The Wolf Of All Streets - GME Drops $1.3B on BTC! Why Is Crypto Ignoring It? | Crypto Town Hall

Episode Date: March 27, 2025

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Well, good morning, everyone. Can anybody hear me? Loud and clear. We can hear you. You sound beautiful. Yeah, well, my wife says I have a face for radio, so there you go. So, interesting morning. She's right.

Dave, again, your wife is right. Thanks, Gary. I I always count on you. There are times in one's career when you look back at moments and you know that they matter and you realize at the time that most people don't see it. I think this is one of them. You know, micro strategy has been I mean, Michael Saylor has been a zealot, a missionary pushing the industry and the industry is hung on his every word. But the one thing that he hasn't been able to do before today was convince others to really follow him. I mean, sure, there are our companies like MetaPlanet,

etc, who have put money, who are putting money as a treasury asset, but MicroStrategy made the leap to say, let's monetize aspects of my stock that I can monitor, i.e. the volatility of my stock, to be able to buy Bitcoin. And that sets up, I don't like words like flywheels or you know money glitches or perpetual motion machines Those are all bullshit, but there is truth to the fact that People like to gamble and the volatile stocks There's a value that they can monetize and therefore companies with volatile stocks can actually borrow via convertible bonds cheaper GameStop taking it from moving from, you know,

not just investing in Bitcoin as a treasury asset, but borrowing money based upon its own stocks volatility to buy Bitcoin is actually a big deal. And it's the kind of thing that we will look back on if it is successful, which I suspect it will be, as a sea change moment. But the market today is looking at it and saying, eh, I it will be, as a sea change moment. But the market today is looking at it and saying, eh, I don't care, Trump's issuing tariffs,

which might hurt the economy and may force more liquidity in the system, but somehow that's bad for Bitcoin. I mean, that's basically how I see it, which is I know completely different than others. I mean, Gary, I suspect you agree with that. And the last few times I haven't had a chance to get you up on stage to talk. I mean, what are

your thoughts? To Mike, your mic working yet, Gary? Yeah, look, I think this is one of many, right? We're gonna see this happen over and over and over again. And it will be the companies who their their future is not obvious right it's uh i mean i i look at game stock and go hey what's their business model at this point it's going to be a financial engineering company i think uh and i don't think that's a bad thing i mean to be able to pivot people talk about google and apple and the big boys. I see this as a mid tier, smaller.

You could have a thousand companies do this. That becomes relevant, I think, you know. Yeah, that's sort of my thought process is that, you know, there was a post from Justin Bonds, who, you know, he's not on here now, but I've done a bunch of spaces with Justin. And he criticizes Bitcoin's technology and I always tell him he's focusing on the wrong thing and we'll disagree and we'll debate and I don't want to put his point of view up without him being here to defend himself. But the post basically said Bitcoin will fail because all the cypher punks are getting out and

that's true. I mean it's actually undeniably true that Bitcoin holders, crypto, you know, native audience has been on balance selling to the TradFi buyers who perceive Bitcoin as something that is important as the world moves forward. And you know, I don't know, know, but it's hard for me to understand the other side or why that's a bad thing if you want Bitcoin to achieve, you know, parry, pursue with gold and beyond. I mean, to me, Gary, it just seems pretty obvious.

I mean, but it's funny, you and I did a space the other day and we got all this crap from idiots on X basically saying, well, what do you mean? GameStop is the most valuable company in the world. Its business model is incredible. And they don't understand that we were actually complimenting them. It was kind of funny. Yeah, well, but I think we'll see a lot more of this. And I don't think it's going to move the price, Dave.

Like I don't think every company just saying this is going to magically change the price. I know everybody wants that. It seems like this cycle is changed, right? That it started early and it's kind of slowing down. It maybe it extends. I don't really know what it's doing, but it doesn't look like the prior three cycles, that's for sure. Yeah, I look at it the same way.

There are a few people around here who are on the panel, who have looked at cycles and understand and are bemused by it. Look, I personally think that four-year cycles and halving were destined to become less relevant You know, look, I personally think that four year cycles and having were destined to become less relevant by the very nature of the fact that each having decreases the absolute level of the effect, right? You know, when Bitcoin went from 12 and a half Bitcoin per block, you know, down to, you know, six and a quarter or whatever the numbers were that is much bigger than when it goes from you know three to one and a half

and you know obviously I'm getting the numbers wrong I'm trying to make it obvious it's the kind of thing that you would expect cycles to become less and less important from that perspective of course you know the four-year election cycle is relevant and there's there's cycles that are relevant, seasonality, etc. But this whole four-year cycle thing is hard to credit being that big of a deal. What's a much bigger deal is an adoption cycle. That is what matters. The more Bitcoin that goes into the hands of people who think it's at a 90 to 95% discount

or more, those people aren't going to spend it, they're not going to sell it, and effectively they're going to demand higher prices in order to even trade it. So that's really what's happening here. And you know, look, that plays out over months and years, not over hours and days. And unfortunately, you know, we're on a daily show and a market that cares about what's going to happen in the next five minutes. And none of this has anything to do with the next five minutes.

Exactly right. That's exactly right. And so, you know, you and I look at this from a value perspective, and we've talked about this before. And look, there's a lot of trading that goes on. I mean, you want to talk about things that are important in trading? I think Ethereum at the 2000 level is at a pivotal point. I think that this upgrade, the Petra upgrade, either works well or doesn't. It's fairly significant in terms of

what the size of the validators will be. It's gonna get substantially more centralized. And there's a lot in here. The question really is, can they hold their lead? Because their lead has gotten eaten into by other coins. And that, to me, from a technical point of view, matters. But we have a couple of technicians up here. I'm curious, does anybody care or think about

what's going on technically in this market? Or are we just all in a holding pattern, everyone breathlessly awaiting whether or not Trump's tariffs are going to go in and the economy is going to tank, yada, yada, yada. I think even technical traders are kind of beholden to fundamentals here. It's just such a headline driven market with so much news risk and fundamental risk, it's really tough to look at a chart and say with any certainty what price is going to do. Because at the end of the day, if Trump says the right thing, then price is going to nuke. And if he says another thing, then price is going to ascend.

