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$500M Bitcoin Buy🔥Strive CEO on Corporate Trade Returning · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Is the corporate Bitcoin trade back? Today, we're going to
• 0:02
  Speaker 1: be breaking that down. Get into where Bitcoin is heading.
• 0:05
  Speaker 1: You guys don't want to miss it. Before we do that,
• 0:07
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• 0:09
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• 0:25
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• 0:28
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• 0:33
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• 0:36
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• 0:38
  Speaker 1: are one of the diversification things that you should be
• 0:40
  Speaker 1: doing to set yourself up for success. Let's just get started.
• 0:44
  Speaker 1: I want to bring in our guest today. And of course,
• 0:47
  Speaker 1: that is Matt Cole coming in from Strive. Nice to
• 0:50
  Speaker 1: see you, Matt.
• 0:51
  Speaker 2: How are you? Doing great. Thanks for having me, Paul.
• 0:54
  Speaker 1: So I got a couple of points I want to
• 0:55
  Speaker 1: hit on. One, of course, is this right here, news item.
• 1:00
  Speaker 1: And it's where Stripe's pretty active right there. You guys
• 1:03
  Speaker 1: are scooping up another 1,223 Bitcoin, 100 million right now.
• 1:07
  Speaker 1: Total holdings reaching 36,000 Bitcoin. So you guys have become
• 1:13
  Speaker 1: a big player on this. The strategy continues to accelerate
• 1:17
  Speaker 1: in this area. When you look at the rest of
• 1:20
  Speaker 1: the companies that might be putting Bitcoin on Treasury, Is
• 1:23
  Speaker 1: this something that you think is starting to make its
• 1:26
  Speaker 1: way into TradFi in a bigger way right now?
• 1:30
  Speaker 2: It absolutely is. And I have exciting news that just
• 1:34
  Speaker 2: before we popped on, we actually announced we bought another 6,000 Bitcoin.
• 1:38
  Speaker 2: So you literally can't keep up with the Bitcoin purchases here.
• 1:41
  Speaker 2: We have 43,000 Bitcoin on the nose here. But really
• 1:46
  Speaker 2: what it comes down to is that the Bitcoin's trade
• 1:49
  Speaker 2: itself is not broken and it will never be broken
• 1:53
  Speaker 2: because the dollar is broken. So the fiat currencies are broken.
• 1:57
  Speaker 2: So as long as this debasement trade that really is
• 2:00
  Speaker 2: the structural engine behind which we're building our treasury and
• 2:04
  Speaker 2: our whole strategy, as long as that does not change,
• 2:07
  Speaker 2: then the strategy is not broken. But it would make
• 2:10
  Speaker 2: sense that our strategy and the strategy of MSTR, also
• 2:15
  Speaker 2: named strategy, is to amplify Bitcoin's exposure. And so in
• 2:20
  Speaker 2: a Bitcoin bear market, it is math. And so that
• 2:24
  Speaker 2: amplification works to the upside to outperform Bitcoin. And it
• 2:27
  Speaker 2: also works to the downside. Strive was unique in this
• 2:32
  Speaker 2: year in the sense that Bitcoin is down a little
• 2:36
  Speaker 2: bit right now on the year. Strive is up massively.
• 2:40
  Speaker 2: That was from phenomenal execution from the team. I would
• 2:43
  Speaker 2: say that would be a rarity. generally speaking, even for
• 2:47
  Speaker 2: our own company, we would expect if Bitcoin's down for
• 2:50
  Speaker 2: our company to amplify that to the downside. But we're
• 2:53
  Speaker 2: underwriting the risk of Bitcoin from a very long term perspective.
• 2:57
  Speaker 2: So we have these preferred equities that are not debt.
• 3:00
  Speaker 2: They never mature and we pay an interest. And really,
• 3:03
  Speaker 2: it's a carry trade. Our bet as a company is
• 3:06
  Speaker 2: that Bitcoin will go up over the long run more
• 3:09
  Speaker 2: than our cost of capital. And if it does, the
• 3:11
  Speaker 2: math would just work that we will outperform Bitcoin. And
• 3:14
  Speaker 2: there's a lot of demand for that because a lot
• 3:16
  Speaker 2: of people understand the rolling heel that is the debt
• 3:21
  Speaker 2: crisis in the United States and the world. And they
• 3:23
  Speaker 2: want to not only own something that's scarce, but also
• 3:26
  Speaker 2: amplify it, which is a common equity. And then there's
• 3:28
  Speaker 2: a lot of people that want income, and that's a
• 3:31
  Speaker 2: preferred equity. And so I think we're really just getting
• 3:33
  Speaker 2: going over what I think will be a very exciting
• 3:35
  Speaker 2: next couple of decades for this trade.
• 3:37
  Speaker 1: All right, so- So Matt, I want to kind of
• 3:42
  Speaker 1: ask you something because you look at the current market,
• 3:45
  Speaker 1: Bitcoin dips below 80K. You guys are out purchasing 511
• 3:50
  Speaker 1: million worth of Bitcoin. Then you have JP Morgan jumping
• 3:54
  Speaker 1: in saying, hey, yes, we're going to see Bitcoin continue
• 3:56
  Speaker 1: to go up. In fact, they've come on to their
• 3:59
  Speaker 1: analysis on long-term return outlook at 10% versus everything else.
