The Wolf Of All Streets - Bitcoin Holders Have NEVER Been This Convicted

Episode Date: July 20, 2026

In this episode, we discuss why several experienced market participants believe Bitcoin may be in the final stages of its correction despite widespread bearish sentiment. We explore the latest macro backdrop, Strategy's recent Bitcoin sales, why some traders are turning bullish again, and the catalysts that could reignite the next leg of the market. We also dive into the growing debate around open-source AI, its implications for crypto adoption, the future of Ethereum versus Solana, and whether blockchain infrastructure stands to benefit from the rise of AI-powered agents and the next wave of institutional adoption. Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, good morning, everyone, for those who care, since crypto markets don't seem to be very interesting to people during the middle of the summer. But whatever, we're here, so we may as well talk about it. We're seeing a very interesting dichotomy going on, and as the market kind of, you know, trades in these incredibly narrow ranges. And, you know, from my perspective, I've been saying the same thing. So I don't really have a whole lot to add other than the fact that it feels like we've bottomed. It feels like there's this notion of smart money buying when others are selling and not really much happening. All I'll say is it's now three weeks since strategy has bought a Bitcoin. Actually, they've sold during that three weeks.

And they're raising cash and feels like a pretty good contrary indicator to me in terms of what's actually happening. So, you know, curious, you know, what people are thinking. But I will say that some of the most thoughtful bears, when I say bears, that's really not a right appellation, some of the most thoughtful traders who sold the top and were bearish and calling for significantly lower are changing their tune. And they're changing it for basically the reason that if everybody expects Bitcoin to bottom in September, October, it will certainly do so beforehand if in fact it's not dead. And so that's sort of where we're at. And I don't really have a whole lot to say on the state of the market other than to say that pretty much every other trend, every other macro thing is positive.

So it's really a question of what's going on. And I don't want to call on people. But whether it's we talked about last week, you know, the BIP 110 debate, which I think most investors don't really care, to be honest. I think that a lot of people are very passionate on the topic, but I don't think people terribly care. So, you know, I guess we, I guess we look to see it. I mean, I don't want to bring up the topic that has me the most annoyed from this morning yet. But, you know, I'll keep that one on my back pocket. Anybody care?

You know, Adam, you know, I know you laugh at people's, you know, apathy of what's going on, you know. Bro, everybody's on vacation. And, I mean, this is what it is, you know. I don't know. I think, you know, there's kind of the more interesting conversations. I don't know if you saw Pop on your timeline today was more about potentially banning open source. I don't know if that, it could be just rumors, but I don't know. This is the kind of open source AI getting banned or some sort of restriction on, you know, the top level open source AI. I don't know. For me, this is the most interesting conversation happening right now. I think you're right. And I think, by the way, to call that asinine, I don't think, I think that's unfair because it's so much worse than that. Yeah. I mean, it's the ultimate protectionism, but protectionism in such a bad way for your own companies and people, right?

I made the point this morning on Macro Monday with Scott that people don't understand that, yes, I mean, certainly open source. AI is not good for Open AI and Anthropic. That's absolutely certain. But it's unbelievably good for the rest of the economy. Of course, dude. I mean, yeah. And I use an example because I know it's true. I've seen it, right?

You know, Corn Routes, you know, Ian built a using an open source AI. He built a customer support bot that's multilingual, that has trained on, that we obviously trained it ourselves. they trained it themselves using, you know, that open source AI and their own information and the labor savings that it can, that it offers and the level of productivity that it offers compared to, you know, typical, you know, support tools is massive. You could extend that throughout every single service and knowledge business. Of course. And it's, well, you say, of course. No, maybe not, of course, because it's maybe not obvious to people who are running kind of, I don't know, traditional businesses, right? It's not really,

obvious to them yet. It's obvious to me because like we're in the AI space and we run, I don't know, 20 some odd, you know, max plans from, from Anthropic, right? And, you know, those 20 max plans, I mean, obviously we can afford it. But the idea that I wouldn't be able to use one, which is 150th of the cost is, I mean, it's so asinine. It's like, and you know people would just work around it. If it's open source, we'll just download it. Who's going to tell us this, you know, what are they going to lock everybody up who uses these? I mean, it's, it's, it's truly insane to even have the conversation, uh, in some ways. It is. But it also, but it gives you an idea of the panic from, you know, who cares about this? The entire VC complex

that has all the money tied up in these big private companies that they want to IPO. Yeah. And, and by the way, uh, If you don't think that there are lots of politicians, both in administration and in Congress, who aren't involved here, then you're not paying attention. I mean, it's the most obvious downside of how bought and paid for our politicians writ large are. And this spans party, by the way. This is a, this is bipartisan. Absolutely.

They're all this way. I mean, I give Dario credit. He's spun in an amazing tale. Like he really has done this incredible fear created a really fantastic narrative around fear and how incredible his product is at the same time, right? That honestly it's been like this masterclass in storytelling of both sides, right? Oh my God, it's basically it's AGI. It's, you know, this is the most powerful thing in the history of the world. we need to regulate it immediately to create the moat.

You know, it's like, it's such a fantastic narrative he's spun. Yeah, except for here's the problem with that, Adam, and I think you know this, is if it truly were AGI, the regulations wouldn't work. It's not going to work anyway, right? But, I mean, if Skynet exists, Skynet's getting there, and the regulation's not going to stop it. Do you know what I thought last week would happen

that I don't think got covered very much, and I think it was very telling. We've been being told now for months and months and months and months and months that there's this massive shortage of compute. And every big company is building massive data centers and needs more compute, needs more compute, and then last week, META announced that they were selling 10 billion of compute to Anthropics.

Why does META have 10 billion extra of compute unless they suddenly realize that they're going to lead a lot less compute than well the meta situation is a bit it's interesting I mean they spent a lot building out compute for the metaverse that turned out to be complete a complete waste and they also try building their own yeah but that's a tiny percentage of what's needed a minute but they're they basically that's more of an outsource lease back deal than anything else that's fairly but but how do they have extra compute If everybody is so short of compute, right, we've been hearing everybody's so short of compute,

everybody needs more compute. And now all of a sudden, META has all this extra compute. Well, everybody who doesn't have compute needs compute, I think it's more along that lines. But yet... No, it doesn't. No, it doesn't. No, no, no. The one of the most, if literally...

