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$500M Bitcoin Buy🔥Strive CEO on Corporate Trade Returning — Transcript

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0:00Is the corporate Bitcoin trade back?
0:01Today we're going to be breaking that
0:02down, get into where Bitcoin is heading.
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0:41yourself up for success. Let's just get
0:43started. I want to bring in our guest
0:45today. And of course, that is Matt Cole
0:48coming in from Strive. Nice to see nice
0:50to see you, Matt. How are you
0:52>> doing? Great. Thanks for having me,
0:53Paul. So, I got a couple of points I
0:55want to hit on. One, of course, is this
0:58right here, news item, and it's where
1:01Strive's pretty active right there. You
1:02guys are scooping up another 100 or,23
1:05bitcoin, 100 million right now. Total
1:08holdings reaching 36,000 Bitcoin. So,
1:12you guys have become a big player on
1:14this. The strategy continues to
1:16accelerate in this area. When you look
1:18at the rest of the companies that might
1:21be putting Bitcoin on Treasury, is this
1:23something that you think is starting to
1:25make its way into Tradfi in a bigger way
1:28right now?
1:30>> It it absolutely is. And and I have
1:32exciting news that just before we popped
1:34on, we actually announced we bought
1:36another 6,000 Bitcoin. So you you
1:38literally can't keep up with the Bitcoin
1:40purchases here. We have uh 43,000
1:43Bitcoin on the nose here. Uh but really
1:46what it comes down to is that the
1:48Bitcoin trade itself is not broken and
1:51it and it will never be broken because
1:54the the dollar is broken. So the fiat
1:56currencies are broken. So as long as
1:57this debasement trade that really is the
2:01structural engine behind which we're
2:03building our treasury and our whole
2:04strategy, as long as that does not
2:06change, then the strategy is not broken.
2:10But it would make sense that our
2:12strategy and the strategy of MSTR also
2:15named strategy is to amplify Bitcoin's
2:18exposure and and so in a Bitcoin bare
2:21market it it is math and so it that
2:24amplification works to the upside to
2:26outperform Bitcoin and it also works to
2:28the downside. Uh Strive was unique in
2:32this year in in the sense that Bitcoin
2:34is down a little bit right now on on the
2:37year. strive is up massively. Uh that
2:40was from phenomenal execution from the
2:43team. I would say that would be a
2:44rarity. Uh generally speaking, even for
2:47our own company, we would expect if
2:49Bitcoin's down for our company to
2:51amplify that to the downside, but we're
2:53underwriting the risk of Bitcoin from a
2:56very long-term perspective. So, we have
2:58these preferred equities that are not
3:00debt. They they never mature, and we pay
3:02an interest. And really, it's a carry
3:03trade. our our bet as a company is that
3:06Bitcoin will go up over the long run
3:08more than our cost of capital. And if it
3:11does, the math would just work that we
3:12will outperform Bitcoin. Uh and there's
3:14a lot of demand for that because a lot
3:16of people understand the the rolling
3:20hill that is the debt crisis in the
3:21United States, in the world, and they
3:23want to not only own something that's
3:25scarce, but also amplify it, which is
3:27our common equity. And then there's a
3:28lot of people that want income, and
3:30that's our preferred equity. And so I
3:32think we're really just getting going
3:33over what I think will be a very
3:35exciting next couple decades for this
3:36trade.
3:38>> All right. So, so Matt, I want to kind
3:41of ask you something because you look at
3:43the current market. Bitcoin dips below
3:4780K. You guys are out purchasing 511
3:51million worth of Bitcoin. Then you have
3:53JP Morgan jumping in saying, "Hey, yes,
3:55we're going to see Bitcoin continue to
3:56go up." In fact, they've come on to
3:59their analysis on learn long-term return
4:02outlook at 10% versus everything else,
4:06it's a high performer. So, what makes
4:08you so confident that right now is the
4:10right time?
4:12>> Yeah. So what was interesting about that
4:14JP Morgan article was that of all of the
4:17assets in their long-term capital
4:19markets assumptions and I'm very
4:20familiar with these they call them CAPM
4:24capital market pricing assumptions that
4:26are used for asset allocations from when
4:29I used to work at Kalpers we did a lot
4:31of work on these we studied every
4:32different banks is the fact that they
4:34have Bitcoin in there number one so it's
4:36a new addition they've never had Bitcoin
4:38even in there before but the first time
4:40they put it in they actually have it as
4:42the top expected performer. And so these
4:45uh predictions are typically not meant
4:48to be on the nose as far as the actual
4:51percentage gain, but the fact that they
4:52had it as number one, I think is really
4:54fascinating. They did say that there's
4:56scenarios that could be better or worse.
