The Pomp Podcast - This Bitcoin Investment Strategy Changes Everything | Jeff Park

Episode Date: September 18, 2025

Jeff Park is a Partner and Chief Investing Officer of ProCap BTC. This conversation was recorded at the Independent Investor Summit in New York. In this conversation we talk about the intelligent investor vs ideological investor, radical portfolio theory, rise of prediction markets, stablecoins, and what the future of bitcoin treasury companies looks like. ======================Pomp writes a daily letter to over 270,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at: ⁠⁠⁠https://pomp.substack.com/⁠⁠⁠======================Check out my NEW show for daily bite-sized breakdowns of the biggest stories in finance, technology, and politics: ⁠⁠⁠⁠⁠⁠⁠⁠⁠http://pompdesk.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠======================Core is the leading Bitcoin scaling solution, enabling you to lock in yield by locking up your Bitcoin. Simply lock it on the Bitcoin blockchain to secure the Core network, and get rewards. No bridging. No lending. Just holding. Still your keys. Still your coins. Now your yield. Start at https://stake.coredao.org/pomp======================BitcoinIRA: Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to https://bitcoinira.com/pomp/ to earn up to $500 in rewards.======================TimeStamps:0:00 - Intro0:35 - Intelligent investor vs Ideological investor3:51 - Radical portfolio theory 10:04 - Why prediction markets will be huge 15:21 - What is the role of stablecoins? 20:41 - Bitcoin treasury companies 29:25 - Ideas to trade Strategy 35:50 - What happens when the premiums trade at a discount? 38:25 - Advice for navigating the world 

So this is the insight that I'm going to share. There's this notion that the bells and whistles of these prefers offer different outcomes because there is some rank order effect as to some appearing a little bit more secure than others. The market has decided that there's a 30 point spread. I'm telling you in a terminal value perspective, it doesn't really matter. They're all going to be shared in the same bankruptcy class. So then what you can really think about is, well, why do you buy prefer today? Anyway, you're buying it because of the yield. You want to get paid cash now for owning MicroStrategy Risk. And so the most compelling security that I see today is... All right, Jeff, you have very unique views of the world of investing,

including you recently have been talking a lot about this idea of an ideological investor versus maybe the Buffett type. Explain the difference between these two people. Yeah. I've been thinking about this a lot, and it goes back to an old adage that has been said before, which is that everyone in the world today seems to know the price of everything, but the value of nothing. And I think that's what the core of value investing is missing today. When you think about Benjamin Graham's version of value investing, it talks about cheapness. It talks about valuation metrics that is mostly concerned around a yield on a liquidity bootstrap. And it talks a lot about these constructs that applies for a certain period of time for which investing frameworks worked, which is really on the back of what we now understand as the Washington consensus.

It has a lot to do with free market principles on how interest rates are determined and the dollar being the risk-free rate for which free markets triumphs above all their interests. And I think what we are now seeing today very clearly is that the Washington consensus has effectively died. I think there's lots of data points to it, but the one that was most salient to me was when Trump announced that the U.S. government will be taking 10% stake in Intel. and i did not see anyone bat an eye across both sides of the party whether this was something worth having a national conversation everyone seems like this is totally fine and it's normal and we're going to live our lives uh that is the beijing consensus that's when sovereignty first principles take over market-based principles and so now we live in a world where intelligent investing in the way that we've learned to benjamin graham is not enough and what that means is we

have to fundamentally challenge what the risk-free rate in itself is that we are venturing into the new modern world. And that's when I coined the terminology to think about ideological investing as a framework, which is to really re-underwrite everything we've ever known about investing. Take a moment to think about this one simple fact that everything we know about modern quantitative finance is all built upon the fundamental principles of physics based on this one particular security for which we know the relationship of mu to its sigma, which is the riskless bond, has a sigma of zero and has a guaranteed return of R. Everything we know about modern finance is built off of the T-bill and the risk-free rate.

