Are Bitcoin Treasuries the Next Big Thing or the Next Blowup?

Michael Tanguma (00:00.238) straight down the middle of the fairway you can ask wrong Jackson Mikalic (00:02.805) Yeah. Michael's pretty burnt out at this point, but we are recording for the last trade and excited for this one because we have two returning guests. We have Rich Byworth from Seas Capital and Bram Kahnstein, Bitcoin for Millennials. Bram, you've been on the show more recently, but Rich, you have not been on the last trade since September or October. We were trading in the sixties. It was before the presidential election here in the United States, which has had significant impact on the industry as we all know and we'll talk about as Brian here was at the Bitcoin policy summit this week in D.C. and then to round it out we have Michael Tanguma as well from OnRamp. So Rich and Brahm, great to see you both. How are the two of you doing? Richard Byworth (00:45.181) Thanks, Jackson. actually I was on stage with your buddy Mason Carter from early writers. And I actually said on stage, I said, you have to, the audience has to understand that the choice you as a group have made to denominate that fund in Bitcoin, and therefore be owing your investors the hurdle rate in Bitcoin as opposed to the hurdle rate in dollars and Bitcoin performance. Brian Cubellis (00:50.182) That's right, that's right. Richard Byworth (01:14.931) to get your fees is significant and I think very notable and commendable actually. Bram Kanstein (@bramk) (01:24.208) Yeah, love, well, I'll share something I love. Richard is mentioning the term hurdle rate again, right? And I think there were some people on Bitcoin Twitter who were like, saying Bitcoin is a hurdle rate is like a trade fight grift, something, something. But I think many people don't understand the term hurdle rate. maybe, you know, because we're also going to talk about Bitcoin treasuries and stuff, maybe it's good to also Michael Tanguma (01:25.174) Rich, had a... Bram Kanstein (@bramk) (01:52.283) now or later touch upon that because I think it's actually a very Bitcoin thing to think about Bitcoin as the hurdle rate for any other thing that you can do in your life when you actually store your wealth in Bitcoin. So I just want to touch upon that and happy to be here, guys. Michael Tanguma (02:08.203) Yeah, glad to have you. I think there's two parts. When I think of Bitcoin as a hardware, I think of it as a like... Meta thing where I've always thought life boils down is to is the juice worth the squeeze It's super crude but it's like comes down to is it worth squeezing the orange juice? Like is it worth doing the endeavor on a personal that's personal for everyone? And so the idea of Bitcoin is the hurdle rate is riches referring to is when we were building on ramps like well Do I spend my Bitcoin or do I raise money? Well, I can raise money, but then if you're gonna give away equity that's effectively in our view Bitcoin in the future So we spent our own Bitcoin. So the idea is we have to help reform Bitcoin And that doesn't mean, you know, from a CAGR perspective, it just means you either have to be able to sell the company for more Bitcoin or you just have to increase your dividends, the amount of value you produce in the world and then accrete it. And so that's how early writers were born. So I think that's ultimately when a lot of people have loved this. You've seen Vivek, Matt Cole, there's new podcasts referencing it. Now Pomp's showing it. There's a lot of people out there saying Bitcoin is a hurdle rate. So I think the suits have picked up on it and that's where it gets a bad rap in the Bitcoin space. But it's just a term. It's indifferent. It's just money. And how do you decide to spend it? That's your ultimate hurdle rate, which is subjective for everyone. It's not objective. Richard Byworth (03:25.407) think it's just much more honest as well. If you're running a venture fund, you're denominating in Bitcoin, you're investing in Bitcoin companies. If Bitcoin goes up, you're denominated in dollars, you're going to make performance fees. But you're just being much more honest with your investors when you're denominating in Bitcoin because you've got to beat Bitcoin to even get a performance fee. I think that's the key. Brian Cubellis (03:47.972) Yeah, there's some nuance to it. think how we've thought about it from the beginning was really internalizing it. Like Michael said, either from an individual perspective or as a GP or as a business, a founder, an entrepreneur, you're internalizing that opportunity cost. think, Brom, to your point where some detractors have come in is more related to their disdain of the treasury company FAD or... proliferation of treasury companies and that being part of the marketing around by my public company is Bitcoin's are all right, so you have to outperform it. So I think that's kind of where the distinction is, but there's nuance there because like Michael said, it is just something you need to internalize whatever you're doing. Michael Tanguma (04:34.955) Rich, I have a quick thing to share with you that I think you'll appreciate and it's gonna be a little bit polarizing. Haven't shared it publicly, but I had this on lock this weekend because we have a lot of venture capitalist buddies and they like what we're doing and we're like living, you know, that term vicariously through them. They wanna get Bitcoin in there, you know, via their LPs or a portion of their fund to de-risk it and they can't get it done. And I was texting them because we're listening to Bill Gurley and all these main venture capitalists and they all like are so smart, but they're missing the piece that the money's broken. So they can't figure out why the alpha is being like decayed. from private investments. And it hit me, unless we're completely dumb, it's possible. So this is a still chance. We're completely dumb. We blow up the fund. We can't lose. And the reason why is because, I promise you, and I promise anybody listening, like our goal is to out compete and return more Bitcoin, because that's the only way we get paid. But even if we hit Bitcoin or a little bit above that, we will be the best performing fund in venture capital. And every VC that is fiat allocating is going to wake up to this is how companies will be built. Because ultimately, it's just increasing the cost of capital. It used to be 2 % it's 6 % now it's you know, whatever bitcoins keger We will just be ahead of that time and then all the money will flow in either way so again a caveat we can't blow up but That's just a that was an unlock. I had this past week and I was like, holy crap Richard Byworth (05:54.111) What you're saying is when you have the comparison tables, you would look at your fund, it would be denominated in Bitcoin, of course, then it gets translated back into dollars for the dollar performance. And so as a result, you're going to just kill everybody. You're also going to probably kill the majority of other Bitcoin venture funds because they're all denominated in dollars. And so they're not just so strictly focused on businesses that can outperform Bitcoin. as a hurdle right? And I think that's the other aspect of you guys. Michael Tanguma (06:24.759) That's exactly right. It's exactly right and it's all a philosophical thing because we talk to folks all the time that are maybe getting higher valuations or whatever and a lot of these individuals are wealthy so they don't necessarily need the money and it's like look if you want more money go do it we won't be those people but if you actually want to build a great company we're building one right now we can like get in the knife fights with you we can talk about how we can actually do it in real time and it's just a fundamentally different experience it's actually really had one yesterday with a pretty interesting firm on the side or a mortgage equity side, which is I think is going to be a big space letting people take a small sliver of equity out of their space and they don't really need the money. But point being is you just get to be transparent just like we're being here. It's like this is our goal. Our goal is to outperform Bitcoin, but even if we barely miss that. You know, even that, I would make the case a lot of Bitcoin individuals will benefit simply because of the man in the coma idea. You always heard about certain people have gone to prison that end up with more Bitcoin than most people because it's just a force hodl. So anyway, we don't gotta talk about early writers. It was just an interesting dynamic that's, this stuff's always just like kind of, as you know, like percolating your head because the marketing we're learning in real time about. Jackson Mikalic (07:36.613) Yeah, and that's a perfect segue as well because we're talking about the private markets and how to allocate capital with Bitcoin as the hurdle rate and how that informs the capital allocation process and how management teams think about it. And I would love to talk about what's happening in the public markets as it relates to Bitcoin treasury companies because Rich, last time we had you on was in the fall and Strategy was the dominant player, still is the dominant player, but there was not this... rapidly growing ecosystem of pure play Bitcoin treasury companies. And so now to Michael's earlier point, you know, we have Strive stepping in, Anthony Pompuliano just announced a SPAC or a merger for a Bitcoin treasury