$9B in Satoshi-Era BTC Sold—Why The Market Barely Flinched

[Music] It all comes down to computers communicating. >> The information superighway can be a confusing mix of on-ramps and off-ramps. >> Bitcoin is worthless artificial gold. >> Is it still rat poison? >> Probably rat poison squared. >> We need to get into the world of okay, this is actually foundational technology. What the internet of money does is it creates a single network which can do a microtransaction to a gigat transaction. The internet is going to be one of the major forces for reducing the roll of gun. The one thing that's missing but that will soon be developed is a reliable ecash. Welcome back to another episode of Final Settlement. Today is July 28th. It's 10:00 a.m. It's 2025. Boys, how are we doing? Liam, Michael, my co-host. >> I'm personally I'm personally a little little ticked off. I have a bone to pick with Brian. Um, so we're not >> Let's hear it. >> We're We're not professional podcasters. We are uh business builders and operators that happen to uh talk about the stuff all day long. Figured folks would like to listen. And so we decided to share our thoughts. Um, we do it weekly and with that my audio has not been the best every week. And so every every in true business form try to iterate, you know, weekly and get better. >> So I had a microphone. The microphone was a little, you know, I I'll save the listeners the details, but end of the day, I thought I figured it out and I got on today and Liam said, "Sounds great." And Brian's like, "Man, it's okay." And it just it really >> There's always there's always room for improvement, Michael. That's that's all I'm trying to instill. >> It's true. And the main reason I'm bringing this up is because uh if anybody listening today, let us know who sounds the best and who sounds wor. And then in the future also, but specifically for this uh show's episode because I want to know actually how it sounds. And then um maybe it's Brian that doesn't sound as good as we think. So >> it might be and and I'm and I'm open to that reality as well. I'm uh I'm down to upgrade my setup too. Um, but yeah, so that's that's a little behind the scenes of uh of Final Settlement. There's been some audio issues and and we're working on it, folks. So, let us know who sounds the best. Um, but >> now on on to the serious stuff. >> On to the serious stuff. We're going to start with what I think was, you know, one of the more bullish happenings over the past several months. And uh you know a little counterintuitive might not feel super bullish but this 80,000 bitcoin that you know people started to observe on chain a few weeks ago these Satoshi era wallets started moving some Bitcoin and we got some more information on it late last week as Galaxy put out a press release um basically clarifying that they had executed uh one of the largest notional Bitcoin transactions ever. it was this 80,000 Bitcoin valued at over 9 billion. Um, and it really, you know, if you just consider the impact it had on Bitcoin's price, that's where this gets extremely bullish just in the sense of um, you know, if you can compare this to prior um, large sales of Bitcoin, whether it was the uh, German government about a year ago selling 50,000 Bitcoin or the Terral Luna Foundation uh, back in 22 selling around uh funnily enough, right around 80 80,000 Bitcoin. Um the price reacted uh much more aggressively and and violently downward than it did this time around. Um you know, if we look at I'll pull up the on-ramp terminal right here for a moment. Um and you can see this uh this little dip from you know, around 119 down to 115 114 and then has kind of recovered back upwards. Um that is that is pretty amazing considering uh the amount of Bitcoin sold and and again what that has historically done to the price. Um and I'll just pull up this other tweet from uh Macroscope who's talking about this and he said important press release from Galaxy information about market depth and liquidity is very valuable to institutional investors and since the sale ultimately didn't impact price much the effect will be to reassure current holders and importantly potential potential future ones. Um so gentlemen thoughts on thoughts on this um the sale of Bitcoin sort of market maturity liquidity depth all these things. >> Yeah there are a ton of different ways that we could go with this but uh one it's it's really important just for the um the marketability of Bitcoin uh to a bunch of different people that it's you know become slightly less volatile than it has been over time. Uh another aspect is um you know both to to retail investors as well as uh institutional investors that they're not going to you know get tapped on the shoulder with uh their risk uh department if Bitcoin goes down significantly. Uh, another one is there's a lot of fervor out there and worry about Bitcoin treasury companies potentially dumping on the market and this is, you know, significantly bigger or uh than any other treasury company other than strategy out there. So would just say the market has matured to a place where uh, you know, I mean, if strategy sold all their Bitcoin there, there would definitely be a little price dip. Um, but at this point it's we're in a completely different market than we were uh a number of years ago. The options on the ETFs are significantly different. There's just more more ways to kind of hedge your exposure and uh a little bit more uh there's significantly deeper markets and institutional interest. Also, it's important to note that they could have been going into one of these Bitcoin treasury companies or uh had a significant buyer on the other side just given all the the new treasury companies that are, you know, being launched every day. Yeah, I think um it is like eye opening when you think about the price of Bitcoin 2018 2019 specifically Q1 dipped into the 3,000 4,000 range for the total you know the price per coin and that's kind of >> that's the dip we're talking about. >> That was the dip we're talking about. Um, but I will say there's a whole notion of, you know, no bad news uh is bad news in a bull market and then no good news is good news in a in a bear when a downtrend. So, um, the Luna stuff's interesting because it's not really apples to apples in the sense that 80,000 bitcoins was sold, but it was in a fundamentally different part of the market cycle. Um, so I would imagine if something like this happened where the market was delevering and it will delever at what what uh what volatility level um it could have more profound impacts to the market but it is it's a crazy thing to see and I think the notion to Liam's point from a