The Wolf Of All Streets - 11 Million BTC Underwater… Capitulation or Opportunity? #CryptoTownHall

Episode Date: June 26, 2026

11 million Bitcoin underwater...capitulation or opportunity? Today's panel explains why the stat is overstated due to custodial ETF and exchange holdings where transfers no longer signal real ownership. They cover record long-term holder conviction, the persistent four-year cycle with possible lower lows into Q3/Q4, and lack of true capitulation without leverage deleveraging. Macro pressures from SpaceX liquidity drains, geopolitics, and inflation are weighed against stablecoins powering dollar dominance, tokenization, and RWAs. The discussion highlights crypto’s bifurcation into Bitcoin as neutral collateral versus infrastructure for AI agents and machine-to-machine payments. Special focus on MicroStrategy’s STRC yields, MNAV debates, dilution risks, cash runway issues, and “investigation” headlines as law firm class-action PR, alongside current bear market frustration and the constructive long-term outlook. Learn more about your ad choices. Visit megaphone.fm/adchoices

Good morning, everybody. Happy Friday. We've got a lot to talk about today, so I think we can dive right in. We've got a great panel. I see a lot of friends up here. So looking forward to getting some inside the title. We kind of arbitrarily pick these amongst all of them that are available. 11 million Bitcoin underwater, capitulation or opportunity.

I'm sure you've all seen the stat that effectively we have the most Bitcoin held underwater in history right now. I kind of dug into that. It's not entirely true. close to what we've seen at bare market floors. And on the flip side, long-term holders is actually approaching an all-time high. So you kind of have the people with conviction holding or buying more, but most of the people who have bought are underwater, right? And I think most of the data when you look at it is not actually including lost coins, which I think makes for a more kind of an interesting argument. But that is the lead story. I would love your guys'

opinions first here, if this is meaningful, something that any of you watch. We have a lot of these sort of like things that have happened in past bare markets happening now while sentiment is in the dumps. So maybe just a, you know, also a constructive conversation about where the market's at. Please, I know we got some newer people here, just raise your hands if you have something to say or just jump in. But don't leave me awkwardly on red. Yeah, I'll go ahead and jump in on that. And so to my understanding, the analysis of underwater Bitcoin versus overwater Bitcoin is entirely blockchain analytics. And I think it's not that meaningful, especially in an era where a lot of coins are held custodially.

They're held in ETFs. They're held in Coinbase. You're held in Cracken and whatnot. And those companies could just be transferring money between one wallet and another. And suddenly that transfer starts to peg the price at which an address received the transfer as ownership of the coins at a certain price. And so maybe in the old days, it was a stat that was a bit more meaningful as a lot of people actually held coins and not that many people would just transfer coins from their left pocket to their right pocket. But transfer actually meant exchanging of ownership.

And this day and age, it's just not as true. And so I don't think it's as meaningful of a stat. Now, there's probably some correlation with respect to the small percentage that actually does transfer. But otherwise, it's not a meaningful stat. Otherwise, I would say this market, classic bear market, I know you guys had Eden Yago. on the show like early this year, late last year, and one of his quotes kept coming to mind, which is, hey, this is going to be the time when we can tell whether or not Bitcoin is in its four-year cycle or if we've finally broken out. And clearly we have not broken out.

And so given that we haven't really broken out of the four-year cycle, I'm guessing we're going to stay bare market and still hit lower lows probably up until classically end of Q3, Q4 time frame. That's where I'm looking at, you know, possibly taking whatever Fiat I've got left and backing up the truck. And so the, you know, Bitcoin underwater thing, I think, once again, a little meaningless. The cycle, ironically, still seems to be holding. And that's probably what a lot of people are looking for. I mean, if it just goes right back up, if it goes right back up in October, it's going to be wild.

Yeah, it would be wild, but it would be like, so there is, so there was a tweet that I'd saw. I'm going to dig it up and try to show it to you guys. But something about there being an exact, precise number of days between the all-time high and the lowest point in a cycle, something like, you know, a certain number of hundreds of days, and it's been pinpoint accurate over the past three cycles. It's absurd. Yeah, it's a couple weeks. Yeah, it's very close. No, like, I think it's like down to the day. Really? Down to the day. I got to dig it up. I'll post it and see like, hey, someone can double check it because I don't have access to all the charts and graphs because I'm not one of those guys.

But maybe we're still in the cycle. Yeah, Carlo. Good morning, Carlo. Good morning, Scott. I'll take the contrarian view. I think, unfortunately, it's frustrating to be in this position and to see this constant chop. Everything in crypto is massively oversold right now. And I think that that trend line is not necessarily a correlation that there is still a four-year cycle as much as it is that this current crypto cycle has seen tremendous headwinds come from unexpected areas like this war that is, for better or worse, unwinding. And I think the massive liquidity and attention drain that came from SpaceX cannot be downplayed.

