The Canadian Bitcoiners Podcast - Bitcoin News With a Canadian Spin - The CBP - Q4 $MSTR, $COIN and The ETF Effect on Bitcoin Equities w/ SB

Episode Date: February 16, 2024

FRIENDS AND ENEMIES Join us for some QUALITY Bitcoin and economics talk, with a Canadian focus, every Monday at 7 PM EST. This week, SB takes a break from playing Wolfenstein on his Bloomberg terminal to break down today's Q4 Coinbase ($COIN) earnings report and call, as well as Microstrategy's Q4 earnings and call, and we discuss what effect the new ETF offerings are having on Bitcoin proxy stocks after a month on the market. From a couple of Canucks who like to talk about how Bitcoin will impact Canada. As always, none of the info is financial advice. Website: ⁠www.CanadianBitcoiners.com ⁠Discord: ⁠https://discord.gg/ESRCZWpb A part of the CBP Media Network: ⁠www.twitter.com/CBPMediaNetwork This show is sponsored by: easyDNS - ⁠⁠https://easydns.com/⁠⁠ EasyDNS is the best spot for Anycast DNS, domain name registrations, web and email services. They are fast, reliable and privacy focused. You can even pay for your services with Bitcoin! Apply coupon code 'CBPMEDIA' for 50% off initial purchase Bull Bitcoin - ⁠⁠https://mission.bullbitcoin.com/cbp⁠⁠ The CBP recommends Bull Bitcoin for all your BTC needs. With their new kyc-free options, there's never been a quicker, simpler, more private and (most importantly) cheaper way to acquire private Bitcoin. Use the link above for $20 bones, and take advantage of all Bull Bitcoin has to offer.

The Canadian Bitcoiners podcast is just two guys and maybe a guest or two discussing Bitcoin, Bitcoin equities, and the related macroeconomic space. It's not meant to be financial advice, so please, if you're doing any investing, after listening to our program, do your own research, do your own due diligence, and understand that any money you invest can be lost. The show is meant for entertainment purposes only get to that. First, the sponsors. He's laughing. First, the sponsors. One of them is EasyDNS. The best place for you to host your content.

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Take your cash. Go get your fiat dollars, your crappy fiat from Kangaroo Canada Fiat. Walk over to Shopper's Drug Mart. Convince the person at Canada Post that you're not being scammed because Bitcoin will show up in the name. And give them your money. You can buy KYC free. It goes into your account on Bull Bitcoin. When the Bitcoin gets bought, it's non-custodial. You have to provide your address. There is no rug pull possibility.

There is no nonsense. And of course, if you really want to, you can even pay your bills with the bills platform on Bull Bitcoin. Property tax, cell phone. You going to university still? Pay for your bills for your university on bullbitcoin.com. Use our code, Iwantbitcoin.ca. They've been a great sponsor. We're looking forward to continuing to work with them. Now, let's get to the main event. First of all, SB, how are you feeling? Are you deep into a fifth of whiskey after today's results from coinbase are you feeling like you know what what

is the mood over there i i see the meme usually it's like that's like the hopeful wojack i was kind of surprised to see that tonight when you signed on i was hoping maybe to see like the distraught decrepit wojack but here we are the look if if people want to count their fiat gains in some shit coin seller in coinbase, by all means, they are. They are allowed to do that. Their personal choice. No, the data point that I did not like, I don't care about the gains. Who cares?

I did not like Bitcoin as a percentage of trading volume did decline quarter over quarter. Not a fan of that. But otherwise, it was pretty good for Coinbase. Okay. Maybe we should start. quarter over quarter. Not a fan of that. But otherwise, it was pretty good for Coinbase. Okay. Maybe we should start. Since Coinbase reported today, we'll start there and then we'll go to MicroStrategy. So quick overview here of the numbers. Let me pull them up. Coinbase revs $904 million, much above Wall Street's expectation of $822. We'll talk about the street versus the reality. We were talking about that before the show. It's something everyone should consider. Earnings per share, analyst expectations was a loss of a little under a penny.

