{ "episodeId": "SLP710", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "matt_cole": { "name": "Matt Cole", "role": "guest", "tag": "MATT" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.16, "text": "If you believe Bitcoin is gonna go up at, really it's about greater than a ten percent cagger into the future, the math will show that if you have amplification on through preferred equity for Strive and Strategy, it just mathematically will outperform Bitcoin over time." }, { "speaker": "matt_cole", "time": "00:15", "start": 14.71, "text": "Actually, I'd love to get your reaction on the, Michael Saylor and, Danny Knowles conversation recently. What's your take on this? My take is" }, { "speaker": "stephan", "time": "00:23", "start": 22.82, "text": "Every company should own Bitcoin, just like every individual should own Bitcoin. My response to that is that I think Bitcoin's the most, most valuable asset known to man. It's a decentralized asset, and if you've created something that is truly scarce, truly valuable in a world of abundance Everybody's gonna want it." }, { "speaker": "matt_cole", "time": "00:42", "start": 42.1, "text": "Hi, everyone, and welcome back to Stephan Livera podcast. Today we're gonna be talking about Strive and digital credit and Bitcoin treasury companies. Joining me today is Matt Cole. Matt is the CEO and chairman of Strive. And, you know, Matt and I have been chatting kind of whenever there's a conference on, we end up chatting, and I've always found it really interesting and very intelligent commentary, and, yeah, excited to chat with you. So first off, welcome to the show, Matt. Thanks. It's been a long time thanks for having me, Stefan. So, obviously the big news for you guys is you just, I believe the shareholders just approved this merger of Strive and Semla, creating a new large entity with, what is it, twelve-- about twelve thousand seven hundred and ninety-eight BTC that you have, last I checked on the dashboard. We are-- it's fourteenth of January twenty twenty-six. So, give us a quick overview what happened here, and, you know, what's the, what's the plan there? So we've" }, { "speaker": "stephan", "time": "01:39", "start": 98.88, "text": "been Months. And in Bitcoin terms, it feels like we've been public for four years, right? I mean, and, and it's, it's easy to forget that. It's like, where were we at as Strive four months ago? Where were we as Strive a year ago? It's January twenty twenty-six. January twenty twenty-five. We hadn't even found a company to reverse merge into to become public yet. We hadn't found asset entities one, one year ago. It was also about one year ago that I met Ben Workman, I met Jeff Walton, met all these guys, met Tim Kotzman. Right, this is, this has happened so quickly. So, I mean, this mo-- those introductions happened in January. We found asset entities and a target in February last year. We march-- we, we announced that we're doing a reverse merger with asset entities. Entities may of last year, right? So, so we're call it like nine months ago, we announced that we're becoming a publicly traded Bitcoin treasury company. About four months ago, we actually became public. One week after becoming public, we had an opportunity to announce an acquisition of Semler, who was the second US publicly traded Bitcoin treasury company. Then in November, so just a couple months ago, we launched Seda, so we were the, the second US company to launch preferred equity after Strategy, the first one that had no debt, which is a topic to discuss now because someone does have debt, right? So we'll, we'll get into that, I'm sure. and, and we announced plans to retire that within, within twelve months and kind of talk about, you know, how we're thinking about doing that, as well. and it's January of, of this year, so," }, { "speaker": "stephan", "time": "03:20", "start": 199.94, "text": "Became public, we had less than six thousand Bitcoin, in just four months ago. Proforma Post Semler, which Semler will close in a couple days, will officially have over twelve thousand Bitcoin, so more than doubling our Bitcoin stack in under four months. also if you look at it, so, so, but the goal isn't just to double our stack, right? This, wh-what, what are our goals? Our goals are actually to generate a Bitcoin yield, right? So that's really how, how you have to look at these, say it how" }, { "speaker": "stephan", "time": "03:50", "start": 229.9, "text": "Generate a good Bitcoin yield for our investors, right? because that's what we're, we're trying to drive here, and then o-over the long run, outperform Bitcoin, which ASST has actually outperformed Bitcoin pretty healthily, you can see it on our dashboard since we announced at Strategy World the strategy. so, so we have a live, tracker of the Bitcoin Standard era, and, and you can see we've, so far we've been, we've outperformed Bitcoin, but the goal is to outperform it over the long run, right In a multi-year period, but then on a year-to-year basis, generate Bitcoin yield. So how do-- how are we doing? If you look at the fourth quarter of twenty twenty-five, we de-- we generated a double-digit Bitcoin yield, and so this is after, you know, we bought our initial Bitcoin, driven primarily by the launch of Sada, but if you compare this to the industry, the fourth quarter was a very challenging quarter, right? Bitcoin was down, most companies had flat to negative Bitcoin yields, a few eked out Small Bitcoin yields and Strive had a double digit Bitcoin yield, so we were among the leaders, if not the leader, in driving Bitcoin yield, amongst in-industry in, in Q4 Then you go Q1, well, obviously Q1, we're two weeks into Q1, so it's, it's very early, but, you know, Strive I think has like a zero point one Bitcoin yield, they've been stacking a ton of Bitcoin. I mean, kudos to them for how much Bitcoin they've stacked. it's been only mi-mildly accretive in, in Bitcoin yield terms. post Semler, we announced yesterday that we anticipate having a greater than fifteen percent Bitcoin yield in January of this year. So again, Str" }, { "speaker": "stephan", "time": "05:30", "start": 330.23, "text": "Yield metrics since we've been public. So I'm just very proud of the, the success that the Strive team has driven, and it, and it filters through in things that are, that are lesser understood, that, you know, I think from a institutional story, and we'll get into the institutional story of Strive, why, you know, we decided to do a reverse split, which is really institutional plumbing in my view, but happy to kind of go in depth on that. But, but what do institutions want to see? They wanna see, you know, a healthy market cap. So, you know, we now, post Semler, we'll have over twelve thousand Bitcoin, well over a billion dollars of Bitcoin, you know, currently trading at a slight premium, so, you know, we're a billion dollar company, right? And, you know, I know money's being debased all the time, but, you know, they call that a unicorn company, right? Like, not a lot of companies become a billion dollar company. What do they also want to see? They wanna see liquidity" }, { "speaker": "stephan", "time": "06:26", "start": 386.42, "text": "Stock and liquidity of Sada, so we'll, I'll focus on the stock for, for a moment. You know, one of the challenges in the Bitcoin treasury space is a lot of the Bitcoin treasury companies have really bad liquidity. and, you know, I think it's still early, right? Like they have Bitcoin, they have time to figure it out, they're at different places in, in their strategy, but if you look at basically- People besides strategy, besides Metaplanet, and you look at Strive relative to peers, I mean, we're like on s-certain metrics more liquid than like our ten closest peers combined. So it's not like number one, number two, number three, it's like Strive divides Strive by ten, and then you're getting like the average of most of our peers. And so, we have a lot of liquidity, which drives institutional interest. Why does that drive institutional interest? Because institutions don't buy, you know, half a million shares, right? They're buying ten million, fifty million, hundred million chunks. They want to be able to enter in size" }, { "speaker": "matt_cole", "time": "07:24", "start": 444.01, "text": "without moving the price. Yeah, exactly. Or leave" }, { "speaker": "stephan", "time": "07:27", "start": 446.61, "text": "in" }, { "speaker": "matt_cole", "time": "07:27", "start": 446.71, "text": "size without moving the price, right?" }, { "speaker": "stephan", "time": "07:28", "start": 448.31, "text": "Yeah, and, and so when I was at Calpers, you know, and most people know this by now, but, you know, managing a seventy billion dollar bond portfolio, you needed liquidity. Like, you couldn't get a position that you couldn't get out of, and that's a problem that a lot of the peers have. We don't have that problem. And then the last problem is" }, { "speaker": "stephan", "time": "07:46", "start": 465.85, "text": "A lot of, a lot of institutions also have minimum price thresholds. Some of them are three dollars, some of them are five dollars, some of them are seven dollars. And these are minimums, right? So like, let's say someone has a seven dollar minimum price threshold. If you, you know, got at seven dollars and twenty five cents, they're not gonna invest in you. Or if you're Amplified Bitcoin, you look at the vol of Bitcoin and you're ten dollars a share, they're still gonna be pretty hesitant to invest in you because they're worried that you might fall under that" }, { "speaker": "stephan", "time": "08:15", "start": 495.45, "text": "It was the one thing that was missing for us to really open the doors to the institutions to ultimately drive, you know, what we think will be a further leading Bitcoin yield, is really just a plumbing, plumbing problem, for us, but, I think it's really, you know, we're just getting started, it's obviously very-- like I said, four months into this, but it's pretty amazing how much has been accomplished in a short period of time." }, { "speaker": "matt_cole", "time": "08:39", "start": 519.07, "text": "Yeah, it's really interesting to see how quickly everything has shifted, as you said, like this merger Or acquisition between treasury companies, now I think, I guess you, you were touching on the re- the stock split aspect of it, because I guess as I'm understanding, you wanna be above a certain threshold, because again, part of the play here is to be accessible to these different pools of capital. You wanna be open to them putting the money in, obviously, to attract the money in, and I, I guess the other thing I was really keen to ask about is the debt aspect, because I know you've spoken about how that's been a key differentiator for you Say, \"Hey, we've got Sada and we have no debt.