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- [00:01]
Scott
The next big boom for our industry, Bitcoin treasury companies. Some might argue that it also will be the next bust for our industry. But that's worth discussing today with Andrew and Tillman. But we don't just have Bitcoin treasury companies. We now have Ethereum treasury companies, XRP treasury companies, Solana treasury companies. Are these things a good idea? Will they sell, succeed? What do they look like in the future? We're going to talk about all that, of course. Review all of our experiences at Bitcoin Vegas and more. I've got Andrew and Tilman, the team from Arch Public. Let's go.
- [00:39]
Andrew
Let's dope.
- [00:54]
Scott
Hey, guys. I got back from Vegas on Friday, but I've got two guys that decided to do the unthinkable, spend like a week in Vegas. You can see that now that they've spent time there. Andrew looks actually looked normal. I was going to make a joke, but Tillman, like, he, like, got a lot of new shirts there.
- [01:15]
Andrew
This is not a new shirt. I've had this shirt for quite some time. But I appreciate the compliment.
- [01:20]
Scott
Well, Ron is his last name Nelson?
- [01:23]
Tillman
No, Beckham. Rob Beckham. Rob Beckham.
- [01:25]
Scott
Rob Nelson's another guy I literally know, and I don't know if I said that, but Rob Beckham, he was like, you're going to be my shirt consultant. That was on my way out the door. He made a shirt joke. It's good.
- [01:34]
Tillman
Yeah. And I laughed a little bit uncomfortably hard at that joke. I. I thought that was quite funny, you know, fashion consultant.
- [01:43]
Scott
That.
- [01:43]
Tillman
That was extraordinary work by Rob.
- [01:46]
Scott
It was good. It was really solid. So listen, I want to talk about everything, obviously that's happening in the market, but I would be remiss not to talk about the amazing. I only had 48 hours, but the amazing time that we had in Vegas. Can I just show the summary video because it's pretty.
- [02:02]
Tillman
Yeah, yeah, yeah, yeah. Absolutely. Let's hit it.
- [02:22]
Scott
Here we are.
- [02:23]
Tillman
Man, that guy's just looking.
- [02:25]
Scott
Wow.
- [03:09]
Tillman
Boom. Done.
- [03:12]
Scott
I was waiting for it. I was waiting for the drop there. Okay, so that was awesome. But let's talk about it. First of all, we were talking about this right before we got on the show. How crazy was it that we had this small room and all those people showed up for recordings which we booked days in advance and we had a live studio audience. When Jack. They were all amazing, but when Jack Mahlers was in there, it was crazy.
- [03:36]
Tillman
Yeah. When Jack Mallers was there, the room was completely full. There was more than 75 people there. There were 70 sitting in the front, you know, crisscross applesauce, you know, to, to spend some time with Jack. Adam Back was there. Vlad Tenev, David Marcus, Bo Hinds. Just a, just an extraordinary moment not only for arch public, but for you, Scott, and for the brand. Just overall to spend time with folks that are meaningful, sort of paragons of the bitcoin story before and now. I think that that's the neat part about what we were able to put together collectively is that, you know, Adam Back is the only human left standing mentioned in the white paper all the way to a guy like bo Hinds, who's 29 years old. It's the executive executive director of crypto initiatives.
- [04:34]
Scott
That guy's gonna be president. I've never met a smoother, younger, like a little kid Kennedy running around and.
- [04:44]
Tillman
Then everybody in between. Right? So like three, four years ago, Jack Mahlers turned into the bell of the ball because he did the work with bitcoin and I believe El Salvador. And you know, now is 21 capital and, and everything that, that he's doing there, you know, being on the forefront of bitcoin treasury companies, which we're going to talk about here. Yeah, it was just a, you know, it was, it was a great moment. It was a great week. Enjoyed the heck out of it. It was, it was not easy because being in Vegas for seven and a half days is nuts. But yeah, we got a. Got a lot done and really enjoyed the heck out of it.
- [05:24]
Scott
Gentleman, is it fair to say that the biggest takeaway was that everybody wants to be this guy? I mean, the bitcoin country thing, I keep saying it, but, you know, first of all, this is a. An article saying copying sailors bitcoin strategy isn't working like it used to. Alluding to the fact that now companies announce that their Stock goes down 12% instead of going up, you know, a few hundred percent. We have a ton of companies trying it. We'll get into it, but like my. That's literally all I heard about. It was like the only topic of conversation was the Treasury. And by the way, I'm totally here for people buying bitcoin for their treasury. Financially. Engineering ways to buy bitcoin we can talk about, but just, you know, instead of cash holding bitcoin, I think everybody's.
- [06:09]
Andrew
Yeah, I think the thing I was most impressed with is just the level of maturity of the, of the audience. I think it's gone up exponentially. I've been to a lot of the conferences and most of them have Been I. I'm the oldest guy in the room and there's lots of mascots running around in bikinis and all sorts of gimmicky ways to try to get attention. None of that's needed anymore. The attention was really all about the substance of the conference. And to say that Wall street has arrived is the understatement of the century. I think there was tremendous interest from retail that was represented there, but I think there was more of a growth in the interest of corporations and institutions than ever before. And I personally love that because I don't think that, you know, what Michael Saylor is doing is going to be, in my opinion, a unique breed of corporate treasuries, raising debt capital in the way that he's doing it to buy more. Bitcoin is not going to be the, the way vast. The vast majority of the companies that I talk to approach this market. They're approaching it with, we want to get in. It's time, it's here. How do we get in? How do we get 1%? How do we get 3% of our balance sheet represented, you know, in Bitcoin? And I, I couldn't. I think those are universes apart. I think that's a very prudent way to diversify a business and to gain a competitive advantage, you know, and really start to attract more of the market that you're going after. I think that the Wall street bets type of, you know, gambling on highly leveraged, highly speculative, huge M navs, like all of that's going to come along with it. But that's not what I think the 80% is. I think that's the 20%.