company. You have MetaPlanet, which has really ramped up their efforts, similar web. There's all these different companies. There's so many that I, you know, I don't even... have the time to follow them to be quite honest. And I really want to get your thoughts on this because you have such a polarizing view in the Bitcoin space where on one side of the barbell you have individuals who are vehemently against the idea of Bitcoin treasury companies because they feel like to them they're aggrift, they're scamming people out of their Bitcoin. But then on the other side you have people who are so incredibly excited about the financial engineering, the idea of increasing Bitcoin per share, Bitcoin yield. And you have people that are even selling all their Bitcoin to allocate it into Bitcoin treasury companies. And so I was particularly excited to have Rich on the podcast because I think Rich, you're one of the most informed and well-spoken on this topic in particular. And while you're bullish on it, you still have a very balanced view. So we'd love to just kind of get an overarching update, you know, over the past six months or so. What are the most important things that have happened in this space? You know, what's exciting to you? Where do risks lie? We'll have a dynamic conversation, but really want to just let you set the stage in terms of what's going on in the Bitcoin treasury space. Richard Byworth (09:33.171) Sure, happy to. I think obviously the key moment was October last year when strategy announced the 21-21 plan. I think it might have been around the time that we last did our chat. But obviously looking at that as a traditional finance guy, you're looking at a 40 % dilution in the equity with an additional 40 % potential dilution. in the convertible bonds. And when you have a dilution of that level, I mean, the ATM was live as of the next day. When you have a dilution of that level, you would expect the stock to fall. The stock went up and Bitcoin was down. And at the end of the day, the stock ended slightly down, but it was up as much as two and half cent intraday with Bitcoin soft on the day. And I looked at it and I just, I just could not understand what was happening. And it sort of really broke my brain, as a traditional finance guy. And so I've obviously spent a lot of time thinking about it and, had, had a few discussions with, with people like Bram on this subject, and other podcasts where we've sort of delved, delved into what exactly is happening. And it really just. It's really interesting that you bring up the point that a lot of Bitcoiners are seeing this as some level of grift and a scam and the rest of it, because I was really hit by that in Prague last week when we were all there. There was a lot of Bitcoiners. I actually shared the stage with someone that he didn't want to say it so directly because he was sat next to me. But and he knew that I obviously have strong views about these Bitcoin treasury companies. And to your point, I'm generally quite bullish. But the point that I made to everybody who sort of brought it up at any point was, well, you got to understand is the entire financial system has been pushed to a point of breaking with the money printing. The money printing has all flowed into the financial markets, right? So when you look at the equity markets, you look at Apple, I don't know what they are today, maybe 35 times PE, 35 times PE, that is Richard Byworth (11:58.095) ridiculous pricing for a company that just is demonstrating very little growth at this point in its life. So when you look at that, you look at the valuations all across the S &P, the problem you've got as an active manager in equities is that you need to actually be allocating to companies that are fundamentally completely mispriced. And if you don't do it, you run the risk of massively outperforming, underperforming the index. So what do you need? Well, you need the best performing asset on the planet. You need Bitcoin, right? You need the 65 % Kega that we talk about for the last five to 10 years. So companies like MicroStrategy are actually providing a bit of a release valve of these ridiculous valuations as they attract more capital in the equity markets. They're relieving that pressure on the apples and all the rest of the mag sevens that are arguably completely mispriced. Plus likely the rest of the S &P, I don't even bother looking at it these days myself. But the other thing, that is also true of the bond markets, right? No one's being paid for the risk that they're taking to hold dollars to continue to lend money to either the US government or the corporates, right? I don't want to hold US dollars and then get paid four and a half percent. I know the rate of debasement is at least 10, right? So the real rate needs to be at least 10. Well, welcome MicroStrategy and his preference shares, 10 % coupons, happy to pay it. You know, if he's borrowing money and paying 10%, he's essentially, you know, paying out and buying his Bitcoin at a 65 % CAGR. So he's more than happy with that performance, right? And obviously the bond market love it because they finally got something that is a stable credit, actually paying the real rate in the US dollar curve. And then you come to volatility, right? If you look at the convertible bond market, convertible bond managers desperately need volatility. But volatility has been destroyed by money printing because every time the market dips, you just get the central bank, print more money, stabilize the price and volatility is just sort of drifting to nothing. Right? So convertible bond managers are crying out for more volatile products. Richard Byworth (14:22.099) Saylor, he doesn't have any control over the volatility of his stock. It's completely defined by Bitcoin, which is this $2 trillion dinosaur tail, I call it, waving his stock around all over the place. So for him, he's happy to sell his convertible bonds at a 50-vol when they're trading at set, when the volatility is really 70 or 80 back when we were last talking and he was issuing converts. So if you look at all of this, All of the managers in those various capital pools desperately need Bitcoin or Bitcoin's implied dollar rate or Bitcoin's volatility. They don't always understand that that's what they need, but they're starting to. And this is where the Bitcoin treasury companies come in because they're like the release valve of those overpriced markets, basically being slightly deflated by the option to move into Bitcoin. And so this is the peaceful transition of the financial markets into Bitcoin. That's what's happening. yeah, of course, you're going to continue to see these companies pop up and then you've got the whole debate about, well, know, Coincilium today, they're trading at, think, a 10 times MNAV. That's the number two company in the UK. A 10 times MNAV at a market cap of 100 million. I like that because then they could do a hundred million raise and take themselves to a two times now immediately. So you've got this sort of, well, we can get into that, but the metrics are very difficult to sort of understand. And so you have to, it's almost like a multifaceted diamond. You have to look at them from various different angles to understand the real value. Otherwise you might miss something and then you might say, well, it's a, it's an eight times now. I don't want to be buying that, but then you miss. the quality of the financial engineering or the level of aggression, for example, that MetaPlanet are providing. Brian Cubellis (16:24.686) Yeah, that makes total sense. Very salient points. think I totally agree with you from sort of the money manager perspective. These pools of capital that to your point are looking at a historically extremely overvalued market, whether that's equities or debt with low volatility. And it makes total sense that they would want these types of investments in their portfolio. think where part of the rub is at least sort of in the Bitcoin community or on Twitter. And obviously that's a bit of an echo chamber. So take all of this with a grain of salt. But I think there is some notion, and this is sort of anecdotal, so I don't know really the data behind it, but it feels to me like a lot of these things are retail driven and not necessarily like professional money managers stepping into some of these smaller examples. I think particularly on the MSTR side, it certainly has been for years, more of a institutional money manager type play. But I think that's part of where the rub is, like, well, this is more of a retail phenomenon. And by definition, these are trades where people are saying, I'm going to sell some Bitcoin, make this trade, and hopefully end up with more Bitcoin on the back end. And so I think that's kind of where some of the more negative sentiment has come from in the sense that it is somewhat antithetical to like Bitcoin as savings technology, you know, buy and hold, you're not trading. And in addition to that, like you're adding risks that are not inherent to Bitcoin, right? From execution risk to management risk to counterparty risk in addition to others. So think that's part of it. I mean, is that your sense or do you think this is really more of a trapped capital money manager type play? I don't know the actual breakdown of who's buying these things. Michael Tanguma (18:03.042) you Michael Tanguma (18:13.751) Well, it's definitely the former because it's objectively true that you don't create communities