\" but now with the similar acquisition, as I believe-- I was looking it up, you, you told me the exact number, but I believe it's in the, it's in the ballpark of a hundred and twenty million. and I believe just for this-- Okay, yeah. And I believe you're, Your market cap is, as we speak, about nine hundred and fifty-two million, y-you know, your, your Bitcoin stack is worth about one point two five billion, and so that's kind of-- these are the numbers we're looking at right now. So what's the plan going forward on trying to, you know, get rid of that debt or what's the plan there?" }, { "speaker": "stephan", "time": "09:51", "start": 590.83, "text": "Yeah, so there's, there's several different options and, and all of them are, are on the table, but what do I think would be the best option and something that I think is, you Our press release when we talked about how Strive might issue a lot more Sada in the near future is, you know, we want to have amplified Bitcoin exposure. in the, in the last presentation we had on, on ASST and Sada update, we talked about having amplification of twenty-five percent plus. we showed an amplification chart that really gets into one of the things that I think, Adam Livingston explains really well, which is the compounding effect of amplification over time, right? Like Interest and total returns compound, right? So if you outperform Bitcoin in one year by ten percent, that's great, but not, it's k-kind of interesting, not really. But if you're doing something like that year after year after year or more, right, over the course of ten years, it becomes extremely meaningful. We put in, you know, in, in a box what it would look like at thirty percent amplification, forty percent amplification, fifty percent amplification. Obviously, all those are greater than twenty-five percent, and, you know, these, these are very dynamic conversations of like where we might go in, in those sorts of range, but we want to provide great amplified Bitcoin exposure, no debt, and so we announced intentions to retire. So Exemplar has two forms of debt right now. They have a hundred million dollar convertible note, and then they have a twenty million- dollar Coinbase loan that they took out when they had a, a settlement with the DOJ around their operating business. Okay, so, so we have, call it, you know, almost one point two billion dollars of Bitcoin About ten percent of that, you know, Semler has some debt that we gotta take out. So the easiest and I think cleanest way, and this is gonna be dependent on market conditions, would be to issue more SEDA to pay that debt off, right? Then you have kept your amplification ratio up because if you just retired the debt, let's just say you had cash to retire it or you sold a little bit of Bitcoin to retire it, then the initial SEDA that we raised, the two hundred million dollar notional, as a percentage of the overall Bitcoin stack is less Amplification, right? Which we want more amplification. And so if we want more amplification, then a use of proceeds for a SATORIZE would be to retire that debt. I think, you know, these things are dynamic conversations, they depend on market conditions and many factors, but I think that would be the cleanest way. but if we had to do it different ways, you know, we, we have a one point two billion dollar balance sheet, we have a, a premium to our Bitcoin NAV currently, that, you know, post the transaction that we Choosing to pay it off, but like, but I think these are, these are dynamic conversations. Where do we wanna go? How we do it? There's certain ways that are better than others, but where we wanna go is, you know, amplification greater than twenty-five percent and no debt, and, and then ultimately also monetize, the similar business within twelve months. So just a clean story, you know, that, that challenge or that operational, you know, work that we have to do, that is the cost of generating a fifteen percent Bitcoin yield. Like nothing comes free. the question is, is, is that fifteen percent Bitcoin yield when, you know, basically no one has any yield strategy has point one percent. Is that, is that difference worth that effort? What I just talked about, do we think executable? And the answer to that, that we believe is, is absolutely yes. So now that's, what we'll be focused on, in the near term." }, { "speaker": "matt_cole", "time": "13:23", "start": 802.97, "text": "Yeah. And when you say monetize, do you mean they're like actually sell off, like you may sell off or spin off the Semla medical business, but, obviously keeping, you know, Joe and Eric on board?" }, { "speaker": "stephan", "time": "13:37", "start": 816.6, "text": "Yes. Yeah. So, so Joe will be part of our Bitcoin operations. so he'll be, you know, working primarily with myself, Ben Workman, Jeff Walton, doing a lot of the things that Joe, Joe has, you know, you, you know, you can never have enough podcasters per So, you know, we brought, we brought Joe in, he's, he's, he's a great, great add to our team, right? So he'll be part of the full-time, Strive team, and then Eric Semler's joining the board, he'll be an independent board member. So he was the chairman of, of Semler, he'll be an independent board member for Strive, and, and that's another one of the plumbing things as we grow, is you need, you know, more independent board members, and so he slots in as a, Bitcoin Treasury Company, obviously a massive supporter of, of Bitcoin, and, and then when it comes to the, the similar operating business, so what, what are the plans there? here's what, what I can tell you at this point. So we've given a high level overview of a bigger vision. So this isn't the day jobs or the focal point of myself or Workman or Walton, that's gonna be on the Bitcoin side of the equation, but Having a, a small team of people around Strive focused on giving that healthcare business a broader mandate. So what does that healthcare business even do? It's around preventative healthcare. So it's about can you find, you know, a problem for them with their heart early, early detection, right? And, and, and a lot of people in our generation are really about preventative healthcare. they're not about-- it's like the whole Maha movement, right? That you don't wait 'til you get sick, you don't wait 'til you get cancer and then go to the doctor and treat Having those bad health outcomes by being healthy and taking, you know, preventative steps to your healthcare. So we think that that's a, that's a business movement into the future that has a lot of momentum behind it, preventative healthcare, and that will only continue in the age of AI, it'll only get better in the age of AI. And so the similar product's actually a good product. So the question is, can we leverage our co-founder Vivek Ramaswamy, who has a background in biotech and healthcare, one of our board members, Ovech Roy, maybe bring in Kind of create a, a small team that's focused on actually giving that business a broader mandate, so, so, you know, not shutting it down, right? But giving it a broader mandate so they have one product, so what if it was a holding company of a bunch of different products or something like that, and then that spins off and is its own thing, and, and ultimately is not part of Strive, but how it ultimately is monetized, you know, is TBD. Could, is it possible that Strive has a minority stake in that, depending on, you know These are negotiated, possibly. Is it possible that it's a complete spin out? Yes. these are things that are unknown, but that's the direction it's going in, i-that, is that it won't stay under Strive over the long run. We don't think it's core to our mission as, as a Bitcoin treasury company, and we wanna stay focused on that to the maximal degree, but we also have a fiduciary duty To our shareholders, to not take an asset and, and just completely discard it, like we, we have to maximize value with that asset, and this is how we think we maximize value with the asset. We put a twelve month window on it, 'cause we don't want this to be something that's lingering forever, right? So we message we'll do this within twelve months, or the intentions are, and then ultimately, you know, we're focused