, this is the risk free rate. This is direct quote, guys. This is the risk free rate. Imagine running a carry trade and levering it 10x. So what did you think was gonna happen? Like, what are we like, come on guys, this is bitcoin. What the fuck are we talking about? And this was not just like one, one off thing. Let me go to the next slide. Totally separate conference, same thing.
- [65:28]
B
Now what you see is we've created the short end of the yield curve, like the one month bitcoin bond, the risk free rate in the crypto ecosystem. So what is the free market rate of capital or the free market cost of capital? It's 11.5% right now and you can see what the risk free rate is in every other currency. 3, 2, 1, 0.
- [66:01]
A
So yeah, I mean, okay, so again, I said it last episode. You know, preferred equities are fine and there's lots of dividend stocks. And it looks like strategy is going to keep paying it, which is great. And I have nothing but love and respect for Michael. No problem. The way he's running things. No problem. Do whatever you want. But you know to say that this recent transaction wasn't dilutive. Guys on their earnings call, they literally said, we will not do what they just did. And then why did strc's price blow up? Well, not only was there leverage involved in it, but there was explicit recommendation to go extreme. Defi. Shitcoin leverage. Like, did a keynote on it. So back to the guy that basically said, I'm a piece of shit and I'm sure there's gonna be plenty more videos. I actually really did not mean to take. These screenshots I've taken are not very flattering. I did not mean to do that. Obviously. I just. The video was playing and this guy was very respectful. So, you know, I have no personal. None of this is very personal. But I mean, this is the same thing where it's like, does Stretch have the best risk adjusted return? Recently I measured the sharp ratio. And so he goes into this video. So I think most of the people that say I'm a piece of and say my dad is a piece of basically really like strategy and I have, I just want to say I have no problem with that. But it doesn't, it seems very emotion like emotion driven. This doesn't seem like it's driven by much logic because the things I'm saying, I'm citing facts, I'm doing math, I'm asking questions. I don't regret anything that I've done. Like I know I wouldn't change it. This is how I've operated in bitcoin and in life and I will continue to do so. I mess up all the time, raise my hand, admit when I'm wrong, learn from my mistakes, hopefully do so publicly so people can learn with me and build really good products and promote bitcoin. That's what I'm all about. So anyway, this guy, because once I saw this video, my fiance like watched a little bit of video of basically like why I'm a piece of shit. We're like, oh my goodness, this guy. And I clicked on his profiles like this guy did a video on MSTR's stretch Sharpe ratio and why it's the best risk adjusted return. Okay? And just so you guys know, the Sharpe ratio was something that has been promoted a lot by Michael himself and strategy and all of the shareholders and stuff like that. So I went on today because after stretch fell from 100 to 88, the Sharpe ratio should be negative. It should be a negative number based on again, the Sharpe ratio. Hold on, we're not even going to do this right now. We're going to do this live because I, I swear to you, after this, I am done with this nonsense. This is literally a waste of my time now and nonsense. So guys, the Sharpe ratio is not something new. This is something that's existed for a very long time. It is a very normal finance metric. Let's, let's click in Wikipedia. In finance, the Sharpe ratio, also known as the Sharpe Index, the Sharpe measure and the reward to variability ratio measures the performance of an investment such as a security or portfolio compared to a risk factor free asset after adjusting for its risk. It is defined as the difference between the returns of the investment and the risk free return divided by the standard deviation of the investment returns. Okay, this is the point. This is the part I wanted to show. It was named after William Sharp who developed it in 1966. Guys, this was invented 60 years ago. So it is very well known. It is very standard. We know exactly how to calculate it. We know exactly what it is because it was invented 60 years ago. So I go on strategy's website as I'm making this keynote today, basically saying like I found the answers to my questions. I don't know, you know, if you're an MSTR shareholder, you might not love my opinion, but whatever you guys buy that, I'll buy Bitcoin in cold storage, I don't really care. I'm not going to talk about it anymore. I. Because I'm not a shareholder and whatever, doesn't matter. But how is the Sharpe ratio 43? So I start thinking to myself like wait, what do I now not know what Sharpe ratio is? And I almost started asking questions again online where I'm like wait, how am I getting this wrong? The Sharpe ratio should be negative for this asset because it just fell 10%. And then I read if you see here at the bottom left, the red underline, I read the fine print and it says with respect to credit instruments, 30 day Sharpe is calculated as effective yield minus risk free rate, not the return. So basically they made up their own version of Sharpe ratio. And so if I go back to the guy that made a really long video about how I'm a piece of shit, this in lies the whole conundrum of the issue is that there's brand new metrics that are being made overriding very like standard metrics. What is enterprise value for a company that's been defined for decades. What is Sharpe ratio? Been defined for decades. But then when