Latest / The Starting Block / Saylor’s Big Bitcoin Sale, Investigating $ANSEM

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Saylor’s Big Bitcoin Sale, Investigating $ANSEM · The Starting Block

2:09
Good morning and welcome back to
2:11
The Starting Block. Sorry, we're a
2:12
little bit late this morning.
2:13
Some technical issues over here in
2:15
Europe, but hey, we are finally
2:17
live. It's great to have you with
2:18
us. If you're joining us for the
2:19
first time, welcome to The starting
2:20
Block. This is The Block's new daily
2:22
show. My name is Gareth Jenkinson.
2:24
I'm your host and head of multimedia
2:26
here at the publication.
2:28
And today we're gonna be jumping
2:29
into some big topics.
2:31
Obviously, Michael Saylor sold a big
2:32
chunk of Bitcoin last yesterday,
2:36
$216 million worth of Bitcoin.
2:38
We're gonna to be jumping into that
2:39
with Jesse Myers in the hot
2:41
seat a little bit later today.
2:43
And if you don't know who Jesse
2:44
Myers is, I'll be telling you a
2:45
little more about him.
2:46
But essentially, he's the man that
2:47
created the original strategy
2:49
that Michael Saylor used to
2:52
buy Bitcoin using convertible notes
2:54
offering. So we'll be picking his
2:55
brain about Michael Sayler's
2:57
big Bitcoin sale.
2:58
And then we're going to be talking
2:59
about the Ansem meme
3:01
coin.
3:02
If you're on crypto Twitter and
3:03
you're a DJ and you know exactly
3:04
what I'm talking about.
3:05
We've got Debs from the Bubble
3:07
Maps team to tell us everything we
3:09
need to know about the Anson meme
3:10
coin. Absolutely pumping.
3:12
Crazy to see a meme coin
3:14
coming back to life.
3:16
In these market conditions.
3:17
But that's what we've got coming up
3:19
on the show.
3:20
We're going to jump straight into
3:22
the block briefing, which is
3:24
our news bulletin first off.
3:26
So to bring up our first headline
3:28
of the day, Galaxy delivers 133
3:31
megawatts of critical IT load
3:33
to CoreWeave.
3:35
Today, Galaxy Digital
3:37
has switched on the first
3:39
of its power at its Helios
3:41
campus in West Texas.
3:43
Handling AI cloud
3:45
provider Coreweave 133 megawatts
3:47
of critical IT load under
3:49
a 15-year lease.
3:51
It marks EOS's full transformation
3:53
from Bitcoin mine to AI data
3:55
center.
3:56
Remember this site started as one of
3:57
North America's biggest Bitcoin
3:59
mines at a 180
4:01
megawatt facility Galaxy bought from
4:03
Argo blockchain for $65
4:05
million back in 2022.
4:08
Rent kicked in during the second
4:09
quarter And it's the clearest sign
4:11
yet of miners chasing AI's
4:13
far richer margin.
4:15
So big Bitcoin miner pivoting
4:17
into AI.
4:19
Then the other big story, and we
4:20
mentioned this just before we
4:21
started the bulletin, Michael
4:23
Saylor's strategy is now a
4:25
seller of Bitcoin.
4:26
An 8k filed on Monday shows the
4:28
firm offloaded 3,588
4:31
Bitcoin for roughly $260
4:33
million last week.
4:35
That's about 1,363
4:37
coins, near $59,000,
4:40
then another $2,225,
4:42
around $60,700.
4:45
That trumps its stash down
4:47
to 843,775
4:50
Bitcoin.
4:51
It's still more than 4% of all
4:53
the Bitcoin that will ever exist,
4:55
but sitting on some $11 billion in
4:58
paper losses.
4:59
Strategy says the proceeds funded
5:01
preferred stock dividends.
5:02
And rebuilt its dollar reserves to
5:04
$2.55 billion.
5:07
Bitcoin dipped about 2%
5:09
right after that filing hit,
5:11
but we're trading in the green ahead
5:13
of the opening bull in
5:15
the US.
5:16
Then our next headline, President
5:17
Trump's strategic Bitcoin reserve
5:19
hit a legal snag.
5:21
According to Bloomberg, the plan
5:22
laid out early in his presidency.
5:24
And funded mainly through the
5:26
Bitcoin government already seized
5:28
in criminal and civil forfeitures
5:31
is running into jurisdictional and
5:33
legal complications.
5:34
The original order also tasked the
5:36
Treasury and Commerce Departments
5:38
with finding budget-neutral ways to
5:40
buy more Bitcoin.
5:41
As of now, no confirmed open market
5:43
purchase has been made for the US
5:46
Bitcoin Reserve, and it is a
5:48
reminder that turning a headline
5:49
executive order into actual holdings
5:51
is proving far more complicated.
5:53
Than the announcement suggested.
5:56
In another story we spoke about
5:58
briefly yesterday, Vitalik Buterin
5:59
is thinking even leaner
6:01
in an Ethereum research forum post
6:03
titled The Extremely
6:05
Lean Chain, the co-founder of
6:07
Ethereum Laydata Plan to radically
6:09
shrink the protocol's consensus
6:11
layer, shifting most of the
6:13
state management burden onto
6:14
validators using zero-knowledge
6:17
proofs. The idea?
