TFTC: A Bitcoin Podcast - Bitcoin Alpha E001: Why Wall Street Veterans Are Dumping Bonds And Buying Bitcoin

Episode Date: November 1, 2024

Join Marty Bent, John Arnold and Grant Gilliam of Ten31 for the inaugural episode of Bitcoin Alpha. Ten31: https://ten31.vc/ 0:00 - Disclaimer 0:24 - Introductions 9:19 - Comparing underwriting in Bitcoin vs trad banking 13:05 - Minneapolis Fed paper 22:48 - Paul Tudor Jones and Stan Druckenmiller 29:54 - Ten31's unique bitcoin focus 39:25 - Bitcoin's dominance over time 56:04 - Bridge/Stripe deal 1:16:37 - Wrapping up

The following is for informational and entertainment purposes only and should not be construed as financial advice. This discussion is a presentation by 1031, the leading institutional investor focused on the Bitcoin ecosystem. 1031 has over 10 years of experience in Bitcoin and has deployed nearly $150 million into the leading opportunities in the space. To learn more, visit 1031.vc. Bitcoin Alpha Episode 1.

Grant, John, let's rip the bandaid off. We've been talking about this for a few weeks now. Absolutely, let's do it. This is a new show that we're going to do under the 1031 brand. Right now we're thinking biweekly, every two weeks. We're going to do a check-in and dissect the news, some news headlines of the week, maybe a deal or two that have happened recently

and try to put forth the case for Bitcoin for the traditional institutional investor who's wondering what the hell is going on here. We've been talking about this. It seems like we're about to head into another bull cycle. And as waves and waves of new entrants come, we want to make sure that you're getting the best information because you're going to have these questions.

So I'm going to throw it to John now, who is the brains behind this podcast, man making the list of the topics that we're going to talk about and i think for the audience giving a brief intro how you came to bitcoin how you came to 1031 and your overall perspective about what we're doing here yeah for sure um as always marty is far too kind uh i do what i can but uh these guys are the rock stars so i'm just just happy to be along for the ride But my background is, for those that don't know me, primarily from traditional finance. Out of college, started in investment banking, went to the buy side after a couple of years, worked at

a few hedge funds, including Citadel. Along the way, I really fell in the Bitcoin rabbit hole pretty hard. It's a story that's becoming more and more common, I think, throughout the world. I was one example of that. I had always been an advocate of and interested in Austrian economics, you know, the history of the gold standard and kind of US monetary framework prior to 1971, when we kind of entered this fully unbacked fiat regime that we've been in for about the last 50 years. And when I finally grokked Bitcoin, it all clicked for me pretty quickly. And so, fell down that rabbit hole pretty hard and spent a few years just being obsessed with it and thinking about not a lot else other than Bitcoin outside my day job and learning a lot from Marty here

about how it works and kind of the ecosystem around it. And so in summer kind of 2021 was looking around for ways to invest more in the ecosystem and kind of found these guys struck up a relationship with them. I saw that they had brought on two kind of guys from traditional finance one of whom is is on the call who will introduce uh in a second and then uh matt odell and marty bent to kind of bridge the uh the the bitcoin gap uh between traditional finance and bitcoin and you know i knew right away that this was a special group that could do special things so reached out struck a relationship and was able to come on full time in summer of 2022 and i think over the the last couple years that we've we've been doing this uh the the proof has

just kind of been in the pudding it's been a whirlwind uh we've deployed close to 150 million dollars um over two funds and you know i think we're just getting started we we've look at everything across uh the bitcoin ecosystem uh technologies financial services consumer applications and that that universe as we'll we'll get into on this this podcast is only expanding and so couldn't be happier with kind of what we're building here and i'll kick it over to to grant who's one of the co-founders to introduce himself and give his vision for what we're doing here and why we think this is so exciting, especially for institutional investors and the broader traditional finance world. Sure, absolutely. The other thing we should point out

about John is he is also the creator and author of the 1031 timestamp, which in my opinion is the best bitcoin focused newsletter out there on a regular basis um and so if you're not a subscriber to that you should definitely check it out i was trying to do some polls around noster and social media to see what else is out there that really covers the landscape in a way that the time sam does and i just think it's unmatched we do it every saturday how long has It's been probably over a year, maybe two years at this point. And that was sort of, in part, the inspiration behind this podcast was to cover some of the content that we cover there, because it's everything from macro-oriented stuff to Bitcoin-specific development activity in our portfolio, which is pretty comprehensive in the Bitcoin landscape. But to bring it back to 1031 and my background, I come from traditional finance as well.

Out of college, I went into investment banking similar to John, spent a few years doing that on the leveraged finance side with Credit Suisse in both New York and London. And then I moved back from London to New York and joined a private equity firm, one of the largest private equity firms globally called CVC Capital Partners, was one of the early members of their U.S. team as they were expanding into the U.S. And I was with him for about 15 years doing all sorts of industry related investing in large cap private equity. There's probably not a business model I haven't seen in that time frame was allocating capital at a very large scale. the companies that were multi-billion dollar companies and involved in the entire lifecycle of a deal from sourcing opportunities to evaluating and diligencing them to establishing relationships with the management teams and the companies trying to advocate for becoming long-term partners with them, establishing those partnerships after we made the investment over, you know,

five to 10 years, sitting on the boards, working with them on value creation plans, and then ultimately driving successful investment returns for our underlying investors. And, you know, to sum it all up, I was just an investor by profession because I love it. But at the same time for, I mean, it's almost going on 10 years now that I've been interested in Bitcoin. First, it was just a side hobby that I was doing alongside of a lot of just angel investing in technology companies outside of my role at CVC. And those two interests of mine, Bitcoin and early stage investing really came together when we found some opportunities to invest in companies in the Bitcoin ecosystem. And it really was just a light bulb moment for me because what I was hearing from some of those early companies that we were meeting,

and when I say we, at the time it was Jonathan Kirkwood, who's my cousin and another one of the co-founders of 1031. When we were hearing from the Bitcoin founders that they were very much interested in capital partners that were aligned with them on the importance of Bitcoin, how it was going to change the world. And there really was a scarcity of capital out there that really fit what they were looking for. And we started investing in some of those opportunities and ultimately rolled that into what became our very first fund,

focused on supporting the ecosystem. And as John said, we've now raised, invested a couple of funds and are really excited about the momentum that we have. The premise was just try to do the opposite almost of what we had seen in the traditional venture capital world um, and focus on companies that we thought could make a meaningful impact on the build out of the infrastructure, um, and advance Bitcoin adoption globally.

