← What Bitcoin Did
Loading summary
Transcript97 lines
- [00:03]
A
I think that the market is trying to find a villain right now. And Saylor is that guy, like he'll be the hero in the bull markets and then in the bear markets, you know, he'll be villainized by a lot of the community. I do think that they did make a misstep when they used that cash reserve to pay off that $1.38 billion of convertible debt. You have to think of how the market is pricing the risk of the instrument and that's simply what it is. It's just the simple fact that right now, if you go to their transparent information, you can see that right now the effective yield is probably slightly over 13%. So really, at the end of the day, it's simply the market signaling to strategy. Hey, in order to essentially by Stretch, if we want to take our money, buy your equity, then we need to be compensated above 13% right now to take on that added risk.
- [00:52]
B
All right, let's do it. Adam Livingston, thank you for coming on the show, man. This was a bit of a last minute one. Stretch has been having a real tough time for the last week or so and I thought you were the right guy to get on the call and figure out if Sailor is trapped in this trade. But welcome to the show, man.
- [01:07]
A
Thank you, Danny. I've been a long time fan of the show, so thank you so much for having me. You texted me last night at like close to midnight my time. I have a new kid at home, she's about seven weeks old, and I thought, will I get some sleep? Will I be sleep deprived? Can I even articulate my thoughts? But we're going to give it a go. So thanks for the invite, man. I'm a huge fan.
- [01:26]
B
No, thank you for pulling this out the bag. That's impressive. With a seven week old at home, I don't know if I'd have said yes to that. But thank you for coming on the show. So I want to start with the Stretch thing. It's trading at like 88, just under $89 right now. Way below what's meant to be par. How big a deal is this? Is this an existential threat to stretch?
- [01:48]
A
It depends on how you define existential threat, of course. But in my opinion, no, ultimately it's, it's an equity, it's a credit hybrid equity thing. You know, it's a credit like instrument and equity wrapper. So you have to think of how the market is pricing the risk of the instrument and that's simply what it is. It's just the simple Fact that right now if you go to strategy.com and you go to their transparent information, you can see that right now the effective yield is probably slightly over 13%. So really at the end of the day it's simply the market signaling to strategy. Hey, in order to essentially by stretch, if we want to take our money, buy your equity, then we need to be compensated above 13% right now to take on that added risk. So what a lot of people do fail to understand though is that there is no like stablecoin peg. I do see a lot of FUD about this like PEG that's broken. And to be fair, I do think there is somewhat accuracy with the term because they have something that they call the par stability mechanic I think is the actual phrase that they use. And at the end of the day it's simply that hey, we're going to raise the dividend based on a volume weighted average price guidance every single month. If there's too much volume, if the vwap's below a certain price, then we'll be more than happy to raise the dividend. I expect that we'll see that. And then on top of that, once the stock actually trades at $100 or above, above that par value on the other end, you have strategy there issuing more shares into the market. So I think a lot of people forget that if that ATM at the market facility wasn't in place, then the effective yield would actually be driven down a lot more because of the demand. So there is a par stability mechanic. But I do think there's a lot of people that don't understand whether or not it's like a stable coin. Terra Luna peg. I think that there's lots of comparisons made, but no, I don't see anything wrong with it. It's just the market saying hey, we want an addition, an additional percent to be compensated for holding this thing.
- [03:46]
B
So I mean it's not the first time that it's traded below that par value of $100. Like in. When was it in sort of November last year. It traded way below, but this is definitely the furthest below and it's not actually traded at par since I think mid May. So it's been over a month now. Do you think it will get back to par?
- [04:05]
A
I do for sure, yeah. I just look at the overall credit quality of the company and I see they have decades of bitcoin dividend coverage. They just raised $300 million last week. So if you look at their year to D capital raising, they are raising about 18 times what their daily dividend bill is or their monthly dividend bill. So the capital markets access remains open. They can continue stack and bitcoin, stack and cash. I do think that they did make a misstep when they used that cash reserve to pay off that $1.38 billion of convertible debt. So there's been a few missteps that strategy has made in my time as a shareholder. But ultimately I don't think there's anything existential. It's just the market wants an additional percentage point. The effective yields up and then the overall credit quality I do think will win out. And it doesn't help when Bitcoin's down 50%. And timing didn't help either because Bitcoin dropped like $23,000 in no time. They paid off that debt and then bitcoin went from 83k to 60k. So that's like I don't know what the exact percentage is, but 20% of your Bitcoin value just immediately going away. So that doesn't help the, the optics either.
- [05:12]
B
That sort of retiring that convertible debt is something that I didn't understand at all. I'm not sure what the thinking was behind that and I don't know if the company have sort of aired that and said why they did it, but I thought that cash reserve was there. So you had dividends for two years in cash. There was no reason that Strata were going to sell Bitcoin to pay the dividends. They had that as a buffer and then they got rid of almost all of that. I just saw before we started recording overnight my time, I think they might have hit the ATM again and put a load more cash in a reserve to do that. But it made no sense to me like that convertible debt wasn't due until I think 2029. Like why did they do that?
- [05:50]
A
Yeah. So the soonest that the debt was putable, where I believe that the bondholders could like ask strategy to repurchase them, I think it was in September of 2027. So I agree with you. Still a decent time, length of time away. Right. So I agree that it was a misstep. But you know, I giving strategy the benefit of the doubt. I think when you look at the way the equity was trading and you look at the true m nav of strategy, there was a hefty premium on the common stock. And so if you're going to pull the lever on doing on selling MSTR and if it's net accreted to the shareholders, I would have rather Rather had them do that. To be honest with you, I think that, you know, probably tapping the USD reserve was not the right call. And what's really interesting is that when you compare the USD reserve strategy to that of Strive, it is really remarkable to see how the market is pricing both of these digital credit instruments because we both know that it's like competing for retail flows Right now, Sailors coming out and saying stretch is 80% held by retail. And I'm not naive enough to think that SEDA isn't competing for the same flows. But it's something like Strive has 43 times less Bitcoin than Strategy, or Strategy has 43 times more Bitcoin coverage. But because Strive has 11 more months in cash or eight months now, you're just seeing a huge discrepancy in how the things are trading. Now, obviously because of the outstanding SATA, the volume is a lot smaller, so you need a lot more liquidity to move strc. But it's interesting to see how the things are trading. But yeah, I would tend to agree with you. I don't think that use of the reserve was a good move. If you look in the SEC filing, or maybe it was the STRC prospectus, I can't remember exactly, it must have been the filing after the USD reserve was announced. But they do talk about how they intended to use it. And then they also had the phrase something along the lines of we have total discretion to use it for whatever we want to. So the debate about whether or not they misled anybody, it's like, well, the language is in there that they have discretion. So. But yeah, as an overall strategic move. I don't know if I agree.