6:18
Use recursive stock proofs to
6:20
keep unchained data near zero
6:22
while still supporting upgrades like
6:24
single-slot finality and quantum
6:26
resistance.
6:27
It's a deeply technical proposal.
6:29
Part of Buterin's broader lean
6:31
Ethereum push.
6:32
In the bottom line here, he wants a
6:33
chain that stays light and fast,
6:35
even if it scales.
6:37
Then a story for the trenches,
6:40
a governance attack to flag.
6:42
From yesterday, BonkDAO tied
6:44
to the popular Solana Munecoin bonk
6:46
says roughly $20 million in bonk
6:48
tokens were drained from its
6:50
treasury.
6:50
According to Bonk, Enew's official
6:52
ex-count, an
6:54
attacker pushed through a malicious
6:55
governance proposal that gave them
6:56
the keys to empty the treasury.
6:59
The stolen bonk has already started
7:00
moving towards exchanges, putting
7:02
fresh downward pressure on the
7:03
token's price.
7:04
Again, a reminder that on-chain
7:06
governance itself can be an
7:08
attack surface.
7:09
It's not just the smart contracts
7:11
underneath it.
7:12
In our next story, a courtroom twist
7:14
for Barry Silbert.
7:16
A federal judge has revived a
7:18
fraud claim against Silbert and his
7:20
digital currency group in an
7:21
investor lawsuit over the collapsed
7:23
Genesis Yield program.
7:25
Judge Stephen Underhill in
7:27
Connecticut revised an earlier
7:28
February ruling.
7:29
Bringing back a new or common law
7:31
fraud claim while letting the
7:33
federal securities claims move
7:35
forward.
7:36
Genesis Yield was a lending program
7:37
that let customers earn interest
7:39
on their crypto before it
7:41
imploded.
7:43
The revived claims mean
7:45
that Solbit and DCG remain
7:47
squarely on the hook as this
7:49
class action grinds on.
7:52
Then our final, oh, actually,
7:54
I think we've dropped that story.
7:56
So I'm going to skip past that one.
7:57
I think our producer Jordan's
7:58
probably scrapped it off the
8:00
screen.
8:01
We've already got our next guest on
8:03
for the Market Pulse, and we're
8:04
going to do something a little bit
8:05
different today.
8:06
As I mentioned, we're going to be
8:07
doing a little bit of a deep dive
8:08
into the Ansem meme coin.
8:09
So it's a great pleasure to welcome
8:11
Deeds from the BubbleMaps team
8:14
to the show today to talk to us
8:16
about.
8:17
The answer mean coin first things
8:19
first deeps.
8:20
How are you? And thank you very much
8:21
for joining us on the show today
8:23
Hey, I'm doing well.
8:25
Hopefully you can hear me okay.
8:27
But yeah, just appreciate you
8:28
having us on and
8:30
hoping we can contribute something
8:33
to the stream today.
8:34
Yeah, beautiful.
8:36
Long-time follower of bubble maps
8:38
and I think the investigations and
8:39
on-chain data
8:41
visualizations that you do are some
8:42
of the best in the industry and
8:44
definitely help a lot of people
8:45
navigate what's going on,
8:47
especially DGENs out there.
8:49
For anyone out there that doesn't
8:50
know about the Ansem meme coin, can
8:51
you give us a quick TLDR about
8:53
what you know from its genesis
8:55
and how the token kind of
8:57
came to be shifted across
9:00
to Ansem and
9:02
what we know so far?
9:04
Sure.
9:05
So the TLDR is
9:07
this you know, the token was not
9:09
deployed by Ansem.
9:12
And so I guess maybe that's a good
9:13
place to start. Who is Ansem?
9:15
Ansem is a very prolific
9:17
Solana based trader,
9:19
crypto trader, as well as
9:21
a KOL key thought leader in
9:23
crypto. He's been around for quite a
9:25
while.
9:26
He has been very vocal
9:28
and made lots of money in crypto and
9:30
has accumulated a million
9:32
followers. So he has a little bit.
9:34
Of his hands in crypto, but also
9:36
you could say in kind of the retail,
9:38
you know, normie, TradFi world,
9:40
a little bit outside of the CT
9:42
bubble, but this
9:44
token wasn't launched by him.
9:45
It was a community-based token.
9:47
There was a mystery behind like,
9:50
what wallet was actually Ansem's?
9:52
And then he ended up sharing one on
9:54
X and very quickly
9:57
there was a token that was deployed
9:58
with the ticker as we know, of
10:00
course, Ansem.
10:01
And he was sent 65%
10:03
of the supply at the time, which
10:06
is now worth several millions
10:08
of dollars, hundreds of millions of
10:09
dollar.
10:10
And that's really where it
10:11
started. He airdropped large amounts
10:14
of the supplies well to
10:16
people in the early days.
10:17
And those tokens have of course
10:19
accumulated in value.
10:21
We've done a couple of tweets about
10:23
that, but yeah, that's the
10:25
story. And now it's sitting at 400
10:26
million market cap.
10:28
It's one of the hottest tokens on
10:30
the market right now for sure.
10:31
So there's a ton of interest.
10:34
When it comes to your investigations
10:35
and the work that you guys have been
10:36
doing, I mean, I'm seeing some
10:38
interesting stats on the Bubble Maps
10:40
X account.
10:42
Just to highlight it, there's
10:43
110,000 holders, 94%
10:46
are in profit with the tokens
10:48
trading right now.