I think that that probably had to some degree a bit of the price action pressure on strategy. and stretch and MSTR because of the short selling that was going on there. I think that the markets are going through a very volatile period right now. And the biggest volatility indicator is what narrative do you want to believe? Do you want to believe that we are going into a run-the-economy hot, rate-cut, print, excess liquidity? Banks are going to be carrying more on the balance sheet cycle. Or are we going to a inflation-sensitive hold rates, maybe raise rates? I tend to think that if you listen to what Bessent has said pretty clearly this week on his press tour,

he is greasing the skids for much more aggressive monetary policy. He believes the dollar is going to be the engine that's going to drive that. and he believes that global dollar dominance is going to be, and I've said this before, and I'll put it up there because it's worth talking about, he has confirmed this week that the U.S. policy is going to be to create a massive global market for dollars built over stable coins and that that's going to be the engine that's going to pick up where this potentially broken petro dollar system. So reminder that we're heading into July, Scott, which is typically very miserable time for markets. And I think the verdict is still out on whether we're going to turn this around. I'm hopeful that we're nearing the bottom. I really am. And I think we're going to see Warsh really start to improve market sentiment by demonstrating that they're going to infuse liquidity.

A lot to unpack there. And I love that we have Gordon here as a chief economist and head of research at Circle. and you're talking about best in stable coins. So perfect time for Gordon to jump in. How are you? Thanks. Great to be here. I think I take the view kind of in the middle, right?

I think this 11 million BTC underwater is overstated exactly for what Paul mentioned in terms of methodology. But we're nowhere near in terms of capitulation. Usually when I think of, I started my career as a fixed-com trader, usually when there's capitulation, you really have leverage. players de-leverage. We haven't seen that. We have seen a lack of demand that is liquidity being sucked away by SpaceX from retail users, but that doesn't mean that people are selling, especially the leverage players. So I take a pretty cautious view on this. You know, until we see

maybe large treasury companies selling off the Bitcoin holds, I wouldn't call it capitulation either. So I think we're kind of in the middle ground. In terms of Overall, you know, what Bison said, yeah, that is hugely bullish or stable coin. And we had to recognize that crypto has, you know, two narratives going on. One is this old, you know, fully permissionless, Bitcoin self-custrial ownership. The other one is this trend of tokenization, RWA's stablecoin kind of growing despite volatility in the market, usage of stable coin, especially for novel things like machine-to-machine payments, agent payment is up.

So crypto is really kind of bifurcating into two camps, right, those who are truly seeing Bitcoin as a asset to hold for long-term versus those who are, you know, realizing the value, the utility of using crypto rails, using blockchain rails, right? By that measure, you know, if you look at every time a stable coin transact, that doesn't mean anything about selling the stable coin. It's just people are transferring money. That all makes perfect sense. Carlo, I feel like you guys should be best friends. Yeah, I just gave you a follow. Please follow back because you're talking my book for sure. I agree with you. I think that stable coins are definitely the growth engine for this cycle. And I think that will

pivot to the L1s once we see liquidity return. And we just need to be patient here. I know that this is frustrating for everyone, but for the people who have been through multiple cycles, there's been a lot of external pressures on this market that I don't think anyone had necessarily on their bingo card, and we're just going to have to ride it out. Yeah, I think that that's true, Carlo, but, and I think, but maybe that to some end was what makes us more frustrating because all those things do exist, but everything else has just gone up while crypto's gone down. So we definitely broke. We definitely broke. The Iran war, you know, the, you know, the, the Iran War, if that's the catalyst for crypto going down,

should have also been a catalyst for markets dropping generally and we're pretty close to all-time highs and everything. I think it's relative, right? We see gold going down a bit for the same reason that people expect rates to be up because we're in the inflationary environment temporarily and the Fed is expected to raise rates. So, you know, there are other assets that are inflation hedge

that's going down as well. So I think there are multiple drivers. And unfortunately, you know, Bitcoin just first called this wave of de-leveraging due to a crypto sector. And then later on is the tech sector. And now it's, you know, inflation hedge going down. Gordon, does that mean? So it's interesting because, you know, we have so many narratives for how crypto trades, right? And I think that those narratives stick on the way down more than on the way up, right?

So people say, you know, it went down because it was tech. and, you know, tech was broadly selling off. But then we get bumped back in the debasement trade, which is obviously selling off right now with gold and silver. But it seems like in this cycle, what may be frustrated people is that we didn't get the upside of, you know, like gold went to these crazy new heights, and silver went to crazy new heights,

and tech went to crazy new heights, and we only got the downside correlations in people's minds and not the upside correlations. Although, to be fair, maybe Bitcoin was leading, as you said, and maybe we'll lead the way back up. let's hope so it's uh i think it could have been a lot worse if all throughout this time uh gold wasn't up overall and tight wasn't up overall yeah anybody else thoughts here uh broadly on the market brian you know we talk about this quite a bit where do you think things stand yeah i think it's

going to be a show me story for crypto so i think it all absolutely recover and reach new heights but I think it could take some time. The reason why I say that is I think the biggest thing impacting crypto right now is just AI stealing the show. I mean, it's just so hard when you've got mega-cap companies like Intel, which is literally over half a trillion in market cap, move up 30% on earnings and everyone's beating and raising. And so it kind of takes the attention away from crypto.

When you talk about what AI can be and how it's going to impact our lives, whereas like the thesis for crypto, right now I think the one that is absolutely taking hold is we are absolutely reimagining our financial infrastructure. These are things like stable coins, tokenization, AI agents. And I think that's just a much less sexy sell versus AI right now, especially vis-a-vis all the price action that we're seeing. All that said, I actually think the TAM is just absolutely massive for things like stable coins, tokenizations, and AI agents.