- [08:05]
B
Yeah, like the, the misleading people is not something that. I mean, I'm not a microstrategy shareholder, so it doesn't concern me at all really, that part of it, it's just whether it was the right move. I don't, I don't understand it necessarily. But like I believe they've just raised or just hit the ATM to raise more money to have that sort of backup. So I think that's probably a good move. But the thing that I don't necessarily get, another thing I don't necessarily get is like, why would you be a MSTR shareholder when it seems like you're just going to get diluted at sort of every opportunity?
- [08:36]
A
Yeah, I think that if you look at history and you look at the overall total returns over a long time horizon, it's pretty apparent that MSTR has considerably outperformed Bitcoin in fiat terms. We were just talking before the show. As we get further into this Bitcoin bear, I become more convinced that holding the treasury companies definitely isn't for everybody because of the added volatility and it requires a decent degree of understanding of Saylor's financial engineering. But overall, I do think, you know, you look to history, you look at the strategy. Can they continue to issue equity that's accretive to the shareholders? Can they amplify the bitcoin exposure via the preferred stock issuance? And then if you think that they can pay those dividends and I mean, that's mechanically how the Bitcoin exposure is amplified. So, you know, it's added risk. You are taking the counterparty risk. You don't own the bitcoin, you are economically exposed to the residual. But, you know, some people like that trade. I'm an MSTR shareholder myself. I buy Bitcoin every day. I don't own Stretch, but I do, like, with my risk capital. That's the way I think through it. Like, I think of Bitcoin as saving and then Bitcoin is the hurdle rate in my mind. Like, if I'm going to beat, I need to beat Bitcoin if I'm going to invest in an equity. So I am an MSTR shareholder for that reason.
- [09:52]
B
It's just getting back to the SATA versus Stretch thing. It's been interesting to see SATA do quite well. And I think one of the points you made before, I could be wrong on this, but you said that stretch is 80% retail. And I'm purely guessing here, I would imagine SATA is not the same. Even higher. They seem like very retail product at the moment. And it's part of the problem that if you play sort of retail games, you win retail prizes. And like, this is. This is part of it. Like, I'm sure huge liquidations played a part in Stretch dropping to like $83 or whatever it did. And I also think you said that the market is deciding that the cash reserves are sort of the thing that they care about more. I just think it's higher yield. I think people just chase higher yield. So I don't know how you kind of balance those two things out.
- [10:43]
A
Yeah, I think that what we're witnessing right now in the market. Danny, I think you're spot on. I should have said that, actually, because I agree 100%. I've talked a lot about this, where I saw this study recently. I think Pierre Rochard tweeted it out, or somebody Else I can't remember exactly, but it was essentially Bitcoin. Like how much of bitcoin is explained by an efficient market hypothesis, like just Bitcoin itself. Not even like all of these crazy derivatives that, you know, these market participants continue to come up with, at least these issuers of the digital credit things. So like I continue to see pricings in my mind with the strategy preferreds that to me in my opinion like just totally don't make any sense at all. Especially when you look at Strike, for example, where you have an embedded call option on MSTR going up, which is essentially a call option on Bitcoin going up and that thing will trade at the same yield as strc. I see a lot of these weird mispricing. I don't think that bitcoin can be explained by the efficient market hypothesis. And it's almost like these things aren't either. But I agree with you 100%. When they're competing for retail flows, I don't think that a lot of people are doing the hard risk analysis of them, to be honest with you. I think that they're looking at a headline yield number and think, oh, I'll get paid daily and I'll get paid more money. They get that dopamine hit. So I agree with you.
- [12:08]
B
And did the daily dividends from SATA have an impact on stretching? Is that part of the reason we've had this drawdown? Because I know that before Stretch were doing sort of bi monthly dividends and before SATA were doing the daily, people were swat swapping between the two, like getting in the lock in date, getting the yield and then moving back and like, and that kind of got completely armed out. Like they, the arbitrage was there, that's gone now because people have to hold SATA every day if you want to get the dividend. Has that meant that the retail has gone there, parked their capital there and SATA now has less inflows? Does that like, Sorry, the Stretch has now less inflows. Does that play any part in this?
- [12:46]
A
Yeah, I think it has to. Like there's no way of getting around that for sure. I think that we are so much in an echo chamber with number one Bitcoin itself in terms of the broader world. And then on top of people even know what Stretch and SATA are. So ultimately like they've issued 10/plus billion dollars of STRC in a year. I think that's been a success for them. They paid every single dividend on time. So like it's going to take A while for the track record to really open up. Strategy only has a B minus credit rating right now. So we're in this Weir period where they have to prove themselves, prove the credit quality of these instruments for a number of years maybe before you see larger institutional capital pools even. Think of this meeting mandates, for example. So right now we're just in an infancy stage and there's highly little doubt in my mind that a lot of people didn't sell Stretch to go to seda.
- [13:39]
B
Yeah, it's. It's been in. I want to pull up a chart, actually. Let me just grab this. Cool. This is by my boy, Checkmate. Can you see this?
- [13:50]
A
Yep.
- [13:51]
B
So one of the interesting things of this chart to me, he wrote a newsletter piece on, on Stretch a couple of days ago is the number here at the end. So I believe, and someone can correct me if I'm wrong, but this shows that there is no Stretch holder that has made money at these prices, including the yield, including the dividend. Like, this is underwater in quite a big way. And I want to know sort of your opinion on this and if this signifies anything about the digital credit narrative maybe not playing out how people expected. Maybe like, is it still working? Is it real?
- [14:27]
A
Yeah. First thing I'd say, I don't know if I need to fact check this. The graph is really small, so I don't know what exactly what it says. I see the price for the stocks.
- [14:35]
B
I mean, here it. It's this Stretch, total return is at 99.795. So it's.
- [14:42]
A
But it was IPO'd at 89, so it's a positive return. So I actually just ran the math on this. It was IPO'd on, I believe, July 28th. And Stretch has an overall total return because it's only like if it was IPO to 89, and it's around $89 today, with every single successful dividend paid, then they're at about a plus 6% total return. So ever since the stretch, IPO, stretch is about plus 6% total return while Bitcoin is minus 50. And so I've actually made this point where people say, Adam, like, you're cherry picking data. And I'm like, well, I'm not really. I'm looking at the entirety of the data set. But I decided, okay, fine. I actually plugged it into AI just to number crunch everything. And I found out that of every single possible holding period between Bitcoin and STRC, Stretch has won out on 86% of all possible time horizons. Since the Stretch IPO when you're comparing it to bitcoin. So the stretch return is when you're including the dividends. It does go up and to the right versus Bitcoin falling off 50%. So when you couple that with every dividend being paid successfully and there are times of high volatility, like now in February for example, but overall it's been a success. The dividends have been paid. They have. It has stripped the volatility out of bitcoin considerably, just showing that it's still a total return positive after a 50% bitcoin price correction. So 86% of all possible time horizons since the IPO and like at least total return since the IPO has been positive.