unless you're going for retail. Like of these companies, you get a Bitcoin influencer to join. That's where the like backlash is coming is because of course there's pooled capital and there's a lot of things and there's, could reference some angles on where that doesn't play long term because anybody sophisticated ultimately wants spot and not want the executioner is. But these are definitely like retail. I don't want to say retail focus, but there's a big focus on getting retail investors Brian Cubellis (18:25.359) Right. Michael Tanguma (18:43.797) products. Richard Byworth (18:46.963) Yeah, I think people obviously have the right to trade and try and increase their Bitcoin stack. You've got options all over Bitcoin, the very developed options market for people to try and trade and increase their Bitcoin stack using Bitcoin. And I think that if retail can again be the front runners and the beneficiary of the massive growth that will be driven by the institutional adoption of Bitcoin as an asset. to improve their portfolios, be it in their equity portfolios, bond portfolios or convertible bond portfolios, then is there a problem with that? I don't have an issue with retail participating. mean, I think you're referencing Dylan Leclerc and MetaPlanet when you talk about a specific person that was brought on with a profile in Bitcoin. Saylor built his profile in Bitcoin from the moment where he adopted. I think this, you know, from meta planet's position. I had Simon Jerovich come on my podcast. You know, I've known Simon for a few years and so he agreed to come on. But he said to me, he said, I hate doing this. I don't want to do this. I don't want to do any of that. I hate being the front man for this sort of thing, which is the reason why I hired Dylan because Dylan's obviously, you know, very comfortable with it. He can speak and It's obvious that you need to be out there. You need to be talking about these companies because frankly, people need to know about it. Right. You know, I missed the IPO completely of SmarterWeb, even though I'm from the UK. I completely missed it. I didn't hear about it. I don't know what I was doing, but didn't pay attention. And so, you know, I would have liked that they had been out there and been more active with marketing because at a four million pound market cap. You know, that's the potential for significant growth. But I'm not saying, you know, what people should do, how they should allocate. You know, for me, the benefit of these companies is that they are allowing, I don't know if you guys have seen that huge triangle of traditional finance capital. I think Samson Mao put it out from the Jan 3 channel with that tiny triangle of $2 trillion of Bitcoin. Richard Byworth (21:12.221) And all that capital basically has to funnel in there. Of course, it's going to be explosive, right? And that's where we're at. We're at the very beginning stage of this. I think it's very bullish, actually, the amount of people that hate Bitcoin treasury companies, because it means that very few people are participating in the trade. So the purists are staying away from it. A lot of traditional managers don't understand the trade yet. But then you have the very sharp allocators and obviously capital are now the second largest shareholder in MetaPlanet. They're also very large shareholder in Microstrategy. They're extremely good equity allocators. So the fact that they are allocating into this space and people will pay attention. I mean, Capital Group is one of the biggest equity firms in the world. I think this is all very, very positive. But yeah, it seems like we're in the very early phases of all of this stuff. Michael Tanguma (22:14.061) Yeah, I think just a few things. don't know how much Jackson you want to stay on this. Every time we talk about it, I always caveat like everything is good for Bitcoin, including this, because any awareness or price appreciation, independent of if somebody gets rubbed or loses is a positive catalyst. When I reference influencers, it was more of just like a playbook we've seen play out with Semmler. I didn't even know Brunel was on his board and like, you other folks. And like, I think every Treasury company has, you know, I think that was something that Bailey saw very early on when they were gonna launch the meta planet strategy. So it just has a retail component. I think where a lot of this diverges is, and this makes sense because your background being in TradFi is the relationship with money and the markets in a fiat world versus an unfiat world, or non-fiat world, meaning like that a lot of like there's a great article. My friend Parker Lewis has called Bitcoin is a great D financialization. It's like these markets won't be as big. So I do think there's a valve component here. But again, it's a valve component from over price to still overpriced Bitcoin. And so sure, it'll help. But the real angle is you referenced individuals getting exposure for the portfolio is this notion that Bitcoin is just money and it's going to make up the majority of somebody's portfolio and asset class in the future. And there's a delta between here and there. to your point, it's very bullish for Bitcoin and the treasury companies because if so many people aren't in it today, that means there's a lot of rugging that's gonna happen in the future, because they can't actually underwrite these different things. They all just look like tickers. There's only one Bitcoin. There's everything else, and then there's counterparty risk from A to Z on how, whether it's just an ETF and who custodies it or executes. trades all the way to the Treasury company and so we're gonna get further out on the risk curve and it's gonna get further out or harder for individuals to discern and then it's ultimately a trade which is the big thing like Brahman. Michael Tanguma (24:10.765) chat about is when you hold money gold or Bitcoin you just sleep because I mean Bitcoin's a little volatile but it's you have no counterparty risk I mean you have very little depending on where you store it everything else is a proxy derivative of that and ultimately is a trade unless these companies go up forever and and they're become money which we all I don't think would agree so then you're effectively taking the individuals time through their day and what they should be doing on earth and just like focusing on having to get out of this trade the last thing I'll say is Parker had really good tweet this morning which was when Bitcoin Treasury what Bitcoin Treasury companies are showing is that it's easier to arbitrage fiat than it is to create productive things this isn't an indictment it's just a fact about fiat that is laid bare by the current trend is the goal to get more money and accumulate capital and I think ultimately where this all comes down to is what people and I'm not saying me but just in general thought there were hit their heroes in the Bitcoin space just went and took the money grab instead of producing more value that's a creative to like the longevity of how most people would discern that's they found value Like, how do I get people to self-custody or whatever? Again, not for that or against it, just stating. I think that's the sentiment that is embodied in some of the culture. Richard Byworth (25:21.253) I don't know what you mean when you're talking about rug pulls, in that particular situation. I think that this isn't a rug pull. This is the risk here, obviously is a deflation of the MNav without accretion through Bitcoin acquisition. so there's a beautiful chart that, 80 IQ Chris or whatever his name is. He's a bit, he's a meta planet focused guy. It's a really Good chart out and I need to ask him for it because I was at lunch with someone I wanted to show it to them. Basically, it's a chart of the meta planet price. And right at the bottom left hand corner, when you're looking at the price like down in the doldrums, there's a bar where she's highlighted is like this was a 20 times MNF. Was this the wrong time to buy this stock? And obviously it's just absolutely exploded. And then at the top of the chart, You know, there was a moment where it was a three times MF, right? So because the meta planet team are recruiting so aggressively and to Parker's point, leveraging the fiat markets, the financial markets to just flow more money aggressively into Bitcoin and doing it in such a way that it's super creative to their shareholders. They've been very successful and I don't, I don't see where the rug pull comes. I mean, the way that people lose money as if that three times and today a six times MNav goes to a one times MNav, which eventually, by the way, all of this will probably end up at a 1.2 to 1.5 times MNav because obviously there's only 21 million Bitcoin. you need to be the way that this is all going to go is it's going to go down the route of financial engineering around Bitcoin, right? know, micro strategy is unlikely to sit. with 600,000 Bitcoin on his balance sheet doing nothing. So you're to start to see the future of capital evolve into what we're seeing out of the US this week, people being able to money, or sorry, fake money, fiat money, against their Bitcoin so that they can then use that in the real world. I think that slowly as we transition, these companies are going to step in to provide collateral Richard Byworth (27:46.651) into the market, the fiat markets to see what can potentially happen around borrowing, lending, yield