They ended up with an EPS of $1.02, 100x the expectation. So where do you come down? What's important here? What are you looking at in the reporting? You got the Bloomberg terminal there. I'm curious, are people who are maybe thinking about the Bitcoin ETF as the proxy and the new proxy for Bitcoin, are they worried about this even with the quality reporting, quality output here from Coinbase? What is the story? Where do you come down? What's the word out there? Yeah. So I actually think it is pretty

simple. It's just that revenue beat expectations. At the end of the day, that's what matters. And so for any company on Wall Street, it doesn't matter if it's crypto related or not. You get the big headlines come in, right? You see Walter Bloomberg, big caps. The reason that big caps are out there on Twitter is because that's how the big headlines flow in on the terminal, which is where 90% plus of investors are analyzing this stuff. So 408 Eastern Time comes in, Coinbase 4Q revenue, 954 million, estimate 826 million. So that's massive. Now that's even bigger for Coinbase, but Coinbase is pretty volatile as a stock in general in terms of where they're going to have revenue and earnings versus expectations. So the fact that there's a $125 million revenue B and a quarter, hugely substantial. So big one that immediately comes out, stock rips up and it's gone up from there. To your point, you mentioned the EPS. I'm not as sure how meaningful EPS is because a lot of times that can be massaged here and there. But yeah, it was $1.04 versus $0.01.

Great. And then the other big one, we got 4Q trading volume, $154 billion, estimated $143 billion. Now, I've looked back before historically, Wall Street has been getting pretty good at analyzing and predicting what the trading volume is going to be for Coinbase. Ahead of the 3Q earnings, looking at what Wall Street had, it was pretty much exactly in line what Coinbase did. So the fact that that was up was pretty substantial. And look, I ultimately think Wall Street was caught off guard by an increase in crypto trading this quarter. I mean, that's at the end of the day, that's the biggest thing that happened to this. So obviously Coinbase stock doing well because of Bitcoin's up, obviously crypto's up, which

as Maxie's here, we're focusing the Bitcoin, but clearly for Coinbase, they're helped by the crypto. But basically, I think we can get into this later, but the valuations really doesn't matter. It's just Coinbase was at X price going into earnings. Earnings beat, it's going to go up X percent because the earnings beat. Curious on your thoughts about the recent price action in the Coinbase stock. Obviously, the stock has been ripping the last, I mean, in the last like six months, I want to say it's up 80% or something like that. Something insane.

If I pull it up here, you can clearly see there's been some six months, 106%. It's clearly been a lot of, as you mentioned, improvement in the ability of investors to predict trading volumes. And so part of me says that you're right. There's definitely something to be said about this thing as a corollary for the Bitcoin price. I agree with you there. Is it possible that you're going to start to see that disappear? Because when I think about Coinbase's business model now, and you mentioned it with the crypto trading, the Bitcoin price might be the least important metric in their reporting now. Because most people, if I flesh this out, most people who want to buy Coinbase

stock or MSTR, which we'll get to in a bit, as a proxy for Bitcoin exposure, don't have to do anymore. The ETFs are available in the States. When the Bitcoin price is moving, a lot of people are buying, fine, you get a little bit of a scalp, but I don't think a lot of people buying Bitcoin spot over the ETF are that worried about price. If that makes sense, I'd be curious to hear what they think about that. So do you think that there's going to be a move away from this thing as a proxy for Bitcoin and vis-a-vis its relationship to the price? You're not going to see this linkage anymore and people start to care more about other stuff or not. And then second question, sort of a follow-up to that. What role does the ETF custody stuff play in Coinbase's revs? I didn't hear a lot about that on the call today. It doesn't sound like they're convinced it's going to be enough to kind of, you know,

keep the ship moving forward. They're talking about other ways to monetize ETF products. Where do you come down on that stuff? I'll answer the second one first. Yeah, I don't think it's going to be meaningful. And so that's why I've kind of, it's been a very nice headline and for the industry, yes, certainly somebody that Coinbase, hate them, love them. We obviously both think that they're focusing too much on crypto as opposed to Bitcoin. But we have to give them a hand here. The fact that they are this instrumental in the Bitcoin ETFs is great. It's massive.

It's fantastic. It is, you know, hate them or love them. This is a good variable for what they're doing. The problem is, is just that you pointed out how much is this actually contributing to results? It's really not. It's really driven not even by institutional trading. It's driven by retail buying shit coins. That is where the earnings are coming from.

