1 00:00:00,040 --> 00:00:03,320 Is Michael Saylor playing a high stakes game of Monopoly or has 2 00:00:03,320 --> 00:00:06,240 he actually discovered the ultimate infinite money glitch 3 00:00:06,440 --> 00:00:08,960 for the 21st century? I've been interested with how 4 00:00:08,960 --> 00:00:12,480 digital credit is being used to strip away bitcoins volatility 5 00:00:12,720 --> 00:00:15,800 and sell it back to the legacy world as a safe yield. 6 00:00:15,920 --> 00:00:18,480 But I wanted to learn more to really understand it. 7 00:00:18,480 --> 00:00:21,680 So in the next hour, macro strategist and MSDR expert Dan 8 00:00:21,680 --> 00:00:25,560 Hillary reveals why risk is the asset and why the very thing 9 00:00:25,560 --> 00:00:28,480 that makes a lot of people nervous Sailor telling that he's 10 00:00:28,480 --> 00:00:30,880 going to sell Bitcoin is. Actually one of the most 11 00:00:30,880 --> 00:00:33,640 bullish. Signals we've ever seen this is 12 00:00:33,640 --> 00:00:36,960 real deep dive into the background and plumbing of MCR 13 00:00:37,200 --> 00:00:40,440 and stretch and I've learned a lot and I think it will also be 14 00:00:40,440 --> 00:00:43,160 valuable for you if you're enjoying my content. 15 00:00:43,160 --> 00:00:45,480 It would mean a lot to me if you could subscribe to the channel 16 00:00:45,600 --> 00:00:47,800 and like my video to support my journey. 17 00:00:47,920 --> 00:00:50,160 Thanks a lot. Now let's dive in to this 18 00:00:50,280 --> 00:00:55,360 episode. Dan, Hillary, welcome to Bitcoin 19 00:00:55,360 --> 00:00:57,720 for Millennials. Hey Bron, thanks for having me. 20 00:00:58,720 --> 00:01:01,880 Yeah, thanks for coming on. I I thought it would be timely 21 00:01:01,880 --> 00:01:05,840 to talk to you right. Like I've talked to to Jeff 22 00:01:05,840 --> 00:01:09,400 Walton a few times about strategy stretch etcetera. 23 00:01:09,400 --> 00:01:13,120 You are also very deep into this also working with Jeff right 24 00:01:13,120 --> 00:01:17,080 with with True North. So I thought it would be nice to 25 00:01:17,080 --> 00:01:21,680 to get you on and kind of like talk through what's I think a 26 00:01:21,680 --> 00:01:24,560 lot of people are not getting, but also I want to ask you some 27 00:01:24,560 --> 00:01:27,920 questions that that I still have, right, Maybe maybe just to 28 00:01:27,920 --> 00:01:32,680 start, because it's something that I didn't know before and I 29 00:01:32,680 --> 00:01:34,240 think is is very important, right? 30 00:01:34,240 --> 00:01:36,960 A lot of people say like, oh, well, but who is buying stretch, 31 00:01:36,960 --> 00:01:38,480 right? Like who is buying these 32 00:01:38,720 --> 00:01:41,880 products? And I saw that that you kind of 33 00:01:41,880 --> 00:01:46,680 argued for, for Bitcoin to, to win, to really be established in 34 00:01:46,680 --> 00:01:51,600 the world, right, it has to eat away at this bond market that is 35 00:01:51,600 --> 00:01:55,240 basically, you know, 100 trillion that that goes on in 36 00:01:55,240 --> 00:01:58,880 there. Why, why is that the case? 37 00:01:59,000 --> 00:02:04,080 And why does that actually establish Bitcoin as you know, 38 00:02:04,120 --> 00:02:06,680 this pristine collateral or the best collateral, however you 39 00:02:06,680 --> 00:02:09,160 want to define that? Absolutely. 40 00:02:09,160 --> 00:02:10,520 I think that's a great place to start. 41 00:02:11,080 --> 00:02:13,960 Well, simply because obviously the M2 money supply is about a 42 00:02:13,960 --> 00:02:18,760 $20 trillion market. And for Bitcoin to serve as a 43 00:02:18,760 --> 00:02:23,360 encoded monetary policy asset or digital capital, there's another 44 00:02:23,360 --> 00:02:26,640 word for that. You need to attack kind of where 45 00:02:26,640 --> 00:02:31,280 value resides across all markets and in a fractional reserve 46 00:02:31,720 --> 00:02:35,560 banking and a debt based monetary system, most of that 47 00:02:35,560 --> 00:02:38,120 value is in debt. It's in the bond market, right? 48 00:02:38,120 --> 00:02:40,320 A large part of that bond market is government bonds. 49 00:02:40,320 --> 00:02:43,360 Obviously there's corporate bonds and different other forms 50 00:02:43,360 --> 00:02:47,720 of, of fixed income products in those markets, but Bitcoin 51 00:02:47,720 --> 00:02:53,000 ultimately needs to address those markets to start replacing 52 00:02:53,360 --> 00:02:57,640 Fiat backed credit. And so for example, you know, 53 00:02:57,800 --> 00:03:02,520 the most pristine form of Fiat backed credit is AT bill, right? 54 00:03:02,520 --> 00:03:06,240 It's a government debt that trades in the in the open 55 00:03:06,240 --> 00:03:08,560 market. And stable coins are effectively 56 00:03:08,760 --> 00:03:11,320 A transaction layer, an extrapolated transaction layer 57 00:03:11,480 --> 00:03:17,160 that is a payment mechanism for for for T-bills and for Fiat 58 00:03:17,160 --> 00:03:19,920 monetary policy. Stretch is this new form of 59 00:03:19,920 --> 00:03:24,800 collateral of debt that's backed by Bitcoins monetary policy. 60 00:03:25,280 --> 00:03:27,440 And we can get into some of the mechanics later and it's a 61 00:03:27,440 --> 00:03:29,600 little bit technical, but the point being is I think you need 62 00:03:29,600 --> 00:03:34,800 to think a lot of you need to think about stretch as a Bitcoin 63 00:03:34,800 --> 00:03:39,000 backed short duration credit instrument much like AT bill is 64 00:03:39,000 --> 00:03:42,000 to the US government's monetary policy. 65 00:03:42,840 --> 00:03:47,400 So I want to talk about why Bitcoin is good collateral. 66 00:03:47,400 --> 00:03:51,760 We'll, we'll get to that. But first I saw you also talk 67 00:03:51,760 --> 00:03:56,040 about how the risk is, is the asset and we are just talking 68 00:03:56,040 --> 00:03:58,760 about how Bitcoin is the collateral, IE the asset. 69 00:03:58,760 --> 00:04:03,200 So what does risk is the asset mean? 70 00:04:03,200 --> 00:04:05,520 Because all the financial advisors in the world always 71 00:04:05,520 --> 00:04:08,440 say, you know, diversify, lower the risk, etcetera. 72 00:04:09,960 --> 00:04:12,000 What does selling risk mean? Like what? 73 00:04:12,000 --> 00:04:15,080 Like why is sailor selling risk? Why is he talking about, you 74 00:04:15,080 --> 00:04:17,519 know, I'm stripping the volatility and it's lower the 75 00:04:17,519 --> 00:04:18,240 risk? Like what? 76 00:04:18,240 --> 00:04:21,880 What does that even mean? Absolutely, and I think it's 77 00:04:21,880 --> 00:04:24,760 important to start from the point of like what do you own in 78 00:04:24,760 --> 00:04:27,120 your brokerage account or when you own AT bill, right And what 79 00:04:27,120 --> 00:04:30,120 kind of risks are there? So when I own AT bill, it's it's 80 00:04:30,120 --> 00:04:32,520 backed by the good faith of that asset is backed by the good 81 00:04:32,520 --> 00:04:34,040 faith of the United States government. 82 00:04:34,040 --> 00:04:36,760 That's the collateral R Feds monetary policy. 83 00:04:37,240 --> 00:04:40,600 There's also extrapolated layers of risk there like the brokerage 84 00:04:40,600 --> 00:04:43,920 could get shut down, your bank account could be insolvent, 85 00:04:43,920 --> 00:04:45,400 etcetera, etcetera. There could be a run on the 86 00:04:45,400 --> 00:04:46,800 bank. Obviously fractional reserve 87 00:04:46,800 --> 00:04:49,320 banking makes it such that your deposits aren't there, right? 88 00:04:49,320 --> 00:04:51,800 And so there are risks associated with owning these 89 00:04:52,280 --> 00:04:55,520 instruments. Now with MSR, with strategy, 90 00:04:55,520 --> 00:05:00,760 they're acting as a de facto central bank or issuer of this 91 00:05:00,760 --> 00:05:02,600 Bitcoin backed instrument, right. 92 00:05:02,600 --> 00:05:05,520 So if you read through the prospectus of STRC, we're 93 00:05:05,520 --> 00:05:07,240 specifically talking about STRC right now. 94 00:05:07,520 --> 00:05:09,440 It's not collateralized by the Bitcoin. 95 00:05:10,040 --> 00:05:13,920 It's backed by the good faith in the credit quality of MSTR, 96 00:05:14,400 --> 00:05:17,240 excuse me, of Strategy that owns a lot of Bitcoin. 97 00:05:17,440 --> 00:05:20,920 So this is a traditional way in which insurance companies 98 00:05:20,920 --> 00:05:23,480 structure their balance sheets. Again, like if something were to 99 00:05:23,480 --> 00:05:27,720 happen to Strategy, you're not directly owed the Bitcoin, but 100 00:05:27,720 --> 00:05:31,480 Strategy has protections to investor protection such that 101 00:05:31,480 --> 00:05:33,920 they have to pay out the STRC dividend. 102 00:05:34,160 --> 00:05:38,360 So when we say STRC is backed by Bitcoin, you can look at all the 103 00:05:38,360 --> 00:05:41,680 different public markets accounting functions on their 104 00:05:41,680 --> 00:05:44,760 balance sheet and determine how much Bitcoin they hold as a 105 00:05:44,760 --> 00:05:48,160 company that can be used to continually pay out the 106 00:05:48,160 --> 00:05:52,440 perpetual dividend on STRC based on its priority in the capital 107 00:05:52,440 --> 00:05:53,800 structure. And that's really how you 108 00:05:53,800 --> 00:05:55,280 determine the credit quality of the instrument. 109 00:05:56,680 --> 00:06:00,480 So basically you're saying just like with an insurer, right, or 110 00:06:00,480 --> 00:06:05,360 a bank, there's a stack of, of capital that, well, you either 111 00:06:05,360 --> 00:06:07,920 understand or not, right? Like you understand Bitcoin or 112 00:06:07,920 --> 00:06:11,560 not, or you understand all the land the US owns, or you 113 00:06:11,560 --> 00:06:14,720 understand, you know, the balance sheet of a bank or an 114 00:06:15,000 --> 00:06:18,520 insurer, right? Like for example, mortgages with 115 00:06:18,520 --> 00:06:21,000 a bank, the collateral are old homes, right? 116 00:06:21,000 --> 00:06:23,760 So they're basically saying if all these people default or if 117 00:06:23,760 --> 00:06:26,960 the bank goes bust, we get, well, if the bank goes bust, we 118 00:06:26,960 --> 00:06:30,360 can still sell the homes. It's XYZ over collateralized and 119 00:06:30,360 --> 00:06:32,160 therefore people can get their money back. 120 00:06:32,360 --> 00:06:35,120 That's exactly right. And I think the key, the most 121 00:06:35,120 --> 00:06:37,800 important key point to understand about STRC and these 122 00:06:37,800 --> 00:06:42,080 products is that it's not. So for example, like let's say I 123 00:06:42,080 --> 00:06:46,840 were on my on a fictitious MSTR balance sheet, they had one 124 00:06:46,840 --> 00:06:51,280 Bitcoin and that was worth $80,000 and they issued $80,000 125 00:06:51,280 --> 00:06:53,200 of STRC against that one Bitcoin. 126 00:06:54,040 --> 00:06:58,800 If this were the case right that STRC would be as risky as owning 127 00:06:58,800 --> 00:07:02,160 the Bitcoin and the 13% yield wouldn't be attractive. 128 00:07:02,840 --> 00:07:07,400 The only way to issue a outstanding liability or a 129 00:07:07,400 --> 00:07:11,080 preferred equity that has a stable yield it is it has to be 130 00:07:11,080 --> 00:07:14,320 over collateralized by the Bitcoin on the balance sheet. 131 00:07:14,400 --> 00:07:19,480 So strategy has to own more Bitcoin than they're issuing USD 132 00:07:19,680 --> 00:07:23,680 nominated values of liabilities or of preferred equity. 133 00:07:23,680 --> 00:07:26,600 So they have to have generally it's about, you know, 3:00 to 134 00:07:26,600 --> 00:07:30,120 1:00 they have to own 3 to 1 Bitcoin relative to preferred 135 00:07:30,120 --> 00:07:33,480 equities outstanding because that way as bitcoins volatility 136 00:07:33,480 --> 00:07:36,520 goes up and down, up and down, up and down, the 137 00:07:36,600 --> 00:07:40,880 collateralization remains for those senior products. 138 00:07:41,160 --> 00:07:44,360 And this is important and why this can really only be done in 139 00:07:44,480 --> 00:07:48,800 a seasoned public market season issuer in a public market 140 00:07:49,320 --> 00:07:51,040 structure in a vehicle like that, so. 141 00:07:51,520 --> 00:07:52,480 What is the? Strategy. 142 00:07:52,800 --> 00:07:55,680 What is the seasoned issuer? So a seasoned issuer is someone 143 00:07:55,680 --> 00:08:00,360 who's been issuing securities in the public markets for a greater 144 00:08:00,360 --> 00:08:01,600 than a three-year period of time. 145 00:08:01,600 --> 00:08:04,200 There's a bunch of different, there's a bunch of different 146 00:08:04,800 --> 00:08:07,080 kind of requirements that you have to have a certain 147 00:08:07,080 --> 00:08:09,440 outstanding market cap, you have to have issued a certain amount 148 00:08:09,440 --> 00:08:12,280 of equity over the past few years. 