So I think, yeah, it's something that I've become more and more aware of in the last few months in particular, even more so than like the decision around the ETFs, which was another heavily headline driven phase in this market cycle. Even more so than that, it just really feels like this is one of those times where technical traders are just sitting back and watching the fundamentals and something that I really hate hearing, especially in this environment is something like show me the chart and I'll tell you the news or technicals matter more than fundamentals, which just drives me crazy even as a technical trader because I recognize that I just don't think it's true.

Yeah, it's funny. Yeah, Phyllis, I've seen a lot of what you said and I think that people get very antsy on the technical side when we're in a range, right? And ranges happen for a bunch of different reasons, but the most obvious reason for a range is there are buyers that are kind of at certain levels or being more passive and the sellers that react to that are also the same people that jump in and buy when they think there's a breakout. When you have an entire community trained to trade momentum, mean reversion is very hard for them to trade.

Well, it's just value at the end of the day. I mean, that's what the market does is it pushes price towards levels of value. And once it hits those levels of value, there's this saying that markets range like 70% to 80% of the time, and they only trend for the remaining 20% to 30%, whatever it is. Usually, when price is trending, it's a symptom of the asset in question being mispriced, because that's what the markets are. Everyone always says, oh, the consensus opinion is this. The markets reflect the consensus opinion at any one time. You can make the argument that, oh, if the asset is underpriced or overpriced, it's going to send higher or lower, but that's exactly what the markets do. They reflect the consensus opinion as to what value is. And that's exactly what

a range is. And I think that's something that I always think people get wrong. A range is just levels of price at which both buyers and sellers, both sides of the order book, are willing to engage because it's seen as some kind of fair value. And I think that's what's happening now to bring it full circle is that the Trump pump we saw in October, November, which brought BTC out of last year's range, this kind of like 60 to 70K range and pumped it up into this new range that we got from kind of like November to February,

which was like 95K to 110k-ish, we're seeing that pump getting retraced now. And to me, the thing that says the most about Bitcoin, about the market, is that speculators are agreeing that it's mispriced to the upside, is that it's expensive here. And that maybe the Trump pump that we's missed price to the upside is that it's it's expensive here. And that maybe the the Trump pump that we got in November to bring price to where it is now, or at least where it was a month ago, was was maybe slightly more reactionary than than people credited at the time. Well, that's certainly possible.

Sorry, something important to remember, when you get a little bit anxious in the chop or trying to decide whether we're at the beginning of a cycle, the middle of the cycle, the end of the cycle is when you look at Bitcoin's returns from an annual standpoint, they're incredibly good. But if you remove the 10 best days of Bitcoin's return over a four-year period, it cuts the annual returns in half. And so you're playing a really dangerous game, not being long. If this is a market that you intend to operate within. So there's a time and a place and traders want to trade. But if you're a passive holder, if you missed the 10 best days,

you cut your annual returns in half. If you look at data back towards 2017 onwards. So just something to remember for those that are trading this market. Yeah, that's absolutely true. David, you had your hand up before? Yeah, thanks. I was just going to say in terms of GME coming out, obviously you want another angle to sort of keep the vol in the stock. But as people mentioned earlier on, thinking about more widespread corporate adoption with respect to holding Bitcoin in treasury, the question here is, you know, are these going

to be strictly speaking passive holders or are they because they've got fiduciary duty responsibilities? Are they going to be hedging this in the derivatives market? You know, my bigger question over time is that as we get past the halvings and the 21 million tokens are all mined out, who's going to be setting the price at the margin if large names such as corporates are going to be holding the vast majority of Bitcoin? What's liquidity in the market itself actually going to be? That kind of sets me up to think back to a long, long time ago. I don't know if anybody's ever studied it or not, but if you went back to the late 1970s

and you had the Hunt Brothers, Nelson and Nelson Bunker and Wilbur Herbert, they tried to corner the silver market. It didn't work out too well for them because silver went up and peaked out at $50 an ounce and then it crashed right back down. Their concerns here in terms of market structure, if corporates become the vast majority owners of this, where is the price discovery going to be? What's the liquidity in the market going to be? And how much of this is actually going to be the derivatives market driving the pricing in the underlying cash market?

Well, OK, so you're this is in debate. We used to have something that we call a turnaround because your argument actually is very pro Bitcoin because you got the facts wrong. Yes, they tried to corner the market. They tried to do it via futures and what ended up happening is the futures markets got together and they changed the rules on them. The fact is the silver, what they realized was that on any given day, the price setting of silver was from the financial side, not from the commercial side, not from the youth side and all this

stuff in the ground. The silver market spot silver was unbelievably illiquid. So there's this huge liquidity arbitrage that happens. And by the way, the Hunt Brothers is probably the largest and most famous liquidity arbitrage, but the exact same thing happened in Japan with the Nikkei Futures and Topix Futures versus stocks because corporates weren't allowed to own the stock because of their cross holdings, but they were able to trade futures. Futures were 10x the liquidity. And so the expirations in Japan became manipulation events called liquidity arbitrage.