- [16:21]
B
Yeah, I'm in the same boat. I heard back from Checkmate. So the first, the first chart that I showed you, which was the stretch returns and his point was that anyone who bought a par is underwater at this point and that the other prefs are below IPO on total return basis. So. And like the question was that like, I guess, are these preferreds working as intended?
- [16:45]
A
Yeah, me and Checkmate must have different math because I ran it today. It's on my ex account. I have a totally different number. It was 89 or 90 at IPO. And then.
- [17:01]
B
But he's saying anyone who bought the hundred dollar peg or one hundred dollars is underwater. Yeah, like.
- [17:06]
A
Yeah, like that is. Well, I don't know.
- [17:08]
B
At any point in time. Yeah.
- [17:10]
A
Then probably. Yeah, definitely. Yeah, that's the. Sorry, I was misunderstanding because his line was for like a month period. So now we're cleared up. But yeah, yeah.
- [17:19]
B
And then the other one, that all the other prefs are below IPO price.
- [17:22]
A
Yeah.
- [17:23]
B
On a total return.
- [17:24]
A
Yeah, he's correct about all that stuff.
- [17:25]
B
Yeah.
- [17:25]
A
When if you would have bought at 100. Yeah. You'd be underwater right now even after factoring in all the dividends paid. That's true.
- [17:34]
B
So what was your question? I'm sorry? Well, and the other prefs being below IPO price, including like with total returns, are the prefs actually working as they were intended?
- [17:46]
A
Yeah, I do think so. I think that when you look at the amount of capital that's raised by them, like we are seeing some higher effective yields, but nothing that signals that the dividends can't be paid. You look at the capital markets access, they are just like they're having their most successful year of capital raising ever. Like 2026 with a Bitcoin bear market, they're still raising more money and buying More bitcoin at a faster pace than ever, at least in a January through now, year to date basis. So when it comes to the credit quality, I think the risk is mispriced. I think it's wild that they have to pay that high. Ultimately they raised billions of dollars and they bought bitcoin. So I think like that's a win for them. And then the people who bought them, I think, yeah, like, just like with anything, if you would have bought bitcoin in October, you would have been down 50% right now. So buying stretch, you would have mitigated a lot of downside. That's just mathematically true. So yeah, I think that they're working just as intended. I don't think anything's broken. I think their credit quality is being questioned by a lot of retail shareholders. But overall, I think the credit quality is great. And I think when bitcoin returns, you'll see them trade back up just like how they were last May. So I think that's what'll happen.
- [18:59]
B
Do you want to pay less in taxes and stack more bitcoin? Of course you do. Well, by mining bitcoin with blockware, you can, under section 168k of the US tax code, Bitcoin mining servers qualify for 100% bonus depreciation. This means every dollar you spend on miners can directly offset your income in a single year. And it's true for both business owners and W2 earners. So if you have $100,000 in ordinary income, you can purchase $100,000 in miners and potentially offset your tax liability entirely. Blockware's mining as a service does all the heavy lifting. They secure the rigs, they source the low cost power, and they handle all the day to day maintenance. So you get to stack bitcoin every single day while drastically shrinking your tax bill. Get started today@blockwaresolutions.com wbd and use code wbd for $100 off your first miner. That's blockwaresolutions.com wbd bitcoiners, as you know, with fiat money constantly debasing, wealth preservation isn't optional. That's why I recommend Swan Bitcoin, a team of dedicated bitcoiners who work with families and businesses to build and secure generational wealth with bitcoin. Strong relationships with clients are at the center of everything Swan does. A dedicated Swan private wealth representative, which is a real person that you can text and call, will help you build a bitcoin wealth strategy. Using Swan's comprehensive platform of bitcoin services including tax advantaged retirement accounts, advanced bitcoin, cold storage using collaborative self custody, inheritance planning with both trust and entity accounts, tax loss harvesting, asset backed loans and more. Swan have helped over 100,000 clients since 2020. And if you're serious about acquiring and securing bitcoin, I recommend Swan. You can meet the team@swan.com wbd which is S W-A-N.com wbd. You wouldn't reuse a bitcoin address. So why does your phone broadcast the same identifier for life? Every SIM has a static id and carriers, ad networks and bad actors all use it to track you. The big carriers have been caught selling that data over and over again. Kape is America's privacy first mobile carrier. Their identifier rotation feature changes your ID every 24 hours so you look like a different subscriber every single day. And SIM swaps are off the table. Your number can't move without a 24 word phrase that only you hold. There's also no name at sign up, no Social Security number, and there's no profile to build on you. If you're a bitcoiner in America, I honestly don't know why you'd use any other network. You can head over to Cape Co WBD and use the code WBD for 33% off your first six months. That's C A P E CO WBD. Okay, because the question I have here is how do they raise capital going forward? Because it seems like they have a few options. They can obviously sell the preferreds, but that then increases their dividend liabilities. They can raise more debt potentially, but again that adds leverage. They can and have and probably will continue to dilute shareholders. Like do you see that as the best option? Because the other option is sell bitcoin and like as a strategy shareholder, is selling bitcoin not the best thing for you? If they just start selling enough to pay the dividends, the bitcoin market can easily absorb that amount of money. I think it's. Is it around just under 2 billion a year or something like that that they. Is that right? That they owe?
- [22:14]
A
Yeah.
- [22:15]
B
The bitcoin market can take 2 billion a year in sell side. Like is that the best option? I don't think they'll do it. But is that the best option?
- [22:22]
A
Yeah. What's really cool is that they have so much optionality as a bitcoiner who like I hate selling bitcoin. I don't. That doesn't jive well with me, to be honest with you. It's maybe a personal preference where this idea of selling bitcoin, the market absorbing it's 1.7 billion is the annual dividend obligation. And do I think it can be done successfully? 100% like the total volume of Bitcoin is orders of magnitude higher. Like the market would absorb that, no problem. As evidenced by the fact that he bought 48 times as much bitcoin the next week after he sold and the price probably went down. So like the market can absorb it, no problem. But we really need to look at their total optionality. With the true MNAV people continue to look at the basic M Nav with the market cap in the numerator. The market cap which is like the value of all the shares, you know, divided by the bitcoin nav that's not telling the entire story because that's not looking at the preferred stock and the outstanding preferred shares. And then so strategy does a better job with enterprise value where it incorporates the overall just a more cohesive picture of the capital structure. But if you look at everything with the outstanding preferred stock and you essentially do like an algebraic, algebraic look at the capital structure and find out what is the senior claim Bitcoin. So like when they issue stretch and they use those proceeds to buy Bitcoin, you have to think of the residual, what's left over economically for the MSTR shareholders. And what you'll find is that the residual value of balance sheet value that's backing the MSTR shareholders, it's not just the bitcoin, it's also the cash. Because as an equity holder you are exposed economically to the total residual, not just the Bitcoin, which is why bitcoin per share is incomplete. But if you crunch that M Nav number right now, last time I ran the numbers was like a 1.2 XM nav right now. And so Saylor has come out and corrected people online about this, where if you look at the total capital markets activity, it is accretive to MSTR shareholders. So in terms of a lever to pull, that would be my number one by far because the stock is still trading at a 15 to 20% true premium. And I think that Bitcoin is close to a bottom. I could be wrong. Maybe it goes down to 50k or something. But I don't think that the premium will probably drop any more than it is now. And if it does, like if the true C E B E M Nav goes down to one, they only have to dilute the shareholders 5% per year to pay that annual dividend, and that's if they don't tap the bitcoin or the cash. So to me, I'm like, the MSTR shareholders are seeing if all the premium evaporates to the residual, they would have to dilute the stock only 5% per year, and in exchange you get that 40% Bitcoin amplification. So I think a lot of MSTR shareholders look at that trade off and if they're bullish on bitcoin from a pretty big overcorrection, the math makes sense for them.