So leading into the first question, Wall Street's forward looking, or at least they try to be. The fiat brains like to think, hey, we want to evaluate this stock 12 to 18 months from now. What does it look like? And you go to 2022. What does Coinbase have? EBITDA, that's your general earnings measure before some adjustments, negative 370 million. So you're doing negative EBITDA. That's a massive no-no. That's terrible. Coinbase, after 2022, came out and was like, hey, going forward, in all scenarios, we're at least going to try to have positive EBITDA. And they did do that in 2023, about 1 billion. A lot of that was stock-based comp. We can get to that, but at least they did it. So I think what investors are saying is, hey,

they did $4 billion of EBITDA in the last bull market in terms of annual EBITDA. They did, looking at my model right here, end of 2021, $4.1 billion. So right now, if the stock is valued at $45 billion at a $1 billion EBITDA. 45 times multiple, pretty steep. You don't see a ton of those out there. I think even NVIDIA might be less than that at this point, if you look at a forward-looking EBITDA and not the last 12 months. So that's pretty high, 45.

You don't find many software companies. And you would be thinking of Coinbase as a software company in this particular situation. You wouldn't find many that are that high, especially because after share-based comp, which is simplistically Coinbase and other companies do this, pay out costs in terms of stock. That was $780 million in 2023. So if you take that out, which a lot of people say is a more accurate representation of what the company's actually earning, they had about 200 million EBITDA. So now 45 billion looks crazy. But of course, investors are saying, I don't necessarily think we're going to get to 4 billion in terms of EBITDA annually. But if the crypto bull market's picking up, there's going to be more transactions, more trading. They already took the take rate up compared to what they had in the previous bull cycle.

So, yeah, I'm forward looking. I'll buy Coinbase on the thought that it continues to get more and more revenue. And then just for earnings in general, the relative earnings are obviously always the most important. But sometimes just looking at earnings, hey, what did it do this quarter? We got transaction revenue plus 64% year over year. So whenever you're thrown a number like that out there, regardless of if it can collapse one day, Wall Street's going to love a plus 64% revenue growth. So I think all those things go into part of it is just the crypto hype. But part of it is that, yes, earnings are doing better than Wall Street expected.

And they have been for a couple of quarters now. Underreported story today, Coinbase had a couple of their executive team members in front of Congress basically begging for the US government to pull up the regulatory ladder behind them in terms of stables and shitcoin trading. I have to look more into that, but I'm curious about how much that plays into something like this, especially an after hours move of that magnitude. I think we were talking before it's 13 or 14 points. I don't know where it is now, but I want to maybe just ask one more question on Coinbase. What is the what is the likelihood that they do find another way to to monetize the etf custody thing i don't know enough about this honestly sb to say whether or not there's a way to do this responsibly or a way to do this that's quote unquote like bitcoin or even crypto friendly to me it sounds like the custody take is just a few basis points of whatever they're holding plus

maybe a security slash you know cold storage fee every. I know the inflow has been crazy, but I mean, without that shitcoin revenue, it would have to be completely bananas. It would have to become extremely lucrative for it to be a positive in the report. What other ways are there to make money on something like this? Do you have any thoughts on that any opinions on that no i think that's exactly right at the the revenue they're getting from retail trading just dwarfs everything else and and actually the the street has been a little bit more negative on coinbase lately because so much of their revenue a much higher percentage has been this interest income, which is not trading, which is the USDC, which is not either. That's harder to model. It's harder to predict if interest rates go down that they can be affected by that. So they now have they now call it out

stable coin revenue. But that's that's not guaranteed. So I think the street would rather see the inflection in the transaction revenue. So that's why today you get that massive earnings reaction to, wow, okay, if you're the Wall Street analyst, you're saying I totally underestimated the demand this quarter in terms of retail trading. But no, I mean, look at the financials. Custodial fee revenue, $20 million in 4Q23 versus consumer transaction revenue, $493 million. We should note that Q423 for them ended before the ETF started. But I don't think, I mean, we've talked about this before. I think you and I may be offline or on the show. Seeding the ETFs, we don't know exactly when that took place.

And they didn't mention it today on the call. I don't think it's in the report. I don't think it's in the report. I don't think it has to be. But I would expect to see that revenue really tick up next quarter, given that they've taken in, I don't know, let's say 85% of all the inflows, right? Let's call it $3.5 billion. It's going to be dwarfed by the retail thing. I think no matter how big that number gets, as retail shrinks as a piece of the pie, it's a less attractive business unless they can get that regulatory capture to really kick in, which so far, I've said this before, they haven't been able to do. And I think another point here too is companies do love doing this. If they've got a hot growth segment, if they've got a good data point to share, they'll come out and share it.