10:49
12 people, 12 wallets rather
10:51
are up $1 million, 200 are
10:52
up 100K, 1,500 up
10:54
at 10K.
10:56
There's a lot of people that are
10:57
sitting on big profits here.
11:00
All of the on-chain data and what
11:02
you guys are looking at, obviously,
11:03
you're the head researcher
11:05
at Bubble Maps.
11:07
What's the most interesting metrics
11:08
here?
11:09
And are there any concerns that you
11:11
have for this token and its
11:13
longevity?
11:16
Yeah, it's an interesting question.
11:19
So I mean, interesting stats, I
11:20
think, are one of the biggest ones.
11:23
You know, you read one of our most
11:24
recent tweets, but we also talked
11:25
about how, you know, the total
11:27
amount that he airdropped.
11:28
When we first put out
11:30
a tweet, it was $6.7
11:32
million airdrop to the
11:34
community, which is quite a bit of
11:35
money, you know?
11:37
For just a normal KOL
11:39
on CT to airdrob to people
11:41
for just holding a token or
11:43
maybe not even holding a tokens.
11:44
It's a very.
11:45
Very generous airdrop, but now
11:47
those values have tripled.
11:49
It's at 26.8 million
11:51
distributed.
11:53
Obviously, some of those tokens were
11:54
sold, not everyone waited until
11:56
they reached their full potential.
11:58
But I think that is potentially one
12:00
of the most interesting stats
12:01
because you can compare it to other
12:03
projects that have had VC
12:05
backing,
12:07
traditional projects,
12:08
not meme coins, have
12:10
distributed far less in terms of
12:12
airdrops.
12:13
I and some projects
12:15
which have promised airdrops
12:17
have have never really delivered on
12:19
those promises which was kind of
12:21
part of the narrative that Ansem
12:22
leaned into. So I think this stat
12:24
just the total amount distributed
12:26
in the airdrop is very interesting.
12:29
As for risks, you
12:31
know, I don't want to obviously
12:33
unnecessarily fud the
12:35
token for any reason here.
12:36
There's always risks with meme coins
12:38
right because the tokens unlocked
12:40
people can dump
12:43
You know, Ansem holds
12:44
a large percent of the supply,
12:46
so there is a little bit of a
12:48
centralization risk, but I assume if
12:50
you trust Ansem and you trust
12:52
that he's not gonna sell, maybe
12:53
that's not so much of a risk for
12:55
you.
12:57
But yeah, hopefully that answered
12:59
the second part of your question.
13:01
Yeah, it does.
13:03
I mean, like, I think I've
13:04
said many times online, my general
13:06
thoughts on meme coins is it's
13:08
literally just a casino.
13:09
So you're playing a dangerous
13:12
game, even getting involved in meme
13:13
coins, but it is what it is.
13:16
When you go back to the actual,
13:17
like, original bubble maps and the
13:19
genesis of the token and
13:21
for people out there that don't know
13:22
much about bubble maps, the
13:24
visualizations,
13:26
were there any sort of interesting
13:28
clusters that you noticed?
13:29
And maybe you can explain a little
13:30
bit about the
13:32
information you can infer from using
13:34
bubble maps and the visualizations
13:36
that you create.
13:38
Sure, do you mean specifically on
13:39
the Ansem token?
13:41
Yeah.
13:42
Sure, I mean, we actually did,
13:44
one of the first tweets we actually
13:45
put out was about a
13:48
cluster that was selling relatively
13:50
early on as the
13:52
token was pumping.
13:53
Now the chart went up anyways,
13:55
right?
13:55
And I think it's important to
13:57
mention also a cluster doesn't
13:58
necessarily mean like it's a scam or
14:00
there's something super negative
14:02
about a token.
14:03
A cluster is just connections,
14:05
multiple wallets that are connected.
14:07
On a bubble map.
14:08
And one of the interesting things
14:10
about the tool bubble maps is you
14:11
can rewind to
14:13
any point on a map to
14:15
see the distribution of
14:17
holders and how they're connected.
14:19
And in that particular
14:21
tweet we did, we rewinded
14:24
and we found, you
14:25
know, one of the top holders that
14:27
purchased very, very
14:29
early on before Ansem had really
14:31
endorsed the token, but after he had
14:32
been airdropped it was
14:34
selling into the chart.
14:36
Um, outside of this though, I mean,
14:38
I, I have to be honest with you.
14:39
I would not say that this is
14:41
a, one of these, um,
14:44
one of these maps where something
14:45
like really jumps out is like, Oh,
14:47
like bundled scam, tons of connected
14:49
holders, hidden supply.
14:51
Um, I would not say
14:53
that.
14:54
Yeah, for sure.
14:56
It's one of the more interesting
14:57
ones, right? Because all the big
14:59
meme coins we've kind of seen, I've
15:01
always looked at Bubble Maps as a
15:02
place to really give us a
15:04
good feeling of how
15:07
legitimate the
15:09
meme coin is or how organic
15:12
it is. And this kind of does
15:14
feel like one of them more organic
15:16
stories around it.
15:17
And the price appreciation alone
15:19
is just is crazy.
15:21
And obviously, Anson's got a million
15:22
followers on X.
15:24
He's very well known in the Solana
15:26
community.
15:27
So it's no surprise that it's got
15:29
so much traction, but still,
15:31
it's a meme coin.