- [08:09]
Tillman
Well, Tillman. Tillman has done a good job of putting together. Let's just call it a meaningful equation for when we have conversations with corporate entities that want to put Bitcoin on their balance sheet. And it's. And it's a powerful message. Right. We're, number one, we're having lots of those conversations. So current customers of Arch Public are generally, a lot of times people that have businesses and they're having a conversation saying, all right, this is working for me personally. How do I integrate this with my business? Tilman, go through that equation associated with inflation that you've talked about having to do with a cash position. Because I think it's meaningful.
- [08:50]
Andrew
Yeah. So I don't think it's boring. But if you're just talking about preserving your, your purchasing power and you're talking about handling the erosion of inflation, it doesn't take much exposure to, to accomplish that, you know, based upon my calculations, about 11% of your available cash can cover 9% of inflation across your entire cash or across, across your entire liquid. Liquid net worth, yes.
- [09:20]
Scott
You're saying buying a lot, putting 11% of your treasury in Bitcoin, will out pace inflation for your entire position.
- [09:27]
Andrew
Correct, yeah. And so if you look at that number, you go, okay, well, what's the risk that goes along with 11% of your cash holdings or your, your net profits going into Bitcoin? Well, I mean, even if bitcoin drops by 50%, you've lost 5% of that or you're down 5%. That's something that, in my opinion, a lot of companies can risk for what the upside represents. And the upside represents a lot more than just protecting inflation from erosion. It's also talk about capital raises, expansion, time frames, like everything gets accelerated. So a couple of our customers have some very unique business models that are franchise based. We're going to be helping them launch a bitcoin treasury not only for, you know, their stores, but to create a model inside of the corporate company and to show kind of the apples to apples comparison of what does it look like when you have a group of your franchisees buy into this type of bitcoin treasury, and what does that look like to the stores that don't? And what's the comparison? And what I'm seeing is, is that the amount of interest in investors that want to come into a deal that has Bitcoin, the, the amount of money that you're able to raise in the amount of time that you're able to raise it is, is very, very accelerated, you're able to raise a lot more capital for those expansion opportunities. Because there is a backstop on the economics. And if you have, if you combine that with a company that does, you know, a lot of cash flow, or cash flow positive from day one, it's exceptionally powerful from a model perspective. It makes, it makes it seem.
- [11:10]
Scott
Yeah, I think that that is the most compelling argument that you can give because it's just math and you can show it.
- [11:17]
Andrew
Well, if you're one, if you honestly.
- [11:20]
Scott
You get outsized PR and marketing gains.
- [11:22]
Andrew
For doing exactly, you're basically getting free publicity, you know, and if you look at the ones that I'm looking at right now, the ones that I'm putting together some of these proposals for them, you know, it takes their expansion efforts from 20 stores a year to 100 stores a year. It's a 5x multiplier in available capital. So you know, if, if you're wanting, if you have a short time frame that you're wanting to capitalize on based upon an opportunity that you tied up. I don't think bitcoin, I don't think there's another asset out there that can accelerate that timeline as quickly as bitcoin can.
- [12:00]
Scott
Some people do, by the way. So we have Ethereum co founder crediting Michael Saylor for crypto treasury firm Nudge. Of course, this was the one that was making a whole lot of news of late is that they're helping Sharplink gaming. I think 425 million in ether for the treasury, but that's going to go apparently up to a billion. Now we have this company, NASDAQ listed class over, plans to raise up to 500 million in new deal to build Solana Treasury. I believe we had an XRP treasury as well. We have a Norwegian crypto platform that's doing bitcoin Treasury. So I don't know why this one's even news. This one's news because it actually went up and they've been going down when people do it. So this one went up 138% on the Bitcoin treasury plan. But there's like 10 of these a day. Now, if you're looking at international markets, I mean listen, there's millions of companies around the world, right? So that's not surprising. But like Norwegian companies, Japanese companies, Indian company, this is happening literally everywhere. And that to me this is a really exciting part of the bitcoin treasury thing. Right. I don't like love, as you said, sort of the raising debt to do it and trying to be a baby sailor. But like if you're in India, the very basic level of this, there's tens of thousands of these that could happen and that even to do with our capital market.
- [13:20]
Tillman
Yeah, this is going to continue at a breakneck pace. It's going to go very, very, very fast. We went from two or three quote unquote bitcoin treasury companies to 10 in about five minutes over the past 90 days. We're going to see the balance sheet movement happen much, much, much faster. We probably won't even be able to keep up with how many because not all of them are going to do press releases. So it's going to happen very, very, very fast. It's going to be the foundation. Just like in late 23 through all of 24, the floor associated with bitcoin price was associated with Bitcoin ETFs this year it's going to be associated with treasury and balance sheet companies. So it's a good thing for Bitcoin overall. Now to talk about Ethereum, treasury balance sheet companies, or Solana or xrp, that's conversation. I think we begin to start swimming into the SPAC space with both treasury companies and then the balance sheet stuff. But that's not necessarily a bad thing, right? There was a point in time at the beginning of the SPAC movement until about the middle, where there were significant gains across that entire sector. Now, that sector came tumbling down in a very significant way. But at the. But at the same time, there's a movement from 0 to 100 that people can benefit from. And I, I look at something that you and I talked about, Scott. The Nakamoto story, you know, the ticker symbol naca, people that got into that, that capital raise at a dollar. I don't know what it's sitting at today, but it's in the 20s.
- [15:06]
Scott
In the 20s. It was less than a month. At one point. It was like a 28x27.20.