people say it's above 1m nav, it's accretive. What are you talking about? Well, they're inventing their own version of mnav. They invented their own version of the Sharpe ratio and they're not very like in your face about it. I had to read the disclaimer in the bottom of the chart. And so if you look here, strategies methodology, methodology of Sharpe ratio is taking the effective yield of the instrument which gives stretch a Sharpe ratio of about 0.5. It's actually on their website now 0.43 which is important. I'll get to that in a second. But if you did the normal methodology, which is total return, so effective yield instead of total return just ignores the price of it entirely. So stretch falling from 100 to 88. Like doesn't matter because they're not using total return, they're using effective yield, which again like either way is fine. You want to invent your own metrics, that's fine. But you guys can't blame me for having questions. And then Once I get answers. Now, the answer to my question is like, they're just using brand new different metrics that I've never heard of, never seen, don't understand why they're inventing their own metrics. So that's the answers to my questions. What is M. Nav? I don't know. How, how, how did this company define their financial metrics? I have no idea. I have no idea. And that's the answer to my question. I'm not crazy. I just didn't. I just didn't. Like, I've never heard of this version of Sharpe ratio. By the way, according to their own KPIs, they write a Sharpe ratio above 3 is excellent, above 2 is very good, above 1 is good. Between 0.5 and 1 is decent, but suboptimal and below 0.5 is poor. So according to their own KPI, now stretch is poor, but they're using a different sharp ratio than what was invented 60 years ago and has been used pretty consistently this entire time. So, you know what, what's the what? Why is this guy think I'm an. You know, why do I not seem to be able to understand what he's saying? Well, because we're using different definitions of stuff, I guess. Like, I'm thinking Sharpe ratio means Sharpe ratio. I'm not reading like the bylaws of this thing. And am I an for not? You know, building businesses is hard. You try and launch products, sometimes they don't go your way. But to say that, you know, I'm saying things and then renacking on my word while strategy in two of their last eight earnings calls said something and did the complete opposite. It's like, come on, man. Like, we got to be okay in this industry with asking questions. We got to be okay with seeking truth. We got to be okay with disagreeing. Like, people disagree with me all the time. Michael can disagree with me on stuff. He could say, hey, Strike is a piece of. I don't think this, but we both agree on bitcoin. We both are bitcoiners and I got no problem. Like, I don't agree with creating your own metrics. I don't agree with incentivizing and promoting defi. Shitcoin leverage. I don't agree with this stuff. I don't. It doesn't make sense to me. It's not something I want to build. But whatever, who cares? Like, it's a free market. The market will figure it out. The market will. MSTR will be like the biggest thing since sliced bread. Or it won't. And Michael, hopefully will still be a bitcoiner no matter what, and we'll all move on with our lives. But, like, I'm not crazy. And I couldn't tell if this tweet was satire because I think this guy. This guy's responded to my tweets before as, like, a MSTR guy, but he writes MSTR is genius. When the metrics don't work, just switch over to another metric and keep the party going. That's kind of like how I feel. Like every single time I try and understand there's new metrics or every single time I reference their earnings, they're violating what they said in their earnings. So I don't know, man. Like, those are the answers to my questions. I don't feel crazy. You know, if I am the guy that takes bullets for asking questions, so be it. Because the other option is I get basically bullied into not speaking my mind, not asking questions, and not promoting public conversation around bitcoin, which I just can't stand for that. I think the reality of the situation is somehow I've garnered a bigger following than others on the Internet. It's been. I mean, people think, like, you know, some of this is some overnight following. I've been posting about bitcoin for almost 14 years, so it's just a lot of proof of work over the years. And so maybe when I say things, they get amplified, and when I say things, there's more eyeballs on them, but I don't necessarily think, at least broadly, that should change my behavior, that that should limit my speech, that I should be afraid to ask questions and try and figure out, like, what's going on, because people ask me and want to know my opinion, and I want to contribute to the public conversation and to building this space. And so, yeah, there you guys go. And listen, I could have. This episode could have been 10 hours long. There's a lot of new definitions and ways to define things. I've already read through to you guys there. 