products, et cetera. Now, again, lots of this stuff are swear words to Bitcoin Maxis who say, you know, everything should be self custody, custody, and you should never trust any other organization. Sure, there will always be a cohort of Bitcoiners that will think that way. But, you know, the adoption of this, there was always was always going to be Wall Street involvement. There's always going to be this sort of element to it because there's such a huge amount of capital sitting in Wall Street in these traditional financial markets. So as I keep saying, this release valve or this vessel, which today is the Bitcoin treasury companies, are allowing for that transition of capital into Bitcoin. And like it or not, there's a lot of money in Wall Street and it wants to transition over to the real money. Jackson Mikalic (28:42.661) Yeah, one question I have on all that, maybe to try to like fill in some of the gaps here is the way I interpreted it is Michael's not calling all, like, he's not explicitly calling them rug pulls, but maybe where my knowledge gap is or what I'm trying to parse out, Rich, and maybe you could help is like, how much opportunity is there actually here for pure play Bitcoin treasury companies? Because like any market, there's winners and losers, right? So. There's going to be really dominant players in different jurisdictions. And when we had Mark Yusko on maybe about a month ago, he was talking about the arbitrage that exists for people purchasing meta planet stock because the capital gains on purchasing Bitcoin direct was so prohibitively expensive. So there is way more incentive to purchase equities that owned Bitcoin in Japan, for example. So what I'm trying to figure out is there's going to be winners. I certainly see that. there's an aspect of this, these companies will need to exist, right? Because Wall Street needs a release valve, as you pointed out, and some players need to access debt markets, others will access equity markets, others may purchase Bitcoin spot directly. But where I struggle to understand is like, who are the, how do you think about winners and losers in this space? Like, is there going to be dozens of pure play companies in each jurisdiction that are all going to be successful? Are they going to be very dominant players like Strategy in the US, MetaPlanet in Japan? Like how do you think this all plays out over the course of the next five years or so? Richard Byworth (30:10.879) Yeah, I think you hit the nail on the head. It has to have a specific edge, right? So why is the UK so successful with these companies? Why have we seen a what is it 100x already in smarter web company in four months that they've been listed? Well, the reason is that there's a £1.25 trillion pension pool that is self-directable in the UK that can't touch Bitcoin ETFs. Right? So there is just huge demand. from retail investors to get some exposure to Bitcoin. This is why MicroStrategy did so well was because actually MicroStrategy was one of the few stocks that you could buy in the UK in the pension system under SIP rules. I have a friend who has a self-directed pension in Guernsey and he's like, Rich, what should I buy? I said, well, this was a few months ago, I said, you should buy MetaPlanet. And they refused to let him because they'd already realized that MetaPlanet was a Bitcoin treasury company. But the UK based companies, it's almost impossible for the trustees to say no. So that's the edge that they have and why Smart Web have managed to explode to the degree that they have. And I think you're going to see more more UK companies come out of the woodwork. as well because there's just so much demand in the UK for Bitcoin exposure. And also, SmarterWeb, they've grown very, very fast. A lot of people have felt that they've missed it. So I think the opportunity for a smaller company to hit the markets like a coin Cillium has done, you can see that, I super successful already. Michael Tanguma (32:03.371) Yeah, think that'll make sense. think that's a big component of, saw a lot of individuals in the US that had spot exposure and get their, I remember the past few years, they would have access to their wife's 401ks, they were retired and like stay at home, they just aped them into MSTR without them knowing. So I could see how that makes sense. I think just to be clear on the rug pulls when I reference that, I just mainly mean where somebody gets shaken out. And it could be via, like was writing down, like volatility. It could be the structure of products that they do underneath to create value. It could be the custody, which nobody's talking about. I think there's a, it's super interesting dynamic. Rich you're referencing about like the hardcore Bitcoiners and then Wall Street. It's like we have no home and that's how I know we're either onto something or again we're very dumb and I told this to Cam before because the Bitcoiners hate us because we tell you multi-institution custody you don't have to hold your keys and then Trefi hates us because they want to hold the underline and do a bunch of crazy stuff. So we're either insanely wrong or we're really really right and that's the angle about Around the past 15 years, everyone's had a new story every cycle, and it's really about the inorganic centralization of the underlying. I always think about Block One as this big conglomerate that had like 200,000 10 Bitcoin and they took a lot of people's, and not even took a lot of people's, it was during the ICO craze. But we've seen the FTXs and we've seen the Block Fies, and it's not that Bitcoin-backed lending is inherently bad in the same way that every business is gonna hold Bitcoin. It's really the notion of... How is it sold, how is it portrayed, and then where does it actually go wrong? And then the kicker is, I don't even think a lot of people will actually do anything. It's that somebody's gonna mess up custody or something else, and then everyone's gonna wake up and realize, wait, what the hell is this thing that they're holding, and what's the best-in-class way I should do it without this counterparty risk? And that's kind of like, I think my big thing is it kind of preys on the naivete on the individual doesn't even know about. Michael Tanguma (34:00.653) something that's tied close to Bitcoin, once, the beauty is doesn't even matter what I or anyone thinks, because generally as somebody goes down the rabbit hole, they're just gonna be like, well what am I doing here? And then they're gonna sell the position and then buy the Bitcoin, which is why I think this is just a short-term thing in general, especially for institutional allocators, because it seems very crazy to me that the most sophisticated people today may not be able to get exposure, so they have to go through all these products, but in the future, they're not gonna say, well, if I want 10 to 15 % of my portfolio, I'm not going to do an investment class way. I'm going have to do it through some proxy. That doesn't like track for me from a just like how this will play out. Richard Byworth (34:37.663) Yeah, think. Michael Tanguma (34:38.157) Which means the shareholder value would reduce, right? Richard Byworth (34:43.071) Yeah. And that's what I said. think longer term and navs gravitate towards sort of 1.2, 1.5. I can see that happening as you get more and more of these companies. Can you guys hear me? Okay. Yeah. Okay. Yeah. I think that that will happen. I think this is a short term period where that, you know, it's like, just always want to picture that triangle, huge triangle, the amount of pressure. It's like right now it sounds like a bicycle tire hiss, right? But it's basically Niagara Falls building up behind that wall and it needs to smash through the dam and everybody needs to get exposure to Bitcoin. So you are likely to see a continuation of this in my opinion. because there's just so much capital built up that needs to get all the various things that I explained earlier, be it outperformance inequities, the rate of debasement at least in the bond markets or the volatility. So all of those things are key to those different capital pools. So I think we've probably got another period of a decent period. think there will be moments like we've seen in the last 48 hours where The MNAP's massively reduced and everybody has a panic up. And, you know, that's just organic, you know, ups and downs that we see in the market. And Mesoplanet has been through all of this in the same way that the smaller companies are now going through it. But I think to your point about the centralization, I think you raise a very, very good point about the fact that these companies, everybody's just assuming that they've got you know, best in class governance around the way that they're dealing with their custody, all of these types of things. I'm not seeing a lot of questions being asked about that. So for me, I always put these sort of checklists out there. Do you trust the management team to make sure that they're doing everything properly? Because the other thing to think about as well is the exchanges that are listing these don't have the same level of governance as the higher. Richard Byworth (37:06.948) end exchanges. So for example, in the UK, you've got the LSE, you've got then a sub market called AIM and then the sub sub market called AQUIS, which is very, very flexible, but very low governance. And you talk about BlockFi, you talk about Celsius, and what were the problems there? Lack