4:58Um but this is a big change from JP
5:01Morgan, who as we know, JP Jamie
5:03Diamond's been very critical of Bitcoin
5:06historically to move in that direction.
5:08And and so I think the the reality is
5:10that banks, everyone sees the the fiscal
5:15problem in DC and the dollar and they
5:17see what people like Secretary Treasury
5:20Scott Bassant is trying to do when
5:22they're actually take trying to take
5:24actions to cap the long-term rates for
5:26the US government, which naturally would
5:29be on a trajectory to go much higher.
5:31And when you actually work to do that,
5:33and I think we're in the early stages of
5:34that, I think they still have a lot more
5:36room to go of what they'll ultimately do
5:37to try to contain rates. The release
5:40valve has to be the dollar. And
5:42Bitcoin's highest correlation of any
5:44type of financial metric is a weaker
5:46dollar. And so I think right now we're
5:48kind of in the early stages of what I
5:51think could be the best macro conditions
5:53in Bitcoin's history. But ultimately, it
5:55will be when the Treasury or the Fed
5:57steps in with more size than they have
5:59yet to lower long-term rates. And I
6:02think that also is part of the thesis
6:04that JP Morgan sees playing out over
6:06over the long term here as well.
6:08>> So, okay. So, I think that's a good
6:10thesis on, you know, the reason why. The
6:12timing is my question. You know, 511
6:15million right now we're at 80K, some
6:17people pointing down towards 72K. Your
6:20average, what is the the current average
6:22of your Bitcoin holdings? Do you know?
6:25>> Sure.
6:25>> Uh just under 90K. Yeah.
6:27>> Under 90K. So being able to buy and
6:30purchase sub 80 would be significant in
6:33being able to drop your average. Is this
6:35something that you see is coming in
6:38terms of a price for Bitcoin as we see
6:40it maybe more pressure to your point. Do
6:43you think we're going to see an
6:44opportunity below below 80K?
6:46So, we're we're structural Bitcoin bulls
6:49underwriting a long-term thesis and we
6:51do not pretend that we have the skills
6:54to predict where Bitcoin will go in the
6:56short run. So, we do think that a
6:58further dip from here is possible. Uh
7:01but we we think that's a game that we
7:03are not excellent at. What we do think
7:05we're excellent is understanding what's
7:07going to happen over four year, 8 year,
7:1010 year, 20 year time frames and and
7:12just underwriting that structural
7:14thesis. And so generally what happens is
7:16that if Bitcoin were to move weaker
7:19into, you know, a downward trajectory,
7:21it's much harder to raise capital. And
7:23so right now we have the ability to
7:25raise substantial capital while Bitcoin
7:28was under $100,000. We'll take that all
7:30day. And we're not trying to get too
7:31cute with our execution.
7:34>> All right. Well, a couple I guess my
7:36question is is why more DAT companies?
7:38And we've got Sailor out there who has
7:41created a a what many people would say
7:44maybe one of the most complex but at the
7:47same time very innovative financial
7:50products available. Why try to jump into
7:53that and continue to build on this DAT
7:56business?
7:58>> So we saw an opportunity to do something
8:00that strategy was going to be unable to
8:02do which is really turn up the
8:04amplification ratio to Bitcoin. And so
8:07amplification, what it really just means
8:09is a leverage ratio. But to note that we
8:11have preferred equity only, not debt. So
8:13how how levered or how amplified is our
8:16return profile to Bitcoin. And so right
8:18now Strive has about a 60% amplification
8:21ratio. Strategy has about a 25%
8:24amplification ratio. And if you think
8:26about that, if Bitcoin moves up, we have
8:29a much higher beta to Bitcoin than they
8:31have. And and the reason is not because
8:33they're doing a bad job. It's just that
8:35when you have 800,000 Bitcoin in your
8:37balance sheet, it is extremely hard to
8:40get that leverage amplification ratio
8:42higher. Um, and so our belief was that
8:44they weren't going to be able to do it
8:45because of their size and that we were
8:47able to provide a more efficient
8:49amplified vehicle um because of our
8:52smaller size. And so we raced in that
8:54direction and that is why that in the
8:56course of a bare market we've now we've
8:59about 8xed our Bitcoin holdings. We
9:02started with just over 5,000 Bitcoin.