I mean, there's no reason for them not to, especially a company like Coinbase, which pays out so much in share based compensation. There's no reason why they would hide something that would be good. So I think the read here is right that it's not going to be that meaningful to their bottom line. Great for the ecosystem. Fantastic. Well, most likely. We'll see. I don't know if Len maybe disagrees with that, but we can say that today with him not here.

Yeah. We'll get to ETF when we finish. Let's move over to MSTR. A quick rundown of their Q4 reporting, which was a few weeks ago now. Total revenues of $124.5 million, a decrease of 6% year over year. Subscription services revenue, $21.5 million, up 23% year over year. And the most important thing here, the Bitcoin holdings, the treasury strategy. They acquired 31,755 Bitcoin since the end of Q3 for $1.25 billion or $39,411 per Bitcoin.

As of February 5th, the company held $190,000 Bitcoin, $5.93 billion worth at $31,224 for Bitcoin. The most important stat here, 0.121 Bitcoin per outstanding share of MicroStrategy. Talk to me about this. Yeah. So look, I'll actually, I'll think about the software for a second. It was a disappointment and I actually don't think they had that great of an explanation for it. They had talked earlier in the year about how there's some enterprises that are maybe taking a little bit longer in decision-making and are putting off projects. Feasible, other cloud software rest companies have talked about that. So that's not something that I necessarily would disagree with.

But yeah, overall, we have revenue 23. It's $496 million versus $499 million in 2022. In the slideshow, in the presentation, 2024 targets growing from 2023. So look, I think really the software business does not matter unless you're seeing whiplash moves of 5%, 10% plus, and then there might need to be some discussion of, hey, do we value this company? Do we value the software piece of this company the same way as we used to given either a significant increase or decrease in the business? So even though that was just one quarter, sometimes these things can be lumpy. Cloud arrangements, deals can be lumpy, for example. So probably some of that too. So I think software is fine. I do think you mentioned the, yeah, you said per share. And the way that I look at it is I call it the Bitcoin premium. So I'll run through the numbers here. I've got them at a little bit over $2 billion of net debt, a little bit over $12 billion of market cap. So enterprise value, which is the valuation of

if somebody was to offer to buy MicroStrategy today, you have to pay at least enterprise value because that's the market cap plus net debt. And that's 14.3 billion. Now, if we take software at a little bit less than a billion, you're looking at maybe 13.4 billion of total non-software enterprise value, which means Bitcoin value. But their Bitcoin is worth $10 billion. So you've got a nice premium here, 36%. That's a little bit closer to where it was in November, December, when they were issuing equity like crazy. I mean, this was insane.

The amount of equity they issued last half of last year when the ETF was close. And I think the very easy explanation for this was Saylor's here and he's thinking, I don't know if I'm always going to have this Bitcoin premium. It's 40. I think it was kind of more 40, 50% range there in that time frame. And so issued as much as possible, as much as could be done and bought. I mean, bought the most Bitcoin they have in years in 4Q. And then, of course, what did we see? Right. We saw ETFs approved.

MSTR is not doing so hot. And that continued for a while. Now we're seeing that reverse again. And so I'm looking at the micro strategy stock movement and I'm going, man, I think they're going to keep issuing equity because the Bitcoin premium is just about right back where it was when they went ham in 4Q23. I have a hard time. I mean, I don't know as much about this as you, but just from the perspective of a retail investor, I don't think there's anyone in institutional investment firms,

even though we know for a fact that I think, is it BlackRock or Vanguard owns a huge chunk of MSTR, right? They bought a number of MSTR shares over the last two or three years or two years, I guess, presumably to get Bitcoin exposure. If I look at the landscape now, the first thing I think is, why would anybody pick up MSTR as their Bitcoin proxy? And I do want to talk a bit about maybe this like rebrand Bitcoin development company thing, which honestly I think is a little bit bullshit, but whatever.