on what everybody has focused on the Bitcoin side of things," }, { "speaker": "matt_cole", "time": "17:04", "start": 1024.36, "text": "yeah. Now, as you were saying around the Bitcoin yield conversation, obviously that's an important Treasury company, is it fair to say this would be kind of like doing an acquisition like this is sort of like a lumpy move that you can't necessarily do that, you're not necessarily gonna do that every quarter, right? Like it's kind of like, this may be, I guess the way I'm understanding it, and you tell me, the way I'm understanding it, like you, the idea is that you've got this engine turning, you've got Sato, Sato, the preferred share to kind of keep, you know, providing, you know, And occasionally you're gonna get these M&A opportunities, that's like a lumpy kind of chunk that you're gonna get, and then that's, you know, that's, I guess, one way to conceptualize what you're doing, or how, how would you react to that, or is that accurate, or how would you change, how would you say" }, { "speaker": "stephan", "time": "17:57", "start": 1076.79, "text": "that? Yes, I think, I think at this point for Strive, having Sada already out there, now having north of a billion dollars of Bitcoin over twelve thousand Bitcoin We don't have to do another acquisition ever. we have the engine churning to generate what we think will be a leading Bitcoin yield with the volumes and the market cap, like, like we think we're, we're big enough. If there's a win-win, of course we're open to additional M&A opportunities, but, but to your point, how do you think about them? So you think about when we announced Semler, to when it closed, it was about a four-month period, right? The average M&A transaction takes about six months, and so realistically, like you're talking about on a given year that you might have one, like if you, if it was an insane year, maybe two acquisitions. And, and I mean, just, just for, for reference, I mean, we did a reverse merger into asset And in twenty, which is, which is a merger, right? And then, and then in January twenty twenty-six, we, we took over another company. So, you know, within twelve months, we have done two acquisitions of two companies, right? So, so that, that is possible, but, you know, when you're in the midst of a, of a transaction, you can't even have the next conversations with the next companies. So like, it's, you know, at this point, some order will close in the near future, and then we could consider like, is, is You, you look at some of the, the peers in the space that don't have great volumes, that are trading at discounts to NAV, and that probably don't have enough Bitcoin to actually issue digital credit, 'cause, we've talked about this before publicly, but, when we launched Seda, so we did two hundred million dollars notional, we started with an IPO size of one twenty-five, and one of the interesting learnings from that is we thought one twenty-five was kind of like the minimum size to actually do an IPO, but our order book was actually Kind of weak at one twenty five, and it was two times oversubscribed at two hundred million. And, and, and even at two hundred million, many of the institutions said it's too small for us, and so they ended up passing. And so what my, what I believe is that for, for most, unless condition, liquidity conditions are just so, you know, loose that two hundred million's probably about the million, the minimum size. And, and so you take a two hundred million dollar notional raise, you know, for most people that issue their first digital credit, it's gonna be at a discount. Strategies' first one was priced at eighty, our first one was priced at eighty. So, so you, so you look at that and you say, okay, like, how many people down the list? And then you also say When you issue your first one, people are gonna want, you know, not to have you push beyond certain amplification ratios. So like, probably twenty-five percent's probably the max that you can go at the start there. And so you say, so you start to go down that list and you're like, okay, actually, like when Strive did that, we were kind of like the minimum size to do that. And it was like, you know, whatever, fifty-seven hundred Bitcoin or something like that. so you're like, who has that?" }, { "speaker": "matt_cole", "time": "20:56", "start": 1255.88, "text": "There's" }, { "speaker": "stephan", "time": "20:59", "start": 1258.92, "text": "only-- There's not a they did SPACs, which a SPAC when they IPO, they have to wait twelve months to have a shelf registration, so they can't do a public, preferred equity until twelve months after their IPO. And so then you, you start to narrow that list more and more, and, and some of them obviously have other debt terms already. And so it's, it's, it's almost-- there's very few players outside of Strive, Strategy, and MetaPlanet that can actually issue digital credit. Do I think we'll see a couple? Yeah, but it's, it That's, that's possible. And so for some of them that are believers in digital credit, could it make sense to team up with Strive, and, and kind of press the go button together? It's possible. Will it happen? I think we'll, you know, it remains, remains to be seen, I think it just has to be, these things have to be win-wins, right? Like it has to be a win for their shareholders, it has to be a win for Strive. we're definitely open to it, but I'd say I wouldn't forecast at this point that, that it'll happen. But I would say like if you were to see consolidation in the space, I do think that Strive is the leading candidate for, for further consolidation. You look at strategy, it's not material for them. I mean, they, they buy ten dollars, and Michael's" }, { "speaker": "matt_cole", "time": "22:14", "start": 1334.29, "text": "mentioned they" }, { "speaker": "stephan", "time": "22:16", "start": 1336.41, "text": "Yeah, so I, I think, I think strategy could be in a very, very rare instance, but I think it's pretty unlikely, especially in the next couple years, that they would do it. Metaplanet's a Japanese company, so how many Japan-- like, you know, for a Japanese company to acquire American companies that has its whole host of, you know, con-- you know, additional complexities, then you start going down the list and you just say, okay, like, it's probably Strive is the most likely con-continue to consolidate in the space to the extent that continued consolidation happens, but we'll see, we'll see. So, yeah. That's the, that's the high level of it, Yeah. And one other topic" }, { "speaker": "matt_cole", "time": "22:52", "start": 1372.47, "text": "on the acquisition I think would be interesting is, you know, as you mentioned, making it win-win. I think people will want to understand, okay, well, what's the price you're paying and, how are you funding it, right? Because as I understand, this was an all equity deal, so can you maybe articulate a little bit on how you get both shareholders on side, both sets of shareholders on side there to feel like, hey, we're getting a deal here, we're getting a decent- Offer here, such that they will then approve. Now, in your case, they did approve it, but if you could just explain a bit there on the structuring of the deal and the pricing and how's it paid for?" }, { "speaker": "stephan", "time": "23:29", "start": 1408.7, "text": "Yeah, so, so I think all stock is the cleanest way to do this, it, it one hundred percent the cleanest way to do it. We're on the Bitcoin standard, we don't wanna be using cash for, for acquisitions, so it probably would have to be all stock, all stock or majority all stock, for Str Is what is the value proposition that each side is bringing, right? So Strive brings size, we bring digital credit, we bring liquidity, and we bring, you know, who knows, but typically one of the leading MNavs in the space is how we've, we've typically traded since we've, we've IPO'd one of the higher MNavs. And so those are the things that, that we bring, And then everybody else, it's a case by case basis, right? Some people have more than just Bitcoin, some people don't. some people have bad liabilities, right? So, so for, for it to likely work out, it probably would have to be an accretive yield deal for Strive or the Bitcoin accretion is there. But if there's a difference in, in MNAV's and ability to drive amplification ratio, you can easily start to do the math and say, okay, for one of these other companies, you look at it on a three or five year basis Amplification that Strive can bring with clean balance sheet, the liquidity, and you say, \"Is this better? Especially if you're trading at like a, you know, at point eight five or point eight or point seven M, right? Discount to one X, yeah. And can, can Strive kind of like meet you in the middle somewhere, right? Give you an increase and then also provide amplification that, that you're unable to get yourself. the answer is yes, but, you know, different investors will have different views on their side if that's accretive" }, { "speaker": "stephan", "time": "25:10", "start": 1510.43, "text": "We have a, a group, so, myself, our co-founder Vivek Ramaswamy, our CFO Ben Pham, our chief legal officer Logan Byrne, we have a, we have a group together, and that group controls greater than fifty percent of the voting power, and so we can move very quickly. So that's why you didn't see us have to hold a, a shareholder meeting like, like when we announced the deal. Strive had already approved it, with Semler, right? It was, it, it was