Latest / The Income Show / The Investment That Beat Bitcoin | The Income Show | Ep. 24

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The Investment That Beat Bitcoin | The Income Show | Ep. 24 · The Income Show

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They have all, even with the drawdown, if you had put $10,000 in one of these digital credit
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offerings since inception to now, you would have outperformed Bitcoin, you would have preserved
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capital more effectively, and you would have earned a dividend. I just think that Bitcoin will
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be that accepted upon monetary language that everyone would agree upon. Cannot be debased,
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cannot be corrupted, cannot be controlled, and therefore everyone will, for lack of a better
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term, speak the language of Satoshi through Bitcoin. If Bitcoin was at $200k right now,
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Do you think that strategy would need to do buybacks?
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Probably not, right?
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That's a simple question I like to ask people.
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Intuitively, people would say to themselves,
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yeah, Bitcoin is at $200K right now.
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Of course they wouldn't need to do buybacks.
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Let's drill into that.
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Why is that?
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Hey, everybody.
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Welcome back to The Income Show.
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This week I have on Adrian Morris.
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Adrian, welcome.
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Joe, nice to be back on.
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We talked early this year?
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We did. We talked. I forgot the exact last day, but we did talk somewhat recently.
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But this is going to be a great conversation.
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Yeah. Yeah. Looking forward to it.
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Yeah. So maybe let's start kind of broadly.
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So at this point, I believe strategy is now bought back about $2 billion of stretch around that.
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Obviously, we had the digital credit mini bear market kind of this summer.
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What's going on with those buybacks?
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How are you thinking about the space at a high level?
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So the space overall, I think, is good.
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I mean, digital credit, you know, I've posted about a lot.
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You've posted about a lot.
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A lot of us have.
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I think that Strategy, Strive have really found a way to create a new capital market for Bitcoin acquisition.
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They're bringing in a cohort that I think would, you know, would be in Bitcoin, but they're also bringing in individuals that would not be.
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and I think that has kind of been shown
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by the level of interest
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that's been around digital credit, right?
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And both companies have done a lot
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to facilitate the conversation
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around digital credits
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and then you have SmarterWeb
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that has more that just went live.
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MetaPlanet is doing certain things.
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I know that Capital B is looking for
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opportunities for digital credit as well.
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So I think that digital credit
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has turned into its own subset
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of the Bitcoin space rather quickly.
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um and it's and what we're seeing with all the conversation around all the opinions around
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around it are kind of indicative of all the interests around it and in terms of the buybacks
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you know i did the the deep analysis with regards to um the stretch buybacks i was as of september
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4th and you know buybacks in of themselves do benefit the capital structure you know they're
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retiring dividend obligations or retiring shares in the market so there's a capital structure
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benefit but one of the things i've been trying to help people understand is that that is not the
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same as the buybacks directly leading to stretch to stretches rebound or directly supporting the
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price and that's kind of what my analysis was about um i went into a very very deep breakdown
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of um what's driving price variance around stretch and the other preferred offerings and i was trying
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to give people some insight into the different dynamics in the market i love it yeah i think
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that's a great broad high level overview of where we can start and i definitely want to go deep into
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your analysis and kind of think about like how you're thinking about things in regards to stretch
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and buybacks and so much else.
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But maybe first, like for someone that's, you know,
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still new to this entire concept of digital credit
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or dollar income powered by Bitcoin,
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what is strategy actually trying to accomplish
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with these buybacks?
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I think that they're trying to signal to the market
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that they are doing a few things.
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One, that they're willing to support the product, right?
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Very, very broadly.
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And, you know, I'm using the term support rather generously,
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rather generously, but that's what they want to do.
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They want to instill investor confidence.
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They want to tell the market that we understand
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that price has been, was somewhat hampered
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by the market activity and we're doing what we can
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to show investors that we are willing to support the price.
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And I think that what they are also doing,
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and I wrote about this in the paper,
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is that they are ironically providing exit liquidity
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for individuals looking to leave.
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So while on the surface that can seem counterintuitive,
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I understand the rationale behind it.
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They are thinking through different ways that they can come to the market with different capital structure actions that will bolster confidence and stretch and support the price.
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The challenge is, is that actually what it's doing in terms of the broader market dynamics?
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So as I said earlier, there is capital structure benefit.
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There is potentially narrative benefit, but there is also the reality of what is stretch actually doing?
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What is digital credit actually doing as a whole that strategy is, I don't want to say fighting against, but they're working within.
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And in terms of the messaging, I think the fact that they've done what now, 14 weeks of buybacks, I think it is.
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They're showing that they have a lot of resolve in terms of what they're willing to do to try to defend the price.
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And I think what the market is doing right now is testing that resolve.
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So strategy is trying to show that they're willing to defend the product.
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They're trying to instill investor confidence in the products.
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But I also think that that is inviting counter market activities that are counter trading their interventions.
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And that is what we're seeing play out in the market right now.
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That's it.
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Now back to the conversation.
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So diving kind of a little bit deeper into like your specific analysis that you kind of shared.
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What's driving the price of stretch and all of these kind of Bitcoin powered preferreds?
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Like are buybacks powering it or is it a multitude of other factors?
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I would say a multitude of other factors.
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And let's kind of try to, I don't want to say speed run through it,
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but let's try to do that to give a very, very high level overview.
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When it comes to strategy, when it comes to my investments as a whole,
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whether that be AI investments, whether it be Bitcoin treasuries,
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what I like to do a lot of statistical modeling and analysis on one price
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variance with regards to what's driving the price action, right?
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So with NVIDIA and NeoClouds and the AI trade,
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I have one series of models that I use, right?
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And they're quantitative models, driven by statistics, of course,
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but quantitative models at their heart.
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Then for Bitcoin Treasuries, because of the Bitcoin dependence, I have another series of models that I use.
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And I was inspired to do this for the prefers because I've been doing it for MSTR.
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As you know, as you probably saw, like in 24 and 25, I was doing my variance analysis on MSTR and doing analysis in the ATM.
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I will be driving price and, you know, so on and so forth.
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So I kind of modified that model to look at the preferreds.
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It started with strike, then moved on to strife, then stride, then stretch, then SATA.
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And now I have enough of a historical data set where I can model all five of them in tandem.
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I model them individually still, but I also model them all in tandem as well.
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And what I found is that in the initial beginnings of digital credits, what was driving a lot of price action was Bitcoin and the parent equity.