- [25:22]
B
It's interesting because, like I was saying to this, but to you before we started the show, like, I get so much hate for, like, trying to sort of ask these questions about treasury companies. Like, I've said a million times, I'm skeptical of them. And honestly, like, I've come to the realization that the truth is I just don't really like them. Like, my gut is just selling me I don't really like them.
- [25:41]
A
There's nothing wrong with that at all.
- [25:44]
B
I don't like the narrative of digital credit. Like, I don't like, like all these sort of financial terms around bitcoin. Like, bitcoin is just bitcoin. Like, I like the idea, I like what strategy started as. I like having a business that generates money and putting that money in bitcoin. Awesome. Like, I love what block are doing, I love what Tesla and SpaceX are doing. Like, having just a cool business that makes money and that money goes into bitcoin is awesome. What I'm not a huge fan of. And again, like, it's not that I think it's going to fail or I don't think it'll do well. It might do amazing. Well, I just don't like it. Yeah. And I feel like there's a lot of the sort of at least Twitter world that are kind of coming to that same conclusion. Like, there's been a lot of hate on Saylor and to be fair, I think probably that's bear market things. I'm sure Saylor will be fine. I'm sure he's not losing sleep over people like me complaining on Twitter. But, like, why do you think this hate has sort of arisen?
- [26:34]
A
Yeah, that's a really good question. I think that there is a philosophical split in the bitcoin community that's like really eating it away at kind of our previously at least better vibe that we had going on. I think that it's because people are defining bitcoin's win condition differently. Like, you just said you don't like the, the treasury companies. And that's a very common viewpoint right now. I think a lot of people, they, you know, people come to bitcoin through a variety of ways and they have their own win condition attached to it. Because to me, like, bitcoin is this monolith that's just this amazing, pristine, free, neutral monetary network. And then a lot of people like to attach their subjective, often political philosophy win conditions. What does it look like for bitcoin to win? And I think a lot of people are finding disagreement about that. A lot of people, you know, they'll say, bitcoin doesn't win until government is abolished. And we live in an ancap society where we're all transacting equally. And then there's some of us that are saying, well, I don't know if that's necessarily a pragmatic thing. Like, bitcoin has improved so many people's lives and it's 16, 17 years since it, the genesis block was mined. So I think it's really a philosophical disagreement about how bitcoin will win. Like, what does it mean for bitcoin to win? So I don't know what your thoughts are on what it looks like for bitcoin to win, but maybe that's the source of the disagreement.
- [27:57]
B
I mean, that. That could be it. And like, to me, bitcoin is winning. Like, I wouldn't say it's already won, but it's winning. And I think it will continue to win. But the problems that I have around it and the areas of concern that I have are, like, I don't love that One company has 4% of the Bitcoin supply. And again, there's nothing I can do about this and that. Like, they can use bitcoin however they want and they should, but I don't love that they have 4% of the supply. Like, I don't know where the sort of crucial number is where it's too much, but, like, if it's 80, 90% of the supply, clearly too much. Is 4% of the supply too much? Maybe. I just don't know. I don't, I don't love that. And like, the other thing that I'm unclear on is whether this is now not actually attracting institutional investment, but, but dissuading institutional investment. Because, like, like you said, Michael Saylor and Fong have come out and said, like, 80% of the people buying Stretch is retail. And to me it's like, that's not a good thing. Like, I thought this was meant to be aimed at institutional type investors and are institutions looking at this and being like, let's wait and see how strategy shakes out and is it actually putting people off? Are they concerned that strategy has too much? Bitcoin can potentially quote, unquote, manipulate Bitcoin. These are some of the concerns that I have around it.
- [29:14]
A
Yeah, it's tough because obviously it's a question of like wealth inequality and the Gini coefficients, like how much is too much and like we know there's a finite amount and humans have never been face to face with true scarcity before. So I find it like psychologically fascinating how us humans are still absorbing it. I think we haven't even thought through the proper ramifications of Bitcoin yet in terms of the institutional capital thing. I think that what you're seeing when you look objectively, like over the past couple years, a lot of people say that bitcoin had its IPO moments. The OGs are selling like crazy. Like the individuals are selling their coins hand over fist to the institutions. Like that has been the trend since the beginning of 2024. River does a great job where they'll post their graphic about this every quarter or so where it's like, you know, I don't know if it's 10 or eight consecutive quarters where like hand over fist individuals continue to sell to the institution. So I think that you raise an interesting point. Like long term, will that be seen as a negative? But overall, when we look at the trend of this institutional monetization of bitcoin, I think it's actually quite the opposite. We've seen a lot of inflows. The IBIT holders are surprisingly sticky. I think. So yeah, I think that you raise a very interesting question long term. But like to me, I'm like, I don't know if it's a cause for concern as of yet. If Saylor gets half of the network, maybe, maybe it will be. But yeah, thinking that hypothetical future is an interesting thought experiment.
- [30:42]
B
Yeah, I was reading Checkmate's recent piece on this and, and he raised a point I think is super valid. Is that like in a bear market, the market goes hunting for the most leveraged people and he like they like to take him out to the woodshed and, and chop him up and, and he put a chart in there which I'm actually struggling to find, but I'll put on the video. So this shows like where the, where, where the first impairments are for, for strategy and it's around 25k. Like I, I don't think we're going to go to 25k, but I don't think it's impossible. And so do you think that the market is looking at these liquidation levels and will potentially try and hunt them?