8k went through some of the earnings. That's enough. You guys get my point. That's why I asked the question. Because these variables are being redefined in real time. Nobody knows the definition of these things. Do I think that someone has to lose currently? Either bitcoin has to be sold, MSTR has to be diluted, or preferred to have to be paused. Yes, I do believe that. And that's why I think if you pull up Bitcoin versus mstr. So this is BTC USD versus mstr. Bitcoin is in a bull market against MSTR since the preferreds were introduced. I still don't totally understand them, but, you know, let the market prove me wrong. I don't know. I, like, who cares if I, if, if I end up being wrong and I lose out on one of the best investments ever, so be it. I prefer bitcoin and cold storage anyways. I still don't understand what's going on, but whatever. I asked the questions, I got my answers. I stand 10 toes down. The last thing people are asking me, well, do you think MSTR can outperform bitcoin? What do you think is going to happen, Jack? Again, this is not for the people that think I'm a piece of and don't value my opinion. This is for the people that do value my opinion and support me. I have no idea what's going to happen. I think, I don't. Just to be clear, I don't think strategies in a death spiral, I don't think they're going to fail or collapse. None of that. I'm not prescribing any of that at all. I'm not making any predictions either. What I will just say is it depends on the, on the nav. Basically. Like, is it going to trade at a premium or a discount? And so Jeff Dorman has this tweet here. I just want to read it to you guys and give my quick thoughts here. And then again, unless you guys have questions for me in Q and A in future episodes and stuff, or unless something really, really big happens and I have to talk about it, I'm done with this stuff. I'm done with invented metrics. I'm done with people talking about my family. I'm done with people questioning my character. I ask questions and we move on. Okay, the tweet from Jeff. The only bull case for MSTR is that if bitcoin skyrockets higher quickly, then MSTR could outperform bitcoin. If bitcoin doubles from here, you'd have, and these are a bit stale, but just bear with me. You'd have $100 billion roughly on balance sheet, up from $50 billion. You'd have $0 billion in USD cash, which was used to pay the dividends. You'd have minus about $5 billion of debt, about $14.5 billion of prefs. So you'd have, call it like 85 to $90 billion of unencumbered Bitcoin. If bitcoin were to double for strategy. Now, if you believe that MSTR stays at around the same mnav, which Jeff writes it shouldn't, but let's say that it does. So let's say strategy stays at this kind of 1.1 mnav as defined by them, not the enterprise value that I'm used to, but their version of m navigation. So $100 billion in MSTR equity market cap, up from 40 billion today. So MSTR would do about a 2.4x while Bitcoin and cold storage would do about a 2x. And Jeff writes that only assumes that Bitcoin doubles quickly and they aren't still on the hook for all of the dividends which continue to eat away at their premium and that they didn't have to sell a ton of Bitcoin or MSTR or more prefs to raise the dividends, all of which would dilute any possible MSTR gain. So MSTR could technically outperform, but slightly and not enough outperformance to compensate for all of the risks. And so I broadly agree with this point. His point is, unless you think MSTR is going to go to 2m nav, 3m nav, 4m nav and trade at these crazy multiples, which I think increasingly is unlikely because of these preferreds, then it could definitely outperform for sure. But more marginally, you're talking about a 2.4x versus a 2x. And there's a lot more risk because what I have on the right is the gbtc. Gbtc. My dad was a beta tester of gbtc, one of the first ever accredited investors allowed to buy it. And so I used to get home from boxing with my dad and we would open trading account and we would stack some GBTC from one of his brokerage accounts. And I remember when GBTC traded at a serious premium and it traded at a premium because it was the only way for accredited investors to get by Bitcoin pre etf, pre microstrategy. Right? The market has changed so much. But after a bunch of changes and a bunch of stuff happened, it started to trade at a very significant discount. And I would just say, like, I don't know if strat like you basically are saying strategy is going to trade at a 2, 3, 4, 5x M NAV, which I guess in theory it might, I just don't, I wouldn't bet on it, I don't think so. And in fact it might end up trading at a discount because you have a pile of Bitcoin that's encumbered by needing to come up with cash all the time. To pay these dividends which we're watching now. You're watching Bitcoin go up 2 1/2% today, but MSTR 2 1/2% down. And obviously, if you are being explicitly told that you need to be diluted and burden the cost for the bear market, then the question is, why wouldn't you just buy bitcoin and cold storage? Like, that's what Saylor's doing, Sailors selling MSTR for real bitcoins. So I don't know why you wouldn't do that, but I don't know. I'm going to get absolutely torn apart online for this episode. But I just, I. I looked myself in the mirror and I just wasn't going to be afraid to give my opinion. Now, strategy could go to $10,000 a share. Sailor could, like, I could be so wrong. And I'm okay with that. This isn't about me. This isn't about my ego. This isn't about. This isn't about me being right or wrong. This is just about public conversation, sharing opinion, and hopefully contributing to bitcoin success. At the end of the day, that's why we're all here and that's why I'm doing this. So, yeah, you guys, you guys asked for it. You said stop asking questions. You should have gotten your answers now. Well, here are my answers. I am going to stick with bitcoin and cold storage. That's why I'm not the biggest bitcoin treasury bull. But I wish them all the best if they can contribute to bitcoin inevitably being successful. I'm all for it, obviously. And I think the free market will figure things out for good or for bad or for indifferent anyway, so. And none of the people I've met are bad people. Like, they've all been kind to me. I have no personal issue with anybody. I do want to play one more clip real quick.
