{ "episodeId": "SLP677", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "cory_klippsten": { "name": "Cory Klippsten", "role": "guest", "tag": "CORY" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.18, "text": "Now inevitably, some retail is going to participate and try to be along for the ride in the trade, because this is something you can just access in your brokerage account and the information is out there. But if all you do is attempt a rocket booster stage leveraging retail and you fail to get to institutional scale and get into, you know, really like tens of billions of dollars flowing into your, your leveraged Bitcoin equity, then really you haven't made a dent on anything. We're working with a bunch of Bitcoin treasuries companies of various flavors. I think one of the biggest new incremental sort of wins here will be being able to make a really strong case for companies holding Bitcoin on their balance sheet, even if they don't become a full LBE, and I think that's something that we're really focused on, because I, I do think that is something that, again, can make a dent in the universe. Not everybody's gonna go whole hog and just become a levered Bitcoin equity or a Bitcoin accumulation machine or whatever it is, but every business can benefit from having some Bitcoin on their balance sheet, and I want to just make it easier and easier to see why that's the case." }, { "speaker": "cory_klippsten", "time": "01:18", "start": 77.61, "text": "Hi everyone and welcome back to Stephan Livera podcast brought to you by Bold. American listeners, you can buy Bitcoin at Bold and also earn the highest Bitcoin back rewards with the Bold debit card. Rejoining me on the show today is Cory Klippsten, CEO and co-founder of Swan Bitcoin. Cory, welcome back to the show." }, { "speaker": "stephan", "time": "01:34", "start": 94.18, "text": "Hey, it's Stephane, it's great to see you." }, { "speaker": "cory_klippsten", "time": "01:37", "start": 97.34, "text": "So, Cory, I know, we were chatting a bit offline about, this is one thing people have been talking about, like altcoin season. Is, is that gonna happen or is it gonna be more like LBE and treasury company season? So, yeah, let's get your thoughts there. What's, what's, w-what's your latest thinking on that?" }, { "speaker": "stephan", "time": "01:53", "start": 113.46, "text": "Well, we're recording on the morning of July 21st, and it appears that both are in full swing. so not surprising that eventually there would be some kind of bounce off the floor, when The centralized altcoins, but, you know, you just have to look at the, the zoomed out chart and think about having to hold any of those for their eighty percent drawdown versus Bitcoin to enjoy a little bump, you know, here from the bottom. And just in the long run, of course, all thirty million of them trend towards your own Bitcoin terms inevitably." }, { "speaker": "cory_klippsten", "time": "02:24", "start": 144.38, "text": "Of course, yeah. And I think what we see, like, I mean, I was just looking some basic numbers, ransom, you know, AI stats, and some of these have-- yes, it In, you know, in fiat terms and a little bit in Bitcoin terms, but they're basically all of them are still down quite a bit from their all time high in Bitcoin terms, and I think that's, that's really the real number, that's the real benchmark, isn't it?" }, { "speaker": "stephan", "time": "02:49", "start": 168.55, "text": "Oh yeah, absolutely. And you, you know, you were, you were with us when we ran these numbers a few times and kind of updated it every couple of years or whatever, and, there've only been two altcoins in history that have had a second all time high in Bitcoin terms." }, { "speaker": "stephan", "time": "03:06", "start": 186.24, "text": "Thirteen and Doge because of the Elon pump had a higher high in twenty one than it did in seventeen. Every single other altcoin has just dwindled in value from its original pump versus Bitcoin. So that is the game, the game is to be an insider, the game is to be the one doing the dumping, and, that's kind of what you see." }, { "speaker": "cory_klippsten", "time": "03:26", "start": 205.82, "text": "Yeah. And so that's kind of the pattern, as you said, like we're, we're seeing this sort of, if you were to chart it, they're, they're sort of, they're trending down, but We get a little pump up, but the trend is down, and I think that's any, you know, hardcore Bitcoiner generally holds that view that in general, things are going to trend down priced in Bitcoin terms, and that's gonna likely remain true from here until hyperbitcoinization, and then from that point on, I don't know, it's, it's a, it's an open game of like, can assets, you know, b-b-uh, go up in Bitcoin terms? I don't know. I guess that, and that maybe is coming to the kind of treasury company thing. Because again, that's where maybe there's so much excitement now around treasury companies, because again, that some of them have produced, you know, crazy returns, with a different risk and return profile, to be clear. so as you look at this, this whole treasury company phenomenon now, can you explain to us a little bit of your thoughts on this? How are you viewing this?" }, { "speaker": "stephan", "time": "04:26", "start": 266.36, "text": "First, I wanna parse something that, that just, to pick that apart for a sec about, so as Bitcoin's growth rate declines, which is inevitable over- Over the long haul, because of the law of large numbers, it, it will likely remain the fastest growing asset class over time, but that doesn't mean that individual assets within other classes can't outperform Bitcoin. That will happen. There've been plenty of stocks and, you know, individual startups and, and things like that that have outperformed Bitcoin over certain time periods, and at some point when Bitcoin is, you know, a widely used medium of exchange and unit of account and it's kind of growing- At, at closer to the, the rate of productivity growth globally, because we're all just on a Bitcoin standard, then of course there will be opportunities to outperform Bitcoin with particular assets. So that's just kind of, it, it won't just go up versus everything forever always. but I just think we're, you know, a few decades away from any other entire asset class being able to outperform Bitcoin. So it's just by far the safest thing for long-term, long-term store of value is the safest asset." }, { "speaker": "cory_klippsten", "time": "05:37", "start": 336.52, "text": "Yeah, I'm with you. And as, as you said, like certain companies, like if you pick, if you cherry-picked the right one and the right timeframe, like, okay, Tesla in a certain timeframe or Nvidia across a certain timeframe, okay, yeah, they did, they did do better than Bitcoin. And even certain Bitcoin investments, like I believe certain investors in maybe Coinbase or Kraken, depending on the timing, they did outperform. But then, yeah, like it, it does come to like, which timeframe are we talking about? And yeah, as you said, longer term, Right? It's just diminishing returns. It's just we should expect this, you know, that today Bitcoin is what, two point two trillion or something like that, and who knows, maybe in twenty years' time it'll be like two hundred trillion, and by then it's just gonna be a different ballgame." }, { "speaker": "stephan", "time": "06:20", "start": 380.39, "text": "Yeah, and even with Coinbase, the, the last round that you could get into that outperformed Bitcoin was the Series A, which was a tiny amount of money that very few people knew about and got into, and it would have been a bet on one company out of dozens. And none of the other ones did that, right? So if you spread equal bets across, you know, thirty companies, and one of them happened to be that Coinbase A round, you know, and that was one thirtieth of what you invested or one twentieth of what you invested went into Coinbase, like you still wouldn't outperform Bitcoin with your portfolio of bets. So even that is just kind of, unlikely that anyone really would have gotten into that in size. Like it was pretty much Union Square Ventures and maybe- A little in Jason, and that's about it." }, { "speaker": "cory_klippsten", "time": "07:08", "start": 427.51, "text": "Yeah, gotcha. So then bringing it to the treasury company question, that may also be driving some of the excitement because some of these have actually outpaced Bitcoin, and I wanna be careful there. Different risks, different return, obviously. Not your keys, not your coins. And I think it's important we are clear for people, right? Do you hold Bitcoin? Do you hold equity? Or do you hold debt? And, you know, understand they are different things." }, { "speaker": "stephan", "time": "07:32", "start": 452.0, "text": "Yeah, for sure. I mean, what