The Wolf Of All Streets - Saylor Ups Convertible Note To $700M | Crypto Town Hall

Episode Date: June 14, 2024

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I'm increasingly difficult to come up with creative titles every single day. Today we have crypto markets recovering. What's next? Then I check it. We're literally flat for 24 hours, flat for an hour, I guess down 6%, 7 hours in 7 days. But the reality is I think it's boring, sideways, and choppy. Fred, can you start doing our titles for us or something? Can you come up with some new innovative ideas for me?

We can go full thumbnail clickbait and say, you will die if you don't listen to this about crypto. Buy this meme or you will be dead in 24 hours with a screaming thumbnail face. We don't get to do the screaming thumbnail faces here, though. But I like that. I think we would get engagement. I'm just glad you made it back after a nice long car ride in a small rental car with the family. Now, to be fair, I rented a Sperman.

But it was, I mean, we were in like apocalyptic rain. That's my second apocalyptic rainstorm in months. I flew into Dubai when they were having like historic flooding. And then I was in Miami and flights got canceled. I mean, they delayed. Not only did they cancel the flight, they rebooked us for like three or four days later. I mean, it's like as if people were just going to hang out for,

you know, 96 hours. People were booking cars to drive to California. Who'd been sitting there for 36 hours in Miami. Mike, you live in Miami. Has it cleared up at all? Yes. Hello. It actually has.

And I was actually able to commute and ride my bike this morning without getting soaking wet. So it's a little sunshine. First time in, uh, since Monday. Yeah, it was, I mean, it was, it was pretty brutal. Nothing compared to Dubai because Dubai has no drainage. At least Miami knows how to deal with water. So I think that, that, that was a win to some degree. I'm glad you were able to ride your bike though. And hopefully flights will start

going out of there. It was, it was definitely a train wreck, but you know, just another, just another travel story. Mike, how far do you ride your bike each day to work? Nine miles, but I have to admit I'm a sissy. It's an e-assist electric bike, so it's quite easy. It's quite good for an older fart like me, but that's great. I go from Key Biscayne to downtown Miami. It's a great commute, but also the backup is the bus, and last week I used the bus a lot. Yeah, that's a beautiful commute as well.

Okay, I'm sure everyone doesn't want to hear about our Miami and travel plans. Mike, maybe we spoke obviously yesterday on Market Mavericks. I think the narrative this week has really been macro, even though I think it's been confusing. There's been very little to talk about, I think, that's particular to crypto. All eyes, even in our sector, I think have been on PPI, CPI, FOMC, all of these things. And it seems like we came out just as confused as we entered. Yeah, I'm less confused. I think the reversion is getting started. It's starting in Europe. You look at the Eurostoxx index, it's down about 4% this week, with just a surprise in the elections, all kind of tilting a little bit to the right, at least what people did not expect.

You look at bond yields in China, they've dropped again, 428. They've been stuck at, I'm sorry, 228, I think, in the U.S. And I see the beginning of what is going to be the number one factor for all markets and just a little revert and bait. And I say that because I'll be publishing Monday. I'm working on it now. If you just take that Euro stocks index, you go back 20 years. It never really sustains more than 20 percent above its 100 week moving average. And it's just backing down now early days. So all the indications that I have are just watch the stock market. That's the key thing you have to watch in cryptos. And I think Bitcoin is a leading indicator. To me, part of the reason it's

underperforming is because it's sensing this coming out. So for the macro, PPI, CPI, a little bit weaker than expected. And the key point I like to make is when you do have a declining economic situation, we will at some point get deflationary forces. But those are very much lagging. And they're extraordinary lagging. Like we talked about payrolls. Payrolls are almost insignificant and very lagging. But you look at the unemployment rate, it's just moving upward. It's on a clear upward trajectory.

And you have to ask, my thing I always like to say is, what stops it? So to me, the macro is way overdue for equity market reversion. That's all that's going to matter. That's why I still think gold is going to be one of the best performers, particularly versus copper, which has put in a peak. Now, that's not so much for this space, but it gives you good indicators. And then there's this fact that you look at the US 10-year note yield at 4.2%, something that's a little bit low, but it's still about 200 basis points above the next largest economy in the world, which is heading towards a severe deflationary

recession. That's China. Their yields right now are 2.28. So to me, the tilt is that way. And I have to ask what stops it. Just a normal little stock market reversion, I think, accelerates everything. And you look for catalysts. So it looks like Europe might have had a catalyst for just a little bit of weakness this week. Can you talk about what's happening in Europe? Well, I don't know specifically. It was just the election, the elections, and most notably in France, tilted Mr. Macron to have to call for a new election. My colleague I've been working with who's based in London pointed out, I guess there's election in England on July 4th. They like to do that on purpose just to mess with us.