If you fundamentally challenge that, that is the equivalent atomic bomb of modern finance. And I think that's why people are talking about Bitcoin. That's why people are talking about how global macro in the context of AI is changing a lot of the ways we think about acceleration and technology. And all of this means we have to think differently about where is value? How are we going to invest in the future that's going to prove ourselves for the forward and not just thinking about the past? As part of this ideological investor, you've come up with this term, radical portfolio theory, which modern portfolio theory is not very radical. So what is the difference between modern portfolio theory and radical portfolio theory? Yeah, absolutely. You know, a funny story here is I was thinking about how to even bring this concept in a way that people would have it registered in their brain and think about it inaccessibly. And I chose the word radical. And I chose it because it's a little bit provocative, right? But the thing that maybe many of you might not know in this room is radical, the word, is actually founded upon the Latin word where it is actually to go back to the root. it's off of radix so to be radical it means to going back to the root of solving its problems so actually when we talk about radicalization happening the notion of this means returning to fundamental principles and trying to understand what anything we've ever known

might have to be fundamentally challenged and so that's why it's the radical portfolio theory and so what is it 60 40 is clearly dead right we know this from all the other speakers we've heard from today, and many of the reasons for its debt is because there's been so much liquidity that's been manufactured in an abundant fashion for which price is no longer reflecting a healthy discovery of market forces. When you see index flows that are overwhelming all kinds of idiosyncratic dispersion and long short stock investing, or bonds that are moving because sovereign actors like Japan is inundating the market and the bond auctions are breaking, all of these things point to a world where it's not on the risk-on and risk-off framework of bonds

and equities offering certain uncorrelated benefits. They're actually all correlated. It's one of one. And so you have to step outside the box and consider what is actually not part of the paradigm of investing today that we can consider truly radical. And so the way I think about it is that there are what I call compliance assets, and there are some that I call resistance assets. Everything we know is generally in compliance assets, bonds, equities, private equity, venture capital, all these form factors we're familiar with. It's all affected by generally macro and sovereign flows and the way institutions operate. That's 60% of compliance assets we should all have. But there are certain assets that none of these folks touch, right? Bitcoin is one kind

of example of it. Gold is another example of it that behaves differently. But there's a slew of other things that I think we are now seeing where we're going to find value in scarce assets. right? These are fundamentally not manufacturable by an institution to provide abundant liquidity that creates hyper-financialization markets. These store value because by definition, they're scarce. And I think there is a whole world of these assets that are going to come online. And people already know about it, actually, at some level, if you're an ultra high net worth, which is why things like yachts are valuable. Things like land is valuable. Things like Hermes Birkin bags are valuable. I mean, things like Rolex watches, all these things are in the

scarce category that's not financialized, but they hold value. And my hope is that more people and retail investors included start thinking about building a portfolio in that holistic fashion where it's not just what the textbook tells you about compliance assets, but really collecting the things that you like for which it holds value in meaningful ways because other people culturally believe that it will hold value as well. When you think about that portfolio construction how much of it is driven by uh gold bitcoin etc being outside the system versus it is being driven by actually other central banks other investors are starting to realize they have to get outside the system as well right it's pretty interesting to me that um bitcoin and gold

maybe it's the two examples people inside the system are also using it as the life raft out like whether you're an individual or you're a foreign central bank you're screwed so everyone's got to get out of the system and nobody wants to say it if you're part of the institutions so what do you do is you just slowly start to increase the allocation you have into these assets but they are escaping they are leaving the system right yeah no this is this is right i think every asset kind of finds itself into some maturity where the end game is you wanted to have a permanent capital vehicle in the end that is more broadly accessible. I think that's the journey of every asset. But some assets can reach that status much faster than others. Some

can reach it in a more fungible way than others. But there are some that will actually never kind of find that fit either because of the physical materiality of its existence. And I joke around people collecting Pokemon cards as a thing that would obviously hold value for certain people and certain class of investors, but it will not probably be financialized in ways where thinking sovereign funds are going to buy Pokemon cards, right? That's never going to happen.