No, no, no, the ones who don't own the companies in the world is compute. The ones who don't own the compute, right? Well, Anthropical owns plenty of compute. Right? Well, they lease it, but yeah. I mean, but now think, but now the bottom line is meta does not need compute. Play it out over. Meta has extra compute that they don't need that they thought that they did need.

Why don't they need the compute they thought they need? Because they weren't using it as well. I think that's a question. We don't know the answer. Well, I mean, that's true. I mean, one would think, but the logical is because they don't do it as well as the companies that they're leasing it to. And so they're going to lease it back, right?

you know, depending on what they're using it for. I mean, look, the thing about compute, the thing about everything about it is there's an iron law of economics and that's at play here, is it will continue to get more and more efficient and get more and more competitive. The real limiting factor isn't compute per se, it's access to power and the ability to get that power into compute.

I mean, I assume that that, Adam... Well, those are the same thing, right? You don't get compute without power and you can't. Yeah, well, yeah. So, yeah. I mean, it's, it's sort of true, but not, not really. But apparently, Meda's got all the power it needs, right? It's selling it.

I mean, yes. I'd be interested to say, look, the market has certainly taken that to heart. I mean, most of these companies involved in this have been cut in half from their highs. They're down 50. It's more than 50% off their highs, quite a few of them. The infrastructure plays. So, you know, we'll see. I think it's more of a secular thing.

But I think that when you said nobody noticed, I would say that anyone who's an investor in name that hyperscale and name that infrastructure, they noticed it. Yeah, I mean, when that Kimming model came out, I think I was listening to a pod, somebody said, you know, if Anthropic was a publicly traded company at the time, it would have lost, you know, 30% of its value, right? Because, I mean, yes, people, it's hard to switch, right? But it's not impossible to switch. I would argue actually like, you know, using something like, I don't know, QuickBooks or, you know, some sort of like, you know, SaaS product is harder to switch than an AI model.

And when you're paying $50, whatever per million tokens with Anthropic, if somebody's going to give it to me for, if an open source gets it to me for 50 cents, like eventually everybody's going to switch. Like, people are not, there will be ways to switch that are, you know, just easier, faster. And I just, Dario, everybody knows this. Like, I mean, yes, people will stay with the, with the American models for now. Because there is kind of this gray zone and hooking up an open, open source model is maybe difficult to some degree. but it's not a difficult, it's not a difficult decision when it's, you know, that many X's cheaper. I just think it's, yeah, I don't know. It just, it seems like these, these big companies are are real, really in trouble. And the quickest way to prevent that from happening is to create

artificial modes by government. I mean, it's just, this has been obvious now for like six months at least. And I don't know how it plays out in the end, but, uh, it's, It would certainly be bad for America and Americans if this went through in any way, in my view. Yeah, I mean, look, I made the point this morning. I'm curious what you think about this, Adam, which is that regulation aside, let's just assume that this fever dream doesn't actually get traction and can't pass, right? Because it's really, you know, it would be difficult for it to do so. Look, our Congress can't get anything done.

So, you know, they can't get clarity done, which makes so much sense even to, most, privately to the Democrats as much as the Republicans. If they can't get that done, doing something so obviously anti-American as banning industries and creating a monopoly. I mean, look, they've done that before, but they did it in health care, and they did it surreptitiously. They knew what they were doing, but most people who voted for it didn't. The trend toward better and better and faster and cheaper open source models is very

bullish for a lot of companies, but it's also likely to accelerate the development of the agentic economy. And more and more agents and more service industries will use it, thereby necessitating the use of crypto-based rails for commerce and probably savings, investing, finance as well. I'm curious. I mean, do you think I'm out of my mind by saying that? I don't know. I think most of what we've seen over the last year is that the idea of what I would call like public blockchains has basically been killed. Like any real company has created their own blockchains to run their stuff. So I think it's definitely gone that way.

I think the thesis has not played out as native crypto people would have hoped. Not to say we haven't had tremendous traction and movement, but still, When the choice between, you know, hosting my stuff on Ethereum or building my own blockchain has come up, companies have chose their own blockchain. Or, and not all of them. Robin Hood. Yeah, but dude, it's basically, how much, what I'm saying is no value has gone to Ethereum. Other than awareness.

Great. Everybody's aware that it's built on Arbitrum and it's on Ethereum. Great. How much fees have passed to Ethereum? Yeah, people were saying the same thing about Facebook as it give it away for years. Oh, Facebook will never invest money. Nobody will ever pay for Facebook. And, you know, it's a trillion-dollar company.

If you have users, if people love what you make, people love- Hold on a second. Hold on a second. What are you talking about? What do you mean? Wait, I thought you were talking about, like, games and stuff built on Facebook that eventually all- No, I'm talking about Facebook itself. Facebook itself did not monetize for years.

So saying that Ethereum hasn't monetized. So monetize, therefore it doesn't have value, in my mind, is not a relevant argument. You're comparing a social network and people on a social network? I'm comparing... To a monetary network? What do you mean? What are you talking about? I'm comparing activity.

If you have users using your product, name me something that's gotten to billions of users that have... Well, there aren't billions of users on Ethereum. I mean, I can't even say there are hundreds of thousands of users on Ethereum. Show me the transactions that tell me there are billions of users. of users on a thing. No, how many transactions does Robin Hood have? Yeah, but dude, that's what I'm saying. It's not on, there's no, nothing is being pushed to Ethereum as far as fees or anything. Total fees I saw it the other day was like, again, again, I agree with you. There is no fees, but saying that because today there are no fees, there will never be any fees is, I think not

relevant. I think that's a silly argument. You want to give it away for free. You want people to use it. You want to maximize people using it before you start charging them to use it. Well, I don't disagree. Is that the plan for Ethereum? Is that the play? I think the plan for Ethereum is to get people to use it. Then that play? And I think they're doing a great job. Then why would they ever, why would we more people? Why would they be moving away from the L2 strategy then? I mean, I wouldn't when they were making no fees and pushing the L2s, I was like, this is actually a great. I thought it was brilliant. So I agree with you. strategy. Why not do more of this? Why not worry zero about fees? Just get everybody building.