of governance, lack of proper security solutions, right? And then, you know, doing high risk strategies without any kind of risk management. So, you know, we have seen these disaster shows before and to your point, if they're not managing their custody solutions properly or their governance solutions properly, you could end up with a theft or a loss. So these are really important considerations. Jackson Mikalic (37:58.063) Yeah, well said. Some people are concerned about the... leverage in these markets, which we had Alex Thorne on a couple of weeks ago and went more into more detail about the leverage that exists in Bitcoin treasury companies. And the assessment there is that it's really not that blown out yet in terms of debt financing to acquire more Bitcoin. But maybe, Rich and Michael, both to your point, one of the bigger risks that investors need to consider with this is kind of the underlying structure of how Bitcoin is secured, how the management team thinks about risk management, custody, counterparty risk, et cetera, as we know that is critically important in Bitcoin more so than in traditional finance because you're dealing with a digital bear instrument. But maybe to move on, I know we want to cover some other things and we have a tight timeline today. One thing I wanted to get the group's thoughts on was Bill Poulty, who kind of like a name that I wasn't too familiar with before this week. It kind of reminds me of Bo Heinz six months ago. All of a sudden everyone talks about Bo Heinz, but Bill is a director of Federal Housing and Finance Agency and he's the chairman of Fannie Mae and Freddie Mac. And he issued a directive, it was either yesterday, Wednesday or might have been Tuesday, about allowing Bitcoin and crypto to be considered as part of, not collateral, but as part of almost like a credit check or an asset check for people qualifying for single family residence in the United States. And Well, I'd to just get general thoughts. Like some people had reactions that, this is incredibly bullish for Bitcoin because now people are not to sell their Bitcoin. I kind of think it might not be as big of a deal because people in general are always looking for ways not to sell their Bitcoin. I deal with clients quite frequently who are looking to purchase a primary residence or even a secondary residence and they're taking out a Bitcoin back loan to do so. And so they weren't going to sell their Bitcoin to begin with. So I'm not sure how consequential this actually is. It's of course a great Jackson Mikalic (39:55.195) thing, right, because people that have a serious or material allocation to Bitcoin and they want to be able to buy a home, well now they'll be looked at a little bit more seriously from lenders. But I'm curious, like, general thoughts there because I think it's just, like, not as big of a deal as people are making it out to be. And then we could also talk about the clause in there as well. Brahm, I think you called it out where, you know, for the Bitcoin or crypto to be considered, it does need to be held on a centralized exchange, which I think makes a lot of sense, but it also... Again, talking about counterparty risk and custody risk, then you have to consider that as well. So open question for anyone, just welcome thoughts on this topic. Bram Kanstein (@bramk) (40:34.96) Yeah, I think also to tie the previous discussion, I think this is just the path, right? We know what Bitcoin is. I think we all agree that once it is used more in, I don't want to say traditional finance sense, but in a finance sense, and the more it gets established, the higher the probability of it still surviving and becoming the thing that we think it is, but slowly but surely, you know, one by one, people are figuring this out. And so I think that's also interesting about these discussions that we have here are doing podcasts, right? Like we are in such a bubble, we really did the work and we are just watching the rest of the world slowly waking up. So, and maybe also to the point of Michael about, you know, the treasury companies or the rock pool part, it's like, I see it as growing pains. So people are going to try stuff, stuff is going to go well, stuff is going to go horribly wrong, right? Because we are talking about money and wealth and also inexperienced people that are seeing opportunities, right? So I think this is in general a maturing market, a very slowly maturing market and stuff will go right and stuff will go wrong. And I think, you know, for this, topic about using Bitcoin as I think it's more like proof of wealth or proof of funds in order to actually get a mortgage, right? So you don't have to sell the Bitcoin, but there was like a byline in this request or I'll call it a request that it has to be in a centralized place, which on one side makes sense, right? Because you want the collateral, at least for the financing side, they want the collateral to be in between the person that borrows and the lender. But I think this is actually an opportunity where new products and services will pop up, right? Like maybe we can have zero knowledge proof of Bitcoin wealth, right? Or the escrow services or whatever on-ramp could build on top of what they provide. So I think this is actually the start of something new. And I think that would be the best way to look at it. Bram Kanstein (@bramk) (42:58.482) that there will be growing pains along the way, I think is probably 100 % assured. Brian Cubellis (43:04.389) Yeah, think it's, I was just gonna say from, it's more like extremely positive and constructive from a narrative perspective. think the, just the continued legitimization of the asset, I mean, where my mind does go is like, I'm curious around, you know, what this ends up looking like in terms of, because it says all crypto assets, right? So like, I would much prefer that it was Bitcoin specific because I think, Michael Tanguma (43:04.929) I think it's you. Brian Cubellis (43:33.048) similar to like with the SBR stuff, right? Like there was a clear line in the sand of like Bitcoin is the reserve asset. The rest of these things are more speculative and therefore we're not going to buy anymore. We're only going to potentially sell them. I would hope that there was some distinction for this type of thing because, you know, using your fart coin as proof of wealth is very different than using your Bitcoin holdings as proof of wealth. like, is there going to be, you know, Analysts behind the scenes who like have knowledge of crypto assets who are then assessing the different profiles of someone who's you proving their wealth with crypto assets like those are some outstanding questions in my mind and and so I think it's generally good But we'll see how the implementation actually goes Richard Byworth (44:19.583) you Bram Kanstein (@bramk) (44:20.688) Yeah, maybe one thing to add, sorry, Mike, one thing to add, because I just saw a tweet of Simon Dixon. So these are his words, but he's talking about the IMF. So whatever you think about the IMF, but he says, the economic hitman at the IMF now classified Bitcoin as a capital asset, categorized as a non-produced, non-financial asset like land or gold, recognizing Richard Byworth (44:38.687) . Bram Kanstein (@bramk) (44:42.866) Bitcoin's decentralized nature and lack of issuers. So this makes it distinct from stable coins, which are treated as financial instruments. So that's just to add Brian to what you said. Yeah, it's just slowly being legitimized more and more. That's basically the Richard Byworth (44:43.647) Thank Richard Byworth (45:00.713) think these credit risk departments who, know, I mean, the way that they work is they'll look at an asset, they'll look at the liquidity of the asset and they'll look at the, you know, the viability of being able to get out of the asset in the event of a margin call. So something like Fartcoin, as you talk about, is not really going to be categorized with the same strength as Bitcoin, right? There will be a haircut on Fartcoin to probably 99%. They have to take it by the sounds of the way that this has been constructed. So they'll just put a 99.9 % haircut on it and that will be the end of the conversation. I think when you look at what this is really saying, this is Bitcoin really being institutionalized at every level within the financial markets. And I think that is a very, very big positive. I think lots of people have made the comment that, you know, if you've had your Bitcoin in cold storage for multiple years and then you want to go and move it to a centralized organization and for some reason that centralized organization decides that, this touched the Silk Road actually. So now we've frozen your assets. You know, these are things that probably need to be considerations. I don't know how we think about all of that. you know, obviously we run a fund that's denominated in Bitcoin. we run Bitcoin through a risk metric. But if someone comes to us and says, look, I'm not sure where my Bitcoin has been. did a real estate transaction in Asia like 10 years ago and someone paid me like 5 % of it in Bitcoin. We'll say, well, look, just check the wallets yourself. before you try and come to us and put it through a situation. I think that people just obviously need to understand that this technology comes with a track record and if you have any concern about it, then you need to understand how to look at it, right? Michael Tanguma (47:17.121) Yeah, think I agree