149 00:08:12,480 --> 00:08:15,680 But strategy right now is the only seasoned issuer in the 150 00:08:15,680 --> 00:08:17,600 market. Strive has not yet hit that 151 00:08:17,600 --> 00:08:21,800 threshold. If something happened to you 152 00:08:21,800 --> 00:08:24,680 tomorrow, could your family access your Bitcoin? 153 00:08:25,000 --> 00:08:27,960 Not probably not. They'd figure it out, but with 154 00:08:27,960 --> 00:08:30,120 certainty. I thought about this a lot. 155 00:08:30,320 --> 00:08:33,200 Whatever custody solution you are using, inheritance is the 156 00:08:33,200 --> 00:08:35,360 piece most people haven't solved yet. 157 00:08:35,679 --> 00:08:38,960 Billions in Bitcoin have already been lost because someone died 158 00:08:38,960 --> 00:08:40,960 without a plan. With on ramp. 159 00:08:41,000 --> 00:08:44,320 Inheritance planning is built directly into your custody set 160 00:08:44,320 --> 00:08:46,720 up. Your Bitcoin stays segregated 161 00:08:46,720 --> 00:08:50,000 and in your control, secured across independent institutions 162 00:08:50,000 --> 00:08:52,880 in multiple jurisdictions, insured through Lloyds of 163 00:08:52,880 --> 00:08:56,240 London, and accessible to the people you choose when they need 164 00:08:56,240 --> 00:08:58,160 it. And it doesn't matter where in 165 00:08:58,160 --> 00:09:02,280 the world you or they are. You can book a free consultation 166 00:09:02,280 --> 00:09:05,480 to learn more at onlinebitcoin.com/brom. 167 00:09:05,680 --> 00:09:12,760 That's onlinebitcoin.com/brom. Most people stop too early with 168 00:09:12,840 --> 00:09:15,040 Bitcoin. They buy it, maybe move it to a 169 00:09:15,040 --> 00:09:17,720 wallet, and think they are done. But they're not. 170 00:09:17,920 --> 00:09:20,800 The real questions are how you're securing it, how private 171 00:09:20,800 --> 00:09:22,920 your setup is, and whether you're verifying your own 172 00:09:22,920 --> 00:09:24,800 transactions or trusting someone else. 173 00:09:25,080 --> 00:09:28,160 And what happens to your Bitcoin when something happens to you? 174 00:09:28,760 --> 00:09:31,360 This is the layer that most people ignore, and it's the most 175 00:09:31,360 --> 00:09:33,680 important one. That's why I've been working 176 00:09:33,680 --> 00:09:37,320 with the Bitcoin way to help you set up self custody properly, 177 00:09:37,320 --> 00:09:40,240 including privacy, cybersecurity, inheritance, and 178 00:09:40,240 --> 00:09:43,400 even running your own notes. And they do it without ever 179 00:09:43,400 --> 00:09:46,760 touching your Bitcoin. They're not a custodian, they're 180 00:09:46,760 --> 00:09:48,960 your support team. If you're serious about this 181 00:09:48,960 --> 00:09:51,760 like I am, go to thebitcoinway.com/brom. 182 00:09:51,760 --> 00:09:55,600 That's Bram to book a free call. They'll walk you through your 183 00:09:55,600 --> 00:09:58,680 setup, personalize everything to you, and help you get a much 184 00:09:58,760 --> 00:10:02,000 stronger position very quickly, whether you're a beginner or 185 00:10:02,000 --> 00:10:05,480 more advanced. That's the bitcoinway.com/prom. 186 00:10:05,840 --> 00:10:08,800 My idea now is that Sailor is using Bitcoin. 187 00:10:08,800 --> 00:10:11,720 That's why he talks about Bitcoin being digital capital, 188 00:10:11,880 --> 00:10:13,280 right? He's using. 189 00:10:13,440 --> 00:10:17,520 So instead of the capital on the balance sheet of a bank, you 190 00:10:17,520 --> 00:10:22,040 know which, you know, the, the, the, the Fiat capital or the 191 00:10:23,400 --> 00:10:28,320 portfolio of a real estate that has mortgages with them, right? 192 00:10:28,320 --> 00:10:31,520 Or you know, all the, all the premiums of an insurance 193 00:10:31,520 --> 00:10:35,560 company, etcetera. He's saying, you know, I'm, I'm 194 00:10:35,560 --> 00:10:38,760 doing it with Bitcoin. So conceptually these are the 195 00:10:38,760 --> 00:10:41,520 same, but he's doing it with Bitcoin, which is obviously, you 196 00:10:41,960 --> 00:10:47,000 know, digitally native, right? So he calls it digital capital, 197 00:10:47,120 --> 00:10:51,000 right? And now there's a lot of people 198 00:10:51,000 --> 00:10:53,200 that say like, well, this is not, you know, what Bitcoin is 199 00:10:53,200 --> 00:10:54,760 or how you should use it, etcetera. 200 00:10:54,760 --> 00:10:57,400 But capital is just pooled money, right? 201 00:10:57,400 --> 00:11:00,640 So he's talking about digital capital. 202 00:11:01,640 --> 00:11:04,720 I would say he's still talking about money, right? 203 00:11:05,040 --> 00:11:07,960 But then people are saying, well, this is, you know, Bitcoin 204 00:11:07,960 --> 00:11:11,480 derivative, paper, Bitcoin, etcetera, this and that. 205 00:11:12,720 --> 00:11:17,400 Why are Bitcoin derivatives good and why would they be bad? 206 00:11:17,400 --> 00:11:21,560 Or, or maybe more importantly, like if, how could like a poorly 207 00:11:21,560 --> 00:11:25,520 designed derivative market on on Bitcoin potentially kind of like 208 00:11:26,640 --> 00:11:28,600 blow up, right? I think these these are 209 00:11:28,600 --> 00:11:32,240 questions that that people have like why would it be a good 210 00:11:32,240 --> 00:11:34,120 thing? Why would it be a a bad thing? 211 00:11:36,040 --> 00:11:37,720 Yeah. That's, that's a great question. 212 00:11:37,720 --> 00:11:40,360 And I think specifically with these instruments, right, 213 00:11:40,360 --> 00:11:44,360 they're U.S., dollar denominated fixed income products backed by 214 00:11:44,360 --> 00:11:49,160 Bitcoin, there's a real ratio that the companies, the issuers 215 00:11:49,160 --> 00:11:52,720 have to get right. And that's the amount of these, 216 00:11:52,840 --> 00:11:54,960 I call them liabilities, even though they really aren't, 217 00:11:54,960 --> 00:11:56,000 right? A preferred equity isn't 218 00:11:56,000 --> 00:11:58,600 technically a liability, but for the sake of argument, let's just 219 00:11:58,600 --> 00:12:01,960 call it say it is the ratio of these liabilities to the total 220 00:12:01,960 --> 00:12:03,800 capital assets, that being the Bitcoin. 221 00:12:03,800 --> 00:12:07,000 And the balance sheet has to be maintained in a responsible 222 00:12:07,000 --> 00:12:11,240 manner because if it's not, then the credit quality of these 223 00:12:11,240 --> 00:12:15,400 liabilities of STRC of these preferred equities is, you know, 224 00:12:15,440 --> 00:12:19,480 it becomes less superior, it becomes less credit credit 225 00:12:19,480 --> 00:12:21,520 worthy. So for example, right now 226 00:12:21,600 --> 00:12:25,200 strategy has 33% amplification. That's what we call 227 00:12:25,200 --> 00:12:28,920 amplification and that's the ratio of the outstanding SDRC 228 00:12:28,920 --> 00:12:32,040 convertible debt and other preferred equities relative to 229 00:12:32,040 --> 00:12:33,880 strategies of total Bitcoin holdings. 230 00:12:34,600 --> 00:12:37,360 Forsake of argument, let's say that went to, let's say they 231 00:12:37,360 --> 00:12:41,120 just Willy nilly went and issued a lot more stretch tomorrow. 232 00:12:41,120 --> 00:12:45,520 Let's say they issued another 16 billion of stretch tomorrow. 233 00:12:46,280 --> 00:12:50,040 Now their amplification or the ratio of total liabilities to 234 00:12:50,040 --> 00:12:53,760 capital assets, that being Bitcoin would go closer to 50% 235 00:12:53,760 --> 00:12:56,600 or 60%. And in the case that Bitcoin 236 00:12:56,600 --> 00:13:00,160 were to fall by 50% over the course of a short period of 237 00:13:00,160 --> 00:13:05,800 time, now all the liabilities outstanding would be equal to 238 00:13:05,800 --> 00:13:07,440 the total Bitcoin on the balance sheet. 239 00:13:07,880 --> 00:13:10,400 And if something like that were to happen, right, this is this 240 00:13:10,400 --> 00:13:13,040 is my example of an irresponsible Capital Management 241 00:13:13,040 --> 00:13:16,560 vehicle, then there would be no over collateralization to pay 242 00:13:16,560 --> 00:13:18,920 these instruments and the instruments would trade all 243 00:13:18,920 --> 00:13:20,640 crazy. They would start trading down, 244 00:13:20,640 --> 00:13:22,800 they would start trading up based on credit quality. 245 00:13:22,800 --> 00:13:25,400 So again, it's that over collateralization in these 246 00:13:25,400 --> 00:13:29,480 public vehicles that allow over collateralization be meaning 247 00:13:29,480 --> 00:13:33,880 more Bitcoin than outstanding STRC that allows for bitcoins 248 00:13:33,880 --> 00:13:37,080 volatility to continue, but for the holders of the preferred 249 00:13:37,080 --> 00:13:39,600 equity to not experience that volatility because they're 250 00:13:39,600 --> 00:13:42,880 insulated by extra Bitcoin in the capital structure. 251 00:13:43,400 --> 00:13:48,600 Yeah. So by having this buffer. 252 00:13:48,600 --> 00:13:50,440 Buffer. Buffer's a great word, right? 253 00:13:50,440 --> 00:13:51,840 Yeah, buffer's a great word because they. 254 00:13:51,840 --> 00:13:53,680 Have this buffer. This is what they mean. 255 00:13:53,680 --> 00:13:56,360 When it's stripped, the Vol is stripped the volatility right? 256 00:13:56,360 --> 00:14:00,680 So it is a exactly? Yep, a, a, a a it is not 257 00:14:00,680 --> 00:14:03,920 Bitcoin, right? You, you can always buy, buy 258 00:14:03,920 --> 00:14:09,600 Bitcoin, but the risk profile of Bitcoin or well, risk, you know, 259 00:14:09,600 --> 00:14:12,760 I, I don't think volatility is risk, but so I don't know if 260 00:14:12,760 --> 00:14:15,200 that's the word I I need to use right. 261 00:14:16,600 --> 00:14:18,520 I like volatility. Profile, I think that's a great 262 00:14:18,520 --> 00:14:19,120 way, OK. Yeah. 263 00:14:19,120 --> 00:14:24,520 So the return profile, yeah. So of Bitcoin is way different 264 00:14:24,520 --> 00:14:29,640 also in time frame, right? Like like holding Bitcoin for a 265 00:14:29,640 --> 00:14:34,400 year is volatile in its own way, but it's in five years it is 266 00:14:35,000 --> 00:14:37,000 volatile in a in a different way. 267 00:14:37,400 --> 00:14:43,000 So if I'm understanding correctly, right, like when 268 00:14:43,160 --> 00:14:45,920 using Bitcoin to create a product like Stretch, you're 269 00:14:45,920 --> 00:14:50,880 saying the, you know, with this pack with 100, it basically 270 00:14:52,160 --> 00:14:55,360 moves around 100, right? So that is why some people say 271 00:14:55,360 --> 00:14:57,840 like Stretch, you can also see it as a stable coin, right? 272 00:14:57,840 --> 00:14:59,880 Like a stable coin is not always $1.00, right? 273 00:14:59,880 --> 00:15:04,840 Sometimes it's $0.96 or 94 and then up and down, whatever is, 274 00:15:04,840 --> 00:15:07,520 is that a good way to describe it then? 275 00:15:07,520 --> 00:15:09,360 Right. Like it, it's just a, it's a, 276 00:15:09,360 --> 00:15:12,480 it's a, it's a different thing. It is definitely not Bitcoin, 277 00:15:12,520 --> 00:15:16,360 right? It's a Fiat money product, but 278 00:15:16,480 --> 00:15:18,480 you're connecting it to, to Bitcoin. 279 00:15:18,480 --> 00:15:21,080 And I, I find it interesting because if we go back to the, 280 00:15:21,080 --> 00:15:24,400 the comparison with the risk of a country, right? 281 00:15:25,120 --> 00:15:27,400 I think, and, and also just companies in general. 282 00:15:27,400 --> 00:15:33,960 I think Jeff used in his coffee Zilla interview the, the 60 year 283 00:15:33,960 --> 00:15:37,640 bond of Ford, right? Like Ford has a 60 year bond. 284 00:15:37,920 --> 00:15:45,400 I saw Austria has 100 year bond, which is already down 40% or, or 285 00:15:45,440 --> 00:15:47,920 something like that, right? So, so no one will ever trade 286 00:15:47,920 --> 00:15:52,960 that anymore. I, I, I think this is where we 287 00:15:52,960 --> 00:15:55,960 should look, right? Like these are the, there are 288 00:15:55,960 --> 00:16:00,240 pools of capital that are actually looking for places for 289 00:16:01,600 --> 00:16:07,040 long duration allocation with a low volatility. 290 00:16:07,040 --> 00:16:10,040 Is that, is that a good way to describe it right. 291 00:16:10,040 --> 00:16:12,960 Like there is money that is looking for those places. 292 00:16:13,960 --> 00:16:17,560 Absolutely. And I go as far as SO I totally 293 00:16:17,560 --> 00:16:20,600 agree with what you're saying and these, but the one thing 294 00:16:20,600 --> 00:16:23,840 like you mentioned this, you know Austria bond is down 40%. 