Never say never. But, you know. Howard Lutnick just got an idea. There you go. Bitcoin treasury companies start buying Pokemon cards. Big announcement, November to come. No, but, you know, things about what that shows you is IP is inherently valuable, right?

So IP, how do you access IP in a thoughtful way? I think there's ways that we're going to see IP that exists today in private funds where litigation claims and trading are hugely valuable. There are people that raise funds to do these strategies. But hey, these IPs can exist differently in a tokenized format that I think is probably where the most interesting opportunities of tokenization is going to come from. In my opinion, tokenization isn't really about NASDAQ reorienting itself so that we can buy Robinhood stocks more conveniently on chain. I mean, that's interesting and it's important and we should have more money velocity and clearing mechanisms that bring all of our age old infrastructure to the next level. But the real tokenization is going to be when the long tail of financial assets that historically hasn't found product market fit for people to access to find a wrapper for which people can now invest in. So one example that I always share with people is predictions market, you brought it up earlier, is going to be a huge market. Because I think prediction markets is the antidote of AI, where basically, if you as a human have any insight that AI is going to be unable to front run, it'll be because you the human are living in the now versus whatever recursive learning that the AI was doing, which by definition is what predictions market is.

you're trying to predict events that haven't happened yet. So if you're able to participate and bet on those markets, I guarantee you there are going to be some incredibly great predictions market traders, i.e. fund managers. They may raise money. They may raise money in a different format than a 3C7 hedge fund that we're comfortable with. It might be through a tokenized on-chain fund. And so these are the things where then I was in the radical portfolio. You should put 10% of your capital in somebody who can make great trades on predictions market because that's an uncorrelated return of 8% to 12%, which has nothing to do with a risk-free rate. Nothing. The rate of return on a great predictions market trader has nothing to do with the state of the economy. That's truly

a resistant radical asset that is productive and income generating. Today's episode is brought to you by Core. You can earn yield on your Bitcoin by just holding your Bitcoin. It's simple. Core, the leading bitcoin scaling solution will reward you for not selling your bitcoin it's not magic here's how it works core is a protocol secured by elected validators you can help elect validators and secure the network by simply locking up your bitcoin on the bitcoin blockchain no bridging no lending and just holding when your validator secures core it earns rewards fueled by network activity and passes them back to you as yield with a minimum lockup of just one day when the Time lock ends, you get your Bitcoin back untouched.

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slash pomp. Again, that's stake.cordow.org slash pomp, or go click the link in the description. If you think about it for the election season, and we saw this play out, right? I think it was the French whale was the guy on Polymarket who was pushing the odds significantly. And everyone was like, oh my God, this guy's lost his mind. He's betting like $80 million on a coin flip election. Look at the polls. And after the election, he finally showed his cards and they said, well, how did you know? And his whole thing was, well, a traditional poll asked, who are you going to vote for? And people lie because they feel like they're being judged. So what he did is he actually commissioned his own poll, which is called a neighbor poll.

And they went to people and they said, well, Jeff, who do you think your neighbors are going to vote for? All of a sudden, Jeff told the truth. And so it was a clear signal and he had this data and he realized that, oh my God, there's this like huge red wave that's going to occur. And so he made a big bet and what i took away from that was this wasn't a guy who was just looking at existing data he went and created his own data set like he did work to do this and therefore he contributed via his prediction market you know kind of contribution truth to the market which he ended up proving that that was actually right but it's because he had actual new data that the market had yet not seen and so i think you'll see this over and over and over again in a way that i we

