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- [00:01]
A
Tom Lee says the upcoming Fed rate cuts are going to send Bitcoin to $200,000 and Ethereum to $15,000. Nothing like some hyperbolic price targets to get the blood flowing in the morning on a Tuesday. But what really gets my blood flowing is the opportunity to speak to these lovely bearded gentlemen, Tillman and Andrew. Let us go. Let. Good morning, Wolf. Packed and welcome to the show. I know you're literally just dying to see Andrew's baby face and Tillman, she's gonna shave his beard at the next target. Apparently didn't make that deal. He didn't make that deal. If you look at, if you look at the thumbnail today, you may have been expecting to see Tom Lee and Mike Novogratz, but you get us. So hi.
- [01:09]
B
Yeah, got us. We're just better looking. I mean, that's just the truth, right? So, you know, you got to bring on the talent. See what I mean?
- [01:17]
C
I won't, I won't degrade, I won't disparage any of those guys. They're, they're better guests than me and.
- [01:24]
A
Andrews, so nobody needs them. But listen, here it is. Bit mines. Tom Lee predicts monster gains in bitcoin and ether on rate cut. To be fair, when has he not predicted monster gains? To be fair, when has he been wrong? I mean, everything has just been going up since he called the last crisis and the never ending bull market. But yeah, he's talking about 200000 Bitcoin by the end of the year. That's not, I don't even think that's that exaggerated. 15k eth is a much bigger move. He may have a vested interest in believing that because, you know, one of the large holders of ETH on this planet of Earth. But yeah, he says 5,500 by mid October for ETH, that would be a pretty big move. And here, you know, 10,000 price target for eth, then we got 200k by the end of 2025. I just want the algorithm to know that I didn't make up these huge numbers and not to give me another warning for posting them because then I get a strike and I can't stream for a week.
- [02:19]
C
I don't argue with the mayor of the pudgy penguins, okay? Whatever he says in terms of price prediction is. No, I listen, all those targets could absolutely be hit. I think the hardest thing in this space is that everybody wants to be right when they're right. And I think the better, you know, vantage point to take is that bitcoin's outperformed every other asset on the face of the earth. When bitcoin performs well, there's a huge inflow of capital and liquidity into the crypto markets, which makes everything else go up. And this is a lesson that I learned two cycles ago when I was scratching my head going, how come these altcoins aren't moving? Well, you know, you can have them move apart from bitcoin, but most of the time, most, most often they move together because the liquidity flows in and out of our sector, you know, as, as a whole and not segregated.
- [03:15]
A
Yeah, Andrew.
- [03:18]
B
Well, I'm, I'm a well known Tom Lee fan.
- [03:22]
A
You are? I actually saw the fan club newsletter this week.
- [03:26]
B
Yeah, yeah. And I, I'm, I'm the president of that fan club.
- [03:31]
A
Taylor Swift too. Also.
- [03:33]
B
Yeah, yeah. And so Tom Lee, I think he's taken a position, which is the right position, that over the last, you know, let's call it 10 to 15 years for all intents and purposes, markets don't really go down. They, they may, they may, they may blip down for a moment, but then they recover and they go up. You know, we're, we're on this podcast and as of the close yesterday, you know, the S P hit hit its 17th new high for 2025 17. The Nasdaq is at another all time high. Rates are hovering at 4% with cuts that are coming and bitcoin has been above 100k for 130 days. So Tom Lee talks about, you know, I saw a spot that he did, I think on a, you know, another podcast or something. He says that fat head on his bedroom wall. That's, you know what, that would be outstanding. That would be absolutely.
- [04:41]
A
Remember those things. I'm sorry, I did not mean to interrupt your flow. But my God, here's the thing.
- [04:46]
B
You know, Tom Lee's hair would, should have its own fat head. Okay.
- [04:51]
A
That's right. Has a fat head.
- [04:53]
B
Yeah, yeah, that's right. But you know, he, that, that, you know, he talked about V shaped recoveries and the prevailing wisdom across Wall street is, well, V shaped recoveries are, are, they're rare, they're not rare anymore. That, that's what happens nearly every time. And they happen often. Right? So when there is a move down, that's, you know, that's the reason why BTFD exists by the, you know what dip. Because every time there's a dip, there's a move not only to recover that dip, but to go higher. You know.
- [05:32]
A
Do you guys know what The F stands for I do effing.
- [05:37]
B
Effing.
- [05:38]
A
Yeah. Did you wear bright orange shirt today because of your deep belief in bitcoin?
- [05:45]
B
That's correct. Yes, that is correct. That that's the only reason I wear a bright orange shirt.
- [05:50]
A
But we do have sort of unique situation right now where we have these huge names saying bitcoin good, altcoins better. Right. Obviously saying bitcoin will not even double from here, but that Ethereum could, you know, 4x from the guy who's leading the Ethereum charge. And then you have Novogratz also on the little thumbnail there. Why Mike, Novogratz says bitcoin isn't the big bet in crypto right now. Do you want to guess what it is, the thing he made a big bet on? It's Solana.
- [06:17]
B
Solana, yeah.
- [06:19]
A
And that's because of Forward Industries, which just raised 1.6, I believe, 1.65 billion in cash. We thought it was in kind in cash with multicoin and jump. And then yesterday like full ported the entire thing into Solana in like a day.
- [06:36]
B
I mean, well, I don't, I, I.