with all those points. I think that to the point of institutionalizing, I don't know if there's probably any other asset, even half of crypto, which is like roughly five to six trillion that doesn't get recognized by the traditional markets for a home loan, right? So this notion of we're going to start to recognize this, it's this realization that it's here. And then to Brahm's point, we're like in the installation phase with all of this. So there's naturally going to be some volatility or you know, things that don't go perfect. So to the point, Farcoin or being able to manage that or the custody. But, you know, I think this also ties back to what Richard was saying about the way I think about Bitcoin is just recapitalizing debt. Unproductive and productive the people that do the productive debt are gonna make their money back the people that do unproductive debt They're probably gonna get left holding a bag of less Bitcoin because you hear about bit bonds and all these ideas I think that things people forget is you have to recapitalize productive debt because if it's unproductive You're probably still you know can't repay back the debt if you're not recurring revenue from it, but from housing A majority of people's wealth is stored in, especially in the United States, and middle America is in their house. And so whether it's gonna be the notion of products that let you get access to liquidity to buy Bitcoin, and then that naturally keeps the prices of the underlying asset growing versus just completely crashing and wiping out a lot of people's stores of value. And then also, to Jackson's point, there's a lot of people that sell their Bitcoin. For every person you hear that took a loan out for their Bitcoin, there's probably like five to 10 that sold it, because most people don't to deal with the volatility. Like they don't want to deal with like they have that's a reoccurring expense that they have to pay on the juice for the interest. So I think this has also implications for the upside for people that aren't going to have that downside pressure. And then for Richard's point on the like debt markets that's going to allow other people you can imagine they probably charge an extra point an extra two points to be able to take a loan and recognize your fart coin maybe. They make some money like there's a lot of I think really positive implications. So yeah it's exciting. Jackson Mikalic (49:23.397) Yeah, makes sense. the the clause about custody makes sense as well because with self custody, right, you could in theory provide your address as part of a wealth check. But then, you know, a year later you lose your keys or something happens and then you no longer have access to your Bitcoin. So it makes sense. It needs to be on a centralized exchange. But then, you know. to all of our points made on this podcast already does bear risks. So it'll be interesting to see how this plays out, but no doubt a positive development. And maybe I'm just bearish. Maybe, Michael, I'm living in a bubble where nobody does sell their Bitcoin, but there are a lot of people, I suppose, out there that will. Richard Byworth (50:02.559) I'd just say Jackson that the amount of buying that you're seeing in the market and the fact that we're not at 250,000 tells you that a lot of people are very happy to sell their Bitcoin. Brian Cubellis (50:13.252) Yeah, somebody's selling. Jackson Mikalic (50:13.903) You know, yeah, I did want to talk about that as well, because this has been a bit of an abnormal cycle. Not to say I'm ungrateful that, you know, we've cleared six figures and Bitcoin is consolidating at 100K and, you know, through a lot of uncertainty in the Middle East and tensions rising there, Bitcoin has remained extremely resilient. The flip side of that, though, is you have all these Bitcoin treasury companies that are aggressively tapping capital markets to purchase Bitcoin. Just for example, Anthony Pompliano, they raised I think 750 million in initial funding. They've already purchased 5,000 Bitcoin, average price of 105, 106 I believe. But we're still pretty suppressed in terms of historical cycles. And I think there's, there are a few reasons that come to mind immediately if you just look at the post-having performance, the price was pretty elevated historically. at the halving already because it juiced up quite a bit from all that pent up demand in the ETF products. So we started at a pretty high base. We hit all time highs prior to last year's halving, but now we're just consolidating at a hundred K or so. We still have six months in the rest of the year. So I'm just kind of curious to hear anyone's thoughts in terms of how this will continue to play out through 2025. You have so much demand. And as we know, a fixed supply. but there clearly are, there is some selling pressure from perhaps larger whales, but what are your guys' thoughts on that? mean, I'm, you know, maybe I'm being a little impatient, but I thought we'd be higher by now. Brian Cubellis (51:52.166) Yeah. Richard Byworth (51:53.375) Ram and I always talk about this. We talk about the fact that you should be grateful that you can still keep buying Bitcoin at these levels and that we haven't adjusted to where arguably the price should be. I made a presentation to the board of Syz group. Richard Byworth (52:14.783) board primarily. And I said, I made the point like, once I'd ran through essentially what Bitcoin was, and sort of told a few stories around it, like everyone in the room, you understand now that this is a much better product than gold ever was as a store of value. So even if you just say it's as good as gold, and the value being of gold 23 trillion today, then Bitcoin needs to be trading at about 1.1. million dollars to equate to that market cap to just be as good as gold. the fact that you can buy Bitcoin today at 107,000, that's a really nice discount. I'm grateful. Brian Cubellis (52:59.566) Yeah, that's, I mean, that's, that's absolutely right. I think, if you're just looking like who is selling, like there is on chain evidence that long-term holders with extremely low cost basis is, have been selling into this level for months. so that's, that is certainly happening. I think the other thing that comes to my mind is like, it's easy for us being so deep in the space to think like, Bram Kanstein (@bramk) (52:59.826) I mean, yeah. Brian Cubellis (53:25.572) all these people are buying. It's so obvious. You have all these treasury companies. But then at the same time, you look at very sharp pools of capital that are still just beginning to come up the curve. Like Philippe Lafont, who has run CO2 for a long time just this past week, was on multiple podcasts, interviews, saying that he has completely reevaluated his stance on Bitcoin and Like that's just a signal that we're still extremely early. Like the vast majority of huge pools of capital, smart money are still just beginning to come up the curve. And so it's easy to lose sight of that in a moment like this, where when you have our level of knowledge and sort of just like, you know, looking at it every day, like, yeah, we should obviously be way higher. But you put those two things in tandem, long-term holders selling and just the reality of if you escape this bubble for a moment, people are still just beginning to learn what's going on here. It kind of makes sense, but totally agree with you, Richard. It is somewhat of a blessing. Bram Kanstein (@bramk) (54:31.73) I'll keep saying it, Bitcoin is an asymmetric opportunity based on publicly available information. I love that we're touching upon this, because there are people, and I think you used the word correct, Jackson, it's impatience. It's impatience. If you are impatient, if you think like, it should be this or should be that, then you don't really trust your own judgment. Because I actually have a podcast coming up with Stephen Parano. He's an astrophysicist who's like deep down, know, the power law, rabbit hole and stuff like that. once you really see the bigger picture, which starts with, you know, fiat monetary debasement is mathematically assured and will never stop. You know, if you really do your due diligence on Bitcoin and you create your conviction based upon your own proof of work, then The only test you have is can you actually hodl, right? If you become impatient and you find other impatient people online and you're like, my God, what is the price doing? Why aren't these people paying attention? What is Sayreler doing? Blah, blah, blah. Then you're still captured with the fiat mind. The whole point is if you have better money than all the other money, you can actually chill. So I like that personal challenge. I just want to add that as well. Michael Tanguma (55:54.51) No, it's profound in what you're saying because this is what embeds all the Luddite Bitcoiners and what they say about... Bitcoin always, no matter if it's today or before, takes the path of most resistance or most time. It always shakes the people out. It always shakes people that are impatient. It almost operates like a fractal in the sense that it doesn't matter if it was 12 or 25. The capital pulls increase, but it still has the same human behavior because humans still run these things, which is what's embedded the beginning part of the conversation. I had this thought, Richard, you'll love this. It's like, was like, man, I need to get into meta plan or I need to get into whatever. Like I just, got to do it. And