15:34
And again, just a disclaimer and a
15:36
warning to people out there, just be
15:37
careful how you invest your money.
15:40
Obviously, we don't give investment
15:41
advice or anything here, but I feel
15:43
like as a journalist and a
15:44
broadcaster, I need to do
15:46
what I need to do and just at least
15:49
warn people out there that, yeah,
15:51
this is...
15:52
In my view, gambling, so
15:54
play responsibly.
15:56
Deves, thank you so much for taking
15:57
the time to chat to us today.
15:59
We've got Jesse Myers backstage,
16:01
so we're going to take a very short
16:02
break and we'll be back with the hot
16:04
seat. We're going be talking about
16:06
Michael Saylor and strategy selling
16:07
some Bitcoin. We'll be chatting to
16:09
Jesse about Smarter Web Co, which
16:11
is, of course, the UK's most
16:12
well-known Bitcoin treasury company
16:14
and is general outlook for
16:16
Bitcoin as it stands right now.
16:18
We will be right back.
16:19
Don't go away.
20:17
Welcome back to the starting block.
20:18
We are jumping into the hot seat
20:20
segment of the show.
20:21
We've got a Bitcoiner that I've long
20:23
followed and admire and I've
20:25
had the pleasure of interviewing a
20:27
couple of times in the past, Jesse
20:28
Myers.
20:30
He's the head of Bitcoin strategy at
20:31
Smarter Webco.
20:33
And I think quite famously,
20:35
your claim to fame is
20:37
basically coming up with the
20:38
strategy for Michael Saylor's
20:40
strategy.
20:41
Jesse, thanks so much for joining us
20:43
on the show, first things first for
20:44
anyone out there that doesn't know
20:45
who you are, Do you want to give us
20:46
a? Brief TLDR before we
20:48
get into the meat of the
20:50
conversation.
20:51
Yeah. Well, it's a little too kind.
20:54
I can't claim to have come up with a
20:55
strategy.
20:57
My contribution, I guess,
21:00
was I put out a piece called
21:01
Bitcoin's Full Potential Evaluation
21:04
a handful of years ago,
21:06
which created a framework for
21:08
how to think about Bitcoin's
21:10
role in the global asset landscape
21:12
and how big it could be
21:14
relative to other existing asset
21:16
classes.
21:17
And so.
21:20
Michael Saylor read that, liked it
21:22
a lot and adopted it as
21:24
the basis for his
21:27
Bitcoin valuation
21:29
model.
21:30
So that's built on
21:32
my analysis and starting
21:34
numbers too.
21:36
So which then
21:38
is an important part
21:40
of the overall treasury
21:42
strategy because if you believe
21:44
it's going to become a
21:46
major asset in the global asset
21:48
landscape and it's going to outpace
21:49
growth of. All the other assets,
21:51
then you start to have the
21:52
justification for what
21:55
they're doing now, which is
21:56
taking on debt at
21:58
a 12% cost to capital because
22:01
they think that Bitcoin
22:03
is an asset that's going to grow at
22:04
29% per year over
22:06
the next two decades.
22:07
And that comes from my
22:09
humble contribution, but I
22:11
can't claim to have invented
22:14
the overall treasury strategy.
22:16
A little background on me,
22:18
I'm...
22:19
I've gone as Croesus on
22:22
Bitcoin Twitter for a number of
22:23
years. I was a management consultant
22:25
at Bain.
22:26
I'm an MBA at Stanford.
22:28
Fell down the crypto rabbit hole.
22:30
So hearing your previous guest talk
22:32
about meme coins
22:34
and gambling that's still going
22:36
on out there in crypto land,
22:39
it's familiar.
22:41
But as it does with
22:43
everyone, I would even
22:45
say including your
22:47
prior guests, people will eventually
22:49
find themselves just trusting
22:51
Bitcoin, because I think that
22:53
Bitcoin is the only thing that has
22:54
any value in the
22:56
digital asset landscape.
22:58
And I think it has a ton of value.
22:59
I think the
23:01
future bedrock of
23:04
finance and
23:06
the preferred savings technology for
23:08
the and it
23:10
will grow to become
23:12
maybe a quarter
23:14
of... Global asset value when
23:16
today it's, you
23:18
know, 0.2%
23:20
of global asset value.
23:21
And yeah, so I've
23:24
been full time in Bitcoin for a
23:26
while for since
23:28
2018, really,
23:31
and 2017.
23:33
And, and have found my way into
23:36
the Bitcoin treasury landscape,
23:40
through my analysis and
23:41
contributions and
23:43
got in touch with the SmarterWeb
23:45
company as they started to repeat
23:46
the playbook in
23:48
the UK.
23:50
So I joined Smarterweb as the
23:51
head of Bitcoin strategy.
23:54
And we are the UK's
23:56
largest Bitcoin treasure company.
23:58
We are seeking to repeat the
24:00
amplified Bitcoin
24:02
value proposition that
24:04
MicroStrategy has
24:06
perfected in the US.
24:08
And we're doing it on the London
24:10
Stock Exchange.
24:12
As the UK is leading Bicron Treasure
24:14
Company.
24:16
Very, very nice overview, and I
24:17
think it paints the context for
24:20
the rest of the conversation today.