- [31:19]
A
Yeah, I think that it depends on what you mean by hunt. Exactly. When it looks like Checkmate's math is spot on with mine, where it's $25,000, where the common equity is impaired, where I see a lot of people get. What I see a lot of people get wrong is simply that this is calculating kind of that residual that I was just talking about, where the bitcoin net asset value would equal the senior capital. So, like the outstanding preferreds and the debt, so there's no room for the common equity. But when we look back in 2022, this exact thing happened. A lot of people don't realize this, but if you would calculate the residual exposure for the MSTR shareholders at the bottom, In November of 2022, it was negative 14,000 SATs per share. So it was in the negative. And the market never valued MSTR at zero. So a lot of people run this math and they'll say, you know, MSTR goes to zero. And it's like, well, that's separating how the market values the residual versus how the residual is calculated. So essentially it won't go to zero because there's kind of an embedded call option where, hey, maybe bitcoin will go up again one day and obviously, you know, price is sentiment and people will look for those opportunities. The stock was trading at a 0.7 XM NAV that invites the. The opportunity for people to snipe that leverage Bitcoin at such a low price because your return is just higher, so that it's impaired in the sense where the residual is calculated at zero. But like, in terms of MSTR going to zero, I just don't see that happening at all. When you actually run the Math, it's about 2022, they had minus 14,400 sats per share at the bottom in terms of bitcoin exposure for MSTR shareholders. And now it's 145,000 today. So it's a huge gulf. Like, the capital structure is so much healthier. So, like, if we go to 25k, I don't think that it will. Like, that's a crazy level of oversold. But yeah, MSTR doesn't go to zero when that happens. It's just the residual calculation.
- [33:32]
B
Okay, that's good nuance, because I wasn't fully aware of that and I actually didn't realize that it traded below that in 2022. That's interesting.
- [33:37]
A
Yeah, yeah, 2022 is way worse for strategy. Like crazy negative exposure. And I think the stock was a bottom like $11. So, yeah, it's a quite of a different story than today.
- [33:49]
B
What's your take on the whole digital credit narrative? Because, like, to me, bitcoin's just money. And I don't fully buy into the digital credit sort of narrative that's growing amongst the treasury companies. Like, what's your take on that?
- [34:03]
A
Yeah, I don't mind the term digital credit. I think that, like, you're evaluating the equities through a credit risk lens. This dictionary definition of provisioning money for the expectation of a return, like, to me it fits the dictionary Merriam Webster definition. So a lot of people take issue with it. I don't take issue with that term. I agree with you. I don't like the digital money term either, though. There was this clip me and Jeff Walton, my friend from True North. Jeff, with my recent appearance on True north, we kind of got clipped up where a lot of maxis were freaking out on us. I think that a lot of people miss the. The context of the entire situation where people were acting like I was advocating for digital money. That's like tranched credit. Replacing bitcoin as a medium of exchange, I view it as like, if some people want to do that, as like an incremental improvement over traditional fiat. Like, if the capital goes to bitcoin, I would view that as a net positive for the overall capitalization of the bitcoin network. But, yeah, I'm with you. I think the idea that you can like, tranche out these risk tranches from a security and that's somehow money, I don't buy that narrative. So I don't like the digital money thing. But digital credit, I don't have an issue with.
- [35:25]
B
Okay, fair with strategy. Well, sorry, with Stretch now trading it like it's $88 post market, this is gonna take a long time to get back to par.
- [35:35]
A
Right.
- [35:35]
B
I think last time it traded significantly below it was a couple of months until it got back to a hundred dol. This is going to be sort of a prolonged stretch bear market, I imagine.
- [35:42]
A
Do you agree? It's tough to say because on February 5, we saw the largest nominal bitcoin crash in the history of the asset. And Stretch rebounded in one day. So I. I'll be honest with you. I expected kind of the same thing where I was like, man, a rebound to 98. That should be expected. And we actually did briefly touch 97. Not after this Thursday, but with this recent overall price stress, we did see it like, reach 97. I think that overall they're gonna follow the guidance that they've set forth with the volume weighted average price. If the VWAP is below $95, they will probably raise the dividend to 12%. That leads me to wonder how many of the people chasing that headline yield with SEDA at 13. Like, is that enough to bring it back up to par? You saw Fong Li today tweet that he bought a million dollars worth of strc. So the CEO is doing his part, I guess. But yeah, I do think it'll go up to par just because I think that overall risk is mispriced with the strategy preferreds. I think the credit quality of the company is amazing. And I think that it's crazy that strategy even has to pay 11.5%. If I'm being honest with you, I think it's. It's too super wild that the dividend rate is as high as it is. It tells me that the overall broader market doesn't appreciate bitcoin. And as a hardcore bitcoiner, I hate that.
- [37:08]
B
I mean, that's something I do agree with. And if I was ever looking at buying stretch like this is, I imagine one of the best buying opportunities you might ever get. Like, I, I don't think this is going to wipe to the right. I think it will get back to $100. Like, if, if you're into it. Like, I get why you'd buy it at this point. Like, it seems very attractive. The, the interesting thing though is like, bitcoin price is going to determine some of this. And I, I feel like it. This works both ways where strategy can have like, a really good impact on the price. And I think right now this is the big overhang we have. Like, I think if we didn't have stretch trading, trading way below, I, I imagine that bitcoin price would be doing better than it is. I don't know if you agree with that.
- [37:51]
A
Yeah, I might have misunderstood you. Are you saying that the bitcoin price is being influenced by the stretch fiasco?
- [37:58]
B
I wouldn't be surprised if it was because people are then baking in, like, the Michael Saylor risk of bitcoin.
- [38:05]
A
Yeah, I think that. I'm not so sure if I agree with that, like, as being a huge. Because I do. Like, going back to what I said earlier, I think that we are in a super niche of A niche of a niche. Like I don't think people know what digital credit or STRC particularly are. Even amongst bitcoiners I see so much misunderstanding about it.
- [38:24]
B
So I don't think they have to understand it to, to look at this. In fact, maybe it actually works because they don't understand it because they might look at strategy being like this looks like it's at risk of blowing up, therefore bitcoin's going to go down. Like I think it can be that simple.
- [38:38]
A
Yeah, I just don't think that bitcoiners who are orange pilled, they're going to be dissuaded from buying bitcoin because of sailors preferred equity. It might have a. I'm not saying it doesn't have a portion of the influence on the, on the price of bitcoin. Of course, like if you understand Austrian economics and human action praxeology, it's the price is the reflection of an endless uncountable number of variables. But like in terms of an overall driver I don't think that that's sizable. I'd be interested to see like research on, on the sentiment behind bitcoin and stretch or something to maybe explore that further. But on its face value I'm not so sure if I agree.
- [39:16]
B
But, but I think you're right. Like I don't think orange pill bitcoiners who are just stuck in sats care and I think that they'll still be buying consistently. But it's the big money that I wonder if this is putting off.
- [39:30]
A
Yeah, I think it's definitely a possibility. I just don't know. It's difficult to say to the extent that it is. It's like an unfalsifiable thing right now. I just wish that we had more market data to tell us that. But I think that it's an interesting theory.