And then you can rack up fees. Then you can move fees once everybody's on top. But it, but it seems like Ethereum has gone away from that strategy over the last, you know, six months. And by that, I mean, you know, Vitalik specifically has gone away from that strategy. Yeah, I think that we saw that the adoptions of the L2s broadly weren't what they thought it did. Look, obviously, Ethereum is still evolving. It's super, super early in all of this. But I think clearly they've got a very substantial lead, and it feels like the lead is getting bigger every day. Wow.

I don't know. I don't know. Yeah, I'm a big, I have, I'm a big eighth holder. It's probably my biggest crypto holding, but I don't know. At some point, I look for like real users, meaning users of the actual chain. And I'd be much more bullish on Salon in that sort of case where I actually know people who use it. Eath is just so lightly used for everyday use cases. And L2's aside, like, is Coinbase has coin.

Coinbase, which is the biggest winner in L2, like, who's using Coinbase? I mean, it's so so lightly used. I just, I don't know. I'm more bearish on it. I just, I don't get the, it doesn't pass the vibe. check for me. Well, here's the thing. And I'll be a little bit contrary here, but let's understand how investing actually works. How do markets actually work? And one of the things we know about markets is they're narrative driven and they're cyclical. They go up, they go down. When you're at a point,

like I've been the first person. I probably, you know, back, you know, a year ago on this show, I would tell people that I can't believe that we have a market with so many assets that clearly have no freaking value at all being worth hundreds of millions or billions of dollars. And I've been saying that for a long time. And by the way, I still think that's true. I think there's a lot of crap out there. But to not understand that people will value things based on narratives for decades, not just years, is just mistaking. So now, understand that that and then ask yourself the question, what happens when the cycle changes and people start looking for investments and looking for narratives? If Ethereum really is being used by all of

these people, as Lou talks about, and it's not just Ethereum, there's a bunch of other things going on. You mentioned Solana. There's a Zcash narrative. There's, look, there's narratives all over the crypto space that are all in the doldrums. They are all nowhere. What happens when Bitcoin goes on a bull run and starts pulling everything with it. And I do think that will happen, by the way. Yes, do I hope, want to see the crap not move? Yeah. Do I think that every zombie coin is going to go back to all-time highs?

Absolutely not. I think quite a few of them never will. But that said, do I think that a lot of these things can catch a bid and that AI and open source AI in particular is going to, to be talked about as one of the reasons and the notion of agents using various crypto, you know, rails and use cases to do their business is going to be relevant. Yeah, I do. Mostly because do I think it'll necessarily mean value to the holder? No, it won't. But you have to understand that catches a bit. I mean, yeah, that's just a thought. Brian.

Hey, morning, everyone. Yeah, I was just going to say on the point on Ethereum, I think that some of the move away from the roll up-centric roadmap has been due to L2s being in a better position to capture value. I do think the phrase has been used that L-2s are parasitic to ETH value capture. I think, like, my understanding of where Vitalik is coming at it from is that L-2 interoperability is proven tougher than originally thought, which is fragmenting liquidity in state. And then I do think that L-2s have been much slower to move to further stages of decentralization. and like having decentralized sequencers. So I think that Vitalik's original vision of this roll-up-centric roadmap hasn't actually come to fruition.

And then I think like the meta-conversation that we're talking about is, are L1 blockchains going the way of TCPIP, which is just a protocol that's free? Or are they more like Microsoft Windows where you can obviously extract a lot of rent and capture a lot of value? I think the true answer is it's too early to tell. No one really knows. My personal opinion is I actually do think they will be worth a lot. I think that there are massive, massive network effects when you've got a big user base, you attract more developers and you have more applications, which then feeds on itself to attract more folks.

I think we're not fully there yet on the privacy side, but I think this will make state more valuable and interoperability a lot harder when you can't just have cross-chain transactions quite as easily. And so I do think, like, generally as these are used more and more, and we're so early, you actually need the gas token in order to pay for your transaction. So as there's more activity, there's more demand for the token, the token should rise. So as kind of how I look at it. I thought I'd share that.

Wait, are we getting bullish on Ethereum again? God damn, you guys are trying to make me a little bullish, man. I'm all in. I'm with you on Solana. Yeah, I think Ethereum, obviously, is the most well-known. It was the first to do it. I do think they're constrained by their original design decisions, and they can't really change that at the L-1. Otherwise, it would impact backwards compatibility, hence the L2 roadmap.

And then I'm with you. I think that Solana is basically the first, second-generation smart contract blockchain. So it had a massive step up in performance, but it's also been around since 2020 to have all these really great network effects. So I'm with you there. Yeah, I mean, for me, it's, and being that we're also building on Salon, I mean, we're building on Ethereum too, but I just see the traction is so much more on Salon and just real users, real people doing real things. I just don't, you know, I know a lot of people still on Eath. I know a lot of, you know, developers on ETH, but I don't see nearly the use cases and people actually using the chain in the same way that I see on Solana. Yeah, but, I mean, whether it's one or the other, the assets themselves are incredibly highly correlated and are going to stay that way for quite a while.

So it really, it's funny, you know, we will talk about it and debate it. I'm more on the Salana side than the ETH side from an asset point of view for exactly that reason. but the truth is it doesn't matter. You know, days when one of them is moving significantly, the other is generally tied to it. I mean, the correlations are just ridiculously high among most of the, you know, basically not just among that, but among a bunch of the rest of crypto.

And in fact, the correlation to Bitcoin is crazy high. The only asset in crypto that may be slightly uncorrelated is e-cash. You know, and even there, there is correlation. is just not as much as, it's just less because it has been more idiosyncratic. But, you know, we put the title about Bitcoin holders in here. I'd like to pivot back to that for a second because it is fascinating that here we have the third straight week where Micro Strategy announced no Bitcoin buys and it's still holding in and doing relatively well, not plumbing the depths.

And I've seen more of the thoughtful, I don't want to call them bears, but people who turned bearish at, you know, above 100,000 and are starting to become are now flipping and saying, okay, wait a minute. You know, the cycle is getting much closer to the end than not. I mean, there have been a few people in that, that, you know, some big accounts on X, some ones that I actually, and some people who I actually respect, you know, are saying the same thing. which is the same shit that I've been saying for two months, which is that the 60,000 level feels like it's a bottoming process. And I use the word process because it's not immediate, but it definitely feels like this. And I laughed and I see Mike down a grain of salt in the audience. I mean, you can certainly request to come up.

