← The Jack Mallers Show
The Jack Mallers Show
Stepping Down From Twenty One, The Fed Coin Flip & The AI Credit Bubble
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Yo. Welcome back to another episode of the Jack Maller Show. I am your host, Jack, and this is yet another edition of Mail Bag Monday, every Monday, 6pm Eastern, 5pm Central, 3pm Pacific. As much signal as I can and the least amount of noise. No ads, no nonsense, no bullshit. Pure signal. Trying to find truth and build a better world for us and our kids. How about it? Okay, let's kick this episode off. Before I get started, I timestamp these things. I'm talking to you all. At a bitcoin price of US$64,700, Bitcoin's market cap sits at a clean $1.3 trillion. All time high remains 126,160 bucks or 48.7% off that all time high we made on October 6, 2025. The last Bitcoin block mined since I hit Stream. Block height 950 9890. Okay guys, it is good to talk to you all. Obviously we have a lot to discuss together. So the title of today's episode is stepping down from 21, the Fed coin flip and the AI credit bubble. So this is the first episode since I stepped down. So that, I mean it is what it is. We'll talk about that. Sorry, I'm making sure I'm live, not a professional podcaster. We'll talk about that. Hopefully you guys have seen my resignation video. Hopefully you have seen my letter to strike investors. Hopefully you have seen the essay that I wrote. But even if you didn't, we'll get into it, we'll cover it and hopefully I can do the brunt of the work on Q and A. So for those that don't know, I do live Q and A every single Monday, show up no matter what and try and answer your guys questions. So Dylan is in the chat this week. He's writing down your questions as we speak. So any question that you guys want to ask me about myself, about 21, about anything, literally, try me. I'm a wide opened book. I have no secrets. So we'll talk about that and then in the back half of the show, we'll just keep it normal. I mean there's lots going on in the markets. The Fed's got a decision to make this week. Are they going to raise rates? Are they going to keep rates as is? And then the AI credit bubble is increasingly driving a lot of market sentiment and market activity. And I do think that some resolution of this AI credit bubble is what's going to drive the next wave of money printing. We'll see. I mean, I'm not always right. So with that, let's get into it. Before we get started, as always, let's answer these first because technically we are in what is self described by the United States as a conflict. I would say at what point is it a war? It's been going on for five months now instead of the five weeks that we were told. But the questions are, is the Strait of Hormuz still closed? Is this conflict still ongoing, our global supply chain still disrupted, and can global debt survive this disruption? The answers remain the same. So I will admit that the straight update. Here's a more detailed visual of what is going through the straight and hey, credit where credit's due, you gotta get, you gotta give credit where credit's due. It looks like things are moving in the right direction and it's impossible for me to know if that's why oil is trading the way it is. Oil's come down. It seemed to come down and be directly correlated with Iran and the United States wanting to renew the idea of being at peace again late Sunday night as they do before market open. But we'll see. It looks like things are getting through again. But the whole point of asking these questions is because we don't know the answer. Following around headlines and politicians is exhausting and pointless. It doesn't matter. I'd rather spend our time focusing on more interesting things and figuring out where we can be productive and useful in the world. So here's the straight horn moves update. I mean listen, it's still relatively closed. That's just what this visual shows. And then are we last time I talked to you guys, we were in conflict with Iran. We were back war, missiles, violence. And as of this morning, the President of the United States, Donald J. Trump said that very friendly talks are ongoing. So now we are back agreeing to agree to agree to agree to not be in conflict anymore. So this is exactly why we don't spend too much time on the show about it because they flip flop like pancakes. Guys. My sentiment remains the same. It seems like this conflict is going to go on longer than anyone thinks. That's always seemingly been the case no matter what politicians tell you. And it seems to be providing inflationary pressure onto a system that was already struggling with inflation and money printing to begin with. That I remain. Those two remain. You're going to get commodity inflation, you're going to get energy inflation, you're going to get oil market disruption because of all of the things and I don't see any near term resolution. There's just nothing that gives me confidence. It doesn't mean it can't happen, but there's just nothing that gives me confidence and that like, oh yeah, this is definitely going to end soon. Been saying that since February. Okay, chapter one, let's get into it. I stepped down from 21, so a lot of the messaging here will be. There's not a ton of new information. So I don't want to bore you guys. I'll try and get through it at a medium pace. Not going to blitz through it, not going to take my time and wax philosophically. I really do think the opportunity is to allow you guys to ask questions for anyone that does. But I will reiterate some of the messaging that I've already been consistent on and the things that I own and where I feel disappointed in myself and I want to own some of the outcomes and just what was accomplished or frankly lack thereof while I was the CEO. And then just some of the reasoning and what comes next. What this all means doesn't you know, I'm not dying, thankfully. Knock on wood, right? It strikes an unbelievable company. And I mean this has been a very clarifying experience for me. What I care about, who I am as a man, as a leader and how I want to spend my time hopefully being useful. So let's do it. First of all, going all the way back, what we set out to build at 21, we wanted to build and they are still building this by the way, the folks still at the company. But we wanted to build the dream bitcoin company. That's why I co founded the business. That's why I got involved and that's what I was working on. And to me, I've given this presentation at nauseum at this point, but that means bitcoin on the balance sheet. So owning bitcoin and you know, sure, of course I would love to own the most bitcoin in the world because I love bitcoin so much. I don't know a bitcoiner that wouldn't. But it didn't necessarily mean we needed to own 100,000 coins or 500,000 coins or a million coins. It just meant that our conviction displayed through our balance sheet. So our conviction explained economically not just verbally. It's one thing to say I love bitcoin, but it's another thing to put your money where your mouth is. And so there's a company where we put our money where our mouth is and then a company that also built bitcoin businesses underneath it and it was the combination of those two. So it's like, can you take the best of what Coinbase is or Robinhood is and but the bitcoin version and combine it with like what the best of strategy is? Because I view these companies as polar opposites in the sense that strategy has a ton of bitcoin conviction, Bitcoin focus, they don't get distracted by shitcoin. Saylor seems to be a bitcoiner, but it's all financial engineering. There is no cash generating products because of customers and building tools that push bitcoin adoption at the consumer level or the business level. There is capital markets, financial engineering. Now Coinbase is the opposite. Coinbase actually does not own a ton of bitcoin relative to the size of their balance sheet. So I would say Coinbase's conviction in bitcoin has not been in the same universe as someone like myself or someone like Saylor. Not just that they don't like bitcoin, but they seem to like crypto as a whole and they like prediction markets. And they, I would say categorically have liked Ethereum more than bitcoin throughout their history. Which again, I mean, it's not an indictment. I personally think that that's a mistake, but whatever. That's not what this episode's about. The question was, can you build someone in between? Because Coinbase has loads of cash flow, loads of customers, they build lots of tools. But there's a lack of focus and conviction in bitcoin itself. Strategy has only conviction in bitcoin itself, which is very exciting and I love that. But there's no cash flow customers, bitcoin and tools. And that's what we tried to build. And I would say in large part we built some of that. We raised. I mean outside of the founding founders capital, we raised over a billion bucks. We bought a lot of bitcoin. You know, there are some misunderstandings of that. We never bought bitcoin. That's not true. You know, the technicality is Tether contributed bitcoin in kind, that's true. But a lot of the bitcoin that Tether bought to contribute in kind was purchased via capital that I raised. And so we did raise over a billion dollars. We did buy. I think it's one point, don't hold me to this. And now I'm not bound by the SEC, so I don't give a fuck. But it's 1.4 billion, something like that. It was a really big number of bitcoin that we purchased and we did build what became the second largest treasury. And we were able to get the company public in a fairly short time frame. So for, for that much, we achieved. Very proud of that. And you know, we did it with a lack of a team. I mean, for a very long time, I was the only employee. So we did a lot. But what we absolutely failed at utterly and completely, and that I own is following through on the second half of the vision, which I think is the most important part of the vision and the part that would make the business unique in its totality. And I failed at that. I, as the CEO, was unable to execute on what I was vocal about wanting to achieve. And that's just a fact. That's just a fact. And the reasons for that and the stories behind that and what will ever see the light of day and all of that doesn't matter. It doesn't matter. You know, something that I'll tell you guys, as a CEO, the buck stops here. That's my job. You know, there is nobody else to point and to blame and to know. The buck stops here. You know, I'll never forget after I graduated high school, basketball was a huge part of my life until I realized I was going to be 5, 8 and £150 forever. But after I graduated high school, I followed up with my high school basketball coach, who's