And I think as folks actually realize that, then crypto prices will start to cooperate. My only worry is that this is like not something that is going to take six months. It could be something that could take like multiple years. But I think it's absolutely happening, so I'm still quite positive on the medium term. As a total side on that, you know, we had kind of the broad market sell off yesterday. Bitcoin dropped below 58 and everyone was pointing to PCE. But I actually think Apple's announcement of a 25% hike in iPad and computer prices because of the price of chips was actually the bigger story, right? Because you had this day when, and, you know, maybe I'm digging too deep, but we had a day when PCE was up. And I think a lot of people could say,

you know, inflation will come down because the war is ending and gas will come down. But PCE, obviously, is like kind of the core measure. But then on the day when you see AI causing massive inflation instead of being deflationary or saving costs, I thought that might have been why the market was selling off. Carl and Gordon, I don't know if your hands are new or old. But feel free to jump in. This thing glitches all the time. I just wanted to jump in on what Brian said because he's right. And I think if your long-term thesis, which it is my long-term thesis, is that AI is the most

disruptive technology to ever come to humanity. The plumbing of AI is crypto. The entire AI economy, and I've written extensively about this, is built over crypto. And the currency of that economy is stablecoins. So if you don't lose sight of that broader narrative, yes, you give the spotlight right now to AI and it's sucking all the attention because I think we're in an attention market. It's sucking all that attention. But keep your eye on the bigger picture that the more AI continues to disrupt every sector of our economy, the more crypto is going to be integrated as the plumbing for that.

So the two go hand and glove. And I think if you forget that. I think far as the question, yeah, sorry, go ahead. No, no, no. I would just say the question there and the one that we've asked all the time, yes, it's less sexy, as Brian said. But also I think think most people feel like it's uninvestable. Like I get that there's excitement around stable coins and tokenization becoming the plumbing of the financial system. But if like retail can't participate in that, you can see why crypto is selling off. Right.

I think a lot of people just wonder, you know, they'll definitely use stable coins because it's a better, faster, cheaper technology. But that doesn't like get the blood flowing like potential 100x returns on an all coin. Because people miss this underlying. theory, you still need smart contract execution. Again, Clarity Act, you and I have talked about that and that we both have our concerns about whether it's going to happen or not, but tokenization is critical to this and smart contract execution does not exist on stable coins. Stable coins are a payment layer that are pegged one to one, but they still need high speed,

high throughput, contract-enabled layer ones to really carry that economy forward. So it's a lagging thing. I think that the alts that are building towards that are going to ultimately rebound. But I agree with you, a lot of things have lost their narrative and may not get them back because of what we're seeing. Probably you're just speaking my language here. I know. I think, you know, I share this in view.

If you look back in history, every single way of innovation, there's a lot of investors that come in, and most of them get burned because the technology will stay, but the companies associated with them might not. It's a very highly competitive dynamic here. And I'm not entirely sure that today, if you invest in a foundation model company, for instance, at a current valuation, you necessarily make out positive. for the reason that it's also being commoditized.

If you look at the open source models coming out of China and other parts of the world, that's just six months behind. It's not clear to me at all that these larger labs will retain their market power. But what I mentioned, you know, what would retain, I think, quite a bit of market power is the rails on which perhaps agent of commerce and agenda economy occur around. And there's a massive issue here. The issue is, you know, you have all these AI agents. We're very proficient, very intelligent, but they need to transact.

They need to exchange value. They need to be able to understand each other's motives and conduct services. And that requires things like identity, things like reputation. These are hard things to build, but crypto is perfectly designed for that. And absolutely, you need a layer one that could accommodate the throughput of transactions. By the way, Circle is building an arc, which is a stable coin layer one, that does allow EVM transactions that is built towards agentic economy. So we build up this whole agentic stock and marketplace for agents, kind of in hope for the rise of AI agents taking over more of the payment volume than human payments. But this is something not easy to build, and it also requires quite a bit of coordination between the largest players.

and we'll have to see how this evolved. But so far, it looks like, for instance, X-402, this agentic payment protocol for agent-to-agent to agent or machine-based payments, it's entirely being conducted USDC on various blockchings. And so we're pretty hopeful that this space will continue to grow. Joshua. Hey, hey everyone.

Yeah, I agree with a lot of the points. And I think the one that resonated with me, the most is around the muddled thesis for Bitcoin particularly, right? Because if you follow the threat of what we've all been talking about just now, it's really around like smart contracts and decentralized computing and decentralized identity, things that are stable coins, right, things that are building on the principles of crypto, but don't really tie to Bitcoin directly. And the fundamental narrative around Bitcoin still remains as this sort of like neutral collateral asset that people can use globally, and it's sort of like digital, you know,

internet native form of collateral, right? And that thesis, the reason it's like weaker now than it used to be, in my view, is that Bitcoin is the concentration of holding on Bitcoin is so much higher than it used to be historically. Like it used to be much more of a democratic, like, grassroots movement where a lot of small retail investors held a piece of this big vision, right? And now it's really dominated by a lot of like institutional players, the ETFs, the DATs. And I mean, just the recent price action is really, I think, directly attributable to like fears in the market around these large holders, right? In particular, you know, the largest Bitcoin data, right? That that is, the market is basically pricing in that traders are going to

test the resolve of Michael Saylor and his desire to keep accumulating Bitcoin. And the only thing I think in my mind that's holding Bitcoin here is the fact that equities and other risk assets are trading so well. If all of these other risk assets were to experience like a 10% pullback and it's entirely possible with like one and a half rate hikes being priced into the curve and the fact that the Fed put is maybe farther now than it used to be. that risk assets will have a meaningful sell-off. And then if Bitcoin does break this level,