9:03Now we have over 40,000 bitcoin that
9:06that has been substantial growth because
9:08of the demand and what we're doing. And
9:10so I do think that there's room for
9:11other players that is so strivep
9:15max amplification but done responsibly.
9:17There's other debts or bitcoin treasury
9:20companies that are more focused on sharp
9:22ratio maximization cash flows and and
9:25just like in investment management there
9:27will be demand for these different types
9:29of risk return profiles. Our belief is
9:31that the biggest demand will be for
9:33amplified Bitcoin exposure. So that is
9:35our strict focus.
9:36>> Okay. You've got strategy out there
9:39buying another 22 million. And he made a
9:42statement. This was in a tweet that he
9:44put out. I'll show you guys. Uh this was
9:46October 23rd and it was an expose where
9:49he wrote just resolving a few Bitcoin
9:52manners matters behind closed doors. Is
9:56this just an acquisition strategy or
9:58what what's say where where's he going
10:00with that do you think?
10:02>> I I I don't know where he's where he's
10:04going exactly with that one. But when
10:06you when you see what's what's going on
10:07at Strategy right now, their Bitcoin
10:09accumulation engine has slowed down a
10:11little bit for the last several months.
10:13Uh Strive has actually been buying more
10:15Bitcoin for them than them. But I think
10:16their their bigger strategy here is that
10:19at that size they are playing the
10:22institutional game. So they're talking
10:23to banks, they're talking to insurance
10:25companies, they're talking to major
10:26asset managers, pension funds, and
10:28that's the type of scale that they're
10:30ready to. And so they're it's a trust
10:32game. It's I'm sure these are, you know,
10:33behind closed doors conversations to try
10:36to unlock massive amounts of capital
10:38because of their size. Right now, Strive
10:40is at a size where our sweet spots
10:43generally more uh high netw worth
10:45individuals um is kind of the the sweet
10:47spot for allocation. To us, that's
10:48probably our average investor. But we do
10:51have pretty good support from some of
10:52some institutions. But um as you grow up
10:54in size like strategies done, they're
10:57kind of growing up in times of the type
10:58of investors that they need to attract
11:01to get to the next level. And I do think
11:03that they will. Um the only the
11:05challenge for them is that those large
11:07pools of institutional capital, they
11:09move slowly, but I think that strategies
11:12balance sheet is basically unbreakable.
11:14And I think over time they will unlock
11:16that with success.
11:18Well, you look at uh their current
11:20strategy right now, which is raising the
11:23stretch buyback limit to three billion.
11:25Is this is would you say that this might
11:27be a warning sign?
11:29>> No. Um so, Strive as an example has
11:32grown ours we we launched our first
11:35preferred equity last November. We've
11:36grown it to over two billion dollars of
11:38notional outstanding. Uh I think that
11:40when you just zoom out a little bit that
11:42over the course of over a year there's
11:44about 15 billion dollars of assets that
11:46have been sold through digital credit.
11:48Um and so I think that there is
11:50learnings as what are these products?
11:53How much volatility can you actually
11:55strip off of Bitcoin? Um and Strategy is
11:58obviously trying to buy back. They're
11:59trying to really minimize that
12:01volatility by being much more aggressive
12:03on their product STRC. Uh but I don't
12:07think it's a sign of failure in any
12:09sense given the fact that that the
12:11industry has gone still from zero to
12:13well over 10 billion dollars in just
12:15over a year. That would be a smashing
12:17success in any new type of financial
12:19product. Um but I do think that it's you
12:22know for for them it's kind of hit a
12:24little bit of its soft sophomore snag.
12:26Um for us it's been a rocket ship. We
12:28just IPOed a new preferred equity
12:30literally last week. That's that's fixed
12:32rate and and strategies STRC are sata
12:35are variable rate. Our belief is that
12:38over time there's actually going to be
12:39more demand for the fixed rate side than
12:41there is the variable rate side. But
12:43it's just still really early in what
12:45these products are and where the biggest
12:47demand will be.