- [06:38]
C
I think that this is the, the bull run of utility. I think that we're going to finally see traditional businesses adopt blockchain technology for their own purposes. I do think that's exceptionally exciting. I do think that's something that bitcoin doesn't have. I mean, from a Treasury company perspective and from a balance sheet company perspective, yes it does, but it doesn't have it from a smart contract and from an interoperable perspective within industry. And so I, I do agree that some of these altcoins assist essentially the new systems that are running financial markets have tremendous upside because they could garner a lot of customers very quickly. It would be a race essentially to integrate. And that presents exceptional, you know, exceptional upside opportunity in my vantage point.
- [07:29]
B
Well, Pete, you know, guys on Wall street used to be a little bit better at talking their book. You know, again, Tom, lead fan club here. But, you know, he's pretty, pretty obvious in talking his, you know, eth book no Regrets is kind of worse in talking his Solana book.
- [07:47]
A
I mean they're just yet to be fair, no salon.
- [07:50]
B
Yeah, right, right. Maybe he learned that lesson. Maybe he learned that lesson. But it's, you know, they're just talking their book. Right. So the idea that Altcoins that it, there's going to be a, you know, over, let's just call it a decade, a shakeout of what works and doesn't work just like there was throughout the, the arc of, you know, Internet, the birth of the Internet, the rise of the Internet, the bubble that burst for the Internet and then now, you know, something like seven of the top 10 biggest companies in the world were, were born during that time period and survived. So same thing will happen in crypto. What will the survivors be? We don't know. We're not sure. Back then in 1999, like the biggest, one of the biggest, coolest companies back then was like ebay, right? Well, ebay is not a seven billion dollar company now. They've just continued to exist. So there is a world where maybe, you know, one of these top five utility altcoins is ebay and it sticks around, but it doesn't really get to where people thought it was going to get. Right, that's, that's possible.
- [09:02]
C
Well, I think it will get to, I think it'll get higher than where people think because I don't think people are very imaginative as it relates to how this integration will impact the markets. But I do think that, you know, you're on a technology curve and it's constantly improving and its capacity is expanding. And if you're familiar with Moore's Law audience, it's basically written in that that will happen. And so as technology ages, it becomes less and less valuable. So I, but I think that the delta that can be had as it pertains to replacing human beings and replacing a lot of errors and omissions and fat within the system. Taking smart contracts into business will be as disruptive as, you know, anything we've seen. It's going to change the landscape. Especially when you're talking about those smart contracts being issued, monitored and managed by banks that are settling in stable coins. I mean that, that, that's going to speed business up in a way that I don't think we've, we've, we can anticipate the page speed up business really.
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A
Quickly is we have this guy in all of his illustrated by coin Telegraph glory, that's Michael Sailor, not Brad Pitt. But he and Tom Lee will be joined by 16 other industry leaders today in the halls of Congress or somewhere in Washington D.C. i can't actually say it's in the halls of Congress to meet with them to figure out the Bitcoin act and the Strategic Bitcoin Reserve. Haven't heard about that for a while, right? Here we are. They're going to talk about budget neutral ways to buy Bitcoin. Sailors going to be like, so you take the debt and you sell it to Other countries, convertible note. And Tommy is going to be like, dude, the debt's going to 400 billion billion, trillion gazillion by next week, bro. Right? And he'll just throw out a big number and he'll be done.
- [11:01]
B
Yeah, I don't think it has the impact that, that it did six months ago. I don't think it has the impact that it did nine months ago. You know, if there is some sort of strategic reserve, great. If not, bitcoin doesn't even know what strategic reserve means. It's, it's just going to continue to be bitcoin. And for all intents, we've moved on there. There are new narratives that will, you know, grow the quote unquote, bitcoin and crypto pie going forward. As Tillman mentioned, utility, the growth of stable coins, the adjustments in banking, and on Wall Street 24, 7 trading, the fact that Robin Hood is announcing some new initiative associated with, you know, tokenization basically every 24 hours. Those are going to be the things.
- [11:47]
C
That push the tokenization of private companies.
- [11:50]
A
Whether you like it or not.
- [11:51]
C
Like you, we're gonna, we're gonna issue a value representation against private companies without their permission. That's literally what the article said that they were planning on doing, which I don't, you know, I guess it's just like essentially a new way to bet on, against your peers. And the, the capital pool that's collected against the bets is the zero sum game capital pool that is drawn from it. It's going to be really interesting to find out how that whole thing works.
- [12:22]
B
Yeah, I just don't.
- [12:23]
A
Again, go ahead.
- [12:24]
B
The strategic reserve thing is, is a, just doesn't move the needle for, for me anymore. You know, unless they were to announce some just insane, you know, number that they're going to be buying over the next, you know, 12 months. That materially moves the market, you know, say that material move the market from where we are now to, you know, let's call it 145K. Okay, then what? Right, then what? So we get a 2520 move and then that's it. Right. So the, the, the narrative would have been, you know, really important. Remember we, we had, I forget what it was called the crypto ball or bitcoin prom or whatever it was, you know, inauguration.
- [13:18]
A
It had an 80s prom theme.
- [13:20]
B
Yeah, whatever it was. If, you know, 90 days after that there was a strategic reserve and there was meat on the bone and there was, you know, programmatic purchases that were happening along the way. Okay, that would have been Compelling. And maybe we're somewhat higher than where we are now, but, you know, hosting Sailor and Tom Lee, I don't know, just doesn't move the needle like it. Like it would have nine months ago.