But it's the tilt towards the right that was unexpected. And even in Germany, the far-light alternatives has been making gains. So that's the key surprise. And I don't know if that is bullish or bearish. All I know is when you have markets that are this stretched, they're just tinderbox looking for a spark. And to me, that's where the equity market is right now. Whatever it takes, if it takes it bullish or bearish, but when you get this extended as a strategist like me, it's just looking for a spark. It looks like it's taking this spark as bearish for equities.

And I just look at that Eurostox index. You'll see it when I publish it on Monday. You look at it like, okay, well, this is just time for some reversion. That'd be great fodder for Macro Monday. I mean, yeah, to your point, I mean, everybody knows markets hate uncertainty, so to speak. Right. So any surprises tend to give markets the jitters. Dan, I saw you had your hand up. Go ahead.

Yeah. So I'm European. I think I can give you some little color on this. I don't think it was so much of a surprise. It was maybe the level of the support was a bit surprised. AfD in Germany have been polling quite well for a while, especially in the east. I think it's more of the uncertainty thing. Macron did not have to call an election. He chose to call an election as a way to try and stem this right-wing surging forward. If you look in my home country of Britain, the party there is reformed.

They've now overtaken the Conservatives, which are the party of government, as the second largest vote. It's not necessarily a surprise. It's about the gridlock that may ensue coming from that. We see in the U.S. if it's a Republican president and then a Democratic House, it's harder to pass things through. I think we're approaching that stage in Europe now where it's like Macron will still remain president even after this vote.

It's not a vote for the presidency, but it's a vote for the House. Olaf Scholz in Germany is refusing to call a vote, but it's just going to be more gridlock and more uncertainty. So I think it's not necessarily the surprise. It's more about the gridlock that will come from this uprising or this newest take of the temperature of the European population. And how is that affecting markets in the short term? I mean, Mike kind of gave the summary, but is there a fear that this could have long term effects on European markets? I think in general, the European market is increasingly less important globally. So I think that's one thing to kind of be aware of.

We saw GBP versus euro surging. We see USD versus euro surging. What happens on the back of that is partly why Bitcoin and cryptocurrencies fell, because they are country agnostic. So what we're seeing is a surging dollar. The dollar is surging against the euro, the pound, that kind of stuff, which then translates itself as Bitcoin weakness. If the dollar is getting stronger, then crypto's getting weaker by default. So I think that's the effect that we saw in crypto markets. Is it short term?

Potentially, yes. I think, you know, if everything's not okay, it's not the end. So I think we'll see some realignment in European politics. But I would see this as being somewhat of a temporary thing. The UK has elections on the 4th of July. Yeah, I think we might have a bit of a cool summer. But, you know, if Trump gets elected, I think we might have a bit of a cool summer, but if Trump gets elected,

I think we see everything rally. So I think it's going to be a muted summer, but this is just a small dip in the scheme of things. Yeah. Do you think that, to Mike's point, not anyone's opinion, but do you think that that's what's driving this sort of

crypto weakness, as Mike put it? I mean, I like to just say we're in sideways chop and, you know, it's the normal summer price action, normal cyclical price action. So I don't necessarily agree with Mike. You know, we obviously discussed this a lot that it's a forward indicator of a weakness or divergent weakness. I think it's just boring right i think the story here is a a strengthening dollar on the base of um european weakness so it's not necessarily the dollar is necessarily strengthening it's strengthening in comparison with uh counterparts europe is you know still a big part of the global economy even though it is reducing but i think it's this is a dollar strength story, which is playing itself out in crypto markets.

S&P 500 hit a new all-time high recently, right? This is not a US-centric thing. This is a global thing. And because of the nature of cryptocurrency and it being a global market, dollar strength is affecting that. That makes sense. Mike, do you agree with that? Yeah, I agree with a lot of it. To me, the key thing is when the fastest horse in the race underperforms beta, you have to be concerned. I know people have heard this from me too much, but I'm very concerned.

It keeps on. You keep making new highs in beta and bitcoins back and down and not doing what it should be. And I think it makes sense after we had the best reason ever for it to make new highs back in Q1, but that's done. It's still the hangover mode. So to me, the biggest factor will be when we get just the normal reversion in equities and we'll see how Bitcoin responds. And we all know when it does trade three times the volatility of gold, three times the volatility of the S&P 500 on an annualized basis, it's probably going to have a problem.

And to me, that's the number one factor in all markets. And as just mentioned, beta is making all-time highs, and that's the problem. We're not seeing the oomph from markets that should be outperforming beta when it makes new highs, which means that's the problem. And that's why I'm looking over at the euro stocks right now. That's a tinderbox waiting to spark just for reversion downward. You know, Fred, do either of you have an opinion on this?