investor perspective especially an institutional perspect institutional investor because remember back in 21 when Tesla had to sell just to test the liquidity of the market and I think that was like a billion dollars or maybe two billion Um, so yeah, it's it's all positive. I think um I think the ETF passive flows are going to be a big thing. Like there's natural large buyers stepping into the market and I think that's what's absorbing any large amounts of Bitcoin lots being sold, but then the natural like dampening of the volatility with the passive flows of ETFs and then depending how long the treasury stuff persists will also keep that kind of like downside protection. >> Yeah, I think that's that's totally right. I because I've I've seen the take from folks on the interwebs that oh like you were worried about the treasury companies selling like look at this you know everything's going to be fine and to Michael's point like it's not an apples to apples comparison because the market environment will be totally different in that scenario where treasury companies would have to be selling uh particularly on the demand side right like to me what just happened these past few weeks is more reflective of the persistent bid from ETF flows to the corporate treasuries and so in a deleveraging event that would obviously be, you know, the opposite way. And so I think it's it's something just to keep in mind like, you know, it's it's less about the amount being sold and really amount about the demand conditions to me. Um, and so maybe that's uh that's all there is to say around that. Maybe we hop to some deals. There's there's a few deals to to cover. Um, maybe Liam, I'll go to your first one. Uh, the PNC deal. I'll pull that up. Yeah, there are about three links in there that are all tangentially related. Um, it's PNC announced that they're going to uh, you know, roll out a a strategic partnership with PNC. Um, and Coinbase will benefit from the banking solutions that PNC will offer and PNC will benefit from the what they're calling crypto as a service infrastructure that they can bring to their clients. Uh, at the same time, JP Morgan announced that they're going to be rolling out um cryptoback loans on Bitcoin and Ethereum. Um, that's TBD. When that happens, I think they said it was sometime next year. Um, I would probably fade that. Um, and then at the same time, you're seeing a number of different, you know, quote unquote crypto companies. I think it was um Anchorage already is a federally chartered bank, but outside of that um since the OC gave guidance that um banks can hold digital assets um there's been Bitco um I think it's Circle, Ripple, a few others that have applied for banking licenses um and Fidelity digital assets as well. Um, and the I think that there's a a big dichotomy going on here and and oh at the same point the bankers assoc let me pull it up. Exactly. Yeah. American Banking Association warned of the risks associated with um cryptocurrency assets um and why there should be more scrutiny on a number of these different firms that have offered the that have applied for banking licenses. Um so I think what what you're kind of seeing is two different things. One, um it would be remiss to not discuss the Biden administration chokepoint 2.0 know and the scars that some of these companies likely have from being debanked from the uh financial system. Um you can kind of say that the banks may or may not have um stood up to what was potentially right or wrong about the debanking of uh digital asset companies. But you know they they just have their scars and they those were top down from the administration, Federal Reserve, etc. Um but at the same time there's kind of two dichotoies going on. One is do do we just do it ourselves get our own banking license and you know not be reliant on the legacy players or do we um benefit from it by providing all those infra uh companies infrastructure and additional reach. Um, I would assume that PNC is likely the first to come of uh Coinbase aiming to offer infrastructure for other companies. And um, and then it's it's interesting that JP Morgan is completely going the other direction and trying to do it all themselves. I think what we're uh or at least what I think is most of these companies they're they're kind of u there's benefit from the distribution of um the banks but at the same time these companies just won't lead. I think JP Morgan's probably going the wrong route of trying to build it themselves and um it'll just take a lot of time, energy, and effort to um do and they're going to be hamstrung by compliance the entire way. they're probably not going to be able to um to bring anything to market quite as soon as they would have anticipated. Um it could be a little bit better in the long term, but I think that a lot of these digital asset firms like the the Bitos of the world, there's just going to um be a little bit of disintermediation of the traditional banking partners. So, it's just something that that I'm watching pretty closely here. What are your thoughts? >> Yeah, I mean >> go ahead. Well, um I kind of I think of like what JP JPMC is doing is very similar um to like Apple in the sense of it's not apples to apples, but they don't have to go first and they don't have to be overly um uh like overzealous or just move too fast in any one direction because of their size. And so it kind of makes sense a that they would do something their themselves and two are going to look for the right entry points and they're probably going to be via acquisitions because I think I agree like no no outside of Fidelity because Fidelity had basically 10 years to iterate and play with custody. I don't think you're going to see a net new company incubate and build a custody solution. What's ultimately going to happen I believe is you're going to see the bit goes u a few other notable maybe even in Anchorage get purchased but there's only so many custodians to go around and so JP Morgan probably ends up with one of them bank of New York Melon ends up with one of them um and so that's where it kind of makes sense that they're not going to go they have the distribution we talked about I think last week when it came about um cutting off a lot of the data sets for the Stripe integrations or uh not Stripe Plaid integrations so they have their levers that I'm pretty confident and they're probably playing possum. They're they know their game that they're going to play in this world. Um and then on the other side, the PNC's and others, they're challenger banks and they need to get a smoother advantage because they're seeing deposits flee. They're seeing demographic changes. Some