• 4:06
  Speaker 1: It's a high performer. So What makes you so confident
• 4:09
  Speaker 1: that right now is the right time?
• 4:12
  Speaker 2: Yeah, so what was interesting about that JP Morgan article
• 4:15
  Speaker 2: was that of all of the assets in their long-term
• 4:18
  Speaker 2: capital markets assumptions, and I'm very familiar with these, they
• 4:22
  Speaker 2: call them CAPM, capital market pricing assumptions that are used
• 4:26
  Speaker 2: for asset allocations from when I used to work at CalPERS.
• 4:30
  Speaker 2: We did a lot of work on these. We studied
• 4:32
  Speaker 2: every different banks. Is the fact that they have Bitcoin
• 4:34
  Speaker 2: in there, number one, so it's a new addition. They've
• 4:37
  Speaker 2: never had Bitcoin even in there before. But the first
• 4:40
  Speaker 2: time they put it in, they actually have it as
• 4:42
  Speaker 2: the top expected performer. And so these predictions are typically
• 4:47
  Speaker 2: not meant to be on the nose as far as
• 4:50
  Speaker 2: the actual percentage gain. But the fact that they had
• 4:53
  Speaker 2: it as number one, I think, is really fascinating. They
• 4:55
  Speaker 2: did say that there's scenarios that could be better or worse.
• 4:59
  Speaker 2: But this is a big change from JPMorgan's. who, as
• 5:02
  Speaker 2: we know, Jamie Dimon's been very critical of Bitcoin historically
• 5:06
  Speaker 2: to move in that direction. And so I think that
• 5:09
  Speaker 2: the reality is that banks, everyone sees the fiscal problem
• 5:16
  Speaker 2: in D.C. and the dollar, and they see what people
• 5:19
  Speaker 2: like Secretary of Treasury Scott Besant is trying to do
• 5:22
  Speaker 2: when they're actually trying to take actions to cap the
• 5:25
  Speaker 2: long term rates for the U.S. government, which naturally would
• 5:29
  Speaker 2: be on a trajectory to go much higher. And when
• 5:31
  Speaker 2: you actually work to do that, and I think we're
• 5:33
  Speaker 2: in the early stages of that, I think they still
• 5:35
  Speaker 2: have a lot more room to go of what they'll
• 5:37
  Speaker 2: ultimately do to try to contain rates. The release valve
• 5:40
  Speaker 2: has to be the dollar. And Bitcoin's highest correlation of
• 5:44
  Speaker 2: any type of financial metric is a weaker dollar. And
• 5:47
  Speaker 2: so I think right now we're kind of in the
• 5:49
  Speaker 2: early stages of what I think could be the best
• 5:52
  Speaker 2: macro conditions in Bitcoin's history. But ultimately, it will be
• 5:55
  Speaker 2: when the Treasury or the Fed steps in with more
• 5:58
  Speaker 2: size than they have yet to lower long-term rates. And
• 6:01
  Speaker 2: I think that also is part of the thesis that
• 6:04
  Speaker 2: JP Morgan sees playing out over the long-term here as well.
• 6:08
  Speaker 1: So, okay. So I think that's a good thesis on,
• 6:11
  Speaker 1: you know, the reason why the timing is my question,
• 6:14
  Speaker 1: you know, 511 million right now, we're at 80K, some
• 6:17
  Speaker 1: people pointing down towards 72K, your average, what is the
• 6:22
  Speaker 1: current average of your Bitcoin holdings? Do you know?
• 6:24
  Speaker 2: Just under 90K. Under 90K.
• 6:25
  Speaker 1: So- being able to buy and purchase sub 80 would
• 6:32
  Speaker 1: be significant in being able to drop your average. Is
• 6:35
  Speaker 1: this something that you see is coming in terms of
• 6:38
  Speaker 1: a price for Bitcoin as we see it, maybe more
• 6:41
  Speaker 1: pressure to your point? Do you think we're going to
• 6:43
  Speaker 1: see an opportunity below 80K?
• 6:47
  Speaker 2: So we're structural Bitcoin bulls underwriting a long-term thesis, and
• 6:51
  Speaker 2: we do not pretend that we have the skills to
• 6:54
  Speaker 2: predict where Bitcoin will go in the short run. So
• 6:57
  Speaker 2: we do think that a further dip from here as possible.
• 7:01
  Speaker 2: But we think that's a game that we are not
• 7:04
  Speaker 2: excellent at. What we do think we're excellent is understanding
• 7:07
  Speaker 2: what's going to happen over four year, eight year, 10 year,
• 7:10
  Speaker 2: 20 year time frames and just underwriting that structural thesis.
• 7:14
  Speaker 2: And so generally what happens is that if Bitcoin were
• 7:18
  Speaker 2: to move weaker into a downward trajectory, it's much harder
• 7:22
  Speaker 2: to raise capital. And so right now we have the
• 7:24
  Speaker 2: ability to raise substantial capital while Bitcoin was under $ 100, 000.
• 7:28
  Speaker 2: We'll take that all day and we're not trying to
• 7:31
  Speaker 2: get too cute with our execution. All right.