- [15:11]
Tillman
Yeah. So. So if you, if you got in and you're now at 25 or whatever the number is, you're not unhappy. You know, you, you, you. That, that was a, that was a solid move. So that reality being out there in conversations and, and all of us know this, the conversations that were had at the bitcoin conference is how many of these are going to get done? Because you don't go from $1 to 25 and just ignore it because, well, maybe, maybe this turns into a bubble. Maybe I should be careful. That's generally not how people that have speculated about the movement of bitcoin from a thousand to a hundred thousand think. They think, hey, I've got another opportunity to capitalize on something and I'm going to do it potentially very quickly. Where does it all shake out a year to 18 months from now? I don't know. But I do know over the next six months, there's it, you know, it's proverbial gold rush to be. To be. To be frank.
- [16:10]
Andrew
Well, and that's. Once that. I think that's the very highly speculative, almost gambling side of the corporate treasury, you know, piece of this. I think the more conservative side. It reminds me of a story that I, I grew up kind of using as a marker in my life as a trader. My dad was a trader as well. And, and he was talking to me when I was about 15 years old about a position that he was taking short in a company and he was going Very heavy into the position because he knew the company was going to most likely go bankrupt. And so he, he started loading the boat months in advance. And sure enough, the company announces that they are bankrupt. The stock plummets. He's sitting there, trading halted. He's sitting there just counting his chickens. This thing is amazing. I've made all this money. Sure enough, then the, the stock gets halted. The next day it opens up, gap up, huge gap up. And it was because in the, in, in the time that they went bankrupt, a lot of analysts realized how much value was in their real estate and that even though the business was bankrupt, the amount of value that they had in their real estate and in their stores, their physical presence made, made them, if they liquidated at all, made the price go way up. So he lost a bloody fortune on that trade because there was a underlying base asset to the company that had nothing to do with their operational value and had everything to do with their real world hard asset value. I think the, what you're going to see in the future is a lot of companies using Bitcoin to be that backstop instead of, instead of real estate, because real estate has liabilities attached to it, costs attached to management, maintenance, all of those, the above.
- [18:00]
Scott
And you can't liquidate it. You can't liquidate. You can be out of your bitcoin position in five minutes and you can borrow against it in five minutes.
- [18:08]
Andrew
Bingo. And, and so if I'm looking at, let's say I'm a franchisee of Subway sandwich shops, some of them own their locations, some of them don't own their locations. That's a huge differentiator in terms of value of, of that business. If, if I'm going into it, why do I want to own a location? I'd put the same, If I put the same amount of money that I'd have tied up in real estate to own the location, I put that into Bitcoin. I would argue that, that Bitcoin does a lot more for the business being on its balance sheet than. Yeah, exactly. And posting collateral and borrowing capital in raising additional debt capital. All of that is a backstop in my opinion now than real estate is. And I think that's going to be where the 80% lies. People replacing real estate value in their, on their balance sheet with bitcoin value.
- [19:05]
Scott
It's coming in a big way, I can tell you right now. And there's some incredible hybrid platforms that are going to be working on these things. Actually, one of them that I met with in Vegas. Now I'm just going to give the soft shill, hopefully. Actually we were talking about sponsorship stuff, but these guys, the People's Reserve, did you meet them by any chance in credit? So they're doing all the bitcoin bonds or behind the scenes on a lot of structuring those. But they have this incredible, basically like bitcoin backed mortgage where you effectively, if you own a property, you put it into the system and you earn a payback for having the property. It's really incredible what we're. I'll explain it like more. But there's a, the point being there's a million of these things. You're even going to be able to be taken advantage of by retail. And the whole premise of People's Reserve and others is bitcoin is pristine collateral. I said this before, I think I said this on Spaces, but Michael Saylor, in the first podcast I ever did with him, which was two weeks after Strategy, maybe bought bitcoin, that was the like his biggest aha moment. He was like, I've got five yachts, I take loans against them. Good luck taking my yacht by default. Right? But the bitcoin that is liquidated instantaneously, it's made to cash for better or for worse, right? You don't want to get liquidated, but it is literally pristine collateral because it's liquid 24 7, 365 and generally holds its value and rises. I mean that's so much better than. And like you said, it doesn't have property taxes.
- [20:34]
Tillman
So there, there it sits with the, you know, the People's Reserve and, and mortgages, right? So a lot of people don't know this. Most people think that BlackRock invented ETFs. Right? Or Vanguard invented ETFs. They didn't. They came very close to. But there was a couple of very small companies that did ETFs very early in the life cycle of, of ETFs. Right? And everybody's forgotten of them. I can't even think of who they are. But when you go to look up or how did ETFs come to, come to exist? There was these tiny little companies that did it first and then the big companies noticed and they just completely took over the market. So that's what's going to happen with, for example, bitcoin associated with mortgages. There's going to be these small companies that do it. They're going to do it really well. There's going to be huge, massive companies that notice and say, wait a minute, the Numbers work and they have the aha moment of Bitcoin is pristine capital and so then boom, a market is created. Like mushroom cloud, a market is created. And that's been my thesis for, I don't know the last six months is that two years from now what we're going to be talking about on this show is going to be very, very different than it was six months ago, right? We talked about bitcoin price, we talked about ETF inflows. Two years from now we're going to be talking about the difference in changes in price associated with the bitcoin connected mortgage market. We're going to be talking about bit bonds in a serious way. We're going to be talking about options and futures and how options and futures actions are really the place where Bitcoin's price is being, is moving higher or moving lower associated with movements in those, those markets. Because that's again going to be the underlying layer associated with the pricing associated with mortgages and bitbots. Right? A completely different landscape. That will be 10x the market cap landscape of what we're talking about, about just spot bitcoin price right now. Very, very different. But, but good, you know, good full.
- [22:44]
Scott
Suite of financial services and the full suite of that exist for everything else. I mean that's just where it's like buying bitcoin for your treasury is the most basic possible fucking thing you could do right now. That's so obvious. But imagine when you could do all of this.