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Hold on. 10,000. The reason Bitcoin went from 10,000 to 100,000 is because the ETFs invested 100 billion, because strategy invested 64 billion, because we got 30 billion from other institutional sources. If that money didn't flow, bitcoin was, would be trading 5,000 or 10,000 coin right now. The reason Bitcoin went from 10,000.
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Yeah. And the last thing I'll say is I just don't want. I just disagree with that. I find that. I found that one to be a little bit offensive, that without strategy, bitcoin would be at $5,000. So right now it's a $1.2 trillion asset. And without strategy, it would be a 100 billion dollar asset. I found that offensive. There's been a lot of people in the space that have worked really hard. Everyone between entrepreneurs to just open source developers. Like how many. You know, my dad and I always try and find ways to fund and support open source developers because there are people that have built the very code that I get to run for free and store my life savings in for free. And they're, I mean, you know, how can you take away what everyone has done for this asset class? So, yeah, I also just want on record, I don't believe in that. I don't think that without Bitcoin, treasury companies, bitcoin would be basically like a worthless project and a piece of shit. Like, I found that. I mean, there's. I don't know, there's a lot of people that have worked really hard to carry this vision forward. And that one I did, I did find offensive. I know he probably didn't mean it in an offensive way. It's all good. I'm definitely one to acknowledge that misquotes and podcasts and clips on the Internet can be taken. Carried away. But. But yeah, I just wanted that as well because people say we need more treasury companies. Like without them, we, we'd. Bitcoin would fail. Like, I just couldn't disagree more and I'll leave it at that for now. Okay, last thing. Just on the topic of like, I just want to say this. People have been making shit up about my family for a long time now. And you know, most of the time I ignore it. I know a lot of you guys in the YouTube comments that do support me, you encourage me. You're like, dude, you should meditate more. You got to drop this stuff. Don't pay him no mind. And you guys are right. You're all right. And I know you're right. But it just hit a little different on Father's Day to be reading some of the slander about my dad because. And my grandfather because I asked some questions to somebody. It's fucking ridiculous. So I just want to say something really quick because it's super unfair to my father. You guys should know that all the rumors about me being part of some financial elite are not true. It's bullshit. Yes, it's true that my dad, excuse me, my grandfather was once the chairman of the Chicago Exchange here. That exchange no longer exists and it was not nearly what it is today. My grandfather died fairly broke and he passed away when I was a very, very young Kid I was in. I think I was nine years old. I only got to meet him twice. And my grandfather was my dad's hero, and my dad is my hero. And the life that I was afforded to live was because of my dad. And my dad busted his ass. It's gonna get me emotional. My dad worked so hard for me. He didn't inherit any money. And you guys should know that because, you know, if. If I'm gonna become a public figure and my dad's name and his legacy is gonna get dragged into whatever mess is on Twitter, then I got to set the record straight from my father. My dad didn't inherit anything. There's no financial elite anything. My dad worked his ass off to make sure that I had an opportunity to become the man that I am. And he founded his own business, and he sold that business and he sold that business and aped all of his proceeds, mostly into bitcoin, supporting me and my siblings. And I'm not going to get into too much personal information, but I'll tell you guys this. The amount of money he sold his business for is a fraction compared to the size of his stack today. So you guys want to know how the Mallers family has really done well? It's because of bitcoin. And the reason that I have an image here with my stepmother is because that's Brooks, not my mom. I went through a really messy divorce when I was a kid. And bitcoin also really helped me reclaim any sense of family that, you know, I really lost when I was a child. And Brooke, my dad, and I really bonded over bitcoin. She's now the bitcoin mom on Twitter. And as you guys know, the legend that is, my dad worked his ass off and was smart enough and humble enough to stack sats before everyone figured out what bitcoin was. And he allowed me to drop out of college and join the bitcoin mission with him. And so just. I was on a ride home from a wedding yesterday, and it was just super painful to read all this stuff. And the most painful thing is that my dad doesn't get the credit that he deserves, because it's that, you know, we're part of some financial elite or some banking elite. It's all bullshit. It's all a lie. And you guys want. You guys don't want to give me any credit for my career. You guys want to make fun of me, you guys want to fuck with me, that's fine. But leave him out of it, because that guy built everything from scratch. And he's the best dad in the world. So you guys want to tear me down and you want to come at me for asking questions and you want to fuck with me, that's fine. I'm a man, I can take it. But let the record know that my dad is a legend and he's the best dad in the world and all