So with that, I'll pause and, uh, we can take it however you like Marty. Well, it's going to be a short pause because before we jump into the list of topics we have to cover today. I think it would be great to get your perspective, Grant, on the difference of underwriting deals for this nation industry that we're playing in with Bitcoin versus what you dealt with at CBC. What's that diligence process or your thought process and how has it changed moving from different scales of the market of capital allocation? MIKE GREEN Well, in many ways, I think that it is very similar. And in fact, I've argued in the past that I think just the way that Bitcoin is going to really disrupt the investment landscape is that I

think just this world of easy money is coming to an end. We've started to see that in general over the last several years just because of the macro backdrop and the situation that governments have been in and the cost of capital changing pretty significantly. But putting that aside, I think Bitcoin was already poised to cause that type of disruption. And so I think that the experience of private equity, You can have different flavors of investing.

The one that I was most exposed to was just cash flow oriented investing where you are underwriting an opportunity based on how do you see the total addressable market, companies positioning within that space, and then ultimately, can it produce in a sustainable way cash flows through which you can underwrite and drive an investment return over a long period of time. I think that a world that's moving towards Bitcoin, that type of underwriting is going to become much more relevant over time than historically what we've become used to over the last couple of decades or so is this growth at all costs, easy money world where there hasn't historically been as much emphasis, at least earlier on in generating sustainable business

models and actually trying to generate profits. It's, you know, growth hacking and blitz scaling and all these buzzwords to try to scale to billion dollar valuations without ever having made a dollar. So I do think that the underwriting process going forward looks a lot like what i'm used to in private equity um and with that um you know we've very much been focused at 1031 on what we call sats flow which is just the the equivalent um thinking around cash flow just a company being able to generate bitcoin denominated profits um that um that boosts their treasury position over time sats flow it's important and it's it's uh a concept that the market has become completely detached from over the last two decades particularly

specifically silicon valley backed startups that have this growth at all minds growth at all costs mindset and i think that's core to our thesis here is that um not only investing in the companies that we are but bitcoin first why does bitcoin exist and this is going to segue into our first topic which is a paper written by the minneapolis fed last week that that highlighted because bitcoin existed is going to make it harder for governments to run deficits the way they have been for for many decades since we were ripped off the gold standard and bitcoin is changing everything And despite that fact, despite the fact that Bitcoin is approaching a $1.4 trillion market cap, there are a lot of naysayers out there who really don't understand the profundity of Bitcoin existing in the market and competing with these fiat currencies. And I think the Minneapolis Fed paper that was written is just a perfect personification of the lack of awareness that incumbent economists have in this case in regards to the fact that the way they're operating the monetary system

is becoming very clear to people that it is not working anymore. And Bitcoin provides this alternative to individuals, corporations, governments. And despite that fact, there's been many naysayers for the first 15 years. And this Minneapolis Fed paper was beautiful because they essentially admit that Bitcoin does have a place in the world. And if it is successful, it can really perturb the ability for these governments to run deficits. And Grant and I were joking before we hit record here.

I think another thing that is hilarious about the paper is that it's essentially an econometrics paper that is just filled with economics jargon and calculations that don't really map to reality. So, John, what did you think of this paper? Yeah, well, I mean, the best thing about it to me when I first saw it is it's like, you know, it's Schrodinger's money almost. It's like, so Bitcoin is simultaneously useless. You know, it's explicitly called in this paper useless, equated to useless pieces of paper, which is ironic given the system from which the paper is emanating.

But so it's simultaneously useless and yet so useful and so desirable as to present a constraint for infinite federal deficits, right? So, and you often kind of see this in kind of traditional finance world, people who have, you know, looked at Bitcoin maybe a little bit, they'll kind of, you know, if they haven't really kind of dug in further, they can kind of simultaneously hold this internally incoherent view that Bitcoin is, you know, worthless, and, you know, it's going to zero, and also it's going to get banned, right? So it's hard to see how you could really kind of reconcile those views at the same time. Either it's, you know, so useful that there would be kind of government action against it, or it's, you know, so useless and, you know, beyond discussion that tomorrow it's going to go to zero or, you know, in relatively short order on kind of geopolitical timelines, it's going to go to zero. So why are we even talking about it? You know, it kind of has to be one or the other, you would think. Uh, so this is, you know, echoing that kind of internal, um, illogic and incoherence in, you know, just a really, uh, pristine and succinct way. So that was the first thing that jumped out to me. And I think it really says, you know, it, it surprisingly says like the quiet part out loud, right? You wouldn't necessarily expect a Fed paper to be so kind of intentionally or not self-aware about the nature of the system, which is that it effectively relies on kind of infinite bag holding and captive bag holding of U.S. federal debt.

And if there is an alternative that is harder, scarcer, permissionless, decentralized, that people can interact with in a variety of ways outside of the permissions of a third party, or said another way, outside money, effectively what gold was 100, 200 years ago, except gold that could be teleported and transported at the speed of light, that people would flock to that. That kind of admission and just awareness that that is necessarily a governor and a constraint on infinite issuance of new debt to pile onto the system is actually something that I haven't really seen in print before from a Fed paper or a broader kind of central bank paper. So those are the things that stuck out to me. The Schrodinger's money piece, simultaneously useless and worthy of being banned. And the fact that it kind of implicitly is admitting that the system only works if and as it can kind of issue infinite new debt without and have like a captive audience to acquire that debt over time. Yeah. I mean, I agree with those points. And one of the things that I also thought was interesting was at the same time they were saying that, you know, Bitcoin are these useless pieces of paper. They were saying the same thing about dollars as well. They sort of were saying government stock and old dollar bills were also useless pieces of paper. So there were some interesting gems like that that they sprinkled in there, I think, which are more accurate than maybe some of the things that they were saying about Bitcoin. But they also got things about Bitcoin right, because, I mean, one of their, I think, biggest concerns was that it wasn't a claim on anything.

You know, they sort of said that multiple times, that it's not a claim. It's not a liability, which is correct. It is its own bare asset. Um, and you know, the fact that they want to, they're advocating a way to have persistent budget deficits. You know, I was starting to go down this line of thinking of, well, why, like, what is it? Um, you know, there's a lot of these complicated math formulas when you look in there and I was an engineer in college and I minored in math.

And even some of that, I was just like, you can't you can't simplify the economy down to an equation and consumer behavior. You cannot simplify it down to an equation. But at the end of the day, I think what it boils down to is, you know, this top down central planning control. They think that if they can run persistent government deficits, then they're able to reallocate resources in a way that they wish. They don't think that individuals have the ability or can stomach the responsibility of doing that themselves, that it needs to be government controlled. Yeah, and this is despite an overwhelming amount of evidence to the contrary. The government, I think it's pretty clear at this point, that's why I think this election is as vitriolic or contentious as it is,

is because we're at this crossroads, particularly in America, where it seems like the government has been overbearing in many facets of our lives and people are clamoring for somebody to come in and make the government smaller. I mean, explicitly, the last couple weeks of the run-up to the election, Trump basically putting forth a whole new tax policy, which is high tariffs, floating, eliminating the income tax, and a bunch of other measures that would get the government out of the economy. And I mean, part of that tax policy, high tariffs, low income tax implicitly alludes to the fact that you're going to have to cut a bunch of government spending, cut a bunch of government programs to make sure that you can do that in a way in which you don't restoke inflation and have inflation running particularly hot.