I, what I've been saying Very loudly and publicly is that no individual, you know, I would call it a leverage Bitcoin equity. So you've got, let's just kind of set definitions. Let's call Bitcoin treasury companies are companies that include both MicroStrategy and Tesla. So it's one, like MicroStrategy, that is trying to, as a primary KPI, increment Bitcoin per share, and then there's other Bitcoin treasury companies that just have Bitcoin in their treasury, like a Tesla or a GameStop or something like that. And I would call the- Bitcoin treasury companies that actually their, their reason for being or their primary business focus is, is raising money in capital markets to acquire lots of Bitcoin. So this is MetaPlanet, Semler, et cetera. I call those leverage Bitcoin equities." }, { "speaker": "cory_klippsten", "time": "08:20", "start": 499.53, "text": "Yeah." }, { "speaker": "stephan", "time": "08:20", "start": 500.35, "text": "So it's, it's similar to the concept of, a leveraged buyout in, in Wall Street terms or private equity terms, and the characteristics of the companies that I expect to do a lot of this over time, are very similar Similar to what, make a company a good private equity target. And that's why Wall Street is able to, understand LBEs so easily, it's because you're looking at companies that have good cash flow and, low multiple on earnings for their, for their market cap. And usually thirty to forty of those get taken private off of, NYSE or Nasdaq each year, and that's the private equity market. And that's about the scale and the number of companies that I expect to be moved over to an LBE strategy over time. So in the next five to ten years, we'll go through a, a bubble here, and obviously it's very speculative with all these facts and things like that, but I don't think that will be the natural origination of most of these companies. I think it'll actually be more like the original one, MicroStrategy, which was tossing off cash, had cash, had a low multiple, and, you know, basically was, was undervalued because the market didn't trust MicroStrategy to re- invest its profits in the business, which puts you in a position where all you can really do is, is stock buybacks or pay dividends or go private and sell yourself to private equity. So this is basically like a different way out, of the melting ice cube problem. So that's what I really see, like, I think you've got, you know, I, I just started paying attention to, I think it's Intus Giga, the, the Windows company, you know, and it's like a good business that tosses off a lot of cash, and privately they've stacked, I think, thirteen hundred bitcoins over the last few years or something like that, and I think they plan to go public at some point, or it would make sense that, that they would. You know, that's, that's something that I expect to see a lot more of going forward, is, is companies that just have steady cash flow and, and then basically turn into leveraged Bitcoin equities, Cash flow to be able to service some of the, the, the debt, especially the kind of debt that we are now seeing MicroStrategy prefer, as they've kind of abandoned converts and moved to preferreds, you need to be able to service that debt, and it would be better, and the market will accept it and lower your cost of capital and make you a more effective leverage Bitcoin equity if you can service that debt with operating cash flow as opposed to having to hit the ATM and sell stock for it." }, { "speaker": "cory_klippsten", "time": "10:54", "start": 653.57, "text": "Interesting. But I would say, I mean, certainly the point, like MSTR being- First and Saylor being first with this, they are in a special category of their own right now, and because they have, you know, six hundred thousand coins, basically no one's gonna catch them or it's very unlikely. But wouldn't it be fair to say they started off being more, let's say, you know, they made, you know, the money in their traditional software business, BI, data analysis, that kind of thing, but then over time, that became so small as a percentage of their overall- Business, right? So now they really are more of a Bitcoin accumulation LBE than they are a, you know, in terms of the size and put it this way, their intent to-- now that MSTR has the three, preferred shares offerings, Stride, Strife, and Strike They may well end up, you know, issuing more ATM on either the common equity to pay, those other, obligations rather than funding it out of their own, business intelligence and SaaS business, right?" }, { "speaker": "stephan", "time": "11:55", "start": 714.71, "text": "Yeah. Well, I think inherent in your description of MicroStrategy, you, you can't assume that other companies that are small and just on the path and on the way up are going to be able to do the same things that MicroStrategy can. At the scale, at the scale that it's already achieved. and just with the market acceptance" }, { "speaker": "cory_klippsten", "time": "12:14", "start": 733.71, "text": "and," }, { "speaker": "stephan", "time": "12:14", "start": 734.43, "text": "and just trust of, you know, hearing, hearing Michael Saylor on shows and podcasts and conferences for five years straight saying, you know, mostly the same things. I mean, there's like an evolution obviously in the story, but for the most part, being very consistent. It's just, it's just a different beast. And, you know, it, you-- There was a, a nice little show last week where, the host, asked Saylor, Do if you were head of Bitcoin strategy for one of these smaller leverage Bitcoin equities. And, you know, he spent the first three minutes just talking about the operating business and how that is, you know, essentially the rocket booster that's required to start to hit scale. I think I called that. And that was," }, { "speaker": "cory_klippsten", "time": "12:54", "start": 774.46, "text": "Joe Bernett's one, one. Yeah, it was Joe. Yeah." }, { "speaker": "stephan", "time": "12:57", "start": 777.08, "text": "Exactly. Yeah, yeah. So he was basically saying like, if you were in charge of Sumlars Bitcoin strategy, what would you do? And it was, I think, really interesting that, You know, really focused on the operating business, and then basically, you know, completely skipped converts. He doesn't recommend doing converts at all, and basically skipping to prefers." }, { "speaker": "cory_klippsten", "time": "13:20", "start": 799.83, "text": "So actually, can we, maybe you can explain that for listeners as well, because there might be people who aren't as familiar with that, and maybe I'm not as familiar as I would like. So in the, I guess as I understand, some of the strategies that MSTR were using before they had the preferred shares, they were doing this strategy where they were issuing debt at very low rates, usually zero or a little bit above zero percent, and as I understand, these are like usually arbitrage traders on the other side who, they are, I guess, monetizing the volatility, and they-- for Can you explain a bit of that and why, why you view that as maybe it's not as optimal?" }, { "speaker": "stephan", "time": "13:54", "start": 834.15, "text": "Yeah, so look, it's really complex to model, but it seems like very low cost of capital, but because you're actually letting people convert into the stock at a forty or fifty percent premium anytime in the next five years or something like that, it actually is, very costly capital. And you can tell that it's costly because the reason that the convertible ARB guys the desks in New York In London were jumping into these so fast is because MicroStrategy was pricing them more cheaply than anything else in the market. So basically, they would run their spreadsheets and they would say that, you know, this, This appears to have something like a, you know, like a seventy implied volatility, but my strategy is selling it to me for a sixty implied volatility, so I can immediately hedge that off right away and make money, risk free, actually risk free. And so that's why they were oversubscribed, is because they were deliberately pricing it so that the convertible arbitrageurs would for sure all want to pile into it. And that's why being part of the sellers' club was so lucrative for a couple years. So if you were one of the banks that was able to rep this, you were making fees for your clients basically risk free, and you were able to reward your clients. And so they, they kind of created a, a crew that could print money essentially. now that was just, again, kind of a, a stage two rocket booster for MicroStrategy, and then they created something that was perpetual capital where people would invest in Stride. And Stride is, I'm sure you've had people explain it on your show before, so let me know if you want me to give kind of the, the short