of the credit unions and so they naturally have to jump and just like go in. They have more to lose. Um effectively being exist like existentially like to lose. They go away because they're kind of going away already. So that's kind of like the idea I think what we're seeing playing out. Um, the big banks aren't going to go anywhere for a long time. And yeah. >> Yeah, I think that's that's very well said. I think the JPMs of the world have a little bit longer leash to figure this out the right way, whereas the PNC banks of the world, like this was kind of always my base case of like they're just going to partner. They're going to outsource it to to a Coinbase. Um, and to your point, like they have a little bit more um urgency in doing so. um they they don't have as as great of ability to sort of sit back and and figure out how to do it themselves. Um they have to act. And so this is a a first signal of sort of that that type of of um thing playing out. There was another um another stable coin related news item that I'll pull up here. Interactive Brokers um Moles launching its own stable coin to enable 247 funding and crypto transfers for its 3.9 million clients. Um, and then there was another um, brief stable coin news around Tether. I think they had announced this maybe a week or two ago. Um, but Paulo was on, I guess, Fox Business and and confirming their plans to launch a US domestic stable coin. And so this is part of um, sort of the the impacts of of the Genius Act going through. So, as I understand it, Tether basically has like a three-year grace period to figure out what what they're going to do in US markets. And so, part of that plan seems to be launching a a separate version of USDT that is specifically for US markets. I guess the the question to me becomes, does this create some fragmentation in the UST market? Um, and is this sort of three-year window enough time for Tether to figure it out to where they don't get out competed by somebody else who already has, you know, an anchor in US markets like a USDC would be the the obvious competitor? Um, any any thoughts on that? um around just stable coin competition. Generally speaking, >> I think the Tether grace period, I could be wrong here, but I think my the understanding is there's certain um maybe this is what you were saying, but there's certain things in the new bill that uh allowed for companies that were outside of the US that had some exposure into US to like play for those years and then ultimately then you would need the license. Um, so they can't like operate with a new entity. Um, the this one's an interesting like question and the way the way to see it play out because I think there's an angle that not only Tether has the data and operational chops to really run this at scale. Um, but also has the connections, right? If they were just a fly by night, you know, if it was Binance, >> it would be very different. I think then, you know, Tether's connected to the highest parts of the US market and will increasingly be so. >> So, you can see the world where they compete there. And then the other side of it is like from a depth of liquidity or just um segmentation of market. I don't really necessarily see it because it's going to end up all being the same thing parked at the same custodian or same you know um underlying you know treasuries but then also really it feels like a lot of this is all a confidence game and uh I mean that's what financial not it's not all financial services is but it's built on trust and I I think tether's proved even though there's been a lot of fun for 10 years they've made everyone hold on their obligations they hold 50 um tons of gold they hold clo you know over 100,000 or roughly 100,000 BTC point being is they come to market and you have a fly by night or a net new company that comes that maybe doesn't have the operational chops and the the war chest that Tether does. Well, what what um stable coin are you going to use? I do think the only thing is the marketability of Tether just has like that notion and so maybe they rebranded something else. Um we'll talk about it later, but Paxos and what they're doing across quietly building infrastructure across the world. Nobody really talks about them and I think that there could be an opportunity there, but uh it'll be interesting to just see how it plays out. Yeah, I think that the l lack of liquidity for this new vehicle is um it's very important. It's probably going to be the first time in a very long time that Tether is trying to like rebootstrap what they've already done. They have a a massive war chest behind them, but you know, um Circle, Coinbase, etc. They have a lot of the existing flows and settlement here in the US. And so it's going to be really interesting to see how that plays out. Um I think it's it's going to be a little bit they don't have the same benefit of having all of the liquidity on the overseas markets that they do here, but they do have all the data and and uh process for how to do it right. And so I think that they have a massive benefit of working with those who are going to be or trying to be the upandcomers, but I don't know if they're going um and that will enable them to get the larger partners later on in my view, but it's going to be difficult for them out of the gate to uh compete directly with the largest players in the space in my view. >> I guess I kind of oversimplify it is like um similar to like Bitcoin. If we figured out the scarcity then we could figure out how to do the payments. It's like if Tether got to its scale, they can figure out how to move the capital across the different entities, >> right? Like the BTC can move for the liquidity or the the swapping. I don't know what the regulatory climate will look like um to do that, but it'll be interesting to see how it plays out. But that's where I don't like >> Yeah, they can keep the losses at first based on uh if there is any slippage within their existing or their new coin assuming that they can, you know, kind of fund the new coin with their existing behemoth treasury or um is is kind of what you're saying I think. Yeah, there's that and then there's the other aspect I don't think most people talk about is tether out. So the USDC I guess there's two different uh be curious your thoughts. There's two different like value props or aspects. There's going to be more growing but today I think about there's the trading pair for BTC and then there's just offshore dollars for the rest of the world. And Tether really excels actually at both, but really where I think they're going to have an interesting opportunity is the big use case at least today for stable coins in the