- [13:49]
A
Yeah, I think that's. That, that's fair. I, like, I. I don't know if I should go into the big topic or just keep doing the other topics.
- [13:57]
B
Jump in, baby. Jump in.
- [13:59]
A
We gotta do other topics. We gotta do other topics. I'm just gonna hit on a couple other topics before I get to the one that I'm just dying to talk to you guys about.
- [14:07]
B
Well, it's. It's important to hit another couple topics that are.
- [14:10]
A
Because once we start talking about that, we're never gonna start talking about anything else. That's what's happening in my mind right now. Okay. We got PayPal drives, crypto payments into the mainstream, reducing costs, expanding global commerce. Okay. We're just gonna go through a few things here that are clearly, like, major signs of adoption. Okay. That wasn't one of them. Oh, should we talk about how the bank of England sucks?
- [14:30]
B
Yeah, yeah.
- [14:33]
A
They're trapping stablecoin holders because apparently, like, having digital dollars is a systemic risk if, like one person has 20 grand.
- [14:39]
B
Or 10 grand, you know, ever since 1776, England has basically found ways to make them. Them more irrelevant. I mean, their government. Their government just does things every day. How can we become smaller and less relevant across the globe? It's. It's fascinating, honestly. Credit where credit is due, where people continue to live there. Very, very interesting. Peter McCormick fighting the good fight over there in England. Yeah, I. I don't understand it. I don't understand how the government does consistently things to find ways to shrink the pie.
- [15:20]
A
Across the pond, Mike McGlone yesterday said, the Cure. Starmer's a wanker. Okay? He said that he was on the train and everyone was yelling, the Keir Starmer is a wanker. And he was like, wow, they're really nice. And I was like, wanker is not, like, nice in England. It sounds nice to us because it's not a bad word here. That's not a favorable term.
- [15:41]
B
No, go ahead.
- [15:42]
C
Yeah, the restrictions are temporary. The cat's out of the bag. It's. It's adopt or die from a financial perspective. I. I don't think that you're going to be able to resist stable coins of, of anything in the crypto space. If. If there was one thing I know will survive, it's stable coins, by God, like, that's.
- [16:04]
A
That.
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C
That's an inevitable. And that's a lot. That's a big statement considering bitcoins in that conversation too. I just don't think you can remove the efficiencies and the convenience and the attraction from all participants in the market. For instance, settlement, the instant settlement has been long overdue in our financial system. It's crazy that we can't have 24 7, 365 banking. That's just nuts. Think about it. Everything else in the world has, has moved forward except for our, our investing platforms. Like it's the same way it was back, you know, 30 years ago for.
- [16:44]
A
The space shuttle was using 80s. The space shuttle was using 80s computers to like.
- [16:48]
C
Yeah, I mean and so it's just, it's time for a big facelift and it may be shocking and painful for some because they've resist it for so long and there's going to be more resistors. There's going to be people who don't have a reason to change because they're fat and happy and they, they don't need to. But those are the ones that just die slowly over long periods of time and they fade away into oblivion. Because the competitive advantage that crypto brings to the table you cannot ignore if, if you like money and you like efficiency because those are the two things that it delivers to you in spades.
- [17:25]
A
Apparently the according to the comments, the UK has free speech. I'm not going to address that. That's bait. So listen, I have four more stories of adoption to share before we talk about the Bitcoin treasury dumpster fire that I'm dying. Metamask MUSD is now live. So Metamask's own stablecoin. Okay, Metamask big worth discussing or mentioning. Coinbase here. Tweeting. American Express live launches travel stamp NFTs on base apparently we've taken a time machine back to 2021. American Express NFTs cool. Coinbase CEO Brian Armstrong and basis Jesse Pollock said the company is exploring a potential base network token though no definitive plans have been made. I'm old enough to remember that the entire pitch of base was not a token error was we are launching an L2 that will not need a token. L2s don't need tokens. Greed is good as Gordon said. And finally, before we talk about flaming dumpster fires, State Farm file in a passion here with chainlink. State Farm like a good neighbor. State Farm is there.
- [18:41]
C
Well that's one of those utility driven type angles that I think a lot of people haven't taken notice of. In this cycle, which is like data, real world data finding its way onto the, the chain, whatever chain it may be, through some sort of Oracle system. I think that's going to be imperative to, to a lot of the adoption that we're going to expect. And a lot of the business models need that type of data and need it from a third party trusted source which the Oracle network provides. So, you know, it wouldn't surprise me if Chainlink gets a lot of headlines going forward.
- [19:19]
A
I mean there's, these have been endless. Like it seems like Chainlink has a new integration use because it's just one of those things that if you're going to use blockchain, you absolutely need an article to confirm. I mean you just need to know the data is real.
- [19:30]
C
That's right. And so you look at that and you go, okay, the utility of that is apparent. And then you start saying, okay, of all the protocols that offer this functionality, which one has the best security? Which one has the most uptime? Which one, which one's the best chain? And it's really interesting because some chains are taking a layer two approach to this and some are taking a layer one. And I personally gravitate more towards the layer one approach from because of the security and the issues that we've seen in Defi when that's not put first. So I'm excited to see where the market goes. But I think DEFI stands to gain a tremendous amount because real world assets are going to start becoming a reality and exchanges are going to be, or central exchanges are going to be slower to adopt that I would think maybe Robinhood or some of these bleeding edge exchanges will be quicker. But I would anticipate that DEFI would pick it up first and we would get to see an exceptional use case and a lot of data that we can analyze as it pertains to how that launches was received. So I'm excited about that. I think real world assets and putting things on chain that are physical objects in the real world, whether they're documents or whether they're, you know, an actual, you know, collectible of some sort, I think that's going to be a big, big deal.