version." }, { "speaker": "cory_klippsten", "time": "15:32", "start": 932.48, "text": "yeah, yeah, give us the short version. Okay. Yeah, yeah. So it's" }, { "speaker": "stephan", "time": "15:35", "start": 934.54, "text": "basically just, it's a, it's a perpetual preferred that has essentially like an option built into it. So it just has like a, an option on, you know, if MicroStrategy gets, above a thousand dollar the share, then you can call it and own the stock as well" }, { "speaker": "stephan", "time": "15:55", "start": 955.02, "text": "A, a, a senior preferred kind of flat offering, and now they have like a junior preferred, you know, basically like a junk debt offering as well. That's, that's junior to both of the other instruments, but has a high, higher interest rate. And I think it's, that one is, I think is strife, and it's just ten percent, if I recall. so, you know, so they've got these, these three instruments, and there are different investors that, prefer different versions of that. And this isn't really novel in any way, not even in the Bitcoin space, by the way. So obviously this has been done in other securities with other cash flows forever, where basically you say, like, okay, I've got this, I've got this income stream or this, this, this instrument that has a yield over time, and what I can do is I can guarantee a fixed Yield to one set of risk averse investor, and then they give up upside and basically sell off that risk to someone that you would call like the equity investor, the equity tranche of something. So this is, this is how mortgage backed securities are packaged and securitized. This is how, you know, collateralized loan obligations are packaged up and securitized, and you basically chunk that off, and you can make as many tranches as you want, essentially. You know, a lot of Wall Street projects, I'm sorry, products classically would have, you know, maybe like Tranches for a big pile of loans that they put in, and they have like, again, it's the same nomenclature as well, right? Like it's, it's a junior debt, senior debt, and an equity tranche is very, very common, in Wall Street. And you've actually seen this in the Bitcoin space going back, you know, at least eight years that I'm aware of, and probably nine or ten years, and it's basically just saying, \"Hey, I've got this fund, this fund buys Bitcoin with your capital.\" And the debt investors get, you know, ten percent, twelve percent, fifteen percent, something like that, but it's fixed. So you get that, that, that fixed in-interest rate, and that's the yield, and it was very popular in Japan, as, you know, the yield chasing country. And then they give up every-- all the upside above that. And that means that the equity investor in that Bitcoin tranch fund-- and you've, you've seen Pierre write about this and describe this, but it's actually been in market for a long time, it's just A structured Bitcoin product, they get the upside, but then it's levered Bitcoin exposure because you're also using the capital from the people that bought the debt tranche." }, { "speaker": "cory_klippsten", "time": "18:24", "start": 1103.82, "text": "Yeah, that is a really interesting thing because now you are really starting to tap these, or at least you're attempting to tap these huge markets of capital, that- That an everyday individual could not. So I guess that's probably a, a question that I think some people will still having that, is this, you know, let's say a, a treasury company skeptic or an LBE skeptic in this context might think, \"Oh, is this just like insiders dumping on the public markets? Or is there something, is there some kind of sustainable real advantage or edge here?\"" }, { "speaker": "stephan", "time": "18:57", "start": 1137.14, "text": "Yeah, it's very real. that doesn't mean that there aren't going to be bad actors. It doesn't mean that there aren't going to be, essentially like token marketing playbooks applied to LBEs, which I think you're seeing kind of a lot of, essentially marketing them with really, it's the same people that have marketed ICOs and all kinds of crap with the same vendors, and they're just turning into, you know, digital asset treasury companies, including some Bitcoin companies, but also doing a bunch of altcoin, and this- Obviously, I just don't see this working long term with altcoins 'cause it's rotten at the base of it. So digital asset companies is kinda stupid, digital asset treasury companies is dumb. But again, what I, what I keep saying is like, it only matters if you actually get to institutional scale. now inevitably some retail is going to participate and try to be along for the ride in the trade because this is something you can just access in your brokerage account and the information is out there. But if all you do is attempt a rocket booster stage leveraging retail and you fail to get to institutional scale and get into, you know, really like tens of billions of dollars flowing into your, your leveraged Bitcoin equity, then really you haven't made a dent in anything. Like you don't-- what I always say is like, as, as you know from spending a lot of time with me over the years, you know, always do what's best for Bitcoin and Bitcoiners. Like you're not doing anything for Bitcoin and Bitcoiners if you don't actually achieve that end- Institutional scale as an LBE. So you should be shooting for that institutional scale and, you know, just running a penny stock up 10x or something like that and then having it crash and never actually being able to achieve scale. And if the team doesn't look like it can actually interface with institutions and actually attract institutional capital and be able to sell it, if that team doesn't look like the type of team that you see at, like, a microstrategy or something like that, or maybe, you know, I, I, you know, obviously you look at the team at, at And, you know, Matt Cole coming from Calpers and knowing all those people already, like that's the type of thing where I'm like, okay, if they get this right, that's at least a team that can actually do this and can actually sell this. I think that's one of the reasons some people still have, you know, a bullish thesis on, on Semler as well, because, you know, Eric comes from the hedge fund world. A lot of people think that he started that company, he didn't. He took it over. I think it was his dad's company, right" }, { "speaker": "stephan", "time": "21:28", "start": 1288.06, "text": "Of a, of a Ross Stevens or something like that in his own neck of the woods, you know, so I think it's, it's something like that. So, I'd say be, be ambitious if you're gonna do this. I don't think podcasters solve the problem. All that does is make a bunch of noise for the initial pump, and if you don't actually have a real plan to be able to graduate to institutional scale, you're really just like not making a dent in the universe, and you're basically just enriching yourselves, like momentarily" }, { "speaker": "cory_klippsten", "time": "21:58", "start": 1318.12, "text": "The lead sponsor of this show is Bold, the banking platform designed for Bitcoiners. With the Bold Virtual Visa Debit Card, you earn Bitcoin back on every purchase. The more Bitcoin you buy with Bold, the more Sats back you get on the card. Buy twenty-five hundred dollars of Bitcoin and earn three percent Sats back. Keep stacking with Bold to earn up to ten percent Sats back. Bold offers the industry's lowest fees on Bitcoin buys and sells with zero added spreads. When starting out, you can use Bold Wallet, which is managed by the team, but Bold is also supporting self-custody Of three collaborative custody multisig for zero monthly fees. With Bold, you get your own FDIC-insured checking account to store and send fiat, pay bills, direct deposit your paycheck, and replace your legacy fiat bank. Sign up today and get zero fees on your first ten thousand dollars of Bitcoin buys and twenty-five dollars of free Bitcoin when you buy a hundred dollars of Bitcoin or more. Go to getbold dot io. This episode is brought to you by CoinKite, the makers of my favorite Bitcoin hardware wallet, the Coldcard Q. Now, some people think self-custody is too hard, but it's really about taking responsibility for your Bitcoin wealth and understanding that self-custody gives you a true feeling of liberty. The Coldcard Q has a full keyboard and big screen, it's got two secure elements and a true air gap, allowing you to go fully air-gapped using QR codes from seed generation to transaction signing. You can power the device using three triple-A batteries, so you don't even have to plug for PC or Nunchuk on mobile, and you can dial it into the right level of security and complexity that you choose. If you want a simple setup, just use twelve words and single signature. If you want passphrase, s