that shit is a lie. And happy Father's Day to him. Drives me fucking nuts, man. This, this like being a public figure thing. Sucks. Okay, grind my gears. Let's talk about Illinois. So what grinds my gears is obviously this shitty ass state, this dystopian that I have to live through, that we all have to live through. I'm sorry. For those of you that are in this state, that are in the city of Chicago, it's been a mess. I mean, we are part of the decline in this country. It feels like San Francisco, Chicago, New York are carrying the brunt of some pretty unstable. A rise in crime, a rise in deficit, in debt, in pension troubles. I mean, it's just bad. I mean, Chicago, I used to take the public train as a kid. And nowadays I wouldn't want my fiance riding it alone. It's just dangerous. And so to see this, it doesn't surprise me. I mean, we talk about this on the show and then when things actually, you know, actualize and become real, it's. I mean, it sucks. But I can't say I'm surprised. Like, listen, guys, these people are broke. They've carried on way too much debt. They have no growth to pay for it. They can't pay their bills. So how are they going to pay it? They're going to come after your property, they're going to come after your bitcoin, they're going to come after your real estate. There's no other way. And the state can't print money like the government can, like the federal government can print money. And so the fact that Illinois basically tried to violate property rights and see if they can get away with it, it's terrifying, it's disgusting, it's pathetic. But it's a sign of the times. This is not a drill. This is not a joke. They don't have the money. They need your money to pay for their mistakes. Oh, nice bitcoins you have there. Take out your cold card and give me that shit. That was their proposal. Now, for those saying, what am I going to do about it? Well, I was going to sue. That is unconstitutional, a violation of my constitutional rights. Over my dead fucking body was I giving Any bitcoin to this state, I was going to sue them. And if I lost, I was going to move. It is an affront to my dignity. It is an affront to bitcoin. It is affront to any constitutional freedoms that this country claims that I have. Bullshit. But as of today, they moved to repeal the bitcoin tax. So the screenshot reads, illinois moves to repeal aggressive bitcoin tax just days after its passage. So it doesn't seem like this is going to be passed anyway. It's an utter and complete joke. But even the mere fact that this state could do something like this and propose something like this is embarrassing. It's a shame. It's a sign of the times. And I don't know. Hey. The most entertaining outcome is sometimes the most likely. When is the next Chicago mayoral elections? 20, 27? February? Do we need a bitcoin mayor here? Would you guys support me? Would I get the. The support from the bitcoin community if I tried to save my great city? I don't know, man. Someone's got to save it. Or I don't know how much longer we might have to say goodbye to the empty closet. A lot of you guys don't like it anyway. You don't like how just big and spacious my beautiful empty closet is. So I might have to run for mayor. I'll let you guys know on that. But anyway, seems like a false alarm. Looks like they're going to repeal it. So I know a lot of you guys. How does that affect my strike account? What's going to happen? Is this a doomsday false alarm? All is well. Don't worry about it. If they did try it, you already know, I would have sued the shit out of them, protected our constitutional rights. And if I had to, I would have left. And if I had to, had to, or if I have to, I'm gonna run for mayor. We fight. We fight. If there's one takeaway from this episode, I ain't no sucka, tell you that much. All right, now to the things that I can control. I like building things. I think 99% of the solution is to just keep your head down and keep going. And that's what we do at Strike. We just keep fucking building. So, as always, let me pull up what we launched last week, and then I've got some exciting updates on some stuff that's coming up. So for one, every single Monday, we tweet what we launched last week. Strike is now on plaid. So you can search Strike on any plaid. So I hooked up Strike to my Venmo account, which some of my high school buddies still use. You can link Strike now to anything. Your bank account, your Robinhood account. You can use it to pay off certain credit cards that didn't take an account and routing number. So we are officially a Plaid partner. We've integrated with Plaid and you can use Strike with Plaid like a traditional financial account, which I know many of you were really, really looking forward to and helps you live more on a bitcoin standard. And with Strike, we also added loan closures with ACH or Wire. So if you want to close a bitcoin backed loan with some fiat, you can send in a wire or an ACH to close out that loan. And last but not least, we got our consumer loan license in Washington. So consumer loans launch in Washington with the $5,000 minimums. Super, super happy about that. I know that a lot of you have been in our DMs, both the strike and my personal DMs asking for Washington. And we're really sorry for the delay but couldn't be more thrilled to actually get it to you now. More Strike stuff. We call them volatility proof loans, but loans that will not liquidate you. We're going to charge an extra, I believe it's 2% for these loans. But then you get no margin call, no liquidation. A lot of the biggest feedback are people like, oh, when I open a