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and by the parent equity I mean in the case of the strategy prefers that'll be MSTR
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and in the case of SATA that'll be ASST right and I kept modeling it out and I was doing this
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at various time frames I was doing this at one minute 15 minute 60 minute four hour and one day
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so five different time frames for each preferred every single day so one day the one day time
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frame would give me one series of analysis for the day then the four hour would give me two breakdowns
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this one hour can be seven and so on and so on and so forth. Right. And I just kind of kept seeing
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that pattern pretty consistently. Then something happened and it flipped. I started seeing that the
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preferreds as a whole, when I was able to start modeling them together, were accounting for more
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and more variance in the price action as time went on, which I thought was very interesting.
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So I kept modeling it out. Right. And it kept growing larger and larger and larger in terms of
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on attributable price variance.
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And when I say price variance,
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I want people to understand
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that is not me predicting price action That is me looking at historical data looking at historical price action and saying what has occurred in the data set essentially right And what I doing is for lack of a better term I looking for think of it as wobbles in the data
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If you think of the things very, very common sense, you have Bitcoin at the base of the capital structure, then you have MSCR, then you have digital credit, right?
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So it stands to reason, conceptually, that risk assessment, price variance, price action from Bitcoin will matriculate through to MSCR, which will then matriculate through to the digital credit ecosystem, right?
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And the reason why I say digital credit ecosystem is because they're very much being traded as a block based upon my analysis.
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they are their own asset class now and it seems like the market is treating them as such
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now conceptually if that is coherent you should see that in the data set and that's what i started
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seeing the data set at first with bitcoin and then with mstr and then with digital credit as a cohort
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within each digital credit offering whether it be strike or whether it be all the way through to
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SATA, this was showing up. So, and as I kept modeling that out, the attributable variance
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with regards to the digital credit cohorts, as I mentioned, kept getting larger and larger and
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larger. And I started noticing that stretch and SATA were taking up more and more space in terms
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of price variance with all the other preferreds. And then when the price breakdown happened, I
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actually watched it in my data set happen. Day by day, the variance just kind of went,
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it just flipped even larger. And the digital credit cohort became disproportionately large.
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And then Bitcoin and MSTR became the second and third. And then as price broke down more and more,
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Bitcoin started going up and MSTR started going up. And I just started noticing all of these very,
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very interesting things in terms of the price variance. And that's why on X I've been saying
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these are meta derivatives when it comes to digital credits.
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They are derivatives of Bitcoin and they are derivatives of their parent equity,
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which is also a derivative of Bitcoin.
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So it is a derivative of a derivative or a meta derivative.
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And I think that what's been going on in terms of the price action
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has been the market forward pricing Bitcoin expectations,
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Bitcoin risk and capital structure risk through to the digital credits cohort.
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And the buybacks, when I directly model them into my model, accounting for nothing else, so accounting for nothing with regards to Bitcoin, nothing with regards to MSCR or ASST, and nothing in regards to digital credit as a whole, for strategy, for stretch specifically, the buybacks account for something like 1% to 3% of price variance as of September 4th.
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And that price variance has actually broken down even further as of October 23rd when I updated my analysis.
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However, what I found very, very interesting is that as of September 4th, when I account for everything else in the actual model,
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and at that point, I believe it would have been eight weeks of buybacks, it's statistically indistinct from zero in the actual price variance model.
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and then I dug a little bit deeper and I said well what what would buybacks most directly impact
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I think trading volume right so when I broke my model apart and then I assessed it a different way
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I'm assuming more of a I want to say correlation but more of a factor association with trading
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volume the results were consistent and the results stayed consistent two weeks after four weeks after
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and six weeks after. So my assessment is that are the buybacks providing support for the price at
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the margins? That's possible, but at the margin does not mean a setting a price level, right?
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To understand the buybacks, people have to understand strategy is a price taker. They are
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not a price setter. So the market is still setting the price that strategy is buying shares at,
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right? So if they are, if the trading volume factor is statistically indistinct from zero,
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and then when I incorporate other things like daily shorting volume, so that's not short interest,
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but that's daily shorting volume in terms of how many shares are shorted on a daily basis.
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If that is also statistically indistinct from zero, and then the buybacks as a factor are going to
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live within trading volume and when I come for everything else they're statistically indistinct
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from zero you have a lot a confluence of factors that comes together that says that the buybacks
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themselves as a factor and as a variable have not been the main driver of stretch's rebound
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and when I look at digital credit as a whole stretch was rebounding before the buybacks
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strike strife stride and SATA all recovered without buybacks and now what we're seeing the
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price action now is that bitcoin is showing a little bit of weakness and notice how all
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the preferreds are now trending down as well. So I think that the takeaway for that, and I'm sorry
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that this is a very long answer, is that yes, there are broader market forces that are driving
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the price action around digital credit. And the three largest market forces are Bitcoin,
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the particular parent equity of the digital credit offering, and digital credit as a market cohort
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that is essentially being treated as its own asset class. And the buybacks are providing capital
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structure support, but capital structure support does not translate into price support and does
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not translate into driving the rebound back to par. Yeah, that analysis is super interesting. And I
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think I generally lean towards your perspective that I do think it makes sense. I think a
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counter argument or a counter question, I'm curious to hear how you would answer this,
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is someone would be like, oh, well, you know, the market is set by supply and demand.
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You know, you are sucking up the supply of stretch and you're buying it off the market.
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Why? Like logically, in many people's minds, that that probably makes a lot of sense.
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And why do you think that like that's just like not how it's really working in reality?
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Well, in terms of the supply and demand argument, that would be true in of itself if the market was purely driven by supply and demand.
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So the other factor that people are not talking about enough with stretch is leverage.
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The reason why stretch had a more violent unwind, in my view, and I think that Fong Lee even spoke about this and others have spoken about this, is that leverage on top of stretch accelerated the unwind.
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unwind now in terms of pure supply and demand it is not as if one share is bought one share
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or sold right you have leverage you have options you have a lot of other factors that come into the
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market that kind of skew a purely supply and demand argument on top of that let's think about
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what strategy is doing when they're buying back shares when they come into the market and they
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buy back a share what they are doing is they are retiring a dividend obligation and they're removing
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a share from the market, right? So without sufficient organic demand, their inorganic
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demand is actually reducing potential liquidity. So what's been happening in the price action and
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sorry, in the trading volume and the trading activity that I've been showing over the last
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several weeks is strategy has been buying up a larger and larger amount of the trading volume
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and decreasing demand. So their share is proportionately larger, yes, but the demand
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has also been going down as well.
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So it is not a one-to-one
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in terms of understanding demand.
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And this is to be grossly simplifying it, right?
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But there is organic demand
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that is market-driven
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and then there's inorganic demand
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that is issuer-driven.