295 00:16:23,840 --> 00:16:29,560 When you take a bond for example US10 year note it doesn't, it 296 00:16:29,560 --> 00:16:32,720 doesn't necessitate that the principle is stable, right, 297 00:16:32,720 --> 00:16:35,640 Because interest rates can change, the credit quality of 298 00:16:35,640 --> 00:16:38,520 the issuer could change. So bonds can be quite volatile 299 00:16:38,920 --> 00:16:40,720 over long periods of time in those. 300 00:16:40,720 --> 00:16:41,720 Years, you mean? Right. 301 00:16:41,720 --> 00:16:44,040 Like exactly in those years. Yeah, exactly. 302 00:16:44,040 --> 00:16:46,200 So it's like you don't know what's going to happen with Ford 303 00:16:46,200 --> 00:16:50,320 in the next 60 years, right? It's quite a quite I, I would 304 00:16:50,320 --> 00:16:53,880 say it's quite risky if you if you if you do that, right? 305 00:16:53,880 --> 00:16:56,840 But again, different people have different risk profiles, right? 306 00:16:57,520 --> 00:16:58,720 So. Yeah. 307 00:16:58,880 --> 00:17:02,040 But just on that same point, it's like in that interim 308 00:17:02,040 --> 00:17:05,599 between the point at which the bond is issued and the point at 309 00:17:05,599 --> 00:17:08,240 which the principal is returned, plus all the coupon payments 310 00:17:08,240 --> 00:17:11,680 over the lifetime of the bond, the value of the bond can go up 311 00:17:11,680 --> 00:17:13,359 and down. It could start at 100, it could 312 00:17:13,359 --> 00:17:16,319 trade down to 80. It can trade up to 120, right? 313 00:17:16,319 --> 00:17:18,920 Like you're saying. And that that can be really 314 00:17:18,920 --> 00:17:23,040 problematic for people trying to just protect money, save money. 315 00:17:23,040 --> 00:17:24,800 And that's what Stretch ultimately solves. 316 00:17:25,079 --> 00:17:27,599 And the way to think about this is, and everything you're saying 317 00:17:27,599 --> 00:17:29,760 is, is spot on. A specifically like let's use 318 00:17:30,760 --> 00:17:32,600 U.S. government debt, right, Treasury bonds. 319 00:17:32,600 --> 00:17:37,120 So if you bought a 10 year Treasury bond today and the 10 320 00:17:37,120 --> 00:17:43,000 year note is yielding, I think it's like 4 1/2% if interest 321 00:17:43,000 --> 00:17:45,000 rates over the period of your hold. 322 00:17:45,000 --> 00:17:49,560 So you buy it for $100 and you're getting 4.5% annualized 323 00:17:49,560 --> 00:17:51,960 until you get the principal repaid at the end of the 10 year 324 00:17:52,240 --> 00:17:55,000 period of time. If interest rates, you know, 325 00:17:55,560 --> 00:17:59,200 generally controlled by the Fed, were to increase, the value of 326 00:17:59,200 --> 00:18:02,640 your bond would go from $100 in that interim period of time to 327 00:18:02,680 --> 00:18:06,440 $80.00 or $70.00 because you have to discount the future cash 328 00:18:06,440 --> 00:18:10,600 flows of that note in the future based on inflation. 329 00:18:10,760 --> 00:18:14,800 Yeah, Yeah. With stretch it's amazing 330 00:18:14,800 --> 00:18:19,280 because it's price based on the 30 day trailing volume weighted 331 00:18:19,280 --> 00:18:23,360 average price of stretch to be designed to trade around 100. 332 00:18:23,840 --> 00:18:27,320 So you don't take on interest rate risk, you don't take on 333 00:18:27,320 --> 00:18:31,080 principal risk in the same way you would with a fixed, fixed 334 00:18:31,080 --> 00:18:34,320 term bond. But the interest rate can 335 00:18:34,320 --> 00:18:37,520 fluctuate. For example, if the sofa rate or 336 00:18:37,520 --> 00:18:42,400 the short term funding rate were to go down to 2%, it's likely 337 00:18:42,600 --> 00:18:46,240 over a period of time that stretches annualized yield could 338 00:18:46,240 --> 00:18:49,840 drop from because there be so much demand from 11 1/2 to 11 to 339 00:18:49,840 --> 00:18:52,600 10. So by holding Stretch, you're 340 00:18:52,600 --> 00:18:57,280 not guaranteed an interest rate, but you are based on the 341 00:18:57,280 --> 00:18:59,600 creditworthiness and the execution of strategy. 342 00:18:59,600 --> 00:19:02,960 As a management team, you are betting that the principal will 343 00:19:02,960 --> 00:19:04,560 stay stable. And for a lot of people, that's 344 00:19:04,560 --> 00:19:06,720 like a bank account. They want the stable principal 345 00:19:07,040 --> 00:19:09,480 and don't want to have to speculate on where interest 346 00:19:09,480 --> 00:19:11,600 rates will be in the future. So that's what's amazing about 347 00:19:11,600 --> 00:19:13,800 this product. And it has to be done in a 348 00:19:13,800 --> 00:19:17,120 preferred equity with a preferred equity instrument with 349 00:19:17,120 --> 00:19:18,680 an ATM on it. And we could talk about that 350 00:19:18,680 --> 00:19:21,400 later, but it's actually a novel structure, stretches the only 351 00:19:21,400 --> 00:19:23,520 product like it in the market. Yeah. 352 00:19:23,920 --> 00:19:28,200 So for millennials that listen and who hear credit market, 353 00:19:28,200 --> 00:19:31,480 right, a lot of people would probably think about the 2008 354 00:19:32,440 --> 00:19:35,800 crash. I've I've talked quite a lot 355 00:19:35,800 --> 00:19:37,920 about this and then I wonder what do you think? 356 00:19:37,920 --> 00:19:41,640 But like how is a is a Bitcoin backed credit system 357 00:19:42,080 --> 00:19:47,440 fundamentally more honest than than a similar type of of 358 00:19:47,440 --> 00:19:50,400 product or scheme in in a Fiat system? 359 00:19:50,400 --> 00:19:52,120 Yeah. And I haven't spent too much 360 00:19:52,120 --> 00:19:55,120 time thinking about this, but the way I I think about it in my 361 00:19:55,120 --> 00:20:01,560 mind is you can think of Stretch as so when a bank issues, you 362 00:20:01,560 --> 00:20:04,960 know, credit in the form of money, it's fractionally 363 00:20:04,960 --> 00:20:07,120 reserved. So the bank doesn't have the 364 00:20:07,120 --> 00:20:10,000 reserves to back all the outstanding liabilities, that is 365 00:20:10,000 --> 00:20:12,880 the circulating M2 money supply with Stretch. 366 00:20:14,280 --> 00:20:16,840 It's over collateralized by the Bitcoin holdings. 367 00:20:17,120 --> 00:20:20,360 So you could argue that it's instead of a fractional reserve, 368 00:20:20,360 --> 00:20:24,040 it's an over collateralized reserve or a fully reserved note 369 00:20:24,440 --> 00:20:27,920 or outdoor paper money issuance that's backed by the Bitcoin. 370 00:20:28,480 --> 00:20:32,760 So I think we're seeing this new form of, you know, we're seeing 371 00:20:32,760 --> 00:20:34,880 this in stable coins too. And this is a bit of a tangent, 372 00:20:34,880 --> 00:20:39,560 but stable coins are an example of a fully reserved, a fully 373 00:20:39,560 --> 00:20:44,200 reserved asset, right, because they are backed by T-bills and 374 00:20:44,200 --> 00:20:46,760 verifiable assets held on the issuer's balance sheet. 375 00:20:47,320 --> 00:20:51,080 Although those those assets may be impaired and and losing money 376 00:20:51,080 --> 00:20:54,320 over time, which I would argue they are, it's not a fractional 377 00:20:54,320 --> 00:20:55,680 reserve. So stablecoins are a fully 378 00:20:55,680 --> 00:21:00,200 reserved kind of new type of banking system and Stretch is a 379 00:21:00,200 --> 00:21:04,680 Bitcoin reserved Bitcoin collateralized instrument. 380 00:21:04,960 --> 00:21:08,400 And the reason you can offer such high yields on something 381 00:21:08,400 --> 00:21:11,040 over collateralized by Bitcoin is because of Bitcoins 382 00:21:11,120 --> 00:21:14,240 performance relative to the US dollar, Yeah. 383 00:21:14,480 --> 00:21:16,920 And I think this is a great point because this is where kind 384 00:21:16,920 --> 00:21:20,200 of like the divergent, I would say takes takes place, right? 385 00:21:20,200 --> 00:21:24,560 Because if you, if you don't understand Bitcoin or agree on 386 00:21:24,560 --> 00:21:29,120 the, the thesis of where it's going in the future, I think 387 00:21:29,120 --> 00:21:33,960 this is where a lot of people actually, and, and I want to 388 00:21:33,960 --> 00:21:36,320 emphasize, you know, I'm not a fan or a hater. 389 00:21:36,320 --> 00:21:39,720 I just think it's interesting because it's also new and, and 390 00:21:39,720 --> 00:21:44,160 again, I haven't been as deep in it as as you, but I'm happy to 391 00:21:44,160 --> 00:21:46,640 hear that I do get it up until a certain degree. 392 00:21:47,400 --> 00:21:51,840 What you're saying about, you know, the I, I, I, I think a 393 00:21:51,840 --> 00:21:54,880 similar thing is happening here with, with, with trying Bitcoin 394 00:21:54,880 --> 00:21:56,880 in the mix, right? Like people don't understand 395 00:21:56,880 --> 00:21:59,960 Bitcoin and therefore they have no clue how all of this works. 396 00:21:59,960 --> 00:22:03,360 What what we're talking about. But the interesting part is that 397 00:22:03,640 --> 00:22:06,960 they also have no fucking clue as to how a bank works in 398 00:22:06,960 --> 00:22:10,520 general, right? Or what the full faith and, and 399 00:22:10,520 --> 00:22:13,840 credit worthiness of, of the American government even even 400 00:22:13,840 --> 00:22:16,840 means. Or how deep, you know, the 401 00:22:16,840 --> 00:22:19,840 rabbit hole of exporting inflation around the world and, 402 00:22:19,840 --> 00:22:23,920 you know, IMF and all that stuff actually goes. 403 00:22:24,520 --> 00:22:27,680 I mean, the whole industry of financial advisors that advise 404 00:22:27,680 --> 00:22:29,840 you to buy, you know, T-bills and blah, blah, blah. 405 00:22:29,840 --> 00:22:35,960 Like it is all part of keeping this facade up, right? 406 00:22:35,960 --> 00:22:38,400 And I think you're saying, you know, stable coins are, are 407 00:22:38,400 --> 00:22:41,320 fully backed by treasuries, but then still, you know, what are 408 00:22:41,320 --> 00:22:43,680 treasuries worth? We just talked about it, right? 409 00:22:43,680 --> 00:22:45,560 They are, they are not worth anything. 410 00:22:45,560 --> 00:22:49,160 You know, over time, you are nominally, you know, it's, it's 411 00:22:49,160 --> 00:22:54,400 a, it's a, it's a real negative rate of return eventually in 412 00:22:54,400 --> 00:22:57,920 purchasing power, which is the entire goal of actually 413 00:22:58,120 --> 00:23:01,960 deploying capital into a certain asset, right, to mitigate the, 414 00:23:02,200 --> 00:23:06,560 the, the debasement, right. So I think this is where a lot 415 00:23:06,560 --> 00:23:14,400 of people kind of glitch because if you have the anti Bitcoin 416 00:23:14,400 --> 00:23:19,440 credit product argument, do you automatically have the pro, you 417 00:23:19,440 --> 00:23:21,320 know, government Fiat Ponzi argument? 418 00:23:21,680 --> 00:23:24,440 I don't necessarily think so, but this is the point where you 419 00:23:24,440 --> 00:23:28,760 actually have to understand the the the Fiat credit Ponzi as 420 00:23:28,760 --> 00:23:33,760 well in order to actually have a side by side opinion. 421 00:23:33,760 --> 00:23:36,040 Does that does that make sense? Like does that resonate? 422 00:23:36,320 --> 00:23:38,320 No. That makes perfect sense and 423 00:23:38,320 --> 00:23:41,160 really interestingly, I mean how Thinny actually wrote about this 424 00:23:41,160 --> 00:23:44,360 in a talk forum in 2010, he said. 425 00:23:44,520 --> 00:23:46,440 I forget the exact quote, but it's something along the lines 426 00:23:46,440 --> 00:23:49,680 of Bitcoin as serving as a reserve asset, a collateral 427 00:23:49,680 --> 00:23:53,280 asset between banks that settled between banks, against which 428 00:23:53,280 --> 00:23:56,680 banks issue their own kind of paper currency collateralized by 429 00:23:56,680 --> 00:24:00,080 the Bitcoin, and they'd offer different rates of returns for 430 00:24:00,080 --> 00:24:03,920 holders based on how over collateralized their issuance 431 00:24:03,920 --> 00:24:07,280 were by the Bitcoin. That's exactly what STRC is 432 00:24:07,280 --> 00:24:08,800 happening. Yeah, it's exactly. 433 00:24:08,800 --> 00:24:13,160 What's happening and yeah, and even more so like we're seeing 434 00:24:13,160 --> 00:24:16,840 the competition between strive and and and MSN strategy, right? 435 00:24:16,840 --> 00:24:22,680 Like STRC offers 11.5% Strive, which has a higher leverage 436 00:24:22,680 --> 00:24:26,080 ratio, or they issue more SATA against their Bitcoin has to 437 00:24:26,080 --> 00:24:29,720 offer a higher return. So 13% because it's by nature a 438 00:24:29,720 --> 00:24:32,040 little bit riskier. So that that's exactly what how 439 00:24:32,040 --> 00:24:34,080 Finney predicted between banks. That's just happening in public 440 00:24:34,080 --> 00:24:38,040 markets, yeah. So you now I kind of want to 441 00:24:38,040 --> 00:24:44,440 switch to maybe a bit bit deeper in in stretch like I've called 442 00:24:44,440 --> 00:24:46,600 this. Part. 443 00:24:46,600 --> 00:24:50,040 Jokingly part serious, it's kind of like an infinite money 444 00:24:50,040 --> 00:24:53,440 glitch. If if there is so much money 445 00:24:53,840 --> 00:24:58,120 that is, you know, sloshing around trying to find a way to 446 00:24:58,840 --> 00:25:01,160 mitigate the debasement essentially, right. 