I'm almost certain, like, there will have to be some de-risking in some of these debts to support the cap structure of these debts. And that's what the market is pricing in right now. That's why these downside moves are so aggressive and slow to recover. That was thorough. I agree with a lot of that.

And I think that the elephant in the room, I think, is still a lot of the Bitcoin treasury companies, as you guys have, multiple of you have pointed out. Michael, go ahead. Yeah, I just wanted to say, like, I think one of the narratives that's missed for what's going on right now is the fact that, like, take a look at, like, what Google's doing. Like, there's a huge thesis coming out of 24 that all these companies would be spending money to put Bitcoin on their balance sheet. But now all these companies are reinvesting in building out AI capabilities. So I think there's been a divergence of money into a place that was

kind of unexpected based on the thesis. I don't really buy the narrative that SpaceX is like draining liquidity from the market because there's been tons of things that are performed really well right through the SpaceX IPO. I think it did for a week. You know, like I don't think it is. I think it did. You know, you saw Bitcoin sell off. You saw tech sell off the Thursday and Friday, for and then I think the market proved that it could sustain the liquidity of SpaceX and here we are. No, I agree. But broadly, like, I just think like there's a huge change in spent. Like people are reinvesting in their businesses. People are raising money. It kind of went against this idea that all these companies were going to be building out these

huge Bitcoin reserves on their balance sheet because they would rather spend their money on other things. So I just think there's huge utility in the usefulness of these blockchains. but in terms of like what a lot of this cycle was prepped up for and what was built around was this idea that people were going to be spending a lot of money to purchase these assets and put them on the balance sheet. And I think AI coming out of nowhere just gave a lot of companies in their use case for that money other than just buying Bitcoin. I think that makes a lot of sense.

Gordon, are you jumping in? Yeah, I think that space, in fact, hasn't been fully felt yet, right? It's, they raise, what, 75 billion on the, you know, when they win the IPO. The vesting and the unlock will happen over the next six months or so. There's a lot to go. You know, even if Elon doesn't liquidate any of his holdings, plenty of employees will end up liquidating the holdings. The market has to absorb that.

That's in the hundreds of billions yet to come in terms of market absorption, maybe at a lower price. But that means somebody's on the margin choosing, okay, do I want to buy SpaceX? at a somewhat supposedly discounted price versus do I go in and scoop up Bitcoin and other assets. So I think we had to yet to see, you know, there's a lot of, is there a wave of API, or IPOs coming? And, you know, there's a lot of liquidity that needs to be reallocated. I wonder how many of those are going to get delayed as the market reality kind of sets in. I think didn't open AI say they're going to delay a bit?

I really wasn't. I just think I saw the headline, but. which makes a lot of sense. Amateo, I think you were lifting your mic before. I don't know if that was an accident, but I saw it there. Yeah, hey, Scott. Morning. My raise hand feature has disappeared. Yeah, I mean, this platform is the glitch, glitch master.

It's incredible. Yeah, I mean, I think there's been some really good takes here. I think that the absolute laundry list of obituaries, the pure bearer euphoria, the massive wave of likes and engagement on anything crypto negative. I'll say this. I haven't been this excited as dollar cost average in a while. And I don't think that this is done. I don't think that we're through the full breadth of this sell-off and these issues.

but I think that we're reaching a place where we can start looking at this and start to prepare for what happens when the momentum swings the other way. And I agree that in the short- This space was downloaded via spacesdown.com. Visit to download your spaces today. We might be looking at some tighter monetary policy. I don't think we're too far away from us getting into a private credit crunch around all of these AI investments that also correlate with us having hit absolute peak AI euphoria

on the downscale of that and the ability to subsidize this with credit and with raising starting to struggle. And I think ultimately, as this starts to happen, we're going to start to see kind of a new landscape develop. And I wouldn't be with this momentum. You know, we've had, when it comes of like alt coins. It's been very challenging, of course, but we've had like four and a half years to address and, and, and destroy kind of all of the thesis and all of the issues. And it's not that they're not real. I think they're very real. But I think that the, the, it's very easy to say that these things need to do XYZ when there's just not momentum and the cycle underneath its direction. Because I think once it does, there's going to be a lot of excitement around

where this fundamental infrastructure has been built the past four years and what it can do and what it unlocks. Yeah, I think so there's just something interesting that I was thinking about as you were talking, which is that we're all having these conversations about not thinking that the bottom is likely in, that these things have to unwind. And seemingly all the takes pretty much. Either people are, I guess, they're defending sailor or trying to clarify things, or you just think it's a death spiral and it's all over. But I was talking about this sort of thinking about it as I was riffing on my show this morning. I haven't seen anybody talking about the fact that, you know, people keep saying there's no easy way out. Isn't the

easy way out if the market just kind of floats up from here? Nobody's even considering the fact that if Bitcoin just kind of floats up into the 80s or 90s, I'm not saying that it will or there's a reason to that like we wouldn't even have these conversations right now. I mean, am I wrong? You're not wrong. I mean, 100%, there's all sorts of arguments to why crypto's dying, where the easy way out around all of this is us just getting some traction in the right direction, including Bitcoin. Yeah. Should we even bother to talk about Sailor?

