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- [00:00]
A
Yeah, those are all really good points and it's, I'm trying to think about how I want to address this because I mean there's a, there's a few different ways to take it. I mean for one, I mean as you've talked about and I've mentioned over my last few shows, it's, it's just a really difficult environment for crypto. I think Citi had had a report that came out, it must have been this week talking about specifically pointing out how retail participation especially in terms of like the Mag 7 stocks is at a multi year low. And it wasn't definitive saying they're all rolling out of stocks but one of the points that was made is that there's a lot of other opportunities to get that sort of very risk laden exposure. I mean you can do the AI stocks, you can go to the stocks that are basically the suppliers to those AI firms. They didn't discount the fact that maybe some of these retail users were moving into diversified ETFs which they're not necessarily able to track. But it really kind of showed how there's, the retail enthusiasm is gone and that's particularly important for crypto. And then just the added fear, the psychological importance of strategy where many people saw it as sort of almost like I've heard it referred to as like Michael Saylor as crypto central banker in a way or the buyer of last resort. And if that buyer suddenly became suddenly becoming a seller potentially at size, I mean that's an order of magnitude more worrisome in the eyes of a retail investor that doesn't understand everything than even if they're just going to pause their purchases for a while. I do agree with what you said. I mean any smart business should always leave themselves and out. I mean obviously saying like sell organs before selling your bitcoin was some tongue in cheek and, and I think most people probably assumed it as such. But you do need to have a business that can, can withstand different market cycles. The one question that, that I still come up with though and I, I, I want to ask you about this, it just kind of goes to the core of, of the business model of these DATs that, that do have like a diversified type of, of, of cap table cap stack and in particular ones with bitcoin that offer prefers, it's a non yield bearing asset so you have to find some way to financialize the cash that you're going to pay for it. I mean Ethereum is yield bearing, Solana is yield bearing. I mean the native yields on those assets isn't by themselves enough to cover the dividends that these things are paying anyway. But I'm sorry, maybe that was a Freudian slip. Bitcoin generates no native yield. So there's always going to be this flywheel up or down that that has to be managed. Like how do you think about that in a market like this?
- [02:46]
B
Yeah, no, that's a great point. And while there's, yeah, there's many ways I can take this, the one thing I would say, and this is just detaching a little bit from the strategy conversation, I actually put out a, a long paper on this about how folks have been using options to generate synthetic yield. Right, right. So strategies like covert call selling. I, I wrote a very long paper on this trying to show what are the type of results were the consistency of positive yields that you are able to implement in a typical or traditional covert call selling strategy. And this is, this is, this is interesting and we have seen a bunch of market participants take advantage of these types of strategies. But, but in this case, yes, you are right. Bitcoin doesn't have a native yield. So it is a lot different this, the strategy that, that, that a bitcoin treasury company will implement versus what an Ethereum or Solana or Hype treasury company. I fully agree with that. The other thing I would highlight though is that bitcoin might have some advantages. Right? So if you think about strategy, I mean they have the option, they're probably the only one of the only, if not the only company that can issue preferreds, right? Because they have an active and liquid options chain that allows them, I'm sorry, converts in order to do those, they have enough market gravitas and in order to issue ATM equity and also all these preferred instruments. The thing I want to say though is I want to say two things. Hear about your commentary, which was very interesting. Number one is I think it's important to keep in mind that Saylor was the OG in this whole Bitcoin, let's say institutional bitcoin accumulation strategy. And I think sometimes these narratives, they develop much more iteratively than actually being set in stone from day zero. I think over time we are all learning that maybe an institutional bitcoin accumulation strategy can look more, a lot like active management instead of looking much more like the huddle forever that maybe a lot of folks or like maybe a lot of us would do in rpa. So I think that's fine. I'm, I'm fine with the, with the strategy evolving over time or the narrative evolving over time. And, and, and I think that is part of the process that is part of being a p. These types of strategies that have been so successful for the past many years. Yeah, that's, that's what I would say. And then on top of Bitcoin specifically, I think one thing to keep in mind is that holders of Stretch or holders of probably any part of the MSTR Capital stack are probably folks who are betting that bitcoin will succeed. And basically the type of analysis that they need to do is what do they think is the return profile that Bitcoin will have in the future? What is the type of risk management that the company is doing, how strong the balance sheet is to storm the inevitable, more difficult times that we're going to have, like the ones that we're seeing today. And that's basically the risk that they need to underwrite. I think so far microstrategy or strategy has been doing a good job in terms of weathering that storm. Of course, in hindsight it's always easier, it's always easy to criticize without being there. But I think they've been reacting quickly, they've been reacting boldly, and we're starting to see the market normalize. Of course these things don't happen all of a sudden. They're not going to happen overnight. But I think we're seeing some that
- [06:53]
C
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