fast, and so that's one of the other things that we can bring where Semler had to go to their shareholders and, and look, the shareholders were very rational, over ninety percent voted in favor of it. ISS and Glass Lewis, the two proxy advisors, they both recommended in favor of it, and, and so it had vast support, right? Like, I mean, that, that's, that's great support to get over ninety percent for, for a transaction, and I think But, but institutional investors and proxy advisors, they, they're, they're able to do their work, they're able to see these things that I'm talking about, this institutional story that Strive brings that others are struggling. And, and I think the fact that they were in favor of it and it got the support it does, does show a path for this to be done in the future. Gotcha." }, { "speaker": "matt_cole", "time": "26:21", "start": 1581.43, "text": "and now another interesting one is this whole-- now, this has been a big kind of Bone of contention amongst, let's say, Bitcoin people online about like MNavs and so on. So, you know, maybe we're kind of getting into a bit of like what happened with Michael Saylor and Danny Knowles a little bit, but even amongst, let's say, the Bitcoin people who are bearish on treasury companies, some of them are saying, \"Well, hey, what, what if some of these companies, their MNav goes down below one and then they can't get it back up above and they, they don't have an engine to keep going on these?\" I You know, Bitcoin, like Bitcoin bear and bull markets obviously will matter. can you explain a little bit of your thoughts on, like, how, how people should, like, consider this MNAV question, because it seems a very confusing thing. Because look, to be fair, a lot of this is very early, and people sort of need to see it play out a little bit, but how, how would you explain it for somebody when, you know, one of these companies is at a discount to MNAV?" }, { "speaker": "stephan", "time": "27:26", "start": 1645.75, "text": "Yeah, so, so I think it's, it I think case by case basis. So should any company that buys Bitcoin trade at a premium to their Bitcoin holdings? I think the answer to that's no. It's like, does any company that have, that has cash, should they trade at a premium to their cash or, or if they had gold or, or whatever, right? Like, like the answer, the answer is, is no. the question becomes, what is the company doing? And, and I think one of the things that sometimes can be confusing to people, but it's actually pretty simple, is like, ultimately, what are You're trying to drive a total return and a total return that's greater than Bitcoin. And so the question becomes, is the company doing something that is likely by the market standard to drive a better total return than Bitcoin over time? And also doing something that an individual couldn't do on theirself, on their own, or a hedge fund couldn't do on their own. And if the answer to those things is yes, then I think it's worth more than the Bitcoin If the answer to those things is no, or maybe, like, maybe it's, maybe, maybe it's worth around the, the, the value of the Bitcoin. If the answer's no, it's probably worth less. A-and so I think the question then comes down to math, and what is your probabilistic outcome into the future of Bitcoin? And this is where I think a lot of the OG Bitcoiners that are massive Bitcoin bulls, their argument really breaks down for specifically issuers of digital credit like Strategy and Strive, because if you have amplified- Through digital credit, you haven't encumbered your Bitcoin and you have a cash reserve set aside to cover interest payments, then you can't be liquidated. And I think that that, that is, that is misunderstood. Sometimes you see people, \"Well, I can, you know, go on Coinbase or I can go on my account and I can put leverage on.\" And I can post margin and I can put leverage on. And it says, \"Okay, what happens if Bitcoin has a flash crash overnight, or for a day, or for a week, or for a month? You're liquidated. You've lost your stack.\" Right? What happens for Strive? I mean, literally, the-- and this is like a crazy scenario, but like, Bitcoin could go to a penny, and Adam Back would buy all, all the Bitcoin, I think, but, let's just pretend that, that he, he didn't have that bid in there, and it went to a penny, and it sat there for a year. Strive could do nothing. We could wait. In that like crazy tail scenario, let's say it went beyond a year, we could then pause interest payments, we could wait for multiple years for it to recover. So the question becomes, if you believe Bitcoin is gonna go up at, really it's about greater than a ten percent cagger into the future? The math will show that if you have amplification on through preferred equity for Strive and strategy, it just mathematically will outperform Bitcoin over time. And so, and so the question becomes, how much better is the amplification through preferred equity than traditional leverage? I think when you talk about a hyper-volatile asset like, like Bitcoin, it is so valuable that leverage outside of the ability to not be liquidated is almost, it's almost just a bad idea in all instances. and so I, I think if you want leverage, I think a-amplified Bitcoin through Perps is like by f- it's by order of magnitude the way to go. And so if you believe that, and I believe that, and you also believe Bitcoin's gonna have a cager over the next ten years north of ten percent, we can all debate where, where we think it is. You know, I, I think it's probably around twenty-five, thirty percent, but whatever, do your own math. sometimes I feel like I'm too bearish when I say that, but, you know, do your own math, and, and it just mathematically outperforms in a way that's not re-replicable Around thirty percent. Strive is the best game in town. Strategy is actually underlevered. That's, that's kind of their problem in a sense, is that they're so big. Their problem isn't that they're gonna go out of business. I'm like the ultimate strategy bull, but the hardest thing that they have is that they have over six hundred thousand Bitcoin. And they have to amplify that through preferred equity, so Sailor has to go out there and sell more and more and more preferred equity and, and grow that market, and that's-- it's, I think digital credit for people that want income is like an amazing product, and I think he'll be able to do it, but that's a multi-year project, right? So in multi years, once he's done that, what's the price of Bitcoin? Well, Strive already has that amplification on, right? So, so really, again, we're talking about total return differential into the future, right? Like, who's gonna be able to drive the best total return, and then how does that filter back into an MNAV? Like, the reality is, I think the MNAV should be substantially greater than one, but let's just say it's one. Like let's just play that out. If you already have digital credit on, you already have the amplification on, then you're just gonna outperform Bitcoin, even if it stays at a one MNAV, because your, your NAV will rise faster than Bitcoin, 'cause you have amplification on as it goes up, so does it break? It doesn't break, you would still outperform. and, and so I think it just ultimately comes down to, you know, the market kind of figuring out how to best value these companies in a, in a space that's moving exponentially, right? Launched their first pref less than a year ago. We talked about our timeline, right? How fast all these things are moving and mNavs are all over the place as people are trying to figure out, you know, what the proper mNav is. I would say at this point Players like Strive and Strategy can be agnostic on it, but also I think that the MNavs are probably lower right now than they should be." }, { "speaker": "matt_cole", "time": "33:02", "start": 1982.01, "text": "Yeah, I think it's a good summary because I, I think I, I probably, I agree with you on most of that. That really, it's, do you believe some Bitcoin treasure companies can justify a premium? I believe the answer is yes, it depends on the conditions, but yes, it can, you know, they can justify a premium based on some of these things like their leverage or amplification, and- And so, I guess, and it's a really interesting point you make about, let's say, in the, the academic case, like let's kind of assume away some of the risk factors, obviously not your keys, not your coins, understand that holding Bitcoin is a different thing to holding equity, but assuming even just one XM Nav, just the pure factor of having- Leverage, or in this case, sorry, I should use the term amplification in this case, you're already, you are outperforming Bitcoin just at least on the financial, you know, NGU side of things. of course, you know, I, I wanna be clear, everyone, you know, shouldn't take that as like, \"Oh, Stephan is endorsing only holding, you know, equity of a treasury company instead of holding Bitcoin.\" Of course, I think you should hold Bitcoin. I see it as, you know, So do I. So do I, just for All or nothing thing. Whereas the way I'm at least understanding it, and again, no financial advice, is just educational. The way I think about it is I keep, you know, most of my, you know, Bitcoin cold storage, multisig, and, you know, treasury companies are like a dabbling, that, you know, it's a small fraction, is how, at least how I think of it. So I'm not saying, yeah, guys, just go all in on treasury companies. No, that's not how I-- That's at least, It's kind of virtue signaling, and maybe some of that is, you, you know, probably a natural spot, actually, I'd love to get your reaction on the, Michael Saylor and, Danny Knoll's conversation recently, where I think, You know, essentially Danny was trying to ask this question of like, \"Oh, how does it change if, you know, prefer-- now, you know, you strategy have put out preferred shares, what does that mean for the other guys and how many treasury companies can there be?