I'd be happy to have you. But it feels like one of the great contrary indicators is Sailor has been pretty good over time at selling the top. I think what or buying the top excuse me I think that he's selling the bottom here not really selling but he's doing it for a reason I don't think it's intentional but it feels like that and Brian is that an old hand or a new hand I can't tell on this that oh old old hand okay I mean yeah since since you're here you what are your thoughts on Bitcoin at these levels I mean obviously it's it's low vol it's obvious sitting around here but it's been no it's been definitely not doing what a lot of what a lot of the popular narrative claimed it would do? Or do you think it's just the combo before the storm? Yeah, I agree. It feels to me like we've bottomed.

Obviously, we were hit with so many different negative catalysts that kind of all came at once. It took it 50% off. It's all-time highs when all these other assets were at or near their all-time highs. I do think that AI continues to steal all the attention and all the capital? I do think that something else negative could always come up, but it's really hard for me to think of something that is an idiosyncratic risk that, you know, may come to fruition. I do think like we're probably going to just continue to bounce

sideways unless we get a catalyst. I think that the Clarity Act could be that. I still put quite low odds on it, but I do think that there's a chance, one, because a lot of folks that are very plugged in to D.C., like Kristen Smith, the Salana Policy Institute, thinks that were well positioned to pass it and number two, because I do think it's in the best interests of the country. So Clarity Act could be that catalyst. The other thing that I'm watching out is, can we get this new source of flows? I think that the ETFs, when they came about, the spot ETSs in the U.S. were obviously brought in massive amounts of new money, and in my mind was the big reason why

BTC went from 35K when BlackRock filed all the way to 70K,000 after several months of good flows. And I think like we need another massive source of demand. The only thing that I can think of that will be even bigger than what we had would be government buying. And the U.S. keeps talking about they were going to put out of announcement on a U.S. Strategic Bitcoin Reserve. I don't know why it hasn't come out. I don't know why, you know, maybe that is no longer an option. But I think like if for some reason we can get that and, you know, the administration certainly has a financial incentive to push that through, I think that could actually be exactly what we need and start this international war for Bitcoin. So my view is kind of sideways moving with the macro and equity markets

unless we can get one of these big positive catalysts to come through. So I'm going to go to Jamie and Lou, but I do want to debunk a couple things you said. The Bitcoin market is so small relative to global capital flows that this notion that there's no potential money that could come into it is just nonsense. I mean, it really is tiny. And it doesn't take much in terms of capital allocators out there, you know, whether those are RIA flows or fund flows. It doesn't matter. I mean, there's just Bitcoin is tiny.

And so, you know, if we had Matt Hogan from Bitwise on, he would tell you all, it doesn't, wouldn't take very much. The ability for flows to overwhelm and surge the market higher is very real. And it doesn't take governments to do it. Now, governments aren't going to do it until the accounting rules change. And as David pointed out this morning on Scott Show, it took gold wasn't even it wasn't even treated from an accounting point of view the way that people would want it to be as a financial asset as opposed to just something you have central banks hold until 2019. So expecting Bitcoin to be approved by both FASB and Basel is small.

But that said, anyway, I saw Jamie and then Lou. Yeah, hey Dave, how's it going, man? So, yeah, I agree on a lot of the points you were talking about with Bitcoin. I mean, we got, you know, about 10 weeks left if we're looking at the site for the cycle theory, fomo kicking, right? And I think it's possible that investors will likely try to front run that cycle theory. You know, I'm probably 80, 20, either the bottoms in or the downside benefit that you can gain relative to the upside, the risk reward doesn't add up.

So, you know, I'm interested to see what's going to happen over this next, you know, a couple months. But as far as the MSTR, you know, them selling today, I was looking at the 8K, they're at about $3.2 billion. They have about $800 million of obligations that are due to the end of the year. And then next year, you know, they have about a billion dollar of converts due on top of the 1.7 of obligations. So, you know, this selling is going to continue and they're going to have to continue to increase their USD reserves because in 2020, they have about almost 5 billion

of converts that that have put potential. So I think this is going to continue and, you know, whether they're going to balance selling, you know, issuing more shares and doing some more dilution or they're going to sell some more Bitcoin. Hopefully as the price goes up, it will sell less Bitcoin. But this is going to have to continue just, just based on their yearly obligations. I think it's bullish though, and I do think that we've seen some movement with Ethereum relative to Bitcoin breaking out of a trend. And so hopefully this is a mid-cycle correction and some more acceleration will happen.

Last cycle, Ethereum led and then Bitcoin followed to new all-time highs. So that's kind of how I see the markets right now to add to the conversation. And first, what do you think? Lou. Yeah, I was just going to mention, you know, that, yeah, sorry about that. I just wanted to mention that I hosted a webinar on strategy last Thursday with three of the smartest Bitcoin analysts around. And, you know, it was highly informative.

You can watch the replay. If you go to my Twitter, you can see I've posted the replay of it and seven highlights. And the most interesting thing that came out of it, you know, in my mind is, you know, the Lance Vatanza, who's the Titi Cowan analyst, who's strategy's main banker. When he values strategy, he looks at their digital credit business, which he thinks is going to generate $8 billion in the next 12 months, and he values it at four times that revenue. And so about a quarter of the value that he sees in strategy,

today is the digital credit business. It's on top of, you know, right now it's trading into one nav, you know, 1.0 MNAP. So, yeah, I'm becoming, you know, the more I learn about strategy, the more bullish I become on it. And I think that that people don't understand, you know, what that entails, right? You know, it's like the, I made the point that my reason for holding some strategy in my portfolio is the bet that at some point Bitcoin will be treated, not just Bitcoin, but just, that assets more universally, but Bitcoin in particular, will be treated as pristine collateral based on its liquidity

and haircut edits based on its liquidity and volatility. That opens up an enormous source of potential revenue and business for all the companies that are in that space that actually know what they're doing that have a critical mass. If you don't have a critical mass, it doesn't help you. And these digital asset treasury companies that are just basic me-toes and wannabes will all, basically collapse under the weight of their management structure.

If they're paying, you know, if you're paying your management team, a lot of money to do nothing, eventually you're gonna lose. And I think that's what we've seen. But to me, that's the kicker. That could be years from now. I don't know when it will be, but it is important because I don't think that,

I think that when Microstrategy was trading at a 3MNAV, that was, in my mind, that was why at a, At a one, it's by definition not being priced at all. So there's a call option embedded there that I don't think is being valued. And that's quite interesting from a Bitcoin perspective, I think. I mean, Mike, I see you up here. Yeah, so I'm trying to, that this is, I want to say something that's insightful and makes sense. I think that the beatings will continue until the morale improves.