I would just kind of go along with what Mike and Dan were saying on the Europe side, and you see it here in America, too, on the political side, is that I think we're just in a stage where we're getting decay, and we're having all these new political voices try and fight the old class. And you're seeing that battle out. And when you think new voices are coming alive, you know, the old guard is starting up another fight here or there. And I just say that because on the French side, it was fascinating that when these new elections were called, because, you know, a new voice is coming up on the European Parliament, the Macron called new elections, and the, I guess what you would best say is the right in French was so unprepared by it, that they almost immediately started infighting. And like, the infighting has been so bad that

one party locked the doors to their headquarters and wouldn't let the head guy in. And then another guy said, I run this Twitter account for the party. And they're saying, no, you don't, because they're trying to figure out like, who's going to align with who. And it's all just, you know, what I think is the broader picture of everybody is now fighting for their role in what they're going to do for their respective governments. And when we're talking macro, you know, crypto is another part of that. And in the U.S., we're getting some positive signs, but we still have a lot of big signs, you know, saying that the fight is still here. And we're still very much anti-crypto at all the levels of power.

So you can't let the foot off the gas if you're going to be a pro-crypto voter come this fall in really any country. There's been so much sort of debate as to whether crypto is worthy of being a single issue for voters, right? I think that people are really, really torn by what they're hearing from the individual parties that they may have supported long term and struggling with what that means for themselves individually or for this industry in particular. I'm curious if we'll see an uptick. You guys talk about Europe. If like in the United States, Bitcoin and crypto could become a meaningful issue in these situations.

Dan, I mean mean you're there have you heard anything about crypto or Bitcoin in this or is it a much greater obviously uh situation uh with bigger issues yeah so I mean I'm actually not there but I'm from there um the only thing I've heard about that was um when Rishi Sunak the current prime minister of the UK um came to power he was saying that he's a Bitcoin holder. He's a fan of Ethereum. He held, I think, CryptoPunks and BoredApe and that kind of stuff. That has really been the only thing that's been spoken about it in the UK. I don't think it's anywhere near the table of discussion in European politics at this point.

It is in the US. And you see Trump came out saying, we want all of Bitcoin to be mined in the US. you see, you know, Trump came out saying we want all the Bitcoin to be mined in the US and then Biden's now accepting stuff. Look, I think the US is the tail that wags the global dog, you know. It's going to be a big thing. I don't think it is yet in European politics, to answer your question. Yeah, maybe they'll just follow. I believe so. I think it's coming. It becomes big enough. Yeah, it becomes a big enough issue in a presidential debate or in this presidential election in the United States. Surely politicians in other countries are going to see the sort of disproportionate marketing benefit you get from talking about it versus how big it actually is. And they're going to take advantage of that. Right. I would imagine. I mean, Dave, you just joined. What are your thoughts? Well, I mean, for starters, throughout most of Europe, people haven't been subjected to bans. So in almost every European country, there's no issue with going into DeFi or playing with whatever coin or doing whatever you want to do for the most part. Yeah, there's some some restrictions on leverage in a few places.

But, you know, it tends not to be an issue if you're not really being stopped. U.S. people have had to go to extraordinary lengths. The number of searches over the years for VPNs, which, of course, no longer work in most cases, is extreme. I mean, so and then they saw their first publicly listed crypto company, which has many, many millions of accounts, gets sued by the SEC for existing, not for doing anything wrong, no allegation of harm for existing. That tends to be a big deal. Plus, in America, unlike Europe, there's still a huge, well, I shouldn't say Europe. Europe is not monotonic on that. There is a cash culture in Italy. But the U.S. has a

huge cash culture. People like to be able to do payments with each other, like to be able to have some freedom from the government doing what they're doing. And we have, you know, Sherrod Brown, the Senate chair of the Finance Committee, and Elizabeth Warren, the behind-the-scenes Democrat leader, effectively, on financial matters, pushing for a CBDC that would essentially say, no, no, no, you don't get to do anything without us knowing about it. And by the way, you know, down the road, we're building the ability to stop you from doing what we don't want you to do in your daily life. So of course, it's going to be a bigger issue in America. It really is that simple.

That makes perfect sense. I was in the middle of trying to change the title. faction they are using this as as a political political messaging tool to say that we are building an army against crypto trying to uh score political points with it he quickly understood what's going on and switched to the other side and day by day he's adopting it more it's very interesting also the tune he talks about, I haven't heard him talk about anything other than Bitcoin yet. Sound, you know, quickly went ahead and supported

mining. He definitely is. I think he will make it a really important campaign issue and something that is also very costly for Biden to kind of attack because he's so committed to the other side of that game. I'm not sure if he'll be able to do a quick pivot and prevent the attacks from Trump.