easy. If you want to add multi-sig or co-signing features, you've got those too. So go to coinkite dot com, use code livera to get ten percent off on your cold card or other devices and level up your self custody today. And, and then what about the, let's say the jurisdiction plays, right? So we've been talking a little bit about the American case, but what about, let's say Meta Planet? They seem to have really been proving out a model there or, some other ones. I know, the Blockchain Group, in France, and obviously very early stage things like, Smarter Web Co and others out there. what are you, what's your take there on the different jurisdictions and whether they will be able to hit a certain level of scale?" }, { "speaker": "stephan", "time": "24:14", "start": 1453.97, "text": "Yeah, well, I think the, the Japanese market and having an actual Japanese company that has that, that particular arm, which is basically, I think spot Bitcoin Cap gains taxes fifty percent there, and I don't, I think it's either none or it's twelve percent or something like that inside of a retirement account. So most of that retail money that's flowing into Metaplanet over in Japan is people trading essentially in their retirement accounts. so that's clearly a major arb and has been a big, a big, booster for capital flows into that ticker. the AltBG, the Blockchain Group out of, France, it, it appears the little arb they found was basically if they set up a Luxembourg entity, you could take investments, whether it originated with Bitcoin or it was a fiat investment that was then converted into Bitcoin, you can basically- We park it in the Luxembourg entity and essentially pass along the cap gains tax obligation from that point forward to the company rather than Keeping it to yourself, there's some kind of transfer of, of cap gains obligation, is my understanding. but the, the, the key is basically they're able to, you're able to like check Bitcoin in and still be able to, call that Bitcoin back anytime over the next three years unilaterally and five years if the company doesn't convert it for you. So basically they're, they're selling convertible debt with a strike, a strike price above the current price, and you can take it Essentially, you know, look, there's obviously risk in everything, operational risk, whatever, but it looks on paper like a, a risk-free, call option on the stock price going up, and they get to show that Bitcoin on their balance sheet even though the investors that are checking the Bitcoin into this Luxembourg entity have the right to call it back at any time in the next three years. So there's, there's a bit of an accounting arbitrage there clearly, because- You know, they're showing it on their balance sheet as their Bitcoin, but each one of those individual investors still can call that Bitcoin back at any time. So it's kind of, you know, it's, it's a little bit of, an accounting game, it seems, from my limited understanding of it, and I'm not that close to it. But, you know, if the system allows you to do it and allows you to show all of that, you know, and, and after three years, the company can actually force the conversion, assuming that they're above the strike Price, then that's, that's quite the little flywheel." }, { "speaker": "cory_klippsten", "time": "26:56", "start": 1615.77, "text": "Yeah, I see. And I haven't seen anything else yet, by the" }, { "speaker": "stephan", "time": "26:58", "start": 1618.29, "text": "way. I haven't, I like, I, I haven't heard anybody tell me about another good ARB other than the Japanese one and this one that AltBG found. everything else just appears to be like, you know, just maybe in certain markets having a ticker that people locally can trade and that's about it. But I don't think there's another actual, you know, sort of tax ARB that I've heard about other than" }, { "speaker": "cory_klippsten", "time": "27:20", "start": 1640.37, "text": "I see. and then, well, as I understand, some of these have, like, I, I, as I understand, in the UK, there's like this retirement account aspect of it. I don't know the detail of this, but my understanding is there are, like, UK Bitcoiners who have money s-trapped in the fiat retirement system, and they would rather, you know, hold Bitcoin assets." }, { "speaker": "stephan", "time": "27:40", "start": 1660.35, "text": "Yeah, maybe. I guess they've already been able to buy, you know, coin, coin shares. Yeah, MicroStrategy and coin shares, I think, has always had, you know, a- Basically like, you know, UK version of GBTC, basically for a decade or more." }, { "speaker": "cory_klippsten", "time": "27:58", "start": 1678.22, "text": "I see. Yeah." }, { "speaker": "stephan", "time": "27:59", "start": 1679.19, "text": "So they're, they're definitely choosing. It's, it's not that there's no Bitcoin price exposure instrument, it's that they're choosing to do some trading and take some moonshots." }, { "speaker": "cory_klippsten", "time": "28:08", "start": 1688.41, "text": "They want, they want to, they want the high risk, they want the, you know, and, yeah, certainly, like you said, there'll be some people who are sort of chasing the short-term pumps." }, { "speaker": "cory_klippsten", "time": "28:19", "start": 1699.32, "text": "There'll be, and I, I, I Sort of trying to build a long term eng-- you know, Bitcoin accumulation engine, let's say. Yeah. And I think it seems that the long game is kind of what, what Sailor is doing with his MSTR and with the preferred shares, because that's really the way to properly tap that huge market. And so I guess you, you need a certain level of size, you need a certain level of scale, you need a certain level of creditworthiness, ideally, and probably it doesn't hurt being listed on some indexes, right?" }, { "speaker": "stephan", "time": "28:49", "start": 1729.34, "text": "Yeah, I mean, that's, that's gonna generate passive flows that just come your way, like, like, MicroStrategy getting add-added to the QQQ index, the Nasdaq Top 100. so look, I also wanna just be- A little bit charitable because, you know, I'm, I'm swayed by arguments from both sides because they're-- This does look a lot like shitcoin marketing with these small ones and the marketing tactics and the people involved are Have a lot of crossover with the altcoin pump and dumpers from the last ten years. that said, how do you know which one is going to achieve institutional scale? And so if you look at these essentially as venture bets, and I believe in free markets, you know, it-- and I believe in freedom, so it really is up to individuals if they believe in a particular stock. And think that it's going to hit institutional scale, you know, how would you, how would you support that? You know, if you're, if you're just convinced that the Smarter Web guys are the ones that are gonna hit institutional scale, or you just like say last year had a thesis that like, \"Oh my God, I just think Dylan is amazing and he's gonna figure it out,\" and it looks like that would have been a good bet on Metaplanet to say like, \"I'm gonna bet on Dylan to work with Simon and the team and like figure out something awesome and They've bought what five-- I don't know how much Bitcoin they bought, maybe it's three billion dollars of Bitcoin, I think it's" }, { "speaker": "cory_klippsten", "time": "30:26", "start": 1825.63, "text": "like sixteen thousand coins, something like this. Sixteen thousand" }, { "speaker": "stephan", "time": "30:28", "start": 1828.15, "text": "coins, I mean, amazing. That's well on the way, right? And then" }, { "speaker": "cory_klippsten", "time": "30:32", "start": 1831.83, "text": "as Bitcoin NGU happens, then eventually maybe that does help them tap into that level of scale and size that can justify, a solid preferred shares offering." }, { "speaker": "stephan", "time": "30:45", "start": 1844.62, "text": "Yeah." }, { "speaker": "stephan", "time": "30:47", "start": 1847.4, "text": "Yeah, what is that? So, is that right, sixteen thousand coins and like, yeah, about two, two billion dollars, two billion dollars worth of Bitcoin and probably like a three or four M nav, so it's like a six to eight billion market cap. So, you know, so like, if they can get to the point where they're actually tipping over, you know, a ten billion- Dollars worth stack of Bitcoin, like that's freaking meaningful. It's already meaningful at two, but once you start to get up in, in double digit billions, like that's, that's making a dent in the universe, which I think should be the goal. So they're, they're on the way to being able to do something like that if they can keep it going." }, { "speaker": "cory_klippsten", "time": "31:27", "start": 1887.34, "text": "Yeah. And so with your earlier comment around how you believe, let's say thirty to forty-- So are you, I'm trying