just aren't used to in finance like it's just like what is the company's earnings or what the company's earnings are, very rarely can an individual get new data to go and express their view in the market. Yeah, that's right. In fact, prediction markets is really useful because the most asymmetric outcome that is going to happen there is if you bet on the wings. The things that people think are so improbable that they're priced at 10x payouts are usually the best markets to play. And this goes back to your foundational question on ideological investing. The reason the investing world today has worked in the way that 60-40 existed is because the world has been so stable around this unipolarity of American hegemony for which the dollar

plays a particular role. And the distribution outcomes is kind of like your standard bell curve. So you can build complex models on top of it because it's inherently predictable by definition. When you go into an ideological world, ideology by definition are fat tail events, right? Like if you are in the IQ of 30 or 150, that's kind of when you have an ideology, whether it's crazy or genius. If you're in the middle, that's not really that interesting. And so when you fat the tails what we're talking about here is allowing more improbable things to be outcomes you can bet on and that's exactly what the world is we are entering a period of a lot of uncertainty where we have to imagine the crazy things we never thought were possible might be possible and that

means it's a more volatile world it means it's a less correlated world but all of those things are inherently what is very valuable about prediction markets because because prediction markets by definition cannot know the improbable things by which models have never existed in the past and so this to me is especially empowering for sovereign individuals because that's when individuals can make their own decisions and what they want to believe in and bet on it now before we talk about bitcoin and bitcoin treasury companies and all the things people want to talk about um stable coins is kind of this like bridge right they're digital but they're dollars um and you're talking about the prediction markets of like there's models that we just

haven't seen before stable coins are we've kind of seen them before but kind of not and so how do you see their role really changing not only in kind of traditional financial system but also like in an investor's portfolio right i i don't think right now you get some significant advantage from holding a stable coin versus an electronic dollar but that may change over time and so how do you see, you know, kind of the same dollar asset just in this new wrapper as part of an investment program? Yeah, stablecoins is really interesting to me because this is also another catch-all word where people seem to mean different things when they talk about stablecoin, kind of like tokenization. Like, are you talking about securitized token or tokenized securities?

Stablecoins is, on one hand, a payment solution, but on the other hand, is a yield-bearing asset management solution. And those two things are kind of different. On the payment side, which is kind of where the Genius Act is most currently addressing the market opportunity for, there's a lot of things to be excited about for kind of the capital efficiency of locked up capital that happens between merchants and the cost of transacting those. But from our perspective, in our seat, well, how do you make money off of that thing, right? It's like, do i buy a stock or like a dollar is not going to become more valuable by holding a stable coin and what i've told people is you know how you open your mailbox and you get like

all the spam mails from like jp morgan at bank of america and they're like hey like open a bank account with us and put in a five thousand dollar deposit and three months we'll give you 300 bucks and if you really wanted to arbit you could probably take the time go to the branch open an account get that 300 do it another bank whatever it takes a lot of time it's not worth your time, so you're not doing it. But that is essentially what I would call a customer acquisition strategy that stable coins are now going to venture into. And when people talk about yield farming crypto and they talk about stable to stable yield farming opportunities, this is what it is. You basically are getting fees off of basically venture capital or other deep pocket

investors trying to acquire customers to use your stable coin and you're just swapping them out. but instead of visit visiting like a physical branch you just have to click a couple buttons online and hopefully also not get phished by the way so that's kind of the other risk but that that's essentially what stablecoin yield farming itself is and so i think there's a lot of opportunities for people to pay attention to like what is possible in this space in the construct of a stablecoin um but the big picture like away from the money making opportunity for us idiosyncratic investors is you know how is stablecoin going to change the united states fiscal and monetary framework into the future. And for that, we do have a bit of a blueprint.