- [21:00]
A
All right, let's cut through this. NFT and stable coins and adoption. I want to show you guys something. I just want you for like a Rorschach test. Okay. When I show you that chart, what do you think?
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B
Ouch.
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A
First word, ouch. That's what I said yesterday by tweet thinking I'm tired.
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C
That's a long hike.
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A
Yeah, right? You think Mount Everest or. Yeah, you think, good thing I didn't buy that? Or you think 2017 altcoin? That's what I think when I see that.
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C
Yeah, that looks like a lot. Like a lot of the meme coin charts, right? These huge spikes and then absolute dump.
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B
You know what that reminds me of? That. That reminds me of the chart of Pepe on Solana. That's what it reminds me of.
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A
Oh, did Pepe. But is that the bad one? There's a good Pepe, right?
- [21:49]
B
Yeah, there's a good Pepe, and then there's the bad Pepe on Salana. I invested a few dollars, so there's.
- [21:56]
A
So much done half on this. I tried. Yeah, there's so much unpacked on this. I tried to write a newsletter about it. I like these guys. It's like, it's nothing personal. I feel so bad because, like, I literally. Like, I wrote to Tyler this morning, I was like, hey, if you guys want to come on and talk, you know. Yeah, let's. Let's talk about it. Like, I would love to hear what's going on here. David Bailey went on, obviously, a tweet storm. So for those who don't understand, no, this is Nakamoto. It was launched in May or announced in May, right before the bitcoin conference, when I joined you guys. And you'll remember that I walked into that conference and I said, we are so fucked. When I saw like 30 of these. Do you remember? It's all I talked about. I was like, obsessing over bitcoin treasury companies the entire time we were there. I even asked Jack Mahlers how this was a good idea, like five minutes after they announced theirs in the Arch Public room, right? And so this thing went to like, 28 bucks after hours one day. Currently trading at A$24. The first round was raised at A$12, the second round at $5. So to be fair, even the early investors are basically flat. Now, if they haven't sold, second round investors are hurting pretty bad, and nobody knows what's going on here. They own 5,700 bitcoin. That's $660 million worth. The market cap. At this price, they do have $200 million, I believe, of some sort of debt. But the market cap here is 466 million. So even if you take that $200 million debt, you're at a NAV of one. They also own Metaplanet stock. They presumably have cash on hand because they raised cash to buy. So you're looking at something that's effectively trading at or below the value just of their bitcoin, not counting their other assets. But the 200 million dollar pipe that was raised, basically. Okay, so they launched this in May. It didn't actually confirm until August. So all that price action was before they bought a single bitcoin. It was just speculation, excitement, bitcoin, treasury hype. Nobody to blame but the hype and people who bought it came all the way back down. But now that those shares from the original 200 million that was raised, I believe 200 million, everybody got them like yesterday. Well, listen, they went down 60 today. More.
- [24:07]
C
I, I don't pay attention to the price of these, these stocks because the whole point of it is to create volatility off of some sort of M nav speculative number. Here's the good news here. You want the silver lining? The silver lining is, is that they found their floor, which is an M NAV of 1, which is a pretty good floor compared to what a traditional business has. If you've got cash in the bank, sometimes they discount the cash. Like you don't get a true 1 to 1 par value on most assets as it pertains to your equities. And I think that, you know, David is a smart guy. I think that their bloom is off the rose as it pertains to bitcoin treasury companies. And I think the question that you have to always go back to is if, if I can, is this better than just a buy and hold or is this better than me just owning the asset directly? And you know, if you can time the treasury market correctly, then yes, if you can't, then it's going to be a big, big loser for you. But that's to be expected, right, that you're buying bitcoin with no real cash flow, just on new cash generated on the back of pieces of paper that you're putting ink on, guaranteeing that you can borrow against your share price. Like it's just a debt mechanism that really is. I'm shocked it lasted as long as it did and I'm shocked that they were able to extract as much capital as they were. And if you look at Michael Saylor like it doesn't, it doesn't shock me that a lot of people saw this as maybe the second version of what he's been able to do. And if you could get on that train back at the very beginning, boy, what a heck of a train it would be to, to be on. And so I, I don't blame the market participants. I don't blame the excitement. I also don't blame, you know, I don't think the crash is here to stay. I think.
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A
Yeah, yeah.
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C
I think it's one of those things that's going to survive as long as they don't start picking up.
- [26:05]
A
I just pulled this up. So, like David Bailey wrote a long thread. It may have been yesterday. Oh, is it 7:40am today? So here we go to clarifying a lot of things. So they raised their pipe at 1.12. I got that right. Smaller amount at 5. They're trading just over 1 xm nav. So that's correct. And there's roughly 500 million shares. Treasury companies need income. A lot of these might be things I've been saying. So if I'm creating fun, I'm sorry. But yes, they agree there. We're going to talk about that later. That maybe just debt and financial engineering aren't a way to create a Treasury company. Bailey's dumping on you. The team and key insiders are locked up. I heard that rumor heavily, by the way, and clearly not true. We haven't and can't sell a single share. I raise money primarily from family, friends and longtime partners. I know that is definitely true. Our staff put money into the deal. That's how much we believe in it. I sold my whole company into it for equity. We are all in and ride with our shareholders. Treasury mania is over. I think that's true in a good way, but doesn't mean there won't be treasury companies. I'm just hoping that the right kind of treasury companies will emerge, which is what I've been saying from the beginning, which is make money by bitcoin. And so basically he's saying that this was shorted heavily. There was a lot, you know, he said, I think 20 of the. Here it says 20 of our cap table was probably responsible for 80 of the selling. Listen, in something illiquid, if 20 of your investors sell everything all at once, you're going to go way down. But the 3 to 120 is less of a story to me than the 27 to 3.