What do I mean by that? Look, look, look, if you're an MSTR shareholder, and I'm a large MSTR shareholder, the stock was over $400. It peaked at $457 in July of last year, one year. So you're down 75%. So there's many people that calculate, including myself, all kinds of metrics here. Do I think that it's great that they increase the USD Reserve? Absolutely.

I think that's the reason why STRC was so successful. I think they're at the point right now of trying not to do any more harm to the MSTR stock price. And for the shareholders, what I would say to them, again, like myself, is that they have, there's two things. We need a big buyer of MSTR. Why did I always like MSTR? Because I knew they'd be a big buyer of Bitcoin.

I think they're, you know, for lack of a better idea, I think they're the, they are the big They are the biggest buyer of Bitcoin. So when somebody says, you know, the guy from, that was speaking about, we need something to change, yeah, we need to get back to an STRC watch party where it's at $100 per share and they can buy Bitcoin or it's MSTR. They acquired whatever. MSTR shares was used to require whatever, about 160,000 Bitcoin for the year. And they've doubled their Bitcoin per share over the past two years.

They're the biggest buyer that we're aware of. Bitcoin. And so that's why am I rooting for them? Sure. But I think that that's where these guys have to have to fix this. And I think they're going to be more thoughtful. I would point to people to watch the two latest videos from Fong, the CEO of Strategy, saying that they did something that most companies don't do. He basically said, you know, in retrospect, cash balance sheet was more important than we thought. That's what he said. So I mean, David, that's where we stand with this. I can we can do more analysis or I can do more analysis of what this all means. But if the stock price doesn't go up for MSTR and STRC, we're kind of in a holding pattern.

That's a takeaway. I think this is a good thing what they did, acquiring more cash. But until the stock prices go up and that's probably largely dependent upon Bitcoin, let's say going to 70,000, I think that's where we stay. Brian, is that a new hand? It is. So my thought, the whole reason to own MSTR or any treasury company is to get more crypto per share. Last, I calculated it since micro strategy first bought Bitcoin in August 2020,

it increased BTC per share at a 65% Kager. Historically, they had only really done this when they were trading at a premium. So when you trade above one times on MNAV, you can monetize that for shareholders by issuing equity, which by definition is accretive to crypto per share. I think that what we saw recently was a repurchase authorization, which tells you that they are able and willing to actually monetize a discount now. So if they trade below one, you can play that multiple the other way, and you can repurchase your stock to increase your Bitcoin per share, even in a bare market.

Now, fully agree, you need good risk management. So if BTC falls significantly and stays there for a long time, there is risk. I think you're also taking risk around the multiple. So say you buy it at two times and the multiple falls to one time, obviously, like, there's that risk there. But I think over a long period of time, they've demonstrated the ability to increase Bitcoin per share. And as long as you believe there will be good stewards of risk management, then I think you will end up being better off buying MSTR than you would. be just buying the underlying Bitcoin yourself. Okay.

Go for it. Yeah, so agreed on most of your points. And by the way, I'm not trying to challenge you. I don't want to take that I'm being argumentative at all. So please take it with this. I think the part where the Bitcoin Treasury space missed things is that they had to be proportional to what strategy was doing. And that's where you get MNAV-led people.

a great and a good example for this is that you can have two companies with the same mnav and the amount of bitcoin that they own can be off by a factor of 20 or 30x and that was one of the big mistakes and and i will take a shot at jack mallars here when he asked that question a month ago he's like wait a second there's two mnavs and mnav can go down while bitcoin per share goes up now you just can't say that as a CEO in a public in a public in a public for them. You just can't. And I think that's part of the problem. They all looked at MNAV thinking, well, MNAV is two things. It's a capital formation metric. If I sell expensive shares, meaning the MNAV is high, it's highly accretive on a per share basis. But in terms of capital

stewardship, not particularly good. If you buy a stock, two MNAV and it drops to one MNAB, but Bitcoin continued to go up. And that happened for strategy in 2020. And so people are like, wait a second, Bitcoin per share went up. And in all the scenarios, yet the MNAV went down. And that was the source of Jack's question. And I think that was problematic. So we have a bunch of problematic things happen. Strategy has the, there's like two exceptions. But strategy has the most Bitcoin per share, 200,000 sats per share. Right. There are other companies with sub 1,000 sats per share. So it's off by a factor of 200x on a per share basis. And if you get a stock that trades below $10 and then below a dollar in the U.S., that is, it kind of screws things up from a public market's perspective. And I think people miss that whole part. So what I'm saying to you, what you just said is that if you look at MNAV,

whether it's EVMNAV or EquityMNAV, both of them need to go in the right direction, which is up. And your Bitcoin per share can continue to go up. and yet the stock can still go down. And like I said, the biggest validation was Jack Muller saying, I don't get it. And I think that's the part where investors are like, this is screwed up. How is it they bought, they've almost doubled their Bitcoin per share for strategy. And yet the stock is, you know, one-fifth of where it was in October of 24.

Does that make sense what I'm saying? Well, it... Sorry, go ahead, Brian. Oh, sorry. I was just going to say it totally does. I think generally what we've seen is in a bull market, you've not only seen the value of their treasury rise because the underlying cryptocurrency price is rising, but you also generally see multiple expansion. So you kind of get this double whammy. I'd actually argue there's three ways to win because when they're seeing multiple expansion,

they can do more and more accretive equity issuance to increase that Bitcoin per share even more. I think in a down market, you see exactly the opposite. So I think that's completely fair. The value of the Treasury falls, you see multiple compression, and then it makes it harder for them to do accretive issuance. I think those things don't always prove true over any one single period. So that might be what you're referencing. To me, the bigger issue with micro strategy that I don't think the market might not fully

appreciate yet is I don't think that all accretion is created equal. So when you issue equity, when you trade it to premium, by definition, you increase Bitcoin per share. This, in my mind, is the highest quality accretion. You have no additional financial obligations to any of the equity holders. When you move down to issuing preferred equity, yes, this increases your Bitcoin per share, but in my mind is lower quality because now you have all these pref dividend payments. You can obviously choose not to pay them, but then you're kind of shut out of the capital markets. also has this negative feedback loop, which underlying BTC falls,