12:49>> I'm looking at uh crypto longs now
12:51losing the 404 mil in 4 hours. Bitcoin
12:54briefly slips below 80K. This, I think,
12:57is going to create some forced sellers,
13:00but it's also going to probably create
13:02some new buyers. And with new buyers,
13:04that of course is going to change kind
13:05of the dramatic role of where Bitcoin is
13:08heading, especially against the dollar.
13:10You guys announced your listing for SATs
13:12right now uh available. And tell me kind
13:16of the comparison for someone that is
13:18saying, "Okay, I want to get exposure
13:20here. I'm looking at maybe going the
13:22Strive route or I could be going over
13:23here and say maybe I want to go the M or
13:26the Micro Strategy route. What would be
13:28the benefit for you and especially on
13:30how you're paying against yields?
13:33>> Yeah. So, so I think there's two
13:34decisions that investors need to make.
13:36The first is are you shooting for price
13:39stability with the high income? And if
13:41you are, the best two products for that
13:43would be our SATA SATA or strategies
13:46STRC. They are designed to minimize
13:48volatility around $100 per share. Um
13:51what we what we heard from several high
13:55net worth investors to the point that we
13:57felt like a bigger idea was that there
13:59was actually a greater desire for
14:01locking in income stability. So not
14:04locking in trying to get price
14:05stability, but just a higher income
14:07locked in forever. um that for the
14:09average kind of baby boomer that's
14:12looking to retire and just lock in an
14:14income that that was actually going to
14:15be a better product market fit just like
14:17how about 93% of bonds are actually
14:20fixed rate. Um, and so when we were
14:22talking to people, what we learned was
14:24that a lot of these high netw worth
14:26investors that want income, they
14:28understand the debasement trade, they
14:30generally understand Bitcoin. They just
14:32don't need the volatility of Bitcoin.
14:34They just want an income for the rest of
14:35their life. And so that's why SATS is
14:38fixed rate, pays 15% forever. Uh, but
14:41the price is very likely to be volatile
14:43um or much more volatile than SATA or
14:46STRC. Um, it'll ultimately see where uh
14:49the demand ends up shaking out. We're
14:51pretty agnostic actually if which one
14:54ultimately has more success. It's not
14:56going to change our cost of capital much
14:58or or what what we view our long-term
15:00prospects. We just felt like this was a
15:02missing need and that the average person
15:04would probably prefer to lock in a
15:06little bit higher of yield and lock in
15:08that rate forever.
15:10>> You were quoted uh by Benzinga. This is
15:13will Bitcoin hit 500k by 2030. you said
15:16maybe when you look at what are the
15:19conditions that have to happen for that
15:21to occur.
15:23>> Yeah. So, so there's there's a few. Um
15:25the first would be contingent on a view
15:28that we have that the dollar is going to
15:29go into a structural bare market over
15:31the course of the next couple years. Um
15:33and that will be contingent on the
15:35Treasury and Scott Basant actually
15:37remaining true to his word when he said
15:39I am the house and and going to take
15:41these actions. We actually believe him.
15:43Uh we believe that uh President Trump,
15:46JD Vance actually also won a weaker
15:48dollar. Uh we also think that that's
15:50somewhat of a bipartisan position
15:52because whether you're a Democrat or
15:54Republican, there really is not a a
15:56desire to actually fix fix the debt
15:59crisis. And so if you're not, then you
16:00really got to control the cost of
16:03borrowing in the United States. Um so we
16:05think that the dollar will be moving
16:07into that structurally weak position
16:08that it really hasn't done in Bitcoin's
16:11history. It's actually generally for the
16:13last 20 years been going a little bit
16:15up, but in many bare markets, that's
16:16when Bitcoin's done the best. So if we
16:18actually had a structural bare market,
16:20so something similar to the early 2000s,
16:23similar to the 1980s where the dollar
16:25index actually went structurally lower
16:27for a period of 510 years, we think that
16:30that could ignite Bitcoin to going to
16:32$500,000 per coin or above. Um, we
16:36actually have three different scenarios.
16:38We have a lower growth scenario that's
16:40about a 30% kagger. The base case is
16:42about a 50% kagger which puts Bitcoin
16:44right around 500,000. Then we have a
16:47bull case um 70% kagger. But we don't
16:50think that those that those
16:52probabilities are equally distributed.
16:54We actually would lean on the more
16:56bullish scenario um or the base case
16:59over over the lower growth scenario. So
17:01we're very constructive on Bitcoin here.