had huge influence on my life just when it comes to leadership and work ethic. And he had a line that I'll never forget. And he was like the type of leader that being a coach and a leader of men requires of you in basketball is when the team wins, it's credit to the players, and when the team loses, it's the fault of the coach. And that's a leader. And that's how I've really led as a CEO is like when things go well, you know, the amount of support you guys gave me and that shareholders and the bitcoin community and investors to 21. But at the end of the day, like, if it didn't work, it's my fault and it's leadership and I own that. So anyway, what changed? Why did I step down? Well, it's really simple, guys. The company's path and the path that I believed I was building and that I co founded weren't the same anymore. Simple as that. Now you ask yourself, how is that possible? Well, something else that you guys should know is that I never had governing control over 21, which if you want to draw a comparison, is not true at Strike. Strike is mine. I control every piece of it. There is no way I can get outvoted at strike. There is no one that can tell me what to do. At strike, I call the shots. That is my ship to drive. I am the captain of that ship. You know how bitcoin is decentralized and no one controls it? Well, that's not true. At strike, I control it. And some people love that, some people hate that. It doesn't matter. That's the way it is now. At 21, that was the furthest thing from the truth. I had no governing say. And that's not necessarily a bad thing. You know, different companies operate in different ways. 21 ultimately was governed by the board. And the board used to be made up of Softbank, Tether and myself. And then obviously Softbank departed from the business and the board was made up primarily of tether. But the point is that the board ultimately has always, and until that changes will always determine the future of 21. And so if you were to say, well, how is it possible that a co founder and the CEO didn't align with where the company was going? It's pretty simple. That's how the board grew to have different opinions and vision than I did, which I put here. But you know, sometimes my font is too small for you guys, especially on mobile, so I want to read it. That doesn't mean that there was a fight where people were throwing things at each other and screaming at each other. And that doesn't make anybody the villain. I think there was just a very fundamental difference in strategy. So that doesn't mean that I don't have to sit with this blame. And I 100% owned the fact that I couldn't get to the board to see and support my vision and that a lot of the market trusted me and trusted in me to be the CEO of this thing. And I couldn't get the board to follow through on the vision that we had been communicating publicly. Like I own that 100%. But that's what happened. That's what happened. And obviously I will talk about that to the extent in which I can. I obviously can talk about my vision and, and what I wanted to do, but I also need to respect my friends that are still running that business. And now that I'm not employed and not working on it, I'm the last person that needs to be talking about what they're going to do or what they should do. That would be the most, the, the most small man, childish thing I could do that they still, I mean, they have everything they need to be incredibly successful, world class backing, unbelievable entrepreneurs sitting on the board. Paulo, I mean, Giancarlo's not on the board, but I mean, the amount of people involved in that company, the backing that they have, the second biggest treasury. I mean, the world is their oyster. Unfortunately. It just became clear to me that the right thing to do was for me not to lead the thing that diverged from what I was there to build. Pretty simple. As painful as it is, I wholeheartedly think that was the right thing to do. So, yeah, anyway, I could not honestly lead and represent a strategy that I didn't believe in. So I stepped aside, I think, and listen again. I own all of it. Like, all of the anger and the frustration and the emotion directed at me is not misdirected. I own all of that and I hear all of it. It's real. I mean, I tried a thing and it didn't work. That's just a fact. But with that being said, something my dad instilled in me since I was a child was the difference between a good man and a great man is the ability to do what's right, no matter how hard it is. Because what is right, you almost always know what is right in your heart, you know, you know in your heart, you. You should not be eating pints of ice cream for dinner. You should get your nutrients in dieting. It's not hard to know what the right diet is. It's hard to actually stick to it. It's not hard. What's better for you to just lounge on the couch or go to the gym? It's not that some people don't know the answer to that. Everybody in their heart knows the answer. But the difference between a great person and a person is the ability to commit to what's right, no matter the difficulty. And for me, this was another one of those instances is obviously, I could have probably pursued an acquisition of Strike and gone and said whatever the path the board wants and the path that I was here to build doesn't align. But whatever, you know, my paychecks are clearing and what do I care? I'm happy to just get on Bloomberg every now and then and push the stock. But I knew that that wasn't right. I knew it. And I knew in my heart, in the same way that, you know, that a steak is better than ice cream, going to the gym is better than lounging on the couch, you know, in your heart. But it's hard. It's hard. And, you know, I try as a person, pass or fail, you know, I'm not saying I'm the greatest performer or achiever of all time. Right? But I try and hold myself accountable to being the most honorable, transparent person. And I knew in my heart what was right. It was right. It was right for the company. The future of the company needs to be led by someone that believes in that mission and that's aligned with the board, period. That means it's also right for shareholders. That is also what's right for investors. And then on top of that, it's also what's right for Bitcoin, Strike and myself to be pouring my blood, my sweat, my tears, and my energy into what I unequivocally can spend the rest of my life doing. And I took out. I mean, a lot of you had sent emails to me and DMs and text messages of just, like, really trying to challenge what my true calling was. And did I need to be in the public markets and did I need to be building big Treasuries in the capital markets? And I think you guys were right. At the end of the day, I'm a professional orange pillar, and I don't know how big Strike can be. I think Strike's becoming one of the more important bitcoin companies in the space for bitcoiners. But I don't know how big of a company will be and if we'll ever achieve these massively great things and yada yada and this and that, but it's mine and it's ours as this kind of corner of bitcoin that we all believe in and support and spend time and energy on. And just having you guys come up to me and say, you're the person that truly, truly got me to understand bitcoin, or you give me a lot of hope, or the fact that you control Strike and you build tools for bitcoiners means a lot to me and has changed my life. Like, those are the things that I felt much more. I felt much stronger about that life than I did the other one. So, anyway, repeating what I said. I own it. I was a CEO. I gave you guys kind of the. The analogy in the backdrop from what I learned when I was 18 playing basketball, the buck stops here. I didn't achieve what I wanted to achieve. There's just. There's no more story to it. I own it. I do not. You know, it's tough because I want to be able to engage with you guys in Q and A. I want to be able to set the record straight, but I don't want that to be perceived as me asking for sympathy or you guys accepting. That's not. Just to be very, very clear, that is not what I'm doing. I am not asking for a. Oh, now I understand why you did it. Okay, never mind. I get it. That's not it. I own it. I helped create expectations, and we didn't finish what I said we would, period. And here's the other thing. Looking back, would I do anything different? And the answer is, yeah, absolutely. Of course that means I didn't make poor decisions on purpose, but, you know, that's always, for me, in my opinion, judgment of if you made mistakes and if you can learn from those mistakes, because obviously, if there's nothing you would have done differently and whatever, the ball didn't bounce your way, luck didn't align with you that one time. Well, there's only so much you can do. And I do think that people sometimes spend too much energy on the past and dwelling and getting depressed and sorrow and, you know, there's so much life in front of you and the life behind you you can't do anything about. So I don't want. You know, typically in my life, I don't want to get caught up on things I can't control. But in this instance, I absolutely could control it. I was the CEO. There's things I would have done differently. I created expectations, and we didn't hit them, period, point blank, period. That's it. People trusted me. And in many respects, I feel like I let them down. And I feel that, and I own that now. With that being said, the company still goes on. You know, what's interesting is, like, this isn't. It's not like the company dissolves of itself. And the bitcoin we said we had, we. I mean, we have proof of reserves. Second largest treasury in the world. So I also have to be careful in that my chapter of the story is over. And I wish I was able to achieve what I wanted to achieve while I was there, but, I mean, if the board goes on to build a massive bitcoin company with cash flows and unbelievable product lines, and they already have public markets, access, and a huge treasury. I mean, the best days of the company are surely in front of it. So you have to. I have to be clear about that as well. So it's not. My. My story with 21 is over, but the 21 story isn't over. So, anyway, these two things I believe to be true. We built something real at the company, and we didn't. I didn't I didn't complete the full vision that I set out to do. So I don't think either of those truths cancel out the other. We did build the second largest Treasury. I mean, there are many people that tried to take a company public, tried to do what we did and they couldn't do it. And we did it. And it was hard. But I mean, I would say on net, if you were to tell me when I started 21, that this is how my time there would end and you would have