Because if you're going to do that tax policy, you're going to need to cut spending. If not, if all else held equal, you raise tariffs and lower the income tax. It's going to be pretty inflationary for the economy. But going back to the Minneapolis Fed paper, the conclusion basically says if we're allowed to make Bitcoin legal for particular use cases and leverage the asset, that you can have budget deficits run hot in a perpetuity because we will have the scarce asset that enables that. And so it's essentially the conclusion is don't let individuals and companies hold this.

Figure out a way to silo it into the government treasury so that we can extend the budget deficits and continue to print these dollars and issue these treasuries. It was actually pretty evil at the end of the day. It's like we're going to leverage Bitcoin to run these deficits. expand the monetary base debasing everybody's purchasing power but the government will be okay

and the fed whether they want to admit it or not has become highly politicized and they do have an effect on how people view what the government is doing at any given point in time and they can never come out and admit that um all all is lost even though they may have alluded to it in this paper. They can never come out and starkly say that. They exist alongside the Treasury to make sure that we can continue issuing debt. And that is the other big topic of the last week. One of the big topics of the last week is the fact that you have two particularly well-respected investors who have repeatedly and consistently outperformed the market over the course of many decades, Paul Tudor Jones and Stan Druckenmiller come out within days

of each other and say that they think inflation is going to run hot. Because of that, they are very bullish on scarce assets like gold, Bitcoin. Paul Tudor Jones said he would also have an allocation to the NASDAQ. And said, Paul Tudor Jones said he owns no bonds. Stan Druckenmiller said something very similarly, but even took it a degree further, which is admitting that or making people aware that 20% of his portfolio within his family office is short bonds. And so there you have two tenured, very respected traders taking a pretty contrarian position, particularly within the bond markets.

John what do you think about these two making that statement yeah I mean it gets to you know to tie it back to the last topic it gets to at the very least I think these three things collectively so the Fed paper Paul Tudor Jones's comments and Stan Druckenmiller's comments should lead people to ask why is it that Bitcoin would be seen as a potential release valve or a potential alternative that would be attractive in an environment with, you know, parabolically growing deficits. Like the Fed seems to acknowledge that that is the case and their reaction to that is very different than Stan Druckenmiller's or Paul Tudor Jones's. But there's kind of underlying all of that is this acknowledgement that Bitcoin is this useful alternative. And so

I would encourage anyone who is kind of looking at this from just a generalist macro perspective to kind of, if you haven't, can I ask that question? You know, ask that question. Why is this something that a bunch of different parties with different interests are all kind of acknowledging is a good alternative in an environment like this? You know, I think it's not beyond the realm of possibility that there's some book talking of already,

like, fully-sized trades here by both of these guys, and that's fine. But I think, you know, whether, I don't know where they are in the life cycle of these trades. And now that this seems to be kind of the consensus view in a certain corner of Twitter, you know, maybe the tenure is about to roll over again. But I think the arguments that they're making are pretty difficult to kind of counter just looking at the reality of the fiscal situation. You know, there's some kind of pundits out there who might argue and have argued,

you know, over the last few years as this kind of thinking and this kind of argument has gained steam among people like Paul Tudor Jones and Sandrock and Miller. The counter argument has been, well, all we really need to do, we're not that far gone. We still have the reserve currency. We're still the issuer of the world's reserve currency. Everything runs on dollar rails and is dependent on the dollar. And so all we need to do is just get our fiscal house in order. We need to get tax rates up and cut spending. And here's the math on if we're just responsible about it, here's how we can, you know, get a, you know, budget surplus or kind of a neutral budget by X year. And I think, you know, what that argument is kind of missing is just, there's no practical

way that, whether the math theoretically works or not, there's no practical way to get marginal tax rates up to, you know, levels that we saw in like the 40s and 50s and 60s without, you know, a borderline revolt. And, you know, from across different segments of different, you know, economic interests, we're talking 90% plus kind of top marginal rates, and that's not something that's going to be popular. And we're in, you know, a system like it or not, that really optimizes for kind of four-year election outcomes. And that's kind of how we've gotten into this place. And so that's one element. And, you know, it's also worth remembering that on the spending side, And even outside of the budget deficits that we're running every year, even outside of the stated federal debt that we have, you know, $35, $36 trillion, whatever it is, and going up kind of parabolically every month, even outside of that, the unfunded liabilities that we have for future generations for Social Security and Medicare are multiples of that, right?

And so that's its own problem that still needs to be addressed, even if you could get, you know, jack up marginal tax rates to some crazy level. And even if you could get really aggressive on the fiscal side, neither of which would be popular and both of which would also tend to push the U.S. further into something that looks more like a recession. So you've kind of got this doom loop where, you know, does that then collapse tax receipts and you actually end up exacerbating the deficit problem? And so it is whether, you know, some resolution of this comes to a head this year, five years from now, 10 years from now, whether Paul Tudor Jones and Druckenmiller have their trades fully sized and they're using, you know, people on Twitter as exit liquidity. The fundamental argument is not, is very difficult to dispute. And I think it's even worse than what Paul Tudor Jones kind of stipulates in that video that's been going around of him making this case. And so, you know, I think that's just something that everyone needs to be thinking about. And I think that the only way, as he says, to get out of this problem without significant

fiscal and tax pain that is both going to be very unpopular and potentially runs the risk of just, you know, fanning the flames and making the fire worse is, you know, fueling nominal growth, right? through looser monetary and fiscal policy, the byproduct of which would then likely be more price inflation. That's very likely going to be, I think, in all of our view, the path that gets chosen. It basically socializes this problem onto holders of the currency, both domestic and foreign, and in a system that optimizes, again, for kind of four-year election outcomes. Unfortunately, I think that's probably going to be, and I think these guys would tend to agree

based on their trades um where we where we end up going and so that's the that's the long-term path or the you know the medium-term path at least for for the bond market and um assets that are not scarce and they're not hard and on the flip side that's why you'd want a significant we think allocation to bitcoin and companies that are leveraging bitcoin in different ways and and stacking it on their balance sheet yeah it's uh and that's like with all that in mind too like thinking about like ptj stand ruck and miller when they're saying bitcoin they're thinking bitcoin the ass and obviously what we're involved in um we're here because we we believe bitcoin is an important tool to counteract these forces