Bitcoin has a very liquid spot market. On-chain detectives constantly looking at everything that moves. It's the polar opposite of silver, where you had no idea where the bank faults were, you had no idea who was holding it, and the hunts took advantage of that until people realized that the empire fought back and said, wait a minute, you can't use the rules, we're going to change the rules. And here's how the margin's going to play out, because they used an enormous amount

of margin to do it. It was a collapse of leverage play not a failure to be able to buy it play. So you know I'm sorry for being so contrary and I got a couple of hands up but I am old enough and I did study it so I do understand what happened there. No, no, no. Look, the difference of opinion is always good. It makes for a conversation in the market. Yeah, no, no, but the point is of opinion is always good. It makes for a conversation in the market. Yeah. No, but the point is that it's actually a very strong reason for Bitcoin because you can't do those sorts of things. Look, anyone who studied GATA, G-A-T-A, and has been a

gold bug for a large part of their life before they learned about Bitcoin like me knows that there have been lots of cases of manipulation on gold, silver is just easier to manipulate, because the spot market is so damn illiquid and opaque. But gold is still illiquid and opaque, unlike the spot market for Bitcoin. But anyway, I've drawn out enough on the tail, you can add something to that, Dave. Sure. I think, you know, the best attempt at corporates owning Bitcoin has been micro strategy just by volume and the ability to attract assets willing to let you buy Bitcoin.

And that's something like a little over 30 billion, I think. ETFs now on the Bitcoin side, if you add all of them together, have nearly $100 billion worth of Bitcoin. I don't think any corporation will be able to do a better job than Sailor's been able to do to attract capital to buy Bitcoin. And so any concern that corporates someday become the largest holder of Bitcoin is just, I think, silly. Well, I don't know about silly.

I mean, it could be as a class. I mean, corporates, pensions, sovereign wealth, obviously, central banks at some point when no one's even thinking about that, or all if Bitcoin is going to pass gold, all of those things are going to have to happen inevitably, but it will be uneven, right? Don't you agree? I'm sorry. I muted myself.

I think if you combine all of those different venues that you mentioned and categorize them as one, then sure. I mean, if you had all the ETFs and all the corporates and all the sovereign wealths, but the point was made by someone else that corporates could control this. And I don't think that's possible. Yeah. I mean, I think I agree with that for sure. Amateo, you had your hand up.

Yeah. I have a couple of things, but first is just like an open question to you, Dave, and the panel, which is like when it comes to panel, which is like, when it comes to micro strategies or strategies now, when it comes to GME, who's facilitating and actually dumping the capital in to support these debt vehicles? Do we have any transparency on where the actual fundraising is coming in that's inevitably pooling into Bitcoin? And who's taking these

offers and investing in them. Because I just haven't, you know, I constantly see these debt vehicles be offered up. I mean, we've seen micro strategies be oversubscribed. And my big question is, who? Well, the answer to GME is no one yet. They haven't been able to raise the capital yet. I mean, it's just the intention, but I think someone else could probably answer about micro strategy.

I mean, look, I can tell you generically, generically, what happens is bond funds and convertible bond funds are segregated pools of capital and fixed income investors are different. And the vehicles are fairly useful from a capital structure point of view. Meaning that if you're a fixed income investor, you know, my contrived, he has a lot of different things that you Gary Cardone earlier used the word financial engineering. And what he meant by that is, you engineer products to suit people. So different investor classes want different types of products. So in the case of GameStop, it's simple. They're going to appeal to convertible bond funds who say, okay, this is a volatile stock and we've seen how this strategy plays out. We think this makes sense. What you're effectively doing is you're buying an instrument that gives you an embedded call option on a super volatile stock that has sufficient cash to be able to pay the pay the bill if the stock doesn't operate.

And so it's it's a pretty good bet, actually. And I'm sure they're going to be able to sell it for exactly this reason. It's not a, it's actually smart. I mean, Ryan is obviously smart. You sell a $1.3 billion issue when people can see the coverage of that, the credit risk is really not that bad, right? The credit risk is pretty small, yet you're a stock that people look at and say, well, this thing could 10x if they implement this.

Okay, great, I get that upside. People like, you know, convertible investors want no downside and some upside as opposed to all upside. And that's the difference. But we'll see how it all works out. Okay, so I missed whose hands was up, but I saw a couple of them flashing. All right, I think David, I thought that,

I thought I saw your hand up. Yeah, no, I did. Yeah, the one thing I was just going to say, just to add into the corporates holding Bitcoin would be to kind of mirror something that was done when I was on the board of this company BTCS, which is NASDAQ listed. We paid the first ever dividend in Bitcoin. And the benefit of that actually that you might see just the recycling of Bitcoin back into the market because obviously people

would decide what it is that they want to do with their Bitcoin which might help something around the liquidity aspects that was raising earlier as far as Bitcoin over time is concerned once we stop doing all the mining. is concerned once we stop doing all the mining. Gary? Hey Dave, yeah maybe slightly shift gears here. You talked about, you know, I think GME, MicroStrategy, all these corporates were all wanting some type of news that moves the price. I'd like to ask a question. I'm beginning to believe when I look at Ethereum that's at 50% of its all-time high, XRP is it, man, they're like when I look at some of these and I look at Bitcoin relative to the 200, 100 day, 50 day moving average, I'm wondering

do the alts need to roll over before Bitcoin can do its thing? And if it doesn't need to roll over, if the alt market doesn't need to really roll over and suffer some real capitulation pain. Why would someone pay premiums relative to 50 and 200-day moving averages? I literally can buy Bitcoin today near a slight premium to the 50 and the 200 day moving average. And the premium for XRP and Ethereum are massive compared to just that metric of 200 day moving averages. Over the lifetime of Bitcoin, if you were able to buy Bitcoin near the 200 day average or below it, it's been an awesome purchase. And I'm just looking at some of these other alts going, hey, what's going to drive these alts up? And if it doesn't, they look weak as shit.

