All right y'all, here's a question that I see popping up
on Bitcoin Twitter right now. Should I buy MSTR and be on team
Sailor and team Bitcoin or should I buy BMNR and be on Team
Tom Lee and team Ethereum? Since its first $250 million
purchase of Bitcoin in August of 2020, MicroStrategy is grinded
to own 3% of the entire Bitcoin network.
It has a $70 billion enterprise value.
It owns 687,410 Bitcoin, and it's already taken in $8 billion
in investments in its preferred stocks, which offer a yield from
9 1/2% to 13%. On the other hand, we have Bit
Mine Immersion Technologies, or BMR, the Etherium powerhouse
which now owns 3 1/2 percent of each supply.
It's investing in moon shots like Sam Altman's world coin.
Oh yeah, and it's now fueling the number one creator in the
world with its recent $200 million investment in beast
industries. They think they're going to make
like $400 million a year just from their ETH position alone.
The question that everybody's asking, should I back the
scarcity driven Bitcoin or the utility pack tokenization
features of ETH? Will the digital credit thesis
play out or will digital tokenization reign supreme?
Today, I'm going to give you my raw, honest opinions on both
strategies, no pun intended. And I'm going to pick who I
think win in the long run. This is not to Coco Bitcoin.
Simply, let's go. I think.
Ethereum is having its 2017 moment now.
Because. Now is the time that Wall Street
will take tokenization seriously, and it's taking place
on Ethereum, so I do think it is the biggest macro trade for the
next decade. If you guys don't know who that
is, that is none other than the price pump price prediction king
Tom Lee, the formerly Bitcoin OG and now ETH head the chairperson
of bit mine immersion Technologies or BMNR.
If you want to look up the ticker.
BMNR is the largest corporate holder of ETH in the world.
They're not the largest holder of ETH in the world because
well, a lot of people got pre mine tokens, but we're not going
to go there on this episode. They own $13 billion of the
programmable token and they're making a huge bet on
tokenization. Here's a thesis in a nutshell.
Build the first Made in America validator network, invest in ETH
development, own 5% of the Ethereum network, and make moon
shot investments. When they first laid out the
strategy, I thought owning 5% of the ETH network would take a
long time, and they actually thought that it would take five
years, but they've done it in about seven months.
Here's how their strategy stacks up.
Two micro strategies. Which is the company's made
rapid progress on and getting to 5% of Ethereum.
So that was our mission statement on June 30th when we
launched the Ethereum treasury funded by our PIPE investors, 2
of which are here today. And in those ensuing 6-7 months,
as you can see, we wanted to get to 6,000,000 ETH tokens and in
six months, we're at 4.2 million ETH.
So we're 68% of the way to 5%. We originally thought this would
take five years, but we're 68% of the way there in seven months
now. Oh, thank you.
Now we have cash, a billion dollars of cash on the balance
sheet. So if we add the cash and said
let's buy Ethereum with the cash, we would have four and a
half million ETH tokens, which means we're 75% of the way to
the alchemy 5%. So we believe if you believe
this trajectory bit mine should cross 5% sometime this year,
assuming the seven months continue to hold.
And as you can see, we studied the blue chip standard for
crypto treasury, which is micro strategy.
And as you can see here, we have 13 billion of ETH including cash
in a roughly seven months. At the same point, MicroStrategy
had 3.4 billion of Bitcoin. In fact, we accumulate as much
Ethereum as strategy accumulated, which took them
roughly 1300 days or four years. Quick question, if there's a
network truly valuable or even a stock, do you think if someone's
able to acquire almost 5% of it in six months that it's as
valuable as what everybody thinks?
Question a ponder now investing in moonshots.
The next part of their strategy, they just dumped $200 million
into Beast Industries, Who is Mr. Beast?
Well, he's the number one creator in the world.
Dude has over 1 billion subscribers.
His content has watched more than the Super Bowl, Netflix,
Disney, NBC in Paramount and Tom believes that his platform will
be the platform of choice for Gen.
Z, Gen. Alpha and even millennial.