that exist within the incumbent central banking system and over a system filled with overblooded governments that are drunk on spending but they view this as an asset and i think pivoting the conversation conversation toward what we're here to do which is the asset sits below everything we do ptj and drunken miller when they're talking about bitcoin they're thinking about bitcoin in regards to it being very scarce asset 21 million i want to allocate to that to make sure I am hedged against inflation or I'm just allocated to an asset that is completely uncorrelated to anything going on in bond markets or public equities. But the business that we're involved in is understanding the layer above that, which is the companies that are enabling

individuals, other companies, governments to onboard to Bitcoin. I think that is an area that we would all agree is severely overlooked, not only by people that have identified Bitcoin as an asset they want to have exposure to, but even the people that have, number one, identified that, and then two, identified that maybe having exposure to the infrastructure around Bitcoin have missed as well because most of the capital that has been raised

has been deployed towards the broader crypto ecosystem. There's a lot of people who have seen what Bitcoin has brought to the world. They think it's MySpace, and they've raised a bunch of money and allocated towards alternative cryptocurrencies and the infrastructure around those. And we exist in a lane that is exclusively focused on Bitcoin and the infrastructure around it. So, Grant, throwing it to you, diving deeper into what we do and how our focus is differentiated from most of the venture capital or investment platforms focused on this space.

And when most people hear the space, they think Bitcoin and broader crypto. Yeah, I think it's such a surprising phenomenon that there hasn't been that much capital pursuing basically the strategy that we are, that haven't connected the dots. that you hear these, you know, these great investors, Paul Tudor Jones, Duncan Miller, you see the conclusions that are coming out from these government papers, not just the Minneapolis Fed, the one that the ECB that came out of Europe, you know, basically everyone's saying all paths are sort of pointing to Bitcoin to some degree. And not many people have connected the dots that, all right,

well, there seems to be this long-term secular growth, this likelihood of continued adoption of the asset. What does that necessarily imply? If more people are entering the market to get access to the asset, then it implies that there are going to be providers that make it easier for them to do so, that make it easier for individuals, for institutions, even governments to acquire Bitcoin, to hold Bitcoin, to use it in different ways. What we basically say is the enabling infrastructure, the companies that build the enabling technology. And that's what we are 100% focused on. We haven't looked at anything but Bitcoin. And Marty, to your point, most of the capital that latched on to this trend of cryptocurrencies

has looked for the next Bitcoin and sort of either follow a hedge fund type of trading strategy, get early access to tokens that they hope to appreciate very much, just sort of speculation play, some of them being venture-oriented strategies as well. But our focus has just been on what are the companies that are going to build this enabling infrastructure? How do we get access to the equity of those companies? And how do we help support the growth of the ecosystem in general that makes it easier for users of all types to enter the industry? And ultimately, that's what we want to see, is it be easier for people to be able to acquire Bitcoin, hold it, use it.

Yeah, and I think, Grant, that hits on something that I think is worth thinking about as well as anyone, you know, looks at the space. You know, everything we talked about kind of for the first 20 minutes related, you know, primarily to kind of a defensive posture, right? That the prior system has a lot of issues that don't have any easy solutions. And, you know, these programs have been set up such that it's very difficult for subsequent generations of politicians to, you know, modify them, you know, once they're in place, that was kind of explicitly, you know, the, the idea behind social security, for example. And so you need some sort of like defensive answer to that for your portfolio. And that's all very, very true. But I think what you're saying that

gets us so excited is, so that's, that's a huge kind of kickstart motivator for the space, but But also, we see, you know, opportunities for Bitcoin to also be very offensive and have the, it has these secular growth characteristics of, okay, well, if that's, if this is the case, right, if, if Bitcoin is a superior store of value in a world that increasingly desperately needs that, you know, what's the implication of that? Well, it means that the world's 8 billion people are in some way going to need and going to want to get access to it and then to probably re-denominate more and more of their economic activity in it and leverage its programmability and its native features in different ways. And all that is to say, if Bitcoin is better money, then it's going to touch literally every economic interaction essentially around the world, right? There's no version of commerce at any kind of scale that doesn't require and leverage money. And so if Bitcoin is becoming over time, not tomorrow, not next year, but over decades becoming the world's chosen money, then that is outside of kind of the defensive characteristics, a massive secular growth opportunity that so few investors are really even thinking about right now. And the only evidence you need for that, to your point, is the mismatch between capital deployed into kind of the broader crypto space.

We estimate that our latest estimates for that are probably north of $25 billion at this point, maybe much more now. And, you know, by contrast, we've seen $250 million, $500 million maybe deployed into the Bitcoin ecosystem for technologies that are building out that infrastructure that is already seeing and is just going to see much more demand over time as these natural effects kind of take place. And so it's not just a defensive story, it's a growth story. And it's a growth story that is, you know, 100 to 1 right now, kind of outmatched in terms of capital raising toward projects that are not going to benefit from that same kind of tailwind and that same kind of dynamic, because there's only going to be one money that people want to hold. And that's where the TAM is, that's where the opportunity is. And so all that is just to say, yeah, it's defensive. Yeah, we're responding to kind of macro trends that might be, you know, frightening or worrisome. But at the same time, it's not just a, you know, hedge against inflation strategy. It's a pursue massive growth strategy as well that a lot of people have not woken up to yet. Yeah.

And if you, I mean, if you want a deep dive on this, talking John's book here, John wrote a great essay called Bitcoin is Eating the World, which kind of goes comprehensively into this. It's 1031.vc slash insights slash TAM. And I think, look, one of the things that we say is that you meet a lot of people who are bullish on Bitcoin and its potential price appreciation over various lengths. And what we say is, well, if you think Bitcoin is going up to $1 million, $10 million, whatever your price target is, it's not going to just do that on its own. It's going to do that because of the companies that are building this infrastructure. They not only will benefit from the continued growth and adoption, but they will actually enable it. Yeah. I mean, having been in this for 11 years,

seen got in 2013 so i saw that cycle going up to like 1200 subsequently falling down to like 150 between 150 and 200 right up to 17k down to 3000 up to 60k down to 15 and where we are today approaching 70 000 leading up to the election and across that period of time there have been different waves of crypto fervors if you will in the beginning you had essentially very simple schemes oh we're gonna increase bitcoin supply by 4x and cut down its block time to one-fourth litecoin and you had proof-of-stake coins that was like the 2013-2014-15 era and then ethereum launching in uh the tail end of that era really introduced initial coin offerings and then you fast forward uh to the last cycle and you had defy projects and now today we have meme coins and

throughout time and that's why i want to pull up this chart look and you can pull it up i think it's been interesting this is not my favorite metric because it can uh noise can easily be introduced in this metric is the Bitcoin dominance level. And I think this is really interesting, particularly for where we are right now, that despite the fact that you've had these waves and you have thousands more coins entering the total supply, Bitcoin dominance as it stands today for the last year plus, two years, has been climbing. And I think this is a product of the market becoming more aware that Bitcoin is where the signal's at. I think we do have at least a few more cycles for people to really shake out the idea that these cryptocurrencies can compete with