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It is not seen in the market the same way,
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especially when you are taking shares
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out of the market,
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when you are retiring a dividend obligation,
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you are driving down
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the available shares in the float.
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If you are driving down the shares in the float
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and then organic demand is going up,
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then you can say, yes,
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there's probably a correlation between them buying down shares
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and demand going up.
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But what we've been seeing is demand has not been ticking up.
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If, in fact, when I did the analysis for September 4th,
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one of the things I was looking at the most
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was daily short volume flow, as I mentioned, right?
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At that point, strategy was about 17% of trading volume.
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daily shorting flow was 17 So what people need to understand is every intervention in the market will be counter traded by the market
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And I think what the market is doing
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is they're counter trading strategies intervention.
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The more shares that strategy buys up,
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the more people are using them as exit liquidity,
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but also the market is not viewing that as organic demand.
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They're viewing that as weakness.
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And that is causing the market to buy down
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every single level that strategy is willing to defend.
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If they're willing to defend 99, they're selling at 99.
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If they're willing to defend 99.50,
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they're selling at 99.50.
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It is not as if strategy is acting in the market
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without counter forces, right?
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So when you intervene in a market that you created,
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and let's be honest, strategy did create this market,
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they did create this asset class,
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you invite testing of levels.
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And I think what the market is doing
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is that they're testing strategies resolve.
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And until strategy steps back,
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I do not think we're gonna have an accurate gauge
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of how much organic demand remains.
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yeah it's a really interesting perspective um i think my my past guest uh framed it as
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buybacks benefit the holders that are exiting stretch uh and then dividend dividend rate
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increases benefit the remaining holders of stretch i would imagine you'd agree with that
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on on some level so the the the benefiting the people looking to exit yes that's the exit
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liquidity point, right? I do agree with that. I think that strategy is essentially saying we will
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give the exit liquidity. We want people that are in stretch to be actually ones that want to hold
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it. I want to leverage it. And when I say leverage it, I don't mean I'd leverage. I mean,
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receive the dividend and they want to be holders of stretch, right? But the thing about the dividend
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yields is that, you know, I think Fong said this in the last earnings call that they didn't find
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that that dividend yield was an effective way
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to drive demand for stretch.
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And the notion of dividend yields or dividend frequencies,
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whether it be 10% to 12%
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or whether it be going from monthly to semi-monthly to daily,
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I've added all that into my model
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and it's indistinct from noise.
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It's not really distinct from noise in the data set, right?
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If we think about it logically,
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if dividend rate was something that was driving price action it would show up in the data set
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because we had them go from monthly to semi-monthly and now announcing to daily right
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we would see those for the lack of a better term ripples in the data set we would also see
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changes in the data set in terms of dividend rates right was there really a noticeable change
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in the trading activity when you account for other factors like Bitcoin, MSDR, so on and so forth
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in the data set, in the data, when you look at them going from 10 to 12 and having the variations
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in between. They show up in the data set, but they are not statistically significant in there.
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And in many cases over many timeframes, they have not been statistically indistinct from zero.
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So my view on it is I understand the benefit in terms of narrative,
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increasing the dividend, being willing to increase the dividend, trying to spur demand and whatnot.
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But people keep treating these preferred offerings as if they are separate and apart from Bitcoin and the parent equity.
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They are trading in tandem with them.
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Digital credit is an asset class now.
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And if we think about it using the kind of frame you set up, let's think about it logically.
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Everything from what is backing the digital credit to the BTC rating and everything,
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It is all dependent upon Bitcoin and it's all dependent upon the capital structure.
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How is a dividend service?
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It's serviced by issuing equity.
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What's backing the digital credit?
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It's being backed by Bitcoin.
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What is the BTC rating?
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That is Bitcoin.
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Do you see what I'm saying?
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Everything is kind of wrapped into Bitcoin and the capital structure of the parent equity.
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So thinking that there's a factor that is somehow separate and apart from that,
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that's driving price action, in my opinion, I think is the wrong view to take.
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and I think that the reality of it is,
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is that strategy is doing the best that they can
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to push against that current until the market turns
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and I think the market will turn
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and everything will be fine.
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I don't think digital credit is broken.
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I don't think that digital credit needs to be fixed
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but what we're seeing right now is growing pains.
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This is a new asset class
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and I think that this is gonna be par for the course
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over the next few years.
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so would you argue that neither buybacks nor dividend increases effectively really have
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anything to do with with the price of digital credit not much no um and let's use a counter
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example if bitcoin was at 200k right now do you think that strategy would need to do buybacks
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probably not right so and and this that's that's a simple question i like to ask people
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intuitively people would say to themselves yeah bitcoin is at 200k right now of course they wouldn't
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need to do buybacks. But let's drill into that. Why is that? That's because Bitcoin price actually
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will be driving up the entire capital structure, right? So it stands to reason that when Bitcoin
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is range bound, it's going to drive down the capital structure. It's going to exert force
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on the capital structure. And if we look at digital credits, and I don't want to seem repetitive here,
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but it's really helpful to rethink this through in a very simple matter of fact fashion.
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if Bitcoin is at the base of the capital structure
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and MSTR sits on top of the capital structure
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and digital credit sits on top of MSTR
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stress and risk assessment from Bitcoin
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and from the capital structure
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will flow through the digital credit
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and given the fact that the entire backing
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and impetus of digital credit is Bitcoin
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is a capital structure
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no, buybacks, dividend frequency
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and dividend rate
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are not going to overpower those market forces
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so would you like if sailor asked you adrian like what should we be doing right now what would you
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recommend like would you recommend pausing buybacks uh and not doing any sort of dividend increases
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would you recommend continuing the buybacks for a little bit and ease them off how would you
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suggest strategy moves forward well here's the challenge now that they have established a
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precedent that they're willing to do buybacks a sudden stop will be viewed by the market
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perhaps interestingly and I'm very I'm kind of have two minds to think about how the market will
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would view that right if I were giving advice from the beginning I already thought that buybacks
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wouldn't work for entirely different set of reasons but I would not have done the buybacks
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in the first place I think it was it was too reactive I think sometimes the best thing to do
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was nothing they created the markets i think that they should in my view stepping back and letting
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the market establish itself for for whatever period of time that would be that would take
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would have been the more
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advantageous option because if we if we kind of think forward now if stretch is ever impaired again
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let's say that Bitcoin has a huge crash and my analysis is right and that Bitcoin has a big crash
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at some point in the future and stretch gets driven down the market's natural expectation is
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going to be the strategy is going to start doing buybacks right and if they don't start doing
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buybacks that can facilitate testing of levels to say okay what will make you do a buyback
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you kind of open the door for a lot of additional factors that you that are outside of your control
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so that's why I say sometimes doing nothing is the best thing and that would be my advice
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Do not continue with the buybacks.