• 7:34
  Speaker 1: Well, a couple, I guess my question is, is why
• 7:37
  Speaker 1: more DAT companies? And we've got Saylor out there who
• 7:40
  Speaker 1: has created what many people would say, maybe one of
• 7:45
  Speaker 1: the most complex, but at the same time, very innovative
• 7:49
  Speaker 1: financial products available. Why try to jump into that and
• 7:54
  Speaker 1: continue to build on this DAT business?
• 7:58
  Speaker 2: So we saw an opportunity to do something that strategy
• 8:01
  Speaker 2: was going to be unable to do, which is really
• 8:04
  Speaker 2: turn up the amplification ratio to Bitcoin. And so amplification,
• 8:08
  Speaker 2: what it really just means is a leverage ratio. But
• 8:10
  Speaker 2: to note that we have preferred equity only, not debt.
• 8:13
  Speaker 2: So how levered or how amplified is our return profile
• 8:17
  Speaker 2: to Bitcoin? And so right now, Strive has about a
• 8:19
  Speaker 2: 60% amplification ratio. Strategy has about a 25% amplification ratio.
• 8:25
  Speaker 2: And if you think about that, if Bitcoin moves up,
• 8:28
  Speaker 2: we have a much higher beta to Bitcoin that they have.
• 8:32
  Speaker 2: And the reason is not because they're doing a bad job.
• 8:34
  Speaker 2: It's just that when you have 800,000 Bitcoin in your
• 8:37
  Speaker 2: balance sheet, it is extremely hard to get that leverage
• 8:41
  Speaker 2: amplification ratio higher. And so our belief was that they
• 8:45
  Speaker 2: weren't going to be able to do it because of
• 8:46
  Speaker 2: their size and that we were able to provide a
• 8:48
  Speaker 2: more efficient amplified vehicle because of our smaller size. And
• 8:53
  Speaker 2: so we raced in that direction. And that is why
• 8:56
  Speaker 2: that in the course of a bear market, we've now,
• 8:59
  Speaker 2: we've about 8X' d our Bitcoin holdings. We started with just
• 9:02
  Speaker 2: over 5,000 Bitcoin. Now we have 40,000 Bitcoin. That has
• 9:06
  Speaker 2: been substantial growth because of the demand and what we're doing.
• 9:10
  Speaker 2: And so I do think that there's room for other players.
• 9:12
  Speaker 2: That is, so Strive is just perpetual max amplification, but
• 9:16
  Speaker 2: done responsibly. There's other debts or Bitcoin treasury companies that
• 9:20
  Speaker 2: are more focused on sharp ratio maximization, cash flows. And
• 9:25
  Speaker 2: just like in investment management, there will be demand for
• 9:28
  Speaker 2: these different types of risk return profiles. Our belief is
• 9:31
  Speaker 2: that the biggest demand will be for amplified Bitcoin exposure.
• 9:34
  Speaker 2: So that is our strict focus. Okay.
• 9:37
  Speaker 1: You've got strategy out there buying another 22 million. And
• 9:42
  Speaker 1: he made a statement. This was in a tweet that
• 9:44
  Speaker 1: he put out. I'll show you guys. This was October 23rd,
• 9:48
  Speaker 1: and it was an expose where he wrote, just resolving
• 9:51
  Speaker 1: a few Bitcoin matters behind closed doors. Is this just
• 9:56
  Speaker 1: an acquisition strategy or what's the answer? with that, do
• 10:00
  Speaker 1: you think?
• 10:02
  Speaker 2: I don't know where he's going exactly with that one.
• 10:05
  Speaker 2: But when you see what's going on at Strategy right now,
• 10:08
  Speaker 2: their Bitcoin accumulation engine has slowed down a little bit
• 10:11
  Speaker 2: for the last several months. Strive has actually been buying
• 10:14
  Speaker 2: more Bitcoin for them than them. But I think they're
• 10:17
  Speaker 2: Their bigger strategy here is that at that size, they
• 10:21
  Speaker 2: are playing the institutional game. So they're talking to banks,
• 10:24
  Speaker 2: they're talking to insurance companies, they're talking to major asset managers,
• 10:27
  Speaker 2: pension funds, and that's the type of scale that they're
• 10:30
  Speaker 2: ready to. And so it's a trust game. I'm sure
• 10:33
  Speaker 2: these are behind closed doors conversations to try to unlock
• 10:37
  Speaker 2: massive amounts of capital because of their size. Right now,
• 10:40
  Speaker 2: Strive is at a size where our sweet spot's generally
• 10:43
  Speaker 2: more High net worth individuals is kind of the sweet
• 10:47
  Speaker 2: spot for allocation to us. That's probably our average investor.
• 10:50
  Speaker 2: But we do have pretty good support from some institutions.
• 10:53
  Speaker 2: But as you grow up in size, like strategy is done,
• 10:57
  Speaker 2: they're kind of growing up in times of the type
• 10:58
  Speaker 2: of investors that they need to attract to get to
• 11:01
  Speaker 2: the next level. And I do think that they will.
• 11:04
  Speaker 2: The challenge for them is that those large pools of
• 11:08
  Speaker 2: institutional capital, they move slowly. But I think that strategy's
• 11:12
  Speaker 2: balance sheet is basically unbreakable, and I think over time
• 11:15
  Speaker 2: they will unlock that with success.