- [22:59]
Andrew
Well, but there's some really large distinctions in here that aren't nuances. Number one, Saylor and these bitcoin treasury publicly traded debt loop financing companies, whatever you want to call them, the zombie companies that are adopting this, they can't, a lot of they're, they're in existence and Saylor has said this multiple times, the reason why they're popular and they're able to raise the debt capital that they are is because a lot of companies can't have bitcoin exposure in any other way. They only can possess equities that have some bitcoin tie or exposure to them. I think the day is coming and I think it's a sleeping giant that no one really understands and is going to be able to factor into the price or price it in is the fact that the vast majority of companies that Saylor talks about, I think he'd said in his keynote address that there was 400 million public or private companies in the world. Well, all those private companies can own spot bitcoin. They can own Physical bitcoin in a cold storage wallet if they so choose to do that. And I think that's the preferred way to do it. I think a lot of people don't understand the MNAV way of doing it and quite frankly are scared of it, myself included. What if I had a, an option?
- [24:22]
Tillman
If he had an option, he had an option. Here we go.
- [24:27]
Andrew
But the point, the point is, is like some of the most boring ways that we can apply bitcoin to the balance sheet I think are going to be the most prevalent. And if you look at the amount of companies that exist in the United States that want the competitive advantage of reinvesting dollars at an 80% average.
- [24:49]
Tillman
80 average, okay.
- [24:52]
Andrew
And, and that's a huge, huge amount of bitcoin that can be purchased. And it's very different bitcoin than what we're seeing on some of these publicly traded companies. And I'm excited for that because I think that is, you know, it's sort of the difference between having five publicly traded mining companies that represent 90% of the ecosystem versus having 10 million regular people like us that are mining, representing that ecosystem. I think there's a tremendous amount of value in the latter.
- [25:21]
Scott
It's interesting. These are the only conversations that are being had right now. I keep saying bitcoin. Treasury is just got the tip of the iceberg, but the lending side is going to be huge. Actually just randomly and I'm just bringing it up, no shill here but like let in. We had them randomly showed up. Mauricio, who I know on spaces yesterday we ended up having a 30 minute conversation on bitcoin backed loans and actually why they're getting rid of their yield products, they're cutting out Ethereum and Leden is now literally just doing bitcoin backed loans. Have been doing it forever. They have like 400 million or 600 million, I don't remember what number he threw at 700 already with just average people taking these loans against bitcoin securely, safely, never been violated. But even he said he's like, listen, we're like 12.5% you pay, you know, and it was like that's going to come down massively as the bigger players come in and as cost of capital goes down and as you get regulatory clarity. These are multi, multi billion dollar opportunities. And even companies like that that have multiple products are focusing in bitcoin backlogs as pristine collateral. Bitcoin backlogs, Bitcoin backlogs.
- [26:32]
Tillman
There were 2,000 whales that bought tickets to the bitcoin Whale experience. That was the biggest whale space by 5x that I've, I've ever seen in the past five years. And it was full 75% of the time. Like it, the whale room was bigger.
- [26:51]
Scott
Than the bitcoin conference five years ago.
- [26:53]
Tillman
That's correct. That's correct. It was, it was incredible to watch, incredible to see. And so that's the reason why Leaden, which by the way isn't the greatest name in the world to even be able to pronounce London Leaden something. Leonard. Okay, let it. John Leaden. Okay. So you know, if they've got 700 million in assets on their platform, that's probably going to double in the next year at minimum. And I guarantee you they have people ringing their phone saying we'd love to take you public. I guarantee it. Right. So the, the space associated with public companies, the space associated with capital shoveling itself into the bitcoin space again is at the point where it's mushroom cloud ready. It's, it's just going to keep happening associated with bitcoin being pristine capital. Bankers can't help themselves, right? What they're thinking is what's the downside here? Things go terribly wrong. But then I get a bunch of bitcoin associated with it and I can liquidate that at the, you know, at any moment if I need to or I could just hang on to it because oh by the way, it just keeps going up every cycle. So that, that, that light bulb is going to go on at some point.
- [28:27]
Andrew
And, and well, would a bank rather have depreciatory assets as their collateral or appreciatory assets as their collateral? And there's no arguing that Bitcoin is, is a lot better collateral than the current system, you know, has. And if you look at most loans out there are collateralized by depreciatory assets. You get a dollars. Billion, you know, bank loan for a boat, you put the down payment on the boat. Well, five years later you've eaten beyond the down payment. The depreciation is eaten away the value of that asset. And a lot of times on boats, houses, cars, people are underwater. They have, they owe more than the assets worth. And that's not a scalable model. That, that is asking for kind of a macro collapse. And, and we've seen that in, in housing collapses in the past. You know, when we saw the 08 collapse, it was because of that there was too free of lending against the collateral that was being posted. And you know, I don't think those days going forward, look the same because I think a lot of banks, to Andrew's point, they don't care if you default if you've got bitcoin as collateral, they want the bitcoin. And what's going to be really interesting to me is some of these large, large, large entities that we all are familiar with like microstrategy turning into a bank and, and absolutely being the juggernaut that no one can compete with because he who has the Most hard collateral, I.e. bitcoin, can make the best loans and is the most solvent, has the most lending functionality and capability. They are the Fed window in this particular instance. And so you know, if you can see somebody like Caitlin Long, if they can provide lending to retail at a bank level, which I, I would guess is coming down the pike pretty soon, that's where we're going to change the industry because it's like there's lots of people wanting to get into the proverbial vehicle, the bitcoin vehicle. Well they're stand, there's a lot of people standing on the side of the airport saying you know what, I'm not going to get an Uber Black, it's too expensive. I'm not going to get a limousine. Too expensive. Where are the taxi cabs for bitcoin? They haven't come yet. They will be coming and that's where all the volume will be had. That is where the vast majority of people will interact with bitcoin. It won't be in Michael Saylor's, you know, microstrategy. It will be in me buying, you know, some dink, rinky dinky business. That's a hardware store that has 10 locations and they've, they're putting, they have great margins. They're putting 30% of their net margins into bitcoin every year. That's going to be the most, you know, found model. I believe out there is just really run ofthe mill commodity based type businesses figuring out advantages through owning bitcoin.