\" what's your take on this?" }, { "speaker": "stephan", "time": "35:10", "start": 2109.75, "text": "Yeah, my, my take is Every company should own Bitcoin, just like every individual should own Bitcoin, every nation state should own Bitcoin, and I think that sometimes, you know, some of the Bitcoin purists don't like that. They don't like the idea of companies holding Bitcoin or nation states holding Bitcoin. My response to that is that I think Bitcoin's the most, most valuable asset known to man. It's a decentralized asset, and if you've created something that is truly scarce, truly valuable in a world of abundance, everybody's gonna want it. There's going- Going to be a race for it. And, and if that-- and if it's not truly valuable, then no one will want it, or only libertarians will own it. And I'll, and I'll say like, I'm, you know, used to be a card-carrying libertarian, have very libertarian ideals, but like, if only libertarians want your thing, it's not very valuable, right? Like, and but if it's super valuable, then everybody wants it and, and you can't control that, right? And, and I think that's what Bitcoin is showing, is" }, { "speaker": "stephan", "time": "36:11", "start": 2171.3, "text": "Companies grow, more and more companies, more and more nations, and people want it. And so, you know, I think from the perspective of how many companies should be-- have a Bitcoin treasury, everyone, just like how I would say to all my friends, \"You should own Bitcoin.\" And, and I think that's where it gets into the, you know, are we competing with each other question, which, you know, Sailor, it got very, very contentious, right? And I, I probably have a little bit different of a nuanced take on that, where I'm, I'm And if I go golfing with my friends, I wanna beat 'em. If I go work out with my friends, I wanna lift more weight than them. I think what, what's true is that in the Bitcoin treasury space, there's a lot of friendly competition. I think it is competition. We are trying to drive a better total return than every other competitor in the space. We're not trying to get more Bitcoin than strategy, that's a silly, proposition, never gonna happen. I guess there's probably some like point o o one percent tell chance that it happens, but like, it's not gonna happen, right? Under any reasonable view of, of the world. But do I think that we can drive better total returns? Yes, and do we want to? Yes. do I also like, like we passed or we're gonna pass this week on the Bitcoin rankings So, you know, Jack Dorsey, Elon Musk, and Donald Trump's companies. How would I feel if tomorrow I wake up and Elon doubled his Bitcoin stack in Tesla? I'd actually be happy. So like, but then I would wanna re-pass him, right? Like, it's, it's a, it's a competition, but we're not competing in the sense that we can all win because of how nascent and how new this industry is, right? As Bitcoin Treasury company. So it's kind of like pure play issuers of digital credit. Is there competition? Yes. Can we all win together? Yes. Do you win more? Do you win more by actually working as an industry, educating others? Like, like I don't want to see in any way, sense of the form, I'm friends with, you know, a lot of the C-suite of Strive, just as a, as a business, I don't wanna see Strive not succeed, and they don't wanna see us not succeed, because if Sada blew up, that's bad for them as an issuer of digital credit, that the only other US issuer of digital credit blows up, they don't wanna see that, right? So, so, so that's in the sense how it's, it's not competing. Is Michael Saylor competitive? Yeah, that guy's a shark. That guy's an absolute shark friendly competition. Just like how, like, imagine you're in the NBA, if you're an NBA player, do you want the NBA to be the place of all the best basketball players in the world? If you're a player, if you're a team, you do. You want the competition level to be extremely high because that's gonna drive viewership, that's gonna drive interest, right? But do you also want to win? Yes. Right? Like, and, and, and I think that's kind of the, the way, the way I see this in the space and why, you know, we go to the Bitcoin for Corporations events. You know, I, you know, Sailor's super generous with his time. I try to be generous with my time when I can help others succeed and why I actually want to see them succeed, right? It's like, it's like, yes, it's competitive, and yes, I want you to succeed, and yes, I think it's a good thing for the Bitcoin industry to have" }, { "speaker": "stephan", "time": "39:22", "start": 2362.5, "text": "Bitcoin treasury company can't do any-- everything. And I could think of at least ten distinct, unique opportunities for different pure-play Bitcoin treasury companies And then broader than that, I think every company should have Bitcoin, have Bitcoin on their balance sheet." }, { "speaker": "matt_cole", "time": "39:39", "start": 2378.59, "text": "Gotcha. And so I think part of the contention, let's say, amongst like some of the, you know, Bitcoiners who are against treasury companies. Now, again, I'm obviously more in the- Pro-trustee company side, but I think what we seemed, what I seem to see is people who are saying, \"Well, you should be doing it, you should be stacking Bitcoin out of your operational company income, not out of, quote-unquote, financial engineering,\" because they see that as like, \"You're just trying to spin off some zombie company and get rich out of that.\" you should do it the hard way. And, you know, I, I, I'm curious, like Okay, yes, every company should hold Bitcoin, but the question then would be, should every company engage in financial engineering? How do you see that? I, I" }, { "speaker": "stephan", "time": "40:23", "start": 2423.04, "text": "partially agree with the statement. So I think the, the, the question comes back to first principles. So what is the goal of a company? The goal of a company should be to maximize the total return to investors, okay? So, so that's the problem, right? Like you're saying, okay, how do I maximize total return? Should I focus on operating-- on like the operations of a business? Should I focus on structured finance, which I think is what digital credit issuers are doing? I do think that those are operating companies with products. should I just stack Bitcoin? the answer could be different for, for everyone. would there be enough- space for every single company in the world to just drop their operating products and become structured finance Bitcoin trading companies. The answer is no. Do I think that there could be more than there is today? Yes. And I could actually create more than there is today, and they could be very unique risk-return profiles that are very different than Strive or Strategy. And, and so the, the question becomes, okay, like, do I think that-- Are we just trying to, to get rich? Well, yes, we're trying to maximize total return, like one hundred percent. We're all Trying to get rich, like whether you're doing an operating company or, or a company, like the, the fiduciary duty you have is to maximize value over the long run. So, so the answer to that is yes. Are you doing it efficiently? Yes. and I think sometimes maybe some of the, the, the frustration could even be in the fact that, that structured finance companies of Bitcoin that are letting the capital do the work, like it almost can seem like a cheat code. Like, why aren't, why aren't you- Right. Feels like an unfair advantage. Yeah And, and I would say like in a certain sense, yes, it is, like if you're bullish on Bitcoin, like, like company-- people that are building Bitcoin companies that generate value to Bitcoin, that value accrues to our amplification. Like they're effectively working for our company, right? And, and we wanna see them win, even, even the ones that, that don't like pure play treasury companies or don't like what we're doing. Like I wanna see them win because if they win, Bitcoin's likely more valuable. And so, like, I, I, I, I don't-- I, I can see why there could be frustration. It's like, like I had to hire a hundred people and we had to do this and do this, and you guys launched a preferred equity, you have amplification, and you've And, and I get the frustration behind that, but this, you know, companies aren't competitive with each other, and we wanna drive maximum total return. And I think that there will be, you know, varying degrees of how you best do that for every company that has different, you know, amounts of Bitcoin, different ability to raise money, different operations. There's no, there's no one size fits all. Every company shouldn't be a copy-paste of strategy. And I think sometimes that's what we saw maybe in, in Bitcoin Treasury Mania one point zero is certain companies that didn't actually Have a distinct vision. They just saw the strategy get rich, they tried to launch their own thing, where, you know, we have always approached it from how do we maximize total return? Can we do something different? Do we think it's interesting? Yes, but it's also flexible, right? When we first announced that we were gonna become a Bitcoin treasury company, we talked about all these alpha opportunities, and they're still there. Digital credit was something that was emerging. We didn't realize that we were gonna be in the perfect position to be a leader in digital credit, that the fact that we didn't take convertible notes would put us in as big of an adva-advantageous position versus a lot of our peers. I mean, frankly, when we didn't take convertible notes, we thought the market wasn't gonna like it, but it was just the right decision for us. So we just, was like, okay, it's the right decision, and it ended up being something that put us in a bigger position to be a" }, { "speaker": "stephan", "time": "44:02", "start": 2642.34, "text": "Like, just make good decisions, keep your head down, maximize total return. The answer will be different for everyone, but I do think the answer will for every company that's looking should involve Bitcoin in some" }, { "speaker": "matt_cole", "time": "44:13", "start": 2653.11, "text": "manner. Yeah, I think that's fair. And I wanna also, I guess, bring up this idea that I think maybe what people are getting into their minds is, \"Well, hey, you're just all selling the same thing.