• 11:18
  Speaker 1: Well, you look at their current strategy right now, which
• 11:22
  Speaker 1: is raising the stretch buyback limit to $ 3 billion. Would
• 11:26
  Speaker 1: you say that this might be a warning sign?
• 11:29
  Speaker 2: No. So Strive, as an example, has grown ours. We
• 11:34
  Speaker 2: launched our first preferred equity last November. We've grown it
• 11:37
  Speaker 2: to over $ 2 billion of notional outstanding. I think that
• 11:40
  Speaker 2: when you just zoom out a little bit, that over
• 11:42
  Speaker 2: the course of over a year, there's about $ 15 billion
• 11:46
  Speaker 2: of assets that have been sold through digital credit. And
• 11:49
  Speaker 2: so I think that there is learnings as what are
• 11:52
  Speaker 2: these products? How much volatility can you actually strip off
• 11:55
  Speaker 2: of Bitcoin? And strategy is obviously trying to buy back.
• 11:59
  Speaker 2: They're trying to really minimize that volatility by being much
• 12:02
  Speaker 2: more aggressive on their product, STRC. But I don't think
• 12:07
  Speaker 2: it's a sign of Failure in any sense, given the
• 12:10
  Speaker 2: fact that the industry has gone still from zero to
• 12:13
  Speaker 2: well over $ 10 billion in just over a year, that
• 12:16
  Speaker 2: would be a smashing success in any new type of
• 12:19
  Speaker 2: financial product. But I do think that it's, you know,
• 12:22
  Speaker 2: for them, it's kind of hit a little bit of
• 12:24
  Speaker 2: its sophomore snag. For us, it's been a rocket ship.
• 12:28
  Speaker 2: We just IPO'd a new preferred equity literally last week.
• 12:31
  Speaker 2: That's fixed rate. And strategies, STRC, are stated are variable rate.
• 12:37
  Speaker 2: Our belief is that over time, there's actually going to
• 12:39
  Speaker 2: be more demand for the fixed rate side than there
• 12:41
  Speaker 2: is the variable rate side. But it's just still really
• 12:44
  Speaker 2: early innings in what these products are and where the
• 12:46
  Speaker 2: biggest demand will be.
• 12:49
  Speaker 1: I'm looking at crypto longs now losing the $ 404 million
• 12:52
  Speaker 1: in four hours. Bitcoin briefly slips below $ 80K. This, I think,
• 12:57
  Speaker 1: is going to create some forced sellers, but it's also
• 13:00
  Speaker 1: going to probably create some new buyers. And with new buyers, that,
• 13:04
  Speaker 1: of course, is going to change kind of the dramatic
• 13:06
  Speaker 1: trend role of where Bitcoin is heading, especially against the dollar.
• 13:10
  Speaker 1: You guys announced your listing for sats right now available.
• 13:15
  Speaker 1: And tell me kind of the comparison for someone that
• 13:18
  Speaker 1: is saying, OK, I want to get exposure here. I'm
• 13:20
  Speaker 1: looking at maybe going the strive route or I could
• 13:23
  Speaker 1: be going over here and say maybe I want to
• 13:25
  Speaker 1: go the master or the micro strategy route. What would
• 13:28
  Speaker 1: be the benefit for you, especially on how you're paying
• 13:31
  Speaker 1: against yields?
• 13:33
  Speaker 2: Yeah, so I think there's two decisions that investors need
• 13:36
  Speaker 2: to make. The first is Are you shooting for price
• 13:39
  Speaker 2: stability with the high income? And if you are, the
• 13:42
  Speaker 2: best two products for that would be our SATA, S-A-T-A,
• 13:45
  Speaker 2: our strategies, S-T-R-C. They are designed to minimize volatility around
• 13:49
  Speaker 2: $ 100 per share. What we heard from several high net
• 13:55
  Speaker 2: worth investors to the point that we felt like a
• 13:57
  Speaker 2: bigger idea was that there was actually a greater desire
• 14:01
  Speaker 2: for locking in income stability. So not locking in trying
• 14:05
  Speaker 2: to get price stability, but just a higher income locked
• 14:07
  Speaker 2: in forever. That for the average kind of baby boomer,
• 14:12
  Speaker 2: that's looking to retire and just lock in an income
• 14:14
  Speaker 2: that that was actually going to be a better product
• 14:16
  Speaker 2: market fit, just like how about 93% of bonds are
• 14:20
  Speaker 2: actually fixed rate. And so when we were talking to people,
• 14:23
  Speaker 2: what we learned was that a lot of these high
• 14:25
  Speaker 2: net worth investors that want income, they understand the debasement trade.
• 14:30
  Speaker 2: They generally understand Bitcoin. They just don't need the volatility
• 14:33
  Speaker 2: of Bitcoin. They just want an income for the rest
• 14:35
  Speaker 2: of their life. And so that's why Sats is fixed rate,
• 14:39
  Speaker 2: pays 15% forever. But the price is very likely to
• 14:42
  Speaker 2: be volatile or much more volatile than Sata or STRC.
• 14:47
  Speaker 2: It'll ultimately see where the demand ends up shaking out.
• 14:50
  Speaker 2: We're pretty agnostic, actually, if which one ultimately has more success.