24:22
Obviously, a lot has happened in
24:24
the last few years, and especially
24:26
just for strategy in
24:28
the past year and a half with
24:30
all of these preferred
24:32
stock offerings that they've put
24:33
out. Obviously, STRC has been
24:35
the real game changer, but it's
24:37
been tumultuous probably like six
24:39
weeks or so.
24:40
And then obviously we had the big
24:42
headline yesterday, Michael Saylor's
24:43
biggest Bitcoin sale to date, $260
24:46
million worth of Bitcoin.
24:47
You put out a really great tweet in
24:49
the last 24 hours, kind of breaking
24:51
down your take and
24:53
your understanding of the
24:55
why and how.
24:56
Can you give us a brief sort
24:58
of TLDR of that and why
25:00
you think Michael Saylors made
25:02
the sale, what the implications
25:04
are for Bitcoin going forward, if
25:06
there are any and why
25:08
he's gone and done this.
25:09
Yeah, I think it's bemusing
25:11
to watch the...
25:15
Misinterpretation of what's been
25:17
happening with strategy recently.
25:20
And I think that's because the
25:21
headlines are great
25:23
clickbait fodder.
25:24
The biggest strategy,
25:27
biggest Bitcoin bull, Michael
25:28
Saylor, suddenly starts selling
25:30
Bitcoin.
25:31
Has he lost faith in Bitcoin?
25:33
That's going to get clicks.
25:36
But what's actually happening is
25:37
that they have figured out as part
25:39
of their ongoing evolution of
25:41
rolling out
25:43
their preferred equities.
25:45
Most notably stretch,
25:48
they have now figured out that if
25:49
they are willing to sell
25:51
a little bit of Bitcoin,
25:54
the market, the credit market will
25:56
give them a ton more capital so
25:58
that they can buy even more Bitcoin.
26:02
So, Sailor went on a
26:04
podcast a few weeks ago,
26:06
I think during the Bitcoin
26:08
Prague conference,
26:11
and he quite plainly
26:13
said this, he said that
26:16
On occasion, we will
26:18
sell one Bitcoin so that
26:20
we can buy 20 more Bitcoin because
26:22
the credit market will give us more
26:24
capital.
26:25
He said that very directly weeks
26:26
ago, and that's
26:29
exactly what has happened.
26:30
So for Q2, they bought,
26:34
off the top of my head, something
26:35
like 80,000 Bitcoin, and
26:37
they've sold 3,600
26:40
Bitcoin. And so that
26:42
ratio is 22.5
26:44
to 1.
26:45
So, they did this in
26:47
Q2 exactly as he said he
26:49
would do weeks ago,
26:52
and that's what
26:54
they're up to. They are trying to
26:56
build out the creditworthiness of
26:58
stretch so that they can
27:00
build the confidence of the credit
27:01
market that investors
27:04
will receive their dividend payments
27:06
and that
27:08
increased confidence from the credit
27:09
mark will allow more
27:11
investors to funnel capital
27:13
toward stretch.
27:17
The value proposition of stretch is,
27:20
send us your dollars.
27:21
We will give you 12%
27:23
dividends forever.
27:27
And the only way that
27:29
the investor can feel comfortable
27:31
about that is to have confidence
27:32
that that dividend is going to be
27:33
paid forever.
27:35
What strategy has going for
27:37
it is two things, the
27:39
best Bitcoin balance sheet in the
27:41
world And also
27:44
fundraising.
27:45
Capabilities into the future.
27:47
So those are the two sources of
27:49
capital for how the dividends can be
27:51
paid. And up until a
27:52
few weeks ago, they'd relied
27:54
entirely on the latter of their
27:56
capacity to keep fundraising in
27:58
order to pay dividend payments.
28:00
And frankly, I think that's entirely
28:01
sufficient forever for
28:03
them to keep paying dividend
28:05
payments, but the credit
28:07
market investors want to know
28:09
that strategy is willing to
28:11
pay to sell some Bitcoin,
28:13
use that balance sheet.
28:15
In order to fund dividend payments
28:17
if they need to, because that's the
28:19
thing that is there and exists
28:21
already and is certain
28:22
to be there, the Bitcoin on
28:24
their balance sheet.
28:25
So strategy's done that.
28:27
They've answered that question.
28:29
And as Saylor has said,
28:31
they are, quote, inoculating the
28:33
market to the
28:35
fact that they are prepared to sell
28:37
some Bitcoin in order
28:38
to build the confidence of credit
28:40
investors and further
28:42
the track record of stretch.
28:44
And trustworthiness of stretch
28:46
and get it officially
28:48
rated by credit agencies, which is
28:49
an important step in
28:52
building out that
28:54
track record of what's a new
28:56
kind of security, these
28:58
preferred equity obligations that
28:59
are backed by Bitcoin.
29:01
Yeah, I think that's an
29:03
exciting thing and like you said,
29:04
you know say they kind of openly
29:06
Said that he wants to inoculate the
29:08
market and just get everyone used to
29:09
the idea as well as you know The
29:11
the creditors that they can sell
29:13
Bitcoin and it's not going to tank
29:14
the price I just wanted to get
29:16
a sense from you if you think the
29:18
actual the
29:20
the amount of time in which
29:22
they can pay back dividends matters
29:24
like if he's selling this much and
29:26
he has $2.5
29:28
billion of cash
29:30
in the back to pay back dividends
29:31
and that's got like a 15-month
29:33
roadmap.
29:36
How much time is
29:38
enough time that creditors feel
29:39
comfortable to continue giving
29:41
money to receive that interest?