The blueprint is Eurodollars. And back when the Eurodollar markets were founded post-World War II, if you study the history, it feels a lot like what Tether looks like today. It's offshore institutions that want dollars and they want to provision dollars in Europe because people think it's more valuable than their local currency. And they're essentially creating dollars kind of out of thin air without the backing of the U.S. Treasury. Back then, the U.S. government noticed it was happening, but they also didn't prohibit it because they knew that having dollars in the hands of more offshore investors is ultimately a good thing for the network effect of exerting further hegemony. So they kind of turned like a blind eye to it, which is why the euro dollar

markets even exist. And to me, this is an incredible blueprint of what Tether is doing right now and where Tether is going to go in promoting US stablecoin to offshore investors that allow us to exercise more control over that network effect. And so I don't know if you guys saw earlier today, but Bo Hines has now partnered as a CEO with Tether to launch a stable coin with Tethers back in here in this country. Two years ago, people thought that would have been imaginable. But I think about these things in the context of how investing really requires you to think outside the box for this radical moment in time where these unlikely, improbable, fat-tail events are happening all around us. And we have to be paying attention to it. And I think part of why

we're all here is because we want to learn about it. The person you're sitting next to, left and right, are probably all thinking about these things. And that, I think, is the most important takeaway for what stablecoins are going to do in the future. It sounds simple, but it's going to be a huge market. Let's talk about Bitcoin treasury companies. They're all the rage. A lot of money has gone into them. The companies that have been in the public market and executed the strategy will have done very well. MetaPlanet is one of the best performing stocks in the world. MicroStrategy, now Strategy, has become very large and has been very successful. What is a Bitcoin treasury company at the heart of it?

Bitcoin treasury company is pretty simple. At the core, it is an operating entity that is leveraging Bitcoin as the unit of account to bring value. I think at the core, that is what a Bitcoin treasury company is. use many ways you can bring value to the Bitcoin ecosystem. But at the core, I think the idea of having your reserve asset being denominated in Bitcoin, where the goal is to acquire and earn more Bitcoin on a per share basis, as organically as possible, is the mission. And it's the mandate for which people want exposure to actively and thoughtfully managed Bitcoin exposure, not just at the spot level, but in the ecosystem of opportunities that are possible in the

technology behind it. So when I think about Bitcoin, there's the capital B Bitcoin, but there's also other sub graphs of Bitcoin adjacent stable coins or zero knowledge roll up opportunities in Bitcoin or Bitcoin mining. All of these things are kind of other operating revenue streams that are associated with Bitcoin that are truly purpose built. Bitcoin native financial institution can actually help navigate a lot of investors to access that historically they haven't been able to. For example, Bitcoin mining is actually the only currently known endogenous way to earn Bitcoin yield, realistically, from what that represents by doing the computational work. But most of us here can't actually access Bitcoin mining revenue directly because it requires scale. So then you

may end up buying a Bitcoin miner company out there who is in the business of doing this at an institutional scale. But those companies also have operating level leverage and management discretion as to how they build out those businesses. But it's possible in the future, we may have the ability to extract those opportunities more directly to the investor's base. That is a kind of a Bitcoin treasury operation that doesn't really mean asset management. It just means operating within the support of the Bitcoin network. So I think all of these things are incredible opportunities for what Bitcoin treasury companies can be doing. besides the proven path that we have seen

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with a new contribution the bitcoin ira team is here to help you get access to real crypto in your retirement account. And here is the best part. As a Pomp podcast listener, you can earn up to $1,000 in rewards when you add funds to your account before tax day. Search for Bitcoin IRA in the app store or visit BitcoinIRA.com slash Pomp to join 200,000 Americans on their journey to upgrade their retirement. That's BitcoinIRA.com slash Pomp to upgrade your retirement today. You had a really good job at a great organization. You left to go operate. We're partnered up. I'm very thankful for you to join us. Talk a little bit as to how you think about building one of these businesses from scratch versus taking kind of a fledgling company and then evolving it. But instead, if you start from scratch and try to build this, what does it look like? yeah i think it's such an incredible privilege and uh on a generational opportunity um you know when i joined pomp as the cio um of this of this entity i i made a joke that um you know internally

in the asset management world we think of cio as the chief investment officer but if you leave asset management cio means chief information officer that's what most people understand that it's a technology job. But I said that this might be the one job at last where that I might be interchangeable because in Bitcoin, the investing is the IT and the technology to which there's gains that are generated within it. And in that sense, to be able to build a team from the bottoms up day one, where everyone is purpose built and joined for that mission, gives you a ton of degrees of freedom to really invest in the right way.