I mean, all alts have rolled over. Looking at ETH, it's down 50% from high and that may not sound like a lot, but the issue is ETH never really had a run like it did in previous cycles. It soles down also 50% from all-time high. I would argue that alt have rolled over obviously way, way harder than Bitcoin. I mean, yeah, this is what's going on in the crypto world outside of Bitcoin echoes a lot of what happened at various stages of the Internet of Information back in the early days. Of course, things move faster now,

but there is an enormous, the basic symptom is this. People saw an enormous potential and bet on companies that would potentially tap into that potential. As soon as those companies started generating revenues and the revenues were less than the potential was showing, they got tired of them and the ones, of course, the ones that didn't have potential eventually got all of it got washed out.

Fast forward 10 years later, 15 years later, that potential starts to get realized. The actual value created was even larger than was anticipated, but it was different companies in some cases, some cases the same. My guess is crypto plays out the same way only the market is constantly Staring at information and what used to take years might take days or me who used to take years might take weeks or months I mean, I don't know exactly how it will play out, but that's what you're seeing I think there is a lot of genuine fear on the Ethereum side that it's gonna lose its edge And then there are others are saying well

No, hell no because you got traditional financial people and it's going to lose its edge. And then there are others who are saying, well, no, hell no, because you got traditional financial people and it's not going to lose its edge. I don't know how it's going to play out, Gary. I really don't. But I don't think that alts are the source of funds for Bitcoin though. That's the one thing. I'm a tail. Yeah.

I mean, I think one thing that we're seeing when it comes to alts is the inability to sustain a trend or a narrative between algorithms and the meme coin madness. I just, I don't think we've ever seen people pile in as fast as they do now. And it's not even just like altcoins, it's memes. Like the whole Ghibli thing that just exploded yesterday and is now immediately cooling off. I mean, the pace at which people pile in has never been greater. And what that causes is just an influx of interest and a washout that just can't sustain.

And so I think we look at this and we have to have a couple of coinciding things. We need a better risk on environment where people feel safer to have exposure and to risk on. And we're gonna have to see where the smoke clears, who's really left and what kind of new participation starts to be generated as a result of all these people piling in and then

getting washed out over and over and over again in a trend that really never sustains. But I think that we'll probably, in some order here, see a more risk on environment, we'll see a more sustained trend, but I just don't think we're in this place. And while we're not, everything just turns over as fast as it garners interest and it just can't hold itself up. And as you said, Dave, and Gary, too, Ethereum has been really the indicator for alt season. And as long as Ethereum continues to sort of struggle in the narrative and in the perception, I do think people are concerned about all exposure as it's been the leading indicator

for the rest of the market. The thing that's different this cycle than previous cycles, I've been here since 2017, which makes me old, unfortunately, but 2017 was driven by ICOs. The next cycle 21 was driven by NFTs. This cycle, the first leg was ETFs and the second leg was now memes. The unfortunate part about the memes sort of like driving the cycle. And the main

benefactor of sort of meme culture, and driving the second leg was Solana. The issue with that is there's nothing to believe in behind it. With ICOs, it took a long time for people to figure out that, hey, this idea might not work. But along the way, there was an idea, whether it was believing in efficient capital formation via ICOs, whether it was believing in sort of just a larger range of the public being able to access early companies, or it was individual ICOs themselves. You believed in something. It takes people a while to no longer believe in that thing with ICOs.

In NFTs, there was a community aspect. Whether or not you liked the picture, you probably made friends along the way. And so it took you longer to feel like, hey, maybe this is not going to work out. With memes, there wasn't something to believe in, you probably didn't make friends along the way. And so when the price went down, the vibes were gone. And so to me, I think that's the difference between this cycle and the other two. And maybe why we washed out so quickly. You had Trump, Melania, Libra, sort of mass extract with PumpFund taking billions of dollars out of the salon ecosystem along the way. That takes time to recover from. And there's a whole age range of 18 to 23 year old males that

has to cycle out and get their interest back to be able to come back and gamble again. So I think that's maybe why we saw less of an altcoin cycle this season, because one, there was nothing to believe in and two, people didn't pretend even the cycle to care about quality. I hope that that change changes going forward. But we'll have to see. I mean, for what it's worth, I think that the next cycle will be an ICO led cycle based upon a regulatory

regime where which encourages founders to build companies that have tokens which return economic value on a disclosed and transparent manner to token holders, as opposed to the ICO mania in 17, which, I mean, look, I joined in 17 as well in the crypto world and going to these conferences and listening to people talk about non-dilutive capital, which was, effectively all these ICO promoters were telling founders, hey, listen, you could raise money and it won't mean a damn,

you don't have to pay those people anything and you just kind of slap your name on a token. They were effective, most ICOs were memes. I know that sounds ridiculous but it's true. Most ICOs, not all ICOs, I mean, you know, Ethereum is not an ICO, is not a meme, but most ICOs were basically memes because- May prove to be one one day. Was that because- May prove to be one one day. Was that Kerry? May prove to be one one day. Well, that's true.