- [27:37]
B
Yeah, you've got to. Yeah. So the. So the business model is. Is. Is flawed to be kind. The business model being, hey, this is really cool. Let's do a reversed reminder that, you know, let's call it three months ago, just after the bitcoin conference, I talked about the reality that these transactions were the basest type of transactions that any Wall street firm would get involved with. So doing an RTO or a pipe, where you're taking over a zombie company the likes of. Let's, let's, let's do. Let's paint a picture. Right? So you have a couple of Wall street firms that are involved in that type of transaction, but then Gemini goes public and JP Morgan, Morgan Stanley and Citigroup and NASDAQ are leading that transaction. Right. So huge, huge differences in the type of people that are involved, willing to put their name on it, yada, yada, yada. So, you know, just from 50,000ft. And the, the type of people involved in these transactions was a huge red flag to me. Doing RTOs and, and pipes are. They're just not the kind of transactions that are embraced by, you know, sort of the gold standards of, of, of Wall street, whether good or bad. That's just the reality. So now you're stuck with decisions that they're grappling with there at Nakamoto. And to some degree, this will happen kind of across this space. Do we take the cash on hand and buy more Bitcoin or buy back stock to lift up the price? Do we, at some are, at some point, are we forced to liquidate some bitcoin to buy back stock if our cash reserves go to a spot that we're not comfortable with those, or if.
- [29:34]
C
The price goes down enough to where you have to rebalance your average. Right. Because you've taken too much money at the top?
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B
Yeah. Those are tough decisions. And when you don't have meaningful revenue coming into that company to do any one of those three things now you're robbing Peter to pay Paul. And that's just a, that's a, that's a difficult business proposition to be involved in. Long term versus short term. Can we make this stock go from A$12 to 750 and everybody's thrilled or, or 30 as it did? You know, just difficult and flawed business model is the best way to say it.
- [30:18]
C
I would, I would be a little easier on them. I don't think it's flawed for the vehicle they've chosen. I just think the vehicle they've chosen isn't the best vehicle in the garage. Right. It's like, why is everybody taking bitcoin and putting it on the least successful real estate properties that they have? You know, it's not being applied to the best real estate properties because they're afraid of, you know, the traditional money, not wanting it to be involved. But a lot of these treasury companies are, like you said, zombie companies. They have no future. They're sitting On a lot of cash. They don't have any ability to create new cash flow. And so you know, for somebody like that maybe this is the best option. And, and we're going to find out whether the management team can, can be considered as valuable enough to trade over. Mnav that's where I, I look at it is like do I bet on the jockey to get me more value than 1 to 1 par value with bitcoins?
- [31:20]
B
And here's a reminder. For a very long time, until just recently, MicroStrategy was a company that generated revenue that then was turned into bitcoin purchases. They were still a meaningful entity associated with their baseline product and products that were still, you know, involved in the, you know, regular commerce.
- [31:45]
C
So their situation is a little different in my opinion though because their stack grew to be such a large multiple. Multiple, sure. What their traditional business was, it basically killed the traditional business overnight, you know.
- [31:58]
A
Yeah, but these things are not going to. Right? Yeah, I mean, yeah. First of all, MicroStrategy, to me, I know like I'm all over the place on X because people think I'm also talking about MicroStrategy. It's a different beast like you, they have the lead, you know, 600 something thousand bitcoin that's going to have insane value no matter what happens. Right. I mean all these bitcoin companies, say what you want about them, I don't love the model, but at least if they've bought, they own a shit ton of bitcoin.
- [32:24]
B
Yeah.
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A
Even if you get wrecked on the stock initially, like if you hold through a cycle and bitcoin goes to a million, you'll get whole. You just would have been better off buying bitcoin.
- [32:32]
C
That's right.
- [32:33]
A
But you shouldn't actually lose money if you're invested in these long term and they buy a lot of bitcoin and trade at a small discount or around that you should eventually be fine. The problem here is just people bought it at 20 something bucks. Right.
- [32:47]
B
Again and again.
- [32:48]
A
They didn't even own bitcoin yet. It was the hype cycle.
- [32:51]
B
When you enter the public markets, it's an entirely different world than the world of crypto. Why? Because now you're a public entity who has to do public reporting and there are all sorts of different constituents that have nothing to do with your mission. There are short sellers that exist that have meaningful sway in the, in, in the markets because that's how the markets work. Short sellers can have a meaningful impact on what it is that you're trying to do you have to give that consideration before you enter the public markets? You have to. So euphoria phenomenon, whatever you want to call it, you know, I. It's one of the things my dad has told me for a long, long time. Whenever you're making decisions, you kind of got to count the cost before you go ahead and, and make a. Any type of decision. So, yeah, we'll see where it goes. Listen, the case can also be made that, you know, from a $50 and if these things survive and now they're seven or eight dollars, that's a huge return for people. Right.
- [34:10]
A
Yesterday, you know.