• 14:55
  Speaker 2: It's not going to change our cost of capital much
• 14:58
  Speaker 2: or what we view our long-term prospects. We just felt
• 15:02
  Speaker 2: like this was a missing need and that the average
• 15:04
  Speaker 2: person would probably prefer to lock in a little bit
• 15:06
  Speaker 2: higher yield and lock in that rate forever.
• 15:10
  Speaker 1: You were quoted by Benzinga. This is, will Bitcoin hit
• 15:14
  Speaker 1: 500K by 2030? You said maybe. When you look at
• 15:18
  Speaker 1: what are the conditions that have to happen for that
• 15:21
  Speaker 1: to occur?
• 15:23
  Speaker 2: Yeah, so there's a few. The first would be contingent
• 15:27
  Speaker 2: on a view that we have that the dollar is
• 15:29
  Speaker 2: going to go into a structural bear market over the
• 15:31
  Speaker 2: course of the next couple of years. And that will
• 15:34
  Speaker 2: be contingent on the Treasury and Scott Bassett actually remaining
• 15:38
  Speaker 2: true to his word when he said, I am the
• 15:40
  Speaker 2: House and going to take these actions. We actually believe him.
• 15:43
  Speaker 2: We believe that President Trump, J.D. Vance actually also won
• 15:47
  Speaker 2: a weaker dollar. We also think that that's somewhat of
• 15:50
  Speaker 2: a bipartisan position because whether you're a Democrat or Republican,
• 15:54
  Speaker 2: there really is not a desire to actually fix the
• 15:58
  Speaker 2: debt crisis. And so if you're not, then you really
• 16:01
  Speaker 2: got to control the cost of borrowing in the United States.
• 16:05
  Speaker 2: So we think that the dollar will be moving into
• 16:07
  Speaker 2: that structurally weak position that it really hasn't done in
• 16:10
  Speaker 2: Bitcoin's history. It's actually generally for the last 20 years
• 16:13
  Speaker 2: been going a little bit up. But in many bear markets,
• 16:16
  Speaker 2: that's when Bitcoin's done the best. So if we actually
• 16:18
  Speaker 2: had a structural bear market, so something similar to the
• 16:22
  Speaker 2: early 2000s, similar to the 1980s, where the dollar index
• 16:26
  Speaker 2: actually went structurally lower for a period of five, 10 years.
• 16:30
  Speaker 2: We think that that could ignite Bitcoin to going to $ 500, 000
• 16:32
  Speaker 2: per coin or above. We actually have three different scenarios.
• 16:37
  Speaker 2: We have a lower growth scenario that's about a 30% CAGR.
• 16:41
  Speaker 2: The base case is about a 50% CAGR, which puts
• 16:44
  Speaker 2: Bitcoin right around $ 500, 000. Then we have a bull case,
• 16:48
  Speaker 2: 70% CAGR. But we don't think that those probabilities are
• 16:53
  Speaker 2: equally distributed. We actually would lean on the more bullish scenarios.
• 16:58
  Speaker 2: or the base case over the lower growth scenario. So
• 17:01
  Speaker 2: we're very constructive on Bitcoin here. I would say the
• 17:03
  Speaker 2: only thing that would really challenge it would be meaningful
• 17:07
  Speaker 2: and substantial improvements in the fiscal situation in DC. But
• 17:12
  Speaker 2: we think that's very unlikely to occur. Okay.
• 17:16
  Speaker 1: You got a couple of things happening right now. You
• 17:18
  Speaker 1: guys are shooting for number two in terms of DATs.
• 17:22
  Speaker 1: but you're number four right now. So how, what would
• 17:25
  Speaker 1: be the strategy to try to get to number two
• 17:27
  Speaker 1: before the end of the year?
• 17:29
  Speaker 2: So it should happen pretty naturally on our side. You
• 17:33
  Speaker 2: never know what your peers are going to do. All right.
• 17:36
  Speaker 2: So we're not, we're not operating in a vacuum here,
• 17:38
  Speaker 2: but this last week we announced buying over 6,000 Bitcoin.
• 17:42
  Speaker 2: We're now 1,001 Bitcoin away from becoming, taking the number
• 17:46
  Speaker 2: two spot. And so at our trajectory, we would take
• 17:50
  Speaker 2: the number two spot, absence one of our peers doing
• 17:53
  Speaker 2: something even bigger, right? And that's one of the great
• 17:56
  Speaker 2: things about our industry is that because the actual treasuries
• 18:00
  Speaker 2: are Bitcoin, we actually would want to see other peers
• 18:04
  Speaker 2: be buying a bunch of Bitcoin as well, right? That
• 18:07
  Speaker 2: it's effectively, if we're all achieving excellence in this digital
• 18:10
  Speaker 2: gold rush era, buying a bunch of Bitcoin, it obviously
• 18:12
  Speaker 2: supports the price of Bitcoin, doing it in our own ways,
• 18:16
  Speaker 2: in our own kind of sources of demand, right? So
• 18:19
  Speaker 2: I say if we didn't achieve number two, that would
• 18:21
  Speaker 2: be the reason. But I think on our own trajectory,
• 18:24
  Speaker 2: we're clearly on a pace to having much more than
• 18:26
  Speaker 2: the number two currently has, which is 44,000 Bitcoin.