29:44
I think it varies based on
29:46
sentiment towards Bitcoin.
29:48
I think that the fact that
29:50
Stretch has sort of dislocated from
29:51
the $100 virtual
29:54
peg, it's not an actual peg,
29:56
but I think colloquially, we can
29:58
understand that as a peg,
30:00
is just downstream of broader
30:03
Bitcoin sentiment right now, and
30:05
that cascades into
30:09
bearish sentiment about strategy,
30:11
and then that caskades
30:13
into embarrassment about
30:15
stretch, which is sort of built
30:17
on top of these other layers.
30:20
And so I think that
30:22
right now, people who
30:24
don't understand these instruments
30:27
deeply, haven't
30:28
done their research deeply,
30:30
think that Bitcoin
30:33
is in trouble.
30:35
In reality, this is just what
30:36
happens every four years with a
30:38
major bear market for Bitcoin.
30:39
Yeah, I think it turns out
30:41
that the four-year cycle is very
30:43
much intact, probably.
30:44
Precipitated by OGs
30:46
who have been playing the four-year
30:47
cycle for the last 17 years.
30:52
Precipitating a top manifesting a
30:55
four-year cycle top and then
30:57
a major bear market.
30:59
But lo and behold, here we are
31:01
at or near the bottom
31:03
of the four-years
31:06
cycle bear market and
31:08
sentiment at that point in
31:10
time is very gloomy
31:12
about Bitcoin because equities
31:14
have ripped recently and
31:16
Bitcoin is down.
31:17
So the
31:20
quote-unquote tourists are
31:22
selling and abandoning
31:24
their bet on Bitcoin,
31:26
meanwhile, the people who have high
31:28
conviction are
31:30
buying with what
31:32
dry powder they have, and
31:34
that includes strategy and
31:36
sailor. So,
31:38
you know, I think that the
31:41
future for
31:43
stretch is entirely
31:45
fine.
31:48
Last week, it
31:50
stretched traded all the way down to
31:52
72, I think very
31:53
briefly, maybe it was a little
31:55
higher than that.
31:57
$72 out
31:59
of 100.
32:00
And now it's trading up to
32:03
well north of that.
32:04
We're currently at $88
32:07
just before market open.
32:11
And SATA, its
32:13
equivalent at Strive is it back to
32:15
$98.
32:17
So You know, I think the market
32:18
freaked out that
32:21
...
32:22
Strategy was in trouble, that
32:24
stretch was in trouble, but didn't
32:26
understand that the mechanics of
32:27
these things are entirely
32:30
unfazed by Bitcoin going down a
32:32
little bit.
32:33
For strategy to be in trouble and
32:35
therefore for stretch to be in
32:36
trouble.
32:37
Bitcoin would have to go to you
32:39
know, sub sub 10
32:41
K and stay there for more than
32:43
two years.
32:44
I think that you know the fact that
32:46
they have bolstered their USD
32:48
cash dividend cash reserve
32:50
to.
32:51
To now 16 months or
32:53
so, is
32:55
an indication that, you know, they
32:57
understand the market wants
32:58
reassurances for
33:00
a bear market.
33:01
And that's why they're topping up
33:03
cash to provide those
33:05
reassurences.
33:06
And yeah, they'll probably go
33:08
up to 24 months.
33:11
I think that it's
33:12
rather arbitrary right now.
33:14
It's basically
33:16
a response to
33:19
fears about Bitcoin.
33:21
From people who don't understand
33:22
Bitcoin.
33:24
So I think that's the
33:26
reality of
33:28
stretch, of strategy moves
33:30
right now.
33:31
And I think in a month or
33:34
maybe a few weeks, maybe it's a
33:35
couple months, this will
33:37
be in the rear view mirror as a
33:39
missed opportunity for people to buy
33:41
discounted stretch.
34:21
Yeah, so I'm
34:24
head of Bitcoin strategy at
34:27
the SmarterWeb company.
34:28
We are the UK's largest
34:30
Bitcoin treasury company, and
34:32
I'm very excited about the future
34:34
for Smarterweb.
34:35
We're in a great position
34:37
right now to continue
34:40
building on
34:42
and hopefully repeating
34:44
some of the success of
34:46
MicroStrategy in the US.
34:47
I think over
34:49
the last...
34:51
Six months in
34:53
particular, there's been a shift in
34:56
global Bitcoin treasury
34:58
strategy.
35:00
Because of the success of
35:02
Stretch and the success
35:04
at SATA for Strive,
35:07
I think the market has
35:09
clearly shown that
35:12
investors want amplified Bitcoin,
35:15
which is to say that
35:17
what Stretch and
35:19
sad to represent to.
35:21
Uh, MSTR, um,
35:24
and, and strive equity
35:26
holders is,
35:28
uh, levered Bitcoin upside
35:30
because you issue
35:32
preferred equity obligations,
35:34
use those proceeds to buy Bitcoin,
35:36
but on your balance
35:38
sheet, um and you know, day zero,
35:40
the value of the
35:43
preferred equity funded,
35:45
uh Bitcoin is
35:47
offset one to one
35:49
by the value That's it.
35:51
Obligations that you have
35:54
taken on.