- [34:11]
C
Well, listen, I think that there's some value there. I honestly did, too. I thought, you know, at M nav of 1. What's my downside? M nav of 1. Great.
- [34:21]
A
It was being reported on the track, like for those who didn't include the debt and such, like, who were just looking at market cap and value of bitcoin, that it was like at a discount. Not entirely true. But, you know, if you're just looking at bitcoin holdings versus market cap, they own more bitcoin than that market cap of the entire stock, which is pretty compelling. Okay. So for a very long time, I've obviously been a massive skeptic. We had Todd from Red Light Holland on here. We've all discussed the point that in our very humble opinion, Bitcoin is very hard to beat, especially with bitcoin. Anyone who's traded altcoins in the past knows that there's these great moments, these great windows where you can beat bitcoin, but if you hold anything, Bitcoin beats it over time. Right? So I think that trying to beat Bitcoin is a failed, flawed model that's going to take perfection.
- [35:08]
C
I think instead of trying to beat Bitcoin, I think the question we should all be asking is, is what other asset classes can, can cover risk of. Bitcoin can be complementary where the sum of the parts is greater than the sum. You know, the, the. The whole of the parts is greater than the sum of the parts. You know, I think there's a. That people do understand that for, you know, businesses that have very modest cash flow and, but they are putting money to the bottom line, where are you going to place that money? Is it more appropriate to place it into your growth curve or is it more appropriate to place it into Bitcoin? Well, from an opportunity perspective and from a historical perspective, Bitcoin obviously would blow that reinvestment out of the water pretty much across the board. Even the Mag 7 couldn't compete. And so we're looking at a time where, you know, the companies that can produce profit and then save that profit in the form of bitcoin for a long period of time. I think that's the most sustainable model. And the thing that I would point to is like imagine Dillard's in their heyday taking a portion of their net profit and putting it into bitcoin like they were in real estate, right? If they were putting a large portion of those net profits side by side into new expansion of real estate, but also into a bitcoin treasury piece, you know, what would their company look like today versus what it does? It would be the saving grace, it would actually be the life vest that allows them to sail off into the sunset and not, you know, go down essentially with, with what affects every business, right?
- [36:54]
A
Time.
- [36:54]
C
Over a period of time, every business goes out of business. There's their needs, their, their goods and services are not needed anymore, or they diminish in need or competition erodes their market share, all sorts of outside influences take place. But why not when you're hot, when, when you're making hay, when the sun's shining, convert that hay to bitcoin so that it preserves and grows its purchasing power forever and ever. And that force of compounding if, if applied to high growth models and applied to companies that are highly profitable. It's the numbers make your head spin, truthfully.
- [37:36]
B
Well, let's, how about we talk about that, what Arch Public is doing, right? We've been asked, yeah, let's talk about.
- [37:42]
A
It because we've been super skeptical of this and found a better way. Well, I'm gonna ride your coattails and.
- [37:49]
B
Say, yeah, we've been asked a thousand times, you know, about our algorithm. If your algorithms are so great, you know, why don't you start a fund? You know, your crypto algorithms, Bitcoin algorithms, arbitrage. So awesome. You know, why don't you guys start a fund? Okay, so we started a fund. So I'll let Tillman take it away from here. But yeah, Arch Public has started a fund and, and it's, it's, it's extraordinary.
- [38:14]
C
Well, in true Arch Public fashion, when we see a problem in the market that doesn't have a solution, we just create the solution ourselves and we believe this is a big solution. So what we're, we're, we're starting a 250 million dollar real estate Bitcoin fund and it's focused on tax advantaged real estate purchases. So you get accelerated, accelerated depreciation in year one and then you also get some additional depreciation in year two. But the whole point of it is, is to create a vehicle that's tax advantaged going in and then the cash flow that those purchases account for go goes into buying Bitcoin. So we will be putting into triple net properties that are producing positive cash flow month one. We will also be working with a national franchise company called Swig. Swig is a high growth franchise model that we're exceptionally excited about. They want to expand as rapidly as possible. This is a means to do that. And we have a partnership with some of their biggest franchisees that, that are going to be contributing over 50% of their net operating income to bitcoin purchases in the fund treasury. So we're going to have this accumulation machine that's using positive cash flow and profits to buy bitcoin on a reoccurring basis, which is going to get a very great healthy cost curve applied into those purchases because we'll be buying it frequently and there will not be any pressure for the fund to sell bitcoin because we're not leveraging any of, we're not buying it with debt. There is no cost basis that forces us to essentially cover our debt mechanisms. So it's a very sustainable, high growth potential fund that we're exceptionally excited about because we think that it fits the bill. If you have capital gains that you want to apply to the fund, there's an advantage there. If you have 1031 exchange money, you want to apply to the fund there, it's exceptionally valuable to you. And then if you want to take that benefit from a taxable perspective and convert it into long bitcoin treasury that's not built on debt and that has sophisticated algos that are managing the purchases of that treasury and managing those assets, then we'd love to talk to you. It's only for accredited investors. Let me be clear. So if you are accredited and you would like to hear more, please reach out to us by scheduling a meeting on our website archpublic.com and we will carve out some time with you.