• 18:30
  Speaker 1: Matt, all of this, I think as you look at
• 18:33
  Speaker 1: investors in general, Bitcoin is typically targeted as, hey, this
• 18:36
  Speaker 1: is the alpha. It's going to be, you know, it's
• 18:37
  Speaker 1: the NVIDIA or the SpaceX of an investor who's looking
• 18:42
  Speaker 1: at crypto in general. Now we're starting to see tokenized stocks.
• 18:46
  Speaker 1: You had Wells Fargo, Cisco, and a whole bunch of
• 18:48
  Speaker 1: others now complaining that we're not necessarily going to allow that.
• 18:51
  Speaker 1: In fact, we started to see even things like this,
• 18:54
  Speaker 1: where there's full page ads out there going after stockholders saying, Hey, don't,
• 18:59
  Speaker 1: you know, help us support this. And then you look
• 19:02
  Speaker 1: at what Jeremy Allaire is talking about, who is all
• 19:05
  Speaker 1: in on this. Now that of course raises the question,
• 19:09
  Speaker 1: when you look at tokenized securities, how crypto is being used,
• 19:13
  Speaker 1: how blockchain is being used, this raises one, the awareness,
• 19:17
  Speaker 1: then investors kind of go the route of, maybe I
• 19:20
  Speaker 1: should invest in Bitcoin as well as leverage against this.
• 19:24
  Speaker 1: First of all, do you think we're gonna see companies
• 19:26
  Speaker 1: finally get on board with tokenized treasuries, or do you
• 19:29
  Speaker 1: think it's gonna continue to be a pushback?
• 19:33
  Speaker 2: So there is pushback from some companies, but there's also
• 19:36
  Speaker 2: a lot of companies that are all in on tokenization.
• 19:39
  Speaker 1: Right, exactly.
• 19:41
  Speaker 2: Our view is that, and my view just as a
• 19:44
  Speaker 2: general principle beyond just what I'm doing at Strive is
• 19:47
  Speaker 2: that democratizing access to investment is a good thing. That
• 19:51
  Speaker 2: people for years have been shut out from private markets. Obviously,
• 19:55
  Speaker 2: when we talk about tokenization, there's a couple of different
• 19:58
  Speaker 2: components to tokenization. One is publicly traded securities that are
• 20:01
  Speaker 2: already available on NASDAQ or NYSE getting tokenized, which allows
• 20:05
  Speaker 2: them to kind of move more freely throughout different types
• 20:09
  Speaker 2: of exchanges and will open up additional access to be
• 20:12
  Speaker 2: able to invest in the securities. That's kind of what
• 20:14
  Speaker 2: we're seeing already. I think that is a great thing.
• 20:17
  Speaker 2: It'll improve the liquidity profile. There's already many market makers
• 20:22
  Speaker 2: that are set up to kind of work on different
• 20:26
  Speaker 2: same token that might be on different exchanges. That's what's
• 20:29
  Speaker 2: been happening in crypto for years, where you have, whether
• 20:31
  Speaker 2: it's Ethereum or Solana, whatever, name your coin, Dogecoin, and
• 20:34
  Speaker 2: they're on all these different exchanges, and you have these
• 20:37
  Speaker 2: market makers that are making these cross markets. So I
• 20:40
  Speaker 2: think the functionality is there. I think it'll improve liquidity.
• 20:43
  Speaker 2: I think it'll be a great thing for capital markets.
• 20:46
  Speaker 2: I think it'll be a great thing for the price
• 20:49
  Speaker 2: actually stability over time, although it might be a little
• 20:51
  Speaker 2: messy in the interim, unlocking new forms of potential leverage.
• 20:54
  Speaker 2: I think it's a great thing. I think that is
• 20:57
  Speaker 2: distinct from how much value that has to accrue to
• 21:01
  Speaker 2: the underlying token that these are based on. So whether
• 21:04
  Speaker 2: that's Solana or Ethereum. And I think the simplistic way
• 21:07
  Speaker 2: to look at that is that these are networks. And
• 21:10
  Speaker 2: if you are going to use their network, how much
• 21:12
  Speaker 2: of these coins do you actually have to hold? How
• 21:14
  Speaker 2: much Ethereum or how much Solana do you have to
• 21:16
  Speaker 2: hold to use tokenized securities? And it's really not that much.
• 21:20
  Speaker 2: And so I think when you look at the market
• 21:22
  Speaker 2: cap of some of those tokens that are more network tokens,
• 21:27
  Speaker 2: I think that it's arguable that it won't accrue a
• 21:29
  Speaker 2: ton of value to them. I do think it will
• 21:32
  Speaker 2: accrue some value to Bitcoin, but I think Bitcoin is
• 21:35
  Speaker 2: really just distinct in the sense that it's digital gold
• 21:39
  Speaker 2: and it's really more based on the debasement trade. And
• 21:42
  Speaker 2: I think that that will continue to heat up.