then people question the ability for you to actually pay that preferred dividend, and so they're going to demand a higher yield, and then your dividend obligations go up if you increase that, if you try to make this thing trade at par. And then the lowest quality form of accretion is if you issue debt, because obviously that will increase your Bitcoin per share, but it comes with obligations that you have to pay that interest in principle back when it's due. And so to me, if I had any critique of micro strategy and I'm a massive fan,

they're sailors the godfather of this industry, but it would just be that do you think that they've moved down that accretion quality curve, if you will, by moving into prefs. So that's a good point. And thank you for this conversation because there's relatively few people that I can have this level of conversation with. And I agree largely with what you just said. I think this brings into an interesting dynamic. Their current net leverage is 6%. So as they increase cash, their net leverage goes down when looking at the pure debt, which is the converts.

And then the amplification part is we're talking about the prefs. And I think this is the part from their website that's hard for people to realize is that if you were to go look at the credit page, their BTC break-even is 3.24%. And that's calculated based upon taking the total BTC reserve. And by the way, I don't remember all these numbers. I just go look at the website as I'm talking.

So they have $54 billion in a BTC reserve. And then they say the BTC break-even to pay all the prefs is only 3.24%. So I think where a lot of people miss this are like, hey, if we issue preps at 10 to 12%, we have to, Bitcoin has to grow at 10 to 12%. in order for us to service that pre-dividend obligation. But what strategy says is, no, no, no, no, we only need 3.5% on a 54 billion dollar Bitcoin stack. And those two numbers are a mismatch in somebody's head. So I get that you understand this, but most people are like, this doesn't make sense at all

because it's the value of the total Bitcoin stack. So does that make sense what I'm saying, the mismatch that most people think up with this? Yeah, it totally gives up your sense. And then the next thing that I said, this was my theory, I don't want to get your takeaway on this, was that when they paid off the convert, they picked the highest convert, the 672 that was in 2009. I think the second order effect of why that was problematic, they looked at it that, hey, it's trading on a discount, we can wipe out 50% of it.

It was a $3 billion convert. And they said, we can buy it a discount. It was the highest one. So it's the most accretive because it's the highest conversion price. I think that also signal to the market that they don't think they're going to hit $6.72 a share in 2029. And on a $40.50 stock, or actually, let me be more precise, sorry, implied volatility of almost 90%.

They really need a stock to be at $900 to $1,000 in 20209. So that way it would convert fully with shares instead of cash. So do you think the market punched them when they bought back that convert? not because it wasn't a good use of the cash, was because they were also signaling the loss, not having confidence that they would be at $900 a share in 2029. That's one of my theories. Yeah.

So that crossed my mind as well. I mean, I basically thought it was probably their best use of cash for increasing BTC per share. I can't remember exactly what it was, but it wasn't like that, that material. So obviously, maybe that was a little. disappointing to me the biggest reason why they got hit that day that they announced it was they touched the cash reserve like my sense was like that was supposed to be there to support

st-trc dividend payments um and then obviously they used a whole big chunk of that to buy back the converts and so i think that uh that was unexpected and so that to me was like the big reason why they got hit but probably maybe a bit of both yeah so and david just trying at any time So, Brian, from your view, let's assume strategy sold about 15,000 Bitcoin for about a billion dollars in cash. And I ran the buyback scenario on MSTR, assume they buy back between $90 and $100. That would be Bitcoin, that would actually increase Bitcoin per share, even though they sold, even though they sold Bitcoin.

That's counterintuitive to probably almost 99% of people's thought process. because you acquired Bitcoin at a high MNAV, you run the ATM in reverse right now. Do you think that that would have a, let's say they did sell a billion dollars worth of Bitcoin, which is only, like I said, 15,000 Bitcoin. Do you think that, not a billion dollars, sorry, sorry, it would be 150,000 Bitcoin.

No, it would be 15,000. From that, do you think that it would help the stock price more once they start buying back, Do you think the announcement itself would help more than just the signal for that? Or do you think they actually have to buy it? And that's only what would be reflected in the stock price? It's a good question. I'm not too sure I'd have to think about it.

And another thing I've been thinking a lot about is almost by definition, the way that they've been working is a recipe to buy pie. And what I mean by that is they can raise the most money when they're trading at the highest multiple. They trade it the highest multiple when we're at the tops of the bull market. And so, you know, I think they trade it two or three times when Bitcoin is at its all-time high. And then that's why Saylor tends to, and then they just put the money in the market. So I think it is a fair question. Like, would you rather raise at two times when BTC is at 125 or would you rather raise at one time when BTC is at, you know, 60. I kind of think it gets you to the same exact place.

It's just, you know, it's not showing up in increasing BTC per share and it's showing up in appreciation of your Bitcoin. And so I think we've had all these truths in the Treasury space that no one would ever dare violate. Like, we will never sell a Bitcoin. I think that there's also something to be said for like, you know, could they actually sell below one times? I wouldn't put it past them to maybe at some point eventually do this. I think like if you're paying, you know, low to mid-teens on STRC, maybe you would be better off just issuing at a slight discount to one time and calling that your cost to capital. And if BTC appreciates, you know, faster, maybe you're better off. I think it, I don't know, has so many thoughts. It depends on

your benchmark too. If your benchmark is BTC, then you should be solely focused on BTC. per share. If your benchmark is S&P 500 and you really do think Bitcoin is going to throttle, maybe you're better off just issuing at one times or slightly below and getting as much of it as you can. So I don't know, a lot to think about. I think, and again, thank you, Brian. I think the interesting takeaway from this is that it became so much more complex, specifically this year, from what it did in previous years, was that Q1 and Q2 of 2026, Q1 was the second best quarter for Bitcoin accumulation in nominal numbers, and Q2, 2026 was the third best, just in rank, out of 25 quarters.