Bitcoin because that's what I think the market is learning. Historically, people have viewed Bitcoin and the altcoins that have come in its wake as tech innovations, which to a degree, they certainly are i mean bitcoin is a distributed technology project is certainly an innovation what satoshi released was a breakthrough um that did not exist before he had published on the code um but people over indexed the tech side of it really think of what we're witnessing as tech innovation when really what we're witnessing and john eloquently described earlier as a monetary um uh revolution of monetary um advancement and as the market becomes more aware that this is a monetary competition and bitcoin has the best monetary properties and will win out in the long

run i think despite the fact that thousands of new coins are being released year in and year out and i think now daily due to the ease with which people can spin up meme coins i said i'm not sure if you guys caught it but the uh the one woman who is famous for walking and telling the world about the bet she's going to make on particular sports games uh had the solana community create a meme coin with her likeness um and within days it pumped she started talking about it it dumped and she feels like her career uh has been ruined um a little tangent there but indicative of the ease with which these altcoins can be spun up today and i think the market is going to realize that that bitcoin is what really stands out that is realizing it and i guess that gets into the

broader question of what do you guys think um from our seat being focused on bitcoin the the market of generalist crypto vc versus our strategy is going to look like over the next three, five, 10 years. Yeah. I mean, you, you said it really well. I, I really liked that point just to dwell on it for one second because one of the typical kind of early stage one-on-one level objections that you hear again from people who are kind of first doing their homework on Bitcoin is, well, you know, why can't it be copied, right? Like, why can't the, the code's open source? Why can't I, you know, fork it, make my own. And now I've got John Arnold coin or MartyBent coin or Grant coin? And the answer is you can, and they have, you know, that's been done

thousands of times and, you know, tens of thousands of times and at an accelerating pace even. And the economic value accruing to any of those is borderline zero in Bitcoin terms. Meanwhile, despite constant copying and constant attempts to, often with great operating budgets, you know, behind them of new coins coming out and marketing themselves as Bitcoin 2.0 or the or the Bitcoin killer, often backed by, Marty, to your point, large kind of crypto VCs or even just generalist VCs. Bitcoin's sitting at a $1.4 trillion market cap. It's being discussed as a strategic reserve asset. It's being owned in size by large investors who are looking to hedge themselves or looking to gain exposure to the secular growth story, whatever the case may be.

And virtually everything else has trended to zero in Bitcoin terms. And the things that haven't are kind of well on their way um more or less and so you know i think it's it's it's good for people to as they're considering the space as they're considering dipping a toe in allocating whether that's to bitcoin uh itself versus other altcoins or kind of a bitcoin fund versus crypto funds the the economic mass has gone only one way for the last 15 years of bitcoin's existence despite it being open source and leaderless and having no marketing budget behind it and so to me that's what you're highlighting is kind of the ultimate answer to, well, why can't it be copied? And, you know, why should I think it has any, you know, durability relative to some new competitor that

could come around over a longer time horizon? And the longer that this continues, the longer Bitcoin continues to maintain and grow that economic mass, the bigger its network effect gets, the more people come onto the network and hold it as a long-term store of value. And as their monetary asset, the harder and harder it gets for any competitor to come onto the scene and disrupt that since money is ultimately a network good. And so I think it bears repeating and bears understanding by anyone who's looking at the space. And to your point on Bitcoin VCs versus crypto VCs, ask yourself where kind of the long-term 10, 20-year economic value is actually going to build up and accrue. And so I think to that point, to get back to your

original question, and Grant, you can hop in here too, but I think more and more kind of crypto VC is likely to, you know, raise smaller funds, probably not persist as long. You've got a lot of funds that have been raised over the last five years, the last five to 10 years. They'll have to kind of stick it out for kind of as long as the, you know, the fund duration, the fund life. But I don't personally see us getting back to anything like the highs that we saw for kind of broader crypto VC in the 2020-2021 cycle.

And I think more and more kind of broad generalist crypto VCs will look at Bitcoin, what's being built on it. And specifically, most interestingly, I think what you might call the financialization of Bitcoin, but I think what we call internally, like the Bitcoinization of finance, Bitcoin getting inserted more and more into traditional capital markets, the $500 trillion of capital markets that are out there, these deep liquid pools that many of which have no access yet to Bitcoin. but over time can be made to leverage Bitcoin in different ways. To me, that seems like where, you know, most people will ultimately have to run if they want to build up strategies kind of in this space. And so it's personally would short crypto and crypto VCs and long Bitcoin and Bitcoin VCs is ultimately my answer to that. Well said. I mean, I think I agree with all that. I think the challenge is if we think that some of these just crypto-oriented strategies have been temporary in nature, how do you predict the death of that or the timing of the necessary pivot that they have to make? I don't know. It's hard to argue with the fact that some of these firms have made tremendous amounts of money, but it comes with a tremendous amount of risk. Because I look at it as very much

like a zero-sum play. There's early allocations to crypto tokens. If they're able to time it right and dump it on, you know, the next investor, which has often been retail, then they're winning, but someone else eventually is losing. You're playing with a very risky strategy there on top of the fact that, you know, the regulatory landscape, I think, will become even more challenging for going down that path. But I find it hard to predict, like, when this, you know, crazy more speculative driven strategies actually makes a shift because i do think in part it's somewhat a flaw of human nature um but the interesting thing like where i think there is some signal is you can talk to people who are um you know not as far on the end of the spectrum

as we are about um an exclusive focus on bitcoin some that are more agnostic or open-minded to other crypto projects. And I would say there's generally unanimous consensus that Bitcoin is not going away, that they believe, they might have a specific view on another token, but there's a general unanimous belief that Bitcoin is here to stay. And most people also agree that we are still really early in terms of the adoption of Bitcoin. I don't know what that is. Is it 1%? Is it less? It's somewhere in that order of magnitude. And if that's the case, undoubtedly, we are in the very early stages of a growth market. And the way that I sort of apply some of my prior history, you know, when we were, when I was at CVC, you know, we did a lot of

diligence work with Bain on the just consulting side, who would do commercial diligence, would do industry diligence. And we'd, you know, we'd underwrite different markets and try to come up with a view for each company and industry that we were looking at. what is the long-term secular growth of this market? And Bain had a really interesting setup. You know, this wasn't Bain Capital, private equity. It wasn't Bain Ventures, the venture capital arm. It was a consulting arm, but they had the ability to co-invest

with other private equity sponsors, which they would do on a very selective basis. And, you know, they had segregated fund that was available to do that. And over time, they were collecting a ton of data on what were the real drivers of fund performance and outperformance, at least across the co-investments they did. And I remember at the time, they had made something like 100, 150 co-investments and then done a deep statistical analysis on what are the factors that really drive performance. And interestingly enough, there were a number of factors that they basically concluded had no correlation to return. And some of them were pretty surprising. One of them was just having market leadership. So if you're investing in an industry and investing in the company leader of that space, that actually didn't have any correlation to return.