US is the notion of cross um border settlement for large businesses. The anecdote that I referenced and it always sticks out is that Stripe as big as their business is only has 1% of the total B2B market. So um the idea is if Tether has most of their exposure globally and most of capital markets and businesses large businesses sit with some multinationals or a large percentage of them in the US there's a logical version of they have a very a lot of like infrastructure already in place to manage those flows. Um where USDC is probably more on the capital market side but they don't have a lot of those relationships and USDC is not a global brand. Um, so I think that would be a positive thing, but I it's it's again going to be very fascinating because Fidelity is coming in and there's a there's going to be a lot of this kind of ties into this that Brian point pulled up. There's going to be a lot of u competition for the onboarding of fiat into stable coins and then the middleware between the different entities from wallets to transaction fees. Uh, and who wants to play in the middle of all that? Yeah, like you said, I I pulled up the the PayPal deal, which I guess is their their stable coin is man managed by Paxos. Um, this is this is one you just alluded to before, Michael. any other color on on what this might mean or >> Yeah, I think um so the the top of the the article basically headline is that they're PayPal is launching um the ability to accept crypto via I think it's a hundred different crypto assets but I believe it's all their merchants and and it's somewhat fascinating just because we think about PayPal and how it started and with this actual like uh theme in mind of cross border and you know move movement of money without uh banks But independent of that um PayPal has not only the market penetration but also there's an interesting aspect of I think where we're going with stable coins and specifically around monetization is the minting of them. So, the on-ramps from fiat into stable coins and that's going to be a very interesting um area of the market and then what is like the middleware between the two entities and wallets uh because that's where you're going to be able to acrue some of the monetization outside of interchange. So, in this article they reference they're going to start with an incentive of I believe 99 basis points and then move it up to 150 basis points. though about half of interchange um at three roughly 3% traditional interchange fees and uh I think like the Paxos and others of the world to Liam's point earlier there's a lot of these banks are not going to create this technology specifically the middleware and how do you accept and then um you think about Amazon is a great example of how much flow goes through Amazon and if they can you know cut out an additional one to two% how many billions of dollars in years that um could you know fill into their margins And so Paxos and I think there's others um that are playing and that will increasingly play in this like middleware game where you don't actually have to create any of the infrastructure um is going to we're just going to see more of it as more demand for stable coins comes. I think the big question is how big does the market get and how fast. So roughly right now I think it's 250 billion and then it's just to see like what's the race to a trillion to a trillion dollars. >> Yeah. Yeah, Bessin, I forget the timeline, but he was, I think, quoted as saying he thinks it's going to grow to over three trillion within, I forget the time range, but maybe like 5 to 10 years. Um, so basically 10x um in terms of stable coin market cap. >> Thanks for tuning in to another episode of Final Settlement. If you haven't already, I would recommend you go to earlyriters.com and subscribe to our newsletter as well as all of our research to come. There will be a couple of interesting articles coming out with respect to how we're thinking about capital allocation and it's changing as Bitcoin becomes to be the identified hurdle rate for any and all capital allocators in the space. If you haven't already, uh please subscribe as well as reach out to me at vmarriters.com in case you're interested in hearing about how we think about research different than the other typical ones out there. Thanks. >> Um maybe a a quasi related uh news item was uh strategies um announcement of a new a new u preferred instrument uh called stretch. Leah, maybe if you want to give sort of an overview of what this is. People are calling it a form of sort of algorithmic stable coin or algorithmic money market fund. Um but uh maybe just give a a high level overview of it and then we can we can unpack what it might mean. >> Yeah, for sure. Um so it's very short duration. I think it pays out monthly. Um but the it pays out 9%. It is a preferred offering and it's the largest um preferred IPO offering of the past decade. It's um strategy's largest preferred offering thus far. Um so there's stretch, stride, strife and strike. Um and you know the majority of them are eight plus years effective duration and stretch is very short. So it's essentially competing with money market funds but it's at a higher yield um of between you know 9 10%. They want the um security to stay very stable. Um and then just you know they have talked about how they will sell above um $101 and and buy back or uh issue their financial engineering 100 under $99. And so um they're likely going to continue to pay out that vehicle and it's uh $2.5 billion. And this is really interesting when you think about how this fits into the broader macro and uh you know Bitcoin economy. uh theme because right now the um if you looked at Galaxy's lending report um the effective duration of pretty much every uh lending vehicle on Bitcoin and digital assets is one year. I think Arch is the only one who has a two-year lending option on uh on Bitcoin directly. um the federal uh and so this is s very significant because it goes after the largest uh market with respect to um bitcoin uh or bitcoin collateralized securities and so there is people should do their own research with respect to stretch there's a lot of different um questions that I have and I haven't done quite as much as likely others have with respect to which uh vehicle between stretch, stride, strike and uh strife that actually um you know and then MSTR if you where the Bitcoin actually sits and uh and those different preferred vehicles. So uh would recommend you know doing more research as you look at all of this. But when you think about where we are in the business cycle where uh Jerome Powell is likely out as the Fed chair within the next 12 months, Trump