- [31:23]
Scott
Yeah. By the way, I showed the wrong website for people's reserve apparently. So like if you Google hear these things quickly in the background. So I, I might have just showed a website that was for like an outright crypto scam of some sort of people. Yeah, they're cool. And yeah, and so I, I think that that's pretty much sums up the treasury conversation. Andrew, you kind of hinted at another huge way for exposure obviously is going to be public companies. Right. We didn't see mergers listings, any of that for multiple years with regulatory environment that we had before. The big news, obviously right Now, Circle seeks 7.2 billion valuation and upsize IPO. Apparently this is happening this week, by the way, and I think it was 600 million when we reported it last week. Now 896 million in a raise. So obviously we saw this with Etoro where they had this major upsize raise, which I think a lot of people didn't expect. This one you expect. Circle's been trying to go public for years. One of the, I think, most reliable, biggest names in the crypto industry, certainly in the United States. This is going to be huge.
- [32:37]
Tillman
Yeah, it's going to be huge and it's going to keep happening. This will be another, just another check mark in terms of quote, unquote, bitcoin slash crypto companies going public. Gemini is going to do it, Kraken's going to do it. They're just all sorts of names that you. It's nearly impossible to resist that kind of influx of capital. It's absolutely impossible because what you can then do with that capital, you know, if only, Right. If the only thing that you do is then to take a sizable chunk of that capital and then add Bitcoin to your balance sheet. That alone is a really, really great idea. Right. So they're going to, you know, plug into the access of public markets again, where all of this lands a year to a year and a half from now in terms of the actual stock prices and asset prices associated with these companies that have gone public is a different story and a different conversation. But as of right now, you know, it's a Katie Bar the door type of situation. It's it. People are going to rush to, to access capital markets and have an influx of cash. Galaxy did it two weeks ago, Circle's doing it now. There's going to be a bunch of others that do the same for the right reasons. And then, by the way, what is that going to do? Beyond the cash that's just injected into spot prices? You're going to see a ton of merger and acquisitions activity associated with the stock availability and prices with those companies. Right. So to give you an example, in 2020, you know, about five minutes after Coinbase went public, they bought Tagomi, an institutional exchange for $70 million, and 80% of that packaged by was Coinbase stock. They, they were using their own currency to do that deal and have done so along the way with other companies. That will happen with the likes of Circle or Gemini or Kraken or whatever it happens to be. They're going to use their own Currency to buy companies, to invest in companies. All of those things will happen. And again, that is new waves of capital washing its way through the crypto space when just a year ago the crypto space was just trying to turn a, a dollar from 15 cents. I mean, there was, there was very limited.
- [35:08]
Scott
A dime and a nickel as.
- [35:09]
Tillman
Yeah, that's right, that's, that's right. So, so huge, huge, huge shift. And again, with capital moving into the markets like this, it's very, very difficult, as I believe the now eponymous trader that we all know of, it's difficult to short the market. That's probably a tough idea to run with James Wynn.
- [35:36]
Scott
Market lost 100, went up 100 million, then down negative 17.5 million, then got long again 100 million, then almost got liquidated, added 400 grand, which apparently kept him from getting liquidated and then sent out a usdc.
- [35:51]
Tillman
Please help.
- [35:52]
Scott
Send him donations.
- [35:54]
Tillman
Yeah, please help. Yeah.
- [35:56]
Scott
You know, because the evil market makers are out to get him and he's, he's doing these trades to prove the conspiracy of the market. No, that's actually just how market work. If you have show people where it gets liquidated.
- [36:09]
Tillman
Yeah, yeah. That wasn't his thesis to when he started this game. Right, that I'm gonna prove that the market makers are bad people.
- [36:18]
Scott
God.
- [36:19]
Tillman
To a trader. Yeah. So, so there's going again, the, the influx of capital is going to be truly significant and it's going to be kind of a beautiful thing to watch, to be honest.
- [36:31]
Andrew
Well, I, I think that it's indicative of the people that have come into the industry since, you know, this drought started. I, I don't think it' best I can tell, since 2021, the capital's dried up. There hadn't been significant money flows from VCs into crypto companies for three years, four years almost. And I think that that's absolutely changed, but I do think that the, the bells of the ball have changed as well. I remember Cathie woods being at the center of those conversations three, four years ago. And where is she now on the list of, you know, influential, you know, bitcoin buyers? She's pretty low on the list now because people have stepped up and they've stepped up in a way that's based on utility. And I think the, the, the VC money right now is flowing into infrastructure build outs, which is incredibly encouraging because that's, they understand the interoperability of the markets and how that's going to allow liquidity to flow freely between traditional markets and crypto. Markets. And it's, you know, you see precursors of this over the last three years and the fact that TradeStation was for a long time the only exchange that I can think of that carried the status of being able to trade traditional finance instruments and crypto instruments and take the crypto off exchange anytime you wanted to. That was a very unique little mechanism.
- [37:58]
Scott
That even when Robinhood added it, the biggest push back at the time was that, you know, you didn't have a wallet, so you were, you were locked on the platform. And they obviously added that.