They also said that cost reduction. So investing in a company and then driving significant cost reduction, which is a strategy that a lot of private equities employ, had no correlation to return. And then the other one was having a low entry multiple or low entry price, which, interestingly, also, they concluded to not have correlation to return. The most important factors to return that they found what they called their home run success factors. One was investing in a growth market. So are you picking a market that actually has growth? That's the most important factor for driving a home run investment. The second one is the possibility of there being a strategic exit. So are you investing in a company that has the potential to sell to a strategic acquirer? And then the third one, and this one is probably not too surprising, but it's the management team. So some of those sound quite obvious. Some of them maybe are surprising. But I think the way that you apply them to this space is that there seems to be consensus that we are in the very early stages of a growth market in Bitcoin, Bitcoin adoption, which we believe implies further growth of Bitcoin infrastructure. And that's the most important factor, according at least to these anecdotes that I got out of interacting with Bain back in the day. And we think from a strategic exit point of view, a lot of the companies that we're investing in are effectively going to become potential targets from a lot of the incumbent players that are going to be forced to adopt or adapt to a world that is increasingly moving towards Bitcoin.

Yeah, it reminds me of one of my favorite Buffett quotes, and I know that a lot of people in the Bitcoin community don't have a lot of love for Buffett and Munger, given they weren't huge fans, to say the least, of Bitcoin, which personally breaks my heart as someone who learned a lot from them. But not everyone can be right all the time. But one of my favorite Buffett quotes is, you know, it doesn't matter how hard you row, it matters which boat you get in. And I think when people are over the next decade, two decades, both individuals and institutions and enterprises, kind of sizing up how and where they want to allocate capital, I think that's a question they'll increasingly be asking themselves and will need to ask themselves as they look at, you know, Bitcoin versus everything else. not just crypto, but literally anything in the world that they can invest in other than Bitcoin. To your point, Grant, investing in getting in the boat, the top boat, you're putting that tailwind at your back just as a force multiplier for the effort that you put in and gives you so much more leverage on any amount of capital invested or effort that you expend. I think, Marty, to come back to your original question that's that's another way to frame it is just you can you know look at the investable opportunity and kind of ask like do you want to try to pick the

the best meme coin fund that is is going to find you know the the one the one needle in the haystack you know one out of ten thousand that can give you a ten thousand x in in three months while basically everything else kind of in that in that market goes to zero or do you want to invest behind this emerging nascent store of value that has monetized from zero to well over a trillion dollars in just 15 years, with, you know, recovered to new all-time highs from four separate 80% drawdowns, 99.99% uptime, despite being decentralized and having no leader, transferring trillions of dollars of value permissionlessly around the world in seconds every year, or, you know, once every 10 minutes every year. And I think ultimately people are

going to have to ask themselves that question like which of these is the better boat to kind of get into broadly to allocate my capital to and you know again to to bring it back to our thesis it's it's pretty apparent to us that it's that it's bitcoin and the technologies and financial services and products being built on top of and with it and around it and with all that being said getting to the deal that we wanted to dive into this week it's interesting it's the bridge deal stripe uh acquiring bridge excuse me which is a company focused on basically connecting stable coins and making it easy for individuals and companies to accept and use stable coins which is an interesting niche part of this broader crypto market which funnily enough seems to be

the only product market fit um with staying power within broader crypto just essentially tokenizing us dollars putting them on these centralized blockchains and having them be able to be sent around the world um quote unquote permissionlessly um with ease and at low cost and despite the fact that we think uh stable coins certainly have a lot of success and they are growing part of the market i think long term they are noise again as we described earlier in the show, like the dollar has a systemic problem where the people controlling it have basically no other option but to continue expanding the monetary base and debasing the dollar, which overall arose purchasing power in the long run.

But for the benefit of the audience and our industry more broadly, if we're being honest with ourselves, this was a really interesting deal because as we know, the last couple of years. Not only in the world that we live in, but broader VC, more generally, M&A activity, IPOs have been lacking. And that's what a lot of people have been looking for is what's going to happen. And I think this deal confirms a lot of what you described earlier, Grant, is that incumbents are going to be faced with the decision, do we build these functionalities into our company or do we simply buy another company that's already built us built this for us and this seems to be the case here at bridge and i think uh this deal is really shocking uh

considering that and stripe acquired bridge at a billion dollar valuation and then coindesk i believe released uh an article uh in the aftermath of the acquisition basically highlighting that bridge at the point of acquisition had arr in the range of 10 to 15 million dollars and so the multiple on this deal is pretty insane and i guess i'll just throw it to you too is this a good signal for the space that we play in the fact that this activity is going on and how are you guys reading this deal yeah i mean i can go ahead yeah go ahead so polite um yeah i mean i guess i'll just throw out a couple of thoughts. You know, I think it, to your point, it is surprising to see multiple like this, you know, implying anywhere from kind of 70 to a hundred X revenue. Now,

of course, you're probably looking at, if you, if you're doing this deal, you're looking at kind of forward numbers and you likely have some sort of conviction that that's going much higher very quickly. But still it's, we haven't seen a deal this rich in not just the space, but kind of anything outside of like AI for the last couple of years. And so there's definitely some sticker shock just kind of looking at it. Maybe we can put this in the show notes, but, you know, there's some good data out there, recent data from, I think it was Galaxy, Alex Thorne at Galaxy, kind of highlighting crypto fundraising broadly, still kind of way off peak from 2021.