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Let the market establish an equilibrium and then see where you're at.
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Yeah, that's very interesting and seems to make sense.
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You mentioned like the main driver of what's driving Stretch and the other preferreds is kind of they're all moving together, all kind of moving like a block.
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And obviously, like Bitcoin's driving a lot of the price, too.
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Have you seen the beta relative to Bitcoin decreasing over time, increasing over time?
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I get that they're all correlated together, but is digital credit becoming more stable over time or no?
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So in the case of Stretch, and I could probably pull this up if I can share it.
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That might be easier to do.
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So while I'm talking this through, I will do that.
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So please bear with me.
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I have the analysis that I been doing on the digital credit offerings right And what I want to share is the actual like series of dashboards I built out that kind of give a simplified view of what they have
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And I apologize, bear with me.
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I'm just pulling up a few things here for us to reference.
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okay i'm going to share my screen here
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you should be able to see sata at this point correct or what i'm sharing my screen okay
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so i'm going to zoom in a little bit here yeah that'd be great because i know this is a small
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I apologize. My monitor has crazy resolution. You should be able to see that, right?
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More clearly? Yes. Perfect. So you're asking about the correlations, right? So let's take a look.
27:01
Right here, I have, you know, Bitcoin transmission and sensitivity, and this is as of October 23rd.
27:07
So the BTC beta is 0.27. Now, what does that tell us? That tells us that its beta to Bitcoin isn't
27:14
as strong as, you know, ASST, of course,
27:18
but it's not non-existent, right?
27:20
So there's about, for every 1% move in Bitcoin,
27:25
that's the relative move we're going to see
27:28
in terms of SEDA, right?
27:30
And the overall BTC correlation is 0.49.
27:33
So what that means is, you know,
27:35
about 50% roughly of the matched daily returns,
27:40
the correlation for SEDA could be, you know,
27:43
explained by Bitcoin.
27:44
But then I kind of also do a more specific analysis for SATA in terms of up days and down days.
27:52
So on up days, SATA is actually a little bit less sensitive to Bitcoin.
27:57
But on down days, it is a little bit more sensitive to Bitcoin in terms of the price moves up and down in terms of beta that you'll see in SATA.
28:09
And the correlation holds the same.
28:13
So it's a little bit less sensitive in terms of a purely price match correlation with Bitcoin on up days, but on down days, it is more sensitive.
28:22
And this is from November 10th all the way through October 23rd, 2026, right?
28:27
So what that shows is that over the entirety of SEDA's history, if you just look at those two factors in terms of the beta to Bitcoin and the correlation with Bitcoin, it's fairly consistent.
28:38
And it's fairly strong in terms of down days for SEDA.
28:43
And one of the things I also did is I did it for ASST as well.
28:48
The ASST beta is much weaker in terms of the understanding, the kinds of movements you'll see with regards to ASST.
28:58
The correlation is fairly strong in terms of ASST.
29:04
But the up-down beta is weaker for SATA with ASST.
29:10
and the up-down correlation is somewhat weaker
29:14
for SATA when it comes to ASST.
29:17
And this is what I mean by meta derivatives.
29:21
People are, and this is just two factors, right?
29:23
I haven't gone into, and this is what drove my paper,
29:26
if I go all the way down to the bottom here,
29:28
and we won't get into this
29:29
because we will lose everyone on the call,
29:31
but maybe we can have a more detailed call.
29:33
When I go to, when I have a more,
29:35
I have a far more detailed model
29:36
that's looking at BTC core,
29:38
is looking at ASST residualized for Bitcoin
29:42
because ASST will have a mechanical link with Bitcoin, right?
29:44
So I have to residualize away the BTC movement
29:47
to get what is just the ASST movement.
29:49
Then I have stretch, then I have strike,
29:51
then I have strife, then I have strive,
29:52
then I have trading volume,
29:54
then I have the short volume flow,
29:56
then I have market volatility in the VIX.
29:58
I have price to par state
30:00
in terms of are people chasing effective yields.
30:02
I've created a residualized factor for that as well.
30:05
There's, as you can see,
30:07
there's a lot more driving the price action in these than dividend frequency and dividend rates
30:15
which I used to have in here but it didn't even show up in the model so I used to have a actual
30:20
residual link for dividend frequency and dividend rates that didn't even show up and that and I
30:25
replaced it with price to par states which is more consistent in the model because as you can see
30:30
if I remove it we're losing explanatory factors for the actual price variance model up until
30:36
October 23rd going back to inception. That's a very, very long detailed way of me saying that
30:43
yes, there's a lot more driving the price action. And yes, the correlations and the beta to Bitcoin
30:49
and the parent equity has been fairly consistent over time. And the strength of those correlations
30:56
has varied over time. And I can even go further with SEDA. And before we move on to stretch,
31:03
I have a rolling correlation here that shows that it's been a fairly consistent correlation.
31:09
We've had periods of breaking down here, of course, naturally.
31:13
And that's with Bitcoin.
31:15
And the same has been true for ASST over time as well.
31:19
So I highlight all of this to show that it is not as if these perpetual preferred equities are existing in a vacuum, right?
31:28
They exist in a broader market.
31:30
And now if you'd like, we can go to say to stretch and I can, I can show that as well.
31:35
That'd be great.
31:39
And this time I'll zoom in first so that people aren't, you know, trying to go blind looking at it.
31:45
And I will share my screen here.
31:50
So now you should be seeing stretch.
31:53
and if we take a look at stretch and go to the BTC transmission and sensitivity,
32:00
this paints a more nuanced picture.
32:05
The BTC beta is 0.2.
32:07
So again, not super strong, but not necessarily what I would say non-existent.
32:11
The BTC correlation is 0.4.
32:14
So a little bit stronger in terms of purely single factor,
32:18
what is driving the price correlation
32:20
with regards to stretch when it comes to Bitcoin.
32:24
But the up-down beta is weaker
32:26
in terms of a 1% price move in Bitcoin
32:31
will lead to an equal price move
32:33
or would lead to a proportional price move
32:36
in terms of stretch.
32:38
And up-down correlations are also weaker
32:40
as opposed to Seta, right?
32:43
It is not as if they are trading the same.
32:46
This is clearly showing that the market
32:47
is treating these differently.
32:49
And we can speculate as to why that is.
32:53
But when we go to, however, stretch when it comes to MSTR,
32:59
the MSTR beta is fairly weak,
33:00
but the MSTR correlation is fairly strong.