At the end of the day, it's not just like a culture alignment of ensuring that everyone believes in the Bitcoin mission, but it's bringing on a diverse set of talent that actually can be useful, not for just the moment of now, but where we think the industry is going to go three to five years from now.

And that I think has been the most incredible privilege. And I'm really optimistic and hopeful that we've done an incredible job in finding the best operators in the most elite way possible that the world has not yet seen. And all it takes is for us to just widen the aperture a little bit more to see beyond what a Bitcoin treasury company can be than the way that we know it exists today. So somebody asked me earlier, what are you guys going to do? What do you think we can share? Let's see. That's me putting it on him. You see?

look, I, I have said that, um, you know, there's levels to this game, right? Like as many things, what a lawyer answer, but you know, there are some things that we understand, like the basic narrative today is people like seeing the stock trading at a premium to nav and you go out there, you hit the ATM and you can engage in what is called a creative dilution, by the way, which I think is horribly named. Some things are, why explain? So, accretive dilution is actually a term that I think got started in the right understanding that eventually morphed into something else. The very first time accretive dilution was brought to the public dialogue was when the convertible bonds were leveraged to essentially allow a free option for the ability to raise capital for the treasury companies. When you are able to borrow at 0% interest rate, which is what strategy has been able to do to then allow the investors, the lenders to convert into stock at a higher price, that is a creative dilution because there's no ATMs and it's really allowing a forward pull of capital for 0% cost of capital.

I mean, that's pretty amazing. Just hitting the ATM by definition is not really a creative if you're increasing the share count by ways that you're actually diluting. So there's a difference here. And the thing that I take to share with everyone is to use the ATM to engage in what people are calling a creative dilution is not a right. That's a privilege. That's the thing you earn by essentially sharing your investors why you deserve to trade at a premium for the exact value of delivering the yield. and only once you've actually been able to deliver that yield do you then have the privilege to hit the atm to raise more capital so if your whole foundational story is oh yeah there's an arbitrage

here and i'm going to just print the atm to get more stock per share and then i'm going to increase my assets no no no that's a privilege and you have to earn it and i think the way that we've been thinking about how we're going to do that is we are going to deliver truly endogenous bitcoin yield where your Bitcoin is actually earning more Bitcoin organically. And some of the come from the financialization of Bitcoin itself, where we know Bitcoin is a very volatile asset, which means we know the options market is very rich. And so if you're able to do some structured trading around it, there are yields to monetize based on that feature. But like I've hinted earlier, Bitcoin itself is part of a larger network. And running the network in itself is the long term mission

of what all Bitcoiners want to see its success rooted in, which is to essentially generate more fees in the network beyond just the mining for additional blocks. And I think in that sense, there's going to be a lot of opportunities there in the future as Bitcoin does become more mature, in which people will want to see some of these primitives come online into the Bitcoin world

that Ethereum and others have led the way, but inevitable for Bitcoin as well as the most pristine asset that we know in crypto. So now you're supposed to bring an investment idea. And you told me that it's part of the strategy complex, which means we're going to have to do some explaining here. So you believe that you've identified an opportunity that is worth sharing. Explain to folks what the complex is and then what you think is unique about it.