loan I could get liquidated, the bitcoin price is going to go down. Jack is so misleading for offering these products, blah, blah, blah. Well, I said, hey, can I offer a bitcoin backed loan where you pay a little bit extra, I take the extra fee and I put on hedges for you so that there is no liquidation. The loan just, just, you know, we'll see in 12 months. I don't care about the bitcoin price and we this is a little bit for the loyalists for the ride or dies. We're launching this probably next week, but early Access is going to open probably this week. I'm going to refinance my loan to remove any possibility of liquidation. I'm more than happy to pay a couple extra percentage points to remove any margin call or liquidation. I believe we're one of the first, if not the first to have this wide scale in app. Anyone can get a bitcoin back loan and don't even stress about liquidation. I'm super proud of that, especially in the bear market, allowing people to borrow without stress, without losing sleep. We at Strike, we do only do Partial liquidations. We never fully liquidate your position. We just liquidate enough to get you back in good standing. And we were really proud of that. We got a lot of business for that. Just for. We don't want to liquidate you. We don't want your bitcoin. We want to provide you with a service so that you don't sell the bitcoin. But this to me is just the cherry, cherry, cherry on top. Super proud of the team. On top of that, interest on cash. Our first version of that has a chance of launching in July, which is in about eight days. And if not, it will launch for sure, for sure in August. So we're just about there with getting interest on cash paid out in bitcoin, which is really, really, really exciting. And then we should have some very exciting Europe news for you guys soon that I cannot disclose early, but it will be exciting. So those are some of the big projects. Europe liquidation, free loans and interest on cash all coming. Very excited. We just keep building and there's more in the pipe. Couldn't be more excited. And yeah, bear markets are for building. 99 of the solution is just keep your head down. Keep going, man. Keep going. You just got to keep fighting. That's another thing I learned from my dad. You know, he used to take me to boxing when I dropped out of college, and there would be this drill where you just throw punches at the punching bag until you couldn't punch anymore. But the point of the drill and the lesson to learn is you can go much harder and much further than you think. Just keep going. Being tired doesn't mean that you stop. So that's what we do. Okay, I got a little bit of time for questions. Obviously this episode is long because I want to go play sports with my friends. That's the reality of the situation. Okay, let me pull up Dylan's. But obviously that was a intense episode, so I don't want to leave you guys hanging. Okay.
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Oops.
- [100:04]
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Let's see here. Question for Jack. If the US Is the number one producer of oil, why is our oil reserves not replenished right now? It's a good question. We don't necessarily from. First of all, I'm not an oil expert. I'm not going to pretend like I am. I can maybe follow up next week and take a look into it. But from my understanding, we don't necessarily produce oil in the form that we consume it. So refining the actual oil is a separate piece of work. And to my knowledge, we aren't necessarily in the business of refined oil. But I will follow up on that. I don't necessarily know, but what I do know is whatever it is is not good enough. And we're actively depleting our reserves and now unsanctioning people just to get more oil supply online. Hey, Jack Doomberg has a tin foil hat thesis that hyped IPOs like SpaceX are put in place to increase capital gains taxes, making retail believe it's worth trillions. Thoughts? Yeah, totally. I mean, as we talked about, it's totally possible. The problem with a lot of these tinfoils is you just will never be proven right or wrong. So they're good for entertainment value. But the reality of the situation is I try and stick to base level math and focus on bitcoin because the coolest thing about bitcoin is we're actually contributing to the future of the world. We don't necessarily have much of a say in the world we inherited. Obviously I wasn't alive, you know, 33 years ago. But we do get a say in the future world and especially the world that my kids will inherit. And so that's what I like focusing my time on, those type of things. So I avoid most of the tin, what is it called? Tinfoil. Yeah, tinfoil hat. But anyway, just to explain your questions for the audience, the idea is, again, if you want to increase taxes, tax revenue. So how does the US generate revenue to pay for those expenses we talked about earlier? Well, taxes. And so, yeah, one way to increase taxes is to have the stock market keep going up because then people sell those stocks and they pay capital gains on that. And so if you have a bunch of, you know, many, many trillions of dollars worth of IPOs, and a lot of people get really rich, they sell that, they convert that into houses, new businesses, new investments. But the question is, you know, if these things are so inflated, are there buyers? And I talked about this before. You know, the problem with the AI companies is they're getting crazy multiples and crazy valuations, which is fine if they can grow into them, but the only way to really grow in them, into them is probably some level of disruption