33:06
The up-down beta with MSTR is somewhat weak,
33:10
but the up-down correlation with MSTR
33:12
is a little bit stronger as well for up days and for down days,
33:16
as opposed to SEDA, which was weaker on up days, stronger on down days.
33:23
That is just another kind of view into how the market is treating these.
33:30
Digital credit is a cohort, but it's clear that the market is treating them differently.
33:35
Now, we can say that that is because maybe it's because strategy has a larger balance sheet
33:39
and the market perceives them as less risky, or maybe because of the size of strategy's
33:43
market balance sheet. The market is saying that they should have a stronger down correlation with
33:48
MSTR as opposed to Bitcoin. There are all kinds of different ways that we can look through and try
33:54
to rationalize it. But my overall guide to the investor base is these perpetual preferred equities
34:03
are not trading in a vacuum. And there is only so much that the companies themselves can do
34:08
to overpower the market forces when it comes to dividend rate,
34:13
dividend frequency, and when it comes to buybacks.
34:17
Yeah, that definitely makes sense.
34:19
I mean, I'm thinking back to when Stretch,
34:22
like when digital credit broadly sold off this summer
34:25
and Stretch hit, I guess, 71 or whatever the low was.
34:29
Obviously, as you pointed out earlier,
34:31
it started to bounce back significantly even before buybacks.
34:34
Bitcoin was obviously like wasn't crashing I guess at that point doing better and kind of the whole preferred complex.
34:42
like rose up the digital credit complex like do you think that that market sell-off was like
34:49
not based on fundamentals like was it was it just like a leverage flush and so therefore maybe next
34:55
time it shouldn't sell off as much or or no like you disagree that like it's it's if bitcoin you
35:02
know wicks down it's completely reasonable for these things to sell off just as much
35:07
so so let's let's focus on on stretch first so this this is my view bitcoin started to sell off
35:15
mstr started to sell off stretch started to sell off and because of the leverage on top of stretch
35:19
the sell-off was accelerated that that's kind of the simple view right and when bitcoin started to
35:24
rebound and i had this in my my analysis as well bitcoin started to rebound rather strongly mstr
35:31
rebounded very strongly stretch rebounded very strongly and all digital credit as a whole rebounded
35:37
very strongly as well and one of the things i've been saying is that you know the market is using
35:42
these um preferred equities as a way to forward price expectations of bitcoin and kind of forward
35:46
price the risk assessment of the entire capital structure so to your question if bitcoin were to
35:52
sell off again do i expect digital credit to sell off again yes now do i expect it to sell off as
35:57
much I can't say if leverage builds up on stretch like it did and if and because
36:03
Seda has a larger footprint now if leverage starts to build up on Seda and
36:06
leverage starts to build up on digital credit as a whole which I think is a
36:10
likely outcome because digital credits I believe will grow and it will scale it
36:15
stands to reason that you will have events where the price sells off because
36:20
of leverage and because of the capital structure and because of Bitcoin but I
36:24
I don't think that's a flaw. I just think that, you know, because I view them as metaderivatives
36:29
and because I view them with that kind of a lens, I expect that the forward risk assessment
36:35
and the market's assessment and the market price expectations for Bitcoin and the capital
36:40
structure of these companies will matriculate through the digital credit and digital credit
36:44
will see some stress. However, digital credit has removed a lot of the volatility away from
36:51
what you would see with the capital structure and what you would see with Bitcoin, right?
36:55
They have all, even with the drawdown, if you had put $10,000 in one of these digital
37:01
credit offerings since inception to now, you would have outperformed Bitcoin, you would
37:05
have preserved capital more effectively, and you would have earned a dividend.
37:08
So there's nuance in it, right?
37:11
Just because Bitcoin sells off and the capital structure sells off and digital credit sells
37:16
off doesn't mean that these are flawed offerings.
37:17
It just means that they have a mechanical structural market link to the broader capital structure.
37:24
And as a cohort, because of that, the market is trading them as a block.
37:29
And people and investors need to understand that until Bitcoin gets to that future state where we all know it's going, $500,000, $250,000, $500,000, so on and so forth, it becomes much larger.
37:40
And perhaps the drawdowns become less volatile.
37:43
I think that it's likely to expect that when Bitcoin draws down, digital credit will draw down with it.
37:51
Yeah, that's super interesting.
37:53
I also want to bring up the dividend rate again because you brought up in the past, like with your analysis,
37:58
like it's clear that the step function increases, at least from your analysis, like didn't really drive the price.
38:05
Is it possible that just like the dividend increases were one, like there's just not that much of a sample size for like stretch,
38:12
like increasing its dividend that much and then two they are like relatively small increments so
38:18
like i'll like i'll give it like i'll exaggerate to kind of give an example you know if you had a
38:23
digital credit instrument that yielded one percent at a hundred dollar par price doesn't matter like
38:29
how much you buy back of that instrument it's not going to trade at par because you can buy some
38:34
like a risk-free instrument like a t-bill and earn significantly more than one percent and so
38:40
So if you but on the other hand, like if you jack the rate from 1% to 20%, maybe all of a sudden you might you might have a lot of buyers.
38:48
Like, how do you think about that in regards to the dividend rate?
38:51
That's a possible factor, because if you think of it just as you as you as you kind of pointed out, the change in rate may not be enough to spur buyers to come into the market and to spur demand.
39:05
and because of that, I think this is what
39:07
Fong Lee was alluding to
39:08
that I think that could be why that they weren't
39:11
seeing that increasing the dividend rate was
39:13
enough to spur demand in and of itself
39:15
because I don't know if
39:17
it's a matter of it not being large
39:19
enough or not being
39:21
disproportionately enough over the course
39:23
of time so perhaps if they had
39:25
kicked up the dividend rates
39:27
much much higher
39:28
over a longer period of time
39:31
that it would
39:33
spur more demand. I can't say because it's kind of hard to test a counterfactual that didn't happen.