447 00:25:01,160 --> 00:25:07,240 So preserving of capital before potentially growing, growing it. 448 00:25:09,920 --> 00:25:12,480 There is so much money. There's way more money than any 449 00:25:12,480 --> 00:25:15,600 general person can imagine, apparently, right? 450 00:25:15,600 --> 00:25:19,000 There's there, there at least 100 trillion that's trying to 451 00:25:19,000 --> 00:25:22,080 find that that place. It's just that's a, that's a 452 00:25:22,080 --> 00:25:25,640 crazy number, right? So it's there's basically like 453 00:25:25,640 --> 00:25:29,440 this menu of all these different types of things that you could 454 00:25:29,440 --> 00:25:30,720 buy. They all have their different 455 00:25:30,720 --> 00:25:34,520 durations risk profile according to how much I would say you 456 00:25:34,560 --> 00:25:39,120 understand the collateral or if you look at the Moody's or like 457 00:25:39,600 --> 00:25:45,160 you know, or the, the, the, the rating, however you judge the 458 00:25:45,160 --> 00:25:47,760 risk, right? You are looking for places to to 459 00:25:47,760 --> 00:25:51,560 put that money you talk about stretch as a variable cost of 460 00:25:51,720 --> 00:25:54,920 capital. Now I'd never heard about that. 461 00:25:54,920 --> 00:26:00,000 So maybe you can kind of explain why having a like fluctuating 462 00:26:00,000 --> 00:26:04,680 cost of of money is actually a competitive advantage for this 463 00:26:05,080 --> 00:26:09,200 flywheel that sailor, but also strive, you know, is is is 464 00:26:09,200 --> 00:26:14,280 trying to to create with the goal again, I would say to 465 00:26:14,320 --> 00:26:17,600 acquire as much of the hardest money to ever exist, the best, 466 00:26:17,600 --> 00:26:20,440 most pristine collateral, etcetera to to ever exist. 467 00:26:21,440 --> 00:26:24,040 OK. So I think the place to start is 468 00:26:24,040 --> 00:26:26,280 to look at your bank account. And so if you have a bank 469 00:26:26,280 --> 00:26:28,560 account and you want to store money, you can put it in a high 470 00:26:28,560 --> 00:26:31,920 yield savings account. And generally what the banks do 471 00:26:31,920 --> 00:26:34,520 is they loan out the money. When you deposit money into the 472 00:26:34,520 --> 00:26:37,000 bank, they loan it out, they get a return and they pass through 473 00:26:37,000 --> 00:26:39,720 some of that yield, that return to you and your savings account. 474 00:26:40,440 --> 00:26:43,480 Another way to get a return on your money without having it 475 00:26:43,480 --> 00:26:46,480 fluctuate up or down is to put it in a money market fund. 476 00:26:46,720 --> 00:26:49,560 And that money market fund will have a variable yield because 477 00:26:49,560 --> 00:26:52,480 it's backed by a ladder of short duration U.S. 478 00:26:52,480 --> 00:26:55,320 Treasuries. So one month it may be yielding 479 00:26:55,320 --> 00:26:58,120 4% in the next month it may be 3.9%. 480 00:26:58,600 --> 00:27:02,560 But what you can count on is your $100 being $100 overtime. 481 00:27:03,080 --> 00:27:07,600 So this is a variable variable rate or variable return, but 482 00:27:07,600 --> 00:27:12,800 stable principal instrument. In public markets, there have 483 00:27:12,800 --> 00:27:15,720 been attempts to have this similar sort of product or 484 00:27:15,720 --> 00:27:19,520 instrument and one of those is so obviously we talked about how 485 00:27:19,520 --> 00:27:24,960 bonds, the principal fluctuates over time because of the change 486 00:27:24,960 --> 00:27:27,120 in the credit quality of the company or the change in 487 00:27:27,120 --> 00:27:31,120 interest rates between issuance and the point of repayment. 488 00:27:32,080 --> 00:27:33,960 There have been other instruments that have tried to 489 00:27:33,960 --> 00:27:36,440 stay stable that are issued by public companies. 490 00:27:36,440 --> 00:27:38,480 One, for example, have been preferred equities that are 491 00:27:38,480 --> 00:27:41,760 benchmarked to SOFR. For example, I'm a company and I 492 00:27:41,760 --> 00:27:46,640 issue a preferred stock and I say it's going to, you know, if 493 00:27:46,640 --> 00:27:51,240 the SOFR or the short term fed funds rate goes down by 1%, my 494 00:27:51,240 --> 00:27:55,360 instrument will yield 1% less. So it'll go from issuing it 495 00:27:55,360 --> 00:27:59,520 being 8% yield to 7% yield. However, as the company's credit 496 00:27:59,520 --> 00:28:02,240 quality changes, as you know, developments happen as the 497 00:28:02,240 --> 00:28:05,320 company succeeds or fails, the market begins pricing it 498 00:28:05,320 --> 00:28:07,760 differently and it's difficult for the principal to stay 499 00:28:07,760 --> 00:28:11,160 stable. So your $100 may go to 95 or 80 500 00:28:11,160 --> 00:28:14,760 and not recover. OK, so what's what's novel about 501 00:28:14,760 --> 00:28:17,160 STRC with regards to the public markets? 502 00:28:17,480 --> 00:28:19,320 Well, it's really the only instance. 503 00:28:19,680 --> 00:28:21,960 It's the only instance in history where there's been a 504 00:28:21,960 --> 00:28:25,680 security issued by a public company that has successfully 505 00:28:25,680 --> 00:28:30,600 maintained a stable price. And the way they've done it is 506 00:28:30,600 --> 00:28:34,720 with the ATM. The ATM facility is a public 507 00:28:34,720 --> 00:28:37,640 company's ability to issue new shares in real time. 508 00:28:38,160 --> 00:28:40,840 Strategy uses it to limit the price at 100. 509 00:28:40,840 --> 00:28:43,840 So whenever the price of SDRC hits 100, they issue a lot of 510 00:28:43,840 --> 00:28:46,480 shares that's sell pressure in the market and they keep the 511 00:28:46,480 --> 00:28:50,440 price pinned there at 100. Now how do they limit, how do 512 00:28:50,440 --> 00:28:53,440 they increase the price of it? If it were to slip below 100, 513 00:28:53,440 --> 00:28:57,400 right, STRC falls to 95, for example, they have to be able to 514 00:28:57,400 --> 00:29:01,400 raise the dividend as a response to the market pricing the 515 00:29:01,400 --> 00:29:03,640 instrument. So that's the major, major 516 00:29:03,640 --> 00:29:07,120 unlock is they, they change the dividend on a monthly basis for 517 00:29:07,120 --> 00:29:12,640 STRC based on the 30 day weighted price over the prior 30 518 00:29:12,640 --> 00:29:15,680 day trading days. So for example, if STRC is below 519 00:29:15,680 --> 00:29:19,800 99, they increase the price, the dividend rate, which should push 520 00:29:19,800 --> 00:29:23,200 the instrument up. So those two mechanisms are the 521 00:29:23,200 --> 00:29:25,440 two mechanisms by which they stabilize it at 100. 522 00:29:25,480 --> 00:29:29,240 And before STRC, there was no preferred equity in the market 523 00:29:29,400 --> 00:29:31,560 that had a shelf registration ATM on it. 524 00:29:31,840 --> 00:29:35,160 So they couldn't limit the price at that upward bound. 525 00:29:35,440 --> 00:29:41,680 It's completely new. So in in that previous instance 526 00:29:42,080 --> 00:29:47,360 it was also more tied to the performance of the company then 527 00:29:47,360 --> 00:29:51,760 also right. Like is that correct exactly? 528 00:29:51,760 --> 00:29:54,680 So the the unlock. Let me try to say it more 529 00:29:54,680 --> 00:29:56,880 clearly. Prior to SDRC there were 530 00:29:56,880 --> 00:30:00,160 preferred equities that benchmarked off the sofa rate, 531 00:30:00,360 --> 00:30:03,720 so they they would offer 500 basis points, which is a fancy 532 00:30:03,720 --> 00:30:07,320 way of saying 5% above the sofa rate right now. 533 00:30:07,320 --> 00:30:10,480 That's about 4% to. To be attractive to to get 534 00:30:10,480 --> 00:30:12,040 capital. Exactly. 535 00:30:12,040 --> 00:30:13,240 And that's how they very standard. 536 00:30:13,240 --> 00:30:14,000 Rate. Yeah, exactly. 537 00:30:14,000 --> 00:30:15,360 Yeah, OK. And they tried to. 538 00:30:15,360 --> 00:30:17,280 Stabilize the principle that way, right? 539 00:30:17,280 --> 00:30:19,320 Because a lot of bonds will change in price based on the 540 00:30:19,320 --> 00:30:21,960 change in sofa. They're saying we'll change the 541 00:30:22,000 --> 00:30:25,600 yield based on the change in sofa, but that was ultimately 542 00:30:25,600 --> 00:30:27,760 flawed. And so because the credit 543 00:30:27,760 --> 00:30:31,400 quality of the company could change with STRC, now the yield 544 00:30:31,400 --> 00:30:35,400 is priced based on the price at which the market values. 545 00:30:35,400 --> 00:30:38,480 STRCSTRC goes down, the yield goes up. 546 00:30:39,280 --> 00:30:41,560 I know it sounds kind of simple. Now we're talking about it like, 547 00:30:41,960 --> 00:30:45,160 you know, STRC down, yield up, pushes price back up to par. 548 00:30:45,160 --> 00:30:47,840 That's a simple mechanism. It's never been executed in 549 00:30:47,840 --> 00:30:51,200 public markets before. For my European friends that 550 00:30:51,200 --> 00:30:54,000 want to buy Bitcoin with ease, check out Relay. 551 00:30:54,200 --> 00:30:56,240 I've been a long time fan and happy to partner. 552 00:30:56,240 --> 00:30:59,360 Up with what I think is the best Bitcoin only platform for 553 00:30:59,360 --> 00:31:01,920 Europeans. 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You need cash, maybe a house 564 00:31:34,600 --> 00:31:36,920 deposit, an emergency or a tax bill. 565 00:31:36,920 --> 00:31:39,920 And you're staring at your stack thinking, Do I really want to 566 00:31:39,920 --> 00:31:42,520 sell this? Here's the thing, you don't have 567 00:31:42,520 --> 00:31:43,840 to. You can borrow against your 568 00:31:43,840 --> 00:31:46,400 Bitcoin instead. So there's also no taxable event 569 00:31:46,400 --> 00:31:48,760 and your stack can keep on stacking. 570 00:31:49,040 --> 00:31:52,120 This is where Firefish comes in. A peer-to-peer marketplace for 571 00:31:52,120 --> 00:31:55,640 Bitcoin backed loans. And Firefish isn't a lender. 572 00:31:55,640 --> 00:31:58,160 They built the protocol that makes this all possible. 573 00:31:58,320 --> 00:32:02,680 Which is exactly why they never ever have to touch your Bitcoin 574 00:32:03,040 --> 00:32:05,480 during your loan. Your Bitcoin sits in an on chain 575 00:32:05,480 --> 00:32:07,680 multi sick secured by open source code. 576 00:32:07,760 --> 00:32:10,480 You can easily create a loan request with your desired 577 00:32:10,480 --> 00:32:13,120 amount, duration and interest rate and share it on their 578 00:32:13,120 --> 00:32:17,080 marketplace at firefish dot IO. When you get matched and decide 579 00:32:17,080 --> 00:32:20,640 to accept a loan offer, you can use code BRUM to get 30% of your 580 00:32:20,640 --> 00:32:24,280 first loans fees. That's firefish dot IO and code 581 00:32:24,400 --> 00:32:26,600 BRUM. Why is it so then that stretch 582 00:32:26,600 --> 00:32:29,840 can actually be 11%? Is that like necessary to to 583 00:32:29,840 --> 00:32:33,440 just like kick start the capital flow and it eventually goes down 584 00:32:33,440 --> 00:32:38,440 to, I don't know, 9 or 8 1/2, which is still way above, you 585 00:32:38,440 --> 00:32:43,160 know, let's say baseline interest rate, especially toward 586 00:32:43,160 --> 00:32:45,640 the future, right. I think that plays in into it. 587 00:32:47,400 --> 00:32:50,480 But also, and I don't know if that's connected, but in my mind 588 00:32:50,480 --> 00:32:54,240 it is like, I wanted to ask you like, but yeah, but what if over 589 00:32:54,240 --> 00:32:58,640 the next 10 years, you know, they issue, I don't know, 100 590 00:32:58,640 --> 00:33:02,520 billion extra stock certificates, right? 591 00:33:02,520 --> 00:33:06,200 Like, would that actually matter? 592 00:33:06,200 --> 00:33:10,040 Like does it matter how much outstanding units of stock there 593 00:33:10,040 --> 00:33:11,120 are? Look. 594 00:33:11,840 --> 00:33:13,600 It's a great point. And I think there's a lot of 595 00:33:13,600 --> 00:33:18,440 variables here and it's all reflected in SCRC demand, right? 