Episode Overview

Podcast: We Study Billionaires – The Investor's Podcast Network
Series: Bitcoin Fundamentals
Host: Preston Pysh
Guest: Andy Edstrom
Date: December 10, 2025
Title: Bitcoin Market Sentiment and Liquidity Cycles

This episode dives deep into the negative market sentiment in Bitcoin over the prior quarter, giving particular focus to Bitcoin treasury companies, liquidity cycles, valuation frameworks, and questions around Bitcoin’s role as savings technology. Host Preston Pysh and recurring guest Andy Edstrom critically deconstruct recent disasters among Bitcoin treasury companies, discuss market cycles, touch on AI’s impact on investment strategies, and explore what current trends mean for investors. The conversation is incisive, candid, and sometimes heretical, challenging core narratives from within the Bitcoin and investment community.

Key Discussion Points and Insights

1. The Bitcoin Treasury Companies “Dumpster Fire”

• [01:42] Andy Edstrom: Opens with strong language, calling most Bitcoin treasury companies “a dumpster fire… an unmitigated disaster.”
• Significant losses are highlighted, especially among smaller, less-professional entrants (down “90 plus percent off their peaks, in some cases more”).
• Only MicroStrategy (MSTR) is discussed as potentially in a “league of its own,” due to scale, management, and structure.
• Key Risks Noted: Poor or inexperienced management, failure to fulfill reporting obligations, no operating cashflows to service debt, and overuse of complex, risky financial engineering.

“A number of my friends who are bitcoiners have lost tons of money in these things.” — Andy Edstrom [02:10]

2. Dissecting MicroStrategy’s Unique Approach

• Leverage and Equity Structure:
  • MSTR uses both debt and preferred equity to build its Bitcoin-backed balance sheet but does so with significant overcollateralization (approx. 5:1).
  • Unlike others, MSTR’s underlying business still generates cashflow (approx. $100m/year).
  • Discussion of how leverage at MSTR compares to historical norms and current structure (significant quasi-debt via preferred shares, but still well-collateralized).

"If you have 50 plus billion of stock and you've got, I don't know, 20 billion of quasi debt claims against that, that's actually not that levered." — Andy Edstrom [04:54]

3. Bitcoin-Backed Securitization: Parallels and Pitfalls

• Tether Comparison:
  • Preston Pysh frames MicroStrategy’s moves as being similar to Tether: both are issuing “dollar stablecoin equivalents” backed by reserves, though MicroStrategy does it with Bitcoin.
  • Overcollateralization is necessary because of high BTC volatility.
• Execution is Everything:
  • MicroStrategy’s success is credited to discipline; many imitators lack rigor, use less robust collateral, or introduce unnecessary complexity (e.g., using tokens like Ethereum or BNB).

“Similar to how Tether ... are securitizing these dollar stablecoins with treasuries, I think what MicroStrategy is effectively doing is also creating stablecoins ... but instead of using US Treasuries, they're using Bitcoin.” — Preston Pysh [07:09]

4. Net Asset Value (NAV) & Valuing Bitcoin Equities

• [15:11] Andy Edstrom: Outlines methods for valuing BTC treasury companies:
  • Compares them to closed-end funds and holding companies (e.g., Berkshire Hathaway, Markel Corp), which sometimes trade at modest discounts or premiums to NAV/book.
  • Suggests 2 to 2.5x NAV is a realistic ceiling for well-managed companies; most should trade closer to parity or even a discount due to risk/uncertainty.
  • Highlights flawed thinking in the community equating NAV multiples to earnings/cash flow multiples ("my head almost exploded").

5. Why Not Own Bitcoin Directly?

• Trade-offs:
  • Three “legs of the stool” for holding Bitcoin: self-custody/sanction-resistance, number-go-up investing, and ethical belief in a better world.
  • BTC equities and treasury companies can only satisfy the investment/return and (possibly) ethical legs—not the self-custody/protection leg.
  • Additional risks: company leverage, key-man risk (e.g., Saylor at MSTR), regulatory/expropriation risk due to concentration.

"There's sort of three legs of the stool for me... Uncensorable money you can carry across a border… the number-go-up investment… and the ethical ‘better world’ aspect. Only two of those can be satisfied with MSTR stock." — Andy Edstrom [24:19]

6. Macro & Sentiment Shifts: Bitcoin vs. AI and Other Assets

• Education Burden & Volatility:
  • Massive portions of the public have neither the means nor the risk tolerance for high-volatility assets like Bitcoin; many with capital are chasing “sexier” trends like AI (which feels more tangible and immediate).
• Diversification and Risk-Adjusted Returns:
  • Andy admits that in 2019, Bitcoin was “the best risk-adjusted investment I’d probably ever see in my lifetime.”
  • Now, while still very attractive, acknowledges there are other reasonable investments (real estate, gold/monetary metals, commodities, select equities).
• Google as an AI Proxy:
  • Both discuss Google’s position as the only credible large-scale AI competitor besides OpenAI, highlighted by recent strong model performance.