39:39
But I think that could be a factor. Now, the flip side of that that I would say is that
39:44
I don't want to give the impression that there is any one lever that can be pulled that's going to
39:48
make these equities trade at a certain level. I think the market will trade them as the market
39:53
will see fit. But yes, that could be a potential factor. How do you compare this space to
40:00
like perpetual markets like you know bitmex pioneered the the bitcoin perpetual swap
40:07
hyperliquid i believe it's like a new perpetual kalshi has their new perpetuals and like i believe
40:13
like from what i've seen like the way it works is the funding rate is like variable it's regular
40:18
and it adjusts like quite significantly if everyone wants to go long then the interest rate that longs
40:25
have to pay the shorts blows out and it rewards people for going short the opposite is true like
40:32
is it possible to adjust the rate rapidly if the rate was able to adjust more rapidly would that
40:39
potentially keep something like stretch more stable or or no in your your mind
40:43
um i can't really speculate on would the ability of stretch to more effectively adjust to market
40:55
conditions keep it at par more effectively because i have to look at it in in the totality of the
41:02
overall of overall modeling i've been doing right i would have to say to myself whatever i've been
41:08
seeing in the data in terms of dividend rates and dividend frequency, does that
41:13
lead me to believe that there's a further adjustments that can be made along
41:17
those lines on any level of the capital structure that would allow stretch to trade at par more effectively I mean I inclined to say no because again just going off of my analysis
41:32
when I put the dividend rate,
41:34
when I put the dividend frequency,
41:35
when I try to model it out a half dozen different ways,
41:38
it still shows up as noise in the data.
41:40
I think that the larger market forces
41:44
are still going to determine
41:45
how the levels that these preferred offerings trade at.
41:50
and things like the frequency and the rates will help at the margin.
41:55
But the margin, in my view, the margins call that for a reason.
41:59
It's those incremental changes that happen at certain price levels.
42:03
So can it smooth out those levels?
42:05
Yes, but it still will not set the level.
42:08
And that's just based upon what the data is telling me.
42:11
Now, at some point in the future, it is very, very likely, very, very possible
42:14
that the data will present a different picture
42:17
because I think that as these offerings mature,
42:22
the volatility in them may abate somewhat, right?
42:27
And the breakdowns from par may abate somewhat.
42:29
But I think that comes through time.
42:32
And that comes through a variety of factors.
42:34
That'll be time of the dividend being paid,
42:36
market stability in the sense of that they have been at the market
42:39
and the dividend has been missed,
42:42
stability in terms of Bitcoin having more time in the market,
42:44
and Bitcoin's risk perception moving further in on the risk curve
42:49
instead of still being somewhat further out on the risk curve,
42:53
all of that will grow the footprint of digital credit
42:57
because as Bitcoin is perceived to be less risky,
43:00
more capital will come into Bitcoin.
43:02
As more capital comes into Bitcoin,
43:04
there will be more capital for strategy to buy,
43:06
to have capital markets access to buy more Bitcoin,
43:09
which will be able to increase the footprint of digital credit.
43:12
Digital credit will be able to support a larger and larger footprint.
43:14
And it stands to reason that the risk perception and the stability of the offering will stabilize over time.
43:21
But I think that time is going to be the largest factor in terms of how these things are going to trade and how stable they become, as opposed to any particular corporate action.
43:29
yeah i definitely agree that just time and you know bitcoin growing adoption bitcoin
43:35
increasing price kind of kind of solves a lot of the over engineering type problems that uh you
43:40
know people seem to be trying to come up with try to fix things whereas you know if bitcoin does
43:46
what we what many of us think it will do um so this will just all get resolved over time um i
43:52
kind of want to shift topic a little bit here as we start to close it out it was super interesting
43:57
going through that analysis.
44:00
But Saylor did an interesting tweet recently
44:02
kind of comparing Bitcoin to like a language,
44:06
like the English language.
44:08
You made a comment on that.
44:09
I'm curious, like, how do you think about,
44:11
you know, how do you think about that?
44:14
So I think what I said is that Bitcoin
44:17
could be the lingua franca of money,
44:20
like of a future base layer
44:22
in terms of what Bitcoin can do.
44:25
And the way to think of a lingua franca
44:26
is just an accepted language that everyone understands,
44:31
everyone can speak, everyone accepts.
44:34
They still speak their own language.
44:35
So, right, someone that speaks French will still speak French,
44:37
someone that speaks Spanish will still speak Spanish,
44:38
but everyone can come together and understand this lingua franca,
44:42
this common language, which English is, right?
44:44
English is the lingua franca of the world, and one of them.
44:48
And I think that Bitcoin will serve to be a similar kind of apparatus in the future.
44:55
You will have other currencies that exist.
44:57
You will have other currencies that are used.
45:00
But I envision a future where Bitcoin is one of those currencies, just like the U.S. dollar,
45:05
that everyone in the world will agree upon using as a potential sentiment layer, as a potential base layer.
45:11
And I think that things like digital credits serve as a way to, for lack of a better term,
45:18
translate Bitcoin from one state to another.
45:21
So if we're using the language analogy, we're thinking of it in terms of, you know, someone speaking Spanish and translating into English.
45:27
We can think about some of Bitcoin existing as a base layer being translated into other currencies and when it comes to digital credit being translated and transmitted into yields.
45:38
I very much view digital credit as a yield curve on top of Bitcoin.
45:41
I envision a future with stable coins existing on top of Bitcoin.
45:45
I envision a future where a lot of countries perhaps settle a lot of transactions on top of Bitcoin, in addition to corporations, in addition to individuals.
45:54
I just think that Bitcoin will be that accepted upon monetary language that everyone would agree upon.
45:59
Cannot be debased, cannot be corrupted, cannot be controlled.
46:03
And therefore, everyone will, for lack of a better term, speak the language of Satoshi through Bitcoin.
46:09
yeah it's uh it's an interesting thing because i think like you know people have many critiques on
46:16
bitcoin too volatile but one of the common critiques is like well you can always create
46:21
another currency and like you know your point and sailor's point is like well you can always
46:25
create another language doesn't mean everyone's going to want to speak your language you kind of
46:30
need to choose the language that everyone else is speaking it's kind of just an interesting way to
46:35
to think about it, I guess.
46:37
Well, I agree.
46:38
And, you know, not to kind of ruffle anyone's feathers,
46:41
but we saw what happened with Bit110, right?
46:43
So I think that, yeah,
46:47
anyone can try to spool up whatever coin they want.
46:49
Anyone can try to fork it however they want.
46:51
That does not mean that you would be speaking
46:53
the agreed upon language of the network,
46:55
sticking with the language parlance
46:57
that we're using right now, right?
46:59
So, yeah, you can,
47:01
And there's a reason why Bitcoin has the largest share of the, I hate using the term cryptocurrency, but Bitcoin dominance is as of this one, I think it was like 59, 60%.
47:14
There's a reason why it is the largest digital currency.
47:20
There's a reason why it has the longest time frame, the longest history.
47:24
And there's a reason why corporations are adopting it.
47:28
Institutions are adopting it at scale.
47:30
We have countries that have adopted it.
47:32
We have legislation talking about the U.S. government adopting it.
47:35
It is because it is the best money.
47:37
It is the best monetary language.
47:39
It is the best monetary framework.