The most interesting part as to what this thesis actually means
in this collaboration is actually intended to do is he
believes that they're going to have meaningful collaboration in
the creation of products from Beast Financial, which filed A
trademark application and is intending to offer insurance
services, lending services, payment providing services,
crypto staking, crypto rewards. Oh yeah, in banking.
Do you think that people are they're going to switch over to
moving their bank from JP Morgan Chase to banking with Mr. Beast,
something to feast on? It's super interesting that this
is the route that Jimmy Donaldson or Mr. Beast took
because something that he was actually spurred on by Michael
Saylor himself. And this trademark was filed
after Michael Saylor told him, just buy Bitcoin, bro.
So that's one side, the BMNR side, Moonshine investing, 5% of
the ETH network, digital tokenization.
Now let's go to the Sailor side, the MSTR side, the OG strategy
of building a digital asset, corporate treasury strategy.
They continue to buy a Bitcoin. As a matter of fact, last week
they bought 1.25 billion more Bitcoin and now own 687,410
Bitcoin, almost 3% of the entire supply of the Bitcoin network.
Their stock MSTR has been the best performing asset over the
past decade, only second to NVIDIA and just ahead of Bitcoin
itself, growing about 60% a year.
Their strategy? Digital credit issue convertible
notes in preferred stocks like STRCSTRFSTRDSTRK.
They raise cheap capital and then they plowed into Bitcoin.
It's a self reinforcing loop. When Bitcoin appreciates, they
cover their debt and they cover their obligations.
Then they're able to issue more credit. 5 to 7% above the risk
free rate yielding return for both their shareholders in MSTR
and the people that own their preferred stocks.
Here's what Michael has to say about.
It I think the most exciting. There are a lot of ways you can
create value from capital, but a treasury company like a Bitcoin
treasury company or a digital treasury company, the most
compelling thing is to create digital credit.
I think the perfect product is I give you a Treasury credit
instrument that pays you 8% more than the risk free rate in the
currency that, that your expenses or your obligations
come in. Then I'm giving you this massive
high yield bank account. You don't need to be able to
read. You know, a three-year old would
get value from it. An 80 year old would get value
from it. If you're in a coma, you would
get value from it, right? Your unborn children will get
value from it. It, it pretty much is the gift
that keeps giving. It's such a good product.
There's that the reaction of anybody would be, well, what's
the catch? And the catch is, well, you need
a Dynamo to power the the dividend and that's digital
capital Bitcoin. You need to trust the
creditworthiness of the issuer. So you want to create a digital
treasury company that's got very transparent credit, that's got a
lot of collateral that is understandable that acts in a
very, a very predictable, transparent, consistent fashion
over time. And that's what makes you credit
worthy and that that is I think the the digital credit.
He turned a software company making $500 million a year into
a Bitcoin bank that's now worth 100 times as much as when he
started in 2020. Bitcoin is a digital credit
worthy primary instrument. They borrow money from the
largest funds, corporations and individuals who want a greater
than risk free return. They believe Bitcoin is the
ultimate collateral and their creditworthiness is what people
are investing in. Is the company credible or not?
Do they have too much debt relative to their overall
Bitcoin balance and assets? Here's Tom Lee strategy a little
bit different in how they're thinking about paying out their
shareholders from their staking rewards when you invest in BMNR.
Growth. The first is to maximize yield
on Ethereum. OK, So we're going to optimize a
staking yield. The Caesar benchmark is 2.8.
We're going to try to do better. One way we do it, at least one
way that we've talked about it, is to pursue alpha strategies.
Now the, the entity that'll execute this for us is Mosaics
Capital, but we also have an advisor, Tom Demark of Demark
Analytics. For those who are Boomers or
older Gen. X, Tom Demark is iconic.
He is the one of the most famous market timing people.
He has won so many awards. He only has two clients.
I believe he's disclosed this. Well, I don't think he's
disclosed his first client, so I'm not going to name it.
We are his only other client, and I showed you that slide
where we bought 2.4 billion of ETH in the last two months.
Tom Demark's strategies, along with Mosaic execution probably
saved US $400 million on those purchases.
So think about that. We bought ETH in a way that made
you guys money. So don't shake your fist at ETH
when it's down. We like it when it's declining.