I had thought, Richard Byworth (56:32.127) . Michael Tanguma (56:34.101) around Solana being in this space too. They were very similar like you're just early you get to see all the things happening you know Dylan. Dylan was an advisor before joining MediPlan. Like you see all these things you're like I should get in. But it's like, there's principle, but forget about the principles, just like the mind share of like, there's so much shit going on here, I have to think about when do I exit that trade, I just don't want that sauce on me. But the real point was it started to remind me of ICOs. And I'm not saying they are ICOs, but I had that same feeling because back in the day during ICOs, it was like, shit, am I the idiot, are we the idiots, and like, we should go invest there. And then, and that was like the moment I was like, shit, now I need to stay away from this and actually talk more about it. If we're wrong, we're wrong, but that's the idea, is it's very easy to buy Bitcoin, it's insanely hard to hold it. just incredibly hard and so that's the notion of like I think where a lot of this just kind of level of I don't know it's almost like a mechanism to help like I don't know but that's the kind of idea I think that embodies a lot of this stuff especially the price action and so that's where I think we probably go a lot higher I hate making price predictions but I think we go higher than anybody's expecting because of all the stuff we're talking about Bitcoin treasury is the amount of time we've been consolidating this period but then I do think If we're just barely talking about treasuries today, the amount of craziness that will all look back a year from now two years that happens at the treasury level is gonna cause that deleveraging event and then that's kind of like the, I think the rug pull for a lot of people are gonna get burned and that's just the nature of installation phase and the new technology. Bram Kanstein (@bramk) (58:09.937) Yeah. Richard Byworth (58:09.959) Yeah, I'll say it again. I mean, I think these Bitcoin treasury companies are Bitcoin adoption. They're Bitcoin adoption by the financial markets, the big players in Wall Street. It's not the same as looking at Solana and going, I want to punt around in this nonsense, right? Like I try my very utmost best to help people understand that it's Bitcoin only. It's really hard. Sometimes people just get tempted by the other tokens. And obviously, as you say, there's a lot of very clever marketing that happens with all this stuff. But the Bitcoin treasuries are Bitcoin adoption. And I think it's different. And I think it's really important to just make that distinction. Sure. To your point, there will be a point that it's painful. There are tears, know, Mesoplanet when it was down in that tiny stock price. phase when it went to all the way to 21 mNav, well, it crashed back down. But now look at it. And if you border that 21 times mNav, you'd still be way in the money, because they're accreting. And so long as they're accreting, and they're using the financial markets effectively to do so, they would just keep going higher and higher. So I think there's a scale problem, which is why I think POMPS made a bit of a mistake. And I think 21 Capital have made a bit of a mistake. They've started way too big. Right? They can't scale. can't yield to the same degree. So they don't have the same level of torque as we call it, as these smaller companies. And when you're doing that torque and you're making the multiples, that's when you build the community. That's when people become diehard fans. MicroStrategy obviously built a whole load of diehard fans over five years with pretty much no competition. Right. There, there are people and myself included that will never sell a core allocation in micro strategy. Just one. Right. That for me, I like, I love the way Sailor has continued to innovate. He's continued to tap different pools of capital in the market. And I think as we move into phase two of this thing, as I alluded earlier, when you start looking at the banks, or sorry, banking type services provided by these very large holders of Bitcoin. Richard Byworth (01:00:26.547) That's where, again, micro strategy is going to be leading the way. Brian Cubellis (01:00:30.682) Richard, can you put a finer point on what you just described around basically starting at a lower base? Because I think that to some that might be a little counterintuitive. If like the goal of all these things is to acquire a ton of Bitcoin, why is it a bad thing to start with a huge slug of Bitcoin? Like, can you just elaborate on that a little bit? Richard Byworth (01:00:50.062) Well, take 21. I mean, 21 capitals is a good example. So they started with 42,000 Bitcoin. No one was allowed to participate. It's basically Tether, Bitfinex, Softbank. So they will put their Bitcoin in. Right. The way that you measure the validity of the MNAV on these Bitcoin treasury companies is you look at their Bitcoin yield. Right. MetaPlanet, I think their yield so far this year is something like 300%. Right. You look at the smaller companies, it's into the thousands of percents. Right. So that's the cretion of value to the shareholders. Right. And remember even as, so let's say SmarterWeb, they did a capital raise, I think 10, two weeks ago where they cut their MNAV in half, essentially. So they went from a 25, sorry, 12 times MNAV to a six and a half times MNAV. Right. And then the MNAV slowly drifted up again, which gave them that torque to be able to do it again. So they just did a couple of rays last night, and they do it again. Right. So they cut the MNAV in half again. So, so long as they keep doing that and they keep sustaining the amount of Bitcoin, then the value base, either collateral, either Bitcoin, keeps just growing at a much faster rate. And so when you look at a company like MetaPlanet last year and you go, Jesus Christ, they went up 2,500 % in a single year. And by the way, that was only three quarters of the year because they only started in April. That's unsustainable. That's your natural reaction if you're Jim Chanos, right? And these sorts of people. But actually, the stock's gone up another, I think, 500 % so far this year. I mean, we started the year with sort of $2.50. So, you know, I think it's about $11 today. So that's nearly five times that it's gone up. So when you look at that and you say, what's propelling that? It's the torque. It's the Bitcoin yield, right? And for 21 capital to have Bitcoin yield to replicate MetaPlanet, they need to add 160,000 Bitcoin in the next few months. Richard Byworth (01:03:14.473) to just replicate Mezaplanet so far this year. So it's impossible for them to do so, right? Like even with Tether behind them, it's going to be very hard. I think Tether's entire Bitcoin holding is a hundred thousand. So it's just a question of growth. And when they get to maturity and you could argue that MicroStrategy is mature, he needs to have had a track record of trust in the market where people know that he is going to do everything to just to create more Bitcoin and he's going to keep tapping different capital pools, which is exactly what he's doing. He is absolutely relentless and singularly focused and he's shown the market that consistently for five years. How's Jack Mallers and 21 Capital going to show that same level of track record without the talk, right, that these other companies have to compete with him? They're building a fan base and whether you like it or not, because you can then compare it to YCOs, these communities become diehard fans. I'm a diehard fan of MicroStrategy and MetaPlanet. Right. And so, you know, I think as the next ones emerge, if we, you know, put a little bit of capital into those and they show us, they are trustworthy. They show us they're capable of execution. They show us that they're capable of financial engineering and innovation. then they will create diehard fans. Michael Tanguma (01:04:47.917) Should we do an honor and corporate corporate treasury? We help us. We help us. You're pretty you're pretty tight. You're pretty tight in this game. Richard Byworth (01:04:48.222) and pump. Yeah, yeah, look, I think... Brian Cubellis (01:04:53.99) You Richard Byworth (01:04:57.855) Look, I think you guys have great reputation. think you're definitely smart innovators in this space. And I think the temptation in the US always is, you know, this is the way we look at the US as Europeans and Bram, I'm putting you in with me as well. It's like, you always just want to go bigger and better. It's about being bigger, right? Big, let's go big. Let's do the huge Bitcoin treasury. I'm gonna buy even more Bitcoin than you, right? Like, it's just like, no, guys, like, you'll see. You're missing the point of this stage because you're not going to be able to get the same level of growth if you don't do it in a more organic way. It's organic, right? And that's what I'm trying to express with all of this. Michael Tanguma (01:05:39.224) To be fair, a lot of these companies have other, I think maybe the kicker of what you just described with 21 is some of that additional fan chair. If you can funnel in Bitcoin offshore from Tether and dollars into the system, there's a lot of other angles that people will do. Or VC's getting their companies to go public so they can get out of their liquidity. I think there's a lot of angles. But to your point, to create value, you gotta start at that base. Bram