told me what I did accomplish and what I didn't, I would have said, no way. I wouldn't take that. So that's the unfortunate reality that I own now. What does this mean for Strike and myself? Just to be abundantly clear, Strike has always been independent, remains independent. We're not selling anybody. In case that's not clear, Strike is mine. I own that business. I run that business. I continue to run that business. I tweeted out the letter I sent to shareholders or to Strike investors because Strike has no direct relationship to 21 outside of me. Strike, I mean, we're sitting on over $100 million worth of Bitcoin as a five year old startup, mind you, of a team that I think is around 100 people at this point. So. And we're 50% off the Bitcoin highs. I think at one point we had a quarter billion dollars on our balance sheet. So I mean, Strike is sitting on a war chest of capital. Despite this bear market that's been ruthless to other peers in the space, Strike remains profitable, growing year over year. I mean, unbelievably proud of the team, of the culture, of the products, of the focus. We are kicking ass. And like I said, like, listen, is Strike going to be on the COVID of every magazine and is Strike going to be documentaries made about it? I don't know. I think that we could be one of the coolest companies ever. But I guess my point is I don't need that. I don't need that. I love building tools for bitcoiners and as I'll get into a second, I love orange pilling. Strike is an unbelievable business. I believe in products, cash flow, profits. Yeah, our bitcoin treasury is not 43,000 Bitcoin. I'm okay with that. I'm okay with that. You know what I mean? The bitcoin treasury is ours and we produce it with cash flow and we're proud of that. So, yeah, that Strike is. I'm pouring my blood, sweat in tears. Not that I wasn't before into strike. I mean, considering how young strike is in the future that it has in the leadership team and how young we are, I mean, I think strike can grow over the decades, we think in decades into a bitcoin financial institution that's gone a long way into pushing adoption around the world too, for what it's worth. I mean, there's not many companies that can say they distribute products globally on this new asset class. And we do. And then one more thing, guys. So as I reflected on all of this stuff, and again, I encourage you to take the time and if you're interested, read the essay I put out. I recorded an audio version and a video version for those of you that like walking around and listening to books or podcasts. I uploaded it to this YouTube channel and to the podcast feed. But I do a lot of deep reflection on bear markets and tough lessons. And you know what, punishments are not gifts. What hard times are not things that you're ultimately grateful for in your future. And so there's a lot more deeper philosophical waxing in those. But one thing that I didn't mention yet that I do want to is this idea of bitcoin adoption. Because I spent a lot of time thinking about how can I help the most, where can I be the most valuable? And I did a lot of you guys DM me and write me emails and stuff and I read every single one. And one of the things that I found interesting is there's this cliche that you see people say of like, oh, well, bitcoin adoption is only like 1 to 2 to 3% of the world globally. We're so early. And I sat with that and I tried to do the math and I think that's bullshit. There's no way Bitcoin adoption is 1% of planet Earth. And if, I mean, if you do the math, I think it's non debatable. There's 8 billion people on the planet, right? Roughly. I don't know, call it 8 billion. 1% of that's 80 million. You think 80 million people understand Bitcoin? Because to me, like adoption of like, oh, well, they have some proxied exposure. They have a 401k that has exposure to that. No, that's not adoption. At least not to me. You know what I mean? Like, like I don't know if your dad or your mom or your best friend or your wife was like, yeah, I have proxied exposure through this, this, this, this. And I guess like 0.7% of my 401k is like, technically exposed through a securities wrapper. Would you say, like, okay, cool, you get it. You are adopted. Fuck no. I wouldn't like this. I'm going to question. It's not even, like, the fact that some people believe that, to me, is asinine. I don't know. It depends on what you want bitcoin to be. And bitcoin's not for me to define. It's not mine, but that's not adoption. And so I sat and I thought, I said, okay, well, you know, first of all, it goes to show how early we really are. Because if we're not at 1% bitcoin adoption, at least how I think of bitcoin, where, like, you at least remotely understand it, and whether you want to know, own an ETF or a security or spot, whatever, but at least you, like, understand it. You get how it works, you get why it's important. Like, 80 million people are at that level, Guys. We aren't even close to that number. In fact, I don't think 8 million people have, like, a vague understanding of bitcoin. We might not even be at 800,000. I don't even know if we've achieved a basis point of bitcoin adoption, at least a level of adoption that the folks listening to me right now and I have, like, not even close. And so I thought to myself, I said, you know what, of all the. Like, how is the world. Because inevitably the world will get to 1%, 80 million people, 8 million people, and then 800 million people, and then 8 billion people will understand bitcoin at some point, and it's going to take time and it's going to be hard. But I thought to myself, and I said, you know, who's going to do that work? I don't know. To me, it's a good question. Like, is Coinbase gonna do it? Is the US Government gonna do it? Is Chase bank gonna do it? And I don't know, you know, because I was thinking to myself, like, okay, obviously, you know, strike. We have so much to do. But I was like, yeah, man, you know, I still have so much ambition and conviction and in this thing. And just because, you know, I didn't believe I was the right CEO for 21, I still, like, really, really want to contribute to Orange Pilling. So the other thing I'm going to be doing is focusing on that. So this YouTube channel, for example, I'm going to start bringing on a lot more guests. I'm hitting the podcast waves more. I got. I'm doing what? Now that I'm not a public company CEO, I could say what I want. I could talk when I want. I mean, it's amazing. And so in that respect. So I go on a podcast tomorrow, another one on Wednesday. I'm going to produce more content on here, a lot more educational content, like, what is money? How does bitcoin work? I mean, I don't know who's going to produce this stuff? And I kind of sat with myself and I thought, well, why not me? And I don't know, maybe people will love it, maybe people won't. But I think it's. I think it's work worth doing. And again, this isn't like the sexiest work. Like, you know, I don't think I'm going to be stacking 20,000 bitcoin a week doing this work. But I don't care. I don't care. I really don't. You know, so much of bitcoin is that ego death thing, that. That stuff don't matter to me. So you guys can expect that from me. I'll get your feedback a bit later into the show, but anywho, that's the section. So for those that hadn't heard the news, now, you know, unfortunate. Obviously, what we set out to start and where the company's going is no longer the same. So I need to step down. And I did. It's the right thing. Hard thing, but the right thing. That doesn't take away from the fact that the outcome of my endeavors with the company didn't match the vision and the expectations I set. And I own that 100%, and I apologize for that. Certainly not the story and the ending to this movie that I wanted in regards to 21. But it's the right thing to do. It's best for the company, its shareholders, for me, for strike for bitcoin. And so then what does it mean for the future? Well, I mean, let's fucking build tools for bitcoiners, build cash flow. I want to build the company that, you know, I have a very particular vision for what a bitcoin company should look like, how it should behave, what it should be working on. And that strike for me, and I also now have a lot more time and focus to Orange Pill and like, really build a voice and a platform and content for bitcoin adoption in the way that I think it matters. So, you know, bitcoin is this. Bitcoin is this open, open thing. It's like a public utility. It's like a. It's Like a park down the street, you know, if I were to walk to the park to sit and read a book and, you know, a dad and his son come play catch, who's right? Is the park for catch or is the park for reading? Well, no one's right. It's a public utility. It's for whatever the fuck you want. Some people are going to use the park to walk their dog. Some people are using the park for a picnic. Some are going to read a book. Some are going to play catch. Everyone's wrong and everyone's right. So it doesn't invalidate everyone else's vision for a bitcoin company. It doesn't invalidate everyone else's perception of what bitcoin is. But what Strike is and what I am will be mine. And I'm going to do it my way. And I'm very excited about that. And as painful as some of this has been, like I write in my essay, what punishments are not gifts, I'm very grateful for acquiring lessons as cheap as I am, because I'm learning a lot about what it means to be a leader, what it means to be a great man, a friend, a colleague, a bitcoiner. And listen, 21 is still a business that has a ton of bitcoin and is set up to be successful. Strike is an unbelievable company that despite anything thrown at its way, it seems to just get stronger, get more profitable, grow bigger. Opportunities seem to be everywhere. I mean, for all. All of the humbling and all of the pain, we're still here. And so I'm very grateful for an ability to learn as hard as it's been. And march on, march on. I think 99% of success is just showing up. I do, you know, at the margins, you'll have to make decisions of like, oh, you know, do we build this product or that product, or do you price it this way or that way? And I'm not trying to invalidate that work, but I'm telling you guys, most of the work, like, like I say, markets try and wear you out or scare you out, right? It's just, don't quit, just show up. Just do the work, Take the lessons to the chin. Humble yourself, own it, be a man, be transparent, be honest, and show up. So that's what I'll be doing. Okay, now for the listeners to the show that don't give a shit about any of that, I apologize. Let's do market updates. So we have a big week because the Fed has an opportunity to change interest rates. And I just Want to say