- [39:44]
B
If you hold bitcoin for long enough, there's probably going to come a time when you need some dollars. Maybe it's for a business expense, a tax bill, a property purchase. But whatever it is, you might not want to sell your bitcoin. That's where LEDN comes in. LEDN lets you borrow against your Bitcoin so you can access cash without selling your stack. They've originated over $10 billion of loans since 2018 and they've operated through multiple bitcoin cycles. And Leden has now introduced new tiered rates. So there's no negotiation, no guesswork. It's just the larger the loan, the lower the rate. And you can see all the rates upfront before you apply. The important part for me though is the custody. With Leden's custodied loans, your Bitcoin collateral is never lent out to generate interest. You also get all the tools to properly manage the loan, including LTV alerts, auto top ups and the ability to repay whenever you want with no penalties. I've used Leadd myself. The application has taken me less than 15 minutes and you get dollars in your account within hours. So you don't need to choose between getting liquidity and sticking to your long term Bitcoin plan. With Leaden you can do both. Check your rate using the loan calculator at LEDENIO and use the code WBD for 0.25% off your first loan. That's LEDNIO and use the code WBD if you're already Self custody Bitcoin, you know the deal with hardware wallets, complex setups, clumsy interfaces and a seed phrase that can be lost, stolen or forgotten. BitKey fixes that. BitKey is self custody built for real life. It gives you an intuitive, easy to use wallet with no C phrase to sweat over. And it has a strong recovery system and built in Inheritance for long term Peace of mind and bitkey's just had a massive upgrade. The new device now has a screen, so before you approve something you can check it on the BitKey itself, the transaction, the address or any account changes. It's a big difference. You're not just trusting what's on your phone, you're seeing it for yourself on the device. It's simple, secure self custody without the stress. Go to BitKey World today and use the code WBD to get 10% off the new BitKey that's BitKey World and use the code WBD. The thing that keeps me up at night with Bitcoin cold storage isn't Bitcoin failing, it's my setup failing. And this is where AnchorWatch comes in. With AnchorWatch, your Bitcoin's insured with your own a rated Lloyds of London insurance policy and all Bitcoins held in their time locked multisig vaults. So you have the peace of mind knowing your Bitcoin's insured while not giving up custody. So whether you're worried about inheritance planning, wrench attacks, natural disasters, or just your own silly mistakes, you're protected by Anchor Watch. Rates for fully insured custody start as low as 0.55% and are available for individual and commercial customers in the US. You can speak to AnchorWatch for a quote and for more details about your security options and coverage, visit anchorwatch.com today. That's anchorwatch.com okay, so let's talk a little bit about bitcoin price. This is when we hit 60 the first time I thought that was the bottom. When we hit 60 this time I think it's the bottom. Do you think this is the bottom?
- [42:31]
A
It's so tough man. I'm not like a technical analysis astrology for man chart squiggler guy. But when you look at so many indicators that mark bottoms, you look at the deviation from the four year moving average which to me is like the most bullish indicator ever. How that line just continues to compound at over 20% per year. We're, we're like in the single digit percentile with a deviation from the four year moving average. Bitcoin priced in gold is like cheapest since 2010 level of percentile. I don't know if you're a power law guy but the same thing there. Like we're seeing so many indicators relative strength index where we're just seeing the same levels as 2022. It's flashing November 2022 FTX levels. So I don't think a wick down to 50k or even 30k is impossible. Nothing is impossible. But I think a lot of people are freaking out because that's what happens when you are in like a single digit percentile of bitcoin's oversold price. So yeah, I think that given bitcoin's volatility a lot of people don't realize this but bitcoin's volatility has almost been cut in half since 2022 which is a wild stat. Like the volatility has been crushed for bitcoin and a lot of people don't realize that, that the moves necessary on a daily basis to get you below like a 40k bitcoin number or like a FTX black swan after black swan type situation. It is so much more statistically unlikely given the amount of capital that has to move now. Like so I think that you know, who knows if we're an exact bottom but it has to be close. I don't know if you agree with me, but it seems like we're right there. Sentiment I think is the worst it's ever been.
- [44:20]
B
So I don't know and sentiment's always like that's kind of the counter trade right? When sentiment's the worst ever been, you're probably close to a bottom and I don't go off anything but vibes at this point, like I've been in bitcoin long enough that I sometimes get feels and it feels like the bottom. I don't know if it is, but like I've certainly been. Any spare cash that I could possibly get my hands on has been going into bitcoin recently and that's not always the case. Like it just, it feels like we must be close. What do you think is going to sort of play out over the next sort of bitcoin cy? Do you think we have sort of diminishing returns like because again Saylor obviously talks about his like he has his CAGA targets and he thinks bitcoin's going to continue to perform in the way it has in the past, at least somewhat. Do you think that's true?
- [45:05]
A
Yeah, as of now. I think when you look at the actual price data and the price performance of bitcoin it's tough to argue that diminishing returns aren't a thing. And like a lot of people do this super cringe thing where they'll draw a line from the 2021 top and they'll do a horizontal line to now and they'll say look, it's a cool been flat dead capital. But what I like to look at is the year over year, four year moving average compound annual growth rate where you smooth out the volatility and you are seeing that, you know, 10 years ago when it was going up 54% per year, year over year. Now it's 30, then 29, then 28. I might be making some numbers up there, but that's essentially what it is. You are seeing a decrease in the CAGR of the four year moving average. So the people that say diminishing returns like aren't a thing, well we just saw huge muted upside with the October 2025 Bull Run where we were trading at the power law trend which is way less than previous bull markets. So it's tough. Like I think that we're going to see muted downside volatility as well. I think that's the most realistic scenario. I think the people calling for 30k bitcoin like it's some certainty are smoke and crack to be frank. I think it's like totally insane when you actually go to AI and crunch in like the statistical likelihood of moves like that with how big bitcoin is now. But yeah, I think that overall I'm bullish. The money printer has to print, man. And the Fed's in an interesting situation where they're being triple squeezed with oil inflation and do you cut rates in this environment, maybe we don't see that for another half year or a year. Overall, I'm bullish on bitcoin because monetary fiscal repression is going to be what happens. There's no getting around that. Fiat has no bottom. So long term, I'm super bullish on bitcoin, but I cannot be speaking with any degree of certainty right now, that's for sure.
- [47:02]
B
I do want to ask a question that I did allude to earlier, which is something that I can't get out of my head in that is Saylor stuck in this trade, whether he likes it or not. And this idea that he does have to just keep his foot on the accelerator, keep coming up with new things, and maybe that means add leverage, maybe, like whatever it is, is he stuck and he. He has to just accelerate at this point?