17:03I would say the only thing that would
17:04really challenge it would be meaningful
17:07and substantial improvements in the
17:10fiscal situation in DC. Uh but we are
17:12very we think that's very unlikely to
17:14occur.
17:15>> Okay. You got a couple of things
17:17happening right now. You guys are
17:18shooting for number two in terms of
17:22uh but you're number four right now. So
17:24how what would be the strategy to try to
17:26get to number two before the end of the
17:28year?
17:29So, it should happen pretty naturally on
17:32our side. Uh, you never know what your
17:34peers are going to do. All, right? So,
17:36we're not we're not operating in a
17:37vacuum here, but this last week, we
17:39announced buying over 6,000 Bitcoin.
17:42We're now 1,01 Bitcoin away from
17:45becoming taking the number two spot. And
17:47so, at our trajectory, we would take the
17:50number two spot absence one of our peers
17:53doing something even bigger, right? And
17:55and that's one of the great things about
17:56our industry is that because the actual
17:59treasuries are Bitcoin,
18:01>> we actually would want to see other
18:04peers be buying a bunch of Bitcoin as
18:06well. Um, right? That it's effectively
18:08if we're all achieving excellence in
18:10this digital gold rush era, buying a
18:11bunch of Bitcoin, it obviously supports
18:13the price of Bitcoin, doing it in our
18:15own ways, in our own kind of sources of
18:17demand. Uh, so I say if we didn't
18:20achieve number two, that would be the
18:21reason. Uh, but I think on our own
18:23trajectory, we're we're clearly on a
18:25pace to having much more than the number
18:27two currently has, which is 44,000
18:29Bitcoin.
18:30>> Matt, all of this I I think because you
18:32look at investors in general, Bitcoin is
18:34typically targeted as, hey, this is the
18:36alpha. It's going to be, you know, it's
18:38the Nvidia or the SpaceX of of an
18:41investor who's looking at crypto in
18:43general. Now, we're starting to see
18:45tokenized stocks. You had Wells Fargo,
18:47Cisco, and a whole bunch of others now
18:49complaining that we're not necessarily
18:51going to allow that. In fact, we started
18:52to see even things like this where
18:54there's full page ads out there going
18:56after stockholders saying, "Hey, don't
18:59you know, help us support this." And
19:01then you look at what Jeremy is talking
19:04about, who is all in on this. Now, that
19:07of course raises the question when you
19:09look at tokenized securities, how crypto
19:12is being used, how blockchain is being
19:14used. this raises one the awareness then
19:17investors kind of go the route of hey
19:20maybe I should invest in Bitcoin as well
19:21as you know a leverage against this. Do
19:24you first of all do you think we're
19:25going to see companies finally get on
19:27board with tokenized treasuries or do
19:29you think it's going to continue to be a
19:31push back?
19:33Yeah. So there is push back from some
19:35companies, but there's also a lot of
19:36companies that are all in on
19:38tokenization. And and so our our our
19:41view is that and and my view just as a
19:43as a general principle beyond just what
19:46I'm doing at Strive is that
19:48>> democratizing access to investments is a
19:50good thing that people for years have
19:53been shut out from private markets.
19:55Obviously, when we talk about
19:56tokenization, there's a couple different
19:58components to tokenization. One is
20:00publicly traded securities that are
20:01already available on NASDAQ or NIC
20:03getting tokenized which allows them to
20:06kind of move more freely throughout
20:08different types of exchanges and will
20:10open up additional access to be able to
20:13invest in these securities. That's kind
20:14of what we're seeing already. Um I think
20:16that is a a great thing. It'll improve
20:18the liquidity profile. There's already
20:20many market makers that are set up to
20:23kind of work on uh different a same
20:26token that might be on different
20:28exchanges. That's what's been happening
20:29in crypto for years where you have
20:31whether it's Ethereum or Salon,
20:32whatever, name your coin, Dogecoin and
20:34they're on all these different exchanges
20:36and you have these market makers that
20:38are making these cross markets. So, I
20:40think the functionality is there. I
20:41think it'll improve liquidity. I think
20:43it'll be a great thing for capital
20:45markets. I think it'll be a great thing
20:47for the price actually stability over
20:50time. Although it might be a little
20:51messy in the interim, unlocking new
20:53forms of potential leverage, I think
20:55it's a great thing. Um [snorts] I think
20:57that is distinct from how much value
21:00that has to acrue to the underlying
21:02token that these are based on. So
21:04whether that's Salana or Ethereum and I
21:06think the simplistic way to look at that
21:08is that these are networks and if you
21:10are going to use their network, how much
21:12of these coins do you actually have to
21:14hold? How much Ethereum or how much
21:15Salana do you have to hold to use
21:17tokenized securities? And it's really
21:19not that much. Um, and so I think when
21:21you look at the market cap of some of
21:23those uh those tokens that are more
21:25network tokens, I think that it's
21:27arguable that it won't acrue a ton of
21:29value to them. Um, I do think it will
21:32acrue some value to Bitcoin, but I think
21:34Bitcoin is really just distinct in that
21:36in the sense that it's it's digital
21:38gold. Um, and it's really more based on
21:40the debasement trade and um, and I think
21:43that that will continue to heat up. With
21:45that being the case, the debasement
21:47trait, you have bit bonds out here
21:48pitched as a solution right now to
21:50Trump's budget Bitcoin reserve strategy.