47:41
It is the best monetary software.
47:42
We can go on and on and on.
47:44
Bitcoin has shown itself to be the best, and that's why it's adopted,
47:47
and that's why people speak its language, and that's why people are willing to use it.
47:50
So to Saylor's point, yeah, you're right.
47:52
I mean, someone can try to create whatever currency that they want.
47:55
It doesn't mean that people are going to want to use it.
47:57
No, that makes sense.
48:00
So Saylor has also kind of talked about this idea of like digital money being built on top of digital credit Obviously like digital money like his view is like a dollar like coin or a euro like coin or or whatnot that built on top of digital credit which is like a dollar income like security
48:22
effectively how do you see that kind of evolve like one do you think that that concept will play
48:28
out and i guess two like how do you see that evolving like will the dollar and bitcoin coexist
48:34
Will there be like different versions of the dollar that are built on top of Bitcoin or Bitcoin derivatives?
48:47
Yes, I think it's very possible.
48:49
And I think that's kind of where we are going.
48:52
So if we if we just look at what Saylor did with MSTR first, right?
48:57
He was the first out of the gate when it comes to a Bitcoin treasury.
48:59
I don't think it's impossible to say that we had a Bitcoin treasury, then we had digital credits, then other offerings will exist on top of digital credits and other differentiated offerings will exist on top of Bitcoin.
49:14
I don't think that's impossible at all.
49:16
I think that people will package and have offerings that are built upon digital credit.
49:23
But I can see, I don't use the term stablecoin, but stablecoin-like offerings or stablecoin-like rails existing on top of visual credits on top of Bitcoin.
49:35
I think that is all coming.
49:38
As Bitcoin's footprint increases, as one Bitcoin is worth, as I said earlier, $250, $500, $1 million one day, it'll be able to service a larger and larger cohort of individuals on top of it.
49:51
So that base layer will remain pristine and we are building the rails on top of it.
49:56
MSTR is a derivative rail that's on top of Bitcoin.
50:00
Digital credits is a yield curve rail on top of Bitcoin.
50:04
I think we'll have further curves and further rails that exist on top of those and on top of Bitcoin as well.
50:09
I don't think what Taylor is saying is outside of realm of possibility.
50:12
And in fact, if I were a betting man, I would say it's within the realm of probability, not just possibility,
50:17
that those things will happen and they will exist on top of Bitcoin
50:20
and top of digital credit at some point in the future.
50:23
Yeah, I mean, you mentioned like you don't want to use the word stablecoin,
50:27
but also it's like there can be these digital money things.
50:30
Call them whatever you want. I agree.
50:31
Like they're the ones that I know of.
50:34
They're not pitching themselves as stablecoins.
50:36
But theoretically, stablecoins, you know, they own credit assets, right?
50:41
There's no reason that they could not allocate a small portion of their reserve to digital credit.
50:48
I mean, Tether already owns Bitcoin.
50:49
Like that's obviously a lot more volatile than digital credit and pays no yield.
50:54
So like it makes sense that like dollar, anyone that issues dollar liabilities or stablecoin like things should have some sort of like Bitcoin exposure or like Bitcoin derivative exposure.
51:07
I agree.
51:08
So taking this like, kind of like what you just said up there.
51:11
So let's take it a step further.
51:13
One of the things I've talked about online and on other pods is that I think that corporate adoption of digital credit is going to be another wave that we're going to see.
51:24
So we already have, you know, Strive.
51:27
They already own Stretch on their balance sheets.
51:29
I think you have Orange BTC that owns Stretch as well.
51:34
You have, I think that we're going to, you have MetaPlanet that's allocating potential capitals towards buying digital credit securities.
51:42
I think they earmarked that as well.
51:44
I think that's a trend that we're going to see, right?
51:46
So let's expand it further.
51:49
If we have corporate adoption of digital credit, it makes sense that Tether could adopt digital credit as well, right?
51:55
It makes sense that pension funds and other kinds of allocators can allocate towards digital credit.
52:01
the footprint for digital credit, I think, is entirely dependent upon Bitcoin's footprint.
52:06
As Bitcoin's footprint grows, the potential footprint and TAM for digital credit and for
52:11
Bitcoin will grow proportionately. So I do think that that is possible.
52:15
The one caution I will give is that we don't want to have a situation where digital credit grows
52:21
disproportionately quickly. And then we have a situation where, you know, there's tons of
52:26
leverage built up and, you know, it's gotten too far ahead of its skis and has grown too quickly,
52:31
right? I would like to see a nice organic structured build out and growth of digital
52:36
credits through adoption, through having a larger footprint, through having more people
52:41
adopting digital credits, whether it be individuals like us that are in the Bitcoin space and that
52:47
have worked in the Bitcoin space, people in our family, individuals that have no exposure to
52:53
Bitcoin, but like the idea of getting yield through digital credit. Tether, the list goes on and on and
52:59
on. I would love to see a slow build out over the next several years as opposed to a large leverage
53:05
driven degenerate build out that we saw perhaps a little bit early in the summer where there's a lot
53:10
of leverage. And yes, I do think that's possible. And I don't think it's as far fetched at all for
53:16
Tether, for others to have digital credits as part of their allocation. And it'd be seen as
53:22
something just as normal as holding T-bills at some point in the future.
53:27
Yeah, that definitely makes sense.
53:30
Yeah, I mean, I agree.
53:31
Like, I don't want that Bitcoin's price to be built on a house of cards.
53:36
Although, like, if you look back, I mean, Bitcoin's history, you know,
53:39
is kind of people getting over leveraged through countless bull markets.
53:45
And then that's part of the reason I think why we have such steep bear markets in Bitcoin.
53:50
how do you see digital credit playing out like in a bull market like you mentioned yeah in a
53:56
perfect world people don't do crazy things and get over leveraged or over amplified but as the
54:03
market grows i mean keep in mind digital credit has pretty much only existed in a in a bear market
54:08
at this point or sideways to bear market so as bitcoin grows i imagine we're gonna have a lot
54:12
new issuers i imagine people are going to be trying to start businesses in the hype they're
54:17
going to be issuing a lot of like digital credit in the hype as well to acquire more bitcoin and
54:22
the market's probably going to love it if if the if the price is going up for for the that that
54:28
period of time like how do you see this evolving over the the bull market um i and i i did a post
54:35
last a while ago i think that in a real bitcoin bull market strategy will have five engines firing
54:43
Strive will have three engines firing.
54:46
Maybe MetaPlanet will have a few engines firing as well.