something here? You know, I've said there's no way war hikes rates. That would be impossible. He'd have to be an idiot. And feedback for my own self. I gotta be a little careful with such declarative statements like that because inevitably when he does raise rates, then everyone's gonna be like, wow, I listen to your show. You're an idiot. So let me just rephrase things quickly. I really don't think he should. I think it's a very bad idea. Mathematically, it cannot work. But that doesn't mean that he won't. I have to be honest about that because, I mean, we're dealing in a world of politics and I mean, this is all Ponzi nomics. It's a woozy, it's a wazi, it's fairy dust. Right Wolf of Wall Street. And so I don't know the politics and being in the war room and what's going on with Iran and AI companies in China. And so I can't make such declarative statements. So I just got to be clear on that. Now, I will walk you guys through once again why it just isn't an option for the long term. But it doesn't mean that he won't. And so the market is effectively pricing this week as a toss up. So Trump today was very vocal with the media. So I got two screenshots here. Trump asked the Fed this week, costs are going down rapidly. And then Trump again, rates should be lowered. So Trump is sticking to his guns. He thinks he also had one I didn't put in here. He thinks the US should have the lowest interest rates in the world. So Trump wants aggressive rate cutting. He always has. Seemingly he sticks by that, which is also fine, but obviously is inflationary. And then this tweet from Feijou is really the visualization of what I was just describing is that it's kind of a toss up. The market is saying wash really might raise rates. Like he really might do it. The way that he's talking and the way the market is pricing it in, it's a non zero chance. Which is why I had to get on here and say I think it'd be a bad idea. He might pop the AI credit bubble. He might cause a lot of irreversible harm to equities and to the bond market. And that's when we're going to get like a big print bailout type of event. But he might do it because I don't again, politicians, I don't know. I Mean, it's the most irrational, ridiculous chapter in human history. Arguably, I can't predict these things. And so this Feijou tweet reads, welcome to the new age. Rates being a toss up, going into meetings is the new normal. Expect volatility. So that's really my market update is to expect volatility. So this from the Wall Street Journal, how sky high deficits threaten the bond market. And I mean, we've gone over this a million times. Luke Gromen has gone over this a million times. Every macro analyst has gone over this a million. The slide on the left, or the visual on the left is showing how the US treasury has financed itself through bills as opposed to long duration. So when people say short duration, long duration, you're issuing these debt notes and what's the duration of the note? Like a 10 year U.S. treasury or a 30 year U.S. treasury. That's long term. That's long duration. Right. Versus a three month bill. Three months versus ten years. One is short, one is long. Now the U.S. treasury. So the U.S. government has been financing itself on the short end, issuing bills short. And they're doing that because the long end doesn't have enough demand to sustain the amount of debt that the government needs to issue because of the deficits. So the government wants to spend $2 trillion a year that it doesn't have. Okay. It wants to run a $2 trillion deficit. They would issue 10 year, 30 years if they could. But there's not enough demand for people willing to lend to the government over that duration. And so if there's a supply demand mismatch in the bond market, which we've talked about all the time, you know, remember bond math? Yields go up when the bond value goes down. When. Right. So if they're pushing a lot of supply to the long end and there's not enough demand to meet it, then they're going to break the bond market. Yields are going to go to infinity. And so the way that they've been able to subsidize the US Government, despite having really fragile US Treasuries market, is by substituting the financing via bills. Okay, what are the consequences of that? Well, when you have to roll over all of this short duration, I mean, this is trillions of dollars. So on the right, you can see privately held marketable US treasury debt maturing within one year is now over $8 trillion. And so the point is, raising interest rates is like pouring gasoline onto a fire. Because who is the person most impacted by a higher cost of financing? Well, the U.S. government itself. And so it's like, it's like, you know, obviously when you hear stories of like oh well you know, the Fed 50 years ago was really aggressive with rates and got inflation under control. Yeah, but 50 years ago debt to GDP wasn't 120 some odd percent. They didn't have $40 trillion of debt. They weren't doing most of the issuance via bills. Like it doesn't, don't tell me what happened 50 years ago. It's a different world. We had taken gold backed currency notes and we've now just printed them out of thin air. Running $2 trillion deficits, going to wars we can't afford. I mean that's why raising rates is a joke. Now on top of that, the AI industry continues to see stress. And I have to just say it every single week because you can't ignore it at this point. The reason we have to care about the AI market is it's become such a material part of the economy. If you take AI and tech out of economic data, we are in like a depression in fact because of this whole K shaped economy thing. I mean a lot of America, maybe the majority is in some form of recession depression and has been for quite some time. So AI needs to succeed and well I don't, I, you know, I have to divorce the US government's opinion from my personal opinion. That's not my personal opinion. I think it will succeed. I think it's very cool. But I'm not convinced that these US AI companies are going to be successful. I have no idea how they're going to out compete China, which we'll get to in a second. But the point is the US government, the Trump administration, there's been no if, ands or buts about it. AI is strategically important. It is a national security event. If anything else, we must win the AI race. We must reshore America as part of this re industrialization around AI, around energy production. And we must win at all costs win. So we have to pay attention to AI because if AI starts to face issues, you're going to start to see stress in the market. Stress in the market. You're getting to bailout territory. You're getting to like, okay, well you know, do we let this whole, you know, U.S. western civilization empire collapse or do we print the money and sustain it? So what are we looking at here? This is credit, credit risk across AI backers or AI financiers. So something that you guys need to keep in mind and I'll say it, I'll Say it every single week if I have to. AI is not financed out of profitable cash flow. These guys are borrowing an insane amount of money. And the biggest borrowers are companies that don't produce profits. So there is no path currently to pay that back. Now, obviously you borrow money because you think your future will be worth more than your present. And so if that's true and they're able to produce loads and loads and loads of profits, good for them. But that's why Chinese competition seems to be like a knife to the throat of these guys where they're like, ban that shit. Or I can't believe I'm seeing open. AI executives say open source is bad. I mean, you'd have to be some kind of fucked up human with the moral compass backwards to say that open source is bad. But this is what these guys are saying. Why are they so threatened by China? Well, if China comes in and is even marginally competitive to their business, well, all of the profits that they were banking on somehow achieving in the future is severely threatened. Even if someone comes in and takes 20%, 30% market share in some, that's enough to have made all of the financing decisions that they've already chosen moot and totally worthless. Right. So who are they borrowing money from? Well, we haven't gotten to a point where the US government, in combination with the banks have been doing like large swaths of effectively government backed financing, which is that highly inflationary, pure money printing. That's when my interpretation of bitcoin is it's calling out there's not enough liquidity to support all of this right now. There is a ton of mal investment going on and there's a ton of people swimming naked. And so bitcoin has pointed this out since the end of last year and it's been sitting here waiting for a resolution. I call it this fiat liquidity smoke alarm. I think bitcoin is going to rip people's face off if and when the US government de facto backs all of this garbage and says whatever, OpenAI probably fucked up and who knows if they're going to be a good company, but they can't fail at this point. So whatever, screw it then bitcoin gold, all of these things are going to rip. And the more time goes on and the more these questions are presented and the more trouble people get in trouble and the more China presents legitimate technology threats in the AI sector to the United States, then the more bitcoin and other assets are going to chop around and fall. So who's lending the money today, Oracle, Microsoft, Amazon, Meta. That's what we're looking at right here. So this is Oracle, Microsoft SoftBank, AMD, Meta, Amazon Core Weave. Okay, look at the credit risk across these businesses, which was virtually nothing in the middle of last year outside of Oracle. And now they're all right, like this trend is real. Now it's not saying that these businesses aren't credit worthy, but I think the point is that the market is starting to assess the this as one giant correlated bet that is not certain any longer. Okay, meaning it's not as if like, oh, like some of this might work out, some not and you know, oh, the risk is isolated over. It's like no, no, no. It's like if this doesn't work out, like the risk is spread across all of these lenders. Nobody is safe. There's concentrated risk which again continues to imply that there's probably going to be a government backstop, government bailout. And then today, one of the only companies that seem to have a unique product that was cheap for them to produce relative to the cost, they were able to sell it. Cash flow out the wazoo, stock through the roof. Nvidia came out and said they're going to guarantee $250 billion in financing to OpenAI. I've been calling out OpenAI for a while now of like, they are not profitable. The path to profitability is not