• 21:45
  Speaker 1: With that being the case, the debasement trade, you have
• 21:47
  Speaker 1: BitBonds out here pitched as a solution right now to
• 21:50
  Speaker 1: Trump's budget Bitcoin reserve strategy. And one of the things
• 21:54
  Speaker 1: that the Bitcoin Policy Institute said that the bonds would
• 21:57
  Speaker 1: pay a 1% interest direct to 10% of the proceeds
• 22:01
  Speaker 1: into Bitcoin. This could save around 700 billion or over
• 22:03
  Speaker 1: 10 years. That would be significant in a strategy like this.
• 22:08
  Speaker 1: My question is, do you think this can actually fix
• 22:11
  Speaker 1: things like pensions and the debt?
• 22:14
  Speaker 2: So Bitcoin itself and getting Bitcoin exposure can fix the debt.
• 22:19
  Speaker 2: It can fix the pension returns. When it comes to
• 22:23
  Speaker 2: something like a Bitbond and the Treasury issuing them, I
• 22:26
  Speaker 2: think it really just comes down to the type of
• 22:29
  Speaker 2: demand and the demand sources that they can issue those
• 22:31
  Speaker 2: into and finding that sustainable demand. And I think that's
• 22:34
  Speaker 2: the hard part. In theory, the U.S. kind of issuing
• 22:39
  Speaker 2: that and getting some direct exposure to Bitcoin and kind
• 22:41
  Speaker 2: of creating a win-win, great product. I think that there's
• 22:44
  Speaker 2: probably a lot of work to do to make that
• 22:47
  Speaker 2: a sellable, sustainable product. And I will give you an
• 22:49
  Speaker 2: example that has nothing to do with Bitcoin. But during COVID,
• 22:53
  Speaker 2: there was a lot of people calling for the Treasury
• 22:55
  Speaker 2: to issue 100-year bonds. I was actually one of them.
• 22:59
  Speaker 2: This makes a lot of sense. Interest rates are near zero.
• 23:02
  Speaker 2: Turn this debt out 100 years. But what you're seeing,
• 23:05
  Speaker 2: and I think even Secretary Besant at the time, before
• 23:08
  Speaker 2: he was Secretary, was in favor of issuing more longer
• 23:11
  Speaker 2: term debt. But there's not really the demand for that
• 23:14
  Speaker 2: type of duration in sustainable size to have a sustainable
• 23:18
  Speaker 2: issuance cadence. And so there's a lot of things that
• 23:20
  Speaker 2: are good in theory. You have to find both the
• 23:23
  Speaker 2: buyer and the seller. Obviously, the seller would be the
• 23:26
  Speaker 2: treasury to have a win-win transaction. And my initial view
• 23:30
  Speaker 2: is that it's probably difficult to actually achieve. But if
• 23:34
  Speaker 2: they are able to achieve it, I think it's a
• 23:36
  Speaker 2: worthy endeavor to try because I do think that it
• 23:38
  Speaker 2: could be a massive win-win.
• 23:42
  Speaker 1: I've got one for you to kind of wrap up today,
• 23:44
  Speaker 1: and that is the concern around quantum and AI in general.
• 23:47
  Speaker 1: Here's Shamath Palayapatiya.
• 23:49
  Speaker 2: This is one of the.
• 23:49
  Speaker 1: Biggest investors and VCs out there in Silicon Valley, claiming
• 23:54
  Speaker 1: that AI is now aimed at crypto, if it were
• 23:58
  Speaker 1: aimed at crypto. I still think that AI is probably
• 24:00
  Speaker 1: going to find its way into banking more so than crypto.
• 24:04
  Speaker 1: but that it could be literally aimed at Satoshi's wallet
• 24:08
  Speaker 1: and could end up draining this wallet and even going
• 24:12
  Speaker 1: short on the asset, which obviously would put a lot
• 24:16
  Speaker 1: of pressure on Bitcoin. What's your take on this? Do
• 24:19
  Speaker 1: you think this is a real vector in terms of
• 24:21
  Speaker 1: a threat?
• 24:23
  Speaker 2: So I think there's already real solutions for AI. I
• 24:27
  Speaker 2: mentioned to you before we hopped on that I'm actually
• 24:29
  Speaker 2: recording this from Lugano, Switzerland, where I was at the
• 24:32
  Speaker 2: Plan B conference and talking to a lot of the
• 24:35
  Speaker 2: developers on Bitcoin. And there are great solutions today. It
• 24:38
  Speaker 2: likely would take just a few months to roll out.
• 24:41
  Speaker 2: There's several different potential attack vectors from quantum. And so
• 24:45
  Speaker 2: right now, the view is that we can actually take
• 24:48
  Speaker 2: our time as a Bitcoin network and figuring out the
• 24:51
  Speaker 2: best way to do this. But there would be some
• 24:53
  Speaker 2: potential quick solutions if needed. My view on Satoshi's coin specifically,
• 24:59
  Speaker 2: I have a couple of different views on that. But
• 25:02
  Speaker 2: one would be, that very likely the first people to
• 25:07
  Speaker 2: get access to quantum would be someone like a Google,
• 25:10
  Speaker 2: a Microsoft, a very large company. You can't just steal
• 25:14
  Speaker 2: someone's coins. If someone leaves their wallet on the table,
• 25:18
  Speaker 2: you can't just go take them and they're yours. That
• 25:21
  Speaker 2: is not how the law works. And so a large
• 25:23
  Speaker 2: company stealing Satoshi's coins would be illegal. If a Google
• 25:28
  Speaker 2: did take them and put them in the hands of
• 25:31
  Speaker 2: the government for safekeeping or something like that. I don't
• 25:33
  Speaker 2: think that it's at the size and scale that represents
• 25:36
  Speaker 2: a real material risk to Bitcoin. You think about 1
• 25:39
  Speaker 2: million coins, 1 over 21 million, that's over under 5%.