But yeah, he will, I think, make it a big deal. And it's very interesting to watch a few years back when we were on spaces or I should say probably clubhouse calls the one the number one concern from people was that Bitcoin is too good. but the biggest danger to it is governments banning it or probably u.s politicians agreeing to ban it but what's what we are seeing is at least you know two of the major contenders in this election um are are supporting bitcoin you can for sure say that this is just political games. And of course, who was the last politician that was truthful? But it's still important to understand that they

see some benefit. As Scott was saying, it's asymmetrical. No one gains anything by attacking Bitcoin, but they do gain a lot by supporting it. Or what they gain by attacking it. And that's exactly the game theory. That's exactly it. Yeah. I mean, I think there's a couple points that need to be stated here. I mean, the first is the why and the how, right? The why and the how are very related.

The how is Vivek educating Trump and Trump's team on a few key matters. The first one is how important having US dollar be the backing of stablecoins is to actually helping dollar dominance. I mean, it's something that we in crypto know. It's something Vivek knows because those of us who attended at Mainnet his event, he was very clear about that. And it's extremely clear that he's educated the Trump campaign and Trump himself on that topic. So Trump no longer fears crypto as an alternative to the dollar. He looked at Bitcoin more in the world of gold and looks at its price and says kind of,

what do I care? Right. You know, Bitcoin 10x from here, it wouldn't impact anything any more than gold is impacting it. And then the second thing is Trump sees the CBDC and has been told this, but he knows it as a tool of the deep state. And given everything that he's about that, that's like the best dog whistle. If you want to get somebody to to support something, point out that it is literally the most important potential tool of what he hates the most in the world. So to say that we don't know what Trump thinks about this, that's just nonsense.

I mean, everything he's saying is completely consistent. I mean, completely consistent with his core beliefs and what he says, other than his other core belief is narcissism, right? And guess what? He got to make money on narcissism by his own NFTs. So I mean, it literally checks every box. When it comes to Biden, I mean, Biden, forget it. Let's just say the administration, I love the way you phrase it, Scott, the White House, the White House is still being run. I won't say Biden anymore. Yeah, it's just pointless. He's not making any decision making. I mean, I don't think he could spell crypto if we spotted him in the sea in the yard. Right. You know, I'm sorry. I just don't think

he understands it. But Elizabeth Warren certainly does. And that is the issue. So he just put Carolyn Cremshaw up for renomination. Now, what's funny, normally renominations are easy, except she's distinguished herself in office by saying things that literally are just the courts have said were wrong. If you read her dissent against the Bitcoin ETF. So, you know, and he's put some other done some other things, too, which indicates that whatever quote pivot they're doing, accepting donations. Yeah. OK, whatever. There's no pivot. And why is it a big issue? It's a big issue because of the path to CBDC. That's why it's a big issue in America. It's not Bitcoin. It's economic freedom. And a lot of

people realize that. And I know that Ryan Selkis goes really crazy on this topic. But honestly, you know, the core reason is because it's about people's freedom to transact. And I think that that cuts very deep in this country. Yeah, it's seen it just to one point that you made before, which I think is very important. Obviously, as you said, there's really no popular there's no upside for the voter base to saying you're the anti crypto army, right? There's points that that just continue me. I mentioned that point about believing is that because it just doesn't matter. You know, you're not looking at any politicians personal belief, you look at their strategy and what they're going to do. And I totally agree if something matches somebody's platform. That's good enough. Please request again. So, well, he can't hear me. So useless for me to tell him. One of you guys tell him.

But otherwise, I think if you know, request again when he brings you up, if you can hear me. Thank you. Thank you, Dave. Always glitchy on X, always an adventure. You never know who you're going to hear or not. But I think that it was always a curious move. And Dave, we talked about this quite a bit. But the anti-crypto army itself, because there's

plenty of people, as we've seen, who will vote for crypto, right? Who are very passionate. It's a one issue for them that they care the most deeply about. They will support any candidate, even someone that they hated before, who even adds Bitcoin to their Twitter profile or talks about their love for Bitcoin. There's nobody, in my opinion, that hates Bitcoin so much that that's their one issue that they're going to vote for. You have to believe that this isn't about the voters. It's about where the money's coming from.

To David's point, it's about Bitcoin being a threat to CBDC. But also, if you listen to John Deaton, who's running against Elizabeth Warren in Massachusetts, he's pointed out that she openly has talked about CBDCs in interviews, but also that her bills are literally written by Jamie Dimon and JP Morgan. And if you follow the money, it's about the banks, right? So for her, even if it's politically unpopular, I think there's an argument to be made that it's more about where her money's coming from and who she's protecting and what she's protecting them from. Dan, you seem to agree there. Go ahead. Yeah, so this comes at the point like rule one of winning elections is to get the most votes, right? It's to appeal to the broadest base.