Q4 of 2024 was almost double, whatever, it's about 160,000 Bitcoin, I believe, in one quarter. But it was the most accretive because it was acquired, for the most part, above. of a 2.5 MNAV and hitting at a 3M nap. So that was the most, not only in nominal numbers, was it the biggest by far, but it was also the best from an accretion perspective on Bitcoin per share because it traded at a high MNAF. Now at Bitcoin low, people are like, you should buy Bitcoin when it's low, but as you correctly said, we have a low MNAV. And it's like, would you rather acquire the same Bitcoin at a 2MNAV when the price of Bitcoin is twice is high or at a one MNAV when the price is low, I think the most important takeaway that they

have proven is that if Bitcoin's in a bare market, if it's 50% off the all-time high, strategy still has complete access to the capital markets, $3.2 billion in cash that they acquired. In fact, because they used $1.5 billion, they would really be at, if they just hadn't bought back the converts, they would have whatever, $4.7 billion in cash. So I think their access to the capital markets and a bear market has been proven that that exists. And I think this is where we are right now is that they have this massive optionality,

but the stock price for both, MSTR and SCRC has to go up. And I think how they slice that right now, that's what I was saying in the beginning, is kind of like now, hey, let's not do any harm. We have to get these, what's the best way to do it? And I think that that is, I think there's, which would you prioritize,

or do 50-50 on STRC versus MSTR. I don't know if there's an answer that's easy to come to. I think it's really hard to do that right now. And so for you, if you were running strategy, would you prioritize STRC over MSTR and buybacks? Yeah, I'm not sure. I agree with you. It's gotten much more complicated.

It was pretty simple before. I think, like, finger in the air, they kind of only used to issue equity when they were trading at 1-6 of NAV or above. And obviously started to trade below that. I think they flooded the convert market so they couldn't issue just straight up converts. And I think they had to figure something else out, which is why they moved to Prefs. And I think like they were just essentially making a simple bet.

Like it's obviously more nuanced than this, but the BTC appreciates more than the dividend payment on the Prefs. That was probably a good trade. And they obviously believe that to be true. But, yeah, I mean, I kind of think like now, I don't want to say they're stuck, but they kind of have to continue to try to push SCRC back to par or at least tell everybody that they are because I think they need to maintain access to the capital markets. Although, I wouldn't be surprised if they pulled back on it a bit here. I don't know that you want to just continue to issue as much as you can,

just because they do come with those dividend, not obligations, but dividend payments. Yeah. They probably should be. I mean, I want to disagree with that because I don't think they should manage. I think that them positioning STRC as a bank account and claiming it was like stable was a classic mistake, maybe not quite as bad as opening a two front war, but pretty damn bad because it's not what the product is.

I think that Bitcoin goes to 90,000. St.RC will be trading at par, full stop. They won't have to do a damn thing. And I think that their mistake when you talk about the converts was completely misunderstanding the impact on the market psychology of Bitcoin of their actions and what it could do. And if Bitcoin, because people forget, Bitcoin was in the middle of what others would call a bear market rally when they did it. And it allowed for people to create the death spiral narrative and push the whole damn thing down.

And it was very badly timed. You know, not understanding market psychology. Everything, Bitcoin prices is the only thing that really matters for a lot of this stuff. And, you know, why do I say that? Well, because the last three weeks is insanely bullish that all of the Bitcoin doom loop narratives have not happened. and that Bitcoin has continued to grind higher without them buying any. And that, to me, matters, and it matters a lot. And if you're listening to this show and you want to understand,

why do I think Bitcoin bottomed at around 60 and why do I think that the price is higher? Well, because the buyers are, is not strategy. And when strategy was the only buyer and it was moving higher or staying there, people were predicting and said, well, look, we would have already seen the bottom of the four-year cycle, you know, way lower, like in the 40,000s of STRC hadn't pumped so many billions of dollars into Bitcoin. And that may very well be true. That may very well be true. But it is pretty clear that there are other buyers out there and that the market is not being only supported by them. And I think the strategy continued to make that. Now, as far as the what else could they do

to increase Bitcoin per share, I mean, frankly, there are lots of things they could do that they haven't done yet. And they have some pretty. smart people there who understand the option markets, but just to put it in perspective, I mean, they could sell puts and, you know, they have the stack to do it. They have the cash support to do it. And, you know, by doing so, then they grow their cash at the same time as being able to buy Bitcoin cheaper as opposed to only buying it when it goes higher. There's lots of different ways they could structure option products to use that market, given their Bitcoin holding that they're not doing. I don't have, Mike, I'm not like you. I don't talk to

them so I don't know what they're doing, but I can tell you that they have come nowhere close to exhausting capital structures. And if you want to understand who is the, why do I say this with with absolute certainty? It's the company that may be the single most sophisticated in the use of derivatives in the entire world, you know, in the capital markets is Berkshire Hathaway. And I don't think many people appreciate or understand that, that they've used their cash and they've used their stock positions over the years extremely well with derivative products to augment their income. I would be stunned if strategy doesn't move in that direction. And so, yes, there are many things they can do that they haven't done yet. And the markets are creating the opportunity

for them to do so. So people who fall asleep on it and don't think that critical mass matters, they literally miss that. And a lot of the Bitcoin Treasury companies may have had that as an idea, but they haven't. And they don't have the critical mass to do it. So it is worth understanding that. I always thought they'd be very well served to turn the Treasury into this productive asset. And I also think it would be accretive to the multiple in addition to throwing off a bunch of cash.

Like whether it's using derivatives or something else, you know, Tom Lee from BitMind Emersions out there saying that they make an Ether. 3% native staking yield on Ethereum, slap it 20 times multiple on it. You can kind of triangulate it and add it to the nav. They should trade at 1-6. I don't think you should trade at, you know, based on something that investors can get themselves. But I do think that if you can generate some alpha on top of that, and in the Bitcoin space, the alpha is zero or the native yield is zero. Well, that's not true. I want to make it very clear.

There are Bitcoin as pristine collateral. has the potential to generate the same yield that Ethereum does through staking. And I'm happy to explain that privately to anybody who cares, who has a stake of Bitcoin, because there's demand for collateral that doesn't cost as much as, I mean, that is half the expense as it is to borrow dollars, for example. And as long as you properly haircut it in risk management, there are lots of things you can do with it. So it's not because Bitcoin's not gold.