to understand your view. Are you saying there's effectively gonna be kind of like a filter almost, or that only some companies are gonna get to the size that really justifies it, and that number might be in the forties-ish? And are you saying that globally or in the US?" }, { "speaker": "stephan", "time": "31:48", "start": 1908.11, "text": "No, so, so it's two different things. So I think there's these beasts that will become kind of the, the, you know, it'll be MicroStrategy and a That actually hit institutional scale and make a dent in the universe that are just purely focused on, on Bitcoin accumulation. And then separately, but maybe with some overlap, there will also be a host of companies thirty to forty a year That otherwise would have been good private equity targets, they're that profile of they toss off cash and they have unloved market multiples. And that's what I expect a lot of those to actually, basically turn their cash flows into Bitcoin and maybe also tap capital markets. And I think that will just be something that develops over time. It's just in the mania phase when there's the possibility for essentially, you know, popcorn alt-stonk type returns Like you're just not gonna get a lot of interest in that kind of like steady growth and just having a lot of Bitcoin on the balance sheet, but not turning into a Bitcoin accumulation machine, leveraging capital markets all the time. So it just seems like the market right now only values the Bitcoin balance sheet machinations and hasn't figured out, and it will probably take a long time. Like you just think about like Wall Street analysts trying to matrix cover Bitcoin accumulation machine or an LBE strategy on the balance sheet side, you know, in the treasury operations, while also having to know something or enough about the business, like it's really difficult. Like, how do you even handle that from a sector coverage standpoint? One's a software company, one's an old line manufacturing company, one's this, one's that," }, { "speaker": "cory_klippsten", "time": "33:25", "start": 2004.61, "text": "one's like a medical tech, like Semler or something. Right," }, { "speaker": "stephan", "time": "33:27", "start": 2007.25, "text": "right. I think it's just gonna be really, really difficult until the whole world understands, or at least all of, all of Wall Street. And High Street, understands, Bitcoin accumulation strategies of various flavors, and then basically it goes back to the sector coverage and the sector investors, and, you know, you just-- everybody's kind of fluent in the benefits of having some Bitcoin in the treasury or lots of Bitcoin in the treasury or just being purely a, a, a treasury company that's accumulating all the time," }, { "speaker": "cory_klippsten", "time": "34:00", "start": 2039.83, "text": "just like merely hodling versus being a actual, like, trying to deal with the financial- Financial play aspect. So how are you see- how are you viewing then the, the mining companies, right? Because last cycle, in the twenty-one cycle, they, they were seen as like a levered bet on Bitcoin, and now, yes, Maira and I believe Riot have done some, and actually they are still on the, if you talk about the league table, Maira has, I think, fifty thousand Bitcoin and Riot has about nineteen thousand two hundred and twenty-five Bitcoin, so sizable stacks, but they perhaps aren't being seen in the same light nowadays. Is that in your view because, Is risky or costly or how are you seeing that?" }, { "speaker": "stephan", "time": "34:40", "start": 2079.8, "text": "I was just gonna look something up which is, what is, what is Marathon's market cap now? So it's six point eight as of the Fri- six point eight as of the Friday close, right? Okay. So, you know" }, { "speaker": "stephan", "time": "34:56", "start": 2095.58, "text": "Basically six billion of their six point eight market cap is their Bitcoin stack. Yeah. So that's, that's, that's stunning when you think about the scale of Marathon's operation that the core business is valued at less than a billion dollars." }, { "speaker": "cory_klippsten", "time": "35:13", "start": 2113.4, "text": "Yeah. And I think" }, { "speaker": "stephan", "time": "35:14", "start": 2114.1, "text": "that's one of the, that's one of the things that, that's one of the issues that miners face is basically, and I've, I've talked to Daniel Batten about this and heard secondhand how Fred and Salman, their CFO, think about it. but I will just say what Wall Street talks about, when I talk to analysts is that they see Bitcoin accumulation via capital markets, so buying spot Bitcoin. And, that capital expenditure in conflict with the CapEx required to stay ahead of the game on the mining side. Yeah. And so you can put a lot of art and science around that and deciding, you know, where you are in cycles and, you know, from what I understand, Marathon actually does have a lot of resources and art and science dedicated to trying to figure out when to buy Bitcoin versus when to make long-dated CapEx investments in mining. I don't think you're gonna be able to explain that to the street anytime soon, and that's why I just don't think you'll be able to be a heavy CapEx business of any kind. It's not just about the miners, it's any heavy CapEx business isn't going to be seen in the same light as a levered Bitcoin equity that is a pure play, \"I'm leveraging capital markets to speculative attack the fiat system and acquire as much Bitcoin as possible.\" it's just not gonna happen. the way I think that miners who want to be LBEs should play is to be asset light, and that was our approach obviously with, with Swan Managed Mining and everything that we were doing last year was to not take the assets onto our balance sheet, to have, investors keep the assets on their balance sheets, so buy the rigs, et cetera, and just do it for profit share. And so, you know, very similar to what BlackRock does in real estate, and I think a miner that does that and basically does managed services for profit share. So you, you mine the Bitcoin, you take out OpEx, and now you've got, and energy obviously, and, and all of that, and then you've got your, your net revenue or your profit, and then you split that, and you take maybe twenty percent or twenty-five percent of that and give the rest to the investor. there have been groups that have done this historically. I think actually a decent chunk of, Mining activity was structured similarly to that, from my understanding. and I think if you do that, then mining can be a great business. But if you're trying to do the vertically integrated thing, and I understand why they're doing that because of the call option of being able to take that infrastructure over into high-frequency compute or, you know, the AI data center thing, and that's played out beautifully for, you know, think about like Core Scientific being bankrupt a couple of years ago and," }, { "speaker": "cory_klippsten", "time": "38:03", "start": 2282.99, "text": "yeah," }, { "speaker": "stephan", "time": "38:04", "start": 2283.89, "text": "yeah, yeah. You know, I, I think it'll take a long- Time for that deal to close, and we'll see if it does. But the point is they built a lot of value through having that optionality, and I think a lot of the miners have that optionality because they own sites or they have long-term leases and things like that, and it's hard to give that up. But if you really believed in- Bitcoin mining as a good operating business to match with a leverage Bitcoin equity strategy, I think by definition, if you wanna be understood by capital markets, you have to go to a, asset light, basically no CapEx model" }, { "speaker": "cory_klippsten", "time": "38:41", "start": 2320.95, "text": "This episode is brought to you by Galloy, builders of banking software for the Bitcoin age. After years of risk and uncertainty, Bitcoin and banking are colliding. The regulatory environment is rapidly shifting in favor of Bitcoin and digital assets. Fintechs and crypto-native companies can become chartered banks, and traditional banks and credit unions will launch Bitcoin products. But the legacy core banking software that many financial institutions run on wasn't built for Bitcoin. The Galloy banking infrastructure stack delivers all the key elements of a modern core banking platform. With cloud-native infrastructure, event-based architecture, and robust APIs coming together to meet the security, scalability, and reliability needs of banks of the future. Whether you are launching a modern financial institution from the ground up or you are adding Bitcoin-backed lending or payments to your product offering, talk to the team at Galloy. Visit galloy dot io or reach out to the team at b i z at g a l o y dot io. Interesting. Okay, so, so I guess that's the, the mining