Yeah, absolutely. I thought I should come prepared with one pitch of a trade idea that you guys might find interesting. So I came prepared, which is within the MicroStrategy complex. Jeff just wants free drinks afterwards. So he brought you guys to trade ideas. No, no. I got to one-up Eric now because Eric's been such a prolific wealth generator. I feel like I got to try something here for everyone else. No. So look, MicroStrategy is an incredible company because it is the first of its kind and has shown that there's ways to segment Bitcoin

risk across customer base for which there's a whole diverse array of participants that want Bitcoin adjacent risk. So we know the capital structure today where, of course, you have the common equity. The company's worth about $100 billion or so. You have convertible bonds at the very top. And then at the layer below, there's this tranche that is rather exotic called preferred equities. Preferred equities, historically, I would call the armpit of American securities because nobody likes it. Institutions don't really like it and retail investors don't like it. But strategy has made it a cool thing. And there's four of them. There's four preferred share classes and they all have slightly different features most of them are all perpetual except one

is convertible they have different coupon rates they have different subordination and because of that the price it trades ranges from 115 on one note which is strf and then there's another that trades in in the 80s in the low 80s actually at one point it was in the high 70s strd that's a 40, like 30 point gap of preferred equities. So this is the insight that I'm going to share in a bankruptcy. The liquidation waterfall is fairly clear. You have your administrative claims that come first, then you have your senior secure creditors, and then you have your debt investors. And then all the way at the very bottom is your equity, which usually gets crammed. Preferred equity is equity. Preferred equity is not bond. Preferred equity is not

credit. It will be treated in the lowest denomination of its class in the event of a bankruptcy. I'm not saying there's going to be a bankruptcy. But because there's this notion that the bells and whistles of these preferreds offer different outcomes, because there is some rank order effect as to some appearing a little bit more secure than others, the market has decided that there's a 30 point spread. I'm telling you in a terminal value perspective, it doesn't really matter. They're all going to be shared in the same bankruptcy class. So then what you can really think about is, well, why do you buy preferred today? Anyway, you're buying it because of the yield. You want to get paid cash now for owning micro strategy risk. And so the most compelling

security that I see today is STRD, which is trading at $80 and is earning you double digit coupon and is actually going to have its X date this coming Monday. And this is the second thing that I'll share with you guys. Usually when a stock goes X dividend, the stock price goes down by the dividend amount, right? Otherwise there would be an arbitrage. So you would actually just box the trade and make free money. The market of course won't allow it. So it drops by the X dividend amount. Well, here's the funny thing about these preferreds. Because it's actually driven by retail and there isn't much institutional participation, almost always the prefers do not drop by the amount of the dividend. And you could have seen it pass in June where they would pay

your coupon in cash and it wouldn't drop at all or it would drop a little bit. And so what I would share now is there's a next dividend coming up for STRD and some other ones as well. It's next monday it's two dollars and fifty cents if the thing drops by two dollars and fifty cents i mean it's break even but there's a genuinely good chance it will not drop and that's just yield that you just got on a principal notional for which you can still hope for a pull to par and make 20 points later up front um so that's the trade most compelling risk is to trade in the micro strategy complex what's the risk in holding it just that it drops more than the dividend the risk i think is ultimately that uh if there was the tail risk of strategy being perceived as

having credit issues then all of these prefers would be problematic um but if you don't believe that which i don't think any of us does because there's so little leverage on micro strategy today is something like 15 percent um and and you assume there's no you know random operational risk of custodial failures or things like that, then you literally are earning double digit coupon while you hold on to the paper. So to me, the other catalyst here that I'm excited by is the Fed rate cut. Right now, because money market funds are still yielding so much yield, 4.5%, there's not a lot of incentives for people to leave for something that's only offering 7% to 8%. But eventually, if we believe that 4.5 is going to go back to 2 or back to 0, the gap's

going to widen. And it's going to become more obvious that earning double-digit yield is actually a huge spread. And so the biggest beneficiary of a rate cut, of course, Bitcoin will benefit. But I think structurally, the biggest beneficiary of a rate cut are probably going to be these preferreds on MicroStrategy. So if you think the yield to worst today on these are 12% and you think it's going to come to 7% or 8%, that principal pool on the duration, which is very high because it's a perpetual instrument, which means it has a lot more duration than most things you own, then these are the kinds of instruments that can actually go above 100.