\" But let me just, you know, I was just having a quick research and looking around, if I look at how many banks are there on Earth, that number, Like nine thousand, right? There are nine thousand banks on earth. They're, are they offering the same product? Well, they've got different loans, you know, they're offering different products. Or even if I took another example, how many companies do some kind of cola-style soft drink? Okay, obviously Coca-Cola and Pepsi are the dominant, you know, global players, but there's like hundreds of them. Clearly there is, you know, there's, there's room for many different, you know, flavors, whether it's some kind of banking play, some kind of insurance play, maybe there's thousands of insurers around the world, right? So do you think that's a fair analogy to make that, okay, if, and if so, what are some of the ways these different, let's say, treasury companies who are focused on structured finance or quote-unquote financial engineering, what are some of the ways that they can distinguish themselves from each other? What are some of the ways that they will differentiate?" }, { "speaker": "stephan", "time": "45:23", "start": 2722.52, "text": "Yeah, so, so I'll give you a couple different, mat-matrices that they could go in different directions. So I do think that's a very fair analogy of looking at whether it's the banking industry, the insurance industry, the asset management industry, that these financial companies, there's, there's hundreds of them in any sector, and I would say banking, banking's probably almost the one where sometimes they might look the most similar. Like, what's the difference between Bank A versus Bank B? And the answer tends to come into how they write loans, where they focus, how they look at risk versus return, and, and they generate different total returns, with regards to structured finance Bitcoin treasury companies. Here's a couple different places where you can differentiate. They're easy. One would be amplification ratio. Different investors have different risk-return matrices, different appetites for risk, so if you look at amplification Some might prefer ten percent, some might prefer twenty, some might be thirty, forty, fifty, and then, so that's, that's just one way of just outright amplification ratio. Another would be, how do you think about generating income? Do you generate income on your Bitcoin? Do you sell covered calls? Like, I, I personally am not a fan of covered call selling, and, and the reason is, is I think that, that Bitcoin has massive positive convexity to the upside, and, and that covered call selling is likely to clip that upside, and we wanna provide amplified Bitcoin exposure. But I'm well aware that covered call selling as an investment strategy is extremely popular, and with Bitcoin it can generate really nice income. And so do I think someone providing some amplification with the covered call selling strategy? Would have interest. I absolutely do. Do I think we would have a better return than them? Total return? I do. But I think that it would, you know, it would be something that would have interest. how do you think about generating the yield on your Bitcoin if you're thinking about generating the yield on your Bitcoin? there's many different ways that you could You could look at things in, you know, the lending space, you could look at things in the banking space, you could look at things in the insurance space. You could, you know, there's, there's infinite ways you could option space. There's many ways you could think about generating a yield on your Bitcoin. They're all very different. and so just on those metrics alone, I think you're already talking about more differentiation than most people will be able to spell out around most banks in the banking industry. And so I think, I think it's very early, and, and I, and I think there's a lot of room for innovation, in, you know, a lot of these Bitcoin treasury companies, the newer ones that I don't think have laid out their plans yet, and I'm sure they're not, I'm, I'm sure they're not sitting there doing nothing, right? They're, they're strategizing, and it's gonna be very interesting to see what they come up with over the course of the next year. And like I said, I, in the competition" }, { "speaker": "stephan", "time": "48:18", "start": 2898.49, "text": "I want to see us, you know, eat their lunches with better" }, { "speaker": "matt_cole", "time": "48:21", "start": 2900.99, "text": "total return. Right. And, and to be fair as well, there's even the jurisdictional aspect of like, you know, Bitcoin treasure companies in the USA are different to treasure companies in Japan or in the UK or Brazil or wherever. So that's also another differentiator, that's out there. so let's talk a little bit about, the growing interest in things like Sato and Strive. So do you want, do you mind just kind of comparing them for listeners and commenting a little bit on the growth that we're seeing here in, the interest in this?" }, { "speaker": "stephan", "time": "48:57", "start": 2937.08, "text": "Yeah. So, so first off, the, the growth is, is absolutely massive. so if you look at Strive, I mean It's trading massive volumes, it's north of, of par, but comparing, and then if you look at SEDA, it also has massive volumes if you compare it on a per capita basis, so just like how the size of SEDA versus the trading volume, and, you'd actually see that SEDA has superior liquidity relative to its size than Strive, but on an outright basis, Strive obviously has massive volumes, because it's massively larger. but here's some of the differences. So SEDA Has a slightly higher interest rate than Stratch. We have a, a twelve point two five percent interest rate, so higher, higher than Stratch. They're both variable rate, so, the companies, so Strive and Strategy, will address, adjust the interest rate up or down depending on, on the range. And then the trading range that the companies have set for the two products are, are little different. So Strategy, they set a trading range that they're trying to drive to over time of ninety-nine to one o one. With a target of a hundred, so a, a two point range, and right now it's within that range, several times, you know, throughout its history, it's been outside that range, and, and I think this is It's so early in the space, but it's gonna be very fascinating to see how much volatility you can strip off of Bitcoin over time. Like, will strategy be able to successfully maintain stretch in a 99 to 101 range over time? I think that's an answer that is unknown at this point, right? I would almost say like it, for most investors, it probably doesn't matter because their, their coverage of the interest is so good that they're gonna be able to pay the interest. I think the question just comes down to what will the actual volatility of this thing be over the next ten years, and I think that's, that's an unknown and it should be an unknown at this point. Strive, given the fact that we have a, a higher interest rate, we're a smaller company, and we're at this point, I would say unsure of how much volatility you'll successfully be able to, to, to strip off a Bitcoin in these products, we did a trading range of ninety-five to one o five. And so if you actually look at that as a target It, it still is very attractive on a vol basis relative to traditional high yield bonds. So that's the way I look at this, is that Seta and Stretch, I mean, Seta at twelve point two five percent interest, that's almost double what high yield bonds are paying, right, on an interest basis. And I think potentially it could have less volatility than high yield bonds. Do I think that there will be massive interest for that? I do. Do I think that these need to be stable coins? I don't. I, I don't think that you need to take a twelve percent interest and say this thing is a stable coin. I think it's great that you're starting to see kind of the app layer on preferred equity. So you're starting to see some innovation of trying to take SEDA and stretch and turn them into stable coins at a little bit lower yield. And I do think that you're-- that there are ways to strip down the wall of these even further