I think as Michael Jordan said, he would never go out and say something bad about Republicans because Republicans buy sneakers too. The biggest parallel I can draw on this is 2016 when Hillary Clinton said anyone that votes for Trump or whatever, they put them in what's called the basket of deplorables. You know what's a great way to lose an election? To call half of your electorate deplorable, right? That's ridiculous. So look, politicians are going to be politicians. They're going to do what politicians do and be self-serving and the rest of it. The wind has changed. There is a big enough now cohort in America that supports crypto. So now both parties are towing the line on crypto. It's just a numbers game. The numbers are now too big. Republicans buy sneakers too, is what I wanted to say, I guess. Yeah, but I think disproportionately loud to how big we actually are as well, and well-funded, which is important. Go ahead, Fred.

Yeah, so I would just, real quick, I would say in America, it's not necessarily getting the most votes, it's getting the most pieces of paper, but that is a different story. On the political side, I would just say that when you're thinking about this book of crypto that's being written, don't forget about the last couple of chapters

or a couple of chapters from a couple of chapters ago, meaning when we were in the last bull run with FTX, remember FTX was angling to make sure that only FTX was going to get any type of pro-crypto regulation, and they were shutting the door on everybody else behind them, you know, working with the regulators and working with all the politicians. So I just caution that, you know, while we're in this fight, make sure you still understand who the good guys are and who is really doing it or seeming to be pro-crypto more to just get themselves the favorable regulatory treatment before shutting the door on everyone else. And I don't know exactly who falls into that camp yet, who's just saying it to get those votes or, you know, to get,

well, to get those votes, but keep that in mind, you know, always focus on the substance. And if somebody is in favor of a bill or a particular, you know, standpoint or viewpoint. Fred, I mean, it's important to note, you brought up a good point, something I've been talking about quite a bit. When you look back at SPF and the sort of trajectory of Sam being on the floor of Congress and meeting with regulators, it was primarily with Democrats. Obviously, I think that that caused a disproportional pushback from that party or fear of speaking favorable about the asset class for a very, very long time. But largely at that time, this was not such a political hot potato. Pre FTX collapse, you had many outspoken Democrats and Republicans. It was a somewhat bipartisan or I would say nonpartisan issue crypto. And I blame Sam to some degree for setting the environment where this has become

so bipolar. And I think it's pretty sad. But yeah, I mean, you know, we're talking about it was Gary Gensler and Maxine Waters and Democrats that he was obviously donating wildly to, of course, it came out that he was donating to Republicans in other ways. But that was the party of crypto at that time. And people kind of seem to forget that for better or for worse, I think. Andrew, what do you think of all this? Oh, I think it's a, from a political standpoint, it will probably over the next, let's call it six to 24 months, it'll be a bifurcated conversation. The powers that be in the world of finance, and, you know, we should remind ourselves that there's a, you know,

there's a power base there that's difficult to deny. So the powers that be have already made choices associated with Bitcoin and Ethereum, right? So BlackRock will have a spot Bitcoin ETF and a spot Ethereum ETF. And the inflows associated with those products over a period of 12 months, 24 months, 36 months will be, you know, very, very significant. The question then becomes politically and from a regulatory standpoint, you know, somebody mentioned earlier that, you know, who's going to get locked out? You know, where does the regulatory line get drawn? You know, we know with the current administration, that regulatory line was going to get locked out? You know, where does the regulatory line get drawn? You know, we know with the current administration, that regulatory line was going to get drawn, you know, at the feet of Ethereum being nailed as a security. The political winds shifted dramatically very,

very quickly. And we're seeing the reality of that given that S1s are still not done and Ethereum as an ETF isn't ready to trade yet because nobody was ready for that particular shift. So the question in my mind is, you know, obviously Bitcoin is an approved asset, you know, across the globe, across the United States, across all of the markets that matter. Ethereum is about to be, but the question then becomes, where is the line drawn? Because there will be a line that gets drawn. And how does the conversation or the narrative of the tokenizing of real world assets with a guy like Larry Fink has

evangelized that idea and that process. And frankly, they've begun taking action associated with a, you know, an exchange in Texas that would begin for all intents and purposes that process. Has anybody taken a look at all the Fortune 500 companies that actually exist in Texas? There are a lot of them. So it's going to be interesting to see how it plays out. If there's a change in the administration, I think the, you know, political and regulatory ball gets moved significantly in, you know significantly in the quote unquote crypto direction. But then it becomes to what end and where do we find ourselves two to three years from now? I don't think we know that right now.