- [47:23]
A
No, I don't think he's stuck at all because I think that everything they're doing is working. If you look at their KPIs, I don't like bitcoin per share bitcoin yield, but that's up considerably year to date. They're raising money at a faster pace than they ever have before. They're buying more bitcoin faster than they have before. So what they're doing is working. It's an amplified expression of bitcoin. The amplification ratio is about 40% right now. So I think that when you saw that crazy blow off top where MSTR went to a 3.4-xm nav in November of 2024, when you have that, and then on top of like leverage on the way down with Jim Chano shorting the stock and a lot of people taking advantage of that frothy premium on the way down. I think the price performance is largely explainable. And then of course, man getting kicked in the teeth with a 50% bitcoin price correction, that doesn't help an amplification story. So. So, yeah, I don't think anything's broken. I think it's largely explainable by those market forces.
- [48:23]
B
And with the, like the. You said it got to 3.4 XM NAV. Are those days gone? Like, do you think it can ever get back there again as. As like a MSTR shareholder yourself? Like, do you think anything over 2 now is kind of out the question?
- [48:37]
A
That's a good question. It's really hard for me to think of that happening again. I'll be honest with you. I. I see this critique a lot. You'll see there's some MSTR maxis out There that are losing their mind. I'll be honest with you, I'm like the biggest strategy bull, but I think it's going to be the most valuable company in the world. I'm like, bitcoin's going to $3 million a coin. They're gonna have trillions of dollars of assets. That said, some people are losing their minds. They will say, sailor and Fong, stop selling MSTR, wait for the M nav to go to a 2.5. And I'm like, you think that the, the company like the market's gonna give them $80 billion in premium just because like they're too big now, man. Like I think that me and you probably are in agreement there where like a 3.4-xm nav. You gotta think of when that happened. That was when there weren't so many bitcoin derivatives in the market that you could access with a brokerage account. That was when Trump just won the election where we were talking about a strategic bitcoin reserve. You saw bitcoin move from I don't remember exactly 55k in September to 90k. Like that was like lightning in a bottle, everything going right to hit 3.4 at that time. And that's why Saylor was selling stock hand over fist because you don't squander that opportunity like go get the bitcoin when the stock is that expensive. So I, I think M Nav will always oscillate just because the price is in the numerator, the price of the company and price is a reflection of market sentiment. So I don't think that like we go to one and stay there forever. I think that's insane. But also I don't think like we just go back to a 3.4 either. I. It's tough because we're thinking of these like long term hypotheticals. Could MSTR one day command a huge premium because they own 6 million Bitcoin and they can issue more credit every than everybody and bitcoin is like the new foundation monetary base. That's an interesting question, but it's all like hypothetical. At least in the next five years. I would be shocked if we ever saw an M Nav explosion like that again.
- [50:35]
B
Yeah, me too. Okay. I want to get back into sentiment because you mentioned before like this feels FTX level sentiment and I totally agree, if not even worse. And I've said this before on the podcast, but I think it's true in that when FTX blew up, if you were a bitcoiner in bitcoin Land you could look over there and be like huge fraud scams, like, of course the market's going to dump. Makes sense. Nothing's changed for Bitcoin. Therefore sentiment sure was bad because the price was way down, but everyone knew why. Whereas this time price is down a lot. We didn't really get the highs that we expected last cycle and there's nothing to point to directly and be like, that's why. And I feel like that's adding to the sort of negative sentiment within bitcoin world. And obviously Saylor is now bearing the brunt of that in a lot of ways because people are just mad about something and to find someone to blame it on. Is that a bullish sign though that we are at these levels and there isn't some like out and out fraud blow up that you can point out and be like, this is why.
- [51:37]
A
Yeah, I agree with you 100%. I think that the market is trying to find a villain right now. And Saylor is that guy. Like he'll be the hero in the bull markets and then in the bear markets, you know, he'll be villainized by a lot of the community. I think that it is a buy signal. I think that. And it's not even a question of opinion almost, it's almost like a mathematical reality just going back to what we talked about. People often forget that like your statistical likelihood of higher returns skyrockets when you buy at this level of oversold versus these indicators. And nobody has a crystal ball. You can't predict the future. But it's so fun to load up Bitcoin's entire price data for every single day since January 3, 2009, or at least the exchange data in July 2010. And just ask it like, what are the forward 6 month, 12 month, 18 month, 24 month returns of Bitcoin whenever we've been at this level of oversold. And you could do it for like the fear and greed index if you wanted to. And all of the numbers throughout all of history are like triple digit returns. Where sometimes I'm seeing them thinking, man, like I want to like take out a second mortgage to buy bitcoin right now. Because like it's seriously, that's what it is. Your statistical likelihood of higher returns skyrockets when you buy when we're this oversold. And the sentiment is an indicator. It is a buy signal. It like literally just is. Like the people who bought MSTR call options in 2022 and made $10 million, like they literally bought the most leveraged possible bitcoin at the worst ever sentiment in history and they made out like bandits. So like, are we 20, 22 levels of oversold? It's pretty close. But yeah, I think I agree with you, man. Like the, the negative sentiment is, it's a buy signal for me. I'm like, I've never been more bullish because I understand the mathematical reality of to make money and to go up NGU, you need to be buying right now 100%.
- [53:34]
B
And it's one of those funny things in bear markets. Like I kind of like perversely enjoy when price is crashing. It's always exciting. There's always stuff to talk about. I don't like the just dragging out. Like this bit's boring and I just can't wait for the tide to turn again. I'm ready for us to go up again.
- [53:52]
A
Awful. Yeah, yeah, I couldn't agree more.
- [53:55]
B
But I'm, it's weird. I'm, I'm sort of, I have this turbo bullishness around bitcoin and if I was to trade, it would get me in big trouble. It's like the big reason I don't trade. But I can't see bitcoin staying at these levels for long. I hope not. Anyway. Do you follow what's going on like on macro side with everything that's happened in the Fed recently?
- [54:15]
A
Yeah, I do to a degree. I don't have a total technical understanding like a lot of these macro experts do, but like I do a lot of analysis on my own channel and then on the Swan channel as well. I have a two day a week show over there where I talk about this a decent amount. But yeah, following the macro side a little bit. I kind of alluded to it earlier, but like the Fed's being triple squeezed right now, man. Like it seems like, like how do you explain away potential monetary easing or rate cutting like that, that, that seems
- [54:44]
B
like the, the battle they've got right now. Yeah, because when, when you talk about headwinds in bitcoin, like we don't really have one that's necessarily intrinsic to bitcoin this time. But like the macro side is the thing and they seem totally trapped, like inflation's higher than they want it, jobs are pretty good, like, but they need to cut rates and how do they do it?