is going to uh announce his own um his next Fed chair and it's likely going to be very politically driven in terms of where the interest rates go and you know that's likely going to be down. Trump is going has said that many times and so stretch automatically gets much more competitive than money markets funds which is the effective duration that it's competing with. So that just brings more um capital into you know the Bitcoin economy as well as the effective interest rates on a lot of these lending products that have been rolled out those will likely go down as well as you know short-term interest rates go down. there's a a large question about, you know, if the long end of the yield curve goes up in the future, but that's pretty irrelevant right now because right now the Bitcoin economy just doesn't have quite as much of an effective duration yield curve um at this time. So it's uh you know and at this time there is a lot of there's just like a financialization of Bitcoin whether you like it or lot or not and uh you know it's just a fact of the world and so it's very important to watch this and uh you know how the next 12 months shake out. it it probably does not look like past cycles at least to my view based on everything that we've talked about with uh you know banks adopting this infrastructure and uh you know I think we're we're a little bit early on in a longer cycle at this point. Um what do you guys think >> Mike? Um, so I have a few hot takes and they're just instinctuals and they're they're left barbell. Uh, I think I think a lot of the stuff when we bring up financialization and you hear people not like certain things. It's easy to throw the baby out with the bath water and say, "Oh, it's lites or it's financialization. You got to like it, whatever." And I think the reality is Bitcoin will financialize in the economy, but it's going to look fundamentally different than anything we're seeing today. And the mental model is everything that has come into Bitcoin in its first iteration generally is not what ends up sticking and standing and a lot of things blow up. And this is just 101, right? Technological uh evolutions, you have to destroy capital, destructive creativity or whatever. Um, and so I don't think so with that said, I think the there's two things that I've been thinking about. They kind of like interweave together, and I don't I'm not going to say they're uh one was done or created for the other to happen, but they conveniently work. One is that I don't I don't think Sailor or MSTR has any risk. I think we all agree from like a deleveraging. They have so much Bitcoin. They're going to be fine. They don't have the debt. Um, any kind of delevering in a market, they're going to be perfectly fine. what what's going to happen is they're going to roll out these structured products and then a lot of people are going to try to mimic them or go further out in the risk curve and then they're going to uh you know end up in unchartered territory and where the second part comes is a lot of these companies I think everyone agrees are going to trade at at lower than their MNAV and then uh sailor just going to go buy them all up and so uh whether this is part of sailor's cheer leading for this stuff or not, but there's a reality and I wouldn't it's definitely more the nonzero that MSTR ends up owning a large percentage of this new cycles treasury companies and um I think a lot of that's obiscated from the people's thesis and coming in thinking this is a new era and a new wave versus they don't understand how this is going to play out and if they thought or knew that that's how it's going to play out they wouldn't be so positive to what's happening here. >> Yeah. >> Does that make sense? >> It does. I I think I think Sailor was asked about that maybe a few months ago and his his response I' I'd have to watch it again, but I recall it being somewhat ky uh and and sort of insinuating he wouldn't do that, but like kind of leaving the leaving the option on the table like if circumstances changed, maybe he would consider um acquiring other other treasury companies. But to me, like I think you're totally right. Like that would be the logical progression of this is that as these copycats try to compete, create other structured products, um get get outside of their skis in terms of leverage, um that would be the natural sort of evolution of how this plays out is like the most um resilient, robust balance sheet just scoops up the the less resilient ones who got too far out on the risk curve. Like that that makes total logical sense to me. Um, I guess it's just a question of like does does Sailor ultimately embrace that as the logical thing? >> Well, does Sailor even have an option? Because if it's the shareholders that are deciding he's effectively being able to buy Bitcoin at less than spot and that's what their whole thesis is. >> Yeah. And I know that Nakamoto and uh I think Strive have said that they're like publicly that they intend to buy companies at uh discount to net asset value or or net cash on their balance sheet. And uh you know there's especi Bitcoin treasury companies. I think they've said uh they could do all the digital asset treasury companies or just you know non-operating businesses. But um while this is probably going to contradict our earlier point, there is a benefit of acquiring companies with um Bitcoin on their balance sheet today because you don't have to go out and purchase it on the open market where um there is like some potential slippage. It depends on the market size though. But um yeah, it's there there will be more acquisitions and roll up of um companies with Bitcoin on the balance sheet. Yeah, I think that's a safe assumption. Um, Mike, you brought this tweet from uh from VJ. We went from the entire state apparatus being adversarial to Bitcoin to the sixth largest treasury company being owned by the president's family. This is not priced in. So, you see on the chart there, Trump Media and Technology now has 18 over 18,000 Bitcoin. They are number six on the list in terms of Bitcoin treasuries. Yeah, I thought it was just interesting that that's the case. I don't know um I don't follow this list as closely and I don't remember seeing that name even in the top like 20. So, I don't know if this just got updated or um where the like influx, but to see them close to top five, they're right, you know, shy of Mara uh or Ryan, I'm sorry, is a pretty wild thing to see. And then it's also pretty crazy to see because you let's say they jump they only need you know what 900 800 more Bitcoin um to leaprog to be in the top five. Well, now you effectively have three of the top five uh