21:53And one of the things that the Bitcoin
21:55policy institute said that the bonds
21:57would pay a 1% interest direct to 10% of
21:59the proceeds uh into Bitcoin. This could
22:02save around 700 billion or over 10
22:04years. That would be significant, you
22:06know, in in a strategy like this. My
22:08question is, do you think this can
22:10actually fix things like pensions and
22:12the debt?
22:14So, Bitcoin itself and getting Bitcoin
22:17exposure can fix the debt. It can fix
22:20the pension returns. Um, when it comes
22:23to something like a bit bond and the
22:24Treasury issuing them, I think it really
22:27just comes down to the type of demand
22:29and the demand sources that they can
22:31issue those into and finding that
22:33sustainable demand. And I think that's
22:34the hard part. Um, in in theory, the US
22:38kind of issuing that and getting some
22:39direct exposure to Bitcoin and kind of
22:41creating a win-win great product. Um, I
22:44think that there's probably a lot of
22:45work to do to make that a sellable,
22:47sustainable product. And I'll give you
22:49an example. Um, that has nothing to do
22:51with Bitcoin, but during COVID, uh,
22:53there was a lot of people calling for
22:55the Treasury to issue 100-year bonds.
22:57Um, I I was actually one of them. I
22:59said, "This makes a lot of sense.
23:00Interest rates are near zero. Turn this
23:02debt out 100 years." But what you're
23:05seeing and I think even Secretary Basant
23:07at the time before he was Secretary was
23:09in favor of issuing more longerterm debt
23:12that there's not really the demand for
23:14that type of duration in sustainable
23:16size to have a sustainable issuance
23:18cadence. And so there's a lot of things
23:20that are good in theory. You have to
23:22find both the buyer and the seller.
23:25Obviously the seller will be the
23:26treasury uh to have a win-win
23:27transaction. And my initial view is that
23:30it's probably difficult uh to actually
23:33achieve. But if they are able to achieve
23:35it, I think it's a worthy endeavor to
23:37try because I do think that it could be
23:39a massive win-win.
23:42>> I've got one for you to kind of wrap up
23:44today and that is the concern around
23:46quantum and AI in general. Here's
23:47Shimath Palapatia. This is one of the
23:49biggest investors and VCs out there in
23:52Silicon Valley claiming that AI is now
23:55aimed at crypto. if it were if it were
23:58aimed at crypto. I still think that AI
24:00is probably going to find its way into
24:01banking more so than crypto, but that it
24:05could be literally aimed at Satoshi's
24:07wallet and could end up draining this,
24:10you know, wallet and even going short on
24:12on the uh on the asset, which obviously
24:16would put a lot of pressure on Bitcoin.
24:18What's your take on this? Do you think
24:19this is a real vector in terms of a
24:22threat?