The dumbest story of the day yesterday was when I saw it widely, widely reported on crypto Twitter by, you know, random people that Sailor was under investigation. We all got suckered into sharing an ambulance chasing billboard of a law firm that was trying to find clients for a class action by sharing news that they were on an investigation by Rosen Law. If you take a look, I'm sure you all saw it, so it's worth addressing even though I'm probably giving them the billboard right now. But, you know, this is kind of like, you know, seeing a commercial for, like, have you, you know, are you coughing? Do you work near someone with asbestos? Call us if, you know, you've been exposed. But they're trying to create a class action lawsuit. and we're in the most litigious country on planet Earth

where you can sue anyone for anything. So I just don't want people to be fooled by a headline because I even saw reported that the SEC or DOJ were quote-unquote investigating strategy when it's literally a law firm effectively using us as free PR for a class action lawsuit that they're trying to maybe do. Carly, your lawyer, is that accurate?

Yeah, it is. That's exactly what it is. They're trying to find a client base. Of course, we've seen all the prior interviews, videos, posts from Sailor talking about the returns on this stuff. And I got to believe that a company that is teaming with lawyers and compliance personnel

is an SEC registered company. Certainly contemplated the possibility of that with every single clip that they released. He has a war chest. is perfectly capable of fighting a class action case if it should come. And I don't think it's going to play out the way these law firms think, but they make money on these cases and they'll continue to do this. We saw this during the mean coin cycle.

Same type of stuff was happening back then. So I'm not surprised by it. You know I was on the wrong side of some of those as we've talked about. Yeah. And look, I'm probably, what I'm surprised honestly about. it is given everything you just said about being such a litigious society. I'm surprised it took this long for the first firm to come out and do this. So the setup is perfect. The company's under a lot of scrutiny right now and how it all plays out for strategy. Of course, remains to be seen. But reminder, people, it is a correlative asset to Bitcoin. So, I mean, you just look at where

Bitcoin is right now. And if you believe in Bitcoin, then there's certainly a case to be made that strategy can recover from all this if Bitcoin recovers. And then this will be a distant memory and just something that was clickbait. Yeah, I think it's just strange that nobody's even considering the fact that QuickBote could go up. It's like that's a foregone conclusion that has to go down. That's fine. Really, really, really interesting.

Should we even, should we talk? I mean, Brian, listen, you're chief, chief strategy officer of a treasury company. How do you kind of view the broad environment right now? Yeah. Yeah, I think that it's a bit tough. I mean, obviously, there's a lack of interest. I do think that there are some treasury companies that are fortunate to be trading at NAV or above. For me, like the biggest impact of STRC is not this strategy implosion.

I don't think that's going to happen. You know, they've got $1.4 billion of cash, $50 billion of BTC to pay the preferred interest if they want. They have this get out of jail-free card where they actually don't. don't have to pay any of the STRC interest payments. Now, I think like it's not actually a get out of jail free card because they lose access to the preff market, but everybody talking about they're going to go bankrupt, they're going to have to sell all their BTC.

I think that's not true because they could just stop paying the Pref divvy. And they still have a $21 billion ATM on MSTR. 100%. People just conflate like no options with no amazing options. Yeah. Yeah, and so I think this is all really much more about their ability to raise. Like the effective yield on STRC right now is above 15%.

And they've raised 10 billion of STRC this year. So I think effectively what you're doing is taking the biggest buyer out of the market, at least via the same issuance means with prefishances that they've had this year. But I also don't think like it's such a horrible scenario for what they could do. So like for me, what I would focus on. is issuing equity at one time to both shore up the cash reserve and buyback STRC. And maybe buying back STRC is dilutive to Bitcoin per share. But on net, when you count the accretion from the prefissuans, it's actually positive.

And then they actually, if you think about it, they went out and they sold something at $100 a par. They're buying back at $75. It's a pretty great trade. Plus, it pushes the price closer to par, which helps solve that issue of them, maybe wanting to issue more in the future. and it decreases their dividend obligations or semi-obligations. And then the other thing I do is like if you can issue at one time,

then you could shore up the cash reserve, which would also instill more confidence. So I don't think either of those two things would be that horrible. And so I actually think like those two things would go a long way to instilling confidence and removing a lot of this fud around strategy. Anybody else want to jump in there? I'd just add that I think I think that the the net crypto community who's really upset and frustrated with Sailor I don't think it's necessarily completely misplaced I don't think that they are out of solutions here I don't think they can they're stuck I think there's ways to work their way out of this but when you have a lot of these Bitcoin OGs that we're really focused on this being sound hard value transfer that had this opportunity to really represent an opt-out of the system to be having so much

Bitcoin consolidated and just having all this risk built on top of it. And then Sayloran podcast talking about that he'd like vibe coded, financial engineered this into the making. I mean, I think it's frustrating. I think it's upsetting. I think that's why the pitchforks are out and everyone's losing their mind. I don't think it's necessarily the end of this thing. But I sympathize with people's sentiment of, you know, where we're at today.