We can talk about that. Why would anyone buy the stock now? And isn't Saylor – if Wall Street is a confidence game, you talked about forward-looking 12 to 18 months out. If it's a confidence game and Wall Street is forward-looking, isn't Saylor really copping to the fact that he thinks his company is not worth that much if he's like, I got to keep getting as much Bitcoin as I can because the software enterprise is just not going to be the thing that draws people and especially new capital to my business. This is what I don't get. I think that he's kind of he's he's demonstrated a quality strategy, one that I think other people will embrace at some point, especially now that there's fair value rules in the United States. But the other part of me thinks that it's really only a strategy you can use if you're sort of really cashflow positive, which he's just not cashflow positive enough to continue to execute the strategy without basically admitting his business is no good.

Do I have that right? I'm trying to flesh that idea out, but I think I'm pretty close. Oh, you could even get more aggressive than that. He's completely aware that a software business is not worth that much i mean absolutely absolutely yeah no he um he knows that and on the cash flow point i mean to throw the the pro coiners over the anti-mstrs people in this in this podcast um they did 10 billion 10 million of free cash flow in 2023. That's barely anything. Now they were doing more before that and they're doing things now,

like they're paying a little bit more in interest, for example, because, because, because some of the debt that they borrowed to buy Bitcoin with, but yeah, that, that is not,

that is not a company that you can do much with in terms of the software business alone. Now the, so the Bitcoin thing, it's, it's very interesting here because I, and we've talked about this business alone. Now, so the Bitcoin thing, it's very interesting here because I, and we've talked about this offline too, like we predicted that the Bitcoin premium,

let's call it 40% when he was issuing all this equity in 4Q23, we thought that's going to drop down. Now, we don't know how far it's going to drop after the ETF. It probably shouldn't be zero because MSTR is a little bit levered. I think there's probably a Saylor premium, which is fair. And the premium is there because there's the idea that Saylor is going to do whatever he can to acquire Bitcoin at advantageous prices compared to where the equity is. So I think that, you know, give 5% for that,

give 5% that there's no fees, for example, maybe give a little bit more that you do have the software business in case something goes haywire and then maybe do a little bit more in terms of historical, you know, Hey, we knew that MSTR freaking went off in 2021, 1200 a share. So maybe that's worth 15, 20%. I don't know. I mean, it's all a guessing game because now it's back up to 36%.

So it's a self-fulfilling prophecy in the sense that if the market is going to give this guy a 36% premium again, it's kind of unbelievable it's happening. If they're going to give this guy this, he's going to keep executing the same playbook. And every Bitcoin that he buys with that inflated equity is going to make the whole enterprise worth more. And then the more equity he can issue to get away with this, this high of a premium, the more there should be a sailor premium in the future because they've already done all this so i think it kind of all works together it is a confidence game to a degree

and now maybe to finally put some juice on it to juice it up even more um look at what look at the slide that he added he added the hypothetical scenarios in which Bitcoin price increases slide. That was new. That wasn't in the past one. And he said, OK, so the spot Bitcoin price, 43,000 at the time of the presentation. So we're already rocking and rolling here. But basically, he's making the point that if you buy a spot ETF and Bitcoin goes to 250,,000, you'll make 480% from $43,000. Per their calculations, again, who knows if they're right or not, they say with current leverage, MicroStrategy would get you 660%. So that's a nice gain.

And if you add another billion of leverage, you'd get a 740% gain, which looks pretty good versus 480%. So I think that's where the premium comes in. And I can stop there, but that jumped out to me as well as what was in what he said on the call as to what they might do in the future. I'm looking at the presentation right now. I'm curious about, I mean, if I look at the presentation here, he spends probably 30% of his mic and camera time talking about how MicroStrategy has outperformed Bitcoin, the S&P, the Qs, whatever. Everything, basically, all the Megs have it in Oracle, IBM, CRM, Salesforce, and SAP. I mean, this is a slide that's been in his deck a long time. And so you're talking about a slide he's added. That's a hypothetical. I think there's going to

be a pretty important real slide that he has to remove pretty soon. And I think it's this one, because even though he's outperforming the mag seven, he's no longer going to be outperforming Bitcoin. And I doubt very much that this guy is going to start putting in like iBit into his deck, you know, because I don't think he's outperforming iBit. Certainly, he's not getting the inflows they're getting. And I wonder how long that lasts. Now, here's a trick question for you. Do you know what the MSTR software does?