within the next half decade. So I mean what, like what model is reliable that's further than five years out for a company that's not even five years old? I mean, what are we talking about? So the details include guarantees from Nvidia to help OpenAI lease a 10 gigawatt project that SoftBank is developing in Ohio. In total, the project could cost more than $500 billion. It's hard to say these numbers out loud. I mean it's so preposterous. Cost more than $500 billion. The largest data center project ever announced. The power for the project is controlled by the US Government and funded separately by Japan under a recent trade deal. Signpost. Commerce Secretary Lutnick is reportedly involved in deciding who will get the power. Interesting. The data center build out just hit a whole new level now. Nvidia I have on the left, don't forget, is the largest weighting in the s and P500 right now. Their credit risk jumped tremendously. It looks like it jumped 40 basis points over 100% just based on this announcement today. And the stock got hammered, the whole stock market got hammered because of these decisions. Jim Chanos writes, so we're at the point in the cycle where Nvidia has to provide financing guarantees for roughly two thirds of the cost of the chips it is selling to the data center project. And then he follows up to that and says, just so you have an idea of how immense that figure is, it represents 135% of Nvidia's total retained earnings. I mean these are gargantuan preposterous numbers. And what we're seeing is the financing of all of this keeps getting pushed further and further down the stack until you get to the US government. So now Nvidia is the lender of last resort and how long until they're deemed not credit worthy? And I thought this tweet was spot on the market, doesn't reward circular financing and revenues round tripping each other anymore. Time is up on this whole charade. That's kind of what I've been saying. And I'm not saying AI itself is a charade. I use AI every day. It's here to stay. I think it's an unbelievable innovation and like I said, it's very in line with my worldview where I think the human story is commercializing energy from the sun. Bitcoin is energy money. We have commercialized energy into a market good that we can monetize. That's unbelievable invention. AI is commercializing energy and turning it into accessible cheap intelligence. That's an unbelievable invention. I mean who knows where the world's going to be in a year, in five years, in 10 years. However, is China going to be really competitive and just open source all of AI? Has there been malinvestment? Who's going to finance and pay for all of this? None of those questions have been answered. I think there's been tons of malinvestment and when we're talking about, you know, on the order of trillions of dollars, guys like if you thought the COVID print was big or all of the mal investment that's gone into AI projects, did nobody think China was going to be competitive? I mean it's mind blowing assumptions and risk and decisions that have been made which I don't know how it's going to work out. But the point is Softbank was down big today and video was down big today. The market is basically saying we can't make the math work. And I also can't make the math work. And so we'll see inevitably I think the Fed and the US treasury, so the government and the Federal Reserve are going to have to decide who are we protecting? Who are we? Let me say it another way. Who are we willing to let fail? Are you willing to let Oracle, Google, Meta, all these companies fail? Are you willing to let OpenAI in anthropic failure? Are you willing to let China win the AI race? Are you willing to let these commercial banks that probably have dog shit loans riddled throughout their books fail? If not, all of this has to be papered over, which is fine. Bitcoin's going to the moon now if you are. Well, I don't know how investable that little time that we'll have to live through will be because I mean the world will fall apart, it will get built again. And I think it will use bitcoin. Ultimately, bitcoin's just the most competitive thing we have access to in regards to money. But I mean, yeah, either way bitcoin will win. I think that they're going to paper this over, print their way through it, and bitcoin is going to sniff that liquidity out and be the greatest absorber of it because it's the scarcest thing, right? But I mean guys, every single week this AI stuff just gets a little more interesting. Right now all of a sudden Nvidia's backing guaranteeing a quarter trillion dollar. And just so you guys know, the reason they're doing that is because OpenAI is, has lost. Like OpenAI. No one's willing to lend to OpenAI. Let me say it that way. And I like, I use their products, think OpenAI is great in regards to the products I use. I don't know anyone that works there. I'm not like talking shit. But it's like, okay, no bank was willing to lend to these people, so they had to get Nvidia to backstop it in order for them to get the backing to build this stuff. So we can continue to kind of like shuffle through larger and larger balance sheets, bigger and bigger lenders, before no one's credit worthy anymore. No one can get a loan because there is no ability to pay all of this back. And then you ask the US government like, okay, do you want the stock market and your banking system to fall apart or do we must win the AI race and you gotta monetize all of this debt and you print it. So we'll see. But it seems that this whole AI credit bubble thing is racing towards some finish line and that, and that's another thing. When I, when I see the market pricing in wash, like is, they're saying, oh yeah, WARSH is definitely going to Raise rates. It's like these guys borrowing all this money are going to go through a rate hike. Someone's going to blow up. I'm just calling it spade a spade. Somebody's going to blow up. So he might though. Warsh might. Hey, he's got to establish his independence. Trump is out on the airwave saying cut, cut, cut. Warsh has to show that the Fed is independent. He's been clear on that. He's not here to bail anybody out. Those are exactly his words. The Fed's not here to bail anybody out. Okay, he can hike. I'm not saying he can't. I really don't think he should, but whatever. I, I just wouldn't be surprised if someone blew up. I mean, mind you, that's what happened last time. They hiked rates a bunch. Silicon Valley bank blew up. History doesn't repeat, but it rhymes. Okay, let's check in on Bitcoin. At the end of the day, I consider this a bitcoin show. Don't want to go a whole show without checking on bitcoin. On the left you see the cot data. So still, I mean still bearish looking, just looking at the shorts here. And on the right I've got the ETF flows. So I mean again, don't rely on me for predictions about the future. I'm not a genie. No one knows the future. Anyone that sells you on an idea that they know the future is full of shit. My base case is bitcoin is going to continue to chop around is the low end, could be, could not be. So you know, I know for a fact I'm not going to regret buying bitcoin at these levels in one year, two year, three or four year, five years. I've got DCA on, I'm a buyer every single day. Strike produces cash every single day and we buy bitcoin. So I feel good about the fact that the bear market's going to continue to try and wear people out, scare people out. Let's go through an example. Warsh raises rates, someone blows up. Bitcoin goes down 20%, stocks down 20%. And that's like the, that's the level of pain where you would get central bank or US government intervention and bailouts. But like that would be a scare you out scenario where if bitcoin went from, you know, 65k to 50k overnight or it hit the 40s, that's a scare you out. Aware you out is we're at the same price in November and it's just chop and chop and wear you down. And it's grueling. And as midterms approach, we're going to learn more about how politicians are either trying to ban bitcoin or using shitcoins and meme coins to enrich themselves. So I expect more wear you out. I expect more scare you out. As I always say, earn more than you're spending. Try and reduce your cost as best you can. Try and be more valuable and earn cash where you can turn on your dca. Stay patient, touch grass, lift weights, eat well, take care of yourself. Bitcoin's a game of survival. Like I said earlier in the show, 90 some odd percent of achieving things is just showing up, just never quitting, just making sure that you're there tomorrow. So don't take on too much risk. Don't blow yourself out. Don't think that you're gonna solve your life's problems with one wick or one smash buy. You're not. You're not. It's a, it's a long duration game. And then, I don't know, people ask me about the Clarity Act. I guess the Clarity act odds are going lower and lower and lower. Like it's not going to pass again, if you're into crypto and whatever. I don't understand why as a bitcoiner I care about this. Bitcoin is fine. I'm sure there's like one or two things that would be nice, like if we can protect bitcoin developers or if we can protect self custody. Sure. But largely, I mean all of these things, like the Genius act or the Clarity act, it's all a bunch of hot air garbage. What does this have to do with bitcoin? Like, bitcoin is like the US government recognizes it not as a security, because it's not. It's taxed as property, which, I mean outside of no taxes at all is reasonable. Makes sense. And so I don't know why I need a shitcoin bill. Why, why do I need to care about a shitcoin bill? I certainly don't care about a shitcoin bill. So people point, oh, bitcoin's gonna go down because the Clarity Act, I, I'd be happy with that. I'm happy to buy cheaper because people interpret a shitcoin bill as anything to do with bitcoin. But in regards to like how I run strike, the things I want to achieve in my career has nothing to do with the Clarity Act. Like literally, the Clarity act could pass or not pass. And I would, I wouldn't Know, unless someone told me the outcome, like none of my life would change as a bitcoiner, just to be clear. So I just expect, I expect more. More grind. Okay. I wanted to leave room for Q A today, so I skipped grind my gears. We'll get back to that at some point. But I, I figured Q A would be the most valuable section of today, given the context so quickly from Strike. So what we. Oh, where's my animations? There they are. What we shipped this week. So every single week we're producing products, enhancements, features for our customers, which we're obviously very proud of. I don't think anybody. The velocity of product building, I don't think anyone does it like we do, just