• 25:42
  Speaker 2: There's obviously probably some other old wallets that would be
• 25:46
  Speaker 2: at risk, but we're not talking about 50% of the
• 25:49
  Speaker 2: coins that would be in this type of scenario unable
• 25:52
  Speaker 2: to be upgraded, we're probably talking about 5% to 10%
• 25:55
  Speaker 2: of the overall coins as a one-time risk that the
• 25:59
  Speaker 2: community is going to have to decide what to do
• 26:02
  Speaker 2: with those types of coins. My view is not to
• 26:05
  Speaker 2: permanently lock them. I think that would be overarching on
• 26:09
  Speaker 2: the Bitcoin network, but that wouldn't potentially prevent a a
• 26:13
  Speaker 2: large tech company to putting them in safekeeping, which I
• 26:17
  Speaker 2: think is more likely than a bad actor getting access
• 26:21
  Speaker 2: to quantum, which I think even when quantum happens, it'll
• 26:24
  Speaker 2: be a long time before that technology is in the
• 26:26
  Speaker 2: hands of the bad guys, in my view.
• 26:29
  Speaker 1: But are you at all worried about this almost bank
• 26:33
  Speaker 1: run effect that you do see in an economy or
• 26:37
  Speaker 1: into any kind of society where something is threatened people
• 26:41
  Speaker 1: will start a bank run, it creates a sentiment waterfall,
• 26:44
  Speaker 1: you get major selling, that entices other major selling, shorts
• 26:49
  Speaker 1: get liquidated, longs are toast. What about that? Because you're
• 26:54
  Speaker 1: talking about a situation that could really ramp up pretty
• 26:57
  Speaker 1: quickly if that became public knowledge that this has been done.
• 27:02
  Speaker 2: Yeah, so Bitcoin is a volatile asset. I think ultimately
• 27:05
  Speaker 2: it comes down to supply versus demand. But I think
• 27:09
  Speaker 2: that's why you always have to be very careful with leverage.
• 27:12
  Speaker 2: So not particularly for the reason you just highlighted, but
• 27:15
  Speaker 2: because of the volatility of leverage, that's why Strive has
• 27:18
  Speaker 2: no encumbered Bitcoin. We have no liquidation points. We could
• 27:21
  Speaker 2: literally ride out a flush to a penny for Bitcoin.
• 27:24
  Speaker 2: I mean, you saw oil in 2020 went negative on futures, right?
• 27:29
  Speaker 2: And then it rebounded and is now very, very healthy
• 27:33
  Speaker 2: prices again, that those short-term types of pressures, I think
• 27:39
  Speaker 2: are not something that worries me. What worries me is
• 27:41
  Speaker 2: the long-term support and demand. And when you think about
• 27:44
  Speaker 2: where we're going, I think there just will be a
• 27:46
  Speaker 2: structural bid on scarcity. Those types of scenarios could result
• 27:52
  Speaker 2: in selling pressure, but they also could result in the
• 27:56
  Speaker 2: opposite of that. People would be trying to secure their
• 28:00
  Speaker 2: coins and actually not selling it. And that what we've
• 28:03
  Speaker 2: seen in the past is that hacks, so exchanges with
• 28:07
  Speaker 2: Bitcoin have been hacked in the past. So you've had
• 28:10
  Speaker 2: like the Mt. Gox hack as an example. These hacks
• 28:13
  Speaker 2: have tended to be bullish for the price of Bitcoin.
• 28:17
  Speaker 2: Introduce short-term volatility, but if you actually zoom out around them,
• 28:20
  Speaker 2: they tend to be something that ends up being more
• 28:22
  Speaker 2: of a bullish catalyst than a bearish catalyst. And I
• 28:25
  Speaker 2: think that if Bitcoin got beyond quantum, even if it
• 28:30
  Speaker 2: got beyond quantum in a messy way, I actually think
• 28:33
  Speaker 2: it would be bullish because it would kind of move
• 28:35
  Speaker 2: something that was an unknown, scary thing to you knew
• 28:38
  Speaker 2: what happened. And I think that it would actually be
• 28:40
  Speaker 2: a bullish catalyst for Bitcoin on the back end of that.
• 28:43
  Speaker 1: Well, I mean, you've had good answers here. I think
• 28:45
  Speaker 1: for investors that are out there looking at Bitcoin long term,
• 28:48
  Speaker 1: that's the key. You guys have been kind of looking
• 28:51
  Speaker 1: at more of a bigger picture here of where this
• 28:53
  Speaker 1: asset is heading. So, Matt, it's been great having you
• 28:57
  Speaker 1: on the show today. Thanks so much for coming in.
• 28:58
  Speaker 1: We appreciate it.
• 29:00
  Speaker 2: Thanks for having me.
• 29:07
  Speaker 1: If you like this video, hit like and subscribe, drop
• 29:10
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• 29:13
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