35:56
And it's a bet that
35:59
Bitcoin's value,
36:01
the Bitcoin that you've purchased
36:02
with those preferred equity
36:05
obligation funds,
36:07
will outpace, it
36:09
will grow faster than the
36:11
cost of capital, which for Stretch
36:13
now is 12%
36:15
a year. And
36:17
if it does,
36:19
then the net
36:21
value accrues
36:23
to the equity holders.
36:26
So it takes less of the Bitcoin that
36:27
you bought with the preferred equity
36:29
funds to settle
36:31
the preferred-equity obligations
36:33
that are outstanding.
36:35
And the remainder
36:37
then is
36:39
attributed to equity holders,
36:41
so this is just basic balance
36:42
accounting and
36:44
that chunk
36:47
of Bitcoin that
36:50
is now attributable to
36:52
equity holders, increases the
36:53
Bitcoin ownership of your
36:56
ordinary shares
36:58
holders.
36:59
And that's the value proposition of
37:02
a Bitcoin treasure company is
37:03
through using capital market tools,
37:06
it is possible to
37:09
increase your Bitcoin ownership over
37:11
time.
37:13
And historically, So, you know,
37:14
thinking back to last summer,
37:17
things got pretty crazy.
37:19
For the other side of how
37:21
that is achievable, and that through
37:23
equity issuance at
37:25
high MNAS in order
37:27
to
37:29
buy more Bitcoin than you,
37:31
to increase the
37:33
Bitcoin treasury rate faster than
37:34
the dilution of new share
37:36
issuances.
37:37
And that nets out to
37:39
a creative transaction for equity
37:41
holders where you've increased
37:42
Bitcoin per share.
37:44
So that was pretty much what
37:46
everybody it globally in
37:48
the Bitcoin treasury.
37:49
Landscape was doing last year
37:51
and that
37:53
works until sentiment goes
37:55
away which happened
37:57
around this time last
37:59
year.
38:00
And from that point forward,
38:02
it becomes hard to deliver
38:04
shareholder value by growing Bitcoin
38:06
ownership for your shareholders
38:08
through that
38:11
method by relying on high sentiment
38:12
to issue
38:15
more equity and buy more Bitcoin.
38:17
But what Preferred Equities
38:19
create is a
38:21
viable way to lever up
38:23
a Bitcoin balance sheet by taking
38:25
away the existential risk of
38:27
liquidation, which is a problem
38:29
if you're to take on
38:31
meaningful leverage with
38:34
traditional debt when you're holding
38:35
Bitcoin as your treasury asset.
38:39
And so Preferred
38:41
Equities take care of that and allow
38:43
you to create
38:45
this levered Bitcoin upside, where
38:47
right now, Strive,
38:49
for example, is something like 60%
38:52
amplified, meaning
38:54
more than half of their balance
38:55
sheet is from
38:57
preferred equity issuance and
39:00
has been used to buy Bitcoin.
39:03
And in an event where
39:05
Bitcoin goes up 100%,
39:08
then if you're
39:10
50% amplified.
39:11
Well, you just increased the.
39:15
Net attributable bitcoin to
39:17
equity holders by 50%.
39:19
So that's the kind of levered
39:22
performance that's possible through
39:24
preferred equities.
39:25
And I think that's where the
39:28
entire Bitcoin treasury landscape
39:29
globally is shifting towards because
39:31
it's great when there's high
39:33
sentiment to run the pure
39:35
equity issuance model, but
39:37
it is better
39:39
if you have preferred equity
39:43
levered Bitcoin upside mechanics in
39:45
place also.
39:46
And you can do both versions
39:48
of, you know, of
39:50
the strategy in order to deliver
39:53
a growing Bitcoin ownership to
39:54
shareholders.
39:55
And so that's where I see this
39:57
moving globally.
39:59
I think that's the success of Strive
40:01
in the first half of this year has
40:03
been a testament to that.
40:05
I that model works in every capital
40:07
market in the world.
40:08
I think the UK is...
40:11
London is the
40:13
number two financial center in the
40:15
world.
40:16
I think UK is
40:19
the third best market to do this
40:21
Bitcoin Treasurer strategy in
40:23
US, Japan, and then the UK.
40:26
And I think that SmarterWeb, as the
40:28
largest Bitcoin Treaser company in
40:30
the UK, is perfectly positioned to
40:33
execute on a strategy now
40:35
and into the future and
40:37
repeat the success That's it.
40:39
Strive has had in the first half
40:41
of this year and strategy has had
40:43
over the last several years.
40:45
So, when do you do it and are you
40:47
going to take a page out of Strive's
40:49
book or Strategy's book?
40:50
Because we chatted to Matt Cole at
40:52
BTC Prague and
40:54
he kind of broke
40:56
down the
40:58
daily dividend payouts and how
41:00
compelling that is to users
41:02
because it removes that one
41:04
day of the month where people will
41:05
try and actually make a trade
41:07
and capture the upside or the
41:09
downside. When it's daily,
41:12
it allows it to peg to that $100
41:13
mark or whatever.
41:15
You know, the company wants it to
41:16
be.
41:17
So yeah, I'm curious.
41:18
You might be giving away some alpha
41:20
here, but I have to ask.
41:22
Yeah, well, what we've
41:25
said is that we
41:27
aspire to have
41:30
a similar sort of model to
41:33
stretch or to SATA.
41:35
And hopefully
41:37
that is possible when the time is
41:39
right.