596 00:33:18,440 --> 00:33:22,880 So as long as there's demand at $100, strategy can issue more 597 00:33:22,880 --> 00:33:26,840 stretch. And if there's a lack of demand 598 00:33:26,840 --> 00:33:30,240 at $100, then strategy will increase the interest rate. 599 00:33:31,000 --> 00:33:34,560 And the amazing thing is it's really the market finding that 600 00:33:34,560 --> 00:33:38,800 equilibrium and the higher for longer strategies willing to 601 00:33:38,800 --> 00:33:42,120 keep the interest rate on stretch, the more they can issue 602 00:33:42,120 --> 00:33:45,720 at 100 because there will be increased demand at the demand 603 00:33:45,720 --> 00:33:48,920 for stretch is really only a function of the creditworthiness 604 00:33:49,160 --> 00:33:53,120 of strategy so that Bitcoin is collateral and the interest 605 00:33:53,120 --> 00:33:56,320 rate. So, you know, Sailor on the most 606 00:33:56,320 --> 00:33:59,280 recent earnings call said he'd be willing to keep the interest 607 00:33:59,280 --> 00:34:04,040 rate at 11.5% for a sustained period of time in order to issue 608 00:34:04,040 --> 00:34:06,400 more stretch. Like for example, if the 609 00:34:06,400 --> 00:34:09,840 interest rate, if stretch, if there was just unlimited demand 610 00:34:09,840 --> 00:34:14,080 for stretch, if there was, then strategy has two options to curb 611 00:34:14,080 --> 00:34:17,360 that demand, essentially to limit the price at 100 and 612 00:34:17,360 --> 00:34:21,159 that's to continue issuing at 100 to cap the price or to lower 613 00:34:21,159 --> 00:34:24,520 the interest rate. And there will come a point in 614 00:34:24,520 --> 00:34:27,000 time where they will likely lower the interest rate. 615 00:34:27,000 --> 00:34:29,920 Saylor has talked about the cost of capital over over 10 years 616 00:34:29,920 --> 00:34:33,040 being about 8% for stretch. So he's saying it will likely 617 00:34:33,040 --> 00:34:36,840 come down. But that's a function of them 618 00:34:36,880 --> 00:34:40,280 kind of selling out of stretch, of having so much demand that 619 00:34:40,280 --> 00:34:43,000 they've issued so much that their balance sheet no longer 620 00:34:43,000 --> 00:34:45,000 has capacity for more stretch issuance. 621 00:34:45,000 --> 00:34:47,239 I don't think we're anywhere close to that that point yet. 622 00:34:48,400 --> 00:34:52,520 OK, so also in the, in the earnings call, there was a lot 623 00:34:52,520 --> 00:34:56,600 of noise, right? That on, on, on X and wherever, 624 00:34:56,600 --> 00:34:59,920 you know, Sailor mentioned, you know, possibly selling etcetera. 625 00:35:01,240 --> 00:35:04,080 Yeah, I, I told you in the beginning my idea around this, 626 00:35:04,080 --> 00:35:06,200 right? Like I'd, I, I don't think it's 627 00:35:06,200 --> 00:35:13,200 an issue if you have to pay Bitcoin to, to pay for stretch. 628 00:35:13,320 --> 00:35:16,120 That sounds very Ponzi ish, obviously. 629 00:35:19,240 --> 00:35:22,960 But yeah, if if it makes you survive across, I don't know, a 630 00:35:22,960 --> 00:35:26,640 bear market or a whatever, because you have a long term 631 00:35:27,120 --> 00:35:32,000 thesis, right, 1020 year thesis or you know, the sailor talks 632 00:35:32,000 --> 00:35:36,360 about 2042 before, right? Like as to where the value of 633 00:35:36,360 --> 00:35:39,960 Bitcoin is, then in my opinion, it doesn't really matter. 634 00:35:39,960 --> 00:35:42,200 But I would love to hear from you why? 635 00:35:43,480 --> 00:35:47,560 Why it doesn't matter, or why it does matter, You know, why did 636 00:35:47,560 --> 00:35:52,800 he even say that? So my, my thinking is that the 637 00:35:52,800 --> 00:35:56,520 reason he said he'd be willing to sell Bitcoin is because it 638 00:35:56,520 --> 00:36:01,640 makes it seem to credit rating agencies and index agents and 639 00:36:01,720 --> 00:36:07,080 you know, indices like the S&P 500 listing committees that the 640 00:36:07,080 --> 00:36:11,160 capital gains from Bitcoin are being paid are being used to pay 641 00:36:11,160 --> 00:36:14,040 the stretch dividend by selling Bitcoin to pay dividends or 642 00:36:14,040 --> 00:36:18,560 having the ability to it, it shows people that the dividends 643 00:36:18,560 --> 00:36:21,480 are being paid by capital appreciation of the assets on 644 00:36:21,480 --> 00:36:24,240 the balance sheet instead of by new capital in the door. 645 00:36:24,680 --> 00:36:28,880 You know, right now strategy will continue to pay dividends 646 00:36:28,880 --> 00:36:32,360 with stock issuance and they laid out quite clearly that 647 00:36:32,360 --> 00:36:35,920 whenever stock is trading at a premium to NAV, it's more 648 00:36:35,920 --> 00:36:39,920 accretive to sell the stock and use that to pay the dividends on 649 00:36:39,920 --> 00:36:42,160 the preferred equities. But for example, of 650 00:36:42,160 --> 00:36:45,040 Schwarzhammer, the stock below 1.2 * M NAV. 651 00:36:46,400 --> 00:36:49,440 And that's just the scenario in which the common equity is 652 00:36:49,440 --> 00:36:51,000 trading very close to book value. 653 00:36:51,760 --> 00:36:55,440 Then they could trim some Bitcoin and pay the pref 654 00:36:55,440 --> 00:36:58,720 divisions instead of selling the equity when it would be 655 00:36:58,720 --> 00:37:01,520 destructive to Bitcoin per share to sell the equity. 656 00:37:01,760 --> 00:37:03,960 That's that's just a complicated way of saying when the equity is 657 00:37:03,960 --> 00:37:07,640 undervalued, MSTR, it's more advantageous or beneficial to 658 00:37:07,640 --> 00:37:10,360 shareholders if they trim off a little bit of Bitcoin and pay 659 00:37:10,360 --> 00:37:14,200 the dividends and it makes so that's that's the mechanical 660 00:37:14,200 --> 00:37:15,880 reason for a Bitcoin per share basis. 661 00:37:16,200 --> 00:37:19,120 There's the secondary reason is the optics look a lot better 662 00:37:19,440 --> 00:37:21,960 when they sell a little bit of Bitcoin or have the option to to 663 00:37:21,960 --> 00:37:25,640 pay dividends because it comes from capital appreciation, not 664 00:37:25,640 --> 00:37:27,840 new raised capital. Yeah. 665 00:37:27,840 --> 00:37:29,880 Exactly. So there's a huge difference 666 00:37:29,880 --> 00:37:34,880 between the Ponzi argument and the actual mechanic, right? 667 00:37:35,760 --> 00:37:38,640 And, and also, like you're saying, it also respects the, 668 00:37:38,880 --> 00:37:42,560 the, the MSCR shareholders to to a degree, right, Because 669 00:37:42,720 --> 00:37:49,040 diluting their, you know, the, the, the shares amount. 670 00:37:49,400 --> 00:37:52,880 And also, I would say then he's actually using Bitcoin as 671 00:37:52,880 --> 00:37:55,320 capital, right? Like, isn't that the whole point 672 00:37:55,840 --> 00:37:58,840 that that he's using it? I would also say that it adds to 673 00:37:58,840 --> 00:38:03,600 distribution of set Bitcoin. I think it also helps at 674 00:38:03,600 --> 00:38:06,280 another, another, another question, obviously around, you 675 00:38:06,280 --> 00:38:11,320 know, can he get too big? Well, if he uses, you know, 676 00:38:11,320 --> 00:38:14,200 because that that's I think why he shouts it from the rooftops, 677 00:38:14,200 --> 00:38:16,560 like, hey, guys, this is my playbook, right, Because I think 678 00:38:16,560 --> 00:38:22,480 the optics are, are bad, right? If he has 22 million Bitcoin, 679 00:38:23,760 --> 00:38:27,880 you know, I, I don't think that would be a good thing in 680 00:38:27,880 --> 00:38:30,960 general, if still not enough people care about Bitcoin and 681 00:38:30,960 --> 00:38:33,880 there's actually, you know, growing, growing demand. 682 00:38:33,880 --> 00:38:37,040 So use it using Bitcoin as, as capital, right? 683 00:38:37,040 --> 00:38:42,720 Just in, in a, in a classic way, like, you know, a country could 684 00:38:42,720 --> 00:38:47,000 sell an airport or a harbor or you know what, whatever a 685 00:38:47,000 --> 00:38:50,800 country can sell to actually pay for whatever obligation they 686 00:38:50,800 --> 00:38:54,040 have, right? This is in my mind kind of like 687 00:38:54,400 --> 00:38:57,560 a similar thing. Yeah, Yeah. 688 00:38:57,760 --> 00:39:02,600 It's I mean, I think it's great signal for the market, OK, so. 689 00:39:03,720 --> 00:39:08,840 If if the stretch yield is 10 to 12%, Bitcoin grows at a 25 or 690 00:39:08,840 --> 00:39:13,920 50% kegger, you know, whatever model you want to follow to 691 00:39:13,920 --> 00:39:16,680 maybe dismantle the Ponzi part, who's actually paying for the 692 00:39:16,680 --> 00:39:17,520 yield? Is it? 693 00:39:17,520 --> 00:39:20,440 Is it just like a transfer of wealth from from people that 694 00:39:20,440 --> 00:39:22,920 have dollars to? The. 695 00:39:22,920 --> 00:39:26,600 Holder of Bitcoin? Is it an arbitrage on kind of 696 00:39:26,600 --> 00:39:29,560 like Fiat money ignorance? I heard a great analogy, someone 697 00:39:29,560 --> 00:39:35,280 said my, my editor Gary, he said it's like sailor is selling sand 698 00:39:35,480 --> 00:39:39,720 in the desert and people because they see sand around them, they 699 00:39:39,720 --> 00:39:42,120 think sand is valuable or something. 700 00:39:42,480 --> 00:39:46,280 But he's buying water, right? Like he's selling sand and he's 701 00:39:46,280 --> 00:39:48,200 buying water or some something like that. 702 00:39:48,520 --> 00:39:53,520 It is it just an arbitrage on, on, on, on, on, on ignorance or 703 00:39:53,520 --> 00:39:57,720 is that, is that too simple to to to kind of like classify 704 00:39:57,720 --> 00:39:58,840 this? Because if you understand 705 00:39:58,840 --> 00:40:01,760 Bitcoin, right, like you have to understand Bitcoin to a degree 706 00:40:02,240 --> 00:40:04,640 to get stretch or maybe you think not, right? 707 00:40:04,640 --> 00:40:07,000 But like why, why wouldn't you buy the Bitcoin? 708 00:40:07,000 --> 00:40:11,160 Like, yeah, I'd be interested to hear your thoughts on that. 709 00:40:11,760 --> 00:40:13,360 Yeah. I think it's what we talked 710 00:40:13,360 --> 00:40:15,480 about earlier. It's return profile, right? 711 00:40:15,480 --> 00:40:18,000 Like different people have different necessities for a 712 00:40:18,000 --> 00:40:21,000 return profile. Like for short term capital, if 713 00:40:21,000 --> 00:40:23,960 I need to pay taxes with if I have 100 grand, I need to pay 714 00:40:23,960 --> 00:40:29,440 taxes with in six months time, I can't, I can't stomach a 50% 715 00:40:29,440 --> 00:40:31,880 drawdown with that capital over that period of time. 716 00:40:31,920 --> 00:40:35,560 Obviously Bitcoin has had historical volatility, so you 717 00:40:35,560 --> 00:40:38,520 need shorter duration capital that you can count on the 718 00:40:38,520 --> 00:40:44,440 principal being returned and and that's the benefit of stretch to 719 00:40:44,440 --> 00:40:46,720 that point. You know, bitcoins going to 720 00:40:47,040 --> 00:40:49,400 bitcoins, the raw capital, it does what it does, it goes up, 721 00:40:49,400 --> 00:40:53,760 it goes down generally over long periods of time, people, myself 722 00:40:53,760 --> 00:40:57,080 included, are betting that it outperforms the interest rate on 723 00:40:57,080 --> 00:41:00,080 the stretch dividend. So I think that's part of this 724 00:41:00,080 --> 00:41:02,160 conversation that was really missed in the Coffee Zilla 725 00:41:02,160 --> 00:41:06,440 interview as well, is for Stretch to work, you have to 726 00:41:06,440 --> 00:41:11,560 have someone willing to take the bet that Bitcoin outperforms the 727 00:41:11,560 --> 00:41:13,440 interest rate paid to Stretch holders. 728 00:41:14,040 --> 00:41:16,880 And that ultimately is the MSCR shareholder, right? 729 00:41:16,880 --> 00:41:20,520 Anyone who holds MSTR now benefits from the leverage 730 00:41:20,680 --> 00:41:22,120 created in the capital structure. 731 00:41:22,360 --> 00:41:26,280 The leverage being as an MSCR shareholder, you're, you have a 732 00:41:26,280 --> 00:41:29,680 claim over this Bitcoin that you're then paying. 733 00:41:29,680 --> 00:41:32,160 So, so as an MSCR shareholder, you essentially have a claim 734 00:41:32,160 --> 00:41:37,640 over 150% Bitcoin, but that extra 50% Bitcoin you have a 735 00:41:37,640 --> 00:41:42,600 claim over, you're paying 11.5% annualized to the stretch 736 00:41:42,600 --> 00:41:45,880 holders to keep that leverage. So that that's kind of how the 737 00:41:45,880 --> 00:41:48,560 capital structure was created. And so long as there's people 738 00:41:48,560 --> 00:41:51,800 willing to take that bet, the leverage or amplified Bitcoin 739 00:41:51,800 --> 00:41:55,360 bet, you can create something like stretch for holders who 740 00:41:55,360 --> 00:41:58,600 aren't betting. I mean, arguably, as a stretch 741 00:41:58,600 --> 00:42:00,920 holder, you're betting in whatever period of time you 742 00:42:00,920 --> 00:42:04,680 decide to hold the instrument that Bitcoin won't outperform it 743 00:42:04,880 --> 00:42:08,800 or you just want that return on a predictable basis with 0 744 00:42:08,800 --> 00:42:10,920 volatility. So that's kind of the target 745 00:42:10,920 --> 00:42:14,280 market, yeah. So here's one thing I would push 746 00:42:14,280 --> 00:42:18,040 back on right? I think the, the, the, the, you 747 00:42:18,360 --> 00:42:25,280 know, with a stock having a claim on, you know, XYZ Bitcoin 748 00:42:25,280 --> 00:42:29,120 of that company. I, I don't want to say it's not 749 00:42:29,120 --> 00:42:31,320 correct, but there is no, no claim, right. 