You know, there's a different world where, you know, Trump doesn't win the election. I don't know what that percentage looks like. And I frankly, I can't imagine it given Biden and his candidacy. But stranger things have happened. as it relates to, you know, the movement of, you know, you know, sovereignty, free money, and the onslaught of, as Dave said, you know, CBDC's control, wanting power over what it is we do and we don't do with our money. So two different paths ahead of us, really three different paths ahead of us. One is where we are now in the squeezing of control associated with the movement of capital and availability of it. And then there's two other paths associated with a change in the quote unquote regime here in the United States,

where the opportunity for growth and the proliferation of crypto becomes a larger opportunity. Dave, I'm going to let you respond to that and sort of wrap a bow on the political conversation. Then I want to talk about what I have pinned up in the nest, which is that MicroStrategy sailor just increased their convertible note from 500 million to 700 million, which seems to happen every time. It's just absolutely incredible. Go ahead, Dave, and then we'll talk about it. Yeah, I don't know a response because I think Andrew and I are on the same, not only on

the same page, I think we're on the same word on the paragraph, right? I mean, I think what he said is perfect. But I do want to elaborate a bit on the Texas thing because it's a very big deal, potentially. Where the devil in the details is, is we all know because we've seen it, we understand that blockchain-based settlement cutting DTCC out and making it more transparent and efficient will be, is probably reason enough. I don't think that either Citadel or BlackRock care about the other pieces, but they matter. So the question is, will they opt for multi currency

trading? Will they opt for on demand settlement so people can actually transfer and physically hold things, you know, as bear instruments like the rest of crypto is? Will they opt for the kind of 24 seven trading environment that we see in the digital world to enable global holdings and global trading of these assets, which would attract listings not just from Texas, but from everywhere in the world. And the question is, to do that would require fairly major changes to digital asset securities, which means you have to have an SEC that would play ball. And honestly, they would make a lot more money if they did the things that I'm suggesting. But it's going to be

a big deal. But that is the fight. That's the thing to worry about. Because, you know, on this space, if you took a poll, I think you'd find somewhere north of 90% of everybody believes that every asset, certainly equities, will trade digitally with all the characteristics and features I just mentioned. The question is, is that the game that these guys are playing? Because if it is, it's potentially revolutionary. It always takes somebody to break an oligopoly. Citadel has been trying to break oligopolies all around the world for a while. BlackRock has been part of it. So it's a fascinating interplay. And I think that people

should be paying attention to the details of the filings when we start to see them, because it will tell us a lot about the future of digital assets. Well, people don't know this about quote unquote exchanges, but for all intents and purposes, intercontinental exchange, so ICE owns like 90% of the exchanges across the globe, right? So this move in Texas with BlackRock and Citadel is a move to adjust that monopoly that ICE has on all of the exchanges. And I can see it from Citadel standpoint. Citadel is one of the biggest market makers, if not the biggest market maker on the planet. And they probably are tired of

paying fees associated with running up and down the rails of intercontinental exchanges pipes. So that's a much bigger move than, oh, BlackRock and Citadel are going to create a competitor to the New York Stock Exchange. The New York Stock Exchange, frankly, is nothing more than a museum anymore. ICE and the pipes that they've built from a digital standpoint to run all of the exchanges across the globe, that's the real target here. That makes sense. I do want to talk about MicroStrategy for anyone who didn't see in in the nest above MicroStrategy increases convertible note issuance to 700 million, I believe it was announced to 500 yesterday, offering 2.25% annual yield. Who are the buyers of a 2.25% yielding convertible note when Treasury bills are yielding much higher Mike what

do you make of this sorry I'm a clone if you're there I would love to hear your opinion but if not someone else can feel free to jump in yeah did you know what I said variability terms are because that is the answer to your question yeah yeah obviously yeah I haven't I would have to dig into the article. But either way, I guess the real story isn't like who would buy it. That was the wrong question. The real story is there's that much demand for it, right, Dave? That he's increasing it. And we've seen this repeatedly, where he, where they, MicroStrategy, you know,

proposes a note and ends up increasing at 40 50 percent well i mean people people don't understand this but there's enormous appetite especially in new asset classes for principal protected strategies that give you some upside i mean i sat on the equity derivative desk at solomon brothers in the 2000s and the amount of money that was being poured into market access products, every time a new market would open up, I mean, it's kind of funny to think about China opening up or, or Korea opening up or whatever. But you know, anytime a new market opened up, and these are basically are of equivalent sizes, actually, in many respects, bigger than Bitcoin and crypto, there was enormous demand for these strategies. So what would they sell them?