side of this. So then in the US Context, I guess it seems like the big players, at least obviously MSTR, number one, top dog, but there'll be, it sounds like at least for now, there are some other Efforts out there, right? So XXI with Jack Maowas and Canter and Tether and Bitfinex, and then also, Blockstream, B S T R, with again, Canter, Adam Back And some other, backers also that are gonna come out the gate with, you know, a sizable amount of coins, presumably. So do you think it's gonna be sort of a competition between those guys on who will be, let's say, the largest in the US market?" }, { "speaker": "stephan", "time": "40:18", "start": 2417.79, "text": "Yeah, and I guess the other ones I'd put in, in the running there for the next cohort is probably, Nakamoto." }, { "speaker": "cory_klippsten", "time": "40:25", "start": 2425.07, "text": "Right. Yeah." }, { "speaker": "stephan", "time": "40:26", "start": 2426.13, "text": "With, with, David Bailey and, and Glovka and BTC Inc. And then Sequans, the, the French company that's actually listed on New York Stock Exchange with ADSs and has a lot of money behind it. and Sequans got out of the gate first because it was an existing company and didn't have to wait for a DSPAC or a merger to complete. so their, their Bitcoin buys already started in earnest, and there's a lot more coming there. Nakamoto, I think, is closing soon, so their merger with, KDLY should be complete, from my understanding, should be able to start Bitcoin acquisitions late August. Something like that, you know, maybe September latest. I don't know when the de-spac is for, for the Tether deal. so Tether and Bitfinex own, I think, seventy-one percent of that company, and then hired Mollers to be the spokesperson. But, I think that might be later in the year, like November, December, before they can actually start buying Bitcoin. So all of the, all they've done so far is basically, it's just Bitfinex and Tether's Bitcoin that's It was committed, I think, at the current price, so they got in, I think, before the recent run up from like a hundred to one eighteen or whatever. So, that's, that's a little bit of an advantage for them. and that's something that, you know, KDLY slash Nakamoto wasn't able to benefit from because they couldn't buy the Bitcoin, I don't think, until the merger actually closes. So it's just cash sitting on their balance sheet dollars." }, { "speaker": "cory_klippsten", "time": "42:01", "start": 2520.76, "text": "Oh, I see. I, yeah, I'm not-- I, I think I Buying at a certain price, but I can't remember the detail. And" }, { "speaker": "stephan", "time": "42:08", "start": 2527.57, "text": "it's very possible, and if I'm mistaken, I apologize. I mean, I, there's a lot of things to keep track of. yeah, I mean, I agree, it's kind of a crazy thing. My understanding is, you know, their, their thing can really, really get rolling once their, merger actually closes and it's not far off. And that's why when people say like, \"Are we at peak?\" You know, what is it, I'm both flattered and annoyed by, paper Bitcoin summer memes using the Pacific Bitcoin logo. but basically, like, it looks exactly like the Pacific Bitcoin twenty twenty-three logo if you look at it. It's like the upside-down triangle and it's like the Miami vibes and everything like that. I'm actually curious, I don't know, maybe they'll come up to me at a conference just at some point, but, They know a lot about Swan, and I have a feeling that one of the Bugle guys is like best friends with some people at Swan or like maybe even used to work here." }, { "speaker": "cory_klippsten", "time": "43:02", "start": 2581.62, "text": "Right, yeah. Who know- Yeah, who knows. Yeah. I mean, definitely the whole paper Bitcoin summer, and definitely there's one area of, let's say, Bitcoin X or Bitcoin Twitter that's kind of very against this whole phenomenon, right? Now, I guess there's different stances, and I wanna get your stance, 'cause I guess, I guess there's a, there's a range of, there The sort of cypherpunk maximalism sort of, you know, don't ever, endorse this kind of thing or be against it. You've got people in the middle who might be more like, \"Oh, look, yeah, we can't stop it, but I guess you've got to tolerate it.\" And then on the other end, you've got full-blown like, you know, \"Go...\" Balls to the wall, go hard. You should, e-every treasury company, p-people should be out there, all trying to launch treasury companies and so on. Where on this spectrum are you at? Obviously, I presume you're in the, at least slightly positive on it, because you're, you're obviously, excited about it too. Look," }, { "speaker": "stephan", "time": "43:58", "start": 2637.62, "text": "I mean, I, I think you know me well by now after all these years. I have a journalist's approach. That's my, that's my training, and even though I've done all these other things since being a journalist" }, { "speaker": "stephan", "time": "44:12", "start": 2651.79, "text": "Strive for objectivity, and I try to figure out what's real and uncover that, and then talk about it. So I'm not trying to push one thing or another, I'm trying to reflect reality and trying to talk about it and understand it for myself, and, and through understanding it for myself, other people get to see that too. as much as it benefits them, great. there is, these are, as a theme, this is actually Probably the best, way that I've seen to enact a speculative attack on the fiat system is to leverage the lower cost of capital from capital markets and arbitrage that against the kegger of Bitcoin that inherently is the arbitrage. It's like if your blended, you know, weighted aver-average cost of capital across your preferreds and your converts and your equity raises is like six or eight percent and the Bitcoin's growing at fifteen or twenty or twenty-five or whatever, that's the Arbitrage. It's literally, it's buy now, pay later writ large. You're borrowing cheaply to buy Bitcoin, and you can do this with companies in a way that you can't do as an individual. So that's it That is real, that exists. It's not actually hard to figure out. I think, you know, very, very simple finance people that I talk to that don't know much about Bitcoin, they get that. You can just say like, \"If I had an asset that I expected to grow at twenty percent per year, and it looked pretty solid, and I could borrow at seven percent, should I do that?\" \"Yes, you should do that.\" \"Great, cool, alright, speculative time.\" you know, so I think it's really just Keeping an eye on these projects as they develop and calling out bad actors, and there's a bunch of these, you know, shitty little companies that are just doing pump and dumps, and there's a bunch of shady people involved, especially in the altcoin treasury companies, and those aren't gonna work, et cetera. And so I think it's just kinda- You know, it's inevitable, so let's talk about it and let's be realistic. And there's gonna be good and there's gonna be bad. And again, I just, I, I think they matter when they get to scale. But again, throwing a bone to the people that look a little bit more like pumpers, you just don't know which ones are gonna make it." }, { "speaker": "cory_klippsten", "time": "46:29", "start": 2789.39, "text": "Yeah." }, { "speaker": "stephan", "time": "46:30", "start": 2790.17, "text": "You know, and so I think you should just let, you should just let the market sort it out, you know? Let the market sort it out, really." }, { "speaker": "cory_klippsten", "time": "46:37", "start": 2797.16, "text": "Yeah. So I'm with you there. I think that's, I think that's right. We, we can't know in advance which ones are gonna become the full scale, large preferred shares offerings that are tapping these huge markets, like hul- you know, mass-massive, you know, trillion dollar, multi-trillion dollar markets that can be tapped and flowing into Bitcoin, but I think I think there are some common, let's say, misconceptions that people might have around things like saying, \"Well, hey, these companies, they're marketing themselves as BTC yield, but I can't get that BTC yield.\" And it's like, \"Well, hang on, no, it's a company. You own shares, you, you hold equity in the company, you don't hold the Bitcoin directly. And if you're not okay with that, well, then just stack cold storage Bitcoin, you know, that's what you should do anyway," }, { "speaker": "stephan", "time": "47:20", "start": 2840.09, "text": "by the way.