- [40:50]
A
Yeah, let's put this in layman's terms. So you guys broke this down for me recently. I literally called like everybody I knew. It was like someone finally figured it out. So we've been saying this since the beginning in interviews, that financial engineering to buy bitcoin probably bad. But everybody on planet earth who is a bitcoiner thinks that individuals, companies, governments should take money they have and put it into bitcoin instead of holding dollars. The same reason we all do it is the same reason that we cheer for companies that say we're going to take 20% of our cash and put it into bitcoin so that we don't go full Kodak and Dillards. To your point. Right. So one thing is to find a really good cash flowing business, take the money and put it into bitcoin and take money you don't ever need to put into bitcoin. This is profits that would have otherwise been sitting in a dollar treasury turned into bitcoin. Okay. That's a B of the brilliance obviously is I have a deep belief in arch public as a platform, as a tool and using that to make sure that you do it better than anyone else for buying that bitcoin. Right. And making sure that you get more of it and more cash to buy it. But the biggest one is the big beautiful bill. That's what we haven't really talked about. So what's missing here for most of these is by investing in this you get massive, massive, massive. This is like the billionaire who buys the private jet on December 30 to offset all of his capital gains. You get a jet and you don't pay taxes. There's benefits to buying real estate through a structure like this where you can effectively, let's say add a million bucks in capital gains this year if you invest, I believe I fuzzy math, 3 million, something like that. Would that be correct math? Then you get $3 million worth of bitcoin and cash flowing every single day business instead of giving your money to Uncle Sam.
- [42:45]
C
Yeah. And, and the whole time we're looking at between one and two epochs. So four to eight years depending upon how much capital is placed. So the larger the capital amount is, the more flexible the the exit term is. But we're exceptionally excited based upon the preliminary feedback that we've gotten. We've gotten feedback from some very, very large firms that have said this is the most sustainable way that we've seen that's been structured to buy bitcoin. And so that, that to me is a, is something that's exceptionally exciting that I think would be the gold standard. You know what's better than buying bitcoin? Like you said, Scott, that's using it as a savings account. And you're tucking away profit that you don't need, that you don't owe anyone else, that you have no obligation against. And investing that in something that has been the best performing asset over the last 16 years by a long shot.
- [43:40]
A
So, you know. Yeah, I was personally looking deeply, I told you, into triple net, you know, triple, triple N, real estate and then in real estate because it's basically like a very sustainable yield. You own the land, you lease it out to a McDonald's or a swig or, you know, someone that's going to be there for 30 years and it's just guaranteed cash flow and yield endlessly without much attached risk to the business. I mean, this is just being a really successful landlord with great businesses and putting the money into Bitcoin and getting a huge tax.
- [44:14]
B
It's very difficult. It's very, it's a fun.
- [44:16]
A
It's not a publicly traded company, guys. So we're not talking about a competitor to MicroStrategy here.
- [44:22]
C
No, it's a private fund and it's accredited investors only.
- [44:26]
B
Yeah, it's very difficult to, to poke holes in the model. And, and the reason why I say that is because one, you have a continued and ongoing, you know, revenue streams from the, the businesses that the, the fund purchases. But then on top of that, you know, for me, you know, as I talk to folks out there and as we, we begin to, you know, have public conversations about the fund, you know, it's four words. Tax advantage, Bitcoin fund. Like, how do you, you know, how do you. Everybody's going to be interested in that. If you're a bitcoin person, if you're somebody who wants to, you know, is evaluating where do I put my capital as an accredited investor and accredited investors, you know, they're looking for interesting ways to place capital that, that are going to benefit them in a meaningful way. So how many angles can it benefit them? The tax advantage part is something that doesn't exist in the market right now with either bitcoin funds or, you know, treasury companies, you know, public companies. There's no tax benefits, any of that unless you take a huge loss and you can write it off at the end here. There's that. So a really, really unique story, a very well thought out story by Tillman and our partners. It is a very, very, very thoughtful story associated with, you know, using Bitcoin as a savings mechanism, but making sure that there are ongoing, you know, revenue attached to, to the purchases of Bitcoin that continue to flow. So it's, it's a, it's a really unique story that has benefits across the board.
- [46:10]
C
Well, I think a lot of these treasury companies are taking kind of the early notion that even, you know, kind of the retail market takes, which is, how do I get rich quick in this market? And if you look at the people who have the staying power that we all admire, the Tom Leaney's, they don't have that mindset. They have the mindset of accumulating over long periods of time and letting the market take care of itself. And that is what we're trying to inject into the treasury side of things, where it's not this highly leveraged, boom or bust type of a model, but it's really a boring model where you're accumulating cash flow and you're applying that cash flow in an increased manner over time to Bitcoin. Bitcoin. And we think that is exceptionally exciting because even if bitcoin does a quarter of what it's been able to do over the last 16 years from a performance perspective, you, you get to add that, that quarter, that 25 KEGR to whatever the profitability of the existing businesses are in the real world. So it's a cumulative benefit. It's, it's plus. Whereas if you take a zombie company, there's more cost to operate than there is income. So you may be able to cover that with the Bitcoin upside, but it's not a plus. They're actually, you know, Bitcoin's having to cover additional ground to, to, to cover the operating expenses of that business. That's not the case in, in what we're doing that. That's the exact opposite. We're taking companies that are doing between 20 and 27% profit margins and we're putting Bitcoin in as a Treasury component at a 50%, you know, net operating income. And that takes that potential from 27 or 20 to 27% to double. More than double in some cases. It can take it, you know, some of the models take it up triple. So you're getting a tremendous amount of upside exposure. But now your M nav is not just a function of Bitcoin, Bitcoin's price. It's a function of Bitcoin's price plus the cash flow that the businesses are producing. That sounds like an advantage to me.