sitting in, you know, basically executive positions of the largest country in the world, right? You have 21 with Caner being involved and then uh Bitcoin Standard Treasury Company. I think that's also Caner, right? And then uh Trump, it's a it's a fascinating thing to play out. And then TBD on who who uh Michael Sailor is owned by. Well, you also um but you also have uh Eric Trump on the board of MetaPlanet coming in at seven and he's also working at American Bitcoin. I forget his exact role which I don't see on the list right now but it's uh you know they have also planned to acquire a Bitcoin treasury. Um, so it's he's he definitely would not be antagonistic to Bitcoin unless he uh there's falling out in his family, I would assume. >> Yeah. It's just it's just a fascinating thing that we just talked about doesn't get talked about enough that most people recognize at a certain point the market will price these treasury companies to at NAV or below unless they have some insane differentiation which they're creating more BTC via structured products or cash flow. And so it's the logical progression that these hundred end up as 10 kind of directionally right prior to distributed let's say it's 20 and then these other companies end up owned by them. And if somebody explained that out loud, there'd be less fervor because nobody would want that. But that's not what's being discussed here. It's like this is the new wave of Bitcoin ownership as these companies are going to go. Um, I don't necessarily think it's good, bad. It's just it's it is what it is. I think we all agree that the real innovation or thing that's interesting is to watch cash flow value producing businesses uh accumulate BTC. Um, >> 100%. Um the the best way I've sort of heard that dynamic described is like well one strategy obviously has the first mover advantage massive scale but two the sort of higher level point is like their product is the stock itself right and so like they've been able to create all these various instruments um sort of uh you know tamp up or tamp down the volatility of the underlying through all these instruments. like that in and of itself is their core operating business. That is what they've specialized in and really pioneered and innovated. Um I think it's it's hard to dispute that. The other side of it is, you know, these copycats that literally don't have that um that sort of um at least track record of doing what what Sailor has done. And so they're accumulation vehicles that um don't necessarily have a core operating business. And so there's there's sort of these different buckets emerging in the Bitcoin treasury company space. Um you know you have like the blocks of the world, the Teslas of the world where you know their Bitcoin strategy is not their core focus. Um and I think that is that that sort of bucket with a real core operating business just naturally has more longevity and long-term sustainability than the copycat accumulation vehicle with no core operating business. like those are the ones that are going to move out the risk curve farther than they probably should. And at some point the market is going to realize like, you know, there's better ways to to get exposure to this asset than this this shell company that that's accumulated x amount of Bitcoin. Um, and that's when those navs are going to start to compress, particularly in that in that sort of bucket. Um, and so I think it's, you know, we are still early in this like progression. Like I I do think that is true. like I think that this can persist for longer than we probably anticipate um in terms of it being difficult to discern those buckets that I referenced um you know for the average retail part participant they kind of um don't necessarily have that level of clarity on like the the distinctions between these things. Um, so it could it could, you know, last the the sort of mania and hype around these things could last a lot longer than than we expect, but at some point there's going to be a delineation of of these various buckets and and the long-term sustainability of these strategies. Um, so something to keep an eye on. As the price of Bitcoin continues to appreciate, it's always important to take stock of your custody setup. Here at Early Riders, we focus significantly on multi-institution custody as we believe that fault tolerant redundant setups are extremely important. I would recommend checking out on-ramp Bitcoin and seeing if that could potentially be right for you. Now, on to the rest of the show. Um, Michael, you'd shared this uh this alts newsletter. I'm not sure exactly what you wanted me to pull up from it, but uh >> maybe maybe starting with um if you go back to the uh the Texas one. Yeah, I can open it because I don't have a >> mail. >> Um, >> so the title of the the piece was uh the money moves, why Texas is all in on precious metals and surging Bitcoin. Um, this has less to do with Texas and really more of just the theme of people looking for um, hard assets. I don't know if this is going to pull up. Yeah, here we go. Um, so money moves, why Texas is all in on precious metals and surging Bitcoin. New legislation will give gold, silver, and cryptocurrency a boost to the Lone Star State. Um, I thought this was really fascinating in the article because it brings up two parts. It talks about the SPR and holding a strategic Bitcoin reserve in bit and in Bitcoin and then the gold and Bitcoin I'm sorry, gold and silver legislation. Um, I don't know how far it is. I I think it actually might have fully passed, but the core idea is that uh citizens will be able to hold um gold or silver at the sovereign um bullion depository and then they'll get issued um like a debit card to be able to use it to purchase. Now, I think we all agree that's pretty inefficient, but I think the the theme is what's core there is that there's a notion of gold and Bitcoin from investors looking for hard sound money assets. And um that's going to continue to play out. I think the the second article if you want to pull up was um kind of ties into a lot of this which was there's a a notable media company and I guess it's a media company now. called alts go mainstream and it's fully dedicated um to alts going you know just alternative investments and if you scroll down um there's a there's a u matrix chart that shows it's a little bit further right there. Yeah. So it it effectively shows uh a fluent investor product ownership type and it shows all these different um products and things that people are going into alternative investments and digital gold and physical gold are moving up the curve. But I think the core theme is that and this is still not fully