“Bitcoin is arguably irrelevant… to a huge swath of the population that doesn’t save. The AI narrative has sucked a lot of the wind out of Bitcoin in terms of US dollar price in the last year or two.” — Andy Edstrom [32:37]

7. Four-Year Cycles & Market Correction

• The “Undefeated” 4-Year Bitcoin Cycle:
  • Probability assigned to bear vs. bull scenarios (60% bear/40% bull at the time of recording).
  • Discussed ongoing importance of halvings but acknowledges eventual diminishing impact.
  • Large, ancient “whales” still have market-moving power; mass distribution will reduce their influence over time.

“My base case, my 60% case, is the four year cycle remains undefeated and we’re living through a bear market right now.” — Andy Edstrom [50:40]

• Decoupling from Risk Assets?:
  • Noted confusion: S&P 500 near all-time highs, Bitcoin down >30% (unusual given historic risk-on correlation).
  • “Correlation’s been higher… If you can buy a bitcoin ETF in your brokerage account, when you get scared about risk, you can sell that too.” — [57:45]
  • Little evidence of systemic “something breaking”; concludes it may simply be a mini cycle or correction.

8. Looking Forward: Get Rich Slow, Not Quick

• Future Returns and Patience:
  • U.S. equities appear expensive; as multiples compress, Bitcoin may be the best performer among major asset classes but will not repeat “get rich quick” dynamics of the past.
  • The world will continue printing money, and Bitcoin’s immutable scarcity remains a draw—especially as AI and robotics threaten to further disrupt labor markets.

“We may be in the get rich slower time period rather than the get rich quick era of Bitcoin.” — Andy Edstrom [62:05]

Notable Quotes & Memorable Moments

• “Bitcoin treasury companies are a dumpster fire. I mean, they are an unmitigated disaster.” — Andy Edstrom [01:42]
• “The execution is different… You have treasury companies that aren’t even using Bitcoin as their reserve. They’re using Binance tokens, they’re using Ethereum…” — Preston Pysh [11:26]
• “I ask myself… how much greater of a return risk-adjusted do I expect to earn holding something like MSTR versus just holding spot Bitcoin? ... For me it has to offer some significant premium.” — Andy Edstrom [25:00]
• "Bitcoin is arguably irrelevant...to a huge swath of the population that doesn't save. ... The AI narrative has sucked a lot of the wind out of Bitcoin..." — Andy Edstrom [32:37]
• “Is it just an education burden? Is that why...it takes longer for more people to come to this conclusion?” — Preston Pysh [29:59]
• "Get Rich Slower Than You Thought." — Preston Pysh [62:05]
• “What a time to be alive." — Preston Pysh [63:08]

Important Timestamps/Segments

• 01:42 — Edstrom’s “dumpster fire” monologue on Bitcoin treasury companies
• 05:32 — Dangers & failures among lesser-known treasury plays
• 07:09 — Preston’s Tether/MicroStrategy stablecoin analogy
• 15:11 — Valuing Bitcoin equities: NAV multiples and closed-end fund parallels
• 24:19 — The “three legs” of the Bitcoin ownership thesis
• 32:37 — Why AI stole market narrative from Bitcoin
• 49:55 — Four-year cycle discussion, odds of bear vs. bull
• 57:45 — Decoupling of Bitcoin from stock market risk-on assets
• 62:05 — “Get rich slower” and changing expectations for Bitcoin returns
• 63:08 — Technology’s pace and the interconnectedness with Bitcoin and macro

Final Thoughts

This candid episode serves as reality-check therapy for Bitcoin investors and the crypto-curious. Edstrom and Pysh don’t shy away from exposing the recent mismanagement of treasury Bitcoin companies, nor do they preach maximum risk at this stage of adoption and market cycle. The underlying message is measured optimism: Bitcoin remains foundationally strong, but returns will be earned slower, and the market’s maturation brings both opportunity and growing pains. The Bitcoin–AI dichotomy is not framed as zero-sum, but as a reflection of shifting attention and the enduring challenge of education and comprehension.

Further Resources

• Andy Edstrom: @edstromandrew on Twitter, Book: Why Buy Bitcoin
• Bitcoin Fundamentals by The Investor's Podcast Network: Website

For complete show notes and links, visit the official episode page.