Business analytics. Yeah, you don't fucking know. You don't fucking know. You don't fucking know. I can't name one company that uses it. I think I heard one time. I can't remember where I heard this, but it's like something that a lot of restaurants use maybe. Is that?

I don't know. But anyway, I'm curious about this slide with the hypotheticals because the one thing I don't – I shouldn't say I don't understand. The one thing I don't see or I don't say I don't understand. The one thing I don't see, or I don't see an advantage is he is pushing other companies to do the same thing that he's done with Bitcoin and his stock and even his convertible notes, right?

That we've talked about his convertible debt issuance over the years as well with you. And I, what I don't see is like where the advantage is if other people start to do this too. And presumably they will, right? I think a lot of people would say that the fair accounting rules was the last hurdle or were the last hurdle for a lot of companies who may want to hold this on their balance sheet and execute

some kind of Bitcoin treasury strategy. Do you share that point of view that he's kind of nerfing his advantage by being an evangelist for the strategy or has he got something else up his sleeve and I'm just missing it? No, I definitely don't agree with that. No, I think the reason why it worked so well with him, there was a bunch of different factors. One of them is definitely the control he has over the company. Now, there are other companies out there that there is voting control, for example. But let's say Zuck or let's say Jack wanted to start sweeping all the free cash flows into Bitcoin. Right. If either of them did that,

Meta has an incredible equity story right now. I mean, they've got, you know, I think what they're worth over a trillion now. They just got there. They went from 90 to 475. And they've got an incredible, I think, operating income doubled year over year or more because of a variety of factors that went into that. So if you're a meta, you're doing great. What do you want to do a Bitcoin strategy for when you're worth 1.2 trillion? And when it's not really, at this point for a company as big as Meta, it's just going to give you a hassle. You're making $45, $50 billion a year in free cash flow, more than that in earnings. You're not going to put $60 billion a year into Bitcoin. And even if you are, the Bitcoin per share price, whatever calculation you're going to do, MicroStrategy is going to be highly, highly, highly more correlated with the Bitcoin price than Meta is.

Because Meta, unless Meta, no, see, even Meta today, if they put every single dollar of cash that they have into Bitcoin, it's going to be more impacted by the business health than Bitcoin. Okay. One more question on MSTR, then we'll move to the ETF to finish. Do you think MSTR, given that one of the metrics that the S&P 500 looks at for getting into their index is business valuation, is it possible that as the price of Bitcoin goes up, they get into the sort of spider ETFs or not? I did see that kind of floating around. I honestly haven't thought that much about it. It would be hilarious.

It would be fascinating if that happened. But yeah, in terms of the inclusion or not, I don't know. Yeah, I wish I had more on that. But I did want to circle back to speaking of things he has in the presentation. Do you notice what stock is not in the slide deck? Let me have a look here. He's got Microsoft, Google, Meta, Apple, Netflix, Amazon. There's a big one that's not in there.

From the Mag 7? That is 6, isn't it? What's the 7th? NVIDIA. NVIDIA's not in there. Yeah. Fuck, is six isn't it what's the seventh uh nvidia nvidia is not in there yeah that's good that's good so i but i will i will have to disagree with you on um at least in the immediate term since earnings mike micro has been much better than bitcoin since roughly since earnings micro is up% and Bitcoin is up 20%. Which is weird to me because it seems like, I mean, I've said this before, but I continue to kind of marvel at the way that this has happened over the last year.

And you're right, since earnings, it's even weirder because the ETF has been available. Who's buying MSTR that's so hyped on the Bitcoin stuff instead of just buying Bitcoin spot or even the ETF? This is the thing I cannot figure out because the answer used to be maybe major hedgies or whatever would buy this stuff or family offices would buy MSTR because they liked Bitcoin and there was no other vehicle. But now that excuse is gone. Who's buying it on that story is what I don't understand. Yeah, I think that 100% is the right question to ask. I think that is the question because ultimately at least at a 20, I would say this at a 20% premium, at least I can sort of buy that from the perspective of what I laid out before you give a