41:41
Our shareholders have also
41:43
noticed that we have
41:45
taken steps
41:47
to increase
41:50
our distributable reserves, which
41:52
is a requirement that
41:54
you would need to do if you were
41:56
trying to get a
41:58
dividend instrument in place.
42:01
And yeah, so we'll have to
42:03
wait and see what happens with all
42:05
that.
42:06
But yeah, with regard to the
42:08
daily dividend point...
42:11
It is interesting, and I
42:13
do think that the trend is towards
42:16
smaller and
42:18
smaller periods for
42:20
dividend issuance.
42:23
I think a month, I guess, is too
42:24
long because for
42:28
stretch right now on a
42:30
monthly cadence, they're
42:32
basically paying out a dollar
42:34
every
42:36
month. And so the
42:38
day after that record date.
42:40
The stock should be worth
42:42
in theory, you know a dollar
42:44
less than it was the day before so
42:46
that creates the sort of Mechanical
42:48
rationale for the price
42:50
to go from a hundred to ninety nine
42:53
You know or or?
42:56
Realistically doesn't quite get
42:57
there, but it has traded down, you
42:59
Know sixty cents the
43:01
day after the record date and
43:03
and that's volatility That's not
43:04
ideal for for an instrument
43:06
like this. So, you're decreasing
43:08
the period length makes sense so
43:10
that you're not incurring
43:12
that meaningful
43:15
mechanical dislocation
43:17
the day after the monthly record
43:19
date. But,
43:21
you know, daily...
43:25
I think is perhaps
43:27
more of an ideal than a
43:31
mechanical necessity,
43:33
because so long as your period
43:34
length is sufficiently short,
43:36
and that could be two weeks even,
43:39
I think that so you have
43:40
24 dividend payments a year,
43:43
then that probably reduces your
43:45
volatility enough.
43:47
The other part of it too is
43:49
assume
43:52
every preferred equity out there is
43:53
on a daily Evidence.
43:55
Um cadence any
43:58
preferred equity that's on a longer
43:59
period cadence becomes the
44:01
thing to own the day before
44:03
its record date because
44:05
it's going to have the largest um
44:07
you know effective yield for
44:09
that for that one day that you're
44:11
that you are in that instrument and
44:13
that can you know
44:15
counterintuitively that can create
44:17
the capital flow that
44:19
uh that particular instrument
44:21
is for in order to trade above
44:23
par and issue more.
44:26
More shares.
44:29
So, you know, that's a...
44:33
Contrary dynamic that's also going
44:35
on with these instruments.
44:37
So, you know, it'll be interesting
44:38
to see how that plays out
44:40
in general Globally
44:42
here. I do think the trend is
44:44
towards You know,
44:47
perhaps daily over the long term,
44:49
but I think um, but i think
44:51
Sort of different needs for
44:52
different issuers And
44:55
and different period links can make
44:56
sense
44:58
Yeah, I think we'll have to wait and
45:00
see sort of what the
45:02
overall trend tells us when, you
45:03
know, stretch goes properly
45:05
bimonthly and then you just compare
45:07
that to Strive
45:09
and Sartre's, you know, daily
45:10
dividends and how that kind of helps
45:12
squash some volatility.
45:15
Jesse, thanks so much for taking the
45:16
time to chat to us today.
45:18
We'll try and keep it as brief as
45:19
possible. But as always, really
45:21
appreciate your time and your
45:22
insights.
45:23
If you're looking for more
45:23
information about Smart to Webco,
45:25
you can.
45:26
Go and find that online.
45:28
Otherwise, please go and give
45:29
Jesse a follow on X.
45:31
It's at crucis.
45:32
That's C-R-O-E-S-U-S
45:36
underscore B-T-C.
45:38
There you go. I can spell.
45:41
Yeah, go ahead and follow him.
45:42
You just passed 100,000
45:44
followers a few weeks back as well,
45:46
so congratulations on that.
45:47
I mean, that's testament to the
45:49
wisdom that you're putting out
45:50
there. But again, thank you so much
45:51
for taking the time to chat to us.
45:52
And to the audience out there.
45:54
Thank you so much for joining us
45:55
today as well.
45:57
If you haven't seen it already last
45:59
week, we launched the show with a
46:00
very special interview
46:02
with CZ from Binance.
46:04
We flew all the way to Abu Dhabi and
46:05
we sat down for an hour long
46:07
conversation live on the show.
46:09
We've now uploaded the high quality
46:11
video onto YouTube so you
46:13
can go and watch the full interview
46:15
on our YouTube channel.
46:15
If you don't already, please
46:16
subscribe to the Blocks YouTube
46:19
channel as well, we'd really
46:20
appreciate that.
46:21
Tomorrow, we will be back with
46:23
the show, but we're broadcasting
46:24
slightly later.
46:25
We've got Mike Balchion from Bitco.
46:28
He lives on the west coast of the
46:30
US, so I graciously agreed to
46:31
do the show a couple of hours later
46:33
so he doesn't have to wake up at
46:34
5.30 in the morning to join us.
46:36
So please do set a reminder on your
46:38
clocks. Tomorrow, will be
46:39
broadcasting at 10.30
46:41
Eastern time.
46:42
So please, do come back and join
46:44
us I hope you have a fantastic
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morning, afternoon, and evening,
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wherever you are around the world.
46:49
We'll be back tomorrow.
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Until then, have a fantastic one.
46:53
Catch you next time.