So I don't really feel or get the sense that kind of broader fundraising in that space is really back and the LPs are kind of chomping at the bit to get in. Perhaps this is a deal that helps raise some eyebrows and bring some more checks in. But to me, I have a hard time thinking that this portends the beginning of a massive run again for broader crypto and even stablecoins in general, certainly possible. It's not our lane exactly, so happy to potentially be wrong on that, but I think it's worth maybe delving into as well. Grant, I can kick it to you and we can talk about it from there. But Marty, to your point that stablecoins have shown the only product market fit, the only durability and staying power within broader crypto outside

of bitcoin you know worth asking kind of as we look at a deal like this um what is kind of the 10 20 year value of you know a market like this of of a set of products like this um i'd certainly have my you know my suspicions and my questions on it but maybe grant i can stop monopolizing and you can uh you can jump in on that yeah well i mean i had a lot of the same thoughts I mean, part of it, for sure, I think was, look, this is a really interesting signal of a strategic player wanting to have a strong position and someone who was building interesting tech. And I definitely agree that there's real product market fit in certain parts of the world for stable coins. You know, let's face it, some people, you know, in different parts of the world, they just can't stomach the volatility of Bitcoin currently. So have been fleeing, you know, shitty currencies for less shitty ones.

Um, and, um, there has been a role for stable coins in that regard. And the fact that there's a very significant strategic transactions like this, the first, one of the first things my mind went to was, you know, at some point this will be, you know, we'll see similar transactions in the Bitcoin world because there will be companies that realize, okay, I need to have a Bitcoin strategy or I really want to access a customer base of underlying holders of Bitcoin or I want the technology infrastructure

so that I can provide Bitcoin-oriented services to my customers. And for any of those potential reasons, I do believe there's going to be a lot of these buy versus build strategies in the Bitcoin space. That is not the only strategy that we have for delivering successful investments. I think that there's going to be a number of Bitcoin companies

that remain independent, that don't want to sell out to your incumbent legacy players in whatever industry they're operating with and that they have the potential to become industry leaders in their own right. And I think that there'll be the opportunity for a lot of these companies to pursue public markets. We've seen that with a couple of companies in our portfolio. I think there'll be opportunities for Bitcoin companies that establish leadership positions and positive sats flowing, you know, profitable business models to remain private

and pursue a dividend-oriented model. So I think a lot of that, like that was the first thing that I thought as it related to this strategic acquisition. John, to your point, you know, what might this business model, what might this specific industry vertical look like in 10 or 20 years? I mean, I don't know that. This is definitely outside of my lane as well. But I started to think that, you know, in a way, might you see this dynamic that we've seen in developing countries where some of them, you know, leapfrog from one technology and fast forward a couple iterations forward, you know, where we've seen certain parts of the world, you skip your landline phone and you go straight to mobile. Might that also be the case once we see Bitcoin adoption really start to take off where, you know, the technology and the infrastructure around stable coins sort of being the interim step?

So, you know, I don't know how durable that will be over the long term, but those are the couple of thoughts that I had around it. Yeah, I think to that point, you use this word of interim or this idea that this is kind of transitionary, intermittent, kind of temporary, technological kind of hack of solving a problem. And I think that that's right for now. The question, I think, as you deploy capital into different companies in the space is, especially in kind of a venture construct or a fund construct, we're trying to think about what happens over the next, you know, five to 10 years. And then, you know, even beyond that

as well to inform where value will accrue over a fund life. And so to me, you know, I echo everything you said that the whole kind of concept of stable coins to us feels very kind of transitionary and temporary. And I think it's, for me, it was instructive to just kind of look at the bridge press release that they kind of put out jointly with Stripe. And one particular set of lines kind of caught my eye. So it says, Stripe and Bridge both believe that our increasingly globalized world needs better money. We need money that can move across borders, be freely accessible to anyone in any country, and can be sent at almost no cost. And so, you know, to me, to us, like, well, better money, we agree, we do need that. And Bitcoin is very clearly, you know, better money

than the dollar. And so right away, it's, you know, questionable to me that stablecoins have kind of a long-term path to beating out Bitcoin by just being kind of tokenized representations of a less hard currency than Bitcoin. But there, I mean, there are two like strains of thought at odds kind of within what this PR says. And the first one to me that's worth noting is like, okay, so we need freedom of movement and access. Well, that's where Bitcoin shines, right? It's completely permissionless. You can use it as an individual, as institution, running your own node on cheap consumer hardware. If you don't want to run your own node, there are other ways to do it that maybe have other trust trade-offs. But no transaction history has been able to be censored

long-term on the Bitcoin network. And the same is very much not true of stablecoins, right? They're permissioned, they have an issuer, often many issuers at play, and ultimately they back into access to traditional banking rails. Somewhere along the line, someone has to be holding treasuries or U.S. dollars that allow the stablecoin peg to actually be maintained or you're running a Terra Luna type scheme. And we saw how that worked out over a couple of years ago. And so the freedom of movement and access piece to me is questionable that it really offers that. However, the second piece, this idea that we need money that can be sent at almost no cost. Well, I think that's really the key for what these products are trying to solve for, right?

What people really want when they're using stablecoins, it appears to me, especially in emerging markets, is, you know, they want low cost transfers of offshore dollars. Like, Grant, you're totally right. Their local home currencies are particularly unstable, even far more so than the dollar. We all know that the dollar is kind of the cleanest dirty shirt. And so if you want a representation of value that is relatively, you know, quote unquote, stable day to day or month to month, it doesn't have the volatility that Bitcoin does. then, and you can't get access to a US bank account, well, it makes sense that you would kind of want this, this transitionary solution, something that would give you kind of US dollar like access or US dollar like kind of value access. The problem is that the ability to

allow those stable coins to be sent at almost no cost, like that, that requirement and optimizing for that is fundamentally at odds with the trade off balance that makes Bitcoin work, right, that makes it, you know, that gives it the freedom of movement and freedom of access, and makes it as scarce as it is. Bitcoin right now has fairly low cost transfers and very low cost views of the Lightning Network. Over time, I think we all believe that Bitcoin's layer one will get a lot more expensive. It'll become high powered settlement money and we'll find other scaling solutions, many of which are already out there in the wild to make your more consumer type payments work and make them cheaper. But the fact is it can't be first and

foremost optimized for low cost and kind of easy to use like stable coin, because the way that that is achieved is through trust and through permission, right? It's through backing into kind of the existing banking and financial service rails that we've already kind of established are ultimately not on a long-term stable path. And so, you know, as we're thinking about the next 10, 20 years of value accrual, about the way that economic mass accrues and where people put their capital to work um i absolutely think like there may be more stable coin deals to come and i absolutely think that this has you know the solution has prime market fit kind of today i think as you look forward the the question is you know what's what's the bigger prize and what

has greater likelihood of like long-term durability um that you can actually build you know real real businesses on and you know it's it's yet to be seen kind of what happens when a major stable coin has its treasury seized or haircut or otherwise shut down by some bank, some central bank in one country or another for one reason or another. If it happened to a sovereign nation like Russia that was holding hundreds of billions of dollars in U.S. treasuries and that could be turned off at the flip of a switch, then it can happen to your stable coin. So, I think that that's as you think about building a house on rock versus on sand that's a key question to me you know fundamentally going forward with with these types of technologies so that's kind of

how i view the deal yeah i also think that if i were invested if i personally were invested in you know companies like this i would want to be realizing those investments in the near term versus taking on whatever, you know, I think there's just tremendous uncertainty and potential risk around how this industry evolves over the next several years, specifically just in the stablecoin world. I mean, one question is how many different dollar stablecoins do we need? I mean, do we need Tether and USDC and Coinbase dollar and PayPal dollar and JP Morgan dollar and BlackRock dollar.