- [38:07]
Andrew
Yeah, well, and then they, they allowed you to take it off platform. They didn't allow you to take it off platform. And so everybody's been fleshing out their models for three years saying, okay, what's the most prudent way to do this for, for us? And I think that you've got now folks that have kind of learned their lesson on the back of speculation and hype, and they're really leaning into utility. And I think that's why Circle so valuable. You know, Circle is no different than a piece of real estate that has a bidding war attached to it. Like, there's a lot of people. Ripple is bidding for them, Coinbase is bidding for them. Like they have, they have two juggernauts that are, you know, worth 100 billion plus dollars that are saying, we need your infrastructure and we need your customer base, and it will be a force multiplier inside of the ecosystem that we already have and possess. That's a very different VC conversation and capital raise conversation than we saw in the past where people were betting on ICOs and just trying to essentially be the sexiest exchange on the market based upon what crazy assets you could buy or had had access to. This is a whole different ball game. This is all about utility and it's about bringing the masses into the coffers. And Robinhood did the same thing. Why'd they lead going into Canada by buying a crypto exchange, the WonderFi deal? Well, because they want the infrastructure in Canada. Why are we expanding our offering at Arch Public from Gemini into Kraken in the next couple of weeks? Because there's a lot of things on Kraken that, you know, you can't, you can't serve Canadian customers, you can't serve Canadian customers on, on Gemini. So it's a real function driven exercise instead of like just a theory or a, you know, sizzle driven exercise.
- [40:01]
Scott
Yeah, there's that question. Andrew and Tillman. I want to get on board with Gemini rejecting me. Nothing against Gemini. We love Gemini by the way.
- [40:06]
Tillman
Yeah.
- [40:07]
Scott
Just saying. I've got Kraken in Coinbase, so like I don't know what's under NDA or what's allowed to be discussed. You just said the words cracking. I didn't. So I can tell you that we are actively working to bring this customers every exchange where you would possibly be trading, including some you may not have mentioned and may not expect.
- [40:25]
Andrew
Correct? Yeah, we, we want our customers to be able to run our automation across multiple exchanges simultaneously and choose which assets they are, are trading based upon the depth of liquidity and the fees associated with it. So we're product, we're vendor agnostic and product centric is the way that I would put it.
- [40:46]
Scott
Yeah, it coming to an exchange and country, hopefully near you, I think is the fair way. So listen, maybe this is the perfect segue to actually talk about it. Obviously, you know we've got the website here, archpublic.com. oh, dude, we didn't do the battery thing. Do we want this one?
- [41:06]
Tillman
There we go, there we go.
- [41:07]
Scott
Wait. Or do we want this one?
- [41:08]
Andrew
Well, I will tell you the hottest thing that the hottest iron in our fire is the fact that we want people to use the product for free. And what's interesting about all the conversations that we did have exchange with exchanges during the conference and beforehand, you know, the models are being broken and what do I mean by that? Traditionally speaking, algorithmic companies, companies like ours, they, they got a piece or they, they were trying to get a piece of the trades that are executed and the fees attached to them. That's not how our model works. We get no fees from your trading activity. We don't care whether you take one trade or a thousand trades. What does that mean? Well, it means that we're building automation with a different motive as, as a primary driver and that's going to be a very different tool. But the thing that we saw at the conference, not only at the bitcoin conference, but I was able to speak at the second ever XRP conference and I was shocked with the scale and the size of what they're doing over there as well. But we want millions of users to use our free product. That's the bottom line. Because seeing is believing you've never used a tool like this before. We have people as high as you can imagine inside of very large companies trading our, our tools and coming back to us and saying this is best of breed first of its kind of. And there's no way that we can sit here and tell you how powerful it is. So.
- [42:44]
Scott
Yeah, he got cut off but I'll quickly say since he got cut off, like this is not just the power of individuals. Now you mentioned it earlier but now you're talking to like the institutions and the treasury companies, RIAs, right? This is going to be, this is going to be how companies do this for their clients because it's just better. You don't want to have some guy in an office somewhere hopefully catching it at 3am on Saturday when you're doing this on behalf of your customers.
- [43:11]
Tillman
Right.
- [43:11]
Scott
I mean it's just obvious and all. It's funny because all the products you guys built and incredibly how well people. Did you forget that a year ago we started with a ten thousand dollar portfolio trading equities on Trade Station, which by the way is up over 40%. But you know that people have to be very comfortable with the trading mentality when it comes to that because you're going to, when you go especially to the more exotic strategies, you're going to draw down 30% up 30% down, you're going to get all the volatility that freaks humans out. We've honed in now effectively on hey man, just buy Bitcoin and do it a little better. And that's what everybody here has really wanted. Not that you had so many amazing experiences with customers who are very happy with those other products across the board, you know, but still like this is the thing that thousands of people are signing up for because it's just so obvious and it's not, you're not going to lose money. This is the way that you're putting money into the market, just doing it better.
- [44:08]
Andrew
It's a completely different animal. And the most valuable thing to us is that it's scalable. You can't scale an infinite amount of capital into trading automation that's trading equities because the markets can't just can't live up to that promise. The markets aren't that liquid as it relates to Bitcoin. Bitcoin is. Bitcoin can be. If you want to own Bitcoin, the question becomes how are you going to acquire it? And to Scott's point, there is no better way to acquire Bitcoin than to do it in intelligent dollar cost averaged way where you're capitalizing on yield opportunities that present themselves during that occasion accumulation phase, but you're also accumulating. So you're getting the best of both worlds. Whereas when you're trading equities, you're settling in cash on every Trade, that is, what is the byproduct of a good trade is more cash and what's the byproduct of a bad trade is less cash. There is no other option. Whereas when you're trading Bitcoin there's a, there's a different value proposition. If you take a trade in bitcoin and it doesn't present itself an opportunity to liquidate some of that position, it continues to go down. Well, you should be dollar cost averaging on the dips anyways. So you just essentially apply what doesn't work to your advantage from a volatility and a cash creation perspective and you apply that to a long term hold hodl position and you wait until the large pumps and it does those, those things exceptionally well. And so you get out of, out of the product exactly what you want. If you say I want to, I'm a company and I want to acquire X number of Bitcoin over the next one year and I want to do it at the lowest cost basis that I can, I can execute. I don't want any human intervention that can mess up. I don't want to have to trust any other company to execute for me. Don't want to pay fees to those ends. This, this does all of those things for you and you remain 100 in control and it keeps all of that off the order books until the trade is triggered. So you know, there's a big popular thing everybody's talking about right now with Michael Saylor with saying, proof of funds, proof of reserves, you know, those are things that are going to become more and more important and the bigger the company is and the more capital they're applying to the markets, the more valuable that information becomes. So how do you keep that information to yourself? How do you keep it, you know, private until you've executed that strategy so people can't front run you? Well, the only way to do that effectively is with automation. That's the bottom line.