being honest. So what we shipped last week, Apple Pay is and Google Pay in the United States, you can now buy bitcoin. I think that this is the cleanest experience. One of the metrics that we follow closely is when a customer signs up and onboards to Strike, what's the quickest way we can get them to get in some SaaS. And sometimes there's a lot of friction and linking your fucking bank account or needing to send a wire. So obviously, if you're looking to buy a million dollars worth of bitcoin, Apple Pay is probably not the way to go. But if you're just looking to get a friend on and say, hey, double tap the side of your iPhone and just get yourself 10 bucks worth of SaaS, we now support it. These are, these are tiny features, right? But they're important. But they're important because if you compound every single week, which is building, building things people care about, listening to customers, and then you take that and you do it for years, and you take those years and do it for decades, you're going to be able to change the world. So the other one is German. So Strike now speaks German, obviously, if you're in Germany. And what's really exciting about this is since we got Mica, we are now allowed to add different languages. We weren't allowed to add native languages to the app before we got our MICA license and registration. So now we do have Mica, so we are allowed to add more languages. So Strike will get a lot more multilingual with time. We want to be a global financial institution because bitcoin is global. And that was part the of. Of my frustration and why I started Strike is nobody had built a global bitcoin company just focused on doing bitcoin stuff. So yeah, that's what we shipped. The two main things Last week again, my essay. So I'm going to try and highlight more content that I do, whether it's other podcasts I'm on or having guests on here or doing more educational videos. I'm just going to try and Orange pill. Like, I'm taking it personally that not even 1% of the planet vaguely understands bitcoin. Like, I think I can help. So I'm going to try and highlight some of my stuff. So last week I published an essay. It's called the Last Honest Market. This is definitely a more sophisticated piece, definitely a more vulnerable and emotional piece. It is not for someone that doesn't really know bitcoin. It's definitely for bitcoiners. But if you haven't checked it out, check it out if you are an audio or video listener as opposed to a reader. I did upload a version to my podcast feed and to this YouTube channel. One more thing, really quick Strike is we are doing some really cool shit with AI. Like really, really cool shit. And our CTO published a new blog about. He calls it the Strike Software Factory. AI agents as first class part of our team, but we're building insane features and insane things with AI. It's really, really cool. And check it out. Give it a read if you're interested. But the reason we're one of the reasons we're able to ship so fast and do so much with not a ton of people, you know, remain profitable. All the things that I brag about is, you know, there's a lot of reasons. Culture, leadership, mission alignment, you know, not being spread between prediction markets and shitcoins and meme coins. That all obviously plays a very important part. But another is our technical capabilities and our technical prowess and how we're using AI. So it's a very cool post. I'd recommend you guys check it out if that interests you. And then last but not least, before we get into Q and A is what's coming up next. So on the strike side, some features you guys can look out for. We're launching beneficiaries so you ensure your assets, your bitcoin goes directly to your loved ones. So that's coming to Strike, a new activity feed. So we've gotten a lot of requests that parsing through your history, being able to search, being able to download specific parts of your transaction history and do it your way. So we call it Activity 3.0 internally, but we'll be rolling that out to customers, our interest on cash. So we are going to start internal testing hopefully this week for Our interest on cash, which should start at 3.5% or even higher. And I think it'll get to hopefully over time, like 5, 6, maybe even 7%. And I've talked about how we would do that. But there are rules about banking, rules about offering certain amounts of interest. But we're going to start at a pretty attractive number. And that has an ability to be paid in bitcoin, which is very exciting. And then Stacks is also this quarter. Stacks is creating sub balances inside of Strike because, people, this is one of the biggest requested features of. I would like to create a sub balance or a sub account or a sub wallet for my wife or for my children or for, you know, my kid by the time he turns 18. And organizing your bitcoin balance or your asset balances within different sub accounts, that's also coming. So pretty exciting there. If you're not seeing, you know, your killer feature that you expect to be announced soon and it's not in that list, let me know. And then for me, now that I'm not a public company officer, as much as this outcome sucks, I'm fucking back. I am so excited. So I'm hitting the podcast circuit orange pilling as much as I can. If you want me to come on your show, just DM me, DM Dylan again. We gotta orange pill the world. So I'm hitting the podcast circuit. I'm going on a podcast tomorrow night. I'm going on another podcast Wednesday. I'm going to bring more guests onto the show. So you guys let me know who you would like to see me interview. I will say this, I don't want to bring on all the same guests that go on all the bitcoin podcasts because this isn't my. This isn't how I pay my bills. Strike is a profitable business. I own a lot of equity in it. I pay my bills that way. I want to have interesting conversations. I want to educate people. I want to continue to push this movement that we're all building together. And so I was kind of planning on bringing on guests that just interest me. And it might be the Luke Romans or the Lyn Alden's and stuff if they're willing to come on. But it also might be Saquon Barkley. It also might be. Diplo is a investor in Strike. That is a friend of mine, he's a dj. I don't know how much we would end up talking about bitcoin. It might be Jason Freed, which is a friend of mine about, you know, we have really Tight alignment on how to build a company, being profitable, being small, being focused. So, you know, I kind of want to just talk to people that interest me. And obviously what interests me is bitcoin. So there will be a strong bitcoin lean. But yeah, I don't know. I don't feel necessary to make another macro show with the same guest, but just my voice asking questions. I personally don't feel the need to create that and I assume you guys don't have a deep desire for that either. But let me know who you would want to hear on the show or what conversations you think would be fun. And then educational content. So what is money? What is bitcoin? How does bitcoin work? I think there's an opportunity to create long videos, short videos, digestible content. Because like I said, I was asking myself, damn, basically nobody on planet Earth totally understands this bitcoin thing or even remotely understands it. Who's gonna spend the time and do the work to educate them and not educate them on like, digital credit or, you know, not that those things are bad, but like, what is money? Why was bitcoin invented? You know, shit like that? Who's going to do that? Coinbase hasn't been doing it. You know what I mean? I'm going to give it a try. Okay, let's do questions. We pull up Dylan's document and try and answer as many as I can. Okay. All right, we're starting out with macro questions. Hey, Jack. China is stacking gold faster than ever. So why not have the US sell its gold and buy bitcoin? It sinks gold and pumps bitcoin demand, switching reserves. Yeah, I guess it's possible. I'm a little bit dubious of like, dumping all of our gold to stack bitcoin. The practical answer to that question is fairly nuanced. Right? Like, the US owns far more gold than the bitcoin has in market cap. So how do you do that without buying the top of this asset class? Like I said, bitcoin's skeletal frame is just still not wide enough and tall enough to support sovereign liquidity. And so how you would practically pull that off would be challenging. But I get the point. The point is well taken. Why doesn't the US if what we want to be like, the US prides itself on being a tech leader. I think that's the most frightening thing about China's ability to compete in AI is that it's starting to question, like, are we the de facto king of technology? And even if we are, but has the margins in Our lead drastically shrunk over the recent decades. So if we are America's about technology and freedom and open source and stuff, then first of all all these high flying execs can't talk shit about open source. But then yeah, we should lean into Bitcoin 100%. So I get, I don't think in theory that thesis is wrong, but I think in practice it would be incredibly challenging to just like you can't just log into Coinbase, dump all the gold and buy a bunch of bitcoin and like aha, China Checkmate. Unfortunately I don't think we could do that. And there's, you know, in the same way that the dollar has lots of network effects, so does gold. Right? Like all the central banks around the world don't own bitcoin, they own gold. And so it's like, well what do you own the bitcoin for? To trade. Trade with who? None of them have nodes running. Right. So, so, you know, I, I think it will take a bit longer than we would hope. But I, your, your point is well taken and I get it and it's awesome. So, so yeah, anywho, as more miners transition to AI, HPC workloads with compute often locked up for 5 to 10 years for AI, what do you forecast for the bitcoin hash price? That's a good question. I don't know, obviously. Listen, bitcoin mining is so cutthroat as a business. It is not a business that is going to have high margin. And even if you do experience high margin in some interim period, I don't know if high margins are very sustainable in that industry. You know, you're effectively saying like it's an open bid for energy in the world. Whoever can amass the cheapest energy source on planet Earth. That's incredible. It doesn't get more competitive than that because energy is the currency of the universe. And so that's a highly, highly, highly competitive margin compressing industry to be in. And so I think, you know, bitcoin mining is going to always be challenging, difficult. Doesn't mean it's not worth doing supporting the network. And the coolest part about bitcoin is it's constantly