That's true. But when I say meme, I mean specifically, and God, I hate it. We don't have the lawyers up here and maybe we could have a lawyer free space. I hate the Howey test. I hate the whole question of whether something is a security. But the fact was once the Dow report came out in early 17 or when the hell did it come out? Late in summer of 17 I think it was. From that point on smart founders figured out and their lawyers figured out don't make any promises about economics. And so

effectively you turned what could have been a selling a future revenue stream kind of token economics to people that they could believe in. And then of course the revenues either are going to show up or they won't. To, hey, you know, we're cool and this token makes sense and the tokens are immediately liquid and so you can trade it. But there was no there there. Most of them, you know, they came up with governance a bit later,

but even governance doesn't really give you anything, no economic rights. Yeah, you're 100% right. I hope that you're also then right about the next cycle, because we do now have, at least in theory, a regulatory regime where we don't have to pretend we don't have to hide the revenue anymore. The revenue was hidden behind a Dow and the Dow was the governance. And now we had this overhang of tokens that were not, like you said, economically benefiting anyone. There was no value being returned. Hopefully that can change, but there are a lot of tokens out there that have really strong revenues that aren't trading at crazy multiples. And so I think for the trend to really take hold, we'll need to see the multiples on revenue returning tokens increase that will sort of, I don't know, peak investors interest that the like funny part about that is once those multiples increase, most of the trade is probably over, but, but that's what

gets people excited right now. The, the, if you over. But that's what gets people excited. Right now, if you have a token that's returning revenue, chances are it's not trading at much more than like a 10 to 15 time annual revenue of multiple, which kind of sucks. Yeah, I would love to get Jeff Dorman from ARCA on the panel one of these days, because he just hit a blistering thread the other day

that was basically on this thing Look, you know There's a lot of value and a lot of sectors and there's a lot of crap and a lot of others And and he said it far better than that. But but yeah, you're right. I mean that that's obviously what's going on here But you know, it is what is Carrie is your hand meant to be up by the way because I can't tell it negative apologies Yeah Is your hand meant to be up by the way because I can't tell it negative apologies Yeah Yes, so in any case so hey Dave on GameStop. It's given back every bit of its Value that popped yesterday. Yeah, that's why I bought some this morning

Yeah, good for you. That's smart. I'm like, it's just yeah, GameStop is its own animal. I mean, the thing that's interesting about that as a stock, other than the cult following and what went on and we've all seen the movie or the book or know what happened is they have assets that are monetizable in a way that crypto, that memes would love to have. So, you know, memes talk about community, GameStop have these, you know, all these stores, they kind of make a little bit of money, but they don't make a lot,

but they got a ton of people who are constantly coming in there. And that is a community that they've been trying to figure out a way to digitally monetize for a while. So I don't know what they're going to actually do. But what I do know is there's volatility and I do know the short interest is there and it's still it's not like as extreme as it used to be. But it does make it an interesting play. It's one of those you put a smart person with a lot of cash.

Could he leverage the brand and the cash to do something with it? And it's really that kind of a bet. I know this sounds stupid, but its market cap is 40% cash. And that plus a smart person with a monetizable thing, you know, I tend to believe with financial engineering you can do well. That has nothing to do with Bitcoin. The Bitcoin story is much bigger than that. It's more game theory.

How many other companies are going to start doing this? You won't see GameStop going up until they actually manage to start should be able to show bought Bitcoin and they have everything structured And who knows you know how far down the curve they are for that Hey grain of salt welcome up I saw you Raising a hand you had said a couple interesting things on X. So what do you got? I always try and say something interesting. So a couple things. The previous person, I believe it was Alan, was asking about who buys the converts for MSTR and then who would buy that and the ATMs itself. And I'll be specific about that. So folks, Grok is your

best friend. And I already posted that. Just type that into GROK. Just say who are the institutional investors for MSTR converts, and it gives you the answer. And I paste it into the chat. And it lists all the different institutional investors that does it. So GROK AI is your friend, and use that every single time to ask those questions. It comes back immediately. The second, the next comment I'll make is on Gary talking about the 50, 100 and 200 day moving averages. I believe that looking at the multiple, the over or

under in the 50 day moving averages is a good signal that I use in terms of buying something. I want to buy when it's, you know, one times the 50 movie, one times the 50 movie average, so it's equal to it or less, that's showing that it's not overinflated. If you know, from history that it trades two or three x of that, then you know that happens in a very short period of time, that rapid rise signals that it might be unsustainable. So I use those all the time to 50 day moving averages. And then if you just change that to weekly, when in

doubt zoom out, you can look at the long term history of it. The other comments would happen in the previous cycle, 2017 low float, hard to buy that cycle ran up, you had a 20 X in 2017 started at 1000 almost hit 20,000 December. And so that cycle was completely different than in 2021, NFTs, FTX, all kinds of weirdness, and they fell apart. And then, so the person that's peeing in the background should probably go on mute. Dave, you're pulling out of a big Ramasamy.

And then this cycle, I think it's different. I think that you do have the alts, but really what's driving this in my view, and I'm a known MSTR bull, is that strategy by securitizing Bitcoin on its balance sheet and having GameStop follow in with this, is that that caused this cycle. So I think a rising tide raises all boats. And what that'll say is that I have worked for a bunch of publicly traded companies for the past 24 years. Whenever you put out a press release or SEC filing, you've already made your decision two, three months before that you've already done your due diligence. You don't put out a press release thinking that, oh, we're maybe going to do this. It does not make any sense. If you're sitting on $4.6 billion in cash and you're going to do a convert at 0%. Logic dictates like, well, I already have the cash.

Why won't I just deploy that? It's because they're going to do something with Bitcoin as they change their Bitcoin treasury. That's my view and just sheer logic. I'll take any comments on what I just said. But I think that we look at these things at the face value. And I think that the more sophisticated you might get, you may analyze yourself out of understanding what's going on.

But folks, the AI is your best friend. Grok everything. Type it in. And your ability, if you don't get a good answer from Grok, think of a different way of asking it. Probabilistically is this what's happening. And Grok will probably come back with a probabilistic answer telling you percentage from zero to a hundred percent. So that is, that is the pro tip that I can give today.

That's actually a great pro tip. The, you know, as far as those sorts of things, the only thing Grok doesn't get is well, I mean there's certain the historically context parts of it, but it does a really good job with the who for sure. The only question that I had about GameStop is, so they're issuing the convert. They almost certainly have their plan for how they're going to deploy capital into Bitcoin. The question is, are they issuing the convert having bought? Wouldn't they have to disclose it in advance?