little bit of credit here and there and you go, all right, you know what? I'm good with that. I think it deserves that. What I would have to say then is it's people that want to go out the risk curve. Maybe it's being influenced by options as well. Who knows? But it's people who say, hey, Saylor last call was like, I might do preferred equity. I mean, that was kind of out of the blue when he said that in the call. That was strange to me because I don't think he'd ever mentioned that. But he uses that line, says whether it's equity, it's secured debt, it's unsecured debt, it's debt backed by Bitcoin, it's preferred equity. We're going to do whatever is most creative to us. And maybe it is people believing in that. And by people, I guess you could say institutions potentially affecting the price. And you could say, okay, look back at how

did MSTR do in the last bull run? Do I think it's going to outperform GBTC? I guess now it's not GBTC. Do I think it's going to outperform the ETFs? It is possible. Yeah. It's also going to depend on the entry price. So you look today, MSTR is down, I think, 6% today. I mean, I bet you he sold 100 million of MSTR stock today. Maybe that's too much, but it was down 7%. I bet you they sold some stock today for sure. We're going to find out. We're going to find out. Let's finish with the spot ETF.

Lots of to-do and hullabaloo around this. Tons of people mentioning stuff, myself included, about the inflows. $4 billion in a month took GLD two years to get that $4 billion. There's something to be said there about currency valuations and inflation, of course. GBTC selling at a pretty good clip for the first of the while, but they've slowed down significantly in the last few days. And on top of that, you're starting to see whispers now that certain places that offer the ETF are starting to add it to broader ETF portfolios. I think here in Canada, this started about two years ago, where you can get, I think it's like a conservative commodities ETF that includes 2% allocation to the spot Bitcoin ETF. Not the miners, not MSTR, the spot Bitcoin ETF, which we've had here for about the better part of two years now, like I mentioned.

What are your thoughts on the ETF? Because I really don't know what to think about it, except that I think we agree on the fact that it's been good for Bitcoin and will continue to be good for Bitcoin. But other than that, I don't really know what to think about this, because there's so many vehicles. There's something to be said about, are these guys going to be contributing to the ecosystem in a positive way? Blah, blah, blah, blah, blah. I don't know. Where do you come down on this and maybe more importantly since you're you know connected bloomy bloomy boy uh what's the what's the mood around these things in in your circles so very simple takeaway from the etfs they built the rails before the halving that's it that's done that's

that's what it is because i'm sorry not everybody listens to the canadian bitcoiners podcast okay not everybody knows how to buy bitcoin on an exchange. Hell, I mean, come on, storing it. That's a joke. Most people, only a very small select percentage of people are going to ever be able to do this. No, no way. So they built Rails and now we're going to have the halving. The amount of demand this is going to enable simply by having this new transmission vehicle to buy Bitcoin is going to be massive. This on its face, without any halving, without any easing, rate cuts, any of that stuff, global liquidity increasing again.

We've seen the numbers. The demand that we're seeing with these ETFs, somebody can guess what percentage of it would have happened without the ETFs. I'm going pretty low on that. I think most of these people are new buyers. If you were already a Bitcoiner and wanted to benefit from the Bitcoin price going up, there were other vehicles for you to do so. GBTC, MSTR, you could go out and you could do some minor plays if you wanted to. I mean, there's plenty of things for you to do

in addition to just buying Bitcoin. ETF changes the entire game. So it is just an incredible enabler of people getting into Bitcoin. And then when you combine that with all these other factors going on, I mean, that's why we're seeing a a rally that some would call disbelief that you know peter zoltan or whatever the guy's name was said bitcoin is going to tell you what his name

is not i'll tell you what his name is not it's not Zeon or something. Zehan or whatever. I think I'm combining the name with that. This is the Rogan guy, right? You're talking about the Rogan guy? That guy? He's like Bitcoin's going negative or something? Is that the same guy?

Yeah. It's 16K. It had a 17K board to go, I think was the quote. So it's either disbelief or it's just indifference. I mean, and so to the second part of your question, what is TradFi saying? They're really not saying much because in their mind, Bitcoin's always been this kind of funky thing. People like to play around with it. It's volatile.

I'll throw in, I'm in these Bloomberg chats and there'll be some 830 data drop. And immediately the 10-year yield changes drastically. The NASDAQ changes drastically. And to the guys that I'm working with, I'll throw in the Bitcoin price and I'll be like, look, Bitcoin's responding. And some people get it, but a lot more people don't. A lot more people don't care. And it's really not on the radar. So no, I don't think people really are thinking about it that much to them. Yeah. Hey, it's an ETF.