widely understood is everyone now understands or has heard of alt or alternative investments but they think of them as ways to uh preserve and store wealth. And all I can think of is they're um they're effectively the because the risk curve and inflation is so high, people have to go further and further out on the risk curve to try to return the capital and most of it's destroyed because alternative investments end up in a lot of these things like private credit where people can't necessarily underwrite or specifically private equity which definitely by definition is more opaque, doesn't have the transparency um to be able to understand the fundamentals and what you're investing in. And the idea is well because a certain few investors got access to core technology before IPO now the rest of the market has to be able to get access to it. Um, and so I think there's just this growing there'll be this growing dichconomy of signal versus noise because alternative investments you can buck you can bucket cryptocurrencies, uh, real estate, private credit, just anything under the sun that wouldn't be in a traditional 6040. And it goes to the same thing that Trump came out with with the 401k uh deal with allowing um via like presidential decree that there's like $14 trillion locked up in 401ks and now those investors can go further out on the risk curve into private uh that you know we got the big boost or it was you know people in the Bitcoin space were excited about it but the reality is it's going to put a lot of other people because people don't understand what Bitcoin is. They're going to look at a bunch of other assets. Um and so I just think that this is a growing dichotomy of individuals that will be able to understand what is preserving capital and what is money and then what are effectively credit instruments um that may nominally uh grow in value but in real returns underperform what inflation is and specifically what gold and bitcoin do and I think not only is that just a core theme for what we talk about but also how we look at investments. I think there's going to be a lot of interesting synergies between gold and bitcoin that persist. Um, the last thing I'll say is I've widely underappreciated and not it's probably not the best thing, but how long not only gold will persist, but what they're going to try to do to make it persist when they're going to create stable coins that will give it property similar. I'm sorry. Yeah, gold. It's not even necessarily stable coins, but gold uh pegged um you know, securizing effectively gold to allow you to move it. And obviously that's counterparty risk and a lot of other things that don't make it better than Bitcoin. But that's still going to happen because these boomers love gold and they all hold a lot of gold. And um I think this is just not fully understood by the market that gold and bitcoiner and specifically how they get digitized and then integrated together uh for investment investors portfolios is still not talked about enough. >> Yeah. The other sort of takeaway to me is like there's going to be an increased learning and education around like you know if you if you want to have an alts bucket there's basically a better way to do it without a lot of the execution risk illquidity risk of private credit or private equity funds um no you just park it in in hard money whether it's gold or bitcoin or some combination thereof um I think that is going to slowly creep into the alt bucket um And I think we're we're very early stages to that. Um, but I think that that that'll be a trend over the next decade is like the the proverbial alts bucket will become more and more dominated by gold and bitcoin and and probably for some time, you know, other crypto assets too. Uh, unfortunately um there was this this other uh Liam, I don't know if you had any thoughts on that, but there was the other Yeah, go ahead. Yeah, I was just going to say um to your earlier point about uh you know Trump media and technology being a top five 10 holder of Bitcoin whatever it is and uh you know the relationship of the Trump family with respect to Bitcoin and now um this letter about you know um the I think it was senator of Texas or whatever um but Texas just getting more interested in uh hard assets including Bitcoin in general. Um it's just going to be both driven from uh you know bottom up from people like us that are just interested in Bitcoin. But um can't really discount the fact that the administration is not going to be as ant antagonistic as they were in the past likely because they just become educated on space. Like I would assume that um those in Texas who are pushing this are just you know um fundamentally believe in it and that is a reason why they're pushing out um you know the ability for their citizens to get gold and Bitcoin uh and silver just because you know they think it's the right thing to do. Um and I think that we're going to see more of that over time. Um, and you know, hopefully there will be a lot of confusion about, you know, Bitcoin versus the rest rest of cryptocurrency uh for a while, but I think it's it's going to be that gold and Bitcoin and silver and and hard assets in general will start to be lumped into one bucket by some. >> Yeah. No, I think that's totally right. The the next thing I was going to bring up was um just along the lines of alts um you know if you want to group crypto funds into that as well this this report crypto liquid funds are down bad and shifting to quoteunquote quality tokens. Um Michael I think you shared this one. Um any thoughts? Yeah, I think the two biggest ones were um there's a guy in there, I think it was his fund, Joe McCann, who was historically just kind of completely crushed the past five years, was early in Salana. He's been around for a while. Um was heavily into like meme coins. There's just this reality that the game's kind of changed. Um specifically around it's not that all coins aren't going to see some pump and lift that it said flight to quality. It's not going to be the penny stock. Um, sure you'll still make money on, you know, a new token that comes about or a memecoin, but these players are coming in. We've seen the backing with Salana and Ethereum, uh, as great examples of whether it's Pubco's, VCs. there's just going to be a lot more weight thrown around some of these large it's going to look very similar to the traditional markets in um in in the listed company space where you're just going to see larger backers, larger teams, more connectivity. Um look at Trump as an example. The affiliation with those three firms on the top five, you can guarantee like they're going to go into other assets and