I mean, you know, disclosures around converts are pretty strict, right? You know, so the real question is, is the sequencing? I mean, do you have any thoughts about that? Yeah, I think that strategy is a good way to look at it. I think that most likely they'll make an announcement that they have achieved the funding for it, then they'll deploy very quickly. From my conversations for people that are in this space, and what you could just see from the filings is that, again, by the time the announcement happens, they probably already have that cash. They're like, oh, when this convert happens,

and they put the green shoe in there saying it's $1.3 billion with the potential for an additional 200 million for oversubscription. They don't even write that in my view whenever a publicly traded company writes something, they only write that knowing if there's, again, I would say probabilistically, a 90% chance that that is a possibility.

Otherwise they would not even write that into the document that they posted. So my view is that they always wanna be oversubscribed and somebody can say well maybe they just sandbag maybe it's a one point five billion dollar offering but they say it's one point three with a two hundred million dollar over. We're sophisticated enough to everybody knows about sandbagging so from that perspective that could be the case also but i think the sequence of events is that. That could be the case also. But I think the sequence of events is that by the time that those listing comes out, they've already secured the funding, they'll have to do another posting.

And I think that money follows very quickly. Now, Monday is the 31st, which is the last day of Q1. Micro strategy, or sorry, strategy really needs the price to be above $96,000 on Bitcoin. And so if you do have GameStop buying, if you have Strife, STRF, the strategy stock that was just released and that went live yesterday, approximately 700 million, you add back in the napkin math or back in the envelope math is showing there's a potential for $2 billion

that can be allocated to Bitcoin. Now the critics or people that have listened to me is, well, they buy over the counter, they use TWAP. Like, okay, I would rather have somebody buy $2 billion worth of Bitcoin than short $2 billion worth of Bitcoin, just sheer logic. And so from my view, having a $2 billion, whether it's over the counter and using a TWAP time weighted average pricing, I would think that that would be good for the price. And so I'm a permable. Well, go ahead. Yeah. I mean, look, well, two comments first, although I don't like to open it up to others.

The need, I mean, yeah, sure. If Bitcoin realizes a lower price, their financials don't look as good, but I don't think that they need anything. I think Sailor has a much longer time preference than that. So I don't know that matters. The second thing is it doesn't, you're right. It absolutely doesn't matter. When you buy OTC, or you buy using algos, it's effectively the same. And how do I know that? Because I founded a company that a lot of the OTC market makers use to implement their buying, which of course is algorithms, those companies called coin routes. And, you know, there's other companies called Talos that do algos and coin based themselves had their own algos, which is what MicroStrategy has used.

Those algorithms are designed to minimize market impact. What you're suggesting, which I don't think is true, by the way, is that MicroStrategy wants to maximize market impact to make their balance sheet look better. There's a term for that in the world, and I'm sure David, if he's still listening, will smile. It's called window dressing, and it's a fairly typical thing in the equity markets. And what actually ended up happening was most of the window dressing is generally done the day before, because regulators got really pissed off

at people for attempting to create market impact and make their books look better on the last day of the month, and particularly last day of the quarter. So it's a pretty well known thing. Being that Microjohnity is a public company, I would be really surprised to see them trying to maximize market impact. Really really surprised. I don't know if that makes sense to you.

Yeah, it makes sense. Look, I use the term window dressing all the time. And so, you know, when the regulatory laws changed about that, and I'm an old tech bubble guy and saw all the shenanigans that went on in 1998 through 2000 with getting shipments out the door, hit your number, then push, and then you sandbag. You don't want to drain the swamp for the next quarter. So all of these terms are rooted in some form of truth. And so I agree with you said window dressing. I think that Bitcoin is a little bit different because it's a commodity and it's not a cash flowing or EBITDA type item. And so from that perspective,

I do think it's a bit different. I also, when you're talking about the algos, totally agree on that. People always like to talk about Bitcoin being whatever, a $1.7 trillion asset. Again, I asked Grok and it only trades, forgot the exact number, approximately $40 billion per day. So a $2 billion buy on $40 billion is 5%. So the question is, does that actually move the price? But what you just said about the

algo is the whole goal is not to move the price. But again, I would rather have a $2 billion purchase than a $2 billion short. So that's where I just go back to this with logic. And so I don't know how this is going to play. I think we're all going to know by Monday. Right? So yeah, I think it'll be, you know, look, you can't buy 5% of a day's volume without having price impact. You can't, there's price impact on everything. I mean, I ran quantitative teams, and I'll tell you, it's always without having price impact. You can't, there's price impact on everything. I mean, I ran quantitative teams and I'll tell you, it's always a measure of degree. The big question with regard to the short term

is always supply demand dynamics. There's also the options expirations that happen at the end of the month, because of the way that those cycles are running. There's a lot of different factors at play and I hate to try to get- Hold on, hold on. I got a point on that. But triple witching was last Friday, okay? And the CME Bitcoin futures rolled over two days early because the last week of every month is when the CME Bitcoin futures roll over. So those are behind us. Those are all great points. If you made that point

two weeks ago, I'd be like, yeah, we have a lot of volatility going into the last full week of the month. So again, the quarter ends on Monday, but the last full week of the month is when the CME Bitcoin futures roll over. So by, and I posted about the OI interest on, on, on the CME Bitcoin futures. So all of what you said is totally correct. Two weeks ago, I'd say, I don't know what's going gonna happen, but now I feel more confident because those are behind us Right and people are looking forward to q2 So so I does that make sense what I just said about those. Yeah, it does