\" And like, so, and You know, Swan's, Swan's client base is fairly diverse, but the, you know, most of the revenue and most of the assets come from high net worth, and I don't think that's a secret. So it's, you know, probably, yeah, I think the last I looked, like ninety-one percent of our- purchases come from like the top, you know, ten thousand customers or something like that out of the hundred and fifty thousand. So," }, { "speaker": "stephan", "time": "47:48", "start": 2867.54, "text": "people are going to do things with their money no matter what. I just have like a, a, a hard rule that I try to get our whole team to talk to all of our clients about, which is, whatever your, sort of Bitcoin allocation is, Bitcoin price exposure allocation is, make sure at least eighty percent of it is just one x long real Bitcoin." }, { "speaker": "cory_klippsten", "time": "48:11", "start": 2891.13, "text": "Right. Yeah." }, { "speaker": "stephan", "time": "48:12", "start": 2892.11, "text": "I can't stop you from doing other things, nor would I want to. We can advise you a little bit and, you know, give you guideposts or whatever, but, you know, you're probably gonna do some other things. You're gonna hold Hold ETFs because of this particular account or the way it's, you know, it's a trust for your kid and you don't want to deal with the keys and all that kind of stuff. Okay, fine. Like, have some I-bit in that one. and if you're gonna gamble and you're already kind of a day trader and you day trade Nvidia and you wanna day trade some micro strategy, like, sure, go ahead, but, you know, just make sure that position added all the, all the paper, all, add up all the paper Bitcoin and make sure that's not" }, { "speaker": "cory_klippsten", "time": "48:52", "start": 2931.53, "text": "Yeah, and I think that's totally fair because ultimately, it, you know, people have different goals in life. Some of them want certain forms of risk and return, other people don't want that, they just wanna hold it in their, in their cold card or in their multisig or whatever. I, it's totally fair as, as far as I, I see it. one other thing that I find interesting is that we use-- and I'm not criticizing you or, attacking the term LBE, but I just find it interesting because we talk so much about, oh And so on. But I'll, I'll, I'll quote to you the exact, debt to Bitcoin NAV numbers just from Strategy, MetaPlanet, and Semla. So for example, with Strategy, their debt over Bitcoin NAV is eleven percent. And with, MetaPlanet, I think that number is maybe fifteen to sixteen percent. It's one point ninety-five, sorry, one point nine five billion Bitcoin NAV, and they've got a hundred sixteen million in debt. And then for Semla, I think that number is maybe Maybe seventeen percent or so, I've gotta get the exact number. here, debt over market cap, is about seventeen percent, and debt over Bitcoin NAV, seventeen percent. So, you know, we talk about debt and we talk about leverage, but these companies aren't like compared to other- You know, normie fiat companies that don't do anything with Bitcoin, they're actually quite low in debt ratios, aren't they?" }, { "speaker": "stephan", "time": "50:11", "start": 3010.74, "text": "Yeah, absolutely. Yeah, I think the, The, the leverage, there's multiple kinds of leverage, so that's kind of like the accounting version. The leverage that I like to talk about, and, you know, unfortunately, it's, it's the same word, but it's really the leverage like using a, you know, a lever with a fulcrum" }, { "speaker": "cory_klippsten", "time": "50:32", "start": 3031.55, "text": "and being able to lift something heavier. So you can put in a certain amount and get more out, output out of it, sort of thing, yeah." }, { "speaker": "stephan", "time": "50:37", "start": 3036.88, "text": "It's the leverage, it's the leverage coming from being able to access capital markets generally at a low weighted average cost Capital and being able to buy Bitcoin with it. so my understanding is that Strategy stopped using the word leverage because they just, you know, didn't want to tweak the SEC, and so they started saying torque instead of leverage. Right. you know, so I, I will say like, I don't, I don't, I usually use LBEs for Wall Street friends and finance friends, and then I don't really care what the term of art is for retail, 'cause I just don't really think that these things are, you know, most of the- Most of the money that flows into these companies over time, by definition, won't be retail. Retail can front run it and conflate along with the trade, but again, it's not really meaningful unless it becomes a big, destination for institutional capital." }, { "speaker": "cory_klippsten", "time": "51:29", "start": 3088.62, "text": "Yeah, and I guess that's part of, you know, coming back to people are placing their bets on which one do they think is gonna, is gonna make it there. yeah. Okay, so, we've got a few minutes left, I also wanted to chat, obviously there've been some updates in the world of, government regulation and legislation, the, the Genius Act and some of the, you know, US Crypto Week. do you have any thoughts you wanna share on that for listeners?" }, { "speaker": "stephan", "time": "51:54", "start": 3113.82, "text": "Yeah, sure. I mean, unsurprising that there's nothing in it that's relevant for Bitcoin or Bitcoiners. It's all just crypto stuff, and it's basically paying off the, donations made in the last cycle by the crypto industry, the non-Bitcoin crypto industry, attempting regulatory capture and buying good out of jail free cards, and they succeeded. And they did, execute on their strategy of regulatory capture, and, this is them, collecting the fruits of their labor. and, you know, I think if you look at kind of the grand strategy of the whole crypto complex, and in particular, kind of the nexus of like Coinbase Circle and, you know, Consensus, so kind of the New York crypto cabal, you know, their goal is to make- Incremental improvements to financial IT. And that's kind of the, the bull case for non Bitcoin crypto is to have their technology kind of worked into the financial system and to be able to build these large companies with the stocks and everything and, and kind of the The, the, it's so funny, I actually forecast this probably in January, and literally by March or April, they started talking about it, and it was kind of openly what they're doing, and now you're actually starting to see it happen, and it was basically that. When you look back from, you know, twenty thirty or something like that, what their story is going to be as stocks get tokenized and Coinbase and Kraken and Binance become, trading venues for real world assets primarily, then basically most of the shitcoins will dwindle toward zero as far as trading volume. they're going to claim that all of the froth and all of the noise around shitcoins was very similar to the internet, You know, broadband access. They're gonna make that" }, { "speaker": "cory_klippsten", "time": "53:45", "start": 3225.15, "text": "dot com parallel. They're" }, { "speaker": "stephan", "time": "53:46", "start": 3226.11, "text": "gonna, they're gonna say that like the internet was built on porn and gambling, and that, you know, these new, these new financial rails and trading venues were built on gambling and shitcoinery. In that it was, you know, it was a necessary evil, and we rocket boosted these, or bootstrapped these things into actually being meaningful. And so I think that's where you're gonna basically let them all kind of escape with their reputations intact and not have to take their Wharton blockchain certifications off their LinkedIn, because they're gonna be using the same words. They're gonna call it crypto and DeFi, but all it really is is just creating like incrementally more useful technology for JP Morgan. And the shitcoins, the tokens don't get to come out Come along for the ride, 'cause they continue to be useless and, and not useful in these systems. So all these Ethereum L2s that the banks are creating and using, they're private, they're permissioned, and they don't require Ethereum, the token, at all. So that's actually not-- none of this, none of this \"govcoin\" theme that's driving the current pump in Ethereum is based on fact or even logic. Because none of it will accrue to the token itself. So their, their new theme basically is that the rise of stablecoins benefits Ethereum somehow, but it doesn't. Do banks, do banks transact between themselves? Millions of times a day racking up, you know, shitcoin transaction fees on, on the base layer. No, they don't. They'll settle up once a week. They just, they, they keep their own ledger between the two banks, centralized, it's behind private keys, it doesn't need to be on a chain" }, { "speaker": "cory_klippsten", "time": "55:26", "start": 3325.64, "text": "anywhere," }, { "speaker": "stephan", "time": "55:26", "start": 3326.24, "text": "a permissionless chain in any way. So it's all just basically bullshit as usual coming out of Lubin. And, yeah, just kind of trying to pump this narrative. So, you know, it's, it's hilarious, but it's inevitable, and I