OK, All right. But here's where I can give you
some imagination. We have 13 billion to be.
So imagine Proposal 2 didn't pass and we're stuck in the
water. We don't buy another dollar V
for the rest of the history of the company.
But using the stake and yield and with some optimization that
would generate 367 to 390,000,000 a year in rewards.
We have a billion in cash that would generate another 35 to 40
million. The company will generate 400 to
$433 million a year in pre tax income.
That's more than $1,000,000 a day and that's been achieved in
six months. I think a company that goes from
zero to in seven months to a company that can make 400
million a year, that's quite an achievement.
But of course, thank you for the stockholders for getting us
here. But let's think about a future
scenario. Let's say that ETH's price stays
at 3000, but we get to 5% of ETH.
That number rises to 542 million to 583,000,000.
But I think ETH is grossly undervalued.
OK, let's say a proper price for ETH is 12,000.
OK. And I'll explain in a later
section how I get to 12. Then the annual rewards and
interest jumped to 2 billion to 2.2 billion, OK, that would make
US1 of the 20 most profitable companies in America.
So or maybe 30th most, but it's really up there.
OK, So that's why if our vision is correct on Ethereum and we're
generating this level of rewards and income, you don't want us to
just be a staking entity. OK, So that gets us to the
second, which is we want to invest in moonshots.
So far we've done 2. We will do more orbs and
Worldcoin. We want to accelerate
tokenization products. We want to work with the L twos
and the Defys, the leading projects, including something
like lighter and we'll I'm going to have a fireside chat with
Vlad today about Lighter and why you really should pay attention
to lighter and its token. And you know, we're really
excited about this beast industries moon shot.
OK, but just to remind you bit mine invested in Aiko $20
million. OK Worldcoin.
It was founded in 2019 by Sam Altman, who's the open AI CEO,
and Alex Blania. They have built an incredible
technology for proof of human. It is the only way to verify
your humanity today using an iris scan.
They're not scanning your iris. They're using your iris to
create a cryptographic hash. But that is unique.
Out of 7 billion people, that would be the only number
cryptographically unique identification.
It's the only thing more secure is a fingerprint.
And eco's done well. They hold 10% of the circulating
supply of Worldcoin 11,000 ETH 69,000,000 cash and they
verified 17,000,000 humans. The world coin app, if you
haven't downloaded it, it's it's almost an Omni app.
It's that good. And they've done some cool pilot
pilot partnerships to do proof of human verification, sort of a
single sign on with Kraken and Coinbase.
And they've also made strategic investments into something like
mythical. OK.
And of course, you know, tokenization is the future and
that's why we want to do moon shots.
So couple things here. They believe that they can
generate about $400 million a year in profit just from staking
their ETH, but that they're only going to earn 4 to 5% from which
that they will pay out a dividend.
The four or 5% that they earn in gas fees isn't even going to
outpace inflation. So I have some questions here.
If you are a shareholder, would there not be a better in a
superior place where you should invest those assets?
If not, why not just buy treasuries?
Oh, it's because you believe in their venture capital arm or the
investments that they're making into coins like World Coin or
orbs, the only proof of human technology out there in the
world. They're going to scan your
eyeball in your retina and allow you to check in at places where
you don't want your privacy revealed.
Seems like something that you should invest in.
Do you believe in Tom Lee is a venture capital investor or not?
If you do, then I would invest wholeheartedly.
But that's a risky game. A lot of bets are going to go to
0, and you can best believe that if there's a possibility of more
fraud, there will be more fraud. We've seen this play out in the
crypto industry in the crypto casinos for the last five years.
The real thing that you're investing in really isn't Tom
Lee or BMNR or MSTR or Michael Saylor.
It's really about do you believe in Bitcoin long term or Ethereum
long term, Digital credit, digital gold in the era of
scarcity in abundance or digital tokenization.
What do you think's a bigger market or is the value of wealth
all across the world or improving the flows and taking a
piece of payment networks in tokenizing the economy?