incentivizing excess energy and cheap energy. Because imagine this, imagine you have a waterfall in rural bumblefuck. The energy that's produced by that waterfall was currently meaningless to society because what, how is the energy hundreds of miles away in a waterfall, in a forest, going to wash my clothes or going to stream the NBA game or going to Allow me to live stream to you guys in my office. It couldn't. What am I, extension cord 200 miles out and trying to plug it into a waterfall that wires all the way up into my empty closet? Of course not. But what bitcoin allows you to do is take that energy and turn it into a money that then you can transmute and sell. And so it's constantly, you can picture the bitcoin network is constantly auditing planet Earth for, hey, who's got abundant, cheap, accessible energy that would be better off being turned into bitcoins? And if the answer for a period, a chapter of human history is, well, there's not many, because we'd rather be plugging them into OpenAI and being backed by SoftBank, which is backed by Nvidia, which is backed by the US government, we'd rather be doing that. Then, you know, the bitcoin market's fine with that difficulty adjust, the show goes on, it doesn't really matter. So I don't know. I just know that bitcoin mining is going to perpetually be, you know, a very cutthroat space with, you know, low margins, very hard. I mean, also, guys never, like, let me say this, I've never ever, ever, ever, ever in my life heard of a, of an industry where it's like, you know, every four years, our revenue model gets cut in half. It's like, okay, I mean, that sounds challenging, right? So, so yeah, I don't know if I answered your question, but the. What I will leave you guys with is it's really important to understand that it doesn't matter. One of Satoshi's greatest inventions was what's called the difficulty adjustment, where what bitcoin does is it measures how fast blocks have been produced on average over a certain duration of time, which is technically supposed to be around two weeks. Although, you know, bitcoin doesn't think in human time, it thinks in blocks. But call it every two weeks. The bitcoin network is looking back and saying, what was the average time a block was found? If it was slower than 10 minutes on average, that means their bitcoin call it math problem that miners are trying to solve is too hard because it's targeting for every 10 minutes. And if everyone's solving it on average 11 minutes, 12 minutes, then we got to reduce the difficulty of the math problem to get them back in line to a target of around 10 minutes. Now, if they're solving it quicker than 10 minutes, say they're solving it on average every minute, five minutes, seven minutes. Well, the problem's too easy. There's a lot more demand to solve the problem than the difficulty of the problem itself. So let's make the problem a little bit harder. And is the most ingenious insight, because the question is, how do you imagine bitcoin like a heartbeat. How do you keep it at a steady heartbeat? You don't want the heart to race, like, and then you die of a heart attack. You also don't want the heart to barely beat and you die from, you know, lack of blood flow. You need a consistent 10 minutes on average heartbeat. And the question is, well, how do you achieve that? And Satoshi had this like, really simple but really brilliant insight, which is instead of changing the outside world, the outside world will always change. And you can't control the outside world. What we can control is how hard it is for the outside world to contribute to bitcoin. Like, bitcoin itself can change. And so it's a self reinforcing, self curing, difficulty adjustment. And so it doesn't really matter. Like, there's been times since I've been in bitcoin where everyone wants to be a bitcoin miner. And then the difficulty gets really, really hard because everyone's trying to solve it. So blocks are produced faster on average. The difficulty gets really high. And then all of a sudden people like, holy shit, this is so hard. And now there's a halving and my revenue is going to get cut in half. And all these miners have borrowed all this money, get blown the fuck out and then no one wants to mine bitcoin. And then difficulty comes all the way back down because it's incentivizing people to say, hey, looks like according to the average block being found over the last two weeks, no one gives a fuck about me anymore. Well, let me entice you a little bit. Let me make it a little bit easier. And then it's kind of been this cyclical thing. It's very cool. So bitcoin doesn't care that people are infatuated with AI for now, let them go. They're going to go in their little sandbox and have fun and throw sand at each other and borrow money from everyone until they need the government. And bitcoin doesn't mind. We'll sit and we'll watch. We'll have our DCAs on and we'll watch from a distance. Okay, Bitcoin markets. Hey, Jack, why hasn't Sailor bought bitcoin lately when he said he will be buying the top forever? Yeah, Let me say this. Everyone assumed that my questions about Saylor and strategy were because I was the CEO of 21. Now I can say that's not the case because I still have the same questions. I still don't totally understand the strategy and I'm not the CEO of 21. So in case you guys didn't truly know me as a person. Very integral, very transparent, very honest, very principled. I do not do passive marketing gimmicks by asking questions about other CEOs. That's not how I roll. Never will be, ever. It's why I stepped down. If I wanted to compromise on my morals and my integrity and who I am as a man to be the CEO of something, I would still be the CEO. I'm not. So just to be clear, why has Saylor not been buying bitcoin lately? Because the market basically told him to stop. He does not have a very rich M nav. So the premium that his equity has to his bitcoin holdings is. Is effectively zero. And to be honest, it's zero based on the new metric that he unreleased. So also, you know what's kind of fucked up? I asked these questions and everyone got mad at me. But then the questions were good questions, because then after I asked the questions, STRC fell off 100, still hasn't recovered, and he introduced a brand new version of mnav. So it's fucked up. No one ever called me and said, hey, dude, sorry for how hard we were on you. Those were really good questions. So, you know, not that I'm waiting for the phone call, I'm just kidding. But yeah, I mean, listen, the problem is that he reinvented the MNAV metric, which is fine. You know, he told me, you know, maybe it's such a new becoming industry, maybe it needs new metrics. We need to revisit this stuff. Whatever, I don't care. But certainly confusing. Confusing for the market. So it depends on how you measure his metric. But if you measure it the way he used to measure it, it's severely under. If you measure it his new way, it's about at 1, but it's not rich enough to be buying bitcoin. And he's now the market is also concerned about this STRC liability thing, and he's now starting to spend money buying that back. And here's the other thing. Let me say I was very, very, very offended as a bitcoiner. And I know, I'm sure Michael didn't mean it. And I get it. Like, people clip things on the Internet and You know, it goes, it's taken out of context and it's used against you. And like, I get it. So I'm just being clear. I'm not calling anybody out. But I was offended when I saw a clip that said without strategy, bitcoin would be worth 5K. And so like, bitcoiners should be thankful for strategy or else it wouldn't be a successful project. I was very offended by that. There's a lot of people that. And the other thing about being a bitcoiner is you are able to experience this phenomena because of all the people that came before you, because of the open source developers that were building on bitcoin when Bitcoin was $0 per coin, right? Because of satoshi, because of how thinny. And so it's just always like, I just, I was really offended by that. Like, you know, no one, no one on Wall street today was at the bitcoin meetup in my living room in 2014. Like, come on, that's super offensive. And I think it's a really cool sign that Bitcoin's up 10% since the last time these treasury companies have been buying bitcoin, which doesn't make them bad, but I'm just saying they're not the entire market. They don't determine the price. Bitcoin would be plenty successful with or without them. You know, I always say you need bitcoin, Bitcoin doesn't need you. Bitcoin will survive without any of us. None of us are too important. Trust me. And you do not want bitcoin to have to prove that to you. Trust me. Trust me, daddy. So why hasn't bitcoin or sailor been buying bitcoin lately? Because he can't really. I mean, he could, but the stock would keep going down. So the market was basically saying, hey, this STRC thing is a mess. You need to tend to it, you need to add cash reserves and your MNAV is low. And so he's changed the way he encourages the market to think about the M nav and he's trying to aid towards the STRC thing and then hopefully he can get back in a position where he can be responsibly buying bitcoin. But who knows? That's my interpretation. And I, I still have the same kind of questions or lack of full understanding of kind of like the whole thing. Not that I want to spend my time on it, at least right now. If you guys really want me to, I will. But good opportunity for me to say that had nothing to do with 21 at all that everything to do with. I'm a bitcoiner, spent my life here, plan to spend the rest of my life here. I care deeply about bitcoin. I just didn't get it. Still don't. How do you reconcile a cash flow business in fiat terms with the belief that bitcoin is going to replace fiat? Like, I get strike as it is onboarding people onto slash into the network. But I mean, this kind of goes into Austrian theory a little bit in that people will say, why do you care about cash flow? Why don't you just buy bitcoin? Well, I. I'm doing something productive to produce cash that I don't yet have. You know what I mean? Like, it's not like I'm saying, you know, do I produce $100 million of cash or do I spend $100 million of cash? Well, I can't spend $100 million of cash on bitcoin without earning it first. And I earn it by being valuable. In Austrian theory, that's the definition of whether something is successful or not is if it's profitable. Because that is the literal expression of something being more valuable to the world than it is consuming from the world. If something's earning $100 million of revenue a year, but it costs them $200 million to produce that $100 million worth of value, well, they're a net