- [55:03]
A
But this is very interesting if people have been paying attention to what Warsh has said leading up to his appointment. And recently he's mentioning things like we need to recalculate how inflation is calculated. And then with his last statement, after this latest Fed meeting, Warsh is saying that, like, we're going to be giving less future guidance or less commentary, essentially. So that's very interesting. Like, what does that tell you? To me, it's almost like you need to play your cards closer with any, like, obvious moves you're going to be making. I'm not quite on the level of, like, the conspiracy tinfoil hat, like, he's Trump's puppet and he's going to do the bidding of cutting rage. But those two things are very interesting, I think. Like, they're already being open about talking about how you recalculate it. And we've seen this game happen time and time again. The government lies to us about CPI. They literally replace ribeye steak with 7327 ground beef. They lie to us, Danny, and they, they manipulate the basket. Anybody who knows shadowstats.com, the true government inflation. I know I'm preaching to the choir here, but, like, we're seeing the same language happening. They continue to change the lingo. And this is very interesting. I saw this recently. There was a meta analysis of bitcoin price action relating to not only the Fed's actual actions in terms of rate cutting, but the market perception in terms of how the media was reporting about it. And the finding was that Bitcoin is the most reactionary asset by far to even the perception of rates being cut or rates being hiked. So, like a 25 study meta analysis of that. To me, that's a big explainer of the bitcoin price action. When you immediately saw this war happen and the poly market betting markets price in rate hikes for 2026. To me, that's like a large explainer. If you look at that meta analysis, that was interesting.
- [57:01]
B
I 100% agree. And the interesting thing is, like, it seems like Walsh is trying to be sort of of somewhat covert in what he's trying to do. Like he said, no forward guidance, but it's so obvious. Like, it's so over. Like, he's going to redefine what inflation is. He'll come out with like a new CPI adjusted number. It'll give us a lower inflation print. And I'm sure he'll go to cut rates or do like, monetary easing in some way.
- [57:25]
A
This is what these central snakes do. This is what these snakes do. These people manipulate the fiat money supply. Like, this is the case that it's been for over 100 years. Like, this should be so obvious to everybody by now. And I know I'm Preaching the choir. We're bitcoiners. But it's literally the same playbook. Like, change the name of this, you know, we'll change the inflation statistic. It's. It's wild, man. It's. It's literally the. Another page out of their playbook. Call it something else and then repress. Repress the society monetarily. It's a sad state of affairs. Like, dude, did you know that the United States debt is like, on pace to be over $50 trillion by the time Trump leaves office?
- [58:08]
B
It's insane. It's just. It's just numbers that, like, I, I can't even understand. Like, I don't know what 50 trillion is. I just know it's absolute insanity.
- [58:15]
A
Yeah, it's just crazy. Like, wait, Elon just became a trillionaire. That's $1,000 billion dollars and that 50 times over. It's. It boggles the mind. It's just ridiculous.
- [58:26]
B
It's crazy. And Honestly, Bitcoin's at $64,000 right now. With all this happening there is literally. I don't understand why more people don't know this is the best place to put your money and move into a bitcoin world. It's crazy to me. And the other interesting thing that I think Walsh has to battle with is he's got rid of forward guidance. And like you say, markets move on what they say, not even what they do. And so without the forward guidance, do markets just get even more confused as everyone tries to read the thieves and they don't really have anything to go off apart from vibes. Like, everything's vibes.
- [59:03]
A
Yeah. I was going to ask you, like, do you feel like that this has been the most uncertain market in history, like, versus when you first started investing? To me, I can't imagine being in anything else but bitcoin. Like, literally 100% of my family's future and my. The success of my bloodline, it is 100% reliant on the success of the bitcoin network because I look at equity multiples and I can't square that in my head on how these things are investable. And what's funny, even before I was totally orange pilled, my orange pilling journey has been quite long. But I have always thought that about equities and I've always been able to perceive certain valuations being ridiculous. And I continue to see that get more crazy as my life goes on and I get older. And it just. The uncertainty is wild. We have people debating on whether or not MSTR should trade at a 10% premium to their Bitcoin holdings versus DoorDash stock trading at a 70x earnings. It's like what? Like to me, I'm like guys, like the answer is probably somewhere in the middle here. So to me that's why I love bitcoin and I actually do like the treasury companies because in terms of like a risk reward calculus, it's so much easier of a tell to me. Like do I buy Costco at a 60 pe? Is that overvalued or undervalued will cost coexist in 2100 when robots have replaced humanity? There's. There's never been more uncertainty yet equity multiples are at the highest they've ever been. The I believe that the composite price to earnings multiple for The S&P 500 is a 29. Like I don't. I think that's crazy. Crazy rather just buy bitcoin, just jbb, just buy bitcoin, stack sats and call it good.
- [60:56]
B
It's it. That's absolutely nuts. I didn't realize across the S and p It was 29 times. That's insane. And like people might think that's silly that because you said before that bitcoin trades off what the Fed says more than almost anything. Like so sure it could have a really negative effect, but we're just playing a different game. Like this is a much longer term, like I'll take the short term volatility to own bitcoin for the long term. Like that's an easy bet for me.
- [61:18]
A
I can't possibly imagine having my wealth stored in anything else but bitcoin and then like with some risk capital buying like a. An equity that's reliant on bitcoin. Like I cannot even fathom honestly, like buying the S&P 500. To me, like I want to like, I don't want to say vomit but I get like nauseated about this. It's just like it feels gross. Like to me it's like this latest stock market crazy rush. It's like the last big boomer hurrah where we've seen real estate and equities just at the mercy of the money printer getting inflated. And we have all of this old boomer capital. I don't say boomer disrespectfully for anybody older listening to this. But like that's what it is. It's people that are unfamiliar with bitcoin and then they store their money and these things that are absorbing the money printer essentially. And it's a really sad state of affairs. And you know as well as I do, like, you know, the capital is going to hunt scarcity at the end of the day, so I can't buy anything but bitcoin.
- [62:26]
B
Let's go. Adam. This has been awesome. The takeaway is you think strategy is going to be fine. Buying bitcoin is always the way. I'm excited for the next few years, man. I think we're going to have good times are coming back.
- [62:39]
A
Yeah, I think so. I think there's a lot of this bitcoin civil war is super interesting. People throw in shade.
- [62:45]
B
There's multiple civil wars.
- [62:47]
A
There are, yeah. The core and knots thing, that's for sure. We didn't even talk about that. So maybe another episode or something. But yeah, like, crazy stuff, man. It was a great talking to you. I'm bullish on bitcoin. Sounds like you are too. And at the end of the day, that's how we win.
- [63:02]
B
Adam, where do people go to find more of your work?
- [63:05]
A
Yeah, I do a daily YouTube show at Adam Livingston BTC and then I have an X account where I post analysis on bitcoin and a lot of MSTR stuff as well. MBLive. So those are my two platforms.
- [63:19]
B
Let's go. All right. Thank you so much, Adam. We'll have to do this again. That was awesome.
- [63:22]
A
Thanks, Danny. I appreciate it.
- [63:23]
B
Appreciate your time, man.
- [63:24]
A
Have a good one.