- [46:48]
Tillman
We have a case study that one of our employees put together because he was a user of our product before he became an employee, which is an ongoing story with our company. Last four people we've hired, actually five as of later this week, will be previous customers. They love our stuff so much like, you know, can we work for you guys? But he put together a case study that said if you'd have been using just our arbitrage strategy with bitcoin since the last bitcoin conference in 2024 until last week, well, what would have happened? 98 trades would have actually occurred, you would have ended up with an additional 3.27 bitcoin accumulated. You would have created $52,294 in cash yield. And your average bitcoin price after all that had happened that you have accumulated was around $53,000. So just extraordinary outcomes trades that happen, you know, seven, eight times a month. Cash yield, that's serious dollars, by the way. That's on $100,000 starting balance. Right. So that's all that happened with a hundred thousand dollars. Is there a better way to use a hundred thousand dollars over the course of a year than 50 plus thousand dollars in cash yield? 3 and a half bitcoin accumulated at a significantly depressed price from where it is now. And you know, not a ton of trades, I don't think so.
- [48:25]
Andrew
Well, it goes back to like Sailor says, all the time and so does everybody that's smart in the space. Volatility is a feature, right? What do they mean by that? It's like they say it over and over and over again, expecting us to understand that. And a lot of people nod their head with, oh yeah, I love bitcoin's volatility, but it doesn't seem that way on Twitter because when prices are going.
- [48:51]
Scott
Down, traders love bitcoin volatility.
- [48:54]
Andrew
Yeah, the prices are going down, everybody's complaining and the sky is falling. The, the reality of it is, is that if prices are going down, you're getting the hardest, the hardest collateral asset on sale. Right. So that should be a good thing. And you should be having a very prudent cash management strategy to have cash available for those depths. By the depths. The question then becomes, well, how is the volatility and asset to the upside? Well, it can be an asset to the upside in terms of your long term huddle position. Eventually the price, every four years, we've seen the cycle, eventually it starts pumping. It makes you a lot of money. But the hold period during those time frames is incredibly hard, it's incredibly tiring, it's incredibly stressful. Why? Because the price is doing this a lot of the times in between those periods. And so if you have a, if you don't have a strategy that systematically taking profits off of those volatile tops that you're seeing during those time periods, that is what they're talking about. They're talking about taking advantage of the volatility to the upside when it presents itself in the short term and midterm, not in the four year cycle. So you have to, in my mind, kind of have a balanced approach how am I trying to use Bitcoin's volatility to my advantage in the next three months? How am I trying to use Bitcoin volatility to my advantage over the next one year? And then finally, like, where do I believe Bitcoin's going over the next decade? Those are three very distinct strategies that are very hard for humans to deploy at the same time. Automation, you can set up instances endlessly against all three of those time periods and you can have all of that volatility harvesting at your disposal at 2am without you sitting in front of your computer. That's very meaningful for the retail space. But I would argue it's even more meaningful to this, you know, new wave of corporate buyers that are needing to be able to show their, their, their co owners, their shareholders, the people that are counting on them to make those prudent buys. They need to be able to show them a well thought out, well executed strategy that doesn't have a lot of risk or human error potential attached to it. So yeah, huge, huge things coming.
- [51:18]
Scott
Yeah, I mean, what I can say, like from my experience, we, like I said, we started a year ago, it was kind of an experiment. Had no idea you knew, but you know, I had no idea how much traction it would gain. Like I talked to these people, we go, I went to this conference fully with you guys. You know what I mean? Like, I usually go to these conferences on my own. I do my own thing. Like the level of passion and great gratitude and like obsession that the clients have with what you guys have built. Like, you can't argue with it. There's hundreds of people there in the suite talking to me. I found this on your show. I'm so grateful. It just works like, and I know like the funny thing is we always sound like we're shillings something, right? But it actually like I, I like to talk about things I wouldn't have given. Like we wouldn't be doing a show together if I didn't deeply believe that this was going to, to help people. I would never like, want to hurt that I did that with Voyager. Well, there's a, when I that on accident myself but I don't ever want to do that again. Like I'm very particular about the things that I would like continue to push over time and these people just love it.