750 00:42:31,320 --> 00:42:36,160 It's more like you have a share in a company that has a machine 751 00:42:36,160 --> 00:42:40,400 to acquire the hardest capital in the world that has a certain 752 00:42:40,400 --> 00:42:43,120 value. And therefore, you know, then 753 00:42:43,120 --> 00:42:46,800 you kind of go back to, you know, business business model or 754 00:42:46,800 --> 00:42:51,400 your idea of how how well they can optimize their business 755 00:42:51,400 --> 00:42:55,400 model of acquiring set capital, right? 756 00:42:55,400 --> 00:42:59,160 And that is, I would say in general, why you buy a stock, 757 00:42:59,160 --> 00:43:00,320 right? Like if you have Apple stock, 758 00:43:00,320 --> 00:43:03,440 you don't have a claim on the amount of iPhones in the 759 00:43:03,440 --> 00:43:05,200 warehouse. Or, you know, if you have a 760 00:43:05,200 --> 00:43:09,680 Boeing stock, you don't have a claim on the on on the on the 761 00:43:09,680 --> 00:43:11,720 plane still be to be developed, right? 762 00:43:11,720 --> 00:43:16,320 It's more about betting on the fact that they can actually 763 00:43:17,680 --> 00:43:20,960 perform well, perform their business model better over time. 764 00:43:21,920 --> 00:43:23,680 And, and that is what I wanted to say to you. 765 00:43:23,680 --> 00:43:28,320 Like that is also why they call it income, right, Or a return, 766 00:43:28,320 --> 00:43:30,320 right? Like, sorry, a Bitcoin per 767 00:43:30,320 --> 00:43:33,240 share, right? It's kind of for me at least a 768 00:43:33,240 --> 00:43:37,760 metric that kind of shows how well they are executing their, 769 00:43:37,760 --> 00:43:39,400 their business model. Would you agree? 770 00:43:40,200 --> 00:43:43,040 Yeah, yeah, I'm you're totally right. 771 00:43:43,040 --> 00:43:47,280 Obviously, you know, no comic shareholder has a claim over the 772 00:43:47,280 --> 00:43:51,720 Bitcoin, but you can argue in the case of liquidation of the 773 00:43:51,720 --> 00:43:54,520 company or if the company sees to exist, this would be how much 774 00:43:54,520 --> 00:43:57,560 Bitcoin each shareholder across the capital stack was paid out. 775 00:43:57,560 --> 00:43:58,760 That's the way you can think about it. 776 00:43:58,760 --> 00:44:00,720 But you know, and it's never that. 777 00:44:00,720 --> 00:44:03,160 It's never that clean and in bankruptcy proceedings in the 778 00:44:03,160 --> 00:44:05,120 United States. So you don't own the Bitcoin, 779 00:44:05,120 --> 00:44:07,720 that's for sure. Well, but it's definitely 780 00:44:07,720 --> 00:44:11,200 cleaner than some electronics manufacturer that goes bust, 781 00:44:11,200 --> 00:44:13,120 right. And and that I think again goes 782 00:44:13,120 --> 00:44:16,840 back to just the the pristine collateral idea of of Bitcoin is 783 00:44:16,840 --> 00:44:20,360 the fact that any company attempting something with 784 00:44:20,360 --> 00:44:24,520 Bitcoin actually just just by definition has a different risk 785 00:44:24,520 --> 00:44:30,720 profile than, you know, planes or whatever types of products a 786 00:44:30,720 --> 00:44:33,720 company is using as their, as their capital stack, just 787 00:44:33,720 --> 00:44:35,360 because you can liquidate it so easily. 788 00:44:35,840 --> 00:44:38,800 OK, so. You believe Bitcoin will 789 00:44:38,800 --> 00:44:41,640 eventually. Eat this, you know 100 trillion 790 00:44:41,960 --> 00:44:48,760 global bond market. I'm more I'm more convinced, you 791 00:44:48,760 --> 00:44:52,600 know, slowly also just also because I I just didn't 792 00:44:52,600 --> 00:44:56,280 understand from from the beginning, but just having the 793 00:44:56,280 --> 00:44:59,000 understanding of there's so much money that's trying to find, you 794 00:44:59,000 --> 00:45:03,520 know, a, a, a place we. Talked kind of about. 795 00:45:03,520 --> 00:45:07,240 You know, also before and I think you also talk about it, 796 00:45:07,240 --> 00:45:09,320 right, 6040 is kind of dead, right? 797 00:45:09,320 --> 00:45:13,240 Like nominal returns are are dumb if you lose the purchasing 798 00:45:13,240 --> 00:45:16,720 power, etcetera. What is the big idea here that 799 00:45:17,000 --> 00:45:22,280 you know, track 5 Wall Street is just totally missing this, you 800 00:45:22,280 --> 00:45:27,240 know, transition from Fiat type bonds to Bitcoin backed credit 801 00:45:27,240 --> 00:45:30,560 bonds. However you want to define that 802 00:45:30,560 --> 00:45:35,000 because it sounds, well, maybe it sounds too good to be true, 803 00:45:35,000 --> 00:45:38,000 but it also sounds like it's working, or it looks like it's 804 00:45:38,000 --> 00:45:40,400 working. Yeah. 805 00:45:40,400 --> 00:45:42,440 I mean, I think it's. Going to take a long time to be 806 00:45:42,440 --> 00:45:44,640 adopt, like a long, long time to be adopted. 807 00:45:44,760 --> 00:45:47,080 And that's obviously the opportunity that presents self 808 00:45:47,080 --> 00:45:51,360 for anyone who holds Bitcoin. But it's not I don't. 809 00:45:51,360 --> 00:45:53,720 Think it's going to be for? Years until there's a rating on 810 00:45:53,720 --> 00:45:57,400 some of these preferred products and until they're in them 811 00:45:57,440 --> 00:46:00,840 trading in the market for three years plus most institutional 812 00:46:00,840 --> 00:46:04,400 investors are unable to allocate to something like stretch or any 813 00:46:04,400 --> 00:46:08,080 strategy preferred equities. So you know that there's a lot 814 00:46:08,080 --> 00:46:12,080 of runway for Bitcoin accumulation over time, but I do 815 00:46:12,080 --> 00:46:13,160 think. It will shape. 816 00:46:13,720 --> 00:46:17,960 Kind of the like you can go, you can take it to an extreme like 817 00:46:18,320 --> 00:46:21,440 you know, I, I have in the past talked about how STRC is 818 00:46:21,440 --> 00:46:23,760 redefining the cost of capital across all public markets, 819 00:46:23,760 --> 00:46:25,080 right. Like the S&P historically 820 00:46:25,080 --> 00:46:29,880 returns 9 percent, 10% with dividends reinvested and you 821 00:46:29,880 --> 00:46:33,240 know, it stretches turning 11.5% on a return of capital basis 822 00:46:33,240 --> 00:46:38,280 tax, tax deferred, you know, predictably on what now will be 823 00:46:38,280 --> 00:46:42,000 a two week time frame because dividends will be paid out semi 824 00:46:42,000 --> 00:46:44,440 monthly. Like it's hard, you know, you're 825 00:46:44,440 --> 00:46:47,080 going to it's arguably stretch is better than the SP. 826 00:46:47,080 --> 00:46:48,560 You know, you could argue stretch is better than money 827 00:46:48,560 --> 00:46:50,680 market, you could argue stretch is better than private equity, 828 00:46:50,680 --> 00:46:52,400 you could argue stretch is better than venture capital, 829 00:46:52,520 --> 00:46:54,360 etcetera, etcetera, etcetera. So you can take it to the 830 00:46:54,360 --> 00:46:58,280 extreme, but these things move really slowly and you know, big 831 00:46:58,280 --> 00:47:01,000 money moves very, very slowly. So I think this is definitely a 832 00:47:01,000 --> 00:47:03,480 marathon of proving out Bitcoin back returns. 833 00:47:03,480 --> 00:47:05,920 And I don't think Stretch will be the only, I think Stretch 834 00:47:05,920 --> 00:47:09,320 will be the the winner long term of the most dominant player, but 835 00:47:09,320 --> 00:47:12,040 SATA will likely take part of market share. 836 00:47:12,040 --> 00:47:14,440 And then also, you know, we haven't even talked about this 837 00:47:14,440 --> 00:47:16,480 yet and I don't want to derail a conversation, but I think 838 00:47:16,480 --> 00:47:20,000 there's going to be short duration Bitcoin backed credit 839 00:47:20,440 --> 00:47:25,120 that is very successful as well. So actual collateralized notes 840 00:47:25,400 --> 00:47:28,360 or something like Stretch, but it's actually collateralized by 841 00:47:28,360 --> 00:47:32,360 someone's Bitcoin that pays a lower yield because in the case 842 00:47:32,360 --> 00:47:38,400 of, you know, because the the Bitcoin is is direct collateral 843 00:47:38,400 --> 00:47:40,240 for the instrument. So we can talk about that later. 844 00:47:42,080 --> 00:47:43,320 Let's. Let's talk about that, 845 00:47:43,320 --> 00:47:45,360 definitely. Because that that would actually 846 00:47:45,360 --> 00:47:51,000 eat even into short term T-bills and money market fund and and 847 00:47:51,000 --> 00:47:52,080 stuff like that, right. Yeah. 848 00:47:52,200 --> 00:47:55,720 So maybe, yeah, let's let's go there after this question 849 00:47:55,720 --> 00:47:57,640 because it kind of ties into to what you just said. 850 00:47:57,640 --> 00:48:01,000 So if Bitcoin. Actually becomes this. 851 00:48:01,000 --> 00:48:08,320 Global hurdle rate, right? Either directly or powering a 852 00:48:08,320 --> 00:48:10,680 product like like stretch, right. 853 00:48:10,680 --> 00:48:13,000 You, you just alluded to, you know, that's better than S&P, 854 00:48:13,000 --> 00:48:16,040 that's better than you know what, whatever and all these, 855 00:48:16,040 --> 00:48:19,160 all these things that you mentioned which looks, looks 856 00:48:19,160 --> 00:48:23,520 like it right, at least percentage wise what happens? 857 00:48:23,520 --> 00:48:25,720 To all the. Companies, right. 858 00:48:26,400 --> 00:48:32,480 I also kind of feel that the stretch product really is this 859 00:48:32,480 --> 00:48:38,720 wedge in the sloshing around the Fiat money in the in the yeah, 860 00:48:38,720 --> 00:48:40,720 I, I always just say the Ponzi scheme, right? 861 00:48:40,720 --> 00:48:45,280 Just the whole thing propping up the S&P, propping up the, the 862 00:48:45,280 --> 00:48:48,480 stocks, right, propping up real estate, all all that stuff. 863 00:48:48,600 --> 00:48:52,080 It's just looking for for different places again, right? 864 00:48:53,160 --> 00:48:55,120 I feel like stretch is kind of a wedge. 865 00:48:55,800 --> 00:49:00,320 And it's also because what we talked about it has, you know, 866 00:49:00,400 --> 00:49:04,600 arguably and, and I would say verifiably better, better 867 00:49:04,600 --> 00:49:06,880 backing because it is Bitcoin, right? 868 00:49:06,880 --> 00:49:11,080 Like you know, Bitcoin is better as collateral than than real 869 00:49:11,080 --> 00:49:15,440 estate is better as collateral than Apple's inventory is better 870 00:49:15,440 --> 00:49:20,120 than collateral as you know the. Ability of the US to pay back 871 00:49:20,120 --> 00:49:21,080 its. Debt, right? 872 00:49:22,680 --> 00:49:25,960 So what happens what what what happens if this is really a 873 00:49:25,960 --> 00:49:28,320 wedge and Bitcoin is a global hurdle, right? 874 00:49:28,320 --> 00:49:29,680 Like what happens to all the companies? 875 00:49:29,680 --> 00:49:32,320 What happens to these these classic products? 876 00:49:32,320 --> 00:49:36,000 What happens to pension funds, insurers, whatever, like all 877 00:49:36,000 --> 00:49:40,680 these huge capital allocators that are, you know, in the field 878 00:49:40,680 --> 00:49:43,640 money circle jerk sloshing it all around. 879 00:49:45,640 --> 00:49:48,160 Yeah, it's a good. Question and I mean ultimately 880 00:49:48,160 --> 00:49:52,440 it, if Stretch is successful at beating the returns of 881 00:49:52,440 --> 00:49:55,840 traditional capital vehicles over one year, 2 years, three 882 00:49:55,840 --> 00:49:59,040 years, four years, five years, it should continue to siphon 883 00:49:59,040 --> 00:50:03,080 money away from those instruments, demonetize those 884 00:50:03,080 --> 00:50:06,920 different investments and power up Bitcoin, the Bitcoin network 885 00:50:07,120 --> 00:50:11,560 and sustain a long term growth rate in Bitcoin above all those 886 00:50:11,560 --> 00:50:13,440 other assets. That would be, that's kind of 887 00:50:13,440 --> 00:50:17,520 the thesis. Another aspect that's massively 888 00:50:17,520 --> 00:50:20,840 important which will drive inflows into stretch over other 889 00:50:20,840 --> 00:50:23,480 alternative investments is simply the liquidity. 890 00:50:23,720 --> 00:50:26,640 And we've talked about that a lot on some of the in some of 891 00:50:26,640 --> 00:50:29,640 our true North calls is, you know, bitcoins really the only 892 00:50:29,640 --> 00:50:33,960 24/7 liquid globally traded asset in the world and now 893 00:50:33,960 --> 00:50:35,800 you're using it to back a preferred stock. 