Kanstein (@bramk) (01:06:07.388) I don't know how much time we have guys, but I have maybe some thoughts also to tie it in with the beginning actually when we were talking about Bitcoin as the hurdle rate and also these treasury companies, the ICO comparison. I I did a lot of ICOs in my crypto day, right? I think I funded more than 10 neo banks that never saw the light of day, right? So. Brian Cubellis (01:06:28.998) You Bram Kanstein (@bramk) (01:06:32.922) I I totally get the comparison. I think it's good also to chat about it, how we are now talking about it. There's just opportunity, right? So Bitcoin is being legitimized. People see this opportunity. think Richard's comments are something that I fully align with, right? Like, it's just, okay, I see an opportunity. I'm going to go big. But how sustainable is it? Right? Because if you don't have that community, And I think it's actually dirty word, right, from the crypto days, but I do agree. If you don't have that, then you're interchangeable with whatever other stock is trying, know, whatever other company is trying to build a Bitcoin treasury. So eventually, we're going to fall into that same game, which is fine, because that's a psychology. That's the fiat money psychology eventually. And that's what I also meant in the beginning, like This is a learning curve. So some people will blow up or they will lose their community, right? The blob of money in one company is going to move to another company and then another company. And there's going to be trouble from that because not everyone is going to be as diligent as the next person, right? But this is inevitable, I would say, on Bitcoin's path to becoming a legitimized asset. And when you think about, should I just hold Bitcoin or should I invest in these companies? This is, in my opinion, actually the difference between Bitcoin as a superior savings technology, which if you do your due diligence has very low risk, right? If you want to take a bit more risk, you invest and you do different things. But because Bitcoin is your hurdle rate, you are forced to do it in a more diligent way than we touched upon, you know, the whole VC game, than the whole VC game, right? If you're a VC, you have an LP of an LP of an LP, right? It's just a trickle down. shotgun type approach to see if they can find ways to have their fiat money actually mitigate the debasement. So there's not a lot of diligence in there. There's more diligence when you hold Bitcoin and it is your hurdle rate and you're going to be actually way more conscious in the way you invest or take more risk. And so I think Richard also touched upon the fact that these are not Bram Kanstein (@bramk) (01:08:57.058) like the ICOs, these are Bitcoin companies. So Bitcoin is the underlying play here. So for example, I'm also in MetaPlanet and MicroStrategy and a blockchain group, only those three, but that's with money I can afford to lose. everything that's in Bitcoin is money that I cannot afford to lose, right? And I think there's a big distinction in that, just looking at it like that, but also that If you use Bitcoin as your hurdle rate, you will be more diligent in which stocks you pick. And over time, because people get burned, will learn this. getting burned or funding a dozen of neo banks without seeing anything in return is part of the whole learning curve, personal learning curve, I'd say, to figure out that Bitcoin is the hardest money to ever exist and the thing you should save in. Those are kind of my closing thoughts here to tie that together. Yeah. Brian Cubellis (01:09:55.226) Yeah, I think I'm glad you said that because I think that is the right mental framework to think about these things is that it is necessarily moving out the risk curve from owning spot Bitcoin. And that's perfectly fine. Like if you want to make more Bitcoin, you want to take a little bit more risk, that is perfectly fine. And I think if we just zoom out, like that is progress, right? Like I'd much rather people are going out the risk curve with things that are Michael Tanguma (01:09:55.649) Yep. Brian Cubellis (01:10:24.388) Bitcoin focused than the vaporware ICOs. So I think if you're zooming out and looking at where we are relative to years ago, prior cycles, like it's certainly progress in that regard. The concern obviously is people selling all their Bitcoin for these things. That's where I get like a little concern. Michael Tanguma (01:10:43.117) Conscious of time. know we need a wrap before Brian. Do you want to just share really quick? Anything on BPI or notable and then we'll send it off Brian Cubellis (01:10:50.254) Yeah, I was in DC yesterday for the Bitcoin Policy Summit. It's the third time they've done this and just a fantastic event. Shout out to the guys there, Zach Shapiro, Matt Pines, Zach Cohen, Steven Pollock, everyone who was involved in putting it on, super high signal event. Really just an amazing confluence of both people in the Bitcoin industry as well as lawmakers and policymakers. Pretty much every other panel had some combination of people from DC who are thinking critically about the space and overall just very, very constructive conversations. I think there's a ton of momentum. They had a similar summit back in, I want to say February of this year. And so that was pre the genius act going through. these things continue to build on each other. And so there was a lot of positive momentum now that stablecoin act has gone through. Now they're looking at market structure, lots of thinking around, you know, budget neutral ways to acquire more Bitcoin for the SBR. And there was one funny moment worth high. Richard Byworth (01:11:58.665) Sorry, Brian, did they give, sorry, I didn't want to cut you off, but did they give any examples of budget neutral ways that they're looking to acquire Bitcoin? Brian Cubellis (01:12:01.764) No, go ahead. Brian Cubellis (01:12:06.47) Well, know, Andrew Hones, who I know you're familiar with, has this idea about around bit bonds, which isn't isn't exactly down that line of thinking. There's obviously, you know, the revaluing gold, which I think is unlikely. But there are a number of things in the toolkit. The one thing I was going to say that that so the deputy Deputy director of the CIA was supposed to do a fireside with Matt Pines. given everything that's going on in the world, sort of geopolitical turmoil, he was unable to make it. So he canceled last minute. so David Zell sat in and did the fireside with Matt instead and kind of reference like, you know, it is a signal of this is a very meaningful policy summit if one of your presenters can't come because there's a war going on. Like that is a signpost of how far BPI has come, how far Bitcoin and the industry has come in that there are people now involved in the conversation at the highest levels of our government. And so yeah, overall a great event and looking forward to future content and research from BPI as well. Michael Tanguma (01:13:23.275) Yeah, it was positive. I tweeted this morning, Brian had shared a fireside chat between, I think it was Shapiro and Crypto Mom, I think that was her old name, Hester Pierce, and was discussing SBR custody, qualified custody, and just kind of like the antiquated model around SEC or securities and stocks in gold, or specifically stocks and bonds, and then actually brought up multi-institution custody, which we helped. There's a report coming out that Brian Cubellis (01:13:34.426) Hester Pierce. Michael Tanguma (01:13:53.209) is gonna go pretty deep on the toolkit for BPI and SBR, the Strategic Bitcoin Reserve. It's still early, but it reminded me very similar to years ago when we brought up and you had different presidential candidates start showing up to these Bitcoin conferences, that that's the notion. I think this was our first time even being introduced to multi-institution custody, but again, we're only at 100K, 250K, 500K, and you're holding hundreds of billions, if not trillions of dollars. People are gonna wake up to like, holy crap, maybe we have to treat this in a different way. So I thought that was positive for kind of the landscape. Jackson Mikalic (01:14:26.577) Well, I know we have to wrap. Bram, Rich, really appreciate your time. You've been very generous. For the audience, if you don't like the video, leave a comment. Rich will be less inclined to join the podcast in the future. Bram almost certainly won't show up if you don't like the video. So, gentlemen, thank you both. If anyone does want to get in touch and not familiar with the work that you're both doing, what's the best place to reach out? Richard Byworth (01:14:53.439) Pretty responsive on X. If someone wants to DM me, my DMs are open. I'm always trying to help people understand this trade. So it's at Richard Biweth. And then of course, at Seize Capital. But I also have podcasts, Seize the Future, which is on all the normal channels. Bram Kanstein (@bramk) (01:15:14.406) Yeah, same for me. I'm also very active on X and DMs are open. I'm at Bram K, B-R-A-M-K. And then my podcast is Bitcoin for Millennials that you can find on YouTube and Spotify and all these places. Jackson Mikalic (01:15:26.897) Thank you gentlemen. Nice to see you both. Appreciate the time. Michael Tanguma (01:15:27.371) Love it. Thanks guys. Brian Cubellis (01:15:28.582) Thanks guys, appreciate it. Bram Kanstein (@bramk) (01:15:29.628) Thanks guys, likewise. Richard Byworth (01:15:31.199) Thanks for having us on. Cheers.