think, you know, it's been clear for many, many years, and I've been talking about it for many, many years, that inevitably non-Bitcoin crypto will seek to be co-opted by the banking system and by the government as a means of survival. And so the inevitable final boss for Bitcoin is actually the, you know, sort of axis of shitcoinery, which is the banks, the government, and all of non-Bitcoin crypto. Join Together, contra Bitcoin." }, { "speaker": "cory_klippsten", "time": "56:11", "start": 3371.19, "text": "Yeah, it may, it may, it may end up happening that way. I definitely agree with you about the, you know, this has been a long argument within Bitcoin and crypto world of like, will value accrue to the token? And most of us see it like, no, it won't, right? It's like, it would be like saying, okay, you need to ride the bus, okay, buy a bus ticket, but nobody goes and like buy, pre-buys all these extra bus tickets because they wanna speculate on the value of the That, but there's a reason to hold Bitcoin, because Bitcoin, we believe, Bitcoin is a superior form of money, therefore there's a reason to hodl it. Whereas a lot of these utility tokens, they're not equity, they're not debt, and they are just a, a free-floating kind of quasi-equity that don't give you a real ownership stake. And As you said, now the, the narrative is gonna be very much about, oh, RWA, real world assets and, tokenization and, you know, as you said, the stablecoin aspect of it. But coming back to it, we don't believe value will accrue to the underlying token. There needs to be a reason to hold that token, like with Bitcoin. one, I'll say this though, I think there's probably one-- I, I'm curious to get your thoughts, if you know this in more detail than I do. Matt Corallo This idea of trying to get a certain, protection for developers of non-custodial technology, I believe they got it into the Clarity Act, but I don't know for sure. Do you know if that's true? Because then at least there's at least a small, let's say, a silver lining of the Clarity Act being passed that, you know, what's happening now to the samurai wallet developers and guys and, you know, maybe there's at least some protection for Bitcoin, genuine Bitcoin developers and builders. Do you know if that happened in the Clarity" }, { "speaker": "stephan", "time": "57:51", "start": 3470.85, "text": "Act?" }, { "speaker": "stephan", "time": "57:54", "start": 3474.05, "text": "In and, and it's, again, it's not-- if it was only Bitcoiners arguing for it, I don't think they would get it in, but because the shitcoiners are arguing for it too, that's one little thing where we have common cause. Yeah. So, you know, yeah, and it's a huge deal. It's very important. It's very important that we maintain the legal right. They can't stop us, but it's nice to not have to be breaking the law to have self custody." }, { "speaker": "cory_klippsten", "time": "58:19", "start": 3498.99, "text": "Exactly. And we don't want the developers going to jail or like entrepreneurs creating software wallets and tools for us to use our Bitcoin to go to jail or this kind of thing. Yes. So that's at least a, you know, that's a win, hopefully. I believe it did come in. I just had a quick AI Yeah, you, you don't know, sometimes these things hallucinate, right? Yep. Yep." }, { "speaker": "stephan", "time": "58:39", "start": 3519.26, "text": "Yeah. And little things like that, I mean, when, again, inevitably shitcoins are irrelevant, and so this would be kind of like the, It's funny. This would be kind of the Reardon code. Literally, I think that's what, Brandon calls his handle, but yeah, the, the code of Reardon is like, take anything that improves Bitcoin, Bitcoin's prospects even a little bit So even if it's like one percent positive for Bitcoin and ninety, ninety-nine percent positive for shitcoins, the shitcoins end up irrelevant no matter what because of market forces. And so just take the one percent win for Bitcoin and just, you know, just chalk it up as a victory, that's all that matters. and I see that, I see that logic sometimes. I think we, we differ sometimes in looking at kind of the social layer and how things actually play out in meat space, and that you can invite a lot of horrible things into your living room by allowing shitcoinery When it gets too close to Bitcoin or ends up on Bitcoin and things like that, 'cause I just don't think you wanna see a bunch of crime being ascribed by politicians and regulators to Bitcoin and Bitcoiners. And that's why it's like, it's good not to, have too much scamery actually on or near Bitcoin." }, { "speaker": "stephan", "time": "59:52", "start": 3592.05, "text": "the last thing I would just say is like, it does appear that we are just kind of coalescing the, the fight toward the final boss, which is actually the dollar." }, { "speaker": "cory_klippsten", "time": "01:00:02", "start": 3602.51, "text": "Yeah, I think that's gonna be the" }, { "speaker": "stephan", "time": "01:00:04", "start": 3604.05, "text": "only way, the only way crypto makes money now is basically dollars, right? All the most valuable companies basically most of their money just comes from stablecoin interest. And, you know, I'm, as you know, I'm over here in, Istanbul and, and, for the summer, and like all the crypto exchanges here, most of their revenue is just from exchanging lira for dollars. You know, they're just exchange windows at this point with apps. There's very little crypto trading going on, it's just dollars. That's true in Argentina and lots of other places around the world." }, { "speaker": "cory_klippsten", "time": "01:00:36", "start": 3636.25, "text": "Yeah, and I think this is one of those things where, in my earlier years of Bitcoin, I would have thought, \"Oh, it's all gonna happen so quickly,\" whereas nowadays I think, \"No, it's gonna-- This is gonna be a long process, you know? We might be another two or three decades out from anything approaching what we would call hyperbitcoinization.\" and so I guess it's about understanding sort of where we are in that, you know, in that journey of, Bitcoin adoption Any closing thoughts and where can people find you online?" }, { "speaker": "stephan", "time": "01:01:05", "start": 3665.18, "text": "Yeah, well, just my, my, my range, my date range from network launch to sort of- Kind of full Bitcoinization has been fifty to eighty years. So, yeah. If you say two to three decades from now, that would be a super bowl case. That's even faster than the, the short end of, end of my range." }, { "speaker": "cory_klippsten", "time": "01:01:26", "start": 3686.05, "text": "Fair" }, { "speaker": "stephan", "time": "01:01:26", "start": 3686.23, "text": "enough." }, { "speaker": "cory_klippsten", "time": "01:01:26", "start": 3686.57, "text": "Yeah." }, { "speaker": "stephan", "time": "01:01:27", "start": 3687.33, "text": "Yeah. So, let's like for full install. Which is kinda changing everything globally. look, Swan, that's W A N on Twitter, Cory Klippsten, easy to find, pretty much everywhere. I don't know, I think," }, { "speaker": "stephan", "time": "01:01:47", "start": 3707.67, "text": "Look for a lot more from us. We're working with, a bunch of Bitcoin treasury companies of various flavors. I think, I think one of the Biggest, biggest new incremental, you know, sort of wins here will be being able to make a really strong case for companies holding Bitcoin on their balance sheet, even if they don't become a full LBE. Like what is the real bull case and what is the benefit for, you know, a GME or a Tesla or your company or my company or, you know, whoever owns these buildings over here out my window, you know, like why should they have a good chunk of Bitcoin in their treasury as a private company or as a public company and like being able to really extol the benefits of, of having some of your, your assets in Bitcoin? And I think that's something that we're Really focused on, we have over two thousand business clients that stack Bitcoin with Swan, and I think that's something that we are, you know, sort of trying to evolve and improve the pitch every day and come up with these benefits, 'cause I, I do think that is something that, again, can make a dent in the universe. Not everybody's gonna go whole hog and just become a leveraged Bitcoin equity or Bitcoin accumulation machine or whatever it is, but, every business can benefit from having some Bitcoin on their balance sheet, and I wanna just make it easier. Easier to see why that's the case." }, { "speaker": "cory_klippsten", "time": "01:03:11", "start": 3791.56, "text": "Excellent. Well, thanks for joining today and sharing your insights, Cory, and, I'll see you around soon. Yeah." }, { "speaker": "stephan", "time": "01:03:16", "start": 3796.93, "text": "Thanks, Stefan. Great to see you." } ] }