894 00:50:36,120 --> 00:50:39,280 That's 1000 times more liquid than any other preferred stock 895 00:50:39,280 --> 00:50:41,680 in the market. And when you look at some of the 896 00:50:41,680 --> 00:50:43,960 problems with private credit, venture capital and private 897 00:50:43,960 --> 00:50:46,840 equity, especially with some of the redemptions that have been 898 00:50:46,840 --> 00:50:50,480 halted over the past few months, investors are looking for an 899 00:50:50,480 --> 00:50:53,120 alternative. So alternative investments are 900 00:50:53,120 --> 00:50:56,120 private equity, venture capital and private credit, generally 901 00:50:56,120 --> 00:50:58,080 speaking. And while they're illiquid, they 902 00:50:58,080 --> 00:51:01,360 tend to return higher than the traditional S and PR index 903 00:51:01,360 --> 00:51:03,040 funds. Now you have something like 904 00:51:03,040 --> 00:51:06,840 Stretch, which is a liquid and returns higher than the S&P and 905 00:51:06,840 --> 00:51:10,280 that liquidity there, there is a premium on liquidity. 906 00:51:10,320 --> 00:51:12,960 So if you can get higher returns and higher liquidity and stretch 907 00:51:13,280 --> 00:51:16,240 than you can in private credit, there's going to be tough to 908 00:51:16,240 --> 00:51:19,000 make that case for private credit over a long period of 909 00:51:19,000 --> 00:51:19,920 time. And I think that's what we'll 910 00:51:19,920 --> 00:51:22,800 see, the demonetization of alternative investments and the 911 00:51:22,800 --> 00:51:27,120 monetization of the Bitcoin network over time and so. 912 00:51:27,120 --> 00:51:30,840 Let's talk about these these. Shorter duration products, do 913 00:51:30,840 --> 00:51:33,640 you think that would be something that strategy would 914 00:51:33,640 --> 00:51:37,880 issue or is that actually kind of like a market opportunity 915 00:51:37,880 --> 00:51:41,560 that opens up perhaps even for these incumbents that, you know, 916 00:51:42,520 --> 00:51:45,760 turn their Fiat capital into Bitcoin capital and then start 917 00:51:45,760 --> 00:51:50,480 serving, you know, a different part of the market probably 918 00:51:50,480 --> 00:51:53,600 right with with shorter duration type products? 919 00:51:55,000 --> 00:51:55,880 Yeah. And I think it's. 920 00:51:55,880 --> 00:51:58,280 A huge, huge question because I don't know what the market's 921 00:51:58,280 --> 00:51:59,960 going to do. It all hinges on what 922 00:51:59,960 --> 00:52:01,640 tokenization looks like in the future. 923 00:52:02,200 --> 00:52:04,520 I don't know. So obviously stable coins are a 924 00:52:04,520 --> 00:52:08,720 $320 billion market growing 40% year over year, most of that 925 00:52:08,720 --> 00:52:12,600 volumes on Ethereum, Bitcoin. Is the largest. 926 00:52:12,600 --> 00:52:15,440 Capital network and it will be the dominant capital network 927 00:52:15,440 --> 00:52:17,280 moving forward. Obviously that takes place on 928 00:52:17,280 --> 00:52:20,320 the the Bitcoin blockchain. And then we have the public 929 00:52:20,320 --> 00:52:22,880 equities markets which trade on different exchanges like the 930 00:52:22,880 --> 00:52:27,000 NASDAQ and those are being tokenized and you know, traded 931 00:52:27,000 --> 00:52:30,720 24/7 in the near future. So I don't know where the 932 00:52:30,960 --> 00:52:34,760 majority of equities trading, you know, in all of crypto or 933 00:52:34,760 --> 00:52:38,400 just unregulated securities. So, you know, I consider that 934 00:52:38,640 --> 00:52:40,320 part of the securities market in the future. 935 00:52:40,800 --> 00:52:43,360 So I don't know where the securities market will trade. 936 00:52:44,240 --> 00:52:49,160 But the thing was stretch that I think could be not improved 937 00:52:49,160 --> 00:52:53,280 upon, but someone may be looking for is a Bitcoin backed, a 938 00:52:53,280 --> 00:52:56,040 Bitcoin collateralized short term note that has no 939 00:52:56,040 --> 00:52:59,800 counterparty risk. And so if you can program the 940 00:52:59,800 --> 00:53:02,000 short term note to be collateralized by the Bitcoin, 941 00:53:02,480 --> 00:53:06,160 you can offer a yield that's lower than that of stretch 942 00:53:06,600 --> 00:53:09,160 because someone may look at it as being less risky. 943 00:53:09,720 --> 00:53:13,040 And I think there is potentially, you know, a world 944 00:53:13,040 --> 00:53:15,560 for that. Maybe it's on the NASDAQ, maybe 945 00:53:15,560 --> 00:53:20,840 you know the NASDAQ in in whatever 24/7 trading looks like 946 00:53:20,840 --> 00:53:23,040 on the NASDAQ, you can lock up a Bitcoin and issue a short term 947 00:53:23,040 --> 00:53:25,520 note against it. But I think there's a 948 00:53:25,520 --> 00:53:27,360 potentially a market where there's no third party in 949 00:53:28,040 --> 00:53:30,680 involved in the issuance of short term credit against 950 00:53:30,680 --> 00:53:33,080 Bitcoin. It's interesting. 951 00:53:33,080 --> 00:53:36,200 Because I think this. Also kind of ushers in the the 952 00:53:36,200 --> 00:53:40,000 transition to to Bitcoin as a as a unit of account, right? 953 00:53:40,000 --> 00:53:43,400 I think definitely, especially for. 954 00:53:43,400 --> 00:53:46,000 Strategy. The what's it called, like the 955 00:53:46,000 --> 00:53:49,080 fair, fair value accounting, you know, and, and stuff like that. 956 00:53:49,080 --> 00:53:55,680 Just the fact that they report as Bitcoin per share earnings, 957 00:53:55,680 --> 00:53:59,400 etcetera is kind of, I think a little, a little star to that. 958 00:53:59,640 --> 00:54:03,440 I, I saw you modelled like NVIDIA and Apple etcetera and 959 00:54:03,440 --> 00:54:06,280 Bitcoin terms. I, I, I, I share this a lot with 960 00:54:06,280 --> 00:54:09,640 people, right? Or like put the NASDAQ in M2 or 961 00:54:09,640 --> 00:54:13,240 like put the NASDAQ in USD and then put it in M2, right. 962 00:54:13,240 --> 00:54:17,640 And then like in in M2, it's higher or it's lower today than 963 00:54:17,640 --> 00:54:20,400 at the.com bubble, which is, you know, arguably, you know, 964 00:54:20,400 --> 00:54:23,800 factually wrong, right, in terms of tech value. 965 00:54:24,600 --> 00:54:27,760 Then when you do when you do Bitcoin, it's even it's even 966 00:54:27,760 --> 00:54:29,600 worse, right? Like it's like all time low. 967 00:54:31,440 --> 00:54:34,920 When when did you start thinking about Bitcoin as a unit of 968 00:54:34,920 --> 00:54:39,200 account in in in that way? Is it also a way to kind of like 969 00:54:39,560 --> 00:54:43,400 view everything we've talked about in a in a different light, 970 00:54:43,400 --> 00:54:45,880 right? Like, is it easier? 971 00:54:45,880 --> 00:54:48,600 To see what's happening. When you, you know, put on the 972 00:54:48,600 --> 00:54:52,800 Bitcoin glasses and, and use that unit of account versus, you 973 00:54:52,800 --> 00:54:55,360 know, just the, the, the Fiat way. 974 00:54:59,560 --> 00:55:02,280 I mean, I think, you know, I don't know when Bitcoin will be 975 00:55:02,280 --> 00:55:05,280 used as a unit of account. I've been doing it for me. 976 00:55:05,280 --> 00:55:06,720 It just came actually with index funds. 977 00:55:06,720 --> 00:55:08,800 Like I believe the best way to invest in equities markets was 978 00:55:08,800 --> 00:55:11,200 to invest via indices. And I've always believed 979 00:55:11,200 --> 00:55:14,880 Bitcoins kind of the index for global productivity, which is 980 00:55:15,120 --> 00:55:16,600 effectively the purpose of money. 981 00:55:17,240 --> 00:55:20,400 And that's why I do believe that, you know, you can use 982 00:55:20,400 --> 00:55:23,320 Bitcoin as a unit of account for your assets. 983 00:55:23,360 --> 00:55:24,600 It's all it's all good. Do you? 984 00:55:25,800 --> 00:55:28,800 Do you think like these companies like NVIDIA or Apple, 985 00:55:28,800 --> 00:55:33,800 like would they be able to even start their own like digital 986 00:55:33,800 --> 00:55:36,800 credit type instruments? Like do you think there will be 987 00:55:36,800 --> 00:55:42,200 attempts to kind of combat the siphoning away of, of for 988 00:55:42,200 --> 00:55:45,320 example, the, the, the automatic capital, right that goes into 989 00:55:45,320 --> 00:55:50,720 the S&P 500 Max 7, etcetera? Like do you think that can be a 990 00:55:50,720 --> 00:55:52,840 thing? Is that a threat or, or wouldn't 991 00:55:52,840 --> 00:55:56,960 they even be able to do it without, without Bitcoin, right? 992 00:55:56,960 --> 00:56:00,360 Like is, is this kind of a moment where it also shows like 993 00:56:00,360 --> 00:56:02,240 you cannot really do it without Bitcoin? 994 00:56:05,000 --> 00:56:07,280 Yeah. Is it a threat and will they 995 00:56:07,280 --> 00:56:09,960 potentially create digital credit and use Bitcoin as 996 00:56:09,960 --> 00:56:12,840 dividend account? I, I think it's pretty 997 00:56:12,840 --> 00:56:15,480 complicated because you know, people look for historical 998 00:56:15,480 --> 00:56:17,440 comparisons for equities markets. 999 00:56:17,800 --> 00:56:20,120 And if you, if you really look at equities markets today, I 1000 00:56:20,120 --> 00:56:24,240 mean there's obviously massive concentration reminiscent of 1001 00:56:24,240 --> 00:56:27,200 that of the Nifty 50 in the late 50s. 1002 00:56:27,200 --> 00:56:31,240 But with the Mag 7 now deploying most of their free cash flow, 1003 00:56:31,240 --> 00:56:33,920 not into stock buybacks, but into capital expenditures 1004 00:56:33,920 --> 00:56:37,600 related to AI. Obviously the broader market are 1005 00:56:37,600 --> 00:56:44,600 looking for places to, you know, markets deploy Fiat into assets 1006 00:56:44,600 --> 00:56:46,880 that they believe will be more productive than Fiat. 1007 00:56:47,480 --> 00:56:50,880 And right now that's data centers and AI CapEx spend. 1008 00:56:52,640 --> 00:56:54,760 Those will probably be massively, you know, there will 1009 00:56:54,760 --> 00:56:57,160 be winners in those markets and there will be losers. 1010 00:56:57,160 --> 00:56:59,240 It's the idea of risk. What is risk? 1011 00:56:59,400 --> 00:57:03,400 And I think people misallocate towards risk, specifically large 1012 00:57:03,400 --> 00:57:08,920 corporations and Bitcoin is certainty amidst uncertainty in 1013 00:57:08,920 --> 00:57:12,520 public markets. And, you know, I think over a 1014 00:57:12,520 --> 00:57:14,840 long period of time, this is the reason why it would be difficult 1015 00:57:14,840 --> 00:57:17,520 to beat Bitcoins hurdle rate and why more and more capital will 1016 00:57:17,520 --> 00:57:20,520 be sucked into the certainty that is Bitcoin relative to the 1017 00:57:20,520 --> 00:57:25,040 uncertainty in public markets and disruption that occurs. 1018 00:57:25,600 --> 00:57:27,360 But that's not to say there aren't going to be like, I 1019 00:57:27,360 --> 00:57:31,360 believe there's going to be lots of success in public markets and 1020 00:57:31,360 --> 00:57:33,280 equities. There will be equities that have 1021 00:57:33,720 --> 00:57:36,920 compound annual growth rates of return because of AI that 1022 00:57:36,920 --> 00:57:40,160 outpace any equity in history. Yeah. 1023 00:57:40,760 --> 00:57:42,840 Yeah, exactly. I, I love that answer because, 1024 00:57:43,040 --> 00:57:45,040 but it will have a different risk, right? 1025 00:57:45,040 --> 00:57:47,560 Maybe that's a good that's good to add, right. 1026 00:57:47,840 --> 00:57:52,120 And also I've, I've talked a lot about, you know, is Bitcoin risk 1027 00:57:52,120 --> 00:57:54,360 on is it risk off like fundamentally 1028 00:57:54,360 --> 00:57:57,600 characteristically, right? I, I think is it is extremely 1029 00:57:57,600 --> 00:58:01,840 risk off, but the but the market trades in a different way. 1030 00:58:01,840 --> 00:58:05,600 But you just said something that made me think, well, Bitcoin is 1031 00:58:05,600 --> 00:58:10,160 a is, is good in bad times and in in in good times, right, like 1032 00:58:10,200 --> 00:58:13,280 it is, it is a superior savings vehicle. 1033 00:58:13,360 --> 00:58:19,120 Just, you know, as as as a way to park capital at least over, 1034 00:58:19,680 --> 00:58:23,520 you know, X amount of time, you know, depending on your risk 1035 00:58:23,520 --> 00:58:25,400 profile, right. So whether that's two years or 1036 00:58:25,400 --> 00:58:31,800 five years or or or 10, but it's also a totally separate, 1037 00:58:32,400 --> 00:58:38,480 fundamentally very stable value. Proposition, yeah, right. 