They would sell them a note, which would either return zero interest rate or some below market interest rate, but give them a percentage of the upside. But they can't lose their principal as long as the credit is good. Now, if people look at MicroStrategy's assets and they say, well, OK, if I'm a senior creditor of MicroStrategy, if it all implodes, I'm still OK, as long as their break-even price is somewhere way below where I think it could go. And I think that at this point, most people look at it that way. So this really satisfies that need for a principal protected strategy that gets some exposure to the upside of Bitcoin. That's where the demand is coming from. It's a tale as old

as time. It's been going on for decades that there are conservative investors who want to dip their toe in the water, but don't want to have to go to their investment committee and say, well, I lost it all because it evaporated. So I think that's where your demand comes from. That makes sense. I saw in the article as I was giving it while you were talking that as a result or as part of this, I believe Bernstein set a $2,890 price target for MicroStrategy shares, which are up 2%, you could say, on this news or in conjunction with this news. But people clearly still, I mean, that's a pretty huge upside analysis from Bernstein. In bull market, the micro strategy outperforms Bitcoin is more volatile.

So it makes a lot of sense for these investors to accept a lower rate, but for a chance to participate in the price appreciation over time. People have been calling this a call option, which is exactly what it is. You are, again, as Dave was saying, you have downside protection, but you have a chance to participate in micro strategies, potentially significant gains.

And this is also very, very important because since the Fed raised rates, it kind of closed the door to many other ways for funds to generate returns. But Bitcoin has been doing really well in the past several months in a supposedly tight environment. Although we know that there's still other channels of liquidity flowing into the market, but we appear to be at a place where the road forward, the path forward is only more liquidity, more cuts and more stimulus. fact that, you know, Bitcoin has been now something that's accepted by institutions, we've had $15 billion of flow into Bitcoin ETFs, we've had, since mid March, we had a little bit of slowdown in ETF flows for about a month or so, and we've begun to run again. And another, yeah, another $4 billion

flowed in the past few weeks. And the second wave is beginning. Couple that with everything else that we've been talking about on the space today. It's the change in politics, the change in the viewpoints similar scientific is becoming, is trying to

follow micro-strategy in a different way. There's meta-planet. There will be more and more and more. GameStop should do it. GameStop should do it. It's a no-brainer. It's one of those things where we will talk about it, talk about it, talk about it, and it will eventually

happen because it just makes all the sense. a no-brainer. It's one of those things where we will talk about it, talk about it, talk about it, and it will eventually happen because it just makes all the sense. And it actually gives them the real fundamentals, right? Because right now they're mostly based on the meme value of their stock. I'm not sure if there's any business

value there, but if they add Bitcoin to the balance sheet, then there is something serious that supports the thesis, the long-term thesis. Just to be clear, I don't think they would. I just think they should to everyone listening. That's from the brains of many people on Twitter and certainly not from the brains of anybody who's at GameStop. I wouldn't want to give any false impressions here. I mean, $2,800 seems like an exceptional target for microstrategy. I think that a lot of people understand, Dave, we talked about this, I think, but the mechanics of why we saw that sort of meteoric rise of microstrategy there, and you could argue why we saw a top in

Bitcoin, right? I believe it was they were sort of at the exact same time was largely because so many people were short micro strategy and long Bitcoin as a kind of a carry trade and then got squeezed and obviously had to cover their micro strategy shorts, which meant selling Bitcoin in mass. And we were talking about billions of dollars hedge funds transparently utilizing this failed strategy. Yeah, you see that a lot in markets when in an individual equity, it can get very hard to borrow. Once something gets hard to borrow, it's a problem. I mean, it's amusing that the movie Dumb Money is probably the reason that most people in America now understand this. But it is a real thing. I mean, I ran a market maker and we saw this. There were multiple occasions where we had to manually adjust our model and say, no,

Moss, don't short this thing. It, you know, just stay out of it and just, you know, just push it out to the market because you're in a, you get to a zone. And that did happen with MicroStrategy at one point earlier this year. But I think that the point, and I don't know who was that said it, I think it might have been Sina, it's that MicroStrategy is a leveraged play on Bitcoin. And it's basically like buying a Bitcoin-leveraged fund at this point,

which is because you know that every time he can, he's going to lever up. And he's not levering up like a DGEN, you know, DGENs lever up and they go from 5x leverage when Bitcoin's at 40,000 to, you know, 20x leverage when Bitcoin's at 70,000, it drops, you know, a tiny amount and they get wiped out. You know, he's not doing that. He's keeping his leverage ratio basically similar, but effectively it's leverage, meaning that you would expect that its delta to Bitcoin is more than one. And so if you short it and buy something at a delta of one and you get into an up channel, you could get ruined. And that's the sort of thing