although I was talking about options not not Futures I actually posted a lot about what was going on CME futures and the collapse of the premium back down to normalcy and all that. We've already litigated that one as it were. But like Deribit has a quarterly and a monthly expiration, that's this Friday. And that's fairly large. And that'll be, I mean, you know, that's the day, the business day before, 34, you know, whatever, but this Friday is very, very relevant. But it doesn't matter. I'm not trying to make the point that it's going to be a big move one way or the other, although options expiration do tend to have a magnet towards whatever the biggest figure

is there. People like to talk about Max Payne, but what it really means is there are very good reasons why Delta hedgers end up pushing the price towards, you know, a particular place as it gets close to options expiration. But look, I'm zooming out on a low time preference that my point is, I don't think micro strategy gives a crap about, you know, a monthly or quarterly report, he has full control of the board, and as long as it's the strategy is still working,

he's gonna be fine. That's really my point. What I think is- Can I ask though, Dave and Greg, maybe you have an opinion on this. I tend to think that Sailor, that you're right, that Sailor doesn't care about short timeframes. However, let's just take maybe the opposite side

of that argument. Could it be that their strategy of offering convertibles becomes less attractive if they have multiple misses or if they have any misses? I'm not sure if they've had misses in the past. And so maybe he doesn't care from a long-term value perspective, but he does care from wanting to have the ability

to offer more or is that, doesn't matter. No one's looking at whether they're hitting or missing. Well, I mean, everything matters to a degree. It's always a question of degree. I mean, look, this last buy was the first time in quite a while actually in the last several, where the price was higher a day later than when he bought. I mean, we haven't seen that in a while. That's true. I mean, we haven't seen that in a while. That's true. Right. So, I mean, does he, is he happy about that? Well, he should. I mean, honestly,

buying when, being more patient and buying when there are retracements, instead of just rushing to deploy capital is probably a smarter strategy for them. You know, for a company called Strategy, you know, the way that he had bought the last few times, which felt like FOMO buying retail at the top was very unstrategic. And you know, I'm sorry if I'm, you know, if I'm insulting, you know, you know, St. Sailor, but it was really bad trading. It just was. I mean, you can't really even argue the fact. Do you think he's trading or is he deploying as soon as the capital is available? Well, that's the thing. Like complete a raise and then they deploy. And so it's not so much about timing that, it's more timing around like when does the

raise actually close? Yeah. And that's the point. And so I don't know the answer. If the answer is their strategy is 100% of the time, as soon as you raise the capital and deploy, then I retract my comment. On the other hand, from the outside, we don't really know that that's true. And the question is, is which will attract more capital to micro strategy, one that does

that or one that's a bit more thoughtful or looking to take advantage of market weakness and et cetera? Kind of like to be the Berkshire Hathaway of Bitcoin buying would be a bit different, right? I would tend to think there is a... So what Alan said, I tend to agree with him. And so, uh, Saylor was on the economic forum in New York city, approximately two weeks ago and somewhere about the three quarters of the way through, he said the capital markets open these windows open and that he has to take those opportunities.

So there's a clip right there in the middle. So in that sense, I think that, um, when he gets the funds, I think it's more likely that he has to deploy those funds more quickly. That's my take. I don't think he can be as opportunistic to wait for a downturn. If the funds are made available, I don't think he can wait 60 or 90 days to wait for a downturn to deploy. I think that it's more like that. That's my take on it. Could very well be.

So Gary had his hand on Gary. What was your comment? Gary just leaves his hand up. Can't tell. I don't see his hand up. Oh, so Dave, what's what's your over under on on GameStop buying before Bitcoin by Friday within one more day? I have no idea. I hate to speculate on day? I have no idea. I hate to speculate on things

that I have no information on, which is another reason why, if you're not on the inside, you're on the outside. And I know that sounds like a stupidly trite statement, but it matters. I mean, I spent enough time on Wall Street to know that you don't wanna play in a game where other people have more information than you.

So for the for the people who are interested in buying convertibles is strategy more or less attractive than Game GameStop We need a convertible analyst to go through it It's also you need to see exactly the pricing exactly where it is It's just I used to sit next to the convert desk for years and it really, I don't even know what long term OTC options on GameStop out that many years

are trading at to know how much edge is in the product. For those who don't know, convertible bonds are effectively packaging a longer term option on a company along with a either a zero coupon or a small coupon bond. And so if you want to understand what's an attractive, you know, whether it's attractive or not, you have to be able to understand how the constituent components are. And I don't right now. I haven't looked at it, but I'm sure there are others who have.

Well, the reason I asked the question was maybe like a little bit leading. This is a guess. But maybe interesting to talk about. Nonetheless, I would imagine that GameStop options are priced more irrationally than strategy options, though maybe that's not the case anymore. But for a time period, everyone was trading GameStop options, you know, like, on unsophisticatedly. But maybe, but maybe that's now shifted towards MicroStrategy, right? Like MicroStrategy has the crypto audience attention, at least in some point. And so I wonder which which companies options trade more

rationally. So that I do have a really strong opinion about. I already posted about this. So both iBit and GameStop because of their price, the unit price, and this is not a unit bias. It's for a stack size for retail traders. If you look at the option chain on GameStop, they range from, depending upon the strikes and expirations, are $3 and then they're all the way down even below $1. And given that unit price, almost any retail trader can go in and buy GameStop options just because the contract price can be as low as $300 to buy a contract, whereas it's 10 times more for strategy just because the unit price of the stock is currently $330.

And so from that perspective, this is the, this is this, and I've asked this question to Grok and everybody on the call, she asked the question to Grok, what is more likely to happen for a short squeeze or a gamma squeeze comparing GameStop versus strategy given their market cap? And when you ask Grok this question, the share floats are almost the same in terms of the size, about 300 million shares. But the problem, the difference here is that strategy already has 500,000 Bitcoins and GameStop has zero.