in the labor market, at least anytime soon. People are saying people can keep their jobs and the AI companies can still grow a lot. That's true. But not anytime soon. That level of growth, which is like new, fundamentally new growth, is probably going to take a little bit. And so the quickest way for these companies to grow is to just take everybody's jobs. But you take everybody's jobs, then the bank balance sheets collapse and are functionally insolvent because banks have given everyone a mortgage, credit card, car, note, and if people don't have income, they can't pay for their expenses, and everything falls apart that way. And you have to print the money. Now, the other way is if all of these big companies that have raised trillions of dollars to build all this shit out actually aren't as valuable as they're marketed, which is fine. Like, what if SpaceX is not a $2 trillion company, it's actually a $500 billion company or a $400 billion company, whatever. I mean, who cares? Well, all the people that invested so much money at a higher valuation, and then all of a sudden these stocks fall, tax revenue falls, the AI bubble pops, GDP slows down because a lot of the GDP growth is all of the AI build out, and then they have to print the money the other way. So I kind of view those as contradictory. Like, if all these companies are worth all this money, then unemployment is probably going to continue to go through some turbulence and delinquencies on things like mortgage and credit cards are probably going to spike. And if that's not the case, then these AI companies actually aren't as valuable as marketed. SpaceX is going to fall below its IPO price, which it already has, and the AI bubble might pop. Either way, they have to print the money. Unless, as we reviewed before, they're okay with tax receipts and revenue falling dramatically and basically the American empire collapsing because they can't afford their base level payments of entitlements, military and interest. Jack, are you familiar with Simon Dixon? If so, what do you think about his point of view on the military industrial complex, financial industrial complex, and tech industrial complex? I do know Simon. He's one of the bitcoiners that actually has been around longer than I have. Good guy. He has some conspiracy theories about me, which I don't necessarily appreciate, but I get it, man, I get it. I. I don't spend probably enough time listening to his podcast episode, so I don't know if I can opine on his specific thesis. I've seen it's all recommended in my YouTube algorithm, so I've got him bookmarked. I'll try and give him a listen and give you guys an honest opinion. But I do know Simon and he recommends bitcoin and cold storage, as do I. And so, you know, obviously I'm a fan of that. Curious if the new bitcoin law in Illinois affects strike. If it does, I have a lot does if it does have a large impact, will strike and jack follow the bears and move to Indiana. Yeah, kind of covered this already. It doesn't look like the law in Illinois is actually going to pass. They're going to revoke it. So false alarm. But yeah, I would have sued and if we would have lost, I would have left for sure. Just, I mean, you know, without property rights, what are we talking about? It's ridiculous. Super dystopian ridiculous. The fact that this was even a thing that someone snuck in there is, I mean it's disgusting. It's super shameful. Dylan, question. Do you think that bitcoiners will choose to live together, could allow for city, state laws to be pro bitcoin? Yeah, I mean I think that's kind of what you're seeing in El Salvador. A lot of bitcoiners have gotten citizenship there, bought real estate there, built there are people in El Salvador literally building cities there. And so, you know, capital formation, capital usually forms where it's treated best. So the more favorable, whether it's a certain state or a country or a hemisphere, the more favorable they are to bitcoin. Capital will form there and you'll attract investment and growth. So we'll see. But yeah, I mean I think you're kind of seeing a little bit of that in El Salvador. Now obviously El Salvador is a smaller country, it's a smaller scale, but still, I mean GDP growth, real estate market booming, crime lessened. There's, there's a lot of, of positives that have come out of El Salvador since they invited bitcoiners to come in. What will onboard the next hundred million users faster? A better bitcoin product or embedding bitcoin into existing distribution networks such as supermarket payroll systems, loyalty programs and commerce. Yeah, I've talked about this. I'm, you know, I think the commerce and the payment stuff is going to take a little bit of time just because the network effects were. I mean, I'll put you this way. What do I think is more of a pain point people are trying to solve in their day to day lives? Getting an alternative to Apple pay or finding a way to avoid inflation and have a savings that they can afford a house and afford to have their kids and stuff. Obviously it's the latter debasement, inflation that's in fact affecting everybody. That's a real problem. That's a Main street problem. And people are investing in stocks, investing in gold, investing in bitcoin. They're trying to find a way to survive the money printer. Now conversely, people that have a Amex or a Chase Sapphire card and Apple pay, they don't have any problems with payments. And these cards are actually paying them to use them. So they're getting free flights, free Napa Valley wine, access to airport lounges. And so getting them to switch over to