It can go above to like 120, 130. Now, of course, that's why the ATM is there. Saylor can use that ATM to then pool more ability to buy Bitcoin. But from a downside perspective, I think it's fairly risk remote. One of the questions I get around these Bitcoin treasuries is, what happens when the premiums slip to discounts? What do you think? Obviously, not what we're going to do, but what other companies? What do you think the analysis is for what they should think through or do? Yeah, great question.

I think if it trades at a discount, it is not that different than how people think about PE ratios to stocks trading too cheap to its earnings power at some level, right? And there are ways that you can think that you can fix it. There are ways you can structurally try to engage in some capital market transactions to close the gap. But I think in the end, if you can generate, again, like endogenous yield on the assets for which that is organically closing the gap by bringing more Bitcoin gains on the balance sheet,

then as long as you're in control of your own destiny, which is that you don't have liquidation risks and you don't have credit covenants that will otherwise create issues down the line, then it's a waiting game. Because if you just wait, the ability of assets on asset return will close the gap, even if the stock doesn't do anything.

And then I think it's actually cyclical related in its reflexivity to people seeing that will then assign the premium for it. It's pretty basic. But if you think about your traditional DCF models, and you have to think about how to assign that terminal value into perpetuity of any stock, it's based on the fact that there's some growth yield associated with it. So if you just model, hey, here's a Bitcoin that earns 6% into perpetuity, what should I pay for that Bitcoin upfront today, that by definition has to trade at a premium because it's generating yield into perpetuity. So I think if you're able to prove it, to me, it feels like one of those things that it should really never, ever trade at a discount the same way that stocks don't trade at

below P of like four, if they think that actually the revenue behind it and the earnings power is long lasting. So I think right now, MNAV, it feels like a little bit of an arbitrage of a metric for which people are playing these funny games. But the reason is because there hasn't been a showcasing of the ability to earn yield. Once I think you show that in the case of an operating company, it'll feel a lot more like a rich or cheap company based on PE metrics of how much yield you need to justify the premium to pay for it today versus tomorrow. Last thing I'd like for you to tell people is there's a lot of self-directed investors in the room. They're all trying to think through uh uncertainty they're all trying to think through risk reward do you have any advice in

terms of from a philosophical or a mentality standpoint of how to navigate the world that we're in and heading more towards a lot of people understand how to navigate the old world but this new world feels very different um a little bit like the ground is a little shaky underneath you and you know people are trying to figure it out so what's some pointers maybe for them yeah my um my number one advice I share with people in the industry, both in Tradify and Crypto, is we all have to start to live with an appreciation for the world being a lot more probabilistic than we think. I think we have a tendency to jump to conclusions. We have views on things in a black and white fashion. But the reality is the world is very,

very, very complex. And the outcomes that can emerge are quite complex. And if you think about the world in a more probabilistic lens of outcomes, then you get to understand how to think about the distribution of outcomes you want to have in your portfolio. And in that sense, owning more exposure to the things that you think are improbable and over-indexing to that against your own comfort zone is, I think, the most valuable thing we can all do to rewire our brains. Because human beings ultimately at the core, we have some flaws. The flaw is one, we're really, really bad with big numbers. We're not meant to think about huge numbers. And then we're not also really good at exponential growth functions over time. We have a very hard time

understanding not just the pace of acceleration, but what that ultimate absolute value in itself can be. And as I've said before, both because of geopolitical order and the ways that we just have fundamentally unknowable things based on the fact that AI is essentially accelerating in a way that none of us can anticipate what the impact really will be at the scale that it will. And three, because of the cultural ramifications of what that all means for us as a society and the ways that we are now really becoming more ideological about things that we historically have not been, all of these things require us to be a little bit more humble to think about the on unlikely outcomes and um and have a little bit more exposure to those types of

opportunities in your portfolio jeff park everybody