So doing that analysis and asking that question to Grok every single day, given the new information that comes out, if they buy and what they have with it. And you can just ask, how many retail traders does it take in order to force a short squeeze or a gamma squeeze on GameStop versus strategy? You guys can all type this into Grok right now on the call or after the call and then you ask Grok,

what's the probability of this happening, one versus the other? And it will calculate the number of traders that's needed, the amount of money they have to have to do it to drive the price. And those simulations, which were impossible to do before AI, everybody in this call can do for free. And the only limitation is how they frame that question to ROC. And the difference is the unit price between these these two and so that's where you get

These dynamics coming into this, huh? What's better? I'll take any comments about that, but that's what I see. It's You know if you enhance your intelligence with AI by asking all those questions that you may not get on a space The information you may get back will be really interesting. I Don't know if it's actionable. Let's leave it at that. But that's your best friend is the is the free AI agent. And by the way, you can cross compare with chat GPT.

I do that also. I think rock works better. But that's my only opinion. I have no statistical reasons to say that. But yeah, there's the most important reason why GameStop's options trade the way they do is because in order to hedge options, if you're a market maker, you have to be able to borrow the shares and the fees on GameStop and the hard to

borrow nature of the stock makes it harder to hedge. And so that's why the options trade at a premium to its volatility, right? And whereas micro strategy is easy to borrow, it's not a problem. So it does mean that it's harder to hedge those things, which is why there's more, it will trade above its realized volatility as opposed to, so the implied volatility is higher than realized. Whereas that's not generally the case? So that fact that's negative for convertible bond interested buyers, is it not? Well depends. That's why I said it depends on where it's being priced. If it's priced

on realize volatility. No, it's incredibly good because you can't buy options at that price. Got it. All right. Hey, it really depends on the price. That's why I hemmed and hawed over over the question. Hey, Dave, so I've got a question for you about this. So what's interesting is that when strategy in 2020, they had approximately $450 million in their cash and they won 100% into Bitcoin.

So everybody knows that. So effectively, they carry very little cash on their balance sheet. The flip side for this with GameStop, which makes it interesting, let's just say it's 4 billion. Let's say it's not 4.6. We'll just round it down to 4 billion in cash and they do that convert and they're not going to pledge folks on lot of securities lawyer. So don't, don't take this, take it with a grain of salt. So they're not going to pledge that cash as collateral for the converts. But do you think that that makes the institutional buyers more confident in

buying a GameStop convert just because they're sitting on $4 billion in cash, even though it's not collateralizing it? Well, yes. And the reason that was the point I was making earlier, which is that if you're buying a convertible bond, you care about two things. You care about credit because most convertible bonds are senior to equity, et cetera. So et cetera. And the coupon, whatever it is, I mean, whether it's zero or not, you'll at least get your principal back.

The credit is certainly enhanced by having 4.5 billion in cash. That on the other hand, if you're buying it purely for upside, then do you really care? You'd rather that all be in Bitcoin? I don't know. I mean, it becomes more complicated. But the short answer is, having that much cash allows you to have the credit to be able to issue a convertible bond probably at a superior price. If that makes sense.

But look, all of this is very technical and we've kind of gone down the rabbit hole here and I hope that the audience finds it interesting. The real question, does anybody have any thoughts on, forget Friday, is this something that's going to be a long-term trend? And my thought is yes, I think it's very relevant. And we'll see the one trend

That's probably the most obvious is and it as we've been seeing it it's been buying is coming from in Bitcoin at least and coming from traditional financial types and Selling has been coming from the crypto community. It's a little bit over broad, but more or less Definitely feels that way. I know anybody else have comments on this. Um, I have a comment. This is, and this has been posted also before. So I believe what happened is a game stop drop is due to, um, is due to short sellers. Somebody else had posted the amount of short positions taking on a

potentially the Delta hedge, the convert prior to the, to the convert happening because they get a they would get a better short position by buying a day or two earlier the so-called front running. So I don't think this is nefarious. I just think that the people in the know, as David said, they're like, oh, they're going to do this convert, we might as well Delta hedge a day. We know that we know the offering potential amount is 1.3 billion with the potential to be 1.5 billion. So there was a post about 1.1 million shares of GameStop were already immediately shorted. Hopefully I got that number right. And so I think that that I think that that could cause the market dynamic for GameStop to drop given that short interest

that picked up over a day to front run it. Do I know that that's the case? No, but it seems, seems plausible. You can ask Rock if that's true. Yeah. I mean, I look, I don't know. Uh, any, any play you're doing, if you're playing that you're, you're on the Bitcoin side, it's more the signaling, the messaging part of it. And what does it mean in terms of supply demand? If you're on the game stock stock side, you're basically saying, okay,

is this going to be a strategy that's gonna work long-term? And if the answer is yes, you buy it, not, not. I mean, you know, if you're a day trader, it's a totally different animal and I don't have that information. And that's the thing that people who are listening need to understand. I mean, day trading is very, very different.

You know, short squeezes happen when people who have shorted it cannot cover. But there really hasn't been that much activity in GameStop as much over the last several months. It's not like it was a couple of years ago. It's not the same story. I mean, history may rhyme.

It doesn't generally repeat. And in this particular case, I think it's different. It could actually, however, morph into something different and we'll see how it goes. But don't expect just because it happened once in the past that it won't happen again or that it will happen again. That's really the only point that I'd make there. Anyway, we are at 11.15. Unless other people have other comments, I think we will call it there.

I think Scott is back tomorrow, so you don't have to listen to me drone on. And we'll see you tomorrow in Crypto Town Hall at 10.15, unless anybody has something else to say. Anyone wants to? Thanks, Dave. Thanks. Thank you. Great.

Okay. Take care. Stay safe for the rest of the day. It's definitely looking interesting out there. Take care. Bye. Bye.