There's an ETF for all these different commodities. There's triple levered ETFs in both positive and negative directions to them. Bitcoin getting an ETF is, is kind of, it doesn't really matter to them because they weren't paying attention to it anyway. Um, now that's,

no, no, I mean, that's, it's crazy, but that's kind of the default view. I think i don't get that at all and maybe the the last question i'll ask you i've heard in the last couple of days

some people especially this this fred krueger guy who came out of nowhere could be a spook i don't know it seems like he's really popular all of a sudden i never heard anything about this guy two months ago talking about how these major price levels just don't matter as much anymore because there's such a significant part of the Bitcoin demand that's coming from the ETF products. And demand for the ETF products comes from people who buy either reflexively or do, by reflexively, I mean like think automatic buys through your TFSA, if people who are listening or your Roth IRA or whatever you guys call it over there. And then the other crowd would be people who are

saying to their portfolio managers, get me 1%, get me 2%, get me 5%, 10%, whatever. They don't care what the price is. They don't sell 50,000. They don't wait for dips. They just say, this is the allocation I want, blah, blah, blah. Is there truth to that? Do you think that we're done trading things like big round numbers, things like ftx crashes there will which which there will of course be you know one or two more of i think there's always like a black swan waiting or do you think that we're still going to be subject to this and maybe in that vein how much if that's the case that these buys are like price agnostic is the having going to be a like a 500k bitcoin event suddenly if this is the case i mean you know we've we've had the conversation about how potentially high it can go i think uh

no one no one needs to make price predictions here but like i was just saying i think the the etf in and of itself was just a massive development and now you you throw the halving on there no i i think um i think we'll always be subject to volatility i mean right you look at in the in the early i mean in the early 2010s when i first you know heard a passing word about it it was like a thousand then it goes to 200 or whatever. It's like, okay, it doesn't, that didn't matter that because it could go from 69 K to 17 K or 16 K or 15, five, if that was the lowest point. So to me, it, it really doesn't matter what the overall market cap of this thing is. I think it can be extremely volatile and especially, I like like i said we we built the rails before before the halving i mean when when the halving has typically come in the past what happens you

get newbies that want to that want to come in and but then it's like oh shit how do i buy a bitcoin like i don't know anything about this and then they go on coinbase and it's like oh shit man i'm i don't want to buy the thing that's that's 15k i'm going for that 50 cent shit coin because it could go up to 20 000 so so like you're potentially going to see diversion from people fucking around with shit coins into just an etf because they're going to say boom like i can just hit this thing in my stock account i'm good to go i don't i don't need to care i just buy a Bitcoin. Oh, there's no ETFs for for anything else. Doesn't matter to me. I just I just see that big CNBC's got Bitcoin at 60 K and I'm like, oh, damn, that's a big number. So I think some of that could happen. so much easier for people to get Bitcoin exposure in 2024 than it ever has been. So why don't we combine that with the fact that if we're right and the price reacts positively

to the halving again, oh my God, rocketing price, easy to get Bitcoin access. That means more of a rocketing price. And we just cycle on up. Oh, and throw a rate cut in there too or throw a 50-bit break cut in there so yeah i mean look maybe you know we can listen to back of this in three months and be like these guys were out of their minds they called the top this is nuts but i think anybody following the space we understand why there's typically a halving rally you know i think there's there's sound qualitative and quantitative reasons for why this

happens. Until it doesn't happen, we should probably think it happens. I think that's pretty fair, even though the sample size is small. So ultimately, yeah, I think the ETF juices what would be a normal halving cycle that this time is being met with global liquidity easing when we've been, when we haven't been easing for the past two years. And extremely high quality CBPA parents from USB tonight. Tell people what you're working on. Woke antidotes on a like indefinite semi-permanent hiatus. What like, are you doing anything else? Do you want to share what you're doing? Do you want to talk about it? Where can people find you? That's true. Yeah, no, I think I'll have something at some point for everybody. But for now, I'm just sharing the good wisdom, the good vibes to the Bitcoin community, which has given so much to me.

So I have to give back to the community. Outstanding. That's it, everybody. Abbreviated rip tonight. a hard 43 minutes we'll see you next week on Monday for the usual live stream till then take care of yourselves now I gotta end this stream we're still live we're still live

there we go