- [52:32]
Andrew
Well, it's a very different product than anybody's ever seen. So obviously if you hear about automation, you hear about all the bad things and, and 90% of the news as it pertains to Automation has been bad news. A lot of scammers, a lot of bad folks out there, bad actors trying to use like the genie in the bottle type model to say, look at this, we've got this incredible money making genie that's going to make you wish, grant you your three wishes. That's not what this is about. This is we, we built a dolly and we see a lot of people moving out of their apartment without the dolly. And we're going, hey you know what, you should use this dolly. It's a lot easier to carry boxes down the stairs. And they're going, well you scammers, you guys. And we're going, how about you use it for free? Oh, you only have 10 boxes. Use this thing for free. You don't need to rent the dolly or license instance the dolly. And so we just want people to use the dolly because they're going to use the dolly and say wow, this is a tool. This is something that helps me accomplish what I'm out to accomplish. Not the genie in the bottle type of a thing. And that's why the product's free and that's why it's not a watered down version of the product. If you are a corporate treasury company and you're going to be buying a hundred million dollars of Bitcoin on your balance sheet, use our product because it's the exact same product that you would get if you who bought the paid version. So our model is quite simply this. We want millions and millions and millions of retail users using the free product with no cost attached to it forever. And we want corporations paying us to stay in business so that we can provide that service to the community. That's, that's how our, our economics work. The corporate buyers, the treasury buyers, the more institutional minded buyers that need our services and our counsel in terms of setting up the software and using its functionality, they are our paying customers and everyone else that wants to just stack sats and use a dolly to do it instead of carrying the boxes themselves, reach out to us. We'd love to show you how to use the dolly.
- [54:35]
Tillman
You know, you never know what's going to come from the, the marketing genius mind of Tim and Holloway. You know, use our Dolly.
- [54:41]
Scott
This marketing genius new tagline for you, it says right on your Nvidia, the Bitcoin yield algorithm. Volatility is your friend. Voltage is your friend if you know how to dance with it.
- [54:48]
Tillman
Arch Public, use our dolly. That, that's the new catchphrase for arch hello Dolly. Use our dolly.
- [54:56]
Scott
What's archpublic.com yeah. By the way, you guys can see if you're watching this, like I'm sitting because I'm in another. The amount of times I adjust when I'm not standing, like, it's so I'm annoying myself. This is why I have a standing desk with no chair when I'm standing. Normally doing it driving me nuts. All right. But gentleman's got a good lean.
- [55:15]
Andrew
Yeah.
- [55:16]
Scott
He's driving like a 50s, like, Cadillac that bounces.
- [55:21]
Andrew
Yeah, I've got a comfortable chair. I'm not standing up during podcasts.
- [55:27]
Scott
That's way too much all the time. I hate sitting. My bad back. It's 10 o' clock, guys. It's 1001. Oh, wow. 7701. For those of you who might be on different time, specific time.
- [55:40]
Tillman
Great stuff across the board. It was a great week last week. Thanks for joining us, Scott. All the interviews you did with, you know, the Adam Backs and Jack Mahlers of the world, just extraordinary stuff. All that content's going to be coming out over the next week or so.
- [55:55]
Scott
And my channel tonight. I like how we're gonna. I think we'll. The plan is to roll those out. You know, the algorithm hates when you put too much content, so we'll do these in the morning and roll those out at night throughout the week just so we can get them out, you know.
- [56:08]
Andrew
Well, you killed it. I, I think the, the level of accessibility that these pillars in our community have given to people walking around the conference. Michael Sailor probably took 10,000 photos and I'm not exaggerating at the, at the conference and didn't say no to one of them. And same thing with John Deon. Everything that he was doing, people were pulling him one way or another. And, and that's, I think that's a super special. My daughter plays pickleball competitively and we've gone to some of these professional tournaments and that's what I actually admire and love about it is the accessibility to the athletes and you can get right into the nucleus of the community and, and kind of roll up your sleeves and get messy. And the bitcoin conference, there's a lot of hate out there, man. I, I can't, I can't believe how many bitcoin centric people badmouth the conference on Twitter. There's never going to be a perfect conference. If you're so mad that Peter Schiff spoke on stage, you know, you've lost perspective as far as I'm concerned. Like the fact that we're Onboarding so many people. And that we rented out the Venetian Hotel to have a conference is mind boggling to me. And the fact that we had the sitting Vice President of the United States there supporting our community and God knows how many publicly traded companies. And this true story. I get in the elevator, there's a guy in there that's in the back with his head down and he has like three Secret Service guys in there. And I don't know who he was and I don't want to know, but I know that there was a lot of undercover Secret Service folks at this conference and I've never seen that before before. So the fact that David Bailey is able to bring this nucleus to one spot, it's unbelievable. And I will tell you this from a selfish perspective. Everybody sleeping in one hotel. It was very special to see all of your, you know.
- [58:10]
Scott
So, you know, everybody's in the casino. Like the amount of people I just walked past, like I'm going from one place to another and they're just playing blackjack or at a crap stable or something. Literally everybody ones.
- [58:20]
Andrew
It was like a giant slumber party with the entire bitcoin community. It was amazing. I, I, I give my hats off to the BTC guys. They, they, they crushed it this year, in my opinion.
- [58:29]
Scott
Yeah, they had, you guys had Gemini and Arch public pillows. And I made the joke that we should have a pillow fight. We had a slumber party. We should have had a pillow fight at the slumber party and it would have been absolutely perfect. And that's the only way I can think to end the show. So everybody, you can check out archpublic.com. the thing was scrolling. I'm gonna do it for one more second. See, look, there it is. Archpublic.com Discover Bitcoin Yield. Just go try it. Throw 100 bucks. 100 bucks in there and try it. Do 100 bucks over a month. See how how it does for you on a percentage basis because it scales indefinitely.
- [59:03]
Andrew
Or download the free version and paper trade it. You know, find you can literally do this for free, including the buying of bitcoin side. So try this off. Try the dollar.
- [59:13]
Scott
Bitcoin for free. Bitcoin. You heard it here first. Okay, show it.
- [59:20]
Andrew
Paper trade. Scott. Paper trade.
- [59:22]
Scott
Paper traded. All right, guys, well, next week we're just gonna exclusively talk about the XRP conference. Hear about it. All right guys, we gotta go. It's 1005. Thank you, guys. Check out Arch Public. Thank you, Andrew and Tillman, as always. Everybody else, see you tomorrow. Bye.
- [59:40]
Andrew
That's dop.