negative to the world. They cost more to the world than they are driving value to the world. So you want to create more value than you're consuming. That's being profitable. Now whether you measure those profits in bitcoin terms or in fiat terms or in gold terms, whatever. But the point is you're cash flow positive, which means you're productive, you're useful, you're adding and aiding towards society. And if you're not, well, and sometimes there's excuses for that, maybe you're making investments currently to be more valuable in the future and you're using your cash flows for that, or you're taking out a loan for that. That's all fine. But like, the idea that you can be perpetually not profitable is just a violation of common sense. It doesn't make any sense. And I think that the world should just be governed by. It's like a form of Darwinism almost, is like those who survive should be the ones that, you know that then make up the DNA of the future of the species. Like the giraffes with the short necks didn't make it because they couldn't Reach the leaves. So like the companies that couldn't find a way to be more valuable for the world than the cost that they burdened on the world should not make it. And the companies that are able to figure that out, those are the people that get to dictate future investment into businesses. Society funding new companies. Measure it in fiat or bitcoin, it doesn't matter. Like strike, for example, any like excess cash that we build up like we plow into bitcoin. So if your point is why am I earning fiat only to be replacing it? I mean I earn fiat because that's what people give me. But then I take the fiat and I buy bitcoin, so it doesn't really matter. I guess I'm long fiat for like a second, but it doesn't matter. It's not like where I'm storing my savings. Jack or Dylan, question, what opportunities do you see for entrepreneurs in bitcoin? Something for a common Michigander. I don't know, dude, I will say this. I've had the most success building things for myself. I think people want to be. Either want to be rich or want to be famous or want to, they, they. And that's fine. Wanting those things is reasonable. And there's some people that do, some people that don't. I don't necessarily recommend being anything remotely close to a public figure. It's an inch. It's an interesting thing. But anyway, you can want whatever you want. But that doesn't mean that that's a good reason to start a product or a company. You know, you need to, you need to feel very strongly and passionately about solving a problem and then become very good at solving that problem. And again, because at the end of the day, to be profitable, to create something valuable to society, you have to produce more value for the world than it costs. You know, for you to consume from the world, that's very hard. That's a very hard thing to invent. And so I found the most success solving my own problems. Like I was a bitcoiner for many years before I started strike, but I started it because I needed to solve my own problems. There was no bitcoin company that didn't give me a bunch of shitcoins. It wasn't giving me stablecoin apy bullshit. That wasn't incentivizing me to gamble and March Madness that was going to like just do bitcoin the right way. Educate bitcoiners. Be simple, be useful, be reliable, reasonably priced. We're not going to explode our headcount and explode our investment. So then we're going to need to raise our prices to justify this. That and the third remain founder led and founder control so that you don't get a bunch of VCs that then have their incentives change. And now the company is being driven in a totally different direction. So like I was able to to create something that was very high quality because I was the first user. So I don't know. I would ask what problems do you have? And I would try and solve your own problem. And then the odds that other people have your same problem are probably high. And then you just start saying like hey would you pay for this thing that I built? Solved X, Y and Z problem for me. That's the story of Strike. At least to be honest. Hi Jack, thanks for all you do for bitcoin and bitcoiners. Do you have any latest info on when borrowing and line of credit might be available in the uk? It's just a regulation thing. We're hopeful next quarter which would be Q4, so earliest A few months from now latest hopefully by the end of the year. But it's just a regulators thing unfortunately. But we're working on it so should be soon. But I apologize for the delay. Obviously if we could, we would be there now. Hey Dylan, can you ask Jack when Strike will roll out mobile check deposits? Yeah, I think, I don't know. I would say maybe end of this year, early next year. It's just a problem of priority. Like we know that you guys want interest on your cash, you know that you want stacks, we know that you want ira. There's so much to build and so where does that fit in? But it's, it's on the list for sure. And if more of you guys say I need mobile check deposit really really bad, then it'll move up the list. But I would say it's probably like a Q4Q one thing earliest for now. Hi Jack, question regarding Strike. The cash withdrawal to banks option uses plaid which says that it is us only. Is there something that can be done for El Salvador and withdraw to banks Here. Thanks. If there's a lot of demand for El Salvador specific withdrawals, we can build it. That's another thing. You guys should not be quiet about what you need from us because we, we like B. I mean we work for you. And so I would say if there's increased demand in certain markets, we'll turn our focus there. We try and figure out, hey, given we have 24 hours in a day, what's the best use of our time. What can we be building? And that's usually what drives these decisions. So I'll try and personally take a look for integrations in El Salvador. And if there's more of you out there that really need that feature, let us know and maybe it can become more of a priority. Straight question. Lots people asking for a credit card, but what about a debit card that converts to sats upon charge? So I can ditch Coinbase. I depend on their debit card, but would prefer to use one with Strike. Yeah, my answers on this one have always kind of been predominantly, cards are tough. There's a lot of fraud and costs that come with them. And so, you know, in order to justify a card product, you know, I gotta charge you guys some way somehow I could not give you rewards. And I can keep the interchange and then I can pay the expenses that come with launching a card that way. But if you guys want the rewards and you want a card, I just need to find a way to make it economical. Obviously we can make our money via other products, buying bitcoin lending and stuff, but there, this is very like cost intensive. There's lots of fraud involved and there's all sorts of shit involved in cards. And I've always wondered, well, are we going to be better at making a card than like Amex or Chase? Is that really where I want to be spending so much resources and effort as opposed to more bitcoin native stuff that they're going to be really bad at and maybe never get to? So that's kind of been my internal justification. But the more and more we build, the more and more customers want Strike to be their primary financial account. And you really can't just live your life on strike without a card. I mean, I do, I use Strike's bill pay, so I use credit card and then I pay my credit card bill and my HOA and my ComEd, my electricity bill. I pay all my bills with strike. But point taken. I don't spend on strike. I spend. I have an Apple card, whatever. So yeah, I have a feeling we'll reevaluate this soon. Because so far our answer has been we're not going to be better than Chase bank at this. Why would we even try? But if you guys really want cards from us, we could do it easily. Just have to find a way to justify it, figure out how we're going to make it economically reasonable. Because like I said, I don't want to run a perpetually VC funded unprofitable Thing. There's no end game there. It's stupid, doesn't make any sense. So that. That's the only thing I'm trying to avoid. Okay, interesting. No 21 questions. Don't get mad at me because Dylan curates these. So either you guys don't care that much about it, which is fine, I mean. Or. Yeah, or Dylan didn't put him in there for some reason. We'll see. Okay, that's the end of my questions list. I'm gonna. I know that you got. This is like 20 second delay, I think, so I'll give Dylan a second to respond to that because I really, really, you know, like I said, you gotta. Okay, I'm getting nothing from Dill and I got no more questions. Appreciate you guys, all the support and all the criticism. Like I said. Yeah. I'll end it by just the relationship I have. Oh, I did get a message from Dylan. Oh. Most of the questions were covered by me talking and others he does not think I'm allowed to answer because, I mean, at the end of the day, it is still a public company run by my friends. So, you know, there are. There is only so much I could say. So I guess I covered most. And the other ones he doesn't think I'm allowed to answer. Fair enough. Yeah. Just real quick, you guys, I'm telling you, maybe, maybe I do include these in the next show, but like the emails you guys send me, the DMS you guys send me, they really mattered and how I thought about how to spend my life and, and where I can be valuable and who I am as a person and what matters to me. And. Yeah, man, you know, you guys and I have a special thing going, whatever we got going on over here. And like I said, I don't know how big this, all this is going to be and like, if we're, you know, the building, the next SpaceX or whatever, but I don't think it really matters. We got a cool thing going. And you guys have changed my life in many ways, but specifically recently, you really, really did change my life. And just the messages that you sent and. Yeah, I don't know you guys get it if, you know, you know, I really, really appreciate it. And the support and support is not always, you know, compliments and roses and stuff. It's criticism too, when it's necessary. I don't take criticism as a personal indictment. If I need to be called out on my shit and I need to be a better person or a better bitcoiner, you guys hold me accountable to that. So I appreciate it. I appreciate what we have, and I appreciate the fact that I have strike to build for you guys. And I get to produce a lot more content and try and orange pill. Let's get to that 1%. Let's see if 80 million people over the next 10 years can, like, remotely understand bitcoin. Cool. Okay, I'll talk to you guys later. Peace and love. Take care. Bye. Bye.