Do you believe that Bitcoin is going to have a fixed supply of
21 million or not? Or do you believe in Vitalik who
says that they just solved the hardest computer problem in the
world, the blockchain trilemma? It says you can only solve for
scalability, security and decentralization, but you can
only pick two out of the three. Well, he believes that somehow
either is going to be able to solve all three, despite what
people have been working on for the past 6 the year.
ZKEVMS and Peer Das is going to be the way that you can transfer
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Before we go any further and I give my real thought to my real
verdict on what you should be thinking about when you're
thinking about these two sorts of investments.
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Let's get back to our show. Sometimes when we talk about
what you should do, sometimes it's better to watch what people
actually do versus what they say and what they promote online.
And did you know Jimmy Donaldson or Mr. Beast was a Bitcoiner
before anything else? Someone.
Broke in and stole all my clothes.
He also took my Bitcoin at the time too.
But he's a idiot. So I had like a laptop like
this, like right here was just written my private.
I just said Bitcoin private key. It's like, and I go in there, I
can't find my laptop. I'm like, God damn it.
They just stole everything I own.
And then I just run over to my desktop, which they didn't
steal, but my my laptop. I pull my private key up there
and I'm like crying and like it's not going to be there.
It literally says Bitcoin private key on my laptop.
He said. And I'm like, they just took it.
There's like $2,000,000 which is every dollar to my name at that
point because I like took like a couple like 100 grand one month
put in Bitcoin. Bitcoin like skyrocketed and I
was literally just about to sell and fund a bunch of videos and
I'm like crying as I'm loading it up and my heart is pounding.
I'm like please it's there. It's all there and I moved it
real quick and like that robbers up.
He's busy shooting my TV like blanket instead of the Bitcoin
that was sitting right there. Idiot.
But unlike Jimmy Donaldson, you need to learn how to protect
your Bitcoin by not writing your Bitcoin private key on the front
of your computer. Work with the team and the
experts at the bitcoinway.com. They'll walk you through exactly
how not to lose $2,000,000 worth of your Bitcoin like Jimmy
Donaldson almost did when his apartment was broken into.
Schedule a free 30 minute consultation with the team at
the bitcoinway.com/simplybitcoin and don't write your private
keys on the front of your computer.
All right, so here's my real thoughts on whether you should
invest into BMNR or MSTR. And I don't think it's
fundamentally about those two things at all.
Also, I don't think of that you're investing in Michael
Saylor in the long term or Tom Lee.
These are just people who are able to educate investors to get
new investors in cheap dollars because they're so good at what
they do. Both of them are persuasive.
Both of them are really intelligent, super brilliant
guys who have been through the markets and been in seeing the
ups and downs in the new waves of innovation and technology.
I think it's a wash on both sides.
I do think Michael Saylor might have a little edge in terms of
competency and skill set versus Tom Lee, but they're both
phenomenal. So that's not really what you're
investing in. What you're really investing in
is do I believe in ETH long term or do I believe in Bitcoin long
term? One of the things that I think
that you should be thinking about in the age of AI, when
computers are able to replicate code and digital ones and zeros
at infinite scale, especially as we find new sources of energy.
It's not about abundance. It's about can I invest in the
things that are actually scarce that are truly.
And this is the conversation that Jordi Visser and Pomp had
last week, which I think is phenomenal.
And I think it's the fundamental question that you should be
asking when you think about BMNR versus MSTR or Bitcoin versus
Ethereum where? We're going to have deflation is
encoding related things. The one thing Elon Musk also
says is, see, I got to write again for the second time.
We're running into constraints in the physical world.
The problem is the energy sector is 3% of the S&P 500.
The material sector, I think is 1 in change, maybe 2.
Combined, they're five. The tech sector, when you take
out the consumer, just like Amazon and stuff like this, it's
like 50. So maybe we'll have deflation
affecting the 50% that's built on, on, on, on, on code.
But the other 5% that's based on true supply and demand scarcity
will actually go higher. We are entering a world when he
talks about abundance. You want to be long scarcity.
You want to be absolutely long scarcity, because abundance is a
dangerous thing for code. Because basically with the
argument you're making is things that are abundant or not
valuable usually, and the scarcity of Bitcoin, even if
there's deflation, the scarcity of Bitcoin is the like black
hole that sucks all this capital and it can kind of protect it in
the way that it can't be protected.