the Lightning network or to Bitcoin is much more difficult than someone says, hey, you've been saving in dollars, your dollars have been getting debased. You should save in bitcoin. So I think one's a much easier sell. So I think the more they print money, the more Bitcoin will grow in adoption. I kind of talked about that. They print the money, the dollar goes down, Bitcoin goes up. I think payments will just be a longer tail growth story. It'll happen. It's just going to take a little bit longer is my opinion. So low time preference. I got all the time in the world. Strike will keep building for it. But yeah curious if slash how the new bitcoin. Oh no. Whoops, sorry I repeated that. Okay, Strike questions Jack, any chance we get a letter of credit for our line of credit? Something to show proof of funds when making offers on properties? We're happy to help with that. Reach out to private at Strike me and we can help you with that. No problem. Dylan. Hey Jack, love your work and Strike, I thought you had mentioned lower minimums in Connecticut but I'm not saying seeing that on my end. Thanks. Okay. We Manuela wrote here. Oh thanks for the support. Oh in. In May we dropped the termed loans in Connecticut from $51,000 minimum to $10,000 minimum. Line of credit is still high and we're working with the regulators to get it lowered. So maybe you're talking about the line of credit but for term loans it did drop from 51 to 10k and as I say we just keep chipping away with regulators. It just there's no such thing as a global Bitcoin license unfortunately. So just one at a time, state by state, country by country, region by region, feature by feature. You know we Strike does really well as a business. We're able to finance all these licenses and continue to just chip away. It's a low time preference way to do it. One, one feature at a time, one license at a time, one lower minimum at a time. So appreciate the patience. And the term loans did come down. Question for Jack Strike Lending when in Hawaii. We are working on Hawaii. Manuela, the president of the company, my right hand, she also leads all of our product stuff. She Wrote, she writes here in my notes that she thinks it's a couple months away, so call it a next quarter thing. Okay? And lastly, Dylan throws in these other questions. Dylan, can you have Jack give us a non bitcoin book list? I'm not a big reader, to be honest, but I do like audiobooks, so non bitcoin. My biggest recommendation would be the End Times by Peter Turchin. I talk about it all the time. But this book is crazy because this guy's not a bitcoiner. He's a scientist. He uses math to look back at history and make sense of trends and basically tries to predict the future. It's a crazy, very niche version of science. And he looked back at history and used math to basically predict that the United States and the west would have a really turbulent 2000s and that something weird happened in America in 1970s. And obviously, as a bitcoiner, I'm like, that's when they severed the relationship with gold. It's all about the money. But the book the End Times by Peter Turchin is a really, really smooth audiobook to take some graceful walks on the beach and listen to, because it's an entirely new and unique perspective that arrives at a very similar conclusion as bitcoiners. That something's off. And the west like things like quality of life, the relationships between elites, and, you know. Anyway, that would be my book, the End Times by Peter Turchin. And it's really interesting because it's not just like a tinfoil conspiracy. He goes through the booms and busts of empires. So like the fall of the Roman Empire, there's a lot of Chinese empires that have risen and fallen over the centuries. And he goes through each, and he applies the same math and the same logic to each. And he basically comes up with a general formula of, okay, what to look for when an empire is killing it and booming and when they're on the decline and you're about to enter some type of fourth turning. And he basically looks back at history. In the book, you go through all of these empires that rose and then ended up falling. And then he takes that and he applies it to the United States, and. And he comes to this conclusion that something weird happened in the 1970s. That's when quality of life, real wages started to decline. And then he makes a prediction that in the 2000 and 20s you'll start to get some type of fourth turning, which so far, halfway through, seems to be the case. So that would be my recommendation. And the very last question hey, Dylan, a question for Jack. How will the Bulls compete in the east again? Our east against Tatum and Giannis. Yeah. No, we won't compete. We won't compete. The Bulls, we. We need new ownership. We need to be sold. So that's my answer. Depressing way to end it. The Bulls stink. We need new ownership. Hopefully, one day, as I've told you guys, bitcoin can go to the moon. Strike can continue to kick ass, and maybe a bunch of bitcoiners, we can rally some coins together, and we can take over the Chicago Bulls. That's my dream, but we'll see. Okay, cool. Well, much love, guys. Hopefully helpful. I got my answers to the bitcoin treasury questions. I'm over it. For those of you that do support me, I really do genuinely appreciate it. Obviously, you know, I try and not let this stuff get to me, but I'm human and it's not very fun, to be honest. So those of you that do support me, I really appreciate it. Happy Father's Day to my dad. And, yeah, those of you that don't like me, I don't know. What can I do? Only so much. Okay. Much love. See ya.