I mean, I think there's a lot of people that now want to participate and there's a lot of different institutions that have varying levels and some of them very significant levels of influence on the direction of US policy. And so I think for players out there, there's a tremendous amount of stroke of the pin risk,

which if you're an investor i mean that's not a type of risk that you want to be taking on because that's the type of thing that dramatically shifts a potential outcome of your investment so i think to be realizing a positive investment return in the space based on at least a belief that hey there's there's some growth in the stable coin market right now i think that's much more palatable than taking on longer-term duration risk of however this industry might evolve because I think it could be significantly changing over the long to at least medium to long term.

Yeah, I completely agree with all that. Nothing to add other than I think we found the topic for maybe one of the next episodes, which is timing. That's something we think a lot about here at 1031 And I think it's something that everybody should really be aware of, especially if you're allocating Bitcoin, allocating money within the Bitcoin space, is that timing is very important, trying to figure out where to allocate dollars and when in the space. And maybe that's the next topic we can dive into in a couple of weeks, which is something that's core to our thesis and me personally, is that there's an order of operations to Bitcoin's long-term success and the necessity of particular companies along the way of that journey to ultimate success. and timing is something that's very important, something that we take very seriously here at 1031.

Despite the fact that we see Bitcoin and can envision its end state, obviously we are not at the end state, and getting to that end state means that we have to be very particular and thoughtful around timing of allocations and what the market is demanding at any given point in time and how certain companies meet that demand. Timing for stablecoin seems to be right. I think it's inarguable that there is demand for it.

Yeah, yeah, absolutely. And like I said, wouldn't be surprised to see kind of more deals in this vein. It's interesting, you know, that the number is, and this isn't to, you know, demean the deal at all, more just interesting from kind of an outsider's headline perspective. You know, it's about a billion dollar deal. Right. And part of that's probably related to, you know, how early stage it is and, you know, how low the today's kind of ARR is.

But you would you would think, you know, if if this is kind of the future of money, the future of finance and whether that's kind of stable coins themselves or something like, you know, Bridges issuance API that grant to your point allows different holders, different users to kind of issue and then kind of use their own stable coins. you know, interoperably, quote unquote, interoperably, that feels like it's a market that should be bigger, you know, big enough to warrant much more than, you know, a billion dollar deal. No idea what went on with the deal dynamics and no comment on that. But I think it's an interesting point you bring up that if you're in kind of the stable coin space, maybe now is the time to just go ahead and monetize rather than continue to take on longer duration risk on what may happen in just a few years, depending on how different administrations here or abroad kind of view the growth of this offshore dollar market.

So yeah, I just think maybe that's something to chew on. It's just kind of the size of the deal relative to what it might have been if stablecoins were truly kind of going to become in the next five to 10 years the future of the world's financial infrastructure. Yeah, and to that point, John, I wouldn't be surprised if the stroke of the pen risk that Grant described earlier comes from Europe instead of the U.S., because stable coins are directly encroaching on the euro dollar market, which the European economy and the financial system over there has depended on and rode that wave for quite some time. And so I think the U.S. is actually happy that these stable coin markets exist. I think explicitly Paul Ryan has come out, many others. You have Howard Lutnick from Cantor Fitzgerald essentially campaigning for tether-like stable coins because they drive demand for U.S. Treasury auctions.

And so I would not be surprised if Europe becomes the antagonist in this stroke of a pen risk that exists for stable coins. as we head forward yeah no doubt yeah guys this was a good first episode i mean the 99 of podcasts that ever start don't make it past the first episode so we get to number two it's 90 never get past the first episode uh 95 never get past 10 episodes so we get the two in the top 10 percent of podcasts that ever exist we get to 10 top five percent so you just got to get the 10 and uh i think we'll we'll deem this a massive success this was a great first dry run we officially ripped the band-aid off we're gonna develop a rapport maybe we'll be um we'll get more emotion into it as with the first one that we're doing it's always it's always a feeling out stage

the first few episodes but i feel like we're already getting into a good groove here we got nice ping pong action here today yeah we we know each other pretty well so i think uh maybe we'll continue to show a little more of the the organic rapport as we go forward yeah and to add to that it's not always just going to be us three we do have um we we are going to get guests from within the 1031 portfolio the 1031 network outside the network um we've got a few in mind um that will that we'll have on in the coming months and can add to this conversation. Cause to the point it was made a few minutes ago about duration risk with stable coins.

I think that's where I want to go next is timing and we'll have this discussion when we record the podcast, but I think timing for Bitcoin embedded in long duration credit products as super collateral is, um, is going to be something that's talked about a lot this cycle. And I think that is an example of a product where the timing is ripe. Yep. Yeah. Agreed with that. And one of the things I want to, um, give listeners and viewers out of this podcast is a peek under the hood with, you know, as we have these guests. Some of them will be people that we're backing and really give a peek under

the hood on, you know, how we think about a partnership, what it's like to build a Bitcoin business. There's a lot of people who make the rounds on podcasts and, you know, talk about their companies on the surface level. I think we have a really unique perspective to be able to to go deeper on some of those businesses and the stories behind some of those founders and how they're building their businesses and how they think about positioning themselves for the longterm in this transition that we're talking about. And I think if we can bring that to life, that'll be something that is differentiated.

Yeah. When, when you said that, it's like we're bringing the tribe to the rest of the world, 1031 tribe which is another thing we think differentiates us here is open communication lines between us the founders founders lps lps us it's uh that's another topic that we can get into is um how applying the ethos of bitcoin as this interoperable network driven by proof of work to what we do at 1031 has actually benefited us massively um over the first five years of the of the fund. Yeah, absolutely. The, uh, I think people will see as, as we go forward, especially when we talk to founders, you know, we're more proud of our founder relationships

and some of the, um, companies we've been able to bring into the fold, um, than, than anything else that we've done, just, just having these relationships and being in many cases able to be kind of the exclusive backers of a lot of these great businesses. And I think people will see, you know, as we, as we bring them on kind of one by one, you know, the proof will be in the putting uh just how you know specialton 31 is and why we're so bullish about what we're doing oh yeah right i think i found an ending for it that was your bitcoin alpha for the week we'll see you guys in a couple weeks