to move in that direction. You know, everything is- From that perspective, everything's breakable, but this isn't like, in my view, if it's done well, like for these, for these app layers, this isn't like a, like a Luna or something like that, right? That's, that's designed to blow up. I think the, the risk is like, can they successfully defend the peg? Not like, is the assets there? The assets are there, the coverage is there, the risk, the rating, the default risk on these, I think are extremely, low. So I think these are very attractive vehicles, but" }, { "speaker": "stephan", "time": "52:38", "start": 3157.62, "text": "It's recording, about ninety-five and ninety-seven and a half, so it's within our stated range, yeah. Right," }, { "speaker": "matt_cole", "time": "52:44", "start": 3164.4, "text": "already. And just, sorry, just on the band, can you just explain what happens when it goes out of that band? Like, do you have a market maker or someone trying to go into the market to bring it back into the range, or is it more about adjusting the rate to try to keep it in there or how, how do you do that?" }, { "speaker": "stephan", "time": "52:58", "start": 3178.09, "text": "Yeah, so, so it could be adjusting the rate, it could be capital markets activity. So like if it" }, { "speaker": "stephan", "time": "53:07", "start": 3187.19, "text": "It, but adjusting the rates probably the primary function. And, and, and you know, these are for both companies, these are long-term ranges, and so, you know, it's not overly concerning if- You know, Bitcoin drops twenty percent and these things fall out of the range for a little bit. I actually don't think they need to as they get better understood, but do I think that that is a problem? Not really. it just is, if it fall out of range and on the low side, we'd likely, start to raise the interest rate to bring it back into range over time. Yeah." }, { "speaker": "matt_cole", "time": "53:39", "start": 3218.96, "text": "And who do you see as the main- Let's say customer or user or investor in Sada, is it, you know, just people who want somewhere to park their money that's better than otherwise being in bonds? Is that how you see it or how do you see it?" }, { "speaker": "stephan", "time": "53:54", "start": 3234.12, "text": "Yeah, so this kind of gets into the question that you kind of hinted on earlier, it was focused on Bitcoin treasury companies and versus owning Bitcoin, but it's really digging into the unique investment needs of different people, right? So people in retirement age generally need income. Right? And, and they, they have a desire for less volatility. If you're, you know, whatever, let's say you're seventy years old and you're trying to think about, how do I survive for the next twenty years of my life or twenty-five years of my life? And you're saying, okay, well, do I want to take amplified Bitcoin exposure for my last, you know, twenty-five years of my life? Like, for most investors, I mean, if you're wealthy enough, maybe the answer is yes, 'cause you're thinking about leaving money behind, but for most Right? maybe some will want a little bit of it, but, they're thinking about income, and so how can you generate a good income with a risk that you're comfortable with? And, and what we're seeing is a lot of people in, I would say the fifty and above category, high net worth individuals that are looking at income that say, \"You know what?\" I like Bitcoin, I understand Bitcoin. I'm also a real estate investor and I have all these real estate properties and the real estate properties I have to, you know, maintain them and I earn a, you know, whatever, a five percent yield and I have to do a lot of work. And you're telling me I could sell that real estate property and I could buy SEDA or I could buy STRV and have minimal volatility and double the yield and no work and it's return of capital, meaning it's tax deferred. They're like, sign me up for that all day. And, and so that's, that's a big investor that we're seeing in that. We're also seeing people that have different accounts, and this also gets into, I think, one of the use cases for Bitcoin treasury companies is like, okay, like, should everyone own Bitcoin? Yes. Should people try to have it in self-custody? Yes, although I think some boomers, you know, I think might have more risk in that 'cause they just don't understand technology, but, but like, is that a principle that we should support? Yes. but some people have You can't buy Bitcoin. You, you could buy maybe a Bitcoin ETF, you could buy Amplified Bitcoin, and, and if you're young and you're looking at, you know, retiring in twenty years, thirty years, or forty years, you might say, \"With my investment time horizon...\" I actually have the ability to compound and ride out, and I have money in accounts like Bitcoin treasury companies, I think that's like, that's like the pristine use case for them, for someone in, in that camp, 'cause they want amplified Bitcoin exposure. And then, and then you have people that, you know, and I think this should be the base layer is everybody has self-custodied Bitcoin to preserve your financial freedom into the future. But at a certain point, you probably have enough of that. Like, d-d-do you, like, how many Bitcoin do you need in self You're kind of set for life from the financial freedom perspective. That answer will be different than everyone, but there's, there's a level where you can start thinking about, you know, your, your portfolio more holistically, and I think that's where these different products, this financial engineering, can come into play. And, and I, and I think that's, that's how you just take the base layer asset and you meet the different needs of different individuals." }, { "speaker": "matt_cole", "time": "57:01", "start": 3421.26, "text": "And so when it comes to, as you were mentioning there, there are various pools of capital that either can't or won't directly buy Bitcoin, or maybe they won't directly, they can't, buy, or they don't want to buy the common equity of one of these treasury companies. And I guess that's, I guess that's one aspect you're targeting. And then of course, as, as you said, it, it, it's relatively unknown for now. There's a lot of people who are trying to chase some yield in, like, whether it's real estate or They're trying to be like a, a dividend investor in like stocks, in like fiat stocks that don't have any Bitcoin, and for them, they just don't-- they aren't even aware that these products exist. and so I think that's kind of a big aspect of the education journey of, of like helping people understand, okay, this is a product that exists. so maybe you wanna elaborate a little bit on the different pools of capital that are out there that can't just directly buy Bitcoin." }, { "speaker": "stephan", "time": "57:57", "start": 3476.73, "text": "Yeah, so there's many. I'll give you some of the bigger ones actually, 'cause there's, there's obviously people that have 401k accounts or whatever IRAs that, that money is ca-is-is trapped. And yes, with an IRA, I'm guessing a lot of the Bitcoiners are aware, you can do self-directed IRAs, you can buy Bitcoin directly, you can self-custody it. we've done that personally, but, you know, s-certain people aren't comfortable with that, they don't have" }, { "speaker": "stephan", "time": "58:27", "start": 3506.73, "text": "That really can't buy Bitcoin directly. but then on the institutional side, this is where it gets, I think, more interesting, is there's many large pools of either fixed income, portfolio managers or equity portfolio managers that are Bitcoin bulls, and their investment mandate is equity only. So if you have an equity only investment mandate, you can't even buy a Bitcoin ETF, right? Because that's not common equity of a company. And so if you're an actively managed equity portfolio manager Manager, this is trillions of dollars, right? Trillions of dollar pools of capital, and, and I think most people are aware that there's a, a known, portfolio manager at Capital Group, Mark Casey, that's like probably the, the, the best known figure that's doing this, right? Equity mandate, massive Bitcoin bull He can't buy a Bitcoin ETF, he can't buy Bitcoin in his portfolio, so what's he doing? He's loading up on, on Bitcoin treasury companies, and he's crushing it, right? Like, a-and that's a massive pool of capital. Is that pool of capital gonna change? That, like, no, these, these are institutional investors that are gonna have equity mandates, and, and as we- You know, mature and, and as people in, I would say the millennial and younger generation grow into these portfolio management roles, which is happening in our Bitcoin Bulls and our Bitcoin Native, you're gonna see a lot of capital that just can't do things other than buy common equity. Or if you have a, a income mandate, you can only buy income assets. So, so some could buy, you know, whether it's, you know, corporate bonds, some could, you know, have preferred equity in that mandate, some might buy the convertible notes. That there's gonna be demand for People understand the risk and they have guidelines that limit them in what they can buy, and these-- it's just, it's impossible to understate like how large these capital pools are, right? That are looking for an edge, and, and that these Bitcoin treasury companies provide a unique solution to them, right? And this kind of- Gets back into the reverse split conversation just quickly for Strive is that we're talking