- [48:24]
A
Yeah, I mean, I'm showing these numbers here. Obviously this is based on that exact cager that you just discussed. And it's hard to argue with like 10x returns if Bitcoin just continues to be bitcoin for the next 10 years.
- [48:37]
C
Well, this is actually dumbed down. This is assuming this calculator assumes that Bitcoin will, will be a million dollars in 10 years, which if you ask some of these guys, they think it'll be 13 million in 10 years. So, you know, who knows what the price will be? But this is, I think it represents a 24% bitcoin annual return year after year. And right now I think the average is 79%. So highly muted, dumbed down numbers based upon what historically bitcoin's been able to, to achieve. But that's the point is, you know, set it and forget it and keep buying bitcoin, that's, that's. And if you can do it with a larger and larger piece of cash flow that's being accumulated based upon buying real estate that produces that cash flow, it, it's a, it is a, a continued look, you know, a liquidity pool. It's like what Michael Saylor has been able to do in terms of injecting new liquidity into this cycle through his debt mechanism. But that liquidity that's being injected into our fund is not coming through pieces of paper with ink on it. It's coming through real properties that are producing real revenue. And that revenue is then flowing into bitcoin purchases.
- [49:51]
B
Yeah, I, I'll tell you, my, my people that watch this show, you know, often slash religiously, my phone's blowing up right now. People, people have a real interest in, you know, this model and tax advantage. Bitcoin. It is a, it's going to be something to watch, it's going to be something to watch grow and how people respond to a will. A well thought out model. Right. So this is a very, very well thought out model that again brings together, you know, businesses that are generating revenue, the tax advantages of those businesses. And then also the bitcoin purchases aren't just let's smash buy once a month. They're also well thought out by Arch Public's algorithms and intelligent accumulation tools. So across the board, just well thought out.
- [50:48]
C
Just very, It's a move more improved model on every front. We've tightened every screw and checked every.
- [50:55]
A
Angle, T's and I's and crossing. Yeah. Angles and toodling your noodle or whatever. Andrew. Oh, by the way, you guys have an algorithm too?
- [51:09]
B
Yeah, yeah.
- [51:10]
C
Oh, that's another exciting thing, Scott. We, we have completed our integration with Robinhood which has been long awaited. Long awaited. We've had tons of customers talk to us about this. I know Scott is particularly fond of the platform and I know that he is planning on putting that algo to work on Robinhood very publicly here soon. We may have some other high profile folks that are wanting to, you know, publicly display what's going on and how it's, how it's working on, on, on their benefit, for their benefit as well.
- [51:49]
A
I wasn't ready for that. I didn't know we were allowed to say that yet. So, yes, we've been working on this for a long time. Bringing this entirely to Robinhood. Obviously, like some close friends over there, very passionate about getting this done. I think that that opens this to a whole other customer base that's crypto native, but also, you know, very passionate about markets otherwise. And to prove it, I'm going to put a lot of money into a portfolio publicly and just let you guys show what the algorithm can do with me as a crash test dummy. But the kind in a really safe car.
- [52:27]
C
A customer, we call those people customers.
- [52:32]
A
I'm just gonna put a whole lot of money in there and prove to you guys that this thing makes a lot of money by just sharing it every single week. And it'll go down and it'll go up and you'll see it. And we got kids on the show. It's awesome.
- [52:42]
B
I've got a visitor. Got a visitor here at my office. My apologies. He just wandered in.
- [52:47]
A
Love it. I'll never Forget when my 2 year old walked right in the back of a public zoom call naked.
- [52:54]
B
Yeah, I thought someone was hovering outside of my office. I didn't look, but I could sense something. And then he showed up.
- [53:06]
C
I feel better now that somebody didn't drag him out. Like that one guy on his partner. You see that one?
- [53:13]
A
Covid?
- [53:14]
B
Yeah. Yeah, it is. The thing here at Arch Public is we, we constantly are innovating. We, we are tireless in terms of the work that we do as it relates to innovation. You know, over the last 90 days, we've added Kraken, we've added Coinbase, we'd have, we, we've added Robin Hood, we've added, you know, several case studies associated with volatility farming, Sui and Salana to buy more Bitcoin. We've, we've added case studies that say basically if you bought at the worst possible time but used our tools, what are your, you know, adjusted returns versus buy and hold. Just constant, constant information, constant innovation, constant new product, constant new partners. And we're just going to keep doing it. Yeah, just going to keep doing it.
- [54:06]
A
Amazing. Robin Hood coming soon. You heard it here first without knowing you were going to hear it here.
- [54:11]
B
I mean, listen, when you, when you get two companies that are, you know, leaning into innovation, like Arch public and Robin Hood. There's going to be some cool stuff that come from our work with them. You know, we're only going to scratch the surface initially, but there's going to be some really cool stuff that. That. That come from. From that. The work that we do with them.
- [54:32]
A
Absolutely. Awesome. Gentlemen, gentlemen, thank you very much. Anything else to add here? You know, no.
- [54:40]
C
We're excited.
- [54:41]
A
Yeah.
- [54:41]
C
First day of many of hearing about the fund. We'll keep talking to you guys about it and keep you abreast of how things are going. But if you are accredited and want to hear more, please schedule a call. We'd love to talk to you.
- [54:53]
A
Awesome. All right, guys, that's all we got for you today. We will see you tomorrow. Thank you, everybody. Bye.
- [55:03]
B
Let's go.
- [55:16]
A
Let's do.