And I do think we need to find a cohesive solution to get this market in the right direction with this looming. Because it's heavy. It's heavy. I think Trump needs to just fire off a new meme coin, get it popping, you know, maybe like Barron or something. Let's fucking go. Yeah. I mean, obviously, like, Saylor is the godfather of this industry and has been a massive, massive innovator. I think one thing that they missed or maybe a lot of folks miss is that all accretion is not created equal.

So, like, if you issue equity when your stock's trading at a premium, that by definition increases your crypto per share. To me, this is the highest quality form of accretion since you have no financial obligations to your equity holders. Move down the curve. You move to issuing prefs. obviously that also issues your Bitcoin per share, but it's now lower quality because you have these semi-pref obligations that you've now created. And then obviously what we're seeing now is there's this negative feedback loop where, you know, if you do want these things to trade close to part, you have to raise the yield in exactly

the wrong time, you know, when your asset value is moving down. And then obviously the last way to increase crypto per share is like you can issue debt. And to me, this is the lowest quality form. of doing it since anyone can really issue that. Maybe a treasury company could do it at better terms, but it obviously comes with the ability or the obligation to pay interest and principal back. So I wanted to point that out because I think like they obviously originally started doing this via accretion from issuing equity and then move down the quality curve by issuing prefs. Yeah. And also like I think isn't there an issue, Brian, with that nobody can seem to calculate

what is dilutive or not at this moment, right? Because you have this kind of like loose MNAV calculation, and I don't think people can even agree on if strategy is trading at a premium or what that premium is. So everybody then has an opinion based on a different data set on what should or shouldn't be done, right? I mean, you see this consensus number. It's like 1.22 premium to NAV or whatever,

and you know, that he said he shouldn't be issuing above that. But if you consider that number differently, maybe he should. I mean, it seems to me right now, I have no idea what he should do. This is way more complicated. But it just seems to me right now, there are a lot of options that even if they're very short-term dilutive are not that bad moving forward unless things get a lot worse.

I mean, couldn't he just issue a couple billion in MSTR right now? It would be dilutive, but they'd still be up on the year on Bitcoin per share and then go buy back STRC. I mean, they showed a willingness in the past. He said he would sell STRC to buy micro strategy. could you do it in reverse? Yeah, I think you make a great point, and this is now getting into some sort of philosophical argument.

But if your strategy, would you rather issue equity at two times and use it to buy Bitcoin when BTC's at 125 at the all-time high, would you rather issue it now roughly around one time and be able to buy Bitcoin at 59K? And I actually think, like, you might be better off. Like obviously your BTC per share accretion will be lower, but you're getting a much better entry price. And so you can make an argument. And then when you start to get into a productive asset like Ethereum or Solana, could you even argue that like you can buy it below NAF?

Because there's some sort of payback period with the staking yield. And so what I'd say is like, I don't think anybody is doing that yet. But I think like there were all these rules that used to be like hard and true. And you can never break. like we'll never sell a treasury asset and you go and look at everyone's filings. And all these stats are selling a little bit to cover their operating expenses. And now you're seeing strategies start to sell a little bit too. I think they did it for very different reasons.

I think they wanted folks to actually add in their BTC reserve as something backing the STRC prefs rather than proving to the market that there's some value out there. Yeah. The SEC needed to see that. I don't see it any other way. Yeah, but I also don't think it's like too far-fetched to see them selling here, even if it is slightly dilutive to Bitcoin per share. And, you know, I actually think it could be a net positive if it helps them with the STRC situation

or even if they use it to buy some Bitcoin to get better entry price. Yeah, I mean, that's, I guess it's kind of how I just take issue with a lot of the analysis, is that because I guess we live in a social media where every move is analyzed in real time, if something is dilutive for a week, it doesn't mean it's a violation to the overall long-term strategy. And I'm not saying this specifically to them,

but like if you zoom out, if anyone looked at a Bitcoin chart, you expect that even if it's going up and to the right, there's going to be massive volatility and changes in that, you know, and huge drawdowns. And so like if a treasury company does something for a couple weeks that's slightly dilutive, but the trend is still in the right direction and it shores things up. That seems to be a rational thing, and you can't judge them on

what they did just that week. I don't think you can expect every single move to be non-delutive or to add Bitcoin per share, I guess, is my point. Maybe I'm wrong. Yeah. And I mean, just another thought experiment, like, let's say they're trading at 0.8 and BTC's going to quadruple over the next two years, like, it would be best off to issue as much as they could at point eight, buy a bunch of BTC and see a quadruple. And so even though that would be dilutive, like their stock would massively outperform because the treasury value, especially on that new BTC would go up a ton. So I don't think like all these rules, you know, I think like everybody assumes you can't break these rules, but until someone does. So I think like there's definitely

weighs out of this. And I think, like, they'll be fine. Yeah. My question is, is like, what is micro strategy do that makes it more valuable than the Bitcoin they hold? Yeah. For me, I think, like, the big thing is the ability to monetize the premium when they get one. I look at these things like a bank. So bank makes spread income, which is the difference between the cost of deposits, the yield on the assets that they have, which are primarily loans. Micro Strategies to say, way they earn spread, which is the difference between the future appreciation of Bitcoin and their cost to capital. But banks are valued far less, right, than the assets they hold. I mean, if you

calculated, right, this MNAV calculation for a bank, it would be at like 0.001 or 0.01. So, like, that's always been my question. Like, this idea that it even should have a 1MNAV, like, to me, it's like, well, what is actually happening at the company that deserves it? Like, everything seems to me, like everyone talks about like, oh, when it has the premium, but like what actually makes it deserve the premium? I think they trade higher at a premium to their net asset value. Am I wrong? Take a look at it.

Well, it depends what you look at, but like how many assets does BlackRock have compared to the market cap? Look, I think this is getting way too complicated for the average retail to understand, right? Like, let alone, you know, agreeing on what is actually the MNAV and how do you actually calculate this? You know, the original thesis is maybe some set of institutions, some set of, you know, retail holders just can't purchase Bitcoin for one reason or another. Maybe for regulatory reasons institutions can't purchase. I think now that's not really true, but there's still some hurdles, right?

Like, you know, I think there's today, if I were to go out and sell that, explain it very simply. Look, do you want to hold your assets on chain in which sometimes you are? you know, certainly security risk and personal risk, and even through exchange, we've seen the risk to that, but do you want to hold it to a treasury company that kind of takes care of for you, and you can see it, you know, in your regular brokerage account. That, to me, is kind of like a selling point to the retail folks today

than kind of going through MNAP calculations and, you know, the insurance terms. Yeah, to be, The whole reason to own a treasury company, especially a BTC treasury company, is the ability to monetize a premium when you trade at one. Now, we can debate whether or not you can or should trade it a premium. Like my personal view is in a bull market you can and will generally trade at a premium in a bare market you can and should trade at a discount. But just the ability to monetize that because when you do trade above NAV and you issue equity is by definition accretive to your crypto per share. And so that's something that you can't get within an ETF. I think this is a big reason why micro strategy has still more than doubled the return of Bitcoin

since it moved to this strategy in August 2020 without having very much leverage. It was all from the secretive issuance. They measure this in BTC per share. I think in 2024, 2025, they literally created $26 billion worth of free Bitcoin for shareholders. They call it BTC yield. And so that to me is the whole big reason. And then obviously, like you're kind of a levered play on Bitcoin because of this. And because not only does the value your stock change with the value of your treasury,

but also you see your multiple moving. So you can see multiple expansion in a bull market, which will throttle that increase in your treasury in terms of your stock price. But you can also see multiple contraction in a bear market. So that's what you're seeing right now. I think that's why there's stocks underperforming Bitcoin. But in general, I do think that treasury companies and micro strategy can add a lot of value on top by monetizing that premium multiple when they have it.

This sounds pretty much just like a leveraged play that's harder to understand. Like Gordon said, like no one can really fully understand all of these terms, the NAV, MNAV. I know it's above my head, but it's really simple to understand. I want 2x leverage. I want 3x leverage. I want 1.5 leverage. And that's available pretty broadly. Admittedly not to the consumer as easily.

But it's available pretty broadly through defy. So maybe that's its only kind of nugget is you get a leverage play easily accessible to the consumer. That's admittedly, though, very hard to understand. Well, you can't even get like a consistent calculation on what the MNAV really is. I mean, like, even like if you go to strategies on website versus you look at some of the other trackers that track MNAB. Like everything's different. Like, I don't even know what the MNAV really is at the moment. So like that's like goes back to like if one of the value props is,

like the premium, like we're there's not even a good definition on what the premium is right now. No, exactly. Just to be clear, I am steering clear away of any of the products from strategy personally, whether they completely implode or not. I'm not going to try to take a complete guess, but I know financially I'd rather just hold Bitcoin. And if I wanted to go leverage, I have access to defy and I know how to use it. So I can leverage up using Defi. But the product going through Tradfai Rails, which is one of the reasons why I got into Bitcoin in the first place, is to avoid these corrupt rails of stocks and equities, securities is what I'm 100% avoiding, including the ETFs, but at least I get the value of the ETFs of the layman that doesn't have anything

but any trade account. But from the viewpoint of strategy, way too complex, too high risk for my appetite, and its alternative is much clearer and much more available to at least people in my demographic. The thing that I don't understand, sorry, the thing I don't understand is how do you You spend $64 billion on Bitcoin, but not stack enough cash to create a dividend product for at least three to five year runway in absolute cash to pay that off when you had the experience of Sailor that's seen so many market cycles was at the forefront of the 2008 crash and has been through this so many times. and has seen yield be the destructive element that destabilizes economies. I mean, he's such a smart guy. This is the piece that really loses me because none of this would be a concern if the cash balance was sitting at $10 billion to stabilize all of this.