trillions of dollars of pools of capital here that have these different mandates that, that are interested in, in opening up those doors. Why would you want to have a, a door closed to trillions of dollars of, of pools of capital? And, and so part of our, our mandate, you know, to drive long-term value is to find these doors and open them. There's other doors that we haven't even opened yet that strategy is opening as we go, like what are those doors? Of course, for preferred equity, it's actually getting investment grade rated, right? Like Strategy got a B-minus rating, they're not investment grade yet, but S&P didn't even look at the Bitcoin, right? So like, clearly like they gave them zero value for the Bitcoin, there's education to be done there, but as that happens, if you get these preferred equities investment grade, that opens trillions of dollars of capital through the door. That's a, that's a door to be opened as you develop a, a track record. So many investors require three year track records before you're It's on the common equity side, but it's on the preferred equity side, some have five-year mandates, right? Meeting those things, we're trying to open up every door, tell the story, and then as we do that, we're gonna get larger and larger pools of capital, and we believe that'll drive Bitcoin yield for the investors that are already in the story." }, { "speaker": "matt_cole", "time": "01:01:40", "start": 3700.99, "text": "So coming back to, another, I guess, point of contention amongst, let's say, hardcore Bitcoiners, I think, a-and we've sort of been touching on this a little bit, but let me state it to you this way, and I'm curious to get your reaction, because I think the-- there's a lot of Bitcoiners out there who- Maybe they, they, they came into it by buying Bitcoin on an exchange and withdrawing to self custody, and that was their experience, and they believed that other people should be doing that too. And I think maybe over the last year or two, because of all the hype of treasury companies, and okay, yeah, maybe we're kind of in a lull now, but we're coming back up. But anyway. Summarizing, I think in simple terms, many of them might believe that treasury companies and treasury equity have cannibalized, let's say, the normal demand for buying Bitcoin on chain and withdrawing. But maybe the o-the other side of that coin is more like, no, it's actually growing the pie. So how would you, see that and how would you answer that idea, like, is it, is b- are Bitcoin treasury companies, are they cannibalizing sort of on-chain use of Bitcoin or is there a bigger picture here?" }, { "speaker": "stephan", "time": "01:02:46", "start": 3766.28, "text": "I think there's, there's a bigger picture here, but I think the question becomes, how big do you think Bitcoin can be as an industry? And, and, and so I think the question becomes, do you always protect and preserve the ability for people to self-custody their Bitcoin as an option? And the answer should be yes. Hardcore Bitcoiners, one hundred percent in that camp. I don't know a single, leader of a Bitcoin treasury company that doesn't agree with that. And, a-and then the second- Second question is, you know, are, are you promoting and preserving the freedom for Bitcoin at, at the nation state level? And if the answer is yes, who's doing it? Like, like that's actually an important question. And ultimately, with what money? And, and, and ultimately, like, like the, the hardcore Bitcoiners aren't funding that effort. They're, they're, they'll, they'll yell at Congress people on, on X, but there's a few people that are funding it, like Jack Dorsey funds a lot of, of efforts there, to, to a major degree, but like, but you need effort, you need to, to pro-promote and preserve those policies, and so I think Bitcoin treasury companies are massively additive in every single nation, and this is, I think, one of the key use cases in Treasury companies to every nation is to have a, a voice that's well capitalized in the room with the politicians to promote Bitcoin friendly, policies, and, and I think that, that you need those people, and I think that we're, we're aligned, as, as a company, so that That's kind of like the, the way that I think that this goes, in, into the future, and, you know, pretty important to, to promote. Yeah." }, { "speaker": "matt_cole", "time": "01:04:27", "start": 3867.79, "text": "Yeah. So I, I think, yeah, we've touched on a lot of things, yeah, I guess, you know, it's kind of the start of the year. Do you have any thoughts on where you think things will go this year? I know, you know, the last year has been kind of- Wild, right? Like with all the different things that have been happening, do you have any thoughts or outlook on what's gonna happen in Bitcoin, this, this year in twenty twenty-six? Yeah, I," }, { "speaker": "stephan", "time": "01:04:50", "start": 3890.41, "text": "I think the, the fundamental equation for Bitcoin Has never been stronger. Regulatory risk is at an all-time low, I think from a technical perspective, we seem to be working through some of the OG selling at this point on some of the on-chain metrics, it looks like it's slowing, slowing down, and I think from a, a price chart perspective, which I view as like one piece of the mosaic, probably the least important piece of the mosaic, but, but a piece that, you know, it's, it's fun to, to talk about. You know, I, I think all things- Just point to limited downside from here for Bitcoin, like, I mean, Bitcoin looks like it's breaking out as we talk, as we speak, right? Like, I have a two-year downtrend, I mean, it looks like this thing could just be rocket ship shipping in, in the near term, but let's say that that doesn't play out for, for whatever reason, I don't think we break 60k. Like, or if we do, it's like for like a one-- So, so if your downside in Bitcoin is like forty percent, let's just say, which in traditional assets is a lot, but like, I think this is low probability, but I think it's always important to look at downside versus upside. What's the upside? I mean, this thing going to, you know, a million plus over the next several years is, is my view. And, and, you know, whatever with the average compound rate of thirty percent or so This is gonna be one of the best risk-adjusted return opportunities you will have to buy into Bitcoin right now, even if you think there's some chance that it goes to sixty K, because I think that's a, a somewhat of a tell chance, but, but a chance. and if you think that we're more likely to go up this year and definitely years into the future, it's much easier to invest now from a total return perspective, risk-adjusted return perspective, than if Bitcoin's at three hundred K or three hundred fifty K, because Because you-- it becomes more difficult to estimate what the downside would be in a bear market, and right now I think we're right around high levels of support Chart looks bullish, fundamentals look bullish, everything that I think reasonable looks bullish. This is the best time to go out the risk curve, in my view. and I think everything that's happening geopolitically These are all bullish tailwinds to Bitcoin. I mean, it really is like fourth turning stuff that we're seeing right now with Venezuela and Iran and, you know, the, the Federal Reserve and You know, Powell making the statements that he's making, which I think are, are, are silly, and I don't have sympathy for him, but like, you know, whatever, trying to, trying to get people to believe that the Fed is independent still, and then all the central bankers around the world, you know, issuing statements of support, which I think, fall flat. It's quite suss, yeah. but anyways, you know, these things that are happening, you're seeing- The backdrop for what Bitcoin was built for continue to play out, right? Dogecoin, and so it's like, I think this is a time when you wanna be max long Bitcoin exposure, which is like, I mean, I, I announced today I bought a bunch of ASST stock. Why did I do that? I did that because I want to be max long risk right now, for the next, you know, five, ten years, and I, and, and I think, you know, obviously I think I'm biased, but I think our stock is the best way" }, { "speaker": "stephan", "time": "01:08:05", "start": 4085.94, "text": "It's hard to find a better risk-return scenario than you have right now, and I think you want to be out the risk curve." }, { "speaker": "matt_cole", "time": "01:08:11", "start": 4091.59, "text": "Yeah, I think there's, so many, bullish factors for Bitcoin right now, the broader industry, and, you know, we're seeing development in all these different areas, whether it's treasury company stuff, whether it's L2s and payment stuff, whether it's medium of exchange, and just all these aspects of it. So, you know, I'm quite bullish. I, I think, we should see this as, hey," }, { "speaker": "matt_cole", "time": "01:08:35", "start": 4115.52, "text": "I think, you know, I, I'm, excited to see what happens over this year. so, yeah, look, thanks for joining me. listeners, check out Strive dot com and you can follow Cole on X, his handle is at Cole Macro. Links will be in the show notes as always. thank you, Matt, for joining me on the show today." }, { "speaker": "stephan", "time": "01:08:54", "start": 4134.3, "text": "This" }, { "speaker": "matt_cole", "time": "01:08:54", "start": 4134.42, "text": "was" }, { "speaker": "stephan", "time": "01:08:54", "start": 4134.58, "text": "fun. Thanks for having me." } ] }