24:23So, I think there's already real
24:25solutions for AI. Uh, I mentioned to you
24:27before before we hopped on that I'm
24:29actually recording this from Lugano,
24:30Switzerland, uh, where I was at the Plan
24:32B conference and talking to a lot of the
24:35developers on Bitcoin and there are
24:37great solutions today. Um, it likely
24:39would take just a few months to roll
24:40out. Um, there's several different
24:42potential attack vectors from Quantum
24:44and so right now the view is that there
24:47that we can actually take our time as,
24:49you know, a Bitcoin network in figuring
24:51out the best way to do this. But there
24:52would be, you know, some potential quick
24:54solutions if needed. Uh my my view on on
24:57Satoshi's coins specifically. Um I have
25:00a couple different views on that, but
25:02one would be that very likely the first
25:06uh people to get access to quantum would
25:08be someone like a Google, a Microsoft, a
25:11very large company. Uh you can't just
25:14steal someone's coins. Uh if you if
25:16someone leaves their wallet on the
25:18table, you can't just go take them and
25:20they're yours. uh that is not how the
25:22law works and so a large company
25:24stealing Satoshi's coins would be
25:25illegal. Um there you know if a Google
25:28did take them and put them in the hands
25:31of the government for safekeeping or
25:32something like that I I don't think that
25:34it's at the size and scale that
25:36represents a real material risk to
25:38Bitcoin. You think about 1 million coins
25:40one over 21 million that's over under
25:425%. Um, there's obviously probably some
25:44other old wallets that, you know, would
25:46be at risk, but we're not talking about
25:4850% of the coins that would be in this
25:50type of scenario unable to be upgraded.
25:52We're probably talking about 5 to 10% of
25:55of the overall coins as a as a one-time
25:58risk that the community is going to have
26:00to decide what to do with those types of
26:03coins. Um, my view is is not to
26:06permanently lock them. Um, I think that
26:07would be overarching on the Bitcoin
26:09network. uh but that wouldn't pre
26:11potentially prevent a a large uh tech
26:15company for put to putting them in
26:16safekeeping which I think is more likely
26:18than a bad actor getting access to
26:21quantum which I think even when quantum
26:23happens it'll be a long time before that
26:25technology is in the hands of of the bad
26:28guys in my view. Are you but are you at
26:30all worried about you know this um
26:33almost bank run effect that you do see
26:35in an economy or into any kind of
26:38society where something is threatened.
26:41People will start a bank run. It creates
26:42a sentiment waterfall. You get major
26:46selling that entices other major
26:48selling. Shorts get liquidated. Longs
26:51are are toast. What What about that?
26:53because you're you're talking about a
26:55situation that could really ramp up
26:57pretty quickly if that became public
26:59knowledge that this is done has been
27:01done.
27:02>> Yeah. So so Bitcoin is a volatile asset.
27:04I think ultimately it comes down to
27:06supply versus demand. Uh but I think
27:09that's why you always have to be very
27:10careful with leverage. Um so not
27:12particularly for the reason you just
27:14highlighted but for because of the
27:15volatility of leverage. That's why
27:17Strive has no encumbered Bitcoin. We
27:19have no liquidation points. um we could
27:21literally w ride out a flush to a penny
27:24for Bitcoin. I mean, you saw oil in 2020
27:27went negative on futures. Um right, and
27:29then it rebounded and and is now uh very
27:32very healthy prices. Uh again, that um
27:35those short-term types of pressures um I
27:38think are not something that worries me.
27:40What worries me is the long-term support
27:42and demand. And when you think about
27:44where we're going, I think there just
27:46will be a structural bid on scarcity. Um
27:50those types of scenarios could result in
27:52in selling pressure, but they also could
27:55result in in the opposite of that people
27:58would be trying to secure their coins um
28:00and actually not selling it. And that
28:03what we've seen in the past is that
28:05hacks so so exchanges with Bitcoin have
28:08been hacked in the past. So you've had
28:10like the Mount Gaus hack as an example.
28:12These hacks have tended to be bullish
28:15for the price of Bitcoin, introduce
28:17short-term volatility, but if you
28:19actually zoom out around them, they tend
28:21to be something that ends up being more
28:22of a bullish catalyst than than a
28:24bearish catalyst. And I think that if
28:27Bitcoin got beyond quantum, even if it
28:30got beyond quantum in a messy way, I
28:33actually think it would be bullish
28:34because it would kind of move something
28:36that was an unknown scary thing to you
28:38knew what happened. And I think that it
28:39would actually be a bullish catalyst for
28:41Bitcoin on the back end of that.
28:43>> Well, I mean, you've had good answers
28:44here. I think for investors that are out
28:46there looking at Bitcoin long term,
28:48that's the key. You guys have been kind
28:50of looking at more of a bigger picture
28:52here of where this asset is heading. So,
28:55uh, Matt, it's been great having you on
28:57the show today. Thanks so much for
28:58coming in. We appreciate it.
29:00>> Thanks for having me.
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