1038 00:58:38,600 --> 00:58:41,720 So in terms. Of in times of turmoil or chaos 1039 00:58:41,720 --> 00:58:46,080 or whatever, right? Yeah, you can actually exit the 1040 00:58:46,160 --> 00:58:50,640 the, let's say the Trat fi system to just park your money 1041 00:58:50,640 --> 00:58:52,480 in Bitcoin. And we are already seeing that 1042 00:58:52,480 --> 00:58:55,440 people are doing that right. Like whenever Bitcoin goes down 1043 00:58:55,440 --> 00:58:59,160 on the weekend, you know there's going to be a rough Monday on 1044 00:58:59,160 --> 00:59:03,160 the on on the stock market just because, you know, big capital 1045 00:59:03,160 --> 00:59:07,920 allocators are already using Bitcoin as their as their 1046 00:59:07,920 --> 00:59:10,480 accounts, right, their liquidity account because that's the only 1047 00:59:10,480 --> 00:59:13,720 thing that they can actually access on the weekend. 1048 00:59:13,720 --> 00:59:16,200 So I'm, I'm personally very bullish on that. 1049 00:59:16,200 --> 00:59:19,240 It's just interesting to see that, that it's already used 1050 00:59:19,240 --> 00:59:20,680 like that. Although, you know, obviously 1051 00:59:20,680 --> 00:59:23,520 the price goes down when they sell in the weekend, but it's a, 1052 00:59:23,560 --> 00:59:26,680 it's interesting to, to, to see that that is already happening. 1053 00:59:26,840 --> 00:59:30,440 So, yeah, maybe some like 3 short questions to, to wrap it 1054 00:59:30,440 --> 00:59:33,920 up, you know, talking about all of this, you know, looking at 1055 00:59:33,920 --> 00:59:36,600 what you're looking and researching what makes you the 1056 00:59:36,600 --> 00:59:41,640 most bullish on, on, on this role of Bitcoin that's evolving 1057 00:59:43,160 --> 00:59:44,800 in the US? You know, we have clarity act 1058 00:59:44,800 --> 00:59:48,840 coming, but also globally, let's say over the next decade, 2 1059 00:59:48,840 --> 00:59:52,640 decades, however far your, your outlook is what, what makes you 1060 00:59:52,640 --> 00:59:55,000 bullish? It's. 1061 00:59:55,000 --> 00:59:58,560 Simply. Returns generated by Bitcoin as 1062 00:59:58,560 --> 01:00:01,680 collateral, Bitcoin as a capital asset with low volatility. 1063 01:00:01,680 --> 01:00:04,640 So SCRC digital credit, I actually don't like that term 1064 01:00:04,640 --> 01:00:08,200 that much, but anything, anything that taps into 1065 01:00:08,200 --> 01:00:11,360 traditional Fiat markets that's powered by Bitcoin. 1066 01:00:12,040 --> 01:00:14,760 I think is the killer application of Bitcoin. 1067 01:00:14,760 --> 01:00:17,520 It is a killer application of Bitcoin because Bitcoin is it's 1068 01:00:17,520 --> 01:00:21,480 encoded monetary policy and which should theoretically 1069 01:00:21,480 --> 01:00:25,040 perform outperform monetary debasement significantly 1070 01:00:25,120 --> 01:00:26,520 especially along its adoption curve. 1071 01:00:27,160 --> 01:00:29,240 And we're seeing that play out in real time. 1072 01:00:29,680 --> 01:00:32,880 And the way to funnel more and more capital into that vehicle, 1073 01:00:32,880 --> 01:00:36,920 into Bitcoin, is to offer it in a digestible format for the 1074 01:00:36,920 --> 01:00:38,520 biggest money managers around the world. 1075 01:00:39,000 --> 01:00:41,480 Stretches the first time we've seen an instrument that's 1076 01:00:41,480 --> 01:00:45,080 actually digestible by money managers, people who have 1077 01:00:45,080 --> 01:00:47,400 mandates to be very low volatility. 1078 01:00:47,400 --> 01:00:49,680 Most hedge funds, most institutions cannot stomach 1079 01:00:49,680 --> 01:00:52,440 bitcoins volatility and won't be able to for 20 years. 1080 01:00:53,200 --> 01:00:55,680 In the interim, stretches a product that solves their 1081 01:00:55,680 --> 01:00:58,480 problems powered by Bitcoin. And I think there's nothing like 1082 01:00:58,480 --> 01:01:01,680 it. So what do you think is the end 1083 01:01:01,680 --> 01:01:04,880 game of? Of sailors that like, you know, 1084 01:01:05,120 --> 01:01:09,440 can a can a company become the central Bank of Bitcoin? 1085 01:01:10,000 --> 01:01:14,880 Some people say, you know, the US government will buy a share 1086 01:01:14,880 --> 01:01:16,760 like they bought a share in Intel. 1087 01:01:17,400 --> 01:01:19,960 Like how do you how do you see that progress? 1088 01:01:19,960 --> 01:01:25,000 Because I can imagine that if he gets too big, you know, maybe 1089 01:01:25,000 --> 01:01:28,280 not in in Bitcoin, well, maybe in Bitcoin terms, maybe not, but 1090 01:01:28,280 --> 01:01:32,040 just in the, well, the amount of capital that he can attract. 1091 01:01:32,040 --> 01:01:34,360 And therefore, by the way, obviously he grows the Bitcoin 1092 01:01:34,360 --> 01:01:35,920 stack and and so on. Right. 1093 01:01:37,680 --> 01:01:39,120 Yeah. Where where does that end? 1094 01:01:39,480 --> 01:01:41,600 Like what's the goal? What what does that look like? 1095 01:01:42,320 --> 01:01:44,560 Yeah, I'm I'm a pretty. Much a simpleton when it comes 1096 01:01:44,560 --> 01:01:47,640 to this, like he stated it briefly that his goal is to 1097 01:01:47,640 --> 01:01:50,840 drive Bitcoin to a million and then 10 million and he will. 1098 01:01:51,480 --> 01:01:54,240 I believe he will. All this hinges on performance. 1099 01:01:54,240 --> 01:01:56,160 I know a lot of Bitcoiners don't like to talk about it at the end 1100 01:01:56,160 --> 01:01:59,240 of the day, but digital credit is this idea that bitcoins 1101 01:01:59,240 --> 01:02:03,280 superior monetary properties support its outperformance of 1102 01:02:03,280 --> 01:02:07,080 traditional Fiat based assets. And so by raising more and more 1103 01:02:07,080 --> 01:02:10,120 capital with Stretch and with MSTR and continually building 1104 01:02:10,120 --> 01:02:13,280 his Bitcoin stack, building the balance sheet, he's sequestering 1105 01:02:13,280 --> 01:02:16,320 Bitcoin that will never move, that terminally pushes the price 1106 01:02:16,320 --> 01:02:18,040 of Bitcoin higher in the long term. 1107 01:02:18,560 --> 01:02:20,720 So I think every single bitcoiner should be cheering 1108 01:02:20,720 --> 01:02:22,960 what he's doing because he's working for Bitcoin. 1109 01:02:22,960 --> 01:02:26,360 Ultimately, he's working for Bitcoin, so. 1110 01:02:26,360 --> 01:02:28,080 It's like a, It's like the end of a. 1111 01:02:28,080 --> 01:02:29,960 Vacuum that keeps on getting bigger. 1112 01:02:30,280 --> 01:02:33,240 Kind of like if he takes 15% of the Bitcoin. 1113 01:02:33,240 --> 01:02:37,560 Supply Bitcoin like yeah, I think people forget that the 1114 01:02:37,560 --> 01:02:40,440 price will move aggressively in in the direct in upwards. 1115 01:02:40,920 --> 01:02:45,560 And once it does, I mean, people realize that he's he's bought 1116 01:02:45,560 --> 01:02:49,760 and secured and won't be selling the majority of his capital 1117 01:02:49,760 --> 01:02:52,920 stack. Yeah, OK. 1118 01:02:52,920 --> 01:02:55,840 I have an extra question. How long until people actually 1119 01:02:55,840 --> 01:02:59,960 take notice in other countries like other countries taking 1120 01:02:59,960 --> 01:03:01,640 notice, right? Like could you have sovereign 1121 01:03:01,640 --> 01:03:05,520 bonds backed by Bitcoin, right? Like this, this whole Bitcoin 1122 01:03:05,520 --> 01:03:08,320 bonds idea? I mean, there has to be a point 1123 01:03:08,320 --> 01:03:14,000 where someone thinks, you know, OK, this is, this is a bit too 1124 01:03:14,000 --> 01:03:17,880 much like this is a bit too much for sailor because I can also 1125 01:03:17,880 --> 01:03:21,680 imagine they, they can get capital from anywhere in the 1126 01:03:21,680 --> 01:03:23,480 world, right? I, I think there's a stretch 1127 01:03:23,480 --> 01:03:26,760 equivalent in, in euro denominated for, for example, 1128 01:03:26,760 --> 01:03:29,200 right? So, you know, yeah, I, I don't 1129 01:03:29,200 --> 01:03:30,280 know, like what what do you think? 1130 01:03:30,280 --> 01:03:33,240 Like I, I'm thinking about this just in Bitcoin terms for the 1131 01:03:33,240 --> 01:03:35,560 last five years, right. Like when is everyone going to 1132 01:03:35,560 --> 01:03:40,880 wake up about Bitcoin? But it feels like this is a 1133 01:03:40,880 --> 01:03:45,680 bigger threat to trade fight type products and and stuff like 1134 01:03:45,680 --> 01:03:48,640 that. Then, you know, spot, spot 1135 01:03:48,640 --> 01:03:51,320 Bitcoin. Yeah, I mean, tech tends to. 1136 01:03:51,320 --> 01:03:54,080 Centralized technology and financial products tend to 1137 01:03:54,080 --> 01:03:57,360 centralized around one or two dominant players. 1138 01:03:57,960 --> 01:04:01,920 So I actually think Stretch is one of the final incarnations of 1139 01:04:01,920 --> 01:04:05,920 this short duration Bitcoin credit instrument and its 1140 01:04:05,920 --> 01:04:08,760 continued existence will just be adopted in structured products 1141 01:04:08,760 --> 01:04:09,920 that are brought around the world. 1142 01:04:10,440 --> 01:04:13,840 So you know, the liquidity is so important on these instruments, 1143 01:04:13,840 --> 01:04:15,960 so you can trade in and out of them with big size. 1144 01:04:15,960 --> 01:04:18,560 Stretch is the only one with the If you want to buy $10 million 1145 01:04:18,560 --> 01:04:20,640 of Strike, you really couldn't do without moving the price. 1146 01:04:21,080 --> 01:04:22,560 Stretch. You can do it in a blink of an 1147 01:04:22,560 --> 01:04:25,600 eye, that liquidity. Will you know? 1148 01:04:25,840 --> 01:04:27,640 You want to instrument with that kind of liquidity, it 1149 01:04:27,640 --> 01:04:30,800 centralizes around stretch. Then you can create a product, 1150 01:04:30,800 --> 01:04:36,560 an ETF for example that has a FX swap of USD to Euro and send 1151 01:04:36,560 --> 01:04:43,200 that over to to Europe or you do JPYUSDFX swap and put sell that 1152 01:04:43,200 --> 01:04:46,080 product in Japan. And so I think Stretch has now 1153 01:04:46,080 --> 01:04:48,520 become much like Bitcoin is the foundation for these products 1154 01:04:48,520 --> 01:04:51,360 that offer high return like Stretch in the public markets. 1155 01:04:51,560 --> 01:04:53,640 There's plenty of financial infrastructure even in the 1156 01:04:53,640 --> 01:04:56,600 stable coin markets to package up stretch and ship it around 1157 01:04:56,600 --> 01:04:58,280 the world. And so I think all the liquidity 1158 01:04:58,280 --> 01:05:00,640 will concentrate around Stretch. And I actually don't think 1159 01:05:00,640 --> 01:05:03,360 there's that much base layer financial engineering that's 1160 01:05:03,360 --> 01:05:06,280 left to be done with regards to those products. 1161 01:05:06,600 --> 01:05:07,880 It's actually pretty interesting, right? 1162 01:05:07,880 --> 01:05:12,200 Like. Like like stable coins by 1163 01:05:12,200 --> 01:05:14,800 treasuries, you know, and there's that flywheel. 1164 01:05:14,800 --> 01:05:18,720 You can have Bitcoin stretch, maybe also stable coins right 1165 01:05:18,720 --> 01:05:22,280 that just have a stretch. Right, Exactly, exactly. 1166 01:05:22,280 --> 01:05:24,920 I think it's in this layer, it's the layered. 1167 01:05:25,000 --> 01:05:27,200 Layeredness, basically that that you're seeing. 1168 01:05:27,760 --> 01:05:30,400 All right, the last question, and I ask everyone the same 1169 01:05:30,400 --> 01:05:33,640 question, which is what is a core belief you will never let 1170 01:05:33,640 --> 01:05:38,960 go of? Core belief I'll never let. 1171 01:05:38,960 --> 01:05:43,280 Go of. Purpose of life. 1172 01:05:43,920 --> 01:05:47,880 Is to gain freedom and then find your purpose once you've 1173 01:05:47,880 --> 01:05:50,360 established freedom. Awesome man. 1174 01:05:50,360 --> 01:05:51,480 Well. Thank you so much for. 1175 01:05:51,480 --> 01:05:54,680 This deep dive, I thought it was very interesting and very 1176 01:05:54,680 --> 01:05:57,040 helpful, and I hope the people listening found that too. 1177 01:05:57,040 --> 01:06:00,280 So yeah, man, let's stay in touch and and see how this goes. 1178 01:06:00,560 --> 01:06:01,440 Thanks. Amazing. 1179 01:06:01,440 --> 01:06:02,520 Thanks, Bram. Great question. 1180 01:06:02,680 --> 01:06:04,400 I hope you enjoyed this episode if. 1181 01:06:04,400 --> 01:06:06,320 You did. You can click here to find more 1182 01:06:06,320 --> 01:06:09,720 just like it and click here to find all Bitcoin for millennials 1183 01:06:09,720 --> 01:06:12,600 podcast episodes. Also, if you want to help me 1184 01:06:12,600 --> 01:06:16,440 shine a light on the message of Bitcoin, please like this video 1185 01:06:16,480 --> 01:06:20,000 and subscribe to stay connected. I hope to see you for the next 1186 01:06:20,000 --> 01:06:20,960 episode. Bye.