Anywhere else? One thing about Elon Musk that's
very interesting, if you ask him, and he's been asked this on
moon shots in other places, what do you think about money?
He he's perplexed. He's like, I don't know how
money fits into the equation. And I believe money fits in from
the the sapiens perspective, which is we actually need
transactions to happen. It's going to take us a long
time to get off of that. So even if I'm right, that Fiat
assets basically stop going higher and they kind of go
sideways and that money starts rotating and chasing into
something that has scarcity. So it Bitcoin is more related
now to copper, silver, gold, it everyone always thought of it
that way, but I think this is now about scarcity.
So I believe this is the year that abundance becomes an
investable theme on the short side for the MAG 7, for software
companies, for all of this stuff.
And the things that start to become investments are the ones
that are scarce, that are very difficult to make abundant.
You cannot flip a switch and make copper abundant.
And he's the first person who admitted he said that in the
exact same episode. So a couple different questions
that come out of here for me. When you think about what's
actually scarce in the world, is Etherium actually scarce?
So they were able to acquire so much of the scarce asset and
network almost 5% of it in seven months.
But do you think that 5% is going to continue to be 5% or do
you think that they're going to continue to print more tokens in
a proof of stake security model? There's no one to say that they
can't create more tokens and issue more things, especially as
more people begin to use it as Mr. Beast drives a billion users
onto the platform. Well, gas fees are going to go
up. And when gas fees go up, in
order to keep the prices low for Jamie Dimon and everyone else
building private ties, block chains and their own financial
tools, while they're going to have to print more tokens and
allow people to issue more tokens.
And so that's a question that I have.
Speaking of Jamie Dimon and these people on Wall Street,
when these private block chains are created, do you think that
they're going to be sharing all of the validator fees and the
gas fees with everyone in the entire network because they just
care about them from the bottom of their heart?
Well, no, that's not how the system works.
In a more centralized system, well, you have the ability to
choose the winners and not with Bitcoin, it's a completely
randomized process. People with solo miners in their
homes are winning full blocks, and that's because no person is
choosing who's the winner and who isn't.
That's the difference between proof of work and proof of
stake. And so when Michael Saylor and
their team own 3.2% of the Bitcoin network, well, do you
believe that that's going to go down over time?
Well, I don't think that they're creating more coins.
As a matter of fact, I think more people are losing their
coins than finding new coins. So what that means is their
percentage of ownership of this digitally scarce network is
going to go up over time. I think that's a more valuable
asset. Will the number of dollars
increase more than the supply of Bitcoin?
Yes. Will the number of dollars
increase more than the tokens created on these digitalized
platforms? I don't know.
Nobody knows. And but what we do know over the
past five years is that people are going to create tokens for
everything when Beast Coin comes out, just like every other coin
that's been created, what is to say who got the coins first?
What's the pre mine? Are they going to dump it on
you? Is it actually going to be used
and able to be used at a restaurant or somewhere else in
the world with real value and real utility?
Or is it going to be privatized to this closed garden and closed
network In the long term? I'm thinking that MSTR is going
to be the winner over BMNR and not because of what's happening
in finance and the market structure, alliance bill and
what's going on in crypto, but because I fundamentally believe
in Bitcoin more than ETH over the next decade.
Tom Lee says it's going to be the big macro trade in the next
decade. I think $100 trillion flowing
into a digital credit network with credit worthy instruments
like Bitcoin is going to win bigger than that because that's
what the world is used to. We don't need another token.
We don't need another blockchain.
They already have these systems that happened behind closed
doors and those walls and they're not sharing the profits
with you and me. And getting a dividend from a
four to 5% stake when the inflation rate is 5% doesn't do
anything. I need 9%, I need 10%.
I need a hurdle rate higher than the rate of inflation or my
expenses are growing. So those are my thoughts and
that's my real thoughts and concerns.
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Thank you for rocking with me today.
Those are my real thoughts on the MSTR versus BMNR debate.
This is Dante Coke with Bitcoin. Simply happy stacking.