54:49
And I think that we see weeks where you know Strive and Strategy have an 8K that comes out and we issued x amount of common stock we issued x amount of sata and sats and stretch and and and um stripe and so on and so
55:04
forth week after week after week after week after week i think that is possible in a bull market um
55:10
because the the thing that i think will be interesting to see play out is that there will
55:18
be individuals that come into the market when we're in a bull market that want Bitcoin exposure.
55:22
There will be people that come into a market that want that additional amplified leverage
55:28
exposure through MSTR, through ASST, through MetaPlanet, so on and so forth.
55:32
And there will be a cohort that come into the market and say, you know, Bitcoin, a little
55:39
too volatile.
55:41
MSTR, ASST, way too volatile.
55:43
Digital credit, I can stick around in digital credit for three to six months as we're
55:48
in a bull market and get some yield on my idle cash and see what happens.
55:52
I don't think that's impossible.
55:54
So it is likely, in my view, that in a bull market, you will have multiple cylinders firing
56:00
for these treasury companies.
56:02
And it is possible that, and again, this is my view, there'll be an opportunity to build
56:07
up large cash positions for whether it be USD reserves or cash reserves, buy large amounts
56:13
of Bitcoin week over week over week for extended periods of time. Of course, there'll be market
56:19
corrections or what have you. But I think that the lessons learned in this last bear market
56:25
will position the companies to be better equipped for the next bear market whenever it does hit,
56:33
right? So whenever we come onto the next bull market, we hit another bear market or another
56:37
lull, I think companies will probably have larger cash positions. They'll obviously have larger
56:42
Bitcoin holdings as well.
56:44
And they'll be better positioned to weather the storm,
56:46
which will only make digital credit as a result stronger
56:49
because they'll be better positioned, better allocated,
56:52
and more structurally willing to adapt to the market
56:55
and more structurally sound because of, of course,
56:59
they went through another bull market.
57:01
They're into another bear market.
57:03
They've experienced a previous bear market
57:04
and they've learned from the experiences as well.
57:07
One more question, then we can close this one out.
57:10
the next Bitcoin bull market, you know, has it started?
57:14
Where do you think it might be going?
57:15
When do you think it might end?
57:17
And how are you thinking about what's,
57:20
why a certain bull market would play out
57:22
and why it would last a certain amount of time
57:24
and kind of where Bitcoin goes from here?
57:27
Well, do I think the bull market has started yet?
57:29
No, but I do want to bring up
57:31
certain things for consideration.
57:33
So we topped out at what 126 and change, right?
57:35
Whatever it was.
57:36
And we've drawn down a little bit more than 50% from that, right?
57:40
Now, people keep focusing on the drawdown, but they don't focus on it in comparison to other markets.
57:48
The drawdown in this market has been more shallow than other markets, right?
57:52
And when we dropped down and we hit, what was it, 58 back in June or was it May?
57:58
One of those dates.
58:00
We've bounced back pretty nicely from it, right?
58:03
And we've been ranging in between, let's say, the 70 to 84 range for a while now, right?
58:11
We had that, we had the, we crossed 84, almost 85 in May.
58:14
We crossed 84 almost and went a little bit higher.
58:17
And then we came back down in the recently.
58:21
So that tells me that we are a little bit range bound.
58:24
Now, I think that 27 could be a good year for Bitcoin because I would have expected with the situation in the Middle East,
58:31
with inflation where it is,
58:34
with the, you know, people are very,
58:36
very anxious in the markets.
58:39
There are a lot of macro factors
58:40
that are acting not necessarily as tailwinds
58:44
and not necessarily as headwinds,
58:45
but kind of as quicksand
58:47
is the best way I can describe it.
58:48
We can't go up and we can't go down.
58:50
We're just kind of ranging.
58:52
And Bitcoin has just been doing this thing.
58:54
It hasn't crashed down to 40K
58:55
like some people were thinking
58:56
and calling for, right?
58:58
So I think that with a little bit
59:00
of relief in the market,
59:01
that Bitcoin could spend 2027 in the 90 to 110 range
59:06
and we're ranging there.
59:07
And then we see what the next halving brings us.
59:10
Now, that said,
59:13
do I think we're going to go to 400K next cycle?
59:15
No.
59:16
I thought it was possible
59:18
that we could have gotten that this last run
59:21
because we just had so many positive narratives.
59:25
We had corporate adoption.
59:26
We had the potential for the SBR, right?
59:29
We had the potential for all kinds of macro narratives.
59:33
People were thinking that we had a real chance of getting, you know, the U.S. government coming in and really buying a lot of Bitcoin.
59:40
And that kind of fueled a lot of fervor.
59:43
Those narratives didn't play out.
59:46
But even with those narratives not playing out and the huge leverage flush on October 10th, we're still been ranging.
59:51
So we can see 27 be a nice ranging year.
59:56
and I think we are positioned to have a very, very good 2028.
1:00:00
I don't think we're going to hit like 400K or anything like that,
1:00:02
but I think we can see some nice price action.
1:00:05
And I think that Bitcoin treasuries will see a lot of disproportionate growth
1:00:11
because this is where I'm going to sound like a toxic Bitcoiner.
1:00:14
I think all coins are pretty much done for.
1:00:16
I don't really see them having the same kind of draw that they had in years past.
1:00:20
They certainly did not have that draw in this last period that we saw,
1:00:25
and I think that was because of treasuries.
1:00:26
And I think that trend will continue, except with more capital and the companies that are still, the treasuries that are still around, and digital credit obviously is still going to be around.
1:00:37
Digital credit is going to suck a lot of capital that would have gone to all coins.
1:00:41
Bitcoin treasury companies are going to suck a lot of capital that would have gone to all coins.
1:00:44
I think that we have created a new wave, a Bitcoin-focused wave, and we're going to see a lot of capital move into those and into the next halving.
1:00:54
I definitely agree that I think a lot of capital will be moving into Bitcoin.
1:00:58
Adrian, this has been an awesome conversation.
1:01:00
I appreciate you taking the time to do this and going through your analysis.
1:01:04
Thank you for having me on anytime.
1:01:07
And to anyone that has concerns about digital credit, I would say don't.
1:01:11
I think digital credit is doing what it's supposed to do.
1:01:14
And we as early adopters are being compensated with dividends.
1:01:18
We are being compensated with, you know, effective yields.
1:01:22
But as a result, we may have to deal with just a little bit more volatility.
1:01:25
But I think we'll be in a very, very different place in a year, two years, three years, and everything will be fine.
1:01:32
Yeah, it's going to be a fun couple of years.
1:01:34
Adrian, thanks again.
1:01:35
This has been great.
1:01:37
Thank you.
1:01:38
Bye, everyone.