that people have to take into account. I mean, trading options is non-trivial. There's a reason that there's option math and very sophisticated people who trade it. Most of the people who aren't sophisticated who trade options get burned. And unfortunately, even some that are sophisticated get burned. And this is one of those cases. That makes perfect sense. That makes perfect sense. And Simon, what do you think of MicroStrategy's, dare I say say strategy at the moment? What? I don't think anything's changing, isn't it? I haven't got too much to add. I think David covered it really well. Oh, guys, do you think there's risk to this strategy? Or how much risk I should say, do you think that there is to this strategy? What's the downside here? What could blow

it up? Because it seems almost bulletproof at this point. I mean, Dave, is there something we're missing here? He survived. I mean, they survived, you know, a down to 15,000 when everybody was screaming he's going to get liquidated at 28, right? You're asking a guy who thinks that this cycle will see 240,000 in Bitcoin. So, I mean, but then again, anybody who uses the words bulletproof or guaranteed or words like that, if someone does that, put your hands over your wallet and hold tight. There's no such thing as a short thing. You have to understand risk. I do think that he understands his risk.

Frankly, I actually have MicroStrategy as one of my retirement accounts, which is essentially I bought it with no intention of selling it. Not a huge position, but, you know, meaningful. And, you know, it's that sort of thing. I mean, you know, it's never bulletproof. But the fact is he's taken a position and he's done something. What's more interesting is how many other companies behind the scenes, now that the accounting rules have changed, how many of those 2400 cfos that he's been talking to in his conferences how many more companies are putting

it on their balance sheet with excess cash that's the real question and and most of them are going to be below the 13f threshold to start so we won't know this for a while but that is a large part of demand that you know add that to the ETF, add that to the other things. And that's one of the reasons I believe what I believe. And, you know, let's face it, Scott, you know, with Long Island, we all remember Long Island iced tea and we joke about iced tea. But how many companies who want to boost their stock prices? There are many executives in this world. I mean, many. And it's not just the United States.

The amount of, and I don't know if you saw the news about Elon Musk, his pay package was literally based upon the stock price. And so that's why it got approved. If you consider the preponderance of executives of companies are paid based on their stock price and they think they can goose their stock price by putting 5% or 10% of their treasury in Bitcoin, they're going to do it. And it doesn't take a rocket scientist to figure this out. People do what they're incentivized to do. And right now it looks like that's a really smart incentive. So to me, that's an unspoken part of the, of my bull case, but that's a big deal here. So to me, that's an unspoken part of my bull case. But

that's a big deal here. Now, I don't know how it's all going to play out. But the way it always starts is one does it, a few do it. And then in 2000, I mean, we saw these commercials where, oh, we have a website. Oh, you have a website? Great. And all of a sudden, the valuation of the company went up. I'm not saying it's going to be like that. Well, that didn't end that way. We have a website. It didn't end that great. And I really do try and stay away from price predictions. But something to really keep in mind is over the next 30 days, it's effectively the lowest volume channel of the year.

That's not the Christmas, New Year's holiday. So between today and the middle of July, you're talking about, you know, anemic volumes across traditional markets. So if Bitcoin stays in this 60 to 70 channel during that time period, it's just flat out spring loaded. And you're going to see volumes in late August, September, October, and all kinds of different large institutions are going to be shoveling money into the Bitcoin ETFs. And so if we range the way that we've been ranging for the last 30 days, I don't know, man. I'm with Dave. Where we go from a price standpoint over the next nine months after this period is really going to be something to behold.

Yeah, I think it might take a little longer. I still think, you know, it could be fall. But what do I know? Yeah, Sina, go ahead. And then we're going to wrap up. Yeah, just one minute to follow up on what Andrew was saying. We've recently developed a metric called volatility adjusted power law index. It's basically demonstrating whether Bitcoin is overbought or oversold. And what we see on that is we are in the dead center.

We are at almost zero. And that metric goes from negative 10 to plus 10. Negative 10 is oversold. Plus 10 is overbought. So we are at a really, really kind of comfortable place, especially given that the title of the room is Bitcoin's trajectory. We are kind of in a boring phase. And it's not overheated.

It's not oversold. And it can, yeah, given the anemic flows that we might observe in the next few months, maybe summer will keep going slow, but it's basically the spring loading for the next move. I agree. Well, good way to wrap the week is talking about the spring loading

for the next massive move to the upside on Bitcoin. Let's hope that we're all right about what we're expecting there. Great conversation, guys. As always, we get to take a break here for a couple days on the weekend. And we will run it back on Monday at 10.15am Eastern Standard Time. Thank you guys for the amazing conversation. As always, looking forward to Monday. See you guys then. Bye.