those are the ones that you're going to naturally see get this lift. and a lot of this crap that everyone's been trading around because you could get smaller VCs to do whatever they were doing around tokconomics and dump on retails just like the fun the game's fundamentally changed and a lot of these guys have been playing the old game. Um and so I think that's kind of the biggest it's just interesting to see they finally come home to Bruce that these guys are going to make money forever dumping you know these tokens on retail. I don't know. Unfortunately, um, this guy is leading, I think, a $500 million, uh, Salana digital asset treasury company now, too, despite his fund being down 80%. Um, and so I would uh I I wish what you're saying uh was was true, but I am a little bit skeptical that they um will go down forever because, you know, they can use their own funds to frontr run any buys of uh Salana um or or do whatever they're going to do in order to bail out their fund. Um >> maybe maybe they should just go all in all in Fcoin. I I just thought this was a funny tweet from Luke Groman. He was responding to uh Clifford Asenes, who's a Tradfi normie brain, hates all things crypto and Bitcoin. Said, "For anyone who thinks today's markets are normal, I remind you that the market cap of FRC is still 1.4 billion." Groman responds, "1.4 billion FARCoin is what you get when the risk-free asset underpinning the entire banking and currency system is a bond issued by an insolvent government with debt of seven times revenues, offbalance balance sheet liability of of 20 to 30x revenues, peace time deficits of 7% of GDP that has not run a surplus in 24 years." Um, so I think all of that is to say that yeah, there's going to be more craziness uh this this cycle, if there are even cycles anymore. I think we're uh we're just scratching the surface of of the craziness. >> Yeah. I think what I was main mainly mentioning because I've been the uh the bull on like crypto and all this stuff is going to continue to persist. It's more of the like hyperlquid uh token funds where somebody can come in and like for instance like the Salana trade. The guy doesn't have as much size as you would need to really like it's $160 a coin asset or whatever it is today versus when he got in with Salana and what was the other one that uh SPF did? Um was the other FTX token? It wasn't Soul, it was uh >> FTT. >> Well, there was that, but then there was another one. Um either way, like there's there was a notion of being able to really buy in size at, you know, $10 million or whatever the total amount is and see a return profile and um have retail come in to get that, you know, launch a whole fund based on that. I think that's where I'm referencing. It's going to be a little bit of a different game that uh we'll see larger institutions come in like the Jane Streets, these larger firms that will move the market and play in these like quote unquote um flight to quality versus, you know, fly by night guys that make a name. And and the one that's probably done it, I'd say that's grown with the market really well is uh Paraffy because Pari started back in the day in I want to say 18 and they were in like all these you know synthetics from it just comes to mind because I knew those guys there and they I had made an introduction um but they like consistently grew where now until the like next I don't call it grift but like the next thing. So like now they've backed a lot of u the treasury company you'll see Parify involved in a lot of these. So they've like moved up and then again this isn't apples apples but like 10T and Dan Tero's firm they had this thesis of the growing asset class and market and then giving boomers and institutional investors that couldn't get spot bitcoin into that and then now they're raising you know whatever the size fund and they've grown in that size um versus like these other people that have been creating these funds that are $10 to $50 million to buy like these liquid tokens and then be able to return a 10x like I think they're just fundamentally a different game that's being played and that kind of shows where this guy's return profile hasn't met what he's historically been able to do. >> Yeah. Um maybe one other tweet to pull up was just uh a little look ahead for this week. Might be a big week. Um we the the stretch product cash that we referenced earlier, the 2.5 billion that they raised for that product. Apparently Sailor gets his hands on that that capital tomorrow. uh Wednesday the US government is is uh scheduled to release their uh working group digital asset working group report effort. There's some um anticipation around you know some mention of the Bitcoin strategic reserve perhaps an accumulation plan has been floated. Uh you also have FOMC on Wednesday and Micro Strategy earnings on Thursday. So could be a big week boys. Um, anything else you guys wanted to bring up before we wrap? >> I think that the I don't know what to think about the reserve working group on Wednesday, but I know that Trump ordered them to give a plan to acquire more Bitcoin um without increasing deficit. So, we'll see uh if that's still serious or not and definitely something to watch for. Yeah, I nothing else outside of whatever is going on with PAL and and the Fed and ultimately I think everyone's, you know, prepared for lower interest rates, which is going to going to juice everything. Um, which is the base case. >> Yeah, we we would be remiss not to mention the um the clip from last week of Trump and Pal at the uh at the construction site, both wearing hard hats and uh Trump pressing him on the costs of the the the renovation. Um, just a hilarious clip. Could have been out of the office. Um, and the the takeaway for me is like he's basically shaming pal in front of the public and being like, "You guys just waste money and uh there needs to be change and here's here's how I'm going to get public support for getting you the hell out of here is by just making a public uh mockery of you." Um, so yeah, >> I wonder if the renovations have kept pace with uh, you know, what they claim inflation is. Uh, I would doubt it. Uh, I I bet that Trump announces who he wants as the new Fed chair after the meeting. We shall see. >> All right, boys. I think that's good for this week. >> Thanks for joining. >> What's up, guys? >> Like and subscribe. >> Thanks, guys. >> Later. >> Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that Onra Media is forformational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are in your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/cont to schedule a consultation with one of our private client adviserss.