Bitcoin, you don't have to pay men with guns to, you know, verify it and hold it. I mean, Bitcoin can be used intelligently as collateral, you know, not the way that Celsius was doing it back in the day because, you know, that was crazy, but there is demand for it. And it's not a zero asset. It should never be looked at as a zero asset. And if you're holding it as a zero asset, then you have opportunity cost around it. And so that is something that's important. And as I said, that that requires, it's a much more sophisticated conversation,

but it is something that anybody who is running a Bitcoin treasurer is a lump of Bitcoin and wants to figure that out, happy to have that conversation. So I'm going to put this up in the nest in a second. So I think one of the more interesting things is that, and by the last time I spoke to anybody at Strategy was at the Bitcoin Conference. So I haven't spoken to anybody's strategy, unless publicly they comment on my post or I comment on what they're saying. And they write back, whether it's CJ or Rohan. But for the most part, one of the things that Fong said, and I find this to be the most interesting part, is that they were kind of blindside.

So on May 11, strategy stock was that it was basically that day, it had hit a high of 1-19. So it was closing under $200 a share. Basically, the stock price has been halved since May 11th. And we're really not that far away from that. We're, what, 10 weeks away? And from when that happened. So I like to say back in the old days. And they didn't have, and on that day on May 11th, Bitcoin was hit a high of 82,000.

So people are like, oh, wow, it looks like, you know, the bear market is not going to drop more. It looks like we have this in control. STRC is phenomenally successful. And then for something, something happened on, I'll have to go figure out what happened. Something happened on June 1st, specifically on June 1st where Bitcoin, you know, had then already lost $12,000 and it was a low of $70,000. And then by, and then it bottomed out on June 6th and it went down to $59,000. And so again, this is history. But the interesting part was that Fong said, you know, they didn't have visibility into Bitcoin dropping from 82,000 down to 60,000.

And I think pretty much, I think most of the market didn't have that visibility. And I think what's interesting is that they said that. They didn't have that. So arguably, the biggest buyer of Bitcoin did not have that visibility to that happening. Because then, you know, they said, well, you know, if we, he basically said, if we knew that Bitcoin was going to drop from 82,000 to 59,000, we would not have done. the $1.4 billion repurchase of the convert. That's basically what Fong said last week. And I think that if people are like, wow, I wish you hung out in circles with people that own a lot of

Bitcoin because you'll kind of know what's going to happen. I think the takeaway from what they just said is you could be the biggest public buyer of Bitcoin by far and not know that the price of Bitcoin could drop in whatever 30% in a matter of a week or two. I think that that's the price of Bitcoin could drop in, whatever, 30% in a matter of a week or two. I think that's a problem I'm trying to say. From May 11th to June 6th is three weeks, and Bitcoin drops by 30%. And they didn't have insight to that. It's not critical of them. It's just saying that it seems like it's very hard to predict what will happen in a very short period of time.

And my point was that when they did the converts, they were, it was very badly time from the market. And they completely missed how important. And I don't know how they missed that actually, you know, because of how relevant it was, but how important having the cash reserve to pay, you know, 18 months to two years of STRC dividends. I don't know how they missed that because the market really did care about that. And that was pretty obvious. And then the knock on effect of so many people believing the Bitcoin's price was dependent upon STRC continuing to accumulate or at least not reversing is a big deal.

And so that's what happened. And, you know, it is, it is always concerning when there's that much, that much of an asset is dependent upon this other thing, these other people. You know, it's key man risk, it's whatever you want to call it. That's why I think the last three weeks has been so important because it kind of proves that Bitcoin is not dependent on strategy, right? And that's why I think it is relevant. But, you know, I guess we'll see.

I mean, we're, we keep in this summer doldrum stuff. I mean, you know, we're still pushing back up against 65 again. And it's like, well, whatever. I mean, you know, this is a bottoming process. This takes time. And so very little would surprise me. Yeah. So I'll say this about Bitcoin.

So I bought in at sub-2,000, like 1936, I think was my initial buying in 2017. And then it almost hit 20,000, then dropped down to sub-4,000. and this is the weird thing is that it's always moving the goalposts. And so at the 2021 high was, it never broke 70,000. It was at 60. So we're just a shade below the 2021 highs. And it's hard to be, it's like, well, you bought this asset. And it goes, and then it drops back to the previous, a little bit below the previous

all-time high four years ago. And then it runs up. I think, I think the highs haven't been as high as we'd like to see. we saw a lot of diminishing returns on that. But the lows seem to be hovering around the previous all-time high. So what I would say to people that if you're new to this, what I would say is at some point in the future, we will retake the all-time high again. It should go way above that. And then if it drops down to $126,000, we'll be on a call like this. You'll probably be on with somebody else and be saying, oh, God, you know, Bitcoin's down at $115,000. It's below the pre-eastern.

all-time high, when are we going to get out of this mess? And I think that's the part where you, you know, this is my third real Bitcoin winter. And you're like, I'm like, I'm bummed about the price. But then the reality is, why am I bummed? It continues to go up and up into the right. And as long as it goes, it doesn't trump significantly low of the previous all-time highs from the previous cycle. I think that that's the trend going forward. The only question is how high does it go when we hit the all-time highs. I think that's the part where everybody kind of missed in the last cycle in 2025. And the other thing that I'll say, if you look at the charts, it appears in each cycle,

it gets front-runned. Because in 2020... Well, the smart money looks to be front-running it today. Yeah, that's the way it looks. And the other thing is that, you know, people are like, you know, it was a four-year cycle dead. You know, this is the first cycle where we had... the spot Bitcoin ETFs came out, whatever, January of 2024, where we retook the all-time high before having. People like, what do you just, would you just say? I'm like, well, because of,

you know, when they launched the spot Bitcoin ETFs, we're going to get approved. We got notice of that sometime around October, November, because Grayscale was winning the lawsuit against the SEC. And then we saw this, all these listings for spot Bitcoin ETFs coming out, specifically with Black Rock. And then they went live in January. So we had this frenzy in January of 2024 before the halming that we retook the all-time high. So if somebody, that's where I say this front running continues. So if somebody said, well, we can't hit an all-time high before the next halving.

I'm like, you can just look at 2024. It's not that long ago. And it did happen. So. Yeah. Well, we'll see. I mean, look, we could go on and talk about this. forever but I'm going to cut it because we're at time and frankly I want to go to the gym and it

is summer so and it's beautiful day so I hope everyone enjoys we'll be back you know presumably on Wednesday morning and we'll talk about this more and maybe there'll be more to talk about but it is interesting times that's we'll leave it at that thank you Dave thanks all I appreciate you do have a good day bro thank you