And it seems like that should have been the end goal before ever creating a dividend yield product that didn't have a runway to support it that was going to put. the underlying debt at the point of being a seller. I mean, that's just, I just don't understand that. I mean, in a way, it's easy to understand. The higher of a dividend you offer, the more stock you can sell, because you can convince people to buy it, the more stock you can sell, the more Bitcoin you can buy. But it's kind of a negative flywheel effect if the price of Bitcoin goes down.

Like I said, it's just leverage. And leverage sucks. When price goes down, it's great when price goes up. I just think all of those, like I totally agree that. I just think that's all like on the idea that like you just have this MNAB. Like the MNAB is the thing that like no markets are going to control. And that's the thing that jackhammer is this entire thing in terms of how much money can be raised. Like if that MNAV, if there is not like a construct that this thing has to stay at one.

And I have a feeling that's probably why they want to keep it out one so much on the website. And it's different places and other places. But like if that goes away and like there's an erosion there. I mean, like, nothing can really stop that. Like, that can just erode in a road. And, like, what I'm hearing is, like, I totally get it. Like, when there was no Bitcoin ETFs and you couldn't get Bitcoin in any trad-fi way, like, yeah, there was like a bit of a value proposition just to gain that proxy exposure. But I just feel like that whole idea is almost completely blown up.

And if not, it's going to get even more blown up in the future because soon you're just going to be able to buy spot Bitcoin at any brokerage. And then you're really just taking the. taking the risk of like, what is the value of having Michael Saylor hold the Bitcoin versus you just holding the Bitcoin directly? And like, unless there's something else there other than, oh, it can trade it to premium, like it seems to me like it's really hard to wrap my head around why it would ever trade at a premium even at like a 0.5MNAV. Like even that is like, is that worth the risk?

Like for a lot of people, probably not. They'll probably just choose the Bitcoin ETF. I would say that I fully agree with you. You're taking risk around the valuation on the multiple when you buy this. I'd argue that it would cut both ways. So in a bare market, you're likely to see multiple compression and a bull market multiple expansion. Yeah. And then what I'd say, I forget my point.

Like if Taylor was doing something, right, like that was like outperforming or there was a perceived value. there that made holding MSTR equity like, okay, well, I get this over, right, like what I would normally get holding Bitcoin and there was a premium there. Like, that would make a ton of sense. And I think there's been a lot of calls from the community for Sailor or strategy to do more to define value around that business because they want a justification for that MNAV to trade where it has to trade for it to work. So, like, that's what I've been waiting on.

And I think that's what a lot of people have been waiting on. It's like, okay, what is going to be the implementation here? to justify where that MNAV needs to trade. But I think that's the slippery slope because the market's going to determine what that should be. And like events like this, although I completely agree with everyone here, like the market's going down. It's a bare market. Of course things are going to be more fearful. Of course there's going to be harder to get demand.

But like you still need to like understand like that's totally out of everyone's control. And if the market keeps losing confidence in sailor, which I get right now is probably going to be the fear, that MNAV is just going to keep going down faster and faster. Yeah, I guess what I'd argue, and this is what I was going to say is absolutely, these can trade at a discount and it can be very material. Companies can push it back to par. So if you sell your digital asset and you buy back your stock, that's the way to push it back to par. And by the way, you're just playing the opposite side of that issuance trade. And this is accretive to Bitcoin per share by doing this. And so there is a mechanism to push the company to trade back to one

times. And then why you trade above one times, I think there's a bunch of different analogies. To me, like in that bank account analogy, like if the market thinks that Bitcoin appreciation is going to outpace the company's cost to capital, you effectively earn a spread, not just this year, but in future years, you present value all that, add it to the nav. That's how I think about these companies, why they can and should trade at a premium when the market has a positive view of future Bitcoin appreciation. I think you can also think of it in a way of like if you expect them to trade at a premium, then they will trade at a premium. Yes, it's a little bit self-reinforcing. But this debt math is real when you can trade it two times and you issue equity. You're effectively

selling a dollar for two. All that goes to your existing shareholders or is tantamount to buy in Bitcoin half off. I could run you guys through the math and how this works to really solidify it. But that to me is like if you think that they're going to be able to monetize that premium, then you're willing to pay that premium for the company. And in bull markets, people generally think that that can be the case. Guys, I hate to do it, but it's time. We need to wrap. Gordon, you can go ahead and I'll jump it up.

I've got a final final. No, I'm just going to say, but there's no way that sailor would end up selling Bitcoin below that. That's just counter to the narrative. I agree with that. Well, guys, this is actually one of my favorite shows we've done in a really long time. I think everyone on the panel absolutely incredible and had the perfect topics

for the speakers that were here. It's because we got in a good morning, Scott, and you know it. It's because Dave's not here. Just kidding. It's because Dave Mario ran and anyone else is supposed to be here in theory, the ghosts of which, you know, Dave does a great job and is here

and he covers my ass regularly, so deeply appreciate them. That's obviously a joke. But yeah, you guys were amazing and I really learned a lot. So I hope everybody else did as well. And we'll be back, obviously, on Monday. Thanks to all of you. Everybody out there, give these guys a follow.

Everyone on the panel obviously is here because of that very reason that we learned from them and they have great insight. So